The knowledge is strong here

Pete Turner says:
October 13 2021 at 9:18 am
You have constantly talked about the merits of pension funds and individuals buying long dated Government Bonds for security ..well have you noticed that from the summer 2020 the 30 year gilt is down over 40%!!!!! …pretty shocking for a “no risk” investment..you clearly have no understanding of duration risk. Thankfully some of us do.

Reply
Richard Murphy says:
October 13 2021 at 11:01 am
Have you noticed that if you hold a 30 year bond you might do so for the long term?

Apparently not…

Thank goodness I do not engage investment advice from the likes of you

Reply
Pete Turner says:
October 13 2021 at 1:25 pm
Richard, I am not giving you advice I am sticking just to facts so no conjecture. So yes from last summer the 30yr gilt is down over 40%. And from today if you hold it to maturity (so longer term as you say) when it repays at par you are guaranteed a further loss..those are the facts.

Richard Murphy says:
October 13 2021 at 1:40 pm
And the demand for them remains strong

I suspect you will find the volume traded is low

How do you have something with strong demand and low traded volume? The implication seems to be lots of people buying them and yet no one buying them.

9 thoughts on “The knowledge is strong here”

  1. I would just love that idiot trading in any market I was in. Like a lamb to the slaughter. A trader’s dream. He doesn’t play poker, does he?

  2. There is no *risk* of loss because there is certainty of loss.
    Volume traded could be low because no-one wants to sell them after the price has fallen by 40%? However, if demand was strong the price would rise in response – Murphy’s failure to understand *that* demonstrates that he is invincibly ignorant about investment.

  3. “How do you have something with strong demand and low traded volume?”
    There’s no contradiction in that. Quite the opposite, in fact. It’s the difference between demand & supply causes a price to rise. So the rising price indicates it’s not tempting sellers. Hence low volume. It’s necessary to remember that the price quotes in any market are transactions that haven’t occurred. Not that have.

  4. @john77. That the Sage of Ely might be the wrong way wouldn’t come as the least surprise. The comment was the answer to the question, not an attempt to dowse the Spud trading strategy. You’d need goat’s innards for that.

  5. How does he know that the demand for these gilts is strong? As BiS says, the indications are that nobody wants to buy and, probably, no one wants to sell unless they want to crystallise a loss for some purpose – given lack of CGT on gilts, why would you want to take the loss unless you suspect it is only going to get worse?

  6. Diogenes: why would you want to take the loss unless you suspect it is only going to get worse?

    Because the demand for them is so strong and you want your fellow citizens to be able to invest for their future without bidding the price up again.

    Candidly, noted, fifithly.

  7. @ bis
    Sorry, I hadn’t realised that you were answering Tim’s question: I had assumed that it was a rhetorical one.

Leave a Reply

Your email address will not be published. Required fields are marked *