The greatness of WEB

Insurance companies typically have a fixed income portfolio and considerable part of their float is invested in fixed income securities. Many (specifically Jim) had observed how in recent years Berkshire had reduce Bond/ fixed income securities.

Now, YTD the the fixed income has declined by 23% using TLT as proxy, now consider that they were earning around 2.5% at the beginning of the year that is 10 years worth of interest loss.

The fixed income was in a multi decade bull market that is breaking down. Still TLT is yielding 2.6% only and if the yield gets to 4%, how much more TLT has to go down? This is not a SaaS, or any other market bear market, but this is fixed income bear market. This bear market is going to driven by a FED who is determined to raise the rates and QT (they are the only tools it seems they have to fight inflation). The bear market is not going to hit bottom until QT started and priced in in this market.

As usual, I feel I have not raised enough cash. Will be selling on any rally.