The (Bursting) of the Bond Manager Bubble

US market history seems to be characterized by some form of hero worship at each point of the cycle. You know, the investment managers that the journalists, investment professionals, and (sometimes) general public drool over:

  • 1980s - The “Corporate Raider”
  • early/mid 1990s = the macro speculator / bond vigilantes
  • mid/late 1990s = The Star Mutual Fund Manager and Venture Capitalists
  • Early 2000s = Equity Short Sellers
  • Mid 2000s = Real Estate and Private Equity “Moguls” … and “value investing”
  • Late 2000s = Housing/Credit Short sellers
  • Early 2010s = The Bond Fund Managers

If history is any guide, R.I.P. Star Bond Fund Managers (not just “high yield”). It was good while it lasted. It’s your turn to come back down to earth…for good.

As @barbariancap eloquently stated: “when talking heads argue which one of the two is more deserving of the bond god/bond king title, you know the end is near”

Questions:

  1. What does the bursting of a bond bubble look like?
  2. Who will be worshipped from Mid 2010s - end 2010?

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s

%d bloggers like this: