Long Bonds

by Mr Juggles

In this time of financial uncertainty, we have experienced heretofore unseen volatility in our portfolio. Assets that were previously uncorrelated are now correlated, assets that were previously correlated are now uncorrelated, write-downs are good, the recession either didn’t happen or is already over, LIBOR is possibly a figment of a banker’s imagination and it’s always the best time to buy. As such, management has decided to allocate a significant amount of our cash on the balance sheet into a fixed income product that shows no correlation with any of our current holdings and is not in any way sensitive to interest rates.

Our new favorite fixed income product is barry bonds. We have invested a meaningful amount of our cash into this asset and the maturity is one year. The yield is 0% on a cash basis, but approximately 25% based on our performance enhancing risk model.

We think barry bonds will help dampen the volatility we have seen in our portfolio as the only thing they correlate with is steroids, perjury and racism. In turn, this should allow our subscriberholders to benefit from more stable returns. Yet again, we say, “You’re welcome.” We considered a pair trade with a short of roger clemens so that we could effectively short the racism spread, but that trade looks to continue to be volatile.

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