Courtesy of John Nyaradi, Wall Street Sector Selector
BEND, Ore. (MarketWatch) — In recent weeks, uber investors Bill Gross and Warren Buffett made headlines with their negative views on the U.S. Treasury bond markets. If you are among the ranks of investors who share Warren’s and Bill’s bearish outlooks regarding U.S. debt, exchange traded funds can offer you several potent ways to potentially profit from a decline in the value of U.S. Treasury bonds.
Pimco founder Bill Gross lambasted our elected representatives in his April Investment Outlooks for letting the U.S. debt situation get so far out of hand and said that he has been “selling Treasuries because they have little value within the context of a $75 trillion total debt burden.”
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In fact, last month it was widely reported in the general media that Mr. Gross took his government related debt to zero in his $230 billion Total Return Fund (PTTAX 10.91, +0.02, +0.18%) , the first time it has held no government debt in more than two years. And he has also been quick to point out that investors in U.S. debt are being “under rewarded.” All of this is startling, considering that Pimco is traditionally a major holder of U.S. debt and one of the biggest players in the global bond market.
However, Mr. Gross is not alone in his bleak assessment of the situation and the likelihood that the 30 year rally in the bond market could be nearing its end.
Famed investor Warren Buffett joined the chorus against U.S. Treasuries recently when he said in a speech in New Delhi that investors should stay away from long term fixed-dollar investments because of his forecast for weakness in the U.S. dollar. Apparently Mr. Buffett is also reducing his long exposure to the long bond market and focusing on what he seems to love to do best, which is buying companies around the world.
Read more here: What do Bill and Warren know that we don’t? The Guru’s Corner – MarketWatch.
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