One million dollars invested at that time would have been paying out $150,000 a year in interest for 3 decades.1 Can you imagine how much demand there would be for bonds yielding 15% for that long today?
Long-term Treasury bond yields rose briefly to 15 percent yesterday, but even that record yield for a 30-year bond backed by the United States Government was not enough to attract much investor buying.
”It’s a vicious circle,” one trader said, ”since the lack of investor demand deepens the gloom among the dealers, while dealers’ forecasts of higher rates in the future encourage investors to stay out of the market.”
That was the bond buying opportunity of a lifetime. Those are the kinds of yields where you can go to the beach and live off the interest…and no one wanted them.
The problem with playing Monday morning quarterback with something like this is the investments that look like generational buying opportunities with the benefit of hindsight often seem like the riskiest bets in the moment.