Past performance does not predict future results. Informational only, not investment advice.
Author believes risk-off sentiment driven by AI concerns will drive capital into bonds. With 5.6% yields attractive relative to stock market risk and calls showing extreme 30:1 leverage on low IV (13%), author is bullish on TLT via call options.
Long-term US Treasury bonds are attractively priced at current 5.25% yields. Stocks face headwinds from elevated valuations and potential earnings weakness, making treasuries' guaranteed ~5% return and upside from yield compression or lower inflation appealing relative to equities over the next decade.
Author believes long-term treasury yields are near a bottom and expects recovery/upside in TLT prices as yields revert. Considering leveraged long exposure via futures on the 30-year curve.
TLT has collapsed to an all-time low of $79, down 50% from 2020 highs, as the 10-year yield hits its highest level since July 2007. The 'safest asset in the world' now faces a perfect storm: $40+ trillion in national debt (soon $48 trillion), federal interest rate hikes, and a circular debt-fueled AI investment bubble that will eventually implode, crushing bond valuations further.
TLT is at all-time lows near $82 support and faces a contrarian setup. The author argues that absent an economic reset or global financial crisis, mean reversion to $88+ is likely, supported by oversold RSI and a 5.14% yield providing income floor.
Author is taking a bullish position on TLT with a $14k YOLO bet on May/June calls, expecting the 20-year Treasury ETF to appreciate. The post contains minimal fundamental reasoning, relying primarily on the position itself as directional signal.
Rising inflation will force interest rate increases, making long-duration 20+ year treasury bonds less attractive and causing their values to decline.
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