Mike Collins

Treasury bonds, especially at the long end, are cheap and attractive. The 10-year near 4.5% and the long bond at 5% offer embedded value from steep curves and roll-down. Adding duration globally is warranted as yields are high.

Credit spreads are widening. They are almost 25% wider from the tights earlier this year... I'm looking at this as a buying opportunity. The market is aggressively pricing in inflation fears from the oil shock, causing a broad selloff in corporate bonds. However, Q4 corporate earnings show fundamentals remain strong with improving margins. Furthermore, historical data shows that geopolitical oil shocks often lead to lower inflation and lower Fed rates a year later, which would act as a massive tailwind for bond prices. LONG. The recent 25% widening in credit spreads is an overreaction to geopolitical noise, creating an attractive entry point to buy investment-grade and high-yield corporate bonds at a discount. Inflation remains structurally high due to prolonged energy disruptions, forcing the Fed to hold or raise rates, which would further pressure bond prices and increase corporate default risks.

Credit spreads are widening. They are almost 25% wider from the tights earlier this year... I'm looking at this as a buying opportunity. The market is aggressively pricing in inflation fears from the oil shock, causing a broad selloff in corporate bonds. However, Q4 corporate earnings show fundamentals remain strong with improving margins. Furthermore, historical data shows that geopolitical oil shocks often lead to lower inflation and lower Fed rates a year later, which would act as a massive tailwind for bond prices. LONG. The recent 25% widening in credit spreads is an overreaction to geopolitical noise, creating an attractive entry point to buy investment-grade and high-yield corporate bonds at a discount. Inflation remains structurally high due to prolonged energy disruptions, forcing the Fed to hold or raise rates, which would further pressure bond prices and increase corporate default risks.