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iShares TIPS Bond Message Board

  • madecoolhome madecoolhome Dec 30, 2009 11:00 AM Flag

    Is now a good tome to buy I shares "Tips"

    I been hear that there inflation coming and is here It just has not recognized by the finical government. Does anyone think that now maybe a good time to but I Shares Tips (TIP)?

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    • http://research.stlouisfed.org/fred2/data/DFII10.txt
      I would wait
      Just an opinion buy when the rate is over 2%

      • 1 Reply to thekro
      • If food and energy are included in the inflation numbers then I would certainly wait as commodities are getting crushed.

        I still believe though that the government numbers are cooked a bit to hide their favorite hidden tax, inflation. I think that most all of 2010 will be deflationary so I'm staying away from TIP for now. I used to hold shares but I sold them when it got around $105 and figured that the market was due for a sharp correction.

    • that why I asking I do know what is going on with these markets Yes I agree just because someone with a big mouth says something just to complement a big run up in stocks or say that it is the best time to buy into a big bubble (steep rise is stock prices)something which already has happen I agree this person is just not thinking much at all. Then again no good to don't just follow the charts I mean how high is high and when do the markets just decide to say enough is enough the price is good.
      We need look at

      A) how has the marked priced the value of the securities. which depends a little on overbuying ard under buying



      New ideas are good. Anyone with ESP could also save a lot of time by just using a way to look into to future and figure where is a good place to put you money now.

    • 1. It is probably best to not rely on what you keep hearing. If we all did that, then we all would have lost a lot of money in dotcom stocks and real estate. Further, the last time we were all told that inflation was coming in a major way was when oil last approached $150 a barrel. In hindsight, we got the exact opposite. Deflation struck with a vengeance. I don't think we'll get that level of deflation again, but we might get a little bit (especially if China falls apart or we slide into Japan's ongoing deflationary mess).

      2. If you truly believe that inflation is not being recognized by our government, then TIP would be the last thing you'd want to own. TIP's payouts are based on the inflation recognized by our government. For the most part I do think our government offers fairly reasonable inflation estimates though. I track my expenses to the penny and have done so for nearly a decade. I'm fine with the government numbers. Some aren't (especially those with high medical bills, those who use more than a typical amount of gasoline, those with larger homes to heat, smokers, and college students trying to make sense of tuition costs). One person's tame inflation can be another person's inflation nightmare.

      3. If you were able to ask every single person in the market what they thought TIP was worth and then averaged their results, the answer you would get is $103.99. That's the price it closed at today. That's what the market thinks it is worth. Asking us individually will just get you more of the same, with possibly an upward bias since most here probably own TIP.

      That said, I will offer an opinion. I think TIP is slightly overpriced. I sold quite a bit in November and so far that trade has worked out okay for me. I'm hoping for a better price to buy it again. (I will also be buying TIPS directly from the government in January, just like I do most years.)

      One reason I think TIP is overpriced is that I think too many people think severe inflation is a sure thing. Another reason is that I am concerned that the government continues to offer ever increasing amounts of debt for the markets to absorb. There may come a time when the demand isn't there to meet it.

      I do still own it in my IRA though. I don't think it is that overpriced clearly.

      And lastly, I want to point to a sign of the times. Gold ads run non-stop these days on TV. Is it any wonder people think severe inflation is coming?

      I was given three silver dollars as a high school graduation gift in 1982. The ads wanting to buy my silver were commonplace then too. I sold them in a rather nice hotel room in Spokane, WA. They paid me $18 each and threw them into big white buckets with the coins of other sellers. At the time I wondered if I was being fleeced but I took the money just the same. In hindsight, they were being fleeced. I could buy those same coins back today, 27 years later, for almost the same price I sold them at. Inflation was apparently not the sure thing in 1982 that so many people thought it was.

      I think people failed to grasp the sheer enormity of modern mining equipment and were instead too focused on the ease of the monetary printing press.

      http://goldinfo.net/silver600.html

      That is not a bullish chart to me.

      • 4 Replies to markm0722
      • Since you sold in November the market is up DJA 1%. TIP is up 2% and another 1% in div. assumig we get at least another 24 cents in Jan. Inflation you would think has to eventually go up. Afterall Obama is printing money like no tomorrow. If we continue at that pace and are up 12% at year end..I'll take it

      • Nice post, but what you failed to realize is that those silver dollars you sold may have been more valuable than you think. Morgan and Peace silver dollars are minted using dies. When a minting die fails it is replaced by a new one. All dies are generally different. Certain combinations are more valuable than others.

        These Buy your silver and gold fly by nighters know this. Unknowedgealbe people looking to cash out their $18.00 silver dollar do not.

        The promoters pick out the die varieties, mint state coins and sell them to real colllectors or post them in major auctions. Certain dates are worth hundreds if not thousands and certain die varieties can easily be worth 10 times of the price of bullion.

        SO you may think you were fleecing them that they probably fleeced you.

      • markm0722, excellent response. Wish I saw more like this on the boards.

      • I do not own silver or gold, but even if mining can produce vast quantities, there is also the issue of rising demand - 3 billion people are becoming richer and richer. 50% of those are females who demand pretty shiny baubles. Some of those are from cultures where you have to buy gold for weddings, etc.

        The same can be said for oil demand. Now, I also do not believe in Peak Oil, and pretty much would say that commodity prices over a long time horizon usually fall, but there will be some up trends in that longer graph.

        Very good point about the gold buying advertisements. Just as when everyone tells you to buy stocks or flip houses during a bubble, there must be people meeting that crazy demand - I suspect that the gold buying and selling is indeed a craze since its on national TV.

        (the old story is when shoe shine boys give out stock tips its time to sell, no?)

 
TIP
115.09-0.21(-0.18%)Aug 19 4:00 PMEDT

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