If the Bond bull market truly has ended we should look to getting short real estate. Mavin, a denizen chatroom pivoteer, recommended looking into shorting DHI (DR Horton) calling it the “Walmart of the housing industry and catering to the low end of the market”. Also check out the TBT tout as another way to play dropping Bond prices.
So does rising rates mean the end of the stock market? Not necessarily and quite possibly the opposite. Rates rose between 1927-1929 along with the stock market. The U.S. Bond Market is almost as big as the US Stock Market ($31T vs $40T) and Bonds globally exceed $100T. If the Bond bull market has ended where will capital seek shelter? I’m guessing the U.S. Stock Market. With retail participation even lower than pre-2009 crash levels (54% currently vs 62% in 2008) we are no where near a top in U.S. equities. [Tout prepared by David Isham]