The Oracle is the latest investing guru to warn about bonds at these levels.Fortune.com:
Buffett, speaking Tuesday at Fortune’s Most Powerful Women Summit in Washington, said it’s “quite clear stocks are cheaper than bonds” now. He added that he “can’t imagine” the rationale for adding bonds to your portfolio at current prices.
The Berkshire Hathaway (BRKA) chief made the remarks in an interview with Fortune’s Carol Loomis at the 12th annual summit. He said in response to a question by Abby Joseph Cohen of Goldman Sachs that investors will eventually regain confidence in the stock market – but he can’t say when.
Buffett is pretty old fashioned in his thinking. Welll, actually that’s obvious — he’s proudly old-fashioned — but he definitely has a conventional attitude on the relationship between the enormous debt we have now, the likelihood that we’ll monetise the debt, the impact that will have on inflation (it will go up) and the effect that will have on bonds (they’ll go down).
Today certainly felt “reflationary,” but more and more the market is betting against the notion that the Fed will successfully create inflation, even if it does monetise the debt.