Convexity Maven Harley Bassman: How To Survive The Next Rate Cycle

Bullish:

• $SPX - Long-term passive equity investment strategy based on millennial 401k flows that will support markets regardless of valuations

  • “I've told all my kids just max out those 401ks, put 80% into an equity passive... reinvest the dibs, call me thirty years.”

    Harley·30:22
• $PFIX - Seven-year option on 30-year Treasury rates packaged in an ETF that performed exceptionally well during Fed rate hikes

  • “I bought a seven year option on the thirty year treasury basically. And we put that into an ETF... this thing went from 37 up to 114, two years ago when the Fed started hiking rates.”

    Harley·11:15
• $TREASURYCALLS - New ETF product betting on lower rates through seven-year options on 10-year Treasury rates with positive 2% yield

  • “we just came out with a new product six months ago that is the opposite of the bet of rates going higher. It's a bet that rates are going go lower. It's a seven year option on the ten year rates... actually earns a positive 2% yield.”

    Harley·39:28
• $BDC - Business Development Companies offering attractive yields when paired with duration hedges

  • “I like buying the loan products or the BDC products... the BDCs like them also, you know, and the big there's like four name brand ones. There's one that's really big. I own them.”

    Harley·43:31
• $MBS - Mortgage bonds offering the best risk-return profile with spreads still above long-term averages

  • “mortgage bonds are still the cheapest, the best risk return out there. They were trading 175 over, they're now 100 over. That's still well more than their long term average”

    Harley·47:37