THE ECLECTICA FUND - APRIL 2003
Investment Manager’s Report: Angels Dancing… German Bunds
They say you learn more about your investments when they fall in price. Rising prices are quite boring. After all, shares are supposed to rise. But when the price unexpectedly declines you gain wisdom. At what (lower) price level will speculators be prepared to buy. The German 10 year bund future is a case in point. Having spent three years failing to rise beyond 113, they broke higher in January, rising to 117. However, in March they promptly collapsed, falling to 112.5. That is to say, they fell back to their breakout level. However this has acted as support and today they trade just below their all-time high. Bonds are in a bull market. We will see new highs, of that I am certain.