BBY is having a great day.  I'll take my wins when I can get them and sell out here at 13.6+.  I was trying to hold out for some more buyout news, but somehow I think I may get another chance to bite at the apple.  Any hint of bad news and we are back to 11.7 where I think it is a buy.

CHK disappointed yesterday but I think it will be a good long term buy, so I am tempted to use this as a buying opportunity.

Bill Gross of PIMCO has upped his treasury weight to the highest in a while.  In addition, he is keeping duration shorter in the 5-10yr bond area and I think he likes TIPS as well.  I tend to agree with this is you are a bond only fund (as he is managing).  TIPS are interesting because you get the government credit and you also get some protection from inflation.  I have said previously there are two likely ways rates go up - from growth, or inflation (credit quality deterioration would be another, but I don't consider that likely).  Buying TIPS would hedge out one of these so it may make sense.  They are not particularly cheap right now,  with a 2.62% "breakeven"rate.  But they still offer some protection.

[The breakeven rate is the amount of inflation we would have to have to do better with TIPS than with the regular bond.  So fro example, the 30yr TIP yields 0.44% + inflation while the regular 30yr is yielding 3.06%, the difference is the breakeven rate.  Historically inflaiton is in the 2.5-3% range so we are on the lower end which is not bad.  We have seen much lower breakeven yields in the 2% area where I think TIPS are a screaming buy]

As treasuries have declined, credit has continued rallying and so the credit spread has compressed further, making those instruments (HYG, JNK, MHN, LQD) just a little less interesting.  At some point, I believe the absolute yield will be too low on these instruments and it will be better to hold stocks for instance (I believe we are there and stocks that pay are very attractive).  I still have some of these other bond exposures but I am pondering reducing them.