Do you remember back in the early 80s when interest rates peaked at 15.25% and most everyone felt rates were moving higher, certainly not lower? The fact is, it was the single best time in history to get bullish on bonds.
Solomon Brothers’ head of research Henry Kaufman went from bond bear to bond bull and that call, unpopular as it was, later earned him “guru” status. The thing is, at that time, most people thought he was nuts.
Recall too that inflation was in the mid-teens and both stocks and bonds had burned investors over the prior decade. Fed Chairman Paul Volcker stood tall in his fight to rein in inflation. Kaufman’s bullish call went on deaf ears. Few seized the opportunity.