When Artificial Intelligence Says, “Take a Vacation,” or How to Buy 90-Day T-bills.
I now have access to the most powerful artificial intelligence trading application in the world, which you will be able to access through the soon-to-be-launched Mad Hedge AI.
Not finding any good low-risk/high-return trades on my own, I hit the mainframes for inspiration. I asked for a list of stocks that have a 90% or better probability of rising over the next 15 days into the June 15 quadruple witching option expiration.
After examining every tick for 3,000 stocks over the last 30 years, guess how many names AI came back with?
Absolutely none.
I guess when AI tells you to do nothing at a market top, that’s a good thing.
That means it is now the time to explore the wonderful world of 90-day Treasury bills, whose yields are now ticked 5.22% yesterday. That’s pretty competitive in a world where stocks yield only 2% and the potential principal risk is real. You are being paid a lot to be a wimp and sit on the sidelines right now.
T-bills are issued every Wednesday with 17-week maturities and are backed by the full faith and credit of the United States government. The ticker symbol is (US-T). It’s as close to safety and a guaranteed return you will ever get, short of hiding gold bars under your bed. But gold bars don’t pay any interest, can always get stolen, and at 400 troy ounces are heavy (27.28 pounds).
You buy T-bills at a discount, and they mature at par. So the August 31, 2023 T-bills I bought yesterday at $98.69574 will pay an annualized yield of 5.22%. They trade in $100,000-round lots, but you can buy odd lots for as little as $1,000 if you are willing to pay a slightly higher price and accept a slightly lower yield.
You can buy these directly from the US Treasury, from your local banks, or your own online broker.
Brokers never recommend T-bills because the commission is nil. They want you instead to rapidly trade short-dated options where the commissions for them are enormous. Better yet, they want you to keep your money in their bank which might pay 1%....or nothing at all and involve real credit risk.
If your broker does go bankrupt, and anything is possible, simply ask to have your 90-day T-bills delivered to another broker or bank. They are not allowed to keep them. Cash deposits get tied up in any bankruptcy proceeds. Just ask former MF Global customers who had to wait three years to get their money back.
Don’t expect to get an elaborately embellished bond in the mail like you used to. All government securities have been digital since 2011 to save money. To learn more about T-bills, please click here.
Old School Treasury Bills