What do you think of a stock that is trading at a very lofty PE multiple of around 54x? You won't touch it with a 10-feet pole, right? The quality of the firm doesn't matter. Investing at that high a PE is surely asking for trouble. And what if we tell you that the earnings of the firm have absolutely no scope for growth? Well, the decision of not investing can't come easier than this, can it? However, there's a portfolio manager out there who's still bullish on a security with fundamentals similar to what we just outlined. Except the security is not of a listed entity but the US 10-yr treasury.

As per the gentleman, who works for none other than bond giant PIMCO, despite such prices, there is no bubble in the US treasury market. He believe that factors like risk averseness and Fed's mandate to keep interest rates suppressed is providing support to the bond market and keeping bond prices high. To be fair to PIMCO, they do seem well aware of why bond prices are high and that much of this is Fed induced. However, they seem to be banking upon their ability to predict when exactly the cycle will reverse. This is hardly the best strategy as per us. The moment something appears expensive and being supported artificially, one should immediately move out of it. Timing the market seldom works on a consistent long-term basis.