"Retail investors buying bonds today, at a time when the supply of corporate bonds is shrinking ... they're chasing a bubble," Tom Lee, chief U.S. equity strategist at JPMorgan Chase & Co (JPM.N), said Wednesday at the Reuters Investment Outlook summit in New York." (full article at Reuters.com, 6/9/2010)
On CNBC on 8/12, Tim Backshall of Credit Derivatives Research said high yield bonds were "the most troubling area" to him in terms of valuation. "A good example of how far things have run, the Pimco high yield fund is running about 54% premium over its net asset value, that's up from about 30% over in June". Go to 6 minutes.
Wharton Finance Professor Jeremy Siegel thinks bonds are in a bubble as well, similar to the Tech bubble of 2000. Here he is on CNBC a few days ago. He had an oped in the Wall Street Journal (The Great American Bond Bubble).
"If 10-year interest rates, which are now 2.8%, rise to 4% as they did last spring, bondholders will suffer a capital loss more than three times the current yield." - WSJ