i’m not sure about this, but as for individual statements, yes, i think, here some new nuances may appear, nuances may appear in that, so to speak, the americans will voice new or, old proposals to reduce tensions, this concerns the plan regarding gas, it exists, it simply cannot be implemented due to the position of israel, due to the position of the other side too. so to speak, but

this is also a plan regarding lebanon, when it is proposed to divide, so to speak, the warring parties, everyone is now very afraid of lebanon, most of all, you know, and the americans are proposing that hezbollah retreat to the north, which means that some un peacekeepers should be brought in again, so that the border will be, so to speak, clearly marked, that naturally the hostilities have ceased , which will allow, on the one hand... the lebanese to return to their homes, on the other hand, the israelis, in israel 60 thousand left from the north, in lebanon 90 thousand left from the south, and there is quite powerful pressure from the one with on the other hand, in order to somehow resolve this issue, here the americans can play a certain role, but again, the situation on earth is such that i don’t see any opportunities for success now, to be honest, why do you see opportunities?

it is necessary to ensure a ceasefire and humanitarian assistance, secondly, thanks to overcoming the split, to ensure palestinian governance in the territories, lastly, of course, to fight for the creation of the implementation of the principle of two states for two peoples, this is, so to speak, there is, so to speak there are certain proposals from regional powers, and some mediation is taking place, we can mention.

it will be and well, naturally in how it can be in very distant and and for no one except maybe the palestinians or maybe it’s iran. this is really the only thing that can somehow save the middle east, but at the same time i’m afraid that the escalation that

is going on has not yet found its logical conclusion with something, victory, that is, the parties are not yet tired enough, the parties may be tired, but they still can’t stop, thank you. i want to completely change the subject and ask you a quick question: now there will be olympic games in paris, i ’m thinking about them, i have a feeling that they are pseudo-olympic, because the olympic committee has deviated from the basic olympic principles, that sports and politics are incompatible, because they are against russia there is outright discrimination there, because...

a game or a sport. at this moment, when the olympic games were held, there was either a war, or the olympic games were held, the cities were at war with each other quite fiercely states and the peloponnese and the balkans, the greek cities of the state, they all concluded a truce, that is, sport meant the end

of the omnipotence of ares, the omnipotence of the god of war, and accordingly, when we turn sport into a field of war in the continuation of politics, we destroy the very...

nothing at all i understand, this is a sport, i don’t want to ban anything, there are things that have to be banned during war, it seems to me that this is not one of them, and i kind of

recognize the right of people to be guided by their short-term, maybe not very short-term benefit, but i think that aleksandrevich is absolutely right, but there is such a thing as dignity. this is not only a question of the dignity of a state, it is a question of the dignity of people, because when they tell you that in order for you... to be present there and to be able to participate, you generally must, i don’t want to say, renounce russia, but you must at least distance yourself from russia at least, but there is something in this, something bad in this, and so i believe that this is unprovable, that this should not be prosecuted, but this is definitely in my opinion point of view, unworthy behavior, and each of us has the right to have our own opinion on this matter, they have the right to go, and we

have the right to say, shame on you, it was a big game, we’ll meet tomorrow on the air. this is the easy money podcast, me and its host mikhail khanov, today we are looking at bonds, what they are, how to choose them, how they work, when to buy, when to sell, and most importantly, what kind of profitability can be obtained using this financial instrument. and today we are visiting, investor, asset manager with more than twenty years of experience, academic. driver of the professional retraining program in stock and financial markets at the higher school of economics, alexey bacherov.

hello alexey. hello, mikhail. what are bonds and why do all those who have been working in the stock markets for a long time call it smart money? that is , investing in bonds, unlike deposits and especially buying or selling shares, has always been called smart or hard money. we have a difficult task, mikhail. today we'll start with what is a bond? a bond is a security, correctly, if we speak in the necessary terms, yes, it is an issue-grade security, and if we simply say it, it is a promissory note, well, if we really simplify it, yes, if we really simplify it, it really is a promissory note that the issuer, yes, this receipt is issued by the word issuer - this is the one who issues it, and once again for our audience i will say that, in principle, when you borrow money from a neighbor and write a receipt, this is also a bond. and the issuer, that is you yourself are the issuer of this receipt, and accordingly, all

the risks for the fact that you fulfill or fail to fulfill the obligations under this receipt are borne by you, accordingly, the issuers or issuers of bonds can be anyone, maybe the state, and companies, well, yes , private or also state-owned, what are gangs, actually the question is, well, is it just english literature in the english language? but these are the most reliable securities within any country, the main thing is that they are imitated in

the currency in which they were issued, issued, absolutely right, that is, in fact, we are lending to the state, absolutely right, if we say, what are the terms, how much can you lend to the state, but the state likes to borrow in different ways, and construction projects are really very large, it starts from a year, by the way, it’s only recently that we have two three-month bonds, and recently such bonds began to appear before... the state or the companies, we said that all responsibility for these

debt obligations lies with either the company or the state, in the case of the second it is even more reliable, well, in my opinion it is even more reliable than a bank deposit, because in principle the state is responsible only for 1,400 in a bank deposit, but here the state is fully responsible for its borrowings, so how does it work? firstly, how can i buy bonds? bonds can be easily purchased on the stock exchange. there are no problems here, just open a brokerage account in any company you like, submit an application through a broker to purchase these securities, for this stock, as well like any other for this, if we are talking about federal bonds... no qualification is required, qualification is a certain requirement for the investor, yes, what he can buy or not, even the most ordinary person, yes, anyone can easily open an account buy bonds without but only through a broker, as everything is by law, any transactions on the stock markets go through a broker, and if we don’t talk about there was such a story about people’s bonds, those

bonds were not distributed through brokers, and through banks, but that was a separate story, i think that the state did this in order to ... investors are now on the exchange where trading takes place, including federal loan bonds, there is a very large influx of clients, yes, that is, in in principle, people are already ready to buy classic bonds without this, now we are still on a separate topic, trading in bonds is underway, i think that many of our listeners and viewers, the checkbox worked for them, yeah, that is, they can still be traded, but now we are separately let's talk about this topic,

so, through a broker, i choose what is acceptable to me, what is the profitability, reliability, what... in any case, this is the state, the question is how long do i trust it, yes or how? this is such a very difficult question, that is, indeed, if we are simply talking about bonds of a purely federal loan, then from the point of view of reliability they are all the same, that they will be short, that they will be long and so on, but in this case a person really has a choice lies in two planes, that is, firstly, for how long am i ready to place my funds, maybe i have some kind of goal and i want to save money for this time, or - this is an opportunity to earn extra money if you know when... buy long bonds, because usually long bonds can change quite a lot in price, and professional market participants can make money on price changes, that is, don’t just let’s, now it’s already unclear, let ’s still be together now alexey, let’s try to explain to our audience how all this happens, it means that now we have, let’s let’s fix the yield on let’s say ten-year bonds, what, that is, once a

year the state pays me what 13% per annum now for... and usually this is even done not once a year, but twice a year, bonds are paid in the form of interest, this is called interest coupons, well, in half, well, i’ll explain for our audience where it came from, that is, in the nineties, when these were securities or vouchers, then there really was such a coupon, you know, like a ticket in a cinema, sometimes even perforated the edge that was coming off the beginning. so that the coupon is redeemed, from then on this annual or semi-annual payment is called a coupon, naturally, what alexey said, when the payment is made twice, this does not mean that you are paid 13% twice a year, you are simply paid half of this amounts, that is, respectively, 6.5% in the first half of the year, 6.5% in the second half of the year,

now we have found out the composition, by the way, the coupon rate yield, we will fix that when the deadline comes... the end of the borrowing, then you get your full amount back , i i understand correctly, that is, let’s say, we bought a three-year bond from us today, now we’ll figure out what we bought, and once, let’s say, for simplicity, let’s once a year, once a year we get 13% after the first year, 13 % after the second year, in the third year we receive 13%, the entire amount that we invest. let’s say we bought it for a million, that is, we gave the state a mutual million for 3 years, it paid us 130,000, two, three times and at the end of the third year it returned the million, now we move on to a very interesting part, as i say , of the marlezon ballet called bond trading, here i will make such a small

explanation, or you should do about liquidity, why is all this done, why is it not just with bonds that i bought it and how... you said , they are still being traded, please explain what bonds are being traded, why this is done and how to work with it, like any security, it is often traded on the secondary market, the secondary market allows investors to enter investments and exit them, well, in different ways reasons for which we can’t even discuss much now, why - well, first of all alexey, for reasons of liquidity, because anything can happen, for example, i invest, investor, private, there is a state fund or just some kind of fund, here i have something happened. i didn’t plan to touch or touch these bonds for 3 years, but something happened, life happened, and i need these funds, that ’s what these bonds are for, as you said, they have circulation.

it was implied that we bought bonds at stage of placement, just when trading is going on, the price of bonds can change, and it can change either up or down, this primarily depends on the monetary policy pursued by the central bank. well, that is , in a different way, we all focus on the key rate, the key rate greatly influences , first of all, short-term bonds, which are from one to three years, and longer bonds, yes, they depend on the expectations of market participants for long-term inflation, most market participants look at what there will be inflation, they calculate it in different ways, model it, and it will depend on how much, what kind of profitability these bonds can give, well, i don’t physically buy or physically sell some instruments like futures, how does it work? no, why are you physically? there is such an index of government

bonds, yes, it can be used for a short position on bonds, a short position is when you play short on a bear, yes, or we have another option, in principle, the bonds themselves can be shorted these bonds in the federal physically, what do i need to do, that is, i need to take them to a mutual broker and sell them or what, well, that’s actually it. how much, how much, it depends on the length of these bonds, here is a three-year bond of 1 million, this is how much it can fall to if the rates change by about one

percentage point, that is, for example, the rate was 15%, but it will remain 16, then we can expect bonds to fall 2%. why? there is such a concept, very similar, not everyone understands, it is called duration in bonds, this is a special concept; with the help of this indicator you can estimate how much the price of bonds will change. if interest rates on the market change, well, by the time of maturity, i understand correctly that, in principle, if i close my eyes, squeeze, i don’t know, all the parts of my body, and just wait until the end of the term, as long as i have issued this bond, then these all the fluctuations in the market don’t bother me much, in any case the state will pay me back the nominal value that is written in the bonds, this plus my interest coupon income, that is, all that...

in the near future, in recent history, i don’t take into account now in recent history, of course, this is 2022, when government bonds sank quite strongly and the fall was about 20%, approximately, that is, nominal debt obligations worth a million cost 800,000, and those whoever took the risk bought them, they earned money, well, of course, to be repaid, because the state is fully paying off, there was no such thing, there was no default, yes, the state is fully paying off its obligation, that is, they also received coupon income, this bonus. risk 20%. moreover, mikhail, we started the conversation with the fact that this is smart money, yes, when there are such falls in the market as in 2022, 2014,

this is precisely the case when large players begin to actively buy such securities, just to get not only a coupon, but also to get the delta between the purchase price and the par value. why not in the action, alexey? after all, stocks are also falling at this moment. why are bonds called market fundamentals and smart money? because the debt market to no small extent predetermines the value of the capital market, the debt market is the market for gang bonds, as we say, everything in the world of investments is interconnected, interest rates set by the central bank, inflation expected by market participants, bond yields, which should be, if we are talking about government ones, close to inflation, and thirdly, the cost of share capital also depends on these very parameters, what is most interesting is that this is not how much... people understand, but it really is so, and knowing what the yield on government bonds is, knowing what risks you bear in stocks, you can calculate what the yield should be in stocks,

exactly. to say that the so-called fixed income or fixed income in english, it is applicable specifically to bonds or to gangs or to treasuries, as they are stuffed, and there are very many, but if you do not speculate with them, that is, if you do not play games, buy cheaper, sell more expensive, if you really bought them they are lying there. in your portfolio, then it is fixed the same income, fixed, because you receive an a-coupon, and the state is responsible to you for paying the full face value of this debt security at the end of its validity period, because in shares no one bears such responsibility to you, and shares - these are not debts, after all, we started with the fact that a bond is a debt, and any debt is repaid in the denomination in which it should be repaid, yes, well, with

the level of risk that you are ready for. identify this issuer, but in principle here we are you know that government debt is that very basic level, yes, well , it’s clear, as i say, for a hundred percent return only to it, and upward, but in principle you must always determine some kind of fixed return, fixed risk, here it is accepted as zero for a certain category of states, i think that for rubles i think that the risk of the state is accepted as zero, we have recent history, when in the year ninety-eight only. yes, and here it must be said that people often confuse, if we remember ninety-eight, it is necessary to very clearly separate the monetary policy that the central bank pursued before the crisis of ninety -eight, after the crisis of ninety- eight, since 2014, when free circulation was adopted, these are actually big milestones in the development of the russian market in that including the central bank, which is why we compare the default of 1998 with

all the events that followed it. well , after all, we didn’t have any events after either hamburg or hamburg accounts there are no topics even closely related to the word default, i’ll just say it again, i’ll just say it so that people can understand why there are quite a lot of interesting literature articles about the crisis of 1998 and the default of 1998, if anyone remembers, then the dollar was worth 6 rubles, and i remember, and this was very much targeted by the central bank, targeted, that is, the exchange rate was actually set. and there are different calculations, after the default the dollar immediately flew by 20 and a kopeck, then grew to thirty, ultimately, but it was shown that if these events had not occurred, that is, there had been no targeting of the ruble exchange rate, then already at 17 rubles per dollar there would have been no problem with repaying the public debt, we are talking about the fact that the foundation the stock market is still a debt market and a bond market; in terms of volume, how comparable is it, is it not comparable with the stock market, is it

one to one? are there any assessments like this? yes, it is actually the debt market that significantly drives the capital market, and in any country, in russia and in the united states and so on. now i’m afraid to say directly exactly, but this is at least one in five, or maybe one in ten, well, five to one on the contrary, one, 10 to one, a good estimate, indeed this is the foundation that probably determines the movement of money in shares in other instruments, it turns out that if we have explained in such detail... sufficiently what depends on the price, it turns out that really the most interesting time for buying is when the bonds have sank in price, that is, when someone is afraid of something , yes, like this, well, for example, in the 1910s i always had before my eyes a potential emerging default of greece, i will explain for our audience, accordingly, naturally, there were debt securities, issued under the guarantee of this country, then greece went

to the european union to pay money and... then it was in question whether they would give them money, but not, and you probably also remember that the cost of bonds, that is, the cost of government debt bonds of greece, fell up to 20% from face value, that is, a paper worth a million dollars could be bought for 200,000, the state owed you a million for it, but no one knew whether this million would be given to the state or not, now what is the situation on the debt market of russian securities, russian debt, because this is what i hear... i think that this market has sank and bonds are, well, practically at their minimum prices, is now the time to buy or can we wait a little longer? bonds are now in a very good position and they are really is it worth buying, am i already those who are in the cache now? of course, yes, in those who are in the cache, and not necessarily, by the way, in the cache, yes, perhaps it’s worth looking, if you have positions in shares, even sub-sell, reduce this position, buy bonds, because fix the profitability at 13 % per annum for...

for the long-term horizon is a very good result, but if we talk about my personal assessments, i believe that long-term inflation in russia will be approximately 8-9%, and today the state essentially allows us to earn 4%. real profit, that is, profit for minus inflation, and this is not a very common story when we can get something like this from the state, so i think it is very interesting to buy bonds now, i also think there in my portfolios and reduce these positions in stocks to buy bonds, now is a great time to buy, in fact, the second question is yes, how much should you buy now or wait a little, a bond is not a stock market, it does not change very quickly, you can start buying now and even if a little... it will come again price to continue them, yes, that is, the standard principle, you don’t need all the money at once, but gradually, yes, gradually build up your portfolio, and bonds do not react very quickly, yes, to such changes, yes, of course, events ala 22 2014 are quick reactions, yes, but it is after such

quick reactions that a good moment of buying begins, all professional investors actively use this, now is a very good time to start buying bonds, that is, government bonds, into your investment portfolio... you can’t guess here, yes, it’s impossible to guess, don’t tolerate drawdowns, you know how some people regret it, oh, i didn’t buy it for everything, but there, well , it’s not called an investment, a lottery, but they will increase in price, great, that’s good, you this is how to gradually build up your portfolio with little steps - this is correct, and i note that

now our central bank rate is 16%, and please note, our dear viewers and listeners, that it is not the banks, when they give you 16%, they are not giving you 5 years and not for 10 and... not even for a year, because everyone is waiting for a reduction rates by the central bank in september, as you said, well, in the second half of the year, and ilvirakhizad nabiulina said that we should expect a reduction no earlier than the fall, so banks, realizing that the rate will fall, give you deposits at 16% only for six months, then interest rates lower, and you can buy bonds now, not only are they cheaper than face value, that is, how much is now acceptable from 100%, how much we are talking about now. well, there is from 80 to 95 depending on how that is, in fact there is already almost 10-15% you can make money only on the fact that if you buy a bond and are not going to speculate on it, you just bought it and alexey put everything in your portfolio, that is

, the state owes you, it will pay, well, if something doesn’t happen, yes, we accept this zero risk that nothing will happen to our state, it will pay off its obligations, plus it will also pay you a coupon every year. you can find all episodes of the easy money podcast on the website of the first channel 1tv.ru. what about corporate debt? corporate debts - this is an interesting thing, but still, it seems to me, it is less useful for private investors. on the one hand, corporate debts provide greater returns. if it’s a credit issue, well, it depends on the credit quality of the issuer, or, in other words, on the issuer’s ability to return the money. if we say that we are talking about the federal government bond.

default, but that’s what it is, by the way, that’s when we come across terms such as what is technical default, technical default is

a procedure, essentially, when a company cannot be in partial default or technical paid the due coupon on time , a technical default begins, that is , 30 days are given for the company to fulfill its obligations under this coupon, if it does not... fulfill this obligation within 30 days, a real default occurs, why? because bondholders can present these bonds for redemption? well , in this case, the whole procedure comes into play, you can’t just say that, to everyone...

in what order will the money be first, well, there is a priority order for bankruptcy payments, and well, now we won’t go that deep to dig deep, but the point is that bonds are not the first priority, and it is still unknown how much will be left after all these queues of payments for us to invest for those who are going to, well, i’ll say it well, chase after this additional 2% per annum, there is no buy government debt at 13.5, and buy corporate securities there with a yield of 15-16. they need to figure out what line they stand in

as investors if something happens, but in principle, alexey, i understand correctly that for small investors, private, it makes sense for them to trust this same pool of large investors who, in any case, while fighting for their own rights, they are actually fighting for the rights of everyone, including minority shareholders, that is, for everyone who owns this class of bonds, and there have been examples in recent history, in zero, in the tenth years... such defaults, and not technical ones, when there was a delay in the payment of the coupon, i don’t know, for a month, or even for six months, god bless him, it was the refusal to fulfill their obligations on large scales, even myself took part in this when i bought bonds from an energy company, then i was asked to replace the bonds that had gone into default with other bonds, but another interesting thing is that if we have already touched on the topic of corporate debt, i would say there is another important aspect that should be taken into account.

why am i suffering here with these shares, i’m worried , but i won’t, i’ll even hope that nothing will happen, i’ll buy there, well, not ten-year, three-year papers, the yield is these 15%, that’s me. or 14, they suit me, i won’t be there, as they say,

worry about what to do, this is what we need to do physically, well, first of all we have to open a brokerage account, yeah on the stock exchange, fixed, open a brokerage account, fixed it, yes, put money there, go to the terminal, although now we don’t even need terminals anymore , i understand correctly that now this is a seamless so-called story, that if you have a bank account, then you can almost remotely open an account with a broker, and you are verified through government services, and if you have... if i have a bank account i’m already verified there as a citizen , user, taxpayer, most importantly, the entry is confirmed by government services, then i just do it online with leading brokers, they definitely sorted out the banks, even yes, yes, so, we opened a brokerage account, deposited money there, just from a bank account. seamlessly, remotely, without getting up from the couch, then i can ask

my broker, listen, dear comrade there, tell me what opportunities there are for a year, two, three, based on the fact that i listened to khanov and butcherova, they talked about some government bonds there, brokers provide such a service of selecting bonds, i think that it is already paid, mikhail, that is, but here you can take a simpler route, in these various applications, and large banks, there is an opportunity to look at the ofz. this graph is one, it demonstrates some semantic things very well, it is built on bonds of the federal loan 211, which is so alexey, let’s do this, here i am, as an engineer minus a physicist by training, i’m used to starting with a coordinate system along the abscis axis, what we have on the abscis axis or the x axis

are dates, dates, this is time, respectively, from the year 13 to the twenty-third, on the ordinate axis we have what, this is the investor’s capital, which is well... a standardized unit, well, that is, we invested conditionally how many times our investments will grow if you and i buy such and such a bond for one, we started looking at how many times from one , we started looking at how much we got from one, that is, this is the conventional million, then i will translate, so the red line is that yes, let's start with blue, this is very interesting, the blue straight line seems like a straight line, this is the theoretical profitability of buying our bonds, how much could we earn by buying these bonds on this time horizon? they wouldn’t hesitate, they would just buy, they wouldn’t just wait for repayment, fulfillment, they would receive an annual coupon or once every six months, and accordingly, at the end of the term, the state or someone would pay off their obligations, so yes , now the red line, it’s just like yourself carried specific bonds, here is ofz 2621, yes, taking into account just look,

i specifically took the crisis of 2014, they sank, and the person received coupons, but did not reinvest them in bonds and... we look at the red graph, this is how much a person would earn in the end, well, that is, in 1, 6 times, that is, in 10, almost 10 years, a person would earn 600,000 from a million, that is, in 10 years he would have 1,600, yes, the green graph is much more interesting, this is exactly the case when a person receives a coupon and buys again they have the same bonds, that is, all the time increases yes investment in these bonds and we see that. we are very close to that theoretical price, yes, which we planned for the maturity date, this point, which is expressed in such a bright color, this is just that terrible word, all professional investors know well that this point is with a very high probability you and i will get the result much earlier, without even necessarily holding the bond until the end

of the maturity date, and we see that even in this example the bonds brought us even better results by this time, so there is one more... this is the same story, but according to the scales we have at the same time times of capital, yes, yes, yes, absolutely true, other bonds, but this is not the point, the direct one is theoretical, the red one is accordingly also with reinvestment and the coupon, here is the green line, inflation, yes, look how well we see that over the long-term horizon government bonds really either correspond to inflation, or even sometimes beat some gaps.

the largest holders of these same bonds are banks, including state-owned ones, yes, they buy not only from the point of view of profitability, they can use these bonds for various transactions, attracting short-term capital from the same central bank in the form of collateral and so on, so if tomorrow the state does not pay for these papers, the banking system will not exist. the abbreviation dia, which you mentioned, is a deposit insurance agency, this is the same 1.4 million rubles that the state obliges us in any bank where. would you not place your deposits if this bank participant in the deposit insurance system, then the deposit insurance agency will fulfill the obligation, but the state will compensate you 1.4 million in each bank, so here of course.