Bond investing is like making a ho a housewife - pick big spreads and hope they tighten. When you see a tightening spread, extend your duration
be careful… u might get charge with excessive management fees
be careful… u might get charge with excessive management fees… 
During the exam, Cobb Douglas was asked by a proctor to meet for a private exchange in the bathroom. She proceeded to show him her box spread and Cobb’s semi-strong form went to an upward slopping forward curve. After going long-short on his enhanced index for a short duration the momentum effect caused Cobb’s control bias to expire deep in the money. Needless to say, Cobb was embarrased by his human capital volatility but even worse, the proctor showed regret aversion as she could have been fully integrated with the L2 candidates, Singer and Terhaar.
Hilarious 
With years I switched my preferences from single-stage model to multi-stage model and my duration profile extended, I also started to experience multiple irr problems with conflicting decisions, now I associate myself more with alpha, rather than beta. However excessive risk taking can damage the strong positive slope of my CAL.
My persistence factor is very high
Too many spread pickups and extended durations outside your asset (home) base especially with poor credit quality bonds might hurt your immunization strategy and make you a victim of survival bias.
Best one yet. Challengers, good luck…
During the break between exams, Cobb Douglas was hitting on some Covered-Call-girls in the lobby. At first, they weren’t all that interested in his weak-form downward sloping demand curve and liquidity preference. Out of nowhere, through open market operations, Mr. Douglas received a shot from his buddy, Fed, and was able to support a strong-form upward sloping supply curve. The covered-call girls didn’t want to jump in his market, and needed to perform their due diligence. They began by administering a Chi-square test to check on the variance of his supported supply curve, it was determined to be suitable for them. They followed up with an F-test to check on the variance of his supply curve and the variance of their efficient frontiers. This test was successful and they began to show him their naked puts. They advised Cobb that, when together, they prefer the normal backwardation position in their z-spread in hopes of receiving some positive roll-yield. With all the excitement, Cobb had covered his short position and paid an early liquidity premium for his short duration. The covered-call girls began laughing histerically, looked at eachother and said “Type-2 error” and realized they failed to check on his safety-first criterion which would’ve pointed out his excessive short-fall risk. Without hesitation, Cobb looked at the covered-call girls and said, “I didn’t want to give you your normal backwardation and positive roll yield, y’all got some stinky OAS-spreads with an over-allocation of STDs, short-term debt that is, which is susceptible to diminishing marginal returns. You aren’t worthy of this debt service coverage ratio!” He then tucked away his flat yield curve and went on his way.
HAHA. That is good stuff.
He did not go on his way until she performed what iscalled the “bear-naked butterfly spread”. It got pretty flamy…
and as the old adage goes… when the blood is flowing in the street, its time to buy
This is great, and I love the fact that you can tell what Level a candidate is by what they say.
+1
Cob Douglas got an unexpected inflation when he saw Miss Represent and Miss Conduct. He ignored the prudent man rule and used Porter’s five forces to cash drag the low-yielding twins into the hedge. He screamed “Alpha Q Tobin’s!” and broke their resistance level. He was their first in first out! He inverted their curves. He WACCed them on their crack spreads. He straddled one and strangled the other. His anchor could barely adjust to Miss Represent’s tight money supply but he still leased her for a long time. He allocated all over her fat tail, then swapped her for her counterparty. He put his index in Miss Conduct’s two-sided tail. At this point, he was so volatile, his log-normal distributed deep in the money. He had gamed their TWAPs and satisfied his inelastic demand… but he was already planning a contango in the future.
Oh, I like this one! “He allocated all over her fat tail,”. Good work rec
You should multiply the correlation times your Sharpe Ratio, not hers.
Haha I was thinking the same thing to myself when I read it, but didn’t want to mess up the flow of the story telling. Whatever way gets her added to the portfolio is probably the way it should be multiplied
Monte Carlo was into alternative investments. He positively loved skewing Cobb Douglas’s backwardation whenever his inflation perked up. He used to handle Cobb’s leading indicator to watch it go up. His index would plunge into Cobb’s firm opening price. On these occasions, Cobbs felt like a butterfly spread across the X-Y axes. But in spite of his conservative bias, Cobb would always let Monte Carlo misuse his corporate jet. Eventually, both would have massive implementation shortfalls and fall asleep, chainlinked and satisficed.