A Journey from Vegetarianism to Burger Enthusiast: A Personal Prelude to Bond Investing

Growing up in India, I was raised in a strictly vegetarian household. The idea of consuming meat was not just unfamiliar but also culturally and morally foreign to me. This dietary preference stayed with me until I moved to the United States at the age of 18 to pursue higher education and tennis. At the time, I was a skilled tennis player, but I lacked the physical strength required for the fast-paced, power-driven style of college tennis. After a humiliating loss in a Division 3 match, my coach suggested that I needed to build strength, and for that, I needed more protein in my diet.

The options presented to me were straightforward: soybeans or meat. Both seemed unappetizing in their own way. On one hand, soybeans were a staple in my vegetarian diet, but I was told it wouldn’t provide the kind of protein density I needed. On the other hand, meat was a complete departure from everything I had ever known or believed in. After much deliberation with my housemates, I decided against trying meat, convinced that my body and taste buds wouldn’t tolerate it. Little did I know, this decision would be short-lived.

Curiosity and determination eventually got the better of me. One day, I rode my bike to the nearest Burger King and took my first bite of a burger. The rest, as they say, is history. That moment marked the beginning of a lifelong love affair with burgers. Over time, I discovered that a diet rich in animal protein—specifically beef—was not just a personal preference but also a practical choice that improved my physical performance, particularly when I transitioned from tennis to ultramarathon running.

Fast forward to today, my family and I have become self-proclaimed burger connoisseurs. Whether we’re in a bustling city or a small village, we make it a point to track down the best burgers in town. My kids and I even grill our own burgers at home, perfecting the art of balancing flavors and textures. This shared passion for burgers has become more than just a dietary preference; it’s a bonding experience that brings us joy and satisfaction.

The Four-Point Checklist for a Perfect Burger

Over the years, I’ve developed a simple yet effective four-point checklist for what makes a truly great burger. This checklist has become a guiding principle for my family and me as we explore the culinary world of burgers. First, it all starts with the quality of the meat. The highest grade beef, free from additives or hormones, is the foundation of a great burger. There’s no substitute for freshness and purity when it comes to the patty.

Second, the cooking process is equally important. A burger needs to be cooked just right—whether it’s rare, medium, or well-done, it should never be overcooked or underseasoned. The perfect sear on the outside and the right level of doneness on the inside can elevate a good burger to an extraordinary one.

Third, the toppings and sauces are where creativity and balance come into play. Fresh vegetables like crisp lettuce, juicy tomatoes, and sharp onions add texture and flavor. The sauce, whether it’s ketchup, mustard, or something more adventurous, ties the whole dish together. Freshness and simplicity are key—too many toppings can overwhelm the natural taste of the beef.

Lastly, the burger should be served hot, straight off the grill. There’s something irreplaceable about the experience of taking that first bite when the patty is still sizzling and the flavors are at their peak. For those familiar with Southern California, In-N-Out Burger comes remarkably close to hitting all these checkpoints, offering a high-quality product at an affordable price with unmatched convenience.

Applying the Burger Philosophy to Bonds

Just as I’ve developed a checklist for the perfect burger, I’ve also learned to approach bond investing with a similar mindset. Borrowing a concept from my former boss, Bill Gross, known as the “Bonds and Burgers” philosophy, I’ve crafted a four-point checklist for what makes a good bond investment. This approach is rooted in the same principles of quality, balance, and timing that guide my pursuit of the perfect burger.

First and foremost, the foundation of a good bond investment is high-quality credit. When you buy a bond, you’re essentially lending money to an issuer. No amount of interest can compensate for the risk of default. Today, despite some speculation that corporate bonds from companies like Microsoft might be safer than U.S. Treasuries, the U.S. Treasury remains the gold standard for credit quality.

The U.S. government’s ability to print money, its status as the world’s reserve currency, and its unparalleled military and economic power make it the most reliable borrower in the world. While concerns about the growing U.S. debt are valid, the likelihood of a default is negligible in the near term. As an investor, I’ve learned to tune out the noise about deficits and focus on the fact that U.S. Treasuries are the safest, most reliable ingredient in the bond market.

Cooking It Just Right: The Importance of Yields and Timing

The second point in my bond checklist is about yields—equivalent to cooking a burger just right. Just as an undercooked burger can be disappointing, bond yields that are too low fail to compensate investors adequately for the risks they’re taking. A few years ago, when central banks were aggressively buying bonds, yields were historically low, even negative in some cases. At the time, I argued that bonds were undercooked and made the case for shorting the bond market.

Today, the picture is very different. U.S. bond yields are among the highest in the developed world across the entire yield curve. This healthy positive yield, combined with an upward-sloping yield curve, provides both “carry” and “roll-down” benefits. In simpler terms, investors not only earn the yield but also see the value of their bonds increase over time as they roll down the yield curve. This is a clear sign that the market is finally offering a proper “risk premium” for taking on duration risk.

For my own portfolio, I’d ideally like to see another half a percent in yield on the ten-year Treasury before I feel like it’s fully cooked. However, the two-year and five-year notes are already at levels that make them attractive. I’m taking advantage of those opportunities now, knowing that even if I don’t time the market perfectly, the returns are still compelling.

Adding the Right Toppings: The Role of Additional Spread in Bonds

The third point in my checklist is about adding the right toppings—equivalent to seeking additional spread in bonds. In the bond market, spread refers to the extra yield you earn for taking on more risk. Right now, the agency pass-through mortgage market is offering an attractive spread of an additional half percent to one percent. This market, which involves mortgages guaranteed by Fannie Mae and Freddie Mac, is not only highly liquid but also effectively backed by the U.S. government.

The extra yield in this market comes from the prepayment risk tied to high-interest rate volatility. When interest rates fall, homeowners tend to refinance their mortgages, which can result in the early return of principal to investors. While this creates some uncertainty, it’s a risk I’m willing to take for the extra yield it offers. On the other hand, corporate bonds are currently priced too tightly for my liking. While they offer a higher spread than Treasuries, the additional yield isn’t enough to justify the added risk. Corporations don’t have the luxury of printing money or taxing their citizens to meet obligations, and that makes them inherently riskier than government-backed investments. For now, I’ll stick with the mortgage market as my “special sauce.”

Timing the Market and Building a Resilient Portfolio

The final point in my checklist is about timing—knowing when to pull the burger off the grill. Unfortunately, timing the market with precision is nearly impossible, even for the most seasoned investors. Instead of trying to predict exact turning points, I aim to be within 10 to 15 percent of where I think the market is headed. This approach allows me to build in a margin of safety and avoid costly mistakes.

If I can lock in a return of around five percent annually in high-quality, short-duration bonds, I’m content with that. The point of owning bonds isn’t to hit a home run; it’s to have a safe, stable investment that generates positive returns with minimal risk. Just as a good burger doesn’t need to be fancy to be satisfying, a good bond portfolio doesn’t need to be overly complicated to be effective.

Conclusion: High-Quality Bonds and the Convenience of Treasury Direct

In conclusion, while there’s always a case for waiting and observing before making investment decisions, the current bond market looks appetizing enough to take action. The combination of high-quality credit, attractive yields, and additional spread opportunities makes this a good time to invest in bonds. And just as In-N-Out Burger offers convenience and affordability without compromising on quality, Treasury Direct (www.treasurydirect.gov) provides a seamless and cost-effective way to purchase U.S. Treasuries.

To me, the bond market right now is like a perfectly cooked burger—hot off the grill, juicy, and full of flavor. It’s not perfect, but it’s satisfying enough to enjoy without overcomplicating things. Whether you’re a seasoned investor or just starting out, high-quality bonds can serve as a reliable foundation for your portfolio, allowing you to focus on the more important things in life—just like how a great burger lets you savor the moment without worrying about the details.