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By Paul Regnier, Money

Warren Buffett made a commonsense call in early 2009. Bonds were the new bubble, the famed investor said, comparable to the recent dotcom and housing manias. The yield on a 10-year Treasury, a standard benchmark for the market, had fallen to 3%, less than half the previous three-decade average of 7.4%. Bond yields fall when investors pile in and push prices higher. Conversely, investors stood to lose money if bond interest rates moved back up to normal. At 3%, where else could rates go but up?

Flash-forward six years. Treasury yields are …2.1%, and it turns out sideways and even down are real possibilities for rates. That’s proved to be a hard lesson. In 2011, Bill Gross, then manager of Pimco Total Return, the planet’s then-biggest bond fund, sold all…

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