When I was on honeymoon in Venice, I spotted a pair of Chinese dragons, one chewing a toenail and the other picking its nose. Smart shop, Grand Canal – my wife, Jane, and I set an upper limit on what we’d pay. We later walked out with the dragons having written a cheque for slightly over four times our upper limit.

That’s the problem with the markets today. How high a rating can a fixed interest security fetch? Ten years ago, the answer might have been a 4% yield. We doubled our money in the government bond known as a war loan, selling it triumphantly at 80. It was redeemed sometime later at 100. Today, it would be trading at around 705 if it still traded as an irredeemable. How about Tesla – a great story, going to the moon – is $600 about right? If yes, then you missed the latest double.

Look down the other end of the telescope – how much debt is too much debt? There has been a relentless rise in levels over the past 50 years. As yields have pushed higher, they have done so to a chorus of ‘they have now reached an unsustainable level’. In the first division currencies this constant cry has always been wrong, but the crickets on the hearth are still chanting, ‘emergency, emergency’.

The more one understands what is going on, the more likely it is that one will have taken action to reduce risk or bet against the continuance of the status quo. The current conventional UK Treasury of 2071 was issued three years ago on a yield of 1.625% (Bloomberg). That equated to a yield to a top rate taxpayer of 0.89%, a yield that therefore becomes negative in real terms with inflation at under 1% (Bloomberg). I used to run a (mythical) portfolio for the man who I secretly hated. The art was to make it look like a sensible portfolio, but the sole purpose would be to lose money for him.He would have had lashings of this 2071 – but in early December this security was trading at nearly 150, yielding, gross, 0.5% (0.3% after tax [Bloomberg]).

Is it a sell, I ask myself, at 150? The perverse thing about something trading far above its apparent upper limit is that it’s just as likely – perhaps more so – to put on another 50% gain. Value is like beauty – in the eye of the beholder.

I am rather proud of shutting up about inflation in my previous investment review, when it was the key issue of the day. Do we feel vindicated that it is again an issue? Not yet. The index-linked gilts – of which we have a prodigious amount – trade enormously expensively, but they are still good value. I describe this phenomenon as the overlooked Canaletto in the Bond Street Gallery – priced much too highly for what its owner thinks it is, but still a bargain for what it actually is.