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Strategies & Market Trends : A.I.M Users Group Bulletin Board

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To: rgammon who wrote (17017)	10/6/2001 9:09:18 AM
From: OldAIMGuy	of 18928

Hi Robert, Sounds like you've made a good play here. In my experience, the bond of a company falls after the common. This is because of the support the yield provides. Once a certain level of confidence is given up, then the bond descends quickly. As you've noted, this pendulum can swing too far as well. Should someone want to buy the company, they'll have to honor the debt with either continued payments or redemption of the bond. That's a win/win for the holders of the debt. Keep us posted on this activity. I've followed similar strategy in the past and still hold many of that sort of bonds even though the companies are no longer publicly traded (because of acquisition). As part of the strategy, I've usually bought some of the common stock also. Then I AIM the common while collecting rent from the bonds. Makes for a wonderful total return. Best regards, Tom

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