What High Yields?
forbes.com
The average yield for a speculative-grade debenture with a ten-year maturity is less than 6.5%. Marko Budgyk, managing director of Helix Investment Partners, says that 63% of the junk market trades above call (the price at which the issuer can, at its option, redeem an outstanding bond), and 80% of the market trades above par. "Corporate credit isn't just overvalued," Budgyk protests. "It has reached bubble-like levels."
Separately, in the spirit of the new year, I resolve to publish no more unprofitable ideas, such as selling short the Treasury market at the the wrong juncture (see my Aug. 11, 2003 column). The two mutual funds I suggested for this, Rydex Juno and Profunds Rising Rates, were down 5% and 6% at year-end. Instead I pledge to impart only profitable ideas, like buying gold stocks (Feb. 17, 2003) via the First Eagle Gold and Tocqueville Gold funds, up 30% and 50%.
LMAO |
