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Strategies & Market Trends : Value Investing
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To: Rawnoc who wrote (35451)9/25/2009 6:08:07 PM
From: MCsweet  Read Replies (2) of 78748
 
ROAIK,

I had a lengthy reply, but I screwed it up, and I am tired to redo it, so I'll cut it down.

I looked up the 2011 notes on Bloomberg and they are rated at CCC- and trading at $0.50 on the dollar with a yield of 59%. That implies non-zero risk of a bankruptcy in the next couple of years. You might feel like you have a better grip on this than the bonds guys, but I don't have that much faith in my analysis abilities.

So maybe the upside is 4x, but downside is pretty big if things turn south. Not a no-brainer for me because losing money gets more painful as I age. I might do it as a spec.

Thanks,
MC
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