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Strategies & Market Trends : Z Best Place to Talk Stocks

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To: c.r. earle who wrote (16630)	10/6/1998 8:27:00 AM
From: Larry S.	Read Replies (1) of 53068

Chat: Hi Yield Bonds: Different subject than usual, but there is something happening in the world of high yield bonds (AKA Junk Bonds) that is very interesting. High Yield bonds usually trade at about a 3 point premium to treasuries. In the latest flight to quality, with the emphasis on quality that has driven the treasuries to these record lows, the spread has widened to almost 6 points !!! That means that junk bonds are yielding close to 6% more than treasuries. Such extremes in the past have been indications of a turning point. When Milken left Drexel, and was indicted, the spread was about this or greater, and it wound up being one of the great buying opportunities in the junk bond area. If one were to venture into this area, I would suggest doing so via mutual fund high yield bond portfolios. And it may be early to do so, but when she turns, she will turn big time. larrry

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