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Strategies & Market Trends : Strictly: Drilling II -- Ignore unavailable to you. Want to Upgrade?

To: Roebear who wrote (3779)	11/9/2001 1:09:58 PM
From: isopatch	Read Replies (1) \| Respond to of 36161

Exactly. W.S. brokers in house trading depts, hedge fds AND<G> a few others since mid-Sept been burnin' the DD midnight oil going after attractive "market inefficiencies" in the long ignored and bubble era irrelevant (because profits were infinite<g>) medium quality long maturity corporate fixed income securities. Perhaps the most contrarian investment idea I can possibly think of for capital gains addicted, bubble conditioned investors. It's time to unplug from that matrix my friends!! Every time there's been a major recession, interest rates stage a major decline. And Treasury Bond, Notes and Bills lead that decline. There's a good reason for that. 1. Investors are slow to see major new trends and 2. Default fears can spread with a global "event" like Argentina or a major scare in our private credit sector like the Enron mess. So, the 1st phase down in interest rates always produces a huge spread between treasury and long maturity corporate debt securities. That yield spread will later narrow significantly. Therefore if you've invested through recessions cycles before, as I have, you also realize this temporary yield spread we are now experiencing creates some excellent intermediate to long term investment opportunities for conservative captial gains + high current cash flow in corporate preferred stocks and bonds. We've already seen cash flowing out of commodity related investments with occasional counter trend rallies ever since Sept of 2000 and again at the other major patch top in Dec/January. And almost all commodities, goods and services prices continue to fall as the US and global economy continue a rapid contraction. A lot of smart captial that left the patch and other commodity sectors parked in MMF and other short term cash equivalents for months. But recently, it's increasingly begun to find its way into investments that MAKE DEFLATION WORK FOR YOU. Meaning the investment class best known for its price appreciation during recessions. Even more so, as disinflation turned into deflation since 9/11. Meanwhile, W.S. shills like the dood I ridiculed in the last post<g> will continue to try every trick in the book to keep YOU folks - the public - OUT of the emerging investment opportunity - A nice bull run in corporate fixed income securities. Remember their job is to try to keep YOU out until their firms favored mega buck private clients get a full plate. One other important thought. But be careful out there people. DD is a bit different but still very important when buying fixed income securities. My approach is to stay away from junk i.e. BB and under rated stuff, unless you REALLY know the financials are improving and are comfortable with the higher default risk. We all have different risk profiles, as well as holding periods and trading styles. I'd be glad to provide a list of some preferreds and debentures that trade on the NYSE. And no I don't own them all<g>. But my choices reflect my moderately conservative approach and aren't suitable for all readers. For those who don't enjoy digging for bargains with their own research skills, as much as I do, listed closed end fixed income trusts are a good choice. And the wheeler dealers out there might prefer fixed income options or futures. Yes, gold will also benefit mightily from deflation. But why not hitch 2 horses to the wagon instead of putting all your money on just one?! JMVVHO, Isopatch