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Strategies & Market Trends : Value Investing -- Ignore unavailable to you. Want to Upgrade?

To: Spekulatius who wrote (32798)	11/18/2008 10:39:20 PM
From: Jurgis Bekepuris	Read Replies (1) \| Respond to of 78704

Well, I sold GNW for about a wash after the debt got downgraded but GNW borrowed from revolver to pay that particular bond issue (2009 May maturity). I was not comfortable holding it anyway. I sold MS bond for a small gain. I still hold AIG debt which right now has traded about $.70-.73 on dollar vs my purchases at $.60 and $.52. Not easy to sell it at that price though, I think the bid may be around $.67 or so. Almost all A rated bonds with 20+% yields have disappeared on Fidelity. GNW long maturities (2014 or so) are still available, but I don't think I want to risk them without government guarantees. Some AIG subsidiary debt still shows up, but I am not sure if it is more attractive than stocks. Considering some stocks could triple without being overvalued, even 20% "guaranteed but risky" bond return is becoming not very interesting. I would not buy a bond fund, since I have no clue what's in it, but that's just me. :)

To: Spekulatius who wrote (32798)	11/18/2008 11:11:05 PM
From: E_K_S	Respond to of 78704

Hi Spekulatius - I have found that the commissions are quite high through Schwab to trade individual corporate bonds unless you buy $50K or more of the issue. The bond desk also make their money on the bid/ask spread which are typically at the high end (ie 5%) again on large orders they may split the middle. You might look at individual preferred shares as I did quite well with a hybrid preferred offering that had a guaranteed payoff after two years. They were 7.5% Albertson preferred shares which were paid at the coupon value early when the Super Value acquisition was announced. If you find anything interesting, update the thread as I am also interested in value priced (but low risk) corporate debt. My credit union pays a pretty good rate at 3.5% but the majority of my fixed income is held in the Vanguard GNMA. EKS