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Subject:  From the Trail (April 26, 2009) Date:  4/26/2009  3:47 PM
Author:  junkman02 Number:  27186 of 35593

I’m totally sympathetic with bond beginners not wanting to jump into a junk bond situation like Hanson’s 6.125% of ’16 [and its 31%YTM] whose case for investigating further Scott laid out in a very journeyman fashion. But at the opposite end of the credit-worthiness spectrum are solid companies like Toyota that don’t have American, short-term, “this-quarter’s numbers” planning goals. Japanese companies think 50 years into the future. That’s why, temporarily troubled some of them are, I don’t hesitate to buy long-dated bonds from the better of them.

Exactly eight days ago, after market close, I stumbled onto Toyota’s 0% of ’37 priced to yield 7.06%. I knew instantly that they were under-priced for this market and for this interest-rate environment. So I scrambled to grab five on Monday morning. My entry was 14.747. Today, five days later, I’m being marked to market at 15.4