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Subject:  My Recent Buys Date:  8/20/2012  3:28 PM
Author:  trader2012 Number:  34336 of 35924

It’s no secret that interest-rates are moving up, that credit-worthiness is moving down, and that it’s getting tougher to find bonds worth buying. So now is as good a time as any to do a quick retrospective.

Over the past thirteen months, I initiated (or added to) 124 positions ($239k face) at a cost of $204k, with a present value of $201k, for an average CY of 8.6% and an average YTM of 12.1%. The credit-ratings range from double-AA to double-CC, but most are spec-grade, because that’s where the opportunities have been. Of them, none have defaulted so far. But I do expect that some losses will occur.

OTOH, my typical position is small, and the damage (individually and cumulatively) will be tolerable. In other words, my benchmark is an 8% return before taxes and inflation. If I achieve that, then I break-even, which is the only thing I care about, i.e., being able to move my purchasing-power forward against the time when I might need it. Though this portfolio generates a lot of income, it isn't income I need to meet current-expenses. It's just a passively-managed (aka, held to maturity), rainy-day savings-account that enables me to lower my overall, financial risks.



Traded Amt Paid Value P/L CY YTM MDY SP
08/11/11 5000 $3,623 $3,306 -9% 12.1% 17.4% Caa1 B-
08/11/11 2000 $1,754 $1,960 12% 8.7% 10.0% Baa3 BBB-
08/11/11 5000 $5,048 $5,475 8% 7.5% 7.4% A2 -
08/12/11 3000 $2,820 $2,927 4% 7.1% 8.4% B1 B+