The Motley Fool Discussion Boards
Investing/Strategies / Bonds & Fixed Income Investments
|Subject: Re: Vulcan Material’s 7.15’s of R||Date: 1/31/2013 7:36 PM|
|Author: globalist2013||Number: 34744 of 35363|
however, interestingly enough though, for those scenarios where the equity was just placed into your lap due to reorgs, the scenarios have been very good like with CIT group and US concrete, gen growth props, etc.
When equity does come my way due to a re-org, I blow it out as fast as I can. I made good money on K-Mart's BK selling the shares of Sears I received. With other re-orgs, I was just cleaning up my books by getting rid of the shares that came my way. OTOH, as I wrote nearly FOUR years ago (in Post #27235):
“Actually, an interest in getting involved with stock investing has been there a long time. E.g., I bought Pep Boys’ bond back in ’01. My scan turned up the bond on the basis of its yield. So I pulled a stock chart. The stock had just moved off a bottom around $4 and was now at $7. So I knew from that that the market favored the company’s prospects. I knew nothing about the auto parts business. So I asked a co-worker who knew car repair from the mechanic’s viewpoint. His opinion was favorable. So I bought the bond and made good-enough money, probably 12%. But had I bought the stock at $7 and exited it when the bond was called (giving me a comparable holding-period), my return would have been 35% ann.
I can name dozens of these pairs where I cued off of what the stock was doing as a way of getting into the bond. A distressed bond would come to my attention from running a bond scan. But I got into it comfortably from knowing that the stock guys weren't trashing the company. Every time I consider a bond, I look to see if the issuer is publicly-traded, and how far the stock price is above $5 bucks, and what the short-ratio is. Those things are too important to ignore.
I don't know what I'm going to do about getting into the equity side of gambling game (err, investing game). The money from stocks can be fabulous. But the work is horrendous, and I've gotten very, very lazy for not really needing better returns than I'm already making. So it's more a "seven-year itch" kind of thing, which isn't to say I don't put major hours each week into researching how I'd go about it. But "going live" is still a long way off (if it ever does happen). And with opening season not many months away, I need to loft and build a new boat. Well, OK. I don't really need a new one. But I'd like to see if I could get another mile per hour of rowing speed, which going with a slightly longer hull would give me over my usual, sub-8' foot prams (but, also, under 50 pounds and a pleasure to handle to and from the water).
|Copyright 1996-2014 trademark and the "Fool" logo is a trademark of The Motley Fool, Inc. Contact Us|