No. of Recommendations: 4
Both of you fail to understand what I said, which shouldn't surprise me.

Charlie, with respect, I think I do understand, but there are some things that confuse me about what you're saying.

Specifically, I assume that this statement:

I'm Charlie, the Junkman, and the bond market has been kind to me.

is just modesty, and that you earned the rewards the bond market gave you through the work you did. I don't think you see your returns as kindness or luck or anything other than the fruits of your labor.

And you point out that it's hard work, work that you don't expect others to do or be willing to do. So given that most people won't follow your advice, what's the right thing to do? I think if they won't listen to your advice, maybe they'll listen to Loki's, and if the result is that someone has a better life, then that's a good thing. You yourself say that there's more than one answer to all this.

But what each person can achieve for her or himself in markets is as big and as wide as their imagination and courage. You objected to my making that statement.

I mostly object to the phrasing. I'm admittedly a cynic and have seen plenty of people fall prey to those who say that anything is possible, as long as they pay $49.95 for the Ultimate Secrets of Getting Rich. And when someone doesn't get rich using their scheme, they'll inevitably say something like what you say: that they just didn't work hard enough at it.

That said, I appreciate the fact that you're not charging $49.95 for your words, and I don't question your own motives.

Know thyself, and then find yourself a market niche you can call your own.

The primary question I and others would have here is how you find your niche. I'd be curious how you chose high-yield and defaulted bonds as your target, and whether there were other areas you considered and rejected for yourself that might be promising for others.

Also, how much do you think you depend on the flow of "dumb money" to sustain your niche? I've often thought about this, as I think that my own strategy of hypersaving wouldn't work if the rest of America didn't spend as much as they do. If everyone saved half their income, then we'd kill a lot of the demand that creates the jobs that provide us with that income. But as long as everyone but me spends most of what they make, then my tiny withdrawal of liquidity from the consumer economy doesn't make much difference.

I also think some niches can get saturated, and there aren't necessarily enough barriers to entry to protect your niche. For instance, a lot of the infomercials say real estate is the way to wealth. Yet there's only so much real estate that can generate the returns that these strategies need in order to be viable. I'm sure that a small number of people can make it work. But I'm equally sure that if too many people started doing it, they'd get in each other's way.

In any event, I'm not trying to criticize you personally or discount your successes. I also don't want to linger too long on an overall discussion of financial planning methods, because this is, after all, a bond board. You remind bond investors that there are bonds out there that have equity-like risks and can produce equity-like returns, and that's a good thing for them to remember. It's much different from the temperament of the typical bond investor, but that just goes to prove your point: that there are all kinds of investors, and we can all make a buck if we do what we need to do.

I hope you'll keep telling us about the opportunities you see down below investment grade, even if you don't get a lot of takers here.

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