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Author: howardgt One star, 50 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 35351  
Subject: Re: Howard: Comparing Portfolios, Again Date: 3/2/2012 6:27 AM
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Charlie,

I couldn’t make too much out of your list because you omitted Yrs-to-Mat. Yields are sort of meaningless to me without some sort of duration. I guess I could’ve figured it out using the difference between CY and YTM against Price, but I didn’t feel in the puzzle mood just now :). Anyway, here is my list as of Mar 1 (bought another today).

8 new positions ($18k face), bought at an average cost of 81.54, with average Yrs-to-Mat of 9.6 yrs, rating of B1/BB, CY of 10.1%, and YTM of 13.02%.


Yrs to Mat price face CY YTM rating


7.0 78.417 3000 10.4 12.86 B3
7.1 78.467 3000 10.0 12.50 B2
2.0 65.400 2000 15.7 34.79 Caa2
7.2 83.585 2000 8.1 9.98 Ba3
9.1 93.525 2000 9.5 9.96 Ba1
16.0 71.800 2000 9.4 10.38 Wr
9.1 96.775 2000 9.2 9.40 Ba1
19.2 91.400 2000 10.0 10.15 B3

YTD Tots
9.6 81.54 18000 10.1% 13.02% B1/BB



I seem to be finding reasonable value (for this interest rate environment anyway). The only thing is that I sometimes have to go out a bit longer in duration than I would like. But when I collect a CY of 10%, I’m prepared to do it. As I’ve said before, if I end up with a YTM anywhere close to 10%, then I’m happy. That leaves me 3%/year for defaults less recovery. In a muddle along economy I think that’s doable.

No time now to answer your other post about charging my bond-risk to all classes in my portfolio. I may explain later, but I purposely “don’t do that”. I got buckets in buckets, all managed separately. There is a reason for my madness, but no time to explain now. Got to get some sleep before I get ready for another (non-financial) project tomorrow.

Howard
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