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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 35383  
Subject: Re: A Part-year Portfolio Review Date: 5/1/2012 4:40 AM
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Charlie,

Just did my month-end marks, so thought I would add my YTD list to this thread. March was my busiest month this year but by April I was starting to have trouble finding new purchases (2 buys in Jan, 5 buys in Feb, 8 buys in Mar, then down to 2 buys in Apr). Probably it's because I had already bought up most of the issues that interested me. Maybe it's time to take a rest and wait for some new stuff to show up (companies getting in trouble).

I seem to be attracted to the single B rated stuff and I usually end up with an average portfolio CY of around 10% and YTM in the 12 to 13% range. That is my target and it has worked out this way for a few years now.

I keep buying this Junky stuff because I'm betting on a "muddle-through" economy for quite a few years. I think it’s the U.S's turn for a "Japan-like" series of lost decades. If I'm wrong and we go over the cliff (like you predict) then my junk portfolio will take a big hit. I wouldn't be buying this stuff if I thought a recession was around the corner.

What I find puzzling is that you have said that you expect the U.S. to experience severe economic problems fairly soon (I interpret this to mean recession or depression). Yet you are still buying lots of lower rated junk. Isn’t there an inconsistency in this strategy? Or is this just insurance, in case you are wrong?

Anyway, my 10% bond CY sure beats the 1% interest I'm getting in my money-market account. I sometimes wonder if this is "savvy" investing or "reckless" investing. I guess only time will tell...

Howard


Yrs to Mat price face CY YTM rating p/l tot return

9.2 78.417 3000 9.5% 9.96% Ba1 4.3% 6.3%
9.2 78.467 3000 9.2% 9.40% Ba1 0.7% 2.5%
7.3 65.400 2000 8.1% 9.98% Ba3 -10.9% -9.1%
7.2 83.585 2000 10.0% 12.50% B2 -17.2% -14.5%
10.6 93.525 2000 8.4% 10.11% B2 -5.8% -4.5%
6.0 71.800 2000 10.5% 13.16% B2 -0.6% 0.8%
7.1 96.775 2000 10.4% 12.86% B3 13.2% 16.1%
19.3 91.400 2000 10.0% 10.15% B3 -4.3% -2.6%
5.9 76.400 2000 10.7% 11.24% B3 -1.3% 0.3%
8.4 73.650 2000 9.3% 9.93% B3 -2.7% -1.5%
6.7 95.850 2000 8.7% 10.58% B3 -0.8% -0.5%
4.4 81.775 2000 11.1% 12.34% B3 -0.8% -0.8%
13.9 92.725 2000 10.4% 11.43% Caa1 7.7% 8.8%
2.2 76.150 2000 15.7% 34.79% Caa2 25.8% 29.2%
2.2 85.900 2000 13.9% 28.22% Caa2 11.7% 13.7%
16.1 93.775 2000 9.4% 10.38% Wr 11.8% 13.7%

YTD Tots
8.4 83.179 34000 10.2% 13.06% B2/B+ 1.2% 2.9%

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