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Author: FjordReject Three stars, 500 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 35345  
Subject: High Yield Spread to Treasury 9/4/01 Date: 9/8/2001 2:27 PM
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Sorry for the delay, I've had a busy week.

Spreads for B rated bonds increased, while that of BB bonds decreased.

          10 year treas  10 year BB   spread  10 Year B   spread   BB % change   B % change
8/14/01    5.17            9.83        4.66     10.38      5.21    -6.05%           -6.96%
8/20/01    5.05            9.77        4.72     10.56      5.51     1.29%           5.76%
8/27/01    4.89            9.86        4.97     10.90      6.01     5.30%        9.07%
9/04/01    4.85            9.63        4.78     11.10      6.25    -3.82%          3.99%

The "riskless return" of a bond is its spread to treasury minus the true
loss rate, or 

(Yield - Treasury Yield) - (default rate*(1-recovery rate))
Currently for a BB rated bond this is

4.78 - (2.2*(0.6)) = 3.46%, down from 3.65%

for a B rated bond this is:

6.25 - (7.1*(0.6)) = 1.99% up from 1.75%

Cheers,

            - FjordReject
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Author: ayduda Big red star, 1000 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 2186 of 35345
Subject: Re: High Yield Spread to Treasury 9/4/01 Date: 10/4/2001 2:36 PM
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As a long suffering junk holder, I have found your monthly reports very useful. Can I convince you to give one for September? I have to decide in the next few days whether to sell some Vanguard High Yield Corporate to buy some TIPS.

ayduda

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Author: TonySCFA One star, 50 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 2187 of 35345
Subject: Re: High Yield Spread to Treasury 9/4/01 Date: 10/4/2001 7:04 PM
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As a long suffering junk holder, I have found your monthly reports very useful. Can I convince you to give one for September? I have to decide in the next few days whether to sell some Vanguard High Yield Corporate to buy some TIPS.

ayduda


Congradulations on learning the price of NOT seeking professional advice.

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Author: ayduda Big red star, 1000 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 2193 of 35345
Subject: Re: High Yield Spread to Treasury 9/4/01 Date: 10/5/2001 3:25 PM
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Congradulations on learning the price of NOT seeking professional advice.

I'm not sure what advice you mean. Do you mean being sold a mutual fund with a 7% load? An annuity with the same load plus a 3% annual fee?

Or do you mean the "advice" of the "pros" who run mutual funds like Dreyfus Aggressive Growth DGVAX that has gone from $22 down to $7 over the last five years?

No thanks.

ayduda

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Author: TonySCFA One star, 50 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 2195 of 35345
Subject: Re: High Yield Spread to Treasury 9/4/01 Date: 10/5/2001 8:58 PM
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I'm not sure what advice you mean. Do you mean being sold a mutual fund with a 7% load? An annuity with the same load plus a 3% annual fee?

Or do you mean the "advice" of the "pros" who run mutual funds like Dreyfus Aggressive Growth DGVAX that has gone from $22 down to $7 over the last five years?

No thanks.

ayduda

Where did I EVER say anything about being sold crap like you listed as professional advice? Go pick up the phone and call your mommy to tell her that you will never be a good investor because you don't listen at all, you don't play well with others and you run with scissors. The most expensive possession you can have is a closed mind. It will cost you money all of your life.

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Author: ayduda Big red star, 1000 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 2201 of 35345
Subject: Re: High Yield Spread to Treasury 9/4/01 Date: 10/6/2001 6:40 PM
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Where did I EVER say anything about being sold crap like you listed as professional advice? Go pick up the phone and call your mommy to tell her that you will never be a good investor because you don't listen at all, you don't play well with others and you run with scissors. The most expensive possession you can have is a closed mind. It will cost you money all of your life.

My my, getting testy aren't we.

most expensive possession you can have is a closed mind.

That's not as expensive as going to a "pro" for financial advice.

ayduda

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