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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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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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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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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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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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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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