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Author: globalist2013 Big red star, 1000 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 35365  
Subject: Re: Question on callable bonds Date: 3/11/2013 3:52 PM
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Mike,

Gaming calls can be tricky, especially bonds as thinly traded as that one. But sales are happening far above par. The spread is tight, and the coupon is modest. So a reasonable bet would be that the bond isn’t going to be called soon.

The more important question to answer is why would anyone bid for those bonds? Do the math. They don’t offer a real rate of return after taxes are paid and inflation is subtracted. If you’re trying to lose money, there’s smarter ways to do it.

How far out is that bond? How far down is that bond? Set up a scan that asks to see anything Baa2/BBB or better and no more than 6 years out. Then figure out which issuers you’d be willing to lend money to, because that’s what you’re doing. Even though you’re doing the trade in the secondary market with a counter-party, the underlying company determines your ultimate profitability.

EMN is on a rip. http://finance.yahoo.com/echarts?s=EMN+Interactive#symbol=em... What else is happening in the chem industry? Is this better played from the debt side or the equity side? Lots and lots of questions needs to be answered before you chase those bonds.

Charlie
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