Back in August, with cash continuing to pile up and places to park it getting fewer, I bought five of McJunkin Red Man Corp’s ’s 9.5’s of ’16. The yield was a mere 8.6% for a B3 issue, and buying the bond required paying a modest premium to par. But the company’s financials were tolerable, as were time-price charts of the common and the debt. Also, I had little exposure to the industry. So, needing to spend down cash and guessing that the risks were manageable, I did the trade. Today, as I do my weekend marking myself to market across all accounts, I see that I was called yesterday at 107.999. That bumps my YTM to 9.9%, but dumps the cash back into my lap, and places to park it have gotten even fewer. OTOH, complaining is a waste of time, because the securities game is what it is. Whether it's stocks, bonds, or whatever, you and a counter-party are making a bet, and one of you will be wrong. Your job is to ensure that if you’re that one, then the damage will be tolerable. In this case, being handed back my cash with a slight gain is a tolerable outcome. Not the one I was hoping for, not the one I would have regretted, but tolerable nonetheless, which is pretty much what investing (stocks, bonds, whatever) has become these days, a game of treading water while we wait --like Vladimir and Estragon on Beckett's stage-- for Europe/the US/Asia to cut spending and increase revenues.
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