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No. of Recommendations: 3

The best and kindest thing I can say is that you're wasting your time ever posting to this board, because of the size you trade. You really, really, really need to be talking to your peers, not us tiny retail accounts. This bond stuff --especially this spec-grade bond stuff-- does NOT scale well. I can survive the risks I take on --as can Howard, Scott, and maybe one or two more of us who traffic in junk-- because we can offset our bond risks elsewhere and/or because we size our positions small enough to be able to sustain our losses. 250 bonds? as in, a quarter-million dollar position? That's professional-level size, as in, you've got a staff of at least three more analysts in your office, all very experienced, and everyone of them not afraid to speak his or her mind, and you're a market-maker who can trade those sizes, week after week, and has done so for years.

Here's a real simple rule of thumb. If you're worried about whether to put on the trade, but also anxious that you might miss out on the "opportunity of a lifetime", I can assure you that you're trying to bet too big. Cut that position in half, and then half again, and then go find something better to do with the cash. Just as "your worst loss is yet to come", there will always be better trades down the road. I guarantee it. You gotta have faith the Bernank, Obam, and Congress are going to screw things up so badly that 2008-2009 will seem like the mild, normal, 20%-40% correction it turned out to be. Any trade you put on right now ought to be a "just treading water" trade. Yes, you've gotta keep your seat at the table and your hand in the game. But now isn't time to double up on bets. Why can I say that with total assurance? Because complacency is rampant. Wait until there really is "blood running in that streets", and then do your big buying.


"Far better a missed opportunity than a realized loss".
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