Skip to main content
No. of Recommendations: 3
I'm 64 days into my preferreds project, whose goal was to learn the market well enough that the discounts created by the coming crash could be responded to in a responsible manner.

Some background: Few investors understand bonds. So it's an asset class that mostly gets ignored, which is a pity, because on a risk-adjusted basis, they offer the same money as equities, or else the arbs step in to make it so. Because bonds mature, buying them responsibly is simply a matter of doing the same comparison shopping used to buy bell peppers or broccoli. It's just classic, Ben Graham-style, value investing in which the basic question is this: "Am I being offered enough reward to accept my risks?"

For any bond offered, every broker will state YTC/YTW/YTM. But for pfds, they only state CY, which is meaningless. Therefore, spreadsheets need to be built. Fortunately, though, there's only 700 or so pfds. So the back-office work is manageable.

As everyone should know, the Fed has destroyed the bond market. But pfds are such a backwater that some money can still be put to work there, and I'm having a good time.

Arindam
Print the post  

Announcements

What was Your Dumbest Investment?
Share it with us -- and learn from others' stories of flubs.
When Life Gives You Lemons
We all have had hardships and made poor decisions. The important thing is how we respond and grow. Read the story of a Fool who started from nothing, and looks to gain everything.
Contact Us
Contact Customer Service and other Fool departments here.
Work for Fools?
Winner of the Washingtonian great places to work, and Glassdoor #1 Company to Work For 2015! Have access to all of TMF's online and email products for FREE, and be paid for your contributions to TMF! Click the link and start your Fool career.