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It’s no secret that interest-rates are moving up, that credit-worthiness is moving down, and that it’s getting tougher to find bonds worth buying. So now is as good a time as any to do a quick retrospective.

Over the past thirteen months, I initiated (or added to) 124 positions ($239k face) at a cost of $204k, with a present value of $201k, for an average CY of 8.6% and an average YTM of 12.1%. The credit-ratings range from double-AA to double-CC, but most are spec-grade, because that’s where the opportunities have been. Of them, none have defaulted so far. But I do expect that some losses will occur.

OTOH, my typical position is small, and the damage (individually and cumulatively) will be tolerable. In other words, my benchmark is an 8% return before taxes and inflation. If I achieve that, then I break-even, which is the only thing I care about, i.e., being able to move my purchasing-power forward against the time when I might need it. Though this portfolio generates a lot of income, it isn't income I need to meet current-expenses. It's just a passively-managed (aka, held to maturity), rainy-day savings-account that enables me to lower my overall, financial risks.

Charlie

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Traded Amt Paid Value P/L CY YTM MDY SP
08/11/11 5000 $3,623 $3,306 -9% 12.1% 17.4% Caa1 B-
08/11/11 2000 $1,754 $1,960 12% 8.7% 10.0% Baa3 BBB-
08/11/11 5000 $5,048 $5,475 8% 7.5% 7.4% A2 -
08/12/11 3000 $2,820 $2,927 4% 7.1% 8.4% B1 B+
08/12/11 5000 $4,283 $2,850 -33% 9.5% 11.8% B2 B
08/12/11 5000 $4,711 $4,948 5% 7.8% 8.7% B1 B+
08/15/11 1000 $745 $775 4% 6.7% 16.1% - -
08/15/11 5000 $5,397 $5,856 9% 7.0% 6.1% - AA-
08/17/11 5000 $5,180 $5,400 4% 9.2% 8.5% B3 -
08/17/11 1000 $1,055 $1,100 4% 7.8% 6.9% B2 BB
08/17/11 1000 $990 $1,030 4% 8.6% 8.7% B2 BB
08/22/11 1000 $781 $800 2% 10.7% 12.3% Caa1 B-
08/23/11 5000 $4,523 $4,631 2% 4.4% 7.6% - -
08/24/11 1000 $853 $960 13% 13.2% 16.7% Caa2 CCC+
08/24/11 2000 $1,792 $1,975 10% 8.6% 9.8% Baa3 BBB-
08/25/11 1000 $1,008 $1,129 12% 8.6% 8.4% B1 BBB-
08/25/11 1000 $961 $1,011 5% 9.2% 9.9% Ba3 BB-
08/29/11 2000 $2,171 $2,260 4% 11.5% 10.1% B2 B+
09/08/11 1000 $1,076 $1,147 7% 9.2% 8.1% B3 B-
09/08/11 1000 $998 $1,024 3% 6.4% 6.5% B1 BBB-
09/08/11 1000 $860 $917 7% 5.2% 14.6% - -
09/08/11 1000 $980 $1,011 3% 9.1% 9.4% Ba3 BB-
09/09/11 1000 $681 $720 6% 7.9% 18.6% B3 CCC+
09/19/11 1000 $870 $921 6% 6.0% 7.9% Ba1 BBB-
09/22/11 5000 $2,443 $2,857 17% 0.0% 7.5% - -
10/04/11 1000 $929 $1,021 10% 5.1% 8.1% A3 A-
10/05/11 1000 $898 $1,064 18% 7.0% 9.3% Baa2 A-
10/13/11 1000 $918 $465 -49% 9.0% 10.3% B3 B+
10/19/11 1000 $885 $984 11% 7.6% 9.6% B1 B+
10/20/11 1000 $914 $1,011 11% 4.7% 8.1% - -
10/24/11 1000 $1,070 $1,005 -6% 9.8% 8.8% B1 B+
10/25/11 1000 $730 $868 19% 12.7% 14.7% B2 B+
10/25/11 1000 $983 $1,080 10% 7.1% 7.4% Ba2 BB
11/02/11 5000 $4,719 $3,132 -34% 9.2% 9.7% - -
11/08/11 1000 $880 $995 13% 8.7% 10.4% B2 B+
11/08/11 1000 $801 $872 9% 5.9% 9.3% Ba2 BB+
11/08/11 1000 $976 $1,135 16% 8.7% 9.0% Baa2 BBB
11/10/11 1000 $886 $1,035 17% 6.2% 9.0% Baa2 BBB
11/16/11 1000 $926 $970 5% 13.4% 16.0% B3 BB-
11/16/11 1000 $925 $1,135 23% 9.2% 10.2% Baa2 BBB
11/29/11 1000 $970 $1,080 11% 7.2% 7.7% Ba2 BB
11/29/11 1000 $858 $1,019 19% 6.4% 8.0% A2 A
12/01/11 1000 $805 $780 -3% 9.6% 12.6% B1 BB
12/02/11 1000 $880 $1,004 14% 5.7% 10.3% Ba2 BBB
12/07/11 2000 $2,226 $2,272 2% 8.9% 7.4% Baa3 BBB-
12/09/11 1000 $950 $1,040 9% 7.7% 8.5% Ba1 BB+
12/14/11 1000 $661 $872 32% 7.1% 13.6% Ba2 BB+
01/05/12 1000 $924 $974 5% 7.0% 8.9% B1 B+
01/05/12 1000 $926 $1,020 10% 7.8% 9.2% B1 B+
01/06/12 1000 $615 $819 33% 11.2% 20.0% Caa1 CCC+
01/20/12 1000 $964 $1,072 11% 7.9% 8.5% B1 BB-
01/23/12 5000 $3,348 $3,306 -1% 13.1% 20.2% Caa1 B-
01/23/12 3000 $2,844 $2,325 -18% 7.8% 8.6% B3 B
01/24/12 1000 $811 $916 13% 6.0% 12.9% - -
01/24/12 5000 $4,055 $5,050 25% 8.5% 11.7% Ba3 BB-
01/24/12 5000 $3,686 $2,887 -22% 11.5% 13.7% - -
01/30/12 1000 $860 $882 3% 5.2% 10.2% Ba2 BB+
01/31/12 1000 $795 $986 24% 10.8% 14.9% B1 B+
02/01/12 1000 $730 $505 -31% 10.8% 15.3% B3 B-
02/01/12 3000 $1,991 $885 -56% 4.5% 48.9% - -
02/03/12 1000 $308 $364 18% 38.6% 68.0% Caa3 CCC
02/07/12 1000 $1,013 $987 -3% 9.9% 9.4% - -
02/07/12 1000 $1,000 $1,002 0% 8.5% 8.5% Caa2 CCC
02/07/12 5000 $4,873 $4,950 2% 7.4% 7.8% Ba3 BB
02/09/12 5000 $4,611 $4,206 -9% 9.8% 12.7% B3 B-
02/10/12 5000 $3,811 $4,462 17% 9.0% 10.7% B3 B+
02/14/12 5000 $3,517 $2,250 -36% 7.1% 17.7% - -
02/16/12 5000 $3,973 $4,200 6% 6.5% 7.7% - AA-
02/16/12 1000 $988 $1,064 8% 8.0% 8.1% Baa1 A-
02/17/12 5000 $5,010 $4,946 -1% 7.5% 7.4% B1 B+
02/23/12 1000 $555 $467 -16% 12.2% 15.7% Caa1 CCC+
02/27/12 3000 $3,285 $3,090 -6% 11.9% 9.9% - -
02/28/12 1000 $1,050 $1,061 1% 8.8% 7.9% B3 B
02/29/12 1000 $1,070 $1,039 -3% 10.7% 9.3% B3 -
03/01/12 2000 $1,698 $1,270 -25% 8.0% 13.1% B3 CCC+
03/01/12 1000 $1,111 $1,052 -5% 12.3% 10.6% Baa3 BBB
03/05/12 5000 $2,923 $2,350 -20% 9.8% 19.9% Ca CCC+
03/07/12 2000 $1,968 $2,100 7% 7.8% 8.0% B1 -
03/08/12 1000 $921 $895 -3% 8.0% 9.3% B3 CCC+
03/09/12 1000 $810 $881 9% 6.8% 16.5% B3 CCC
03/09/12 1000 $789 $770 -2% 7.0% 8.4% Ba1 BBB-
03/12/12 2000 $2,030 $2,102 4% 8.1% 8.0% B2 B
03/14/12 1000 $965 $982 2% 10.6% 11.2% B3 B-
03/16/12 1000 $1,026 $930 -9% 10.2% 9.7% B3 B+
03/28/12 1000 $1,015 $950 -6% 10.3% 10.1% B3 B+
04/24/12 2000 $1,718 $1,611 -6% 6.3% 8.4% Ba1 BB+
04/24/12 2000 $1,592 $1,586 0% 7.2% 8.5% Ba1 BBB-
04/25/12 1000 $365 $364 0% 32.5% 58.6% Caa3 CCC
04/26/12 1000 $891 $895 0% 8.3% 10.1% B3 CCC+
04/27/12 1000 $710 $295 -58% 4.2% 51.7% - -
05/02/12 1000 $733 $695 -5% 8.7% 11.8% B2 B-
05/07/12 1000 $833 $669 -20% 3.4% 8.5% - -
05/09/12 5000 $3,843 $3,200 -17% 10.6% 15.1% B2 B
05/15/12 1000 $972 $1,060 9% 7.5% 7.9% Ba3 BB-
05/15/12 1000 $1,003 $1,004 0% 7.6% 7.5% B3 B-
05/15/12 2000 $2,031 $2,065 2% 7.5% 7.3% Ba3 BB-
05/16/12 1000 $620 $287 -54% 19.2% 36.7% Caa2 CCC
05/16/12 1000 $549 $495 -10% 12.5% 22.9% Caa2 CCC
05/16/12 1000 $841 $727 -14% 15.2% 18.1% Caa2 CCC
05/16/12 1000 $561 $450 -20% 8.9% 28.4% Aa2 AA+
05/17/12 1000 $910 $802 -12% 7.8% 10.3% B3 CCC+
05/21/12 1000 $335 $292 -13% 22.8% 45.2% - -
06/04/12 1000 $380 $857 126% 19.1% 83.6% - -
06/07/12 1000 $836 $855 2% 12.0% 15.3% Caa2 CCC+
06/07/12 2000 $1,692 $1,820 8% 8.9% 11.6% B3 CCC+
06/07/12 1000 $846 $895 6% 8.7% 11.4% B3 CCC+
06/08/12 2000 $1,940 $1,915 -1% 7.7% 8.2% B3 B
06/08/12 1000 $635 $795 25% 13.6% 23.9% Caa3 CC
06/11/12 1000 $835 $855 2% 12.0% 15.4% Caa2 CCC+
06/15/12 3000 $2,316 $2,416 4% 7.0% 10.8% Ba1 BB+
06/20/12 1000 $919 $920 0% 7.9% 9.1% Ba3 B+
06/20/12 1000 $549 $470 -14% 10.5% 22.5% Ca CCC+
06/22/12 1000 $678 $562 -17% 9.6% 12.1% - B
06/25/12 1000 $1,010 $927 -8% 7.8% 7.6% - -
06/26/12 2000 $1,406 $1,455 3% 9.1% 12.6% B2 B-
06/27/12 2000 $1,613 $1,556 -4% 10.7% 14.6% B2 B
07/17/12 1000 $836 $534 -36% 8.5% 9.7% B2 -
07/17/12 1000 $966 $964 0% 8.5% 9.0% B3 B-
07/24/12 1000 $831 $680 -18% 10.2% 12.4% B3 B
08/06/12 5000 $5,462 $5,452 0% 8.3% 8.0% Baa1 BBB
08/06/12 5000 $5,248 $5,200 -1% 7.4% 6.8% Ba3 BB-
08/16/12 1000 $801 $750 -6% 5.3% 11.0% - B-
08/16/12 4000 $1,981 $1,800 -9% 11.6% 26.3% Ca CCC+
08/20/12 1000 $885 $870 -2% 10.0% 12.2% B3 B

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No. of Recommendations: 1
What can I learn from this? I'm asking that sincerely.
Thanks.
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No. of Recommendations: 1
What can I learn from this? I'm asking that sincerely.

Fungi,

By “this”, you are referring to a listing of one bond-investor’s purchases over a recent, 13-month period. So, equally sincerely, I’ll answer that you can learn from it what you choose to.

But allow me, if you will, to point out the most obvious thing, namely, that despite the actions of the Fed, there have been ample opportunities to make money in bonds. It hasn’t been the easy, nearly risk-free money of former days. But decent-enough money has been available to them that chose to pursue the available gains using methods that Ben Graham would describe as “Enterprising Value Investing”.

Charlie
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