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Not only are you finding what to buy, but it sounds like you are also having fun doing it. And that counts for a lot too!


It's fun for any investor when he/she is winning, but not so fun when they aren't. This week hasn't been fun, not because I'm losing money, because the game has gotten tough again.

Yesterday, I was in and out of the market in maybe forty minutes with nothing to show for it. I found some senior secured debt that was attractive, and I was ready to buy, because their financials were decent. But when I checked my holdings (one of the steps I do as part of my due-diligence), I saw that I had already put on a marketable position (which is different for me than a full position) last fall at a much better price. So I was faced with the decision to add or not. But I backed away, mainly on the basis of Moody's estimate of the company's prospects should the economy continue to slow.

Also, on the basis of marking myself to market over the weekend, I pulled the current offering-list of an issuer whose bonds had moved back into the money for me. With them, I have a full position. But if their prospects looked good, I'd be willing to add. Their financials seemed to be decent. However, my reading of the Moody's report again steered me away, especially their warning about how the privately-held company was disadvantaging bond-holder claims. So, the obvious response was not to add. I've got as much exposure is as prudent for my account size.

Also, yesterday, I did something I generally don't do. I looked at the slice of corporates offering at least 5% but no more than 6%. But that turned up no leads. So I was done for the day.

Today, what I saw in the slice I generally troll, anything paying 6% or better, was more rising prices. So I backed out of there and switched over to munis and spent some time digging into Puerto Rico's debt. But I didn't like what I saw. So, again, it was a case of fast-in/fast-out with nothing to show for it.

Some days/weeks are like that. But they aren't fun. I'd rather be finding things to buy and spending down my cash. Last year, through a truly heroic effort, I got cash down to sub 5% of AUM. But the persistent calls have pushed cash back over 11%, which drives me crazy. I HATE carrying cash. I love it when I have to sell something in order to buy something. That's when you've got a target-rich environment and the shopping is easy and fun. But this grind, grind, grind can be a drag. But that, too, is part of the game. Good investing, effective investing, is never all sea shells and balloons. Most of it is the dull, dull work of scan-vet-execute, scan-vet-execute, and then get up the next morning and do it again. But bonds have provided me with more than a good living for over a decade now. So I shouldn't complain too loudly. When all is said and done, it's a easy, easy gig. Not as sexy as stock investing, but mostly worry-free, and long ago --as the trader's quip goes-- I decided I'd rather "sleep well, than eat well".

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When Life Gives You Lemons
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