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Rich,

Good article. Thanks for linking it.

The game he describes is way beyond my pay grade. I ignore convexity entirely and focus on trying to buy bonds at a discount --which I intend to hold to maturity-- such that the combo of coupons and cap gains offers a decent total return. In other words, classic, Ben Graham-style, value-investing applied to fixed-income instruments.

E.g., one of my all-time, best buys was Xerox's 8's of '27 for 34. Within a couple years, it was back to trading near par, and I got called in '17. But meanwhile, my yearly, achieved YTM was close to 100%.

Right now, all markets are tough for "investors". Due to the Fed's interventions --more so than the uncertainties over the medical situations-- classic fundamental analysis can't be used. When a genuine bottom gets put in -- as much as 2-3 years hence-- then I go back to shopping.

Arindam
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