No. of Recommendations: 1
To All,

Please ignore the previous post as the deluded ravings of a lunatic. I’d love to break into a new market. But I’m running too much money in bonds to give a new investing adventure the attention it requires. How much is “too much”? Roughly 334 positions, spread across $765k face, offering a CY of 7.5% and a YTM of 10.4%. In other words, I‘m running a fixed-income portfolio that isn’t unusual in terms of size or composition. But it’s too much money to neglect or walk away from because I wanted a chance to play with stocks. In life --and in investing-- it’s a rare and fortunate person who can learn to do even one thing well. Me tying for two is just asking for trouble.

Bonds really are easy compared to anything else in the investing world. You run a scan, vet what you find, and then execute or back away, and you’re done for the day, and for as much as the next 30 years. That’s an easy gig, and the money --though not the best-- is decent enough on an absolute-returns basis, and certainly so on a risk-adjusted basis.

So I’m back in the bond game with both feet. As the year goes by, if I really, really can’t any place in the bond world to put idle cash to work, then I’ll look elsewhere. But there’s too much going on right now, and there’s still too many opportunities to be walking away from them. E.g., I got into Travelport’s 11.875’s of ’16 at 33. This morning, the LAST was 56. Something’s going on, and I’m likely to capture a good chunk of it whatever it is. That kind of money isn’t something one walks away from.


PS Do track down Kyle Bass’s recent talk. It’s an hour long, and in it he thoughtfully and methodically lays out just how screwed up the world’s economies are, specifically, how inflated the credit bubble has become and how horrific might be its unwinding. He called the housing bubble correctly and made billions shorting it. The smart money bet has to be that he isn’t wrong about the credit bubble, nor how to play it.
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