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Re: Corporate Bonds on the Secondary Market
Old 02-11-2006, 11:01 PM   #21
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Re: Corporate Bonds on the Secondary Market

Ha,

If you have access to the Vanguard bond desk on their website
click on the "secondary bond" link then click the "find bonds"
button. *This will bring up a list of all secondary market bonds
being offered with the "floaters" listed first in alphabetical order.
ER = expense ratio. *Also check out "OSM" on the NYSE. *This
is an exchange traded debt security from Sallie Mae paying
CPI + 2% . *You buy and sell it like any stock.

Roger,

My biggest holding is a CD from Std Fed Bank that pays CPI + 2%.
I also hold J. Hancock (CPI + 2%), Principal Life (CPI + 1.8%) bought
at 90, *Household Financial Corp (CPI + 2.38% and Boeing (3 mo T-bill
plus 2.05%).

Cheers,

Charlie
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Re: Corporate Bonds on the Secondary Market
Old 02-12-2006, 06:52 AM   #22
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Re: Corporate Bonds on the Secondary Market

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Re: Corporate Bonds on the Secondary Market
Old 02-12-2006, 07:20 AM   #23
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Re: Corporate Bonds on the Secondary Market

Good Stuff Charlie

How big is the playing field?

Can't remember where I saw an article that corp bonds were availible with inflation adjustments.

Any thought's on advantages to the issuing company - compared to straight corp bond?

Depending on availibility - ? yet another avenue of protection for the fixed income holder?

Keep us posted as time marches on.

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Re: Corporate Bonds on the Secondary Market
Old 02-12-2006, 07:27 AM   #24
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Re: Corporate Bonds on the Secondary Market

Quote:
Originally Posted by ERD50

In that case, the day-day or year-year fluctuations in NAV never really affect you - so why not ignore them and just look at the dividend % return?
Because we were talking about annualized/snapshot returns where one looks at the value of ones capital vs the paid yields. Basically you could say the same thing as any investment. I could hold a stock fund with a loss until it bounced back and only sold it then. Would it be reasonable to just forget about current valuations when considering my net worth or investment returns since I didnt plan to sell it until the value was positive?

But that wasnt really the point...
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Re: Corporate Bonds on the Secondary Market
Old 02-12-2006, 08:31 AM   #25
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Re: Corporate Bonds on the Secondary Market

Quote:
Originally Posted by (Cute Fuzzy Bunny)
Because we were talking about annualized/snapshot returns where one looks at the value of ones capital vs the paid yields.* Basically you could say the same thing as any investment.* *I could hold a stock fund with a loss until it bounced back and only sold it then.* Would it be reasonable to just forget about current valuations when considering my net worth or investment returns since I didnt plan to sell it until the value was positive?

But that wasnt really the point...
TH: Yep. By the way thank you for fielding the question from ReWahoo's new neighbor. (JG).
I doubt he still knows who he was responding to, but oh well.......

One of the problems of a forum like this is perspective. (Especially age perspective).

For me personally, total return is the only thing that I am concerned with. (I've never been a live off dividend type). I prefer to take my lumps as I go along.

For JG: To avoid further confusion. TH is a young guy that lives in the valley, and has a pretty young wife and drives a Lexus.
I'm an old phart that lives in the mountains.





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Re: Corporate Bonds on the Secondary Market
Old 02-12-2006, 08:42 AM   #26
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Re: Corporate Bonds on the Secondary Market

But nobody has seen us together at the same time, so...

I'm wondering how much ReWahoo is reconsidering the benefits of texas life right now...but maybe he likes dog crap on his lawn
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Re: Corporate Bonds on the Secondary Market
Old 02-12-2006, 08:57 AM   #27
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Re: Corporate Bonds on the Secondary Market

Quote:
Originally Posted by (Cute Fuzzy Bunny)
I'm wondering how much ReWahoo is reconsidering the benefits of texas life right now...but maybe he likes dog crap on his lawn
Not a problem. I'm still uphill, upwind and 350 miles away. Ya'll don't worry none about me.

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Re: Corporate Bonds on the Secondary Market
Old 02-12-2006, 09:01 AM   #28
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Re: Corporate Bonds on the Secondary Market

Quote:
Originally Posted by REWahoo!
Not a problem.* I'm still uphill, upwind and 350 miles away.* Ya'll don't worry none about me.

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Re: Corporate Bonds on the Secondary Market
Old 02-12-2006, 10:32 AM   #29
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Re: Corporate Bonds on the Secondary Market

Then you just need to be careful to avoid isolated issues of road rage.

If you see some accountant looking dude with ridiculously big glasses driving along talking to himself, dont cut him off. He might have a gun.

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Re: Corporate Bonds on the Secondary Market
Old 02-12-2006, 01:19 PM   #30
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Re: Corporate Bonds on the Secondary Market

Unclemick,

I suspect the field is not big and liquidity could be a problem.
There are 10 Household Finance Corp bonds paying CPI + 2.55%
that have been on the market since 1/26 at 99.5.* I would have
bought them myself if I had the free cash.* CUSIP # 44181EXR4
if anybody is interested.

You can sometimes find new issues at:

http://www.internotes.com/exports/wk...klyUpdate.html

or,

http://www.directnotes.com/all-rates.asp

Cheers,

Charlie
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Re: Corporate Bonds on the Secondary Market
Old 02-12-2006, 01:35 PM   #31
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Re: Corporate Bonds on the Secondary Market

RE: Bond NAV -
Quote:
Originally Posted by (Cute Fuzzy Bunny)
Basically you could say the same thing as any investment. I could hold a stock fund with a loss until it bounced back and only sold it then. Would it be reasonable to just forget about current valuations when considering my net worth or investment returns since I didnt plan to sell it until the value was positive?
I still see a difference. I can be assured that the bond will be at full value at a date certain (except for risk of default - but that is another story). I can never be sure what any stock or stock fund will be at a that date.

ERD50
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Re: Corporate Bonds on the Secondary Market
Old 02-12-2006, 02:31 PM   #32
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Re: Corporate Bonds on the Secondary Market

How about I just agree with you, even though this is the first time I've heard anyone say that current asset valuations dont count as part of net worth or annual return on investments if in a risk adjusted manner they will at some point in the future probably be worth more or less than they are today.
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Re: Corporate Bonds on the Secondary Market
Old 02-13-2006, 10:12 AM   #33
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Re: Corporate Bonds on the Secondary Market

Quote:
Originally Posted by (Cute Fuzzy Bunny)
How about I just agree with you, even though this is the first time I've heard anyone say that current asset valuations dont count as part of net worth or annual return on investments if in a risk adjusted manner they will at some point in the future probably be worth more or less than they are today.
You're very agreeable today.

That's as valid an approach to net worth & total return as any of the other quibbling spirited debates we have on this topic. Luckily we're not required to post IAW GAAP...
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Re: Corporate Bonds on the Secondary Market
Old 02-13-2006, 10:29 AM   #34
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Re: Corporate Bonds on the Secondary Market

Well, it was getting close to tieing for the second dumbest argument I've ever had about finances, so I figured I'd just agree...

I just decided that since there is no major stock market index that has failed to gain during a 20+ year period, I'm declaring my portfolios stock holdings to have a duration of 30 years, just like a long bond, and that since its a virtual certainty I'll get my money back and then some, there is no such thing as a paper loss or unrealized loss.

Unfortunately, when I tried to do this with any one of the portfolio web sites or money management software packages, not one of them had an option or check box to ignore current asset valuations. When I called my flagship representative, Weiland D. Tarpley, and demanded that vanguard make this change for me on their reports and their web site portfolio manager, he seemed very confused. I'm going to call back again later and take a second run at it with him.

Its much more comforting than reality!
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Re: Corporate Bonds on the Secondary Market
Old 02-13-2006, 02:08 PM   #35
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Re: Corporate Bonds on the Secondary Market

CFB,

The duration of stock might be much longer than 30 years, given the rather low dividend yield of today's stocks [1.5%]:

The Duration of Stocks

The 40-Year Forecast for the S&P 500 Index

- Alec
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Re: Corporate Bonds on the Secondary Market
Old 02-13-2006, 02:48 PM   #36
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Re: Corporate Bonds on the Secondary Market

Quote:
Originally Posted by (Cute Fuzzy Bunny)
Well, it was getting close to tieing for the second dumbest argument I've ever had about finances, so I figured I'd just agree...
....

Its much more comforting than reality!
Just to be clear, I absolutely agree that using the current NAV of the bond is the proper, correct, accurate, and rational method to use to measure ones current net worth or current returns. No argument at all.

OTOH, if someone told me, that for estimating their net worth, that they just used the par value of the bonds that were holding, and that they planned (and had a plan - as in plenty of liquidity) to hold them to maturity, well, I would not argue with them that that was OK for estimating purposes. As long as they understood that it wouldn't hold water if they had to liquidate everything today.

For all those caveats, it would probably be a rounding error anyway.

-ERD50
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