Join Early Retirement Today
Reply
 
Thread Tools Search this Thread Display Modes
Re: Heh, ISM/OSM again
Old 04-20-2007, 11:45 AM   #141
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
brewer12345's Avatar
 
Join Date: Mar 2003
Posts: 16,391
Re: Heh, ISM/OSM again

Quote:
Originally Posted by soupcxan
Can you explain the logic behind this swap? Curious.
The bonds would most likely crest nicely over 21 once the specter of a multi-notch downgrade due to piling many billions of new secured debt on the balance sheet goes away. The stock would sell off heavily, since it was in the low 40s before the deal was announced. If it is a REAL panicky rout, the stock might sell off irrationally far, so much so as to make the company a bargain. Somewhere in the 30s I would start getting real interested.
__________________

__________________
"There are three kinds of men. The one that learns by reading. The few who learn by observation. The rest have to pee on the electric fence for themselves."



- Will Rogers
brewer12345 is offline   Reply With Quote
Join the #1 Early Retirement and Financial Independence Forum Today - It's Totally Free!

Are you planning to be financially independent as early as possible so you can live life on your own terms? Discuss successful investing strategies, asset allocation models, tax strategies and other related topics in our online forum community. Our members range from young folks just starting their journey to financial independence, military retirees and even multimillionaires. No matter where you fit in you'll find that Early-Retirement.org is a great community to join. Best of all it's totally FREE!

You are currently viewing our boards as a guest so you have limited access to our community. Please take the time to register and you will gain a lot of great new features including; the ability to participate in discussions, network with our members, see fewer ads, upload photographs, create a retirement blog, send private messages and so much, much more!

Re: Heh, ISM/OSM again
Old 05-02-2007, 10:27 AM   #142
Thinks s/he gets paid by the post
 
Join Date: Aug 2004
Location: Houston
Posts: 1,435
Re: Heh, ISM/OSM again

Whats up with the big moves yesterday and today?
__________________

__________________
soupcxan is offline   Reply With Quote
Re: Heh, ISM/OSM again
Old 05-02-2007, 10:33 AM   #143
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
brewer12345's Avatar
 
Join Date: Mar 2003
Posts: 16,391
Re: Heh, ISM/OSM again

Quote:
Originally Posted by soupcxan
Whats up with the big moves yesterday and today?
Dunno. I note that the stock is also up despite some pretty unfriendly regulatory-related headlines. I am a suspicious bastard, so I am starting to think that someone knows or suspects that another offer from a different type of buyer may be in the offing. Time will tell.
__________________
"There are three kinds of men. The one that learns by reading. The few who learn by observation. The rest have to pee on the electric fence for themselves."



- Will Rogers
brewer12345 is offline   Reply With Quote
Re: Heh, ISM/OSM again
Old 05-15-2007, 10:08 AM   #144
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
youbet's Avatar
 
Join Date: Mar 2005
Location: Chicago
Posts: 9,965
Re: Heh, ISM/OSM again

CONSUMER PRICE INDEX: APRIL 2007

The Consumer Price Index for All Urban Consumers (CPI-U) increased
0.6 percent in April, before seasonal adjustment, the Bureau of Labor
Statistics of the U.S. Department of Labor reported today. The April
level of 206.686 (1982-84=100) was 2.6 percent higher than in April 2006.


The above from the BLS and emailed out today.

Looks like the July 15 to Aug 14 yield on ISM will be 2.6% + 2.05% = 4.65% at PAR.

Talk about ISM has been quiet lately. Anybody heard anything further?



__________________
"I wasn't born blue blood. I was born blue-collar." John Wort Hannam
youbet is offline   Reply With Quote
Re: Heh, ISM/OSM again
Old 05-15-2007, 10:09 AM   #145
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
brewer12345's Avatar
 
Join Date: Mar 2003
Posts: 16,391
Re: Heh, ISM/OSM again

Since the bonds traded back up to where they were before the buyout was announced, I liquidated.
__________________
"There are three kinds of men. The one that learns by reading. The few who learn by observation. The rest have to pee on the electric fence for themselves."



- Will Rogers
brewer12345 is offline   Reply With Quote
Re: Heh, ISM/OSM again
Old 05-15-2007, 10:12 AM   #146
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
cute fuzzy bunny's Avatar
 
Join Date: Dec 2003
Location: Losing my whump
Posts: 22,697
Re: Heh, ISM/OSM again

Me too.
__________________
Be fearful when others are greedy, and greedy when others are fearful. Just another form of "buy low, sell high" for those who have trouble with things. This rule is not universal. Do not buy a 1973 Pinto because everyone else is afraid of it.
cute fuzzy bunny is offline   Reply With Quote
Re: Heh, ISM/OSM again
Old 05-15-2007, 11:09 AM   #147
Thinks s/he gets paid by the post
 
Join Date: Jun 2005
Posts: 4,005
Re: Heh, ISM/OSM again

Still holding. I'm certainly regretting NOT putting in that buy limit order at 20.00. Shoulda coulda woulda...
__________________
justin is offline   Reply With Quote
Re: Heh, ISM/OSM again
Old 05-15-2007, 11:19 AM   #148
Thinks s/he gets paid by the post
FIRE'd@51's Avatar
 
Join Date: Aug 2006
Posts: 2,317
Re: Heh, ISM/OSM again

Quote:
Originally Posted by justin
Still holding. I'm certainly regretting NOT putting in that buy limit order at 20.00. Shoulda coulda woulda...
I'm still holding too - of course, ISM/OSM are only about 1% of my portfolio. It does appear that 20 was probably a very good buy. Seems like nothing fundamentally has changed over the past month - perhaps the probability that the deal won't go through has increased slightly. Maybe it was simply a "knee-jerk" over reaction by the marketplace to the buyout.
__________________
I'd rather be governed by the first one hundred names in the telephone book than the Harvard faculty - William F. Buckley
FIRE'd@51 is offline   Reply With Quote
Re: Heh, ISM/OSM again
Old 05-15-2007, 01:05 PM   #149
Thinks s/he gets paid by the post
 
Join Date: Jun 2005
Posts: 4,005
Re: Heh, ISM/OSM again

I have ~4% of my portfolio in ISM. My only bond position. If I only got back 80 cents on the dollar (which would equate to 68 cents on the dollar paid out based on par), I'd be happy enough with that outcome. In the meantime, I'm getting paid a reasonable coupon comparable to similar maturity bonds.
__________________
justin is offline   Reply With Quote
Old 06-04-2007, 07:50 PM   #150
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
clifp's Avatar
 
Join Date: Oct 2006
Posts: 7,450
Quote:
Bondholders took a ratings cut for SLM Corp. (SLM), or Sallie Mae, in stride Monday morning: the cost of protecting its bonds barely changed after Standard & Poor's cut the student lender's ratings two notches to triple-B-plus from single-A late Friday.
Sallie's credit default swaps, or CDS, which are privately negotiated contracts that allow investors to wager on a company's creditworthiness, are three basis points wider at 173/178 basis points Monday morning, according to Wayne Schmidt of AXA Investment Management. This means the cost of protecting a notional $10 million of Sallie's bonds against a possible default for five years is between $173,000 and $178,000 per year.
"The downgrades were probably already priced in," Schmidt said.
Ok any advice for those of us who weren't smart enough to get out when ISM/OSM went back to there pre-buyout levels. The bonds are 20.20/20.25 respectively.

I assume that with the bad news already out they bonds will rally if the deal falls through and then stay pretty stable, until the details of the takeover are known.

Does anybody have the current yields or YTM of inflation index bonds with comparable credit ratings?

Why does losing 5% on bond issue upset me so much more than a 5% move on a stock?
__________________
clifp is offline   Reply With Quote
Old 06-04-2007, 10:14 PM   #151
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
cute fuzzy bunny's Avatar
 
Join Date: Dec 2003
Location: Losing my whump
Posts: 22,697
Because they're supposed to be a safe haven...
__________________
Be fearful when others are greedy, and greedy when others are fearful. Just another form of "buy low, sell high" for those who have trouble with things. This rule is not universal. Do not buy a 1973 Pinto because everyone else is afraid of it.
cute fuzzy bunny is offline   Reply With Quote
Old 06-05-2007, 10:38 AM   #152
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
FinanceDude's Avatar
 
Join Date: Aug 2006
Posts: 12,484
Quote:
Originally Posted by clifp View Post
Why does losing 5% on bond issue upset me so much more than a 5% move on a stock?
Because they're not supposed to, unless you own some fine GM or FORD bonds...........
__________________
Consult with your own advisor or representative. My thoughts should not be construed as investment advice. Past performance is no guarantee of future results (love that one).......:)


This Thread is USELESS without pics.........:)
FinanceDude is offline   Reply With Quote
Old 06-05-2007, 11:25 AM   #153
Thinks s/he gets paid by the post
FIRE'd@51's Avatar
 
Join Date: Aug 2006
Posts: 2,317
The other thing to consider is that the real rate of interest has increased 25-30 basis points over the past month (take a look at TIPS rates on Bloomberg). The duration of ISM/OSM with respect to real rates is about 10. So at least half the price decrease over the past month could be explained by a rise in real rates. Note that TIPS prices have declined a couple of percent over the past month as well.
__________________
FIRE'd@51 is offline   Reply With Quote
Old 06-05-2007, 11:35 AM   #154
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
brewer12345's Avatar
 
Join Date: Mar 2003
Posts: 16,391
Spread over comparable TIPS is about 210 BP, so the spread has widened out somewhat to reflect the increased credit risk. I actually was somewhat surprosed that S&P did not whack the ratings more than a couple notches, and I would expect more cuts once the deal goes through. But it will be no shock to the market, given that everyone is now expecting the deal to happen with an attendant degradation of credit quality.

As a point of interest, this deal was such a shock that it has changed the bonds that financials issue. Countrywide just did a 5 year bond deal that included a "poison put": this allows the bondholder the option of forcing the issuer to buy back the bonds at 101% of par if the issuer is acquired. This is pretty much unheard of for high grade debt issued by a financial.
__________________
"There are three kinds of men. The one that learns by reading. The few who learn by observation. The rest have to pee on the electric fence for themselves."



- Will Rogers
brewer12345 is offline   Reply With Quote
Old 06-08-2007, 01:19 PM   #155
Thinks s/he gets paid by the post
FIRE'd@51's Avatar
 
Join Date: Aug 2006
Posts: 2,317
For anyone who's still left with these puppies, a nice spread has opened up between ISM and OSM. I had 50% in each bond. Today, I swapped all of my ISM for OSM taking out 0.52 per share. OSM currently has a YTM of about 40 basis points more than ISM at this spread.
__________________
FIRE'd@51 is offline   Reply With Quote
Old 06-08-2007, 01:29 PM   #156
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
cute fuzzy bunny's Avatar
 
Join Date: Dec 2003
Location: Losing my whump
Posts: 22,697
Yeah and ISM had a nice little pop today for anyone else who didnt bail out but wants to.
__________________
Be fearful when others are greedy, and greedy when others are fearful. Just another form of "buy low, sell high" for those who have trouble with things. This rule is not universal. Do not buy a 1973 Pinto because everyone else is afraid of it.
cute fuzzy bunny is offline   Reply With Quote
Old 06-08-2007, 02:01 PM   #157
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
haha's Avatar
 
Join Date: Apr 2003
Location: Hooverville
Posts: 22,386
Quote:
Originally Posted by brewer12345 View Post
As a point of interest, this deal was such a shock that it has changed the bonds that financials issue. Countrywide just did a 5 year bond deal that included a "poison put": this allows the bondholder the option of forcing the issuer to buy back the bonds at 101% of par if the issuer is acquired. This is pretty much unheard of for high grade debt issued by a financial.
Very good provision. Fool me once...

Ha
__________________
haha is online now   Reply With Quote
Old 06-20-2007, 02:34 PM   #158
Thinks s/he gets paid by the post
 
Join Date: Aug 2004
Location: Houston
Posts: 1,435
JSM has been beaten down to 20 which puts it at a 7.5% yield given the coupon...granted there has been some progress in moving the buyout forward but they really seem to be pricing this stuff as junk...and I really can't imagine it's risk profile is that junky. Any opportunity here?

Plus I imagine you'd get the accretion back to par of $25 (although not until 2043).
__________________

__________________
soupcxan is offline   Reply With Quote
Reply


Currently Active Users Viewing This Thread: 1 (0 members and 1 guests)
 
Thread Tools Search this Thread
Search this Thread:

Advanced Search
Display Modes

Posting Rules
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts

BB code is On
Smilies are On
[IMG] code is On
HTML code is Off
Trackbacks are Off
Pingbacks are Off
Refbacks are Off


Similar Threads
Thread Thread Starter Forum Replies Last Post
How Happy are You? LKH Other topics 88 03-22-2011 10:28 AM
Heh, another humorous wine review brewer12345 Other topics 4 05-17-2007 02:15 PM
Heh, a Falwell eulogy brewer12345 Other topics 1 05-16-2007 01:11 PM
Heh, unfortunately worded headline brewer12345 Other topics 10 05-04-2007 08:35 AM
Heh, another unintentionally brewer12345 Other topics 0 09-17-2006 02:37 PM

 

 
All times are GMT -6. The time now is 09:13 AM.
 
Powered by vBulletin® Version 3.8.8 Beta 1
Copyright ©2000 - 2017, vBulletin Solutions, Inc.