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Junk Bonds
Old 07-31-2007, 07:56 AM   #1
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Junk Bonds

The junk market really collapsed in the past couple of weeks, but now appears to be rebounding. Might not be a bad time to buy a bit. No guarantee that this isn't the sucker rally, but yield premiums pretty richly compensate for the risk at this point, IMO.
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Old 07-31-2007, 08:11 AM   #2
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Ok, I'll be the first sucker to ask.........any recommendations?
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Old 07-31-2007, 08:12 AM   #3
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If y ou wish to do this, I think a fund is the best way to go. The Vanguard junk fund isn't bad. Bank loans in particular look attractive, so I would also think about Fidelity Floating rate and two exchange traded funds that are virtual twins: FRA and FRB.
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Old 07-31-2007, 08:38 AM   #4
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Quote:
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If y ou wish to do this, I think a fund is the best way to go. The Vanguard junk fund isn't bad. Bank loans in particular look attractive, so I would also think about Fidelity Floating rate and two exchange traded funds that are virtual twins: FRA and FRB.
What's your thoughts on EVV?
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Old 07-31-2007, 08:59 AM   #5
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What's your thoughts on EVV?
Looks good.
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Old 07-31-2007, 12:03 PM   #6
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I might mention that I exited my junk short on Friday, for a quick $12,000 profit.

At this time,still no interest interest in going long however.

But I am not a debt speculator, so my opinions are fairly casual.

Ha
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Old 07-31-2007, 12:13 PM   #7
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I might mention that I exited my junk short on Friday, for a quick $12,000 profit.



Ha
I should have listened to your tip a couple of weeks ago. Would have, could have, should have......................
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Old 07-31-2007, 12:19 PM   #8
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What scares me about them is Jim Jubiak (with msn) really poo-poo'ed on bonds of this kind in 2 recent articles (for 2007), one just out yesterday I think. I'm kinda holding his opinion in high regard lately because its past performance (particularly in stocks) has almost been god-like.

I'm already in them though so hopefully I can recover some losses.
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Old 07-31-2007, 12:27 PM   #9
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I should have listened to your tip a couple of weeks ago. Would have, could have, should have......................
No Dawg! Never listen to what I say! I don't consider what I say tips- way too much responsibility! Responsibility and I avoid one another like the plague.

I was merely cautioning about what appeared to be junk market without much possibility of an upside, and (clearly) considerable possible downside.

Once I introduced my friend to a very cute woman. He was grateful-until he got herpes.

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Old 07-31-2007, 12:35 PM   #10
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What scares me about them is Jim Jubiak (with msn) really poo-poo'ed on bonds of this kind in 2 recent articles (for 2007), one just out yesterday I think. I'm kinda holding his opinion in high regard lately because its past performance (particularly in stocks) has almost been god-like.

I'm already in them though so hopefully I can recover some losses.
I guess the good news is that Jubaks performance is a little short of godlike. In fact, his picks are underperforming the market by about 50%, almost consistently on a year to year basis, since 2000. Over the last 12 months, his picks have gained 8.39% while the s&p500 has managed a 16.69% return.

He did have a few good calls in the 97-00 time frame (when you could make good picks with a dartboard) and got his money out, so his 10 year performance is pretty decent.

The bad news is that junk bonds do suck, so he's correct there.

I guess if you're buying Jubaks picks and own junk bonds, its all bad news.
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Old 07-31-2007, 12:46 PM   #11
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Junk has repriced to a significantly fatter spread in the last month, probably to where it should have been to compensate investors for default risk. But the spread widening, bond price declines, and general blood-letting aside, underlying credit quality has (for the most part; basket cases aside) improved if you look at the fundamentals.

So we haven't had defaults sufficient to crash the junk market to record lows, but junk is now more attractive than it has been for a long time.
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Old 07-31-2007, 01:15 PM   #12
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Once I introduced my friend to a very cute woman. He was grateful-until he got herpes.

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If you can introduce me to the girl in your avatar, I'll take my chances on herpes.
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Old 07-31-2007, 01:36 PM   #13
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I guess the good news is that Jubaks performance is a little short of godlike. In fact, his picks are underperforming the market by about 50%, almost consistently on a year to year basis, since 2000. Over the last 12 months, his picks have gained 8.39% while the s&p500 has managed a 16.69% return.
The bad news is, none of this is correct and his performance measured by any timeframe over one year is outstanding. For one year, he beat the nasdaq, s&p500, and the dow.

"Jim’s main portfolio, launched in May 1997, has doubled in the last three years, more than tripled in the past 10 years and continues to beat the major averages by a wide margin. "

Performance chart at the following link: (brace yourself)

Jim Jubak : Stocks feel the pain of a buyers strike

..............

I don't buy Jubak's picks since i'm a mutual fund investor, but I am apt to listen to anyone that can put of performance numbers like that.
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Old 07-31-2007, 02:06 PM   #14
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Like I said, Jims ten year performance looks great when you let him cherry pick which of his "pick boards" he talks about, and you include the 97-00 picks that he fortunately bailed out of.

Same crap that Fortune and the other financial porn mags pulls and many mutual funds do with scuttled "incubator" funds. Throw a ton of stuff at the wall, if some sticks, talk about that and pretend the rest never happened.

Since 2000 his performance sucks.

Brace yourself:
Stock Picks: Jubak's Picks for the next 12 months - MSN Money
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Old 07-31-2007, 02:50 PM   #15
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If that performance chart is not an accurate representation of his positions, including when he bought and sold, then who knows what is true; what Jim's saying, what you're saying, or something else all-together. However, If that chart is accurate, his performance for any time-period looks outstanding to me. Though 2000- isn't reflected in that chart, it would be hard to image that being poor (relative to indexes) if that chart is accurate.

My initial reference to his performance was based on that summary, so if the summary is a fabrication, then obviously any conclusions I'm drawing from it are going to be mistaken.
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Old 07-31-2007, 02:56 PM   #16
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Here is another guru from Personal Finance and Investing - MSN Money. Tim Middleton discusses small cap funds today and below is a quote and theme from today's article.

If you have big gains from the past few years, now's not a bad time to sell. But if you don't own any of these gems, says MSN Money's Tim Middleton, it's not a bad time to buy, either.

Another slick way of covering all your bases.
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Old 07-31-2007, 03:03 PM   #17
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I couldn't quickly find anything useful on his site with regards to performance. It looks like that link is a trailing 52 week look at his stocks for the next 12 months. Further, it looks like he's just entered some of those positions.

So, if he bought a position in company x at $y, does that chart show 52-week to date performance for company x or does it show ytd performance based on entering at $y?
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Old 07-31-2007, 03:17 PM   #18
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Grantham Growls

Bloomberg.com: Worldwide

My Homey Jeremy predicts "Most of the money going into private equity today will be a total loss.''

Ha
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Old 07-31-2007, 08:05 PM   #19
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I couldn't quickly find anything useful on his site with regards to performance. It looks like that link is a trailing 52 week look at his stocks for the next 12 months. Further, it looks like he's just entered some of those positions.

So, if he bought a position in company x at $y, does that chart show 52-week to date performance for company x or does it show ytd performance based on entering at $y?
Jim makes "picks for the next 12 months" on a continuous basis. That log is a list of all the picks he's made in the last year, how they performed, and a current roll up of them. In other words, if for the past year you had been buying what he had suggested were good stocks and would remain good to own for a year, the results would have been that you would have enjoyed roughly 50% of the returns of the s&p 500.

He's not a bad guy. He's not an idiot. He has decent reasoning behind many of his picks. You could do worse.

But let me put this to you a different way: my year by year returns absolutely blow his pants, underwear, socks, shoes and any front facing tattoos off his body. Going back as far as he goes and further.

Would you like to buy MY newsletter?
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Old 07-31-2007, 08:18 PM   #20
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Would you like to buy MY newsletter?
Well, let me go back to my mantra "know what you bought and why you bought it". Hmm... let's try that on for size "I own this stock because a rich guy told me to on the Intarweb"

Yes! How much?
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