tag:blogger.com,1999:blog-6616959642391988608.post1867789747386550225..comments2024-03-28T00:18:25.641-07:00Comments on Calafia Beach Pundit: Junk bond default rates have plungedScott Grannishttp://www.blogger.com/profile/14028519647946868684noreply@blogger.comBlogger7125tag:blogger.com,1999:blog-6616959642391988608.post-55179219645479357822010-12-09T08:28:50.864-08:002010-12-09T08:28:50.864-08:00Septi's comment above I think is a commonly he...Septi's comment above I think is a commonly held belief among many investors (I am not trying to be critical here) and I wanted to comment earlier on it but couldn't seem to find a good way to say it. <br /><br />Randel Forsyth's daily column in Barrons online today addresses it well..."High yield bonds ain't junk anymore". He quotes a Wells Fargo fund manager who ratherJohnhttps://www.blogger.com/profile/11652253509768573561noreply@blogger.comtag:blogger.com,1999:blog-6616959642391988608.post-82056955643930601782010-12-08T10:26:12.567-08:002010-12-08T10:26:12.567-08:00Good news. I liked HYG too, but my wife wanted a h...Good news. I liked HYG too, but my wife wanted a house. <br /><br />My wife won.Benjamin Colehttps://www.blogger.com/profile/14001038338873263877noreply@blogger.comtag:blogger.com,1999:blog-6616959642391988608.post-39775453966200282282010-12-08T08:28:35.170-08:002010-12-08T08:28:35.170-08:00the vast majority of the issuance is refinancings ...the vast majority of the issuance is refinancings and term extensions effected by very speculative grade credits, supported by hy mutual funds and other investors lunging for yield. this is not indicative of anything other than that. the default rate has plunged because of the access to the refi. very little is for new growth or to new companies. most issuers today are past repeat credits, andseptizoniomhttps://www.blogger.com/profile/14253705209662419429noreply@blogger.comtag:blogger.com,1999:blog-6616959642391988608.post-20191208459903258512010-12-08T07:48:43.033-08:002010-12-08T07:48:43.033-08:00Would you sell naked puts on the S&P right her...Would you sell naked puts on the S&P right here? That chart of Junk Yields is identical to a chart of the Vix. Owning high yield is identical to selling CDS on the crappiest credits. It makes sense sometimes, but it sure doesn't here, IMO.TDhttps://www.blogger.com/profile/06468054754043514702noreply@blogger.comtag:blogger.com,1999:blog-6616959642391988608.post-74037246541559191292010-12-08T07:41:37.919-08:002010-12-08T07:41:37.919-08:00Bill: sorry, I meant to say ETFs, with my favorite...Bill: sorry, I meant to say ETFs, with my favorite being HYG.<br /><br />John: I agree completely.Scott Grannishttps://www.blogger.com/profile/14028519647946868684noreply@blogger.comtag:blogger.com,1999:blog-6616959642391988608.post-48296737829868541712010-12-08T06:50:05.206-08:002010-12-08T06:50:05.206-08:00I would suggest that the very same factors Scott p...I would suggest that the very same factors Scott points out would apply to financial institutions such as banks and insurance companies. Credit quality has been improving consistently for several quarters. Many of these companies are still not out of the woods but improvements are clear. <br /><br />Markets will not wait for the facts to be obvious to all. Financial securities are underowned and Johnhttps://www.blogger.com/profile/11652253509768573561noreply@blogger.comtag:blogger.com,1999:blog-6616959642391988608.post-76592616943213636622010-12-08T05:01:37.211-08:002010-12-08T05:01:37.211-08:00Why are you in high yield mutual funds instead of ...Why are you in high yield mutual funds instead of high yield junk bond ETFs?<br /><br />BillBillhttps://www.blogger.com/profile/06522048487859597301noreply@blogger.com