Distressed Bonds Go Their Own Way; Plus a Sell
When interest rates go up, bond prices go down. Most segments obey that rule, by falling in price, as the benchmark 10-year Treasury yield rose. But not distressed bonds.
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Be Careful of Averages When It Comes to Distressed Debt
When investing in distressed debt, be very selective about which distressed bonds you buy. Buying a market basket of assets – a quick, efficient way of adding to equity holdings – is not a smart alternative with distressed debt.
Distressed Debt and the Presidential Election
The media likes to guess how the outcome of the U.S. presidential election will play out in the financial markets. Here, Marty Fridson analyzes past distressed-debt data to discover if it actually matters who wins on November 5: Donald Trump or Kamala Harris.
Breaking Out of the Pack
Within the junk heap of distressed debt are bonds of companies that turn themselves around and get out of distress. Those bonds re-enter the non-distressed ranks, rewarding holders with big price gains on top of the super-high yields earned along the way.
When Personalities Trump the Numbers
When the King of Bankruptcy Wilbur Ross and Donald Trump negotiated the terms of a distressed-bond settlement, Ross’ knowledge of the casino operator’s ability to pay helped him win the deal.
This Is Your Brain on AI
Artificial intelligence has caused this company’s revenues to plummet – the price of its bonds to fall. Now, it’s fighting back, by flipping the story and using AI to create a better product. Whether or not it succeeds, investors will very likely get paid anyway.
Distress Exists Even When the Market Booms
Financial distress persists even when the S&P 500 and other indications seem to be emphatically signaling prosperity – and why this could mean more opportunities to earn excellent returns in coming months.
The Low Price of High-Yield Bonds
The distressed-bond universe exhibits a rare market condition that in the past has produced an average annual return of 73%. On the face of it, as we discuss in this issue, this condition could prove to be an excellent time to be buying distressed debt.
A Stock-Bond Combo Buy
In this issue, we recommend the stock and bond of a company that has moved itself from a financially precarious position to a secure one… but the market doesn’t yet appreciate this new reality.
The Return-to-Office Rebound
Owing to an oversupply of office space, the bond price of this commercial real estate company has declined as if a bankruptcy is likely. In this issue, we will show you why we think the bonds are worth more than that – possibly much more.