corporate credit

Today, Distressed Investing editor Marty Fridson writes that when a sell-off in distressed debt begins, and sellers vastly outnumber buyers, outstanding opportunities will exist even in bonds that face no serious risk of failing. It can be a ripe time for juicy returns.

An urgent warning about the ongoing consumer credit implosion, and Porter announces our new “short” portfolio.

When the economic cycle reaches the point where corporate earnings are plunging, hundreds of companies will come under closer scrutiny and often become distressed. Investors who get in around the low point will realize huge gains. The trick, of course, is figuring out which pose the risk of bankruptcy and which do not.

Most investors believe the Fed is done or nearly done with its inflation-fighting interest rate hikes – and so far, no recession is in sight. That means perceived risk will remain subdued in the high yield bond sector... for now.

In today’s “two-for-the-price-of-one” recommendation, we pair one of the best distressed debt vehicles available, with a company that offers an inflation hedge through its exposure to higher commodity prices.