Hiyield007

Why Junk Bonds Are No Longer Junky

JNK is not down 6% for the year. It's not up as much as other junk bond funds because it came into 2009 with a huge premium to its NAV and it worked that premium off early in January. Some of the open end junk bond funds, which track the cash market and trade at NAV, are up 18% to 20% and more YTD. So I wouldn't say the market is oversold as we are on track for the best year in junk bond history which was 1991.

Kendle: I'm Glad I Didn't Buy the Chart

You sure are dead on about nothing working in this market, especially the old tried and true ways. About the time that becomes accepted though will be the time it begins working again. I hold one CRO and that is CRL. And that is only because of all the CROs I like its chart pattern the best. It has a tighter pattern and hans't reacted as much as the other CROs on the downswings.

7 Small Cap Water Infrastructure Plays for the Stimulus Package

I don't want to pull rank and even though I have published a couple trading books and have over 40 years of trading experience, I don't have that much more insight into where the market is going than some rank rookie. But in my time I have seen more than my share of what is called a crowded trade. And anything related to infrastructure recently has been a very, very crowded trade. Everywhere you turn you are reading about the love affair with infrastructure. That tends to bring in the public trader aka weak longs. The past few weeks and especially the past two days it has been an absolute bloodbath in anything infrastructure. FWLT, FLR, CBI, TEX, MTW, MWA, NWPX, and the list goes on and on. ACM is an exception primarily because it was added to the S@P midcap index. TTEK has also held fairly well. In the future beware of the buzz, the hype, and the logical.

7 Small Cap Water Infrastructure Plays for the Stimulus Package

>>>Thanks for the recommendation on Tetra, but I do think you are wrong in assuming that just because infrastructure isn't the "hot word" on the Street, the area is no longer worth your while. Have a look!<<<<

Jim, my point is you wanted to be in these things before they became overhyped and that was back in November for most of the infrastructure plays - water or otherwise. Once the hype and buzz began they fell hard from their post November/December highs. That's because in this business you don't want to be a headline trader or investor. Regardless, I hope your plays work out. At this point just about everything is dependent on the overall market and so goes it so goes most of the sectors. It's after we come out of this ugly bear market that the cream will rise to the top and hopefully that will be many of your recommendations. Good luck.

7 Small Cap Water Infrastructure Plays for the Stimulus Package

Making money off the Obama infrastructure buzz has come and gone. These stocks ran up over 50% and more off their October/November lows and now have collasped off their most recent highs. If you want a water infrastructure play about the only viable one is TTEK.

Take a Look at Junk - Barron's

Clorox Cowboy not all that bad of an ideal, just don't go overboard. Junk bonds are the most trend persistent asset out there and once they begin trending it is hard to break the momentum be it up or down. I prefer to wait for more signs of life and some indication the down trend is over. My concern is that default rates on junk bonds may be much greater than many expect in 2009 and hence we have a ways to go on the downside. On the other hand, junk often bottoms with the stock (October 2002 is a good example) so I may jump back in if I see some indication the stock market bear has ended. I will admit though, this fund has never has this type of carnage since its inception back in the 80s and it's tempting to leg in as you suggest. Personally though my open end junk bond of choice isn't going to be Vanguard. It always lags in bull markets. It normally outperfomrs its peers in bear markets but sure isn't this time around.

Take a Look at Junk - Barron's

As several have mentioned above way, way too early. And in the three market days since the Barron's article, the average open end junk bond fund (which best reflects the cash market) is down between 4% to 5% while the closed end junk funds have taken a much more severe pounding. This is now the worst junk bond bear market of all time. I never thought I would see anything as bad as the 89-90 affair but this one takes the cake. Junk bonds are the most trend persistent asset class out there and this bear trend will not be easily broken. My concern is that the default rate will hit historical highs in 2009 and normally new junk bull markets don't develop until we are right at or near the peak of defaults.

Why Buy High Yield Bond Funds?

A good article on junk bonds if only to alert investors that during junk bond bear markets the dividends are reduced. My only objection is the default rates on junk bonds are projected to hit record levels in 2009. As an aside, this is now officially the worst junk bond bear market of all time. I never thought I would see anything like 89-90 but this one takes the cake. I am drooling over the prospects of the next next bull market in junk bonds hoping it will be similar to 1991, but it may be a very, very long wait.