8 ms·
NPR's Planet Money also bought some oil: https://www.npr.org/sections/money/2016/08/26/491342091/planet-money-buys-oil https://www.npr.org/sections/money/2016/0
by dublinben 7y ago
NPR's Planet Money also bought some oil: https://www.npr.org/sections/money/2016/08/26/491342091/planet-money-buys-oil https://www.npr.org/sections/money/2016/08/26/491342091/plan...
- duxup 7y agoI think Planet Money also bought a mortgage backed security a while back when things had already gone south. They tracked the houses involved and their history. It was interesting to see the investment tied to specific homes, and etc.
- NikolaeVarius 7y agoAlso a junk/high-yield bond https://www.npr.org/2020/02/19/807544557/meet-our-junk-bond https://www.npr.org/2020/02/19/807544557/meet-our-junk-bond
- wefarrell 7y agoSchwab allows retail investors to buy junk bonds. I bought one a few weeks ago.
- kart23 7y agoReally? Care to share your experience/details?
- somebodythere 7y agoFidelity allows one to do so as well. The interface is a bit different from trading stocks (no intraday charts, additional fundamentals like YTM/YTW) but not exactly obscure. You search for a bond, type in a bid, quantity, and hit buy. The coupons show up in your account every few months.
- wefarrell 7y agoSure, I bought a Delta Airlines bond with a 3.4% coupon for 93 cents on the dollar due in a year from now. Provided Delta doesn't go bankrupt in a year I will make 10%. They have a pretty healthy balance sheet compared to their peers and I don't expect the government to let the sector fail in such a way that bondholders get wiped out.
- TomGullen 7y agoI would of thought holding Delta stock would have more than 10% upside if they don’t go bankrupt
- IAmGraydon 7y agoHe’s not talking about stock, and you’re right - their stock would have a far greater return. Potentially over 100% within a year.
- throwaway373438 7y agoBut also far more likely to go to zero.
- ineedasername 7y agoThe stock probably does have a bigger potential upside, but also a more probable (than the bond) downside. The stock could drop quite a bit while the bond remains solvent. Bankruptcy and declining stock are not (completely) correlated positions to take. It's always a risk trade off.
- ShorsHammer 7y agoGuess who gets paid first if the company collapses.
- hcknwscommenter 7y agoEven if they don't go bankrupt, the equity has a much higher risk. The gov't could take massive warrants or preferreds etc. in exchange for needed money. That sort of dilution can be profound. Look at a 10 year chart of AIG. Yahoo chart says all time high was 1971 (by eye), currently trading at 23. Of course the stock was never actually trading at almost 2000/share, that's just the dilution factored in.
- perl4ever 7y agoWhat happens in the event of a default? I would have thought that your broker would zero it out, but I remember hearing about someone buying a worthless bond from a friend for like $1 once as a favor.
- dcormier 7y agoToxie. Here are the relevant episodes: https://www.npr.org/sections/money/2011/06/01/131077279/toxie-a-life https://www.npr.org/sections/money/2011/06/01/131077279/toxi...
- ngold 7y agoThey also have a bot kicking around somewhere to buy stocks on Trump tweets. Pretty interesting stuff.
- Gustomaximus 7y agoJohn Oliver bought peoples debt and released it: https://www.youtube.com/watch?v=hxUAntt1z2c https://www.youtube.com/watch?v=hxUAntt1z2c
- hedora 7y agoYou can donate to RIP medical debt, and they’ll do this for you.
- kart23 7y agoI've always wondered If I could just go out and buy like 10 mortgages or car loans in my area, and try to recover some of the money. I've heard that debt goes for pennies on the dollar, so I would think it would be possible to make a decent amount if you have the time.
- HeyLaughingBoy 7y agoI think in most states, if you are the original owner of the debt (i.e. you or your business lent the money), you can just go collect it. But in a case where you're collecting a debt you did not originate, you'll need a debt collector's license in the state where you plan to operate. The license isn't hard to get, but typically there is a very large bond that needs to be posted. And you're right: if you have the stomach for consumer debt collection and are good at being nice to people (being nice has a much higher success ratio than being a dick when trying to collect), and you're incredibly patient (the really cheap debt is almost uncollectable) it's basically printing money. source: wife used to be a commercial debt/receivables collector and a long time ago I considered writing debt collection software.
- kart23 7y agoThanks for giving some insight into that process. I'd rather be patient and take on 'human' risk, which for some reason I feel more comfortable with. I'm probably being overly idyllic, but I just imagine being friendly and reasonable with people and their situations might go a long way, especially reaffirming that you're not some massive bank that doesn't give a shit.
- invalidOrTaken 7y ago1. Buy cheap debt. 2. Call debtors and offer to teach them to code. 3. Walk them through interviews, etc. 4. Collect! I don't know if that particular path is viable, but I am somewhat taken by the idea of making money by/while helping people out.
- 7y ago