Recent content by A.J. Sutton

This is a very beaten-down sector, with many companies in serious trouble. However eventually it will turn. I mean tankers, container ships, bulkers, LNG tankers. There are many MLPs and also MLPs that report via 1099s, so are appropriate for IRAs (which standard K-1 MLPs are not). I am in...

I have been doing these for years. The debt can often be traded well after announcements when forced sellers are dumping. Or, wait until the POR (Plan of Reorganization) is filed, or approved, when you can see what you will get in return for the old bonds/preferred/common. I am currently in...

Bankruptcy is not the end, except for the common stock. Many times I have bought the debt by after bankruptcy anticipating that the new common in the recapitalized company will have some good value. The one key requirement there is that the business the company in is decent, so that the...

Yes, the crisis seems to have passed for now, but we will see if companies can make money in this environment. One example is CHK, whose stock and bonds have both come back, and yet it is still losing large amounts of money and only survives by selling its better assets. It seems as if in this...

Holding period depends on the cost to borrow for the short. With companies at risk of bankruptcy, this can be high. So you need a catalyst, for example bond maturities that will force a bankruptcy unless something is done- like a prepack. Annual return will vary, as usual, but will be less...

If you bought your debt cheaply then if the company recovers it would presumably go to par. I generally will do these pair trades when the debt trades to around 30% of face, and the company has serious problems. At that point the common would be under $10 usually. But of course if the company...

The concept is to play the seniority of the securities. It works when a company is under stress, as in at risk of bankruptcy, but when you see it has some assets and a valid business. Not good if it is a flake company that is worth zero. But if the thing is worth something, just...

With shorts I use put options to limit risk. You may lose your entire premium but you can get the leverage of a much larger short position if it works out. However, when I use options time is hurting you so I need to see a near-term possible catalyst. For example, I have SCTY puts because...

Personally I use Linux with the graphical interface Ubuntu. Installing it is a little gnarly, so you want to buy it pre-installed from some place like System76.Com. After that it updates much better than Doze, in that you don't have to constantly re-boot, and it is totally easy and fast. I...