Lets see if anyone shares my opionion with the bond market

N

never lose ever

Okay so I was just watching street signs on CNBC and they brought up how alot of investors are pouring money into bonds for various companies and that the yields are the highest ever!

Now my thaught is this: Eventually people will go astray from the bond market and go into stocks again. I believe that the companies that will benefit most greatly are those that aren't taking alot of bond money because they are able to recieve capital since their credit is good.

I have one question. How can I find companies that are strong and most likely to benefit from the upcoming switch back to stocks?
 
Quote from never lose ever:

Okay so I was just watching street signs on CNBC and they brought up how alot of investors are pouring money into bonds for various companies and that the yields are the highest ever!

Now my thaught is this: Eventually people will go astray from the bond market and go into stocks again. I believe that the companies that will benefit most greatly are those that aren't taking alot of bond money because they are able to recieve capital since their credit is good.

I have one question. How can I find companies that are strong and most likely to benefit from the upcoming switch back to stocks?
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Nope! And turn CNBC off, start reading journals here, educational threads, and googling what you're having trouble with.
 
Quote from never lose ever:

how do I have this all wrong ?
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I read your post about 5 times, slowly. I sincerely wanted to give a helpful answer, but your post makes no sense. try clarifying terms like "takes bond money". Try again.
 
I don't mean to speak for the OP, but if you issue bonds you are in fact taking on debt. A high debt-to-equity ratio probably won't be considered favorable in a time of secondary or dilutive offering, especially in a fragile markets like now.

But with the treasuries at near zero, does all that matter?
 
Quote from never lose ever:

Okay so I was just watching street signs on CNBC and they brought up how alot of investors are pouring money into bonds for various companies and that the yields are the highest ever!
More...
When investors pour money into bonds, yields go lower, not higher. So, hopefully, the peeps you were listening to said "yields are the lowest ever".
Now my thaught is this: Eventually people will go astray from the bond market and go into stocks again. I believe that the companies that will benefit most greatly are those that aren't taking alot of bond money because they are able to recieve capital since their credit is good.
More...
What does the amount of "bond money" taken by a company have to do with its ability to "receive capital"? A company that has obtained a lot of long-term funding at attractive levels (which is what all these bond issuers are doing, in fact) should, if anything, be more attractive to equity investors. Such a company's credit is good, 'cause it has adequate and stable liquidity. Obviously, this holds up to a certain point, after which it's no longer positive.
I have one question. How can I find companies that are strong and most likely to benefit from the upcoming switch back to stocks?
More...
How about reading a finance textboook? You will, hopefully, learn to understand financial statements, which will allow you to make informed decisions about which companies are "strong" and which aren't.
 
I will try to help


Okay so I was just watching street signs on CNBC and they brought up how alot of investors are pouring money into bonds for various companies and that the yields are the highest ever!

Yields are extremely low, people pouring money into bonds makes the price go up and the yield go down. This is fixed income 101.

Now my thought is this: Eventually people will go astray from the bond market and go into stocks again. I believe that the companies that will benefit most greatly are those that aren't taking alot of bond money because they are able to recieve capital since their credit is good.

This one is harder because I am not sure if I understand your thoughts... but maybe I can help. The only reason anyone cares about good credit is because it allows them to receive "bond money" cheaply... currently everyone is receiving "bond money" (aka DEBT) cheaply because yields are so low because investors are pouring money into the debt markets.

I have one question. How can I find companies that are strong and most likely to benefit from the upcoming switch back to stocks? [/QUOTE]

If money starts flowing out of debt and back into equities, it should raise all equities, a smarter person than me will have to decide which company is best positioned to profit from this. However, money flowing out of bonds will also mean yields will go up, making it more expensive for companies to borrow, which would be a drag on the equity market.

The two main capital markets are debt (bonds) and equity, these are the two places large companies go to raise money, debt is much bigger than equity. In the equity market the company gives up a "share" of ownership, in the debt market they take out a loan... exactly like a mortgage.

This run up in the debt market has just started, please see Japanese Government Bonds in the 90s to see how long it can last. Also see the Nikkei over the same time period

5yr
 
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