Deep Discount Bond

Deeeeeeep. Where the whales go for a bit of peace and quiet at the whale outhouse.

Look around. Everything down here...is cheap. Espcially the bonds: 32 cents on the dollar.

Over here, they're 23 cents on the dollar.

Ahhh...and here’s a 12-center.

Peace. Quiet. So waaaaaay up there…yeah, at the surface. Where the flying things hang out a lot. Up there is par. The 100 cent crowd. But down here lives the Deep Discount Bond crowd, and we have our own set of rules.

So who are we? We’re the shipwrecks. The fallen overboard phone companies that didn’t work. We’re Puerto Rico and Greece. We’re the failed. The losers. Les miserables.

This guy used to yield 5%. Now he trades for just 20 cents on the dollar. He’s angry because he thinks he should be...up there. On the surface. At par. But no…the Street has thrown him out and he sank. They don’t believe that newspapers, on paper, are ever gonna be a Thing again. So, ironically, they don't even want his paper. Sad. He thinks he’s a big bargain; he’s still paying his coupon of 5% on the 100 cents on the dollar schedule. Only now you can buy him for ⅕ of that amount (20 cents), so you get 5 times the yield. Yep, that’s 25%. Crazy high yield. If he pays.