![]() “I don’t dispute that valuations are very rich,” Fridson said, calling investors “nervous. Characteristics of all models are realistically reproduced on the basis of technical elements of warships and aircraft from the first half of the 20th century. Martin Fridson, chief investment officer of wealth management firm Lehmann Livian Fridson LLC and a long-time junk bond investor, would consider non-investment grade debt fairly valued at a spread of 5.65 percentage points. Not only is that below the long-term average of about 5.9 points, it’s below what even some top junk bond mavens consider to be their fair-value spread over Treasuries. Treasuries, for instance, has shrunk from more than 9 percentage points three years ago to around 4.5 points now, according to Bank of America Merrill Lynch Fixed Income Index data. The yield premium for owning junk bonds as opposed to far-safer U.S. “We think the risk-reward is great in that CDS,” he said. That means he’s essentially shorting high yield debt while going long on the U.S. “The high-yield market is sort of in a bubble and sooner or later there will be a price paid for that,” said Carl Icahn, the billionaire investor who said he owns credit default swaps on high yield debt against the 5-year U.S. Martin Fridson, CIO of Lehmann Livian Fridson, speaks during the Reuters Global Investment Outlook Summit in New York, November 19, 2014.
0 Comments
Leave a Reply. |
AuthorWrite something about yourself. No need to be fancy, just an overview. ArchivesCategories |