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10/14/2011

Sell Treasuries, Buy Corporates

October 12th, 2011
By David Goldman
In a new Macrostrategy report, we recommend selling Treasuries and buying lower-rated corporates
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The above extract from David Goldman is quite interesting. With a little twist, it can be turned into a strategy for SWFs. Sell core assets and buy fire sales assets. This means that one should sell all core assets, land, landed properties, and blue chip companies, for very good prices as they are really valued assets. With the money, go out to the world and buy lelong(junk) assets or lower rated corporate assets at fire sale prices. By selling a smaller number of core assets or blue chip assets, one can buy thousands of failed corporate assets and turn them around. Then can make billions and billions of profits.

I think it is a terrifying strategy, a brilliant strategy. Between a genius and an idiot, is only a fine line. I call it terrifying because if successful, the profits can be enormous. But failure rate is so high that it is terrifying. Only the fools or genius will ever think of applying such a strategy. It is like throwing good money after bad money. But if it is OPM, other people’s money, it is worth a gamble. After all one can lose everything, without losing one’s own pants. But if successful, one can claim all the credits and demand a pot of gold.

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