High Yield
topic on 3 shows · 12 statements across 12 episodes
Invest Like the Best 
Capital Allocators 
the a16z Podcast
12 statements about High Yield, every show
James: DLJ controlled 40% of high-yield trading for 12 years
“We accounted for all, 40% of all trading volume and high yield for 12 years.”
Lewinsohn: Leveraged loan quality dropped as high yield quality improved
“As high yield has become higher quality, levered loan market is often lower quality.”
Kleinman: Apollo held virtually no high yield debt in late 2021
“If you looked at our entire footprint at the time, we had virtually no high yield on the Apollo platform.”
Milgram: Most Distressed Investors Merely Trade Cheap High Yield
“Today, a lot of, you know, the folks that call themselves distressed investors, again, I view them as buying cheap high yield and sort of Participating as pure financial investors and portfolio traders but they will outsource all of that critical thinking.”
High-yield default losses average around 2% after historical 40% recoveries
“And in fact, the recovery rate is in the forties. So if you look at a default rate of three, four percent, and if you get close to half your money back afterwards, your loss is like two percent.”
Williams: Equity growth risk permeates high yield, real estate, and private equity
“The major driver of portfolio risk is growth and equity growth. But that exists in equities, and that exists in high yield, potentially, real estate, certainly private equity, and maybe even other investments. And so having a very clear picture of where that e…”
Baumgartner: Stress in private credit and high yield creates liquidity-provider opportunities
“Obviously with spreads blowing out the way they have opportunities in private credit, distressed, high yield are interesting. And there's enough stress that looks like it's been created in that market to make it attractive for liquidity providers. Wouldn't say…”
Mauboussin: High yield debt provides a direct comparability benchmark for equities
“High yield typically trades not dissimilarly to equities. It's a little bit more of a senior claim. And so you have sort of something that's not too far off in terms of a comparability and allows you to sort of calibrate.”
Passive investing in high-yield debt is counterproductive
“You don't want to be passive in high yields. And, you know, even if you just want to get exposure, you still want to be active there. You don't want the biggest bonds in your portfolio to be there just because the company's issued more debt.”
High-Yield Bonds Are Like Pennies in Front of a Steamroller
“So the question is, picking up three, four, five, six percent in high yield from today forward, it's like picking up pennies in front of a steamroller. Is it worth it? That's the question. And my answer to that is no.”
Mauboussin: High-Yield ETFs Are Much More Liquid Than Their Underlying Assets
“Most of the volume, for example, in ETFs would be things like the SPDR, which is the S&P, and there's just not, there's unlikely to be a big issue there, but as you point out, we've had this massive proliferation, and especially into credit markets, and you kn…”