HYBRID VIGOR: VOL 3 ISSUE 10 "Hope and Change"


Three new deals last week! Was everyone feeling ok? Pretty good for a hated asset class that’s probably just leading the league in percentage of salespeople laid off. The deals are a good start, anyway.

Of course, we recognize that man, woman and child cannot live on convertibles alone. To that end we are unveiling, slowly but surely, the high-yield adaptation of our HOCS convertible methodology. Today our colleague Dennis Dowden comments on some “fallen angels” in the energy sector. They’ve had a “fallen angel” bounce, of course, but we hope that you find an interesting note or two inside. As far as our high-yield HOCS are concerned, we hope that, as with convertibles, these measures prove a useful addition to your tool kit, particularly in sizing up large numbers of issues quickly before deciding on deeper-dive candidates. We also do a bit on mandatories this week. In coming issues we look forward to talking more about option-based ideas and small-cap equities, as we seek to make Hybrid Vigor a fuller representation of that big space between blue-chip stocks and investment-grade (we still hate that term) debt.

Time to strut a little now, with Yale making the NCAA tournament for the first time since, well, I don’t think they had calendars back then. Baylor who? So Thursday afternoon, while most people are parading or recovering from parading, I’ll be looking for a free bar seat and a TV screen.

Ok, back to business. Seems like we broke through, however tenuously, some decent technical hurdles last week. That said, an interesting number to us is the 107-ish Fibonacci support for the Russell 2000 ETF (IWM). If it holds, maybe we get another big leg to get the still-downtrodden small caps fully back in the game. If not, well…this might be a good time to be careful out there.

Meanwhile, the countdown to opening day gets ever shorter, and the setup for the Triple Crown continues to be very exciting. The odds of another American Pharoah are, of course, long, but there are some very nice horses getting ready. We’re very excited about little Mohaymen, one of those horses that can’t possibly be as flawless as he seems. His upcoming face-off with California-based champion Nyquist in Florida is old school. And for fans of girl power, there are some fillies, led by Songbird in California and Cathryn Sophia in Florida, who may be as good as or better than the boys.

Great sports and new convertible deals. It’s YUUUUUGE!

(This is the cover letter for the subscription-based weekly Hillside's Hybrid Vigor newsletter. For a complete copy, please contact John Anderson at + 1 (646) 712-9289 x 107).