Reddit reviews Distressed Debt Analysis: Strategies for Speculative Investors

I started out in HY. This is a good list.

I’ll add that your main focus is liquidity. Can the company service its debt? Make payroll? What’s their cash burn rate?

I’ll second learning about covenants and capital structure (secured, unsecured, preferred) and which entity the debt sits at. Focus on how close the company is to violating their covenants. What happens if they trip a covenant? How much of their asset base is pledged as collateral? If a company files for BK, how much can you recover?

Know their leverage ratio. Know what their EBITDA looks like on a rolling basis. Did they have a monster 4Q18, which gave them a ton of room? If so, when will their EBITDA fall off?

If you have time, read this book. The legal info is probably stale, but the analysis sections are still good.

• The Intelligent Investor - Benjamin Graham
  
  
• Security Analysis - Benjamin Graham
  
  
• The Interpretation of Financial Statements - Benjamin Graham
  
  
• Financial Shenanigans: How to Detect Accounting Gimmicks & Fraud in Financial Reports - Howard Schilit
  
  
• Applied Value Investing - Joseph Calandro
  
  
• Analysis for Financial Management - Robert Higgins
  
  
• Margin of Safety - Seth Klarman
  
  
• Common Stocks and Uncommon Profits and Other Writings - Philip Fisher
  
  
• One Up On Wall Street - Peter Lynch
  
  
• Beating The Street - Peter Lynch
  
  
• The Essays of Warren Buffett - Warren Buffett
  
  
• Snowball: Warren Buffett and The Business of Life - Alice Schroeder
  
  
• Buffett Beyond Value - Prem Jain
  
  
• Value Investing: From Graham to Buffett and Beyond - Bruce Greenwald
  
  
• You Can Be A Stock Market Genius - Joel Greenblatt
  
  
• The Little Book That Beats The Market - Joel Greenblatt
  
  
• The Big Secret for the Small Investor: A New Route to Long-Term Investment Success - Joel Greenblatt
  
  
• Reminiscences of a Stock Operator - Edwin Leferve
  
  
• Fooled By Randomness - Nassim Taleb
  
  
• The Black Swan - Nassim Taleb
  
  
• Poor Charlie's Almanack - Charlie Munger
  
  
• Rediscovered Benjamin Graham - Janet Lowe
  
  
• The Theory of Investment Value - John Burr Williams
  
  
• Seeking Wisdom: From Darwin to Munger - Peter Bevelin
  
  
• Security Analysis and Business Valuation on Wall Street - Jeffrey Hooke
  
  
• Value Investing: Tools and Techniques for Intelligent Investment - James Montier
  
  
• Investment Valuation: Tools and Techniques for Determining the Value of Any Asset - Aswath Damodaran
  
  
• The Dark Side of Valuation - Aswath Damodaran
  
  
• Financial Statements: A Step-by-Step Guide to Understanding and Creating Financial Reports - Thomas Ittelson
  
  
• Buyout - Rick Rickertsen
  
  
• Influence: The Psychology of Persuasion - Robert Cialdini
  
  
• Why Smart People Make Big Money Mistakes: Lessons from the New Science of Behavioral Economics - Gary Belsky
  
  
• The Warren Buffett Way - Robert Hagstrom
  
  
• The Most Important Thing - Howard Marks
  
  
• Competition Demystified - Bruce Greenwald
  
  
• Accounting For Value - Stephen Penman
  
  
• Distressed Debt Analysis - Stephen Moyer
  
  
• Bankruptcy Investing - Ben Branch
  
  
• The Vulture Investors - Hilary Rosenberg
  
  
• Creating Value Through Corporate Restructuring - Stuart Gilson
  
  
• Distress Investing - Martin J Whitman
  
  
• The Aggressive Conservative Investor - Martin J Whitman

Bond Economics is pretty good blog resource. And the CFA book fixed income analysis is a really thorough read (academic though and made for post-grad study), you can find that at libgen rus or other places around the internet. Also Stephen Moyer has a book on distressed debt valuation is a super good read. That said, to get bonds outside of ETF's you do need a large amount of money and a premium broker.

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EDIT (due to not reading the full Qu's): Vanguard bond ETFs are usually safer than holding one type of bond due to diversification risk. I.e from what I know about XTB you're getting one companies bonds.

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In terms of yields, generally this calced by risk. The riskier the bond the higher the yield. A totally safe bond like a Western governments will have a low yield as investors are confident it will be paid back. A shitty corporate bond with no assets will have a large yield as it is risky.

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There is also where bonds full in capitalisation rank. I.e those secured by assets (that investors can get to in case of default) will have a lower yield than those that are not secured.

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The rabbit hole for how yield is calced goes very deep my man and has many moving parts. This has barely scratched the surface.

If you are new to the game, use HL's.

If you require more depth, Moyer's book

I know a few lawyers that moved on to create a massive distressed-debt hedge fund. I can parrot what they've said, and it's to know accounting and valuation. Check out Moyer's book on distressed investing, too.

http://www.amazon.com/Distressed-Debt-Analysis-Strategies-Speculative/dp/1932159185/ref=sr_1_1?ie=UTF8&qid=1449612872&sr=8-1&keywords=distressed+debt+investing
http://www.amazon.com/Distressed-Debt-Analysis-Strategies-Speculative/dp/1932159185/ref=sr_1_1?ie=UTF8&qid=1449612872&sr=8-1&keywords=distressed+debt+investing


https://www.youtube.com/watch?v=1zNdw4DaUM8

http://www.amazon.com/Distressed-Debt-Analysis-Strategies-Speculative/dp/1932159185

best book I've seen on the subject. I know there were pdf's floating around the internet a few years back if you don't want to buy it.