As a hands-on research and portfolio management shop, we develop capabilities that many advisors do not need or have. If we were just finding money and sending it off to a third party to manage, life would be simple (and boring).

From time to time our research uncovers potential opportunities in discounted corporate bonds. The market for these high yield bonds is challenging. At times the market is “thin,” which means there is a lack of buyers and sellers. That makes it difficult to complete the purchases we desire.

Fortunately, LPL Financial has experienced and capable traders on the bond desk. They help us execute multimillion dollar bulk transactions at the best available prices. Buying for many accounts at one time in a bulk deal is a more efficient way to do it.

The opportunity in bonds is somewhat rare. We have only purchased eight different issuing companies in sixteen years. But there is another kind of trading that is relatively constant—the purchase and sale of stock.

The bulk bond purchases led us to a breakthrough in our stock trading protocol. One day we learned at 1 P.M. that a big bond purchase had been completed. We needed to go through eighty accounts and make sales of stock to raise money to pay for the newly purchased bonds. We had two hours before the market closed.

We had devised a protocol (a set of rules) to guide us. The four holdings we liked the least were ranked in order of priority to sell. In each account, we sold in that order until the bonds were paid for. Greg Leibman worked from one end of the list, Mark Leibman worked from the other, and they met in the middle before the market closed.

More recently we adapted the protocol concept to make stock trades. We came to a negative conclusion about an industry we previously invested in—at the same time we uncovered a new opportunity in another industry. We devised a protocol to sell one and buy the other, and completed more than five hundred stock trades in a single day.

The trade desk is where two of our key activities come together for you: research and portfolio management. We are pleased at the continued development of our research. The time we save with effective operations goes back into communicating with you—so call or email if you would like perspective on any money question.

---

The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual. All performance referenced is historical and is no guarantee of future results.

The market value of corporate bonds will fluctuate, and if the bond is sold prior to maturity, the investor’s yield may differ from the advertised yield.

Stock investing involves risk including loss of principal.