The company considers fixed income investments appropriate for funds held in reserve, to achieve an asset / liability maturity match for expected capital needs, as a vehicle to profit from shifts in or changes in the shape of the yield curve, and as a way to profit from distressed debt that offers limited potential downside with stock-like upside.

Our strong value investing philosophy results in substantial fluctuations in the composition, size, and characteristics of our bond holdings as a result of changes in market conditions and prices.  As a general rule, unless engaged in a specific strategy that requires longer durations, we strive to limit bond duration on all fixed income assets to no more than 5-8 years.  We believe that history has shown to hold bonds with longer maturities is to essentially “go long” currency; until the politicians of the world stop printing money to fund record deficits, we think a belief in the maintenance of the dollar’s purchasing power is foolish.

From time to time, we may purchase or trade in bonds and other fixed income investments that have unique characteristics such as attached warrants or conversion privileges.  We do not consider these part of the traditional low-risk bond portfolio, but rather as part of our active trading division.