CHAPTER 7
Portfolio Policy for the Enterprising
Investor: The Positive Side
The enterprising investor, by definition, will devote a fair amount
of his attention and efforts toward obtaining a better than run-of-
the-mill investment result. In our discussion of general investment
policy we have made some suggestions regarding bond investments
that are addressed chiefly to the enterprising investor. He might be
interested in special opportunities of the following kinds:
(1) Tax-free New Housing Authority bonds effectively guaranteed
by the United States government.
(2) Taxable but high-yielding New Community bonds, also guar-
anteed by the United States government.
(3) Tax-free industrial bonds issued by municipalities, but ser-
viced by lease payments made by strong corporations.
References have been made to these unusual types of bond
issues in Chapter 4.*
At the other end of the spectrum there may be lower-quality
bonds obtainable at such low prices as to constitute true bargain
opportunities. But these would belong in the “special situation”
area, where no true distinction exists between bonds and common
stocks.†
155- As already noted (see p. 96, footnote †), the New Housing Authority and
New Community bonds are no longer issued.
† Today these “lower-quality bonds” in the “special situation” area are
known as distressed or defaulted bonds. When a company is in (or