The Predators' Ball Quotes

“Mike knows the market is crazy, but it will come back,” Wynn continued. “But the people who run money panic, they want to get out, so they start selling everything—and Mike will make a bid. Then he sits there. And when it does come back, he makes out.”
― Connie Bruck, The Predators' Ball: The Inside Story of Drexel Burnham and the Rise of the JunkBond

“Milken told his boss, Edwin Kantor, who was in charge of all fixed-income trading, that he wanted to create an autonomous unit, with its own sales force, its own traders and its own research people: the high-yield- and convertible-bond department. Selling these low-rated bonds, he explained, was more like selling stocks than it was like selling high-grade bonds. If a bond was rated triple A by a rating agency, institutions bought them based on that rating—not on the salesman’s pitch about the company. But to convince an investor to buy a bond with a C rating you had to tell the company’s story. You had to know the company’s management, its product, its balance sheet, its earnings trend and cash flow—just as you would in trying to sell the stock of a little-known company.”
― Connie Bruck, The Predators' Ball: The Inside Story of Drexel Burnham and the Rise of the JunkBond

“Explaining their allure, Milken said, “The opportunity to be true to yourself in high-yield bonds is great. It is not like buying a stock. With a stock, its value is generally dependent upon investors’ collective perceptions of the future. No matter how much research you have done regarding a particular stock, you don’t have a contract as to what the future price will be. But with a high-yield bond there is a date certain in the future when it matures, and if you hold it to maturity and your analysis is correct, you will be correct in your calculation of your yield—and you do have a contract as to future price. One is certain if you’re right. The other is not.”
― Connie Bruck, The Predators' Ball: The Inside Story of Drexel Burnham and the Rise of the JunkBond