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In the Middle Ages theologians led for a long time an interesting argument, namely "how many devils could be collected on top of a pin?”. Who knows why, consensus was achieved for 1007 in number. Nowadays speculators inspired debate on day trading or long-term investment. In the first case the transactions are closed during the day or in the next few days. Theoretically abnormal returns can be obtained by accumulation within the year.  However, for this purpose it is necessary almost all operations to be winning and most often they are not.

In the long-term play assets with good potential are selected and are kept for a year, two, five, and sometimes more. Of course, this requires “patience of a bull”, which generally is a privilege of the "big sharks”. "The small ones" are usually tempted to collect the profits much earlier and in this way they miss the whole movement. The question that reasonably arises is "how to select the best share, the rising in price currency, or the movement of the respective commodity”. We have at our disposal many books, web sites on the Internet, technical and fundamental analysis, expert opinions, etc. Sometimes it is helpful but not always.

Then we need a relatively successful strategy that works in all circumstances. “Junkbonds” is considered as such; it comes from English and means “rubbish, garbage”. It is applicable in the stock market in all times and countries. The basic idea here is that at some time "the ugly duckling becomes a swan." Shares, whose values have fallen close to zero, are selected, for example value of 30-40 dollars has collapsed to 30-40 cents and all players have already written them off.  A portfolio of about 20 such companies all with equal influence is formed during the first year.

Over the next few years, most of them really will "fall off" but some will remain. The portfolio is supplemented annually with “fresh shares” in proportion of 50 to 50, i.e. equally by the "survivors" and the new ones. Not later than the tenth year "the first frogs” will start to become “princesses”.  Some may reach their previous levels and even higher ones. In practice, the increase from 30 cents to 30 dollars is a whole 10,000%! Even if this happened with only one of the initially selected shares, which requires a 5% chance, returns would be 500% as a whole. With the course of time, efficiency in constructing the portfolio will inevitably increase, which will entail a higher success rate – for example, every tenth or every seventh securities will become a “star”.

Not bad examples of such a rise are the shares of Kremikovtzi (the native giant of steel production). In 2000 they could be found at levels of 60 stotinkas to reach over 18 BGN only six years later, which is a super return of 3000%. Of course, at the moment they cost only 18 stotinkas and to bet for the second time for their resurrection is a little bit naive. However, history repeats but usually as a farce.
Key to the success of "Junk bonds" strategies is the broader time horizon that allows the market to screen out "the wheat from the chaff." Therefore, patience and patience; the name of success in financial markets is patience! See more in Courses 

 
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