If you're fully invested, you might want to think twice. Even a seasoned vulture investor is packing it in.
Since January, Phillip Schaeffer, senior vice president of Robert Fleming Inc., New York, and manager of $94 million in distressed equities and high-yield debt, has been raising his already hefty 30% in cash reserves.
"There's now a massive correction in the pricing of distressed (equity) and high-yield debt which appears to be continuing. We are at 55% cash and looking forward to investing that in compelling situations in the future." "I think for a variety of reasons we will see lower prices ahead. ... A lot of bonds were overpriced. There will be a lot to do in distressed land in the next six to nine months. It's starting to get very interesting."
Well-known names among distressed stocks also have been pounded, such as Leaseway Transportation Corp. and Kinder-Care Inc.
"In general the entire markets have gone down in price - something we eagerly awaited. We are doing our research as to whether to go back in. ... Even in a down market there will be diamonds in the rough," he said.