- Market valuations typically overreact during periods of high uncertainty, discounting much more pain than will likely materialize. As uncertainty fades, prices often come roaring back.
- Recoveries have yielded outsized returns; holding and adding to credit allocations through downturns has been rewarded handsomely in the past.
- Security-specific opportunities open up. Fear, forced selling and other factors create dispersions that credit pickers can potentially capitalize on.