CONVERTIBLE DEBT PAYS OFF

Chou owes his above-average performance over the last year in part to significant stakes in bonds issued by New Jersey-based biotech Mannkind Corp and North Carolina-based marketing company R.H. Donnelley. R.H. Donnelley has since changed its name to Dex One Corp after going through a Chapter 11 restructuring.

Chou bought both securities in 2011, when Mannkind was trading at about 57 cents on the dollar and R.H. Donnelley was trading at 31 cents, he said. Each fell further after he bought them, contributing to his poor 2011 performance, he said. The bonds rebounded over the last year, with Mannkind now trading at 90 cents on the dollar and R.H. Donnelley trading at 71 cents on the dollar.

"The only thing we can do is buy them cheap," he said. "So be it. You can't know where the bottom is."

http://finance.yahoo.com/news/star-canada-stockpicker-runs-years-172045762.html