During a panic, some of the best investment opportunities come out of smaller markets where liquidity dries up. Take Asian convertible bonds, which have been severely mispriced in the last few weeks.
Convertibles are bonds that have the option to convert into a fixed number of shares in the company. As long as the share price is high enough to make conversion worthwhile, this conversion option has value. So a convertible shouldn't trade at a lower price than a comparable non-convertible, and will usually trade at slightly more.
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