6-Sigma Event In Junk Bonds?

It seems that people are pulling their money out of junk bonds to the tune of $7.1 billion.

"HY flowmageddon," said Goldman Sachs' Charles Himmelberg in a research note we saw via @lebullmarche. "This is the largest HY outflow on record – a 6-sigma event when flows are scaled by mutual fund assets under management!"

Sigma is another way of saying standard deviation. And the greater the number of standard deviations, the more unlikely the event.

A 6-sigma event is extremely rare. If you want to put a number to it, think 1 in 500 million. According to Business Insider quant reporter Andy Kiersz, it's like flipping a coin 29 times in a row and getting heads each time. It's like rolling a die 11 times in a row and getting 6 each time.

Some people are saying that it is a good entry point because the companies that are issuing the debt are still in pretty good shape. The economy is growing fairly well so you don't have to worry about the risk of a downturn.