Episode Summary Why does buying a stock feel so transparent while buying an individual bond feels like you are being shown a single, unverified price? The answer lies in the fundamental structure of the fixed-income market. This episode explores the "variety problem" that prevents bonds from trading on public auctions, how dealers act as market makers, and why retail investors pay an invisible premium that can quietly consume an entire year of yield.

Key Concepts

• The Variety Problem: Unlike a company that typically issues a single class of common stock, a single issuer may have dozens of distinct bonds outstanding with different maturities, coupons, call options, and currencies. This fragments buyers across thousands of unique instruments, meaning most individual bonds rarely tra ...