Saturday, January 21, 2017

Observations and Sample of Recent Trades (ARRY, MNRPRC, MFCPRM, MFCPRN)

The Orange King claimed that the election was rigged in the event Hillary won. 

One of his sources was a fake news story that claimed Hillary partisans had already stuffed some ballots for Hillary before the election in Ohio. 


The Ohio Secretary of State denied that such an event occurred, but the Orange King was certain that it was true. 


The source of the story was after all a website called the ChristianTimesNewspaper.com. 


The NYT just exposed the writer of that blog as a 23 year old Donald Trump supporter who blogs from his parent's house. From Headline to Photograph, a Fake News Masterpiece - The New York Times All of the assertions made by that Trump supporter were false and were known to be false.


I certainly can understand how the fake news story could be taken as true, provided the person is both stupid and ignorant.

Lying works in politics for the reasons just mentioned in the prior sentence. So why tell the truth or be accurate with information conveyed to the public when the constant repetition of false facts works so very well? Telling the truth or being realistic about campaign proposals are prescriptions for defeat in a U.S. election.

During the campaign, Donald was clocked as lying every three minutes during his speeches, far more than Ms. Hillary, yet the Ms. was successfully tagged and branded by the Orange King as both a crook and a liar judging from the exit polls. Donald Trump’s Week of Misrepresentations, Exaggerations and Half-Truths - POLITICO Magazine.

That article does not use the word lie in the title which has a mens rea  requirement, but I have no such reservation about that word's use given the number and repetitiveness of the easily proven "Misrepresentations, Exaggerations and Half-Truths."

Toronto Star compiles list of almost 500 Trump lies during campaign, Donald Trump's file | PolitiFactThe Whoppers of 2016.

 


When politicians lie as much as the Orange King, and he set a record in a presidential election and won by the way, it is important to demonize and belittle a free press that points out the constant parade of knowingly false statements.

In the minds of millions of voters, the "mainstream press" is nothing other than a propaganda machine for the left-wing, viewed as anyone to the left of Rush Limbaugh, Sean Hannity and Ann Coulter. Their articles can consequently be ignored in their entirety.

In the unlikely event the True Believer hears about an article published in the "mainstream" media, its content, which is probably being misrepresented by the speaker, can be readily dismissed as being false simply by being inconsistent with the True Believer's false information that is fervently believed to be true, their reality creations, or just plain ole fake news spread over the internet for the gullible and easily manipulated to absorb without exercising even the smallest decree of common sense and intelligence.

As I have said in the past, I was not pleased with the choices but I am rarely pleased anyway. I was just more displeased with my choices in 2016 than in prior elections going back 1972 when my choice was either Tricky Dick or Clueless George who was a much better person, though a few managed to have their eyes opened to that observation by subsequent events.  

I am a fiscal conservative and believe the nation is on an irreversible path to a fiscal meltdown due to the efforts made by both political tribes and their supporters. Trump will continue along that path.

I do not approve of lying and pie-in-the sky campaign promises, particularly when those proposals accelerate the nation's day of reckoning, which I estimate to be somewhere in the 15 to 20 year time period from now, possibly sooner rather than later depending on near and intermediate term future events.

I view Trump's main attribute to be his unquestionable success at self-promotion that has resulted in a successful business of licensing his name on just about everything, including the structures that are built with other peoples' money. Donald Trump's Real Secret To Riches: Create A Brand And License it: Forbes Magazine

Before building the Trump brand as the successful business, Trump managed to lose $916 Million, a legally dubious loss, that gave him a free ride on paying taxes for many years to come, which was another main source of his success along with what he inherited from his Daddy.

Some of name licensing businesses did not work out too well either: Trump University CasesFormer Trump University Workers Call the School a ‘Lie’ and a ‘Scheme’ in Testimony - The New York Times. When confronted with accurate reporting of an event, it is necessary to demonize the press and to convince everyone susceptible that the Orange King is the only source of truth and everyone else, except possibly Ann, Rush or Sean, is a source of fake news created for a bad ulterior motive by the left-wing mainstream media.

Why is the foregoing relevant to investing?  The herd consensus now is that Trump will lead the U.S. to economic nirvana. A more realistic assessment of the man based on his history is that there is more potential now for economic chaos than with any other U.S. President.

So a certain level of caution rather than exuberance will probably end up being the best investment strategy over the next 4 years, particularly after the stock market's run up after the election based on the herd consensus opinion about the impact of future policy changes.

1. Small Cap Biotech Lottery Ticket Basket Strategy


A. SOLD ARRY AT $11.25




This lot was bought at $4.1 on 8/3/16.


Profit Snapshot: +$355.48





Quote: Array BioPharma Inc. (ARRY) 


The market cap at $11.25 is about 1.9 billion.  

The percentage was too good for the Old Geezer to leave alone. 

I bought my 50 share lotto ticket after ARRY suffered a drug failure in a late stage trial. 


Shortly after I bought my 50 share lot, ARRY reported that a Phase 3 trial of selumetinib in combination "with docetaxel chemotherapy as 2nd-line treatment in patients with KRAS mutation-positive (KRASm) locally-advanced or metastatic non-small cell lung cancer" failed to meet its "primary endpoint of progression-free survival (PFS), and selumetinib did not have a significant effect on overall survival (OS)." AstraZeneca Provides Update On Phase III Trial Of Selumetinib In Non-Small Cell Lung Cancer That failure result in a price slide on the day of its announcement: Array BioPharma shares fall 11% premarket after lung cancer drug trial fails to meet goals - MarketWatch

Failures will be more plentiful than successes in this sector. Cancer in particular is just hard. 

Array sold over 21 million shares in October at $6.5. Array BioPharma Announces Closing of Public Offering and Full Exercise of Option to Purchase


In between my purchase and now, there have been some positive developments on other compounds which led to the price almost tripling from my initial $4.1 purchase increase.

I do not have any expertise to evaluate whether ARRY will ultimately hit pay dirt. I do know that I harvested a $355.48 profit on a $206 investment in about 5 months. That is all that I really know.

Array BioPharma and Pierre Fabre Announce COLUMBUS Phase 3 Study of Encorafenib plus Binimetinib (9/26/16 Press Release)

Array BioPharma Announces Phase 3 BEACON CRC SPA Agreement with FDA (9/14/16 Press Release)

Array BioPharma and Pierre Fabre Announce COLUMBUS Phase 3 Study of Encorafenib plus Binimetinib (9/26/16 Press Release)

Array BioPharma Announces FDA Acceptance of Binimetinib NDA for Patients with Advanced NRAS-Mutant (9/1/16 Press Release)

Array Presents Data from Cardiovascular Trial with ARRY-797 at the European Society of Cardiology (8/30/16 Press Release)



2. Intermediate Term Bond Ladder Strategy 

Just in case I am wrong about the future course of interest rates, I have increased my weighting slightly in the intermediate term bond ladder, focusing on 2020-2022 maturities. The overall investment in the intermediate term ladder will be about 10% of the short term bond/CD ladder until I can secure significantly better rates than now. 


The abnormal monetary policies of the ECB, BOJ, and other European central banks doe provide a major headwind for increases in U.S. intermediate and long term interest rates.   


A. Bought 1 Shell 2.375% Senior Unsecured Bond Maturing on 8/21/2022




FINRA PAGE: Bond Detail

Credit Ratings: 

Moody's RatingAa2 (04/08/2016)
Standard & Poor's Rating
Fitch RatingAA- (11/07/2016)

B. Bought 2 Verizon 1.75% Senior Unsecured Bond Maturing on 8/15/21




FINRA Page: Bond Detail

Moody's RatingBaa1 (07/27/2016)
Standard & Poor's RatingBBB+ (07/28/2016)
Fitch RatingA- (07/27/2016)

YTM at Total Cost (96.274) = 2.62%


Moody's rates Verizon's new notes Baa1 (10/26/16 report); 



A. Added 1 Nextera 1.649% Senior Unsecured Bond Maturing on 9/1/18 (total now at 3)



FINRA Page: Bond Detail (bond prospectus linked at the FINRA Page)

Moody's RatingBaa1 (08/26/2016)
Standard & Poor's RatingBBB+ (08/26/2016)
Fitch RatingA- (08/01/2016)

YTM at Total Cost (99.994) = 1.684%

Common Stock Quote: NextEra Energy Inc.  (NEE) 

2016 Third Quarter Results ("reported third-quarter 2016 net income attributable to NextEra Energy on a GAAP basis of $753 million, or $1.62 per share, compared to $879 million, or $1.93 per share, in the third quarter of 2015. On an adjusted basis, NextEra Energy’s third-quarter 2016 earnings were $809 million, or $1.74 per share, compared to $730 million, or $1.60 per share, in the third quarter of 2015.")


B. Added 1 Diageo 1.125% Senior Unsecured Bond Maturing on 4/29/18




FINRA Page: Bond Detail

Moody's RatingA3 (12/15/2016)
Standard & Poor's Rating
Fitch RatingA- (11/03/2016)

YTM at Total Cost (99.725) = 1.343%


Diageo Website: Credit Ratings;


Link to Moody's Report Dated 12/15/16 



SEC Filed Annual Report For the Period Ending 6/30/16: 20-F

DEO Analyst Estimates

C. Bought 1 Shell 1.125% Senior Unsecured Bond Maturing on 8/21/17



FINRA Page:  Bond Detail




Moody's RatingAa2 (04/08/2016)
Standard & Poor's Rating
Fitch RatingAA- (11/07/2016)

YTM at Total Cost (99.999) = 1.126%

D. Bought 2 Bank of India U.S. .95% CDs Maturing on 10/25/2017: Bank of India - USA- about


E. Bought 1 Bank of China N.Y. .85% CD Maturing on 10/30/2017 


F. Bought 2 WFC 1.75% CDs (monthly interest payments) Maturing on 1/20/20 (OUTER LIMIT OF SHORT TERM BOND LADDER PERIOD)


All of the CD purchases are FDIC insured. 


I am now several thousand over a $200K allocation in this basket and do not know when I will stop adding to it.


Yellen appears to be moving closer to supporting gradual increases in the FF rate. FRB: Speech--Yellen, The Goals of Monetary Policy and How We Pursue Them--January 18, 2017



4. Paring Canadian Reset Equity Preferred Stocks: Trade snapshots for this category are located in this post: Advantages and Disadvantages of Equity Preferred Floating Rate Securities (net profit as of 1/19/17= +$19,055.3).


A. Sold 50 MFCPRM at C$20.51:





Profit Snapshot: C$113 





Quote:  Manulife Financial Corp. Non-Cumulative Preferred Series 17 (MFC.PR.M:TOR)


MFCPRM pays non-cumulative dividends at the current fixed coupon rate of 3.9% on a C$25 par value. That translates into about a 5.36% current yield at a total cost per share of C$18.2. The quick profit on the shares is more attractive to me than the dividend yield. I received only one quarterly dividend payment. For 50 shares, the annual dividend payment at the 3.9% fixed coupon rate is $48.75. It would take more than two years for those dividend payments to exceed the realized gain taken now.     

MFCPRM is another reset preferred. The fixed coupon will be paid through 12/19/19 whereupon the coupon will reset at a 2.36% spread to the five year Canadian Government Bond for five years and so on. If the Canadian five year is then higher than 1.54%, the coupon will increase compared to the current 3.9% fixed rate and decrease if the rate is less than 1.54%.  A potential coupon cut is a risk in this preferred stock sector. Resets at lower than the fixed rate coupon rates over the past few years caused prices to decline and created attractive entry points for many Canadian reset equity preferred stocks.  

MFC's preferred shares have a BBB+ rating from S & P, BBB- from Fitch and Pfd-2 from DBRS. The DBRS rating is equivalent to a BBB. Credit Ratings

At a 3% five year when the reset occurs late in December 2019, the coupon would be 5.36% or 7.69% at a constant total cost per share of C$18.2.

If the five year was then only .5%, the current yield would drop to about 3.93% on the reset date.

B. Sold 50 MFCPRN: +C$108 Profit





That lot was bought in November 2016 at C$18.7 and was discussed here.


MFCPRN pays a fixed coupon of 3.8% until March 2020 when it resets, unless redeemed by Manulife then at par value, at a 2.3% spread to the 5 year Canadian Bond.


5. Paring U.S. Fixed Coupon Equity Preferred Stocks:


A. Sold 100 MNRPRC at $24.85




Profit Snapshot: $71.93





Quote: Monmouth Real Estate Investment Corp. 6.125% Cumulative Preferred Series C Stock (MNR.PC) 


I discussed buy this REIT cumulative equity preferred stock in my SA Comment Blog.  


MNRPRC pays non-qualified and cumulative dividends at the fixed coupon rate of 6.125% on a $25 par value. Prospectus


This preferred stock was sold to the public in early September 2016.

Interest rates had started to rise in July. Shortly after the IPO, the price sank to as low as $23 in response to a continue rise in rates: MNR.PC Stock Chart

I did receive one dividend payment on the first 50 share lot bought ($16.59), bringing the total return for 100 shares up to $88.52.

The quarterly ex dividend date is on 2/13/16.

I  doubt that I would buy back even 50 shares now above $23.5. At a total cost of $23.5 per share, the yield would be about 6.49%. In part, the next nibble will take into consideration interest rate and inflation trends, including changes in the break-even spreads for the intermediate term TIPs which have been rising. If the ten year treasury rises to 3%, I may need at least a 7% yield on an equity preferred stock before buying when the prior trend line is up for both inflation and inflation expectations.      

Monmouth SEC Filings 


 2016 3rd Quarter Earnings Report 


Again, I am selling recently bought and potentially long duration fixed income securities based on an anticipation that the securities can be repurchased at lower prices and higher yields. This is just an example of small ball. Clip a dividend or two and sell for a quick profit.  

Stocks, Bonds & Politics: Advantages and Disadvantages of Equity REIT Cumulative Equity Preferred Stocks


6. Paring Recently Bought, Potentially Long Duration Exchange Traded Bonds:

A. Sold 100 SOJB


Profit Snapshot: +$93.37




Quote:  Southern Co. 5.25% Junior Subordinated Notes (SOJB)


SOJB is a junior bond that matures on 10/1/2076 unless redeemed early at the issuer's option. In short, this bond has interest rate risk coming out of the wazoo for the owner and a minimal amount for the issuer who can redeem at par value on or after 10/1/21.


Prospectus 

I discussed buying the two fifty share lots in my SA Comment Blog and noted there that SOJB was on one short leash. I did harvest one quarterly interest payment on the first 50 share lot purchase. The amount was $19.32 and was paid on 1/3/17. 


Disclaimer: I am not a financial advisor but simply an individual investor who has been managing my own money since I was a teenager. In this post, I am acting solely as a financial journalist focusing on my own investments. The information contained in this post is not intended to be a complete description or summary of all available data relevant to making an investment decision. Instead, I am merely expressing some of the reasons underlying the purchase or sell of securities. Nothing in this post is intended to constitute investment or legal advice or a recommendation to buy or to sell. All investors need to perform their own due diligence before making any financial decision which requires at a minimum reading original source material available at the SEC and elsewhere. A failure to perform due diligence only increases what I call "error creep".  Each investor needs to assess a potential investment taking into account their personal risk tolerances, goals and situational risks. I can only make that kind of assessment for myself and family members.


Thursday, January 19, 2017

Short Term Bond Ladder: Clustering Maturities Near FED Meetings Where Increase in FF Currently Expected

I was asked about a reader about whether a gradual and persistent rise in the federal funds rate would deter me from adding to my short term bond ladder.  

I am hopefully near or at a completion point. I started building the ladder about thirty days ago in anticipation that the FED will hike the FF rate on or before the July 2017 meeting and again in December 2017. I have now allocated slightly more than $200K to the short term bond/CD ladder.  

I have clustered maturities in December 2017 and January 2018 that can be reinvested into higher yielding short term bonds and CDs assuming my future predictions prove prescient including the prediction that there will be a .25% FF increase in December 2017. Another cluster is in the June 2017 through August 2017 period when the FED may increase by .25%.  

This clustering approach is one way to address interest rate risk issues related to a rising rate environment.   

The FED is scheduled to meet on December 12-13, 2017: 

This is a list of maturities in December through January 2018: FRB: Meeting calendars, statements, and minutes (2012-2017)

Principal Value $1K per Bond or CD
4  4 Week Treasury Bills Maturing Per Month
2 AT & T 1.4% (YTM at 1.491%) Senior Unsecured Maturing Due 12/1/17
2 Disney 1.1% (1.043% YTM) Senior Unsecured Maturing 12/1/17
2 Ecolab 1.45% (1.389% YTM) Senior Unsecured Maturing 12/8/17
2 Chevron 1.104% (YTM 1.224%) Senior Unsecured Maturing 12/8/17
2 ConocoPhillips 1.05% (1.203% YTM) Senior Unsecured Maturing 12/15/17
2 Sherwin Williams  1.35% (YTM 1.294%) Senior Unsecured Maturing 12/15/17
1 U.S. Treasury .75% (YTM .95%) Maturing 12/31/17  
1 U.S. Treasury Bill .888% (1 YR. Bought at Auction) Due 1/4/18 (scheduled 1 Yr reinvestment) 
2 Everbank CDs 1.05% Due 1/11/18
2 BBT 1.45% (YTM at 1.394%)  Senior Unsecured Bonds Due 1/12/18 
2 C.R. Bard 1.375% (YTM at 1.363%) Senior Unsecured Bonds Due 1/15/18 
2 Dominion Resources 1.2% (YTM at 1.507%) Senior Unsecured Due 1/15/2018
2 Brown Forman 1% (YTM at 1.303%) Senior Unsecured Due 1/15/18
1 Deere 1.35% (YTM at 1.35%) Senior Unsecured Due 1/16/18
1 WFC 1.5% (YTM at 1.499%) Senior Unsecured Due 1/16/18
2 Royal Bank of Canada 1.5% (YTM at 1.457%) Senior Unsecured Due 1/16/18 
3 Anheuser Busch 1.25% (YTM at 1.342%) Senior Unsecured Due 1/17/18
1 Statoil 1.2% (YTM at 1.325%) Senior Unsecured Due 1/17/18 
2 Merck 1.1% (YTM 1.192%) Senior Unsecured Due 1/31/18
1 U.S. Treasury .75% (YTM .946%) Maturing on 1/31/18
1  6 Month Treasury Bill Scheduled for Reinvestment at Auction January 2018 

Total Principal Amounts Maturing 12/1/17 through 1/31/18 = $40,000 (about 1/5th of the total allocation). 

A significant number of securities will mature prior to 12/1/17 and in February and March 2018.  

If short term rates rise over the next several months, and bonds maturing in this time frame decline some, I may buy more. 


When the YTM is above the coupon rate, I was able to buy the bond at below par value with the commission. Sometimes, the purchase was made below par but the $1 per bond commission reduced the YTM a slither below the coupon rate. 

Generally, several senior unsecured bonds that I now own may be called at par value within one month prior to maturity. An optional redemption prior to then would trigger the make whole provision that would penalize the issuer for exercising its optional redemption right. 

In the event an issuer sees rates going up higher, there is a possibility that it will elect to call a bond maturing on 12/15/17 on 11/15/17 for example. 


An optional redemption is fine with me when interest rates are rising and I will be able to invest the proceeds in a higher yielding security a month early.     

Since I expect short term rates to rise, a short term bond ladder that extends out three years will lose some income simply by having the longer dated maturities. I am dealing with this form of interest rate risk, which I label the risk of lost opportunity, by weighting maturities within the first 18 months compared to the last 18 months.  

The risk of lost opportunity can also arise in that weighting when short term interest rates remain stable or decline. In those scenarios, I would have been better off weighting the 18 to 36 month time period since I would receive more income for longer. 

The ladder approach is basically designed to mitigate interest rate risk and is based on a recognition that the future is ultimately unpredictable. Something may happen within the next 12 months that will cause rates to plummet or to rise higher than I currently expect.    

The short term bond ladder is also a response to four co-existing events: (1) totally inadequate MM fund yields, (2) an abundance of cash in those MM funds; (3) a strong emphasis on capital preservation with no financial need to take risks; and (4) an unwillingness to commit idle cash to stock purchases given the current high valuations. Conditions (2) and (3) are relevant to me and may not be applicable to others. Some investors may believe that stocks are not overvalued. I view the U.S. stock market as clearly overvalued based on any rational short to intermediate term forecast for real earnings growth.  

I am also dealing with interest rate risk issues in a variety of ways. I have been selling several exchange traded bonds that were recently bought during the last price correction that have rallied in price. I would then look for opportunities to buy buy at lower prices. 

I have a number of bonds and preferred stocks that are floaters and could benefit from rising interest rates when that scenario results in coupon increases. 

And, I still have a substantial cash reserve that can be drained without selling something in the event that particular stocks provide a more attractive entry point than now. 



Wednesday, January 18, 2017

Observations, Ruminations and Sample Trades (SNY, OMER, PWFPRT, THO:CA, G:CA )-JANUARY 18, 2016

Over the weekend, the Orange King claimed that the USD was too strong because China was keeping the Yuan too weak, adding that our "companies can’t compete with them now because our currency is too strong, and it’s killing us.” U.S. stocks slump as Trump’s dollar comment rattles investors - MarketWatch 

Trump has claimed repeatedly that China was manipulating it currency lower, an assertion that demonstrates a profound level of ignorance and an unwillingness to change an opinion based on accurate information rather than his own reality creations.  


China is spending billions in reserves to keep its overvalued currency from declining faster-the exact opposite of keeping the Yuan too weak. When China allowed the Yuan to decline at a fast rate during the 2015 summer, the world's stock markets went into a tailspin. 


One problem leading to the Yuan's weakness is capital outflows that China has been attempting to curb. China’s Foreign Reserves Drop Most in 10 Months as Yuan Slumps - Bloomberg

  
Chinese foreign reserves slide as yuan falls - Business Insider ("The government is also using up foreign reserves to stop the yuan from falling faster than it is.") 

How We Know China's Central Bankers Are Worried About the Yuan-Fortune.com ("Chinese officials were working hard to support the yuan from crashing even further and inciting panic about the country's financial position.")


"Currency Wars Are the Big Threat to Global Trade" - Barron's


"Sorry, Trump, but Chinese Currency Is Actually Way Overvalued" - Barron's


"Trump Is Still Wrong About the Yuan" - Barron's


"Currency Reserves Drop As China Manipulates Yuan Up In Value": Forbes


China burns through nearly $70 billion trying to prop up its currency - Dec. 7, 2016: CNBC


+++++++++++


Trump: 'I don’t like tweeting’

The only reason why Trump tweets is to provide truth to those who pay attention to the false propaganda and fake news spewed from the mainstream media particularly from the NYT and the Washington Post. For example, there are still a few souls who do not recognize that  the "concept of global warming was created by and for the Chinese in order to make U.S. manufacturing non-competitive." Yes, Donald Trump did call climate change a Chinese hoax It is shocking, unbelievable really and truly, that the mainstream media has not yet discovered that self-evident truth.  

I See The Light Now

or Hank Williams is almost on point: Hank Williams- I saw The Light - YouTube

or maybe the Infamous Stringdusters' Version of Bob Dylan's 1962 song Don't Think Twice It's Alright - YouTube

+++

I had a scheduled rollover yesterday of a 4 week treasury bill that was auctioned at a .52% rate: Results.pdf


1. Small Cap Biotech Lottery Ticket Basket Strategy


Yesterday was another bad day for pharmaceutical stocks as the Orange King, not to be confused with the Sun King despite many  similarities, expressed his oft repeated opinion that Medicare and Medicaid need to negotiate drug prices directly with the drug companies, adding that this approach was part of his "insurance for everybody" (details to be supplied at a later time) Trump vows ‘insurance for everybody’ in Obamacare replacement plan - The Washington PostTrump’s Strategy for Cutting Drug Prices Is DOA - Bloomberg View


So, I looked around for another small cap biotech lottery ticket to buy.


It may be possible for Trump to brow beat and bully enough GOP representatives too support a federal government price control plan relying on mostly Democrats to pass the legislation. I will believe that when I see it happen.



Bought 30 OMER at $9.03: 




OMER Stock Quote - Omeros Corp.  (OMER) 

If I had to guess, OMER is more likely to produce a winner than Celldex (CLDX) which is the last small cap biotech that I discussed here. 


I will admit to ignorance about the science.  


Importantly, OMER does have an approved product, OMIDRIA, that is currently being sold.


11/10/16 Motley Fool Article: Why Omeros Corporation Is Soaring 17.7% Today


The company does have several current shots on goal: 





Omeros Pipeline 


The furthest along is OMS721 for atypical hemolytic uremic syndrome. I would have to google those words to have a clue.  

Atypical Hemolytic Uremic Syndrome - NORD (National Organization for Rare Disorders)


Symptoms and causes - IgA nephropathy (Berger's disease) - Mayo Clinic



I do not bust any brain cells researching small cap biotech companies, recognizing that any opinion formed even after extensive research would have either a zero value or more likely a negative one. I am basically throwing a lot of names against the wall and hopefully one or two will become 10+ baggers.


I do need to generate at least a lay person's interest in the science before buying and some kind of positive "gut" reaction to the possibilities. To reach that point, I need to spend about an hour reading recent press releases, the last earnings press release, and discussions about the pipeline. I will also do a cursory review the last Annual Report and will quickly look at the history of stock offerings. 


Omeros - 2016 Press Releases


Omeros Corporation Reports Third Quarter 2016 Financial Results ("company reported in October 2016 positive data (p = 0.017) from its Phase 2 clinical trial of OMS721 for the treatment of kidney disorders, including IgA nephropathy and membranous nephropathy, none of which currently have an approved treatment and all of which frequently lead to end-stage renal disease and dialysis. In this trial, OMS721 significantly improved key endpoints of renal function and patients achieved partial remission with 12 weeks of dosing. ... reported in August 2016 that it received scientific advice from the European Medicines Agency (EMA) directed to its OMS721 Phase 3 program for the treatment of aHUS. Based on this EMA advice, the company plans to run the same, single-arm Phase 3 clinical trial to support OMS721 marketing approval applications in both the U.S. and in the EU for the treatment of aHUS.")


Q3 2016 Results - Earnings Call Transcript | Seeking Alpha


2. Healthcare Basket Strategy: Sold 50 SNY 

SNY Profit Snapshot: Barely Worth the Effort


2017 SNY 50 Shares +$130.36
I discussed this purchase here: 1. Bought Back 50 SNY at $38.86Update For Healthcare Basket Strategy As Of 2/25/16 - South Gent | Seeking Alpha

For this lot, I did receive the 2016 annual dividend payment. Fidelity does take the necessary steps to secure the applicable 15% dividend rate mandated under Article 10 of the U.S-France tax treaty.





The $2.25 fee is paid to the ADR custodian and is withheld before the dividend payment arrives at my broker.


Adding the one annual dividend adjusted for the ADR fee to my $130.36 profit, the total dollar return is $211.27 or 10.85% with about an 11 month holding period.


Historically, that is about as good as I have been able to do with this stock, so I harvested my profit and will look for an opportunity to buy back a 50 share lot prior to the next annual ex dividend date.


I have nothing new to add to my prior SNY discussions. 



3.  Intermediate Term Bond Basket Ladder Strategy

Bought 2 AT & T 3% Senior Unsecured Bonds Maturing on 2/15/22




FINRA Page: Bond Detail (bond prospectus linked at Finra Page)


Moody's RatingBaa1 (08/29/2016)
Standard & Poor's RatingBBB+ (02/02/2015)
Fitch RatingA- (10/24/2016)


YTM at Total Cost = 3.042% (bought at 99.701; 99.801 with $2 commission)

AT & T SEC Filings 


2016 Third Quarter Earnings Release 

4.  SOLD 100 PWR.PR.T AT C$21.41

QUOTE: Power Financial Corp. 4.2% Pfd. Series T Stock (PWF.PR.T:TOR)


PWFPRT has a 4.25% coupon until it resets 1/31/19 at a 2.37% spread to the five year Canadian bond for a five year period. Par value is C$25. The break point for the five year bond would be 1.88% on the reset date. If the five year bond is higher than 1.88% on the reset date, then the reset coupon will exceed the current fixed rate one.   

This is an investment grade preferred stock. Power Financial Corporation | Credit Ratings

Profit Snapshot: +C$190.5





I bought this 100 share lot in two fifty lots: at C$19.47 on 10/03/16 and at $C19.52 on 12/8/16. 


I discussed selling a 50 share lot at C$20.97 here.


This security was ex dividend for its quarterly distribution on 1/7/16.


I am moving some CADs into purchases of gold mining stocks. I discussed my reasons in the last post. Item # 1


I have been taking profits on my Canadian reset equity preferred positions. 


I classify the Canadian reset preferred stocks as part of the equity preferred floating rate securities, and trade snapshots can be found in that topic's Gateway Post. Stocks, Bonds & Politics: Advantages and Disadvantages of Equity Preferred Floating Rate Securities



5. GOLD: I have not bought a gold mining stock in years and decided earlier this week to start nibbling on a few of them, just in case my "gut" feeling about gold prices this year proves prescient. As I noted in my last post, there is at least a meaningful possibility that Trump will be a major force in world economic instability. 

Everyone guesses about the direction of gold and silver prices. Few will admit that their serious articles predicting the future directional change in price, based on charts, Fibonacci sequences or some macro issue, are no better than a coin flip-maybe even worse when their successful predictions are measured against the wrong way ones.  

I flipped my current magic coin, which has not yet been fired, and called Heads for gold moving up in price this year. The coin hit the ceiling and bounced on the floor, and Heads was the verdict. I do have some reasons that support that coin flip, so I am not being entirely flippant here.


I am certainly no expert on picking mining stocks, preferring bullion ownership. Miners consume vast amounts of cash in production costs and do not shine much when reporting profits and losses. They are operationally levered to the price of gold and will generally go up or down significantly more than gold's price. Looking at the Volatile Relationship Between Gold and Gold Miners - TheStreet


GLD rose in price yesterday: GLD $115.85 1.64 1.44% : SPDR Gold Trust (1/17/17 close)



A. Bought 100 Tahoe Resources at C$11.93 and Another 100 at USD$9.03 

Toronto Quote:  Tahoe Resources Inc.  (THO:TOR) 


NYSE Quote:  Tahoe Resources Inc. (TAHO:NYSE) 


I bought the Canadian listed shares last Monday when the U.S. stock exchange was closed and then added 100 of the NYSE listed shares yesterday. 





Toronto Listed Shares: Bought 100 at C$11.93 (C$1 commission)
Tahoe Resources Achieves Record Silver And Gold Production In 2016, Announces 2017 Financial And Operating Guidance ("Silver production in 2016 was a record 21.3 million ounces (Q4 2016: 4.8 million ounces), which surpassed the Company guidance of 18 – 21 million ounces. Gold production for the year totaled 385,111 ounces (Q4 2016: 119,932 ounces), in line with guidance of 370,000 to 430,000 ounces. Included in 2016 gold production was record output at the La Arena mine of 204,362 ounces (Q4 2016: 58,388 ounces), 121,562 ounces of production from Canadian operations from their acquisition on April 1, 2016 to the end of the year (Q4 2016: 45,341 ounces) and 48,462 ounces of production from Shahuindo (Q4 2016: 13,801 ounces), including ounces produced prior to commercial production being achieved on May 1, 2016.")


Tahoe Resources Reports 2016 Exploration Results

Summary of Results 2016 Third Quarter  





2016-Q3-MDA.pdf


The information in the preceding snapshots needs no further exposition. 
B. Bought 50 Goldcorp at C$19.23:


Toronto Quote:  Goldcorp Inc. (G:TOR)


NYSE Quote: Goldcorp Inc.  (GG:NYSE)





Goldcorp currently has a four star rating from Morningstar and a fair value estimate of USD$19.


Website: Goldcorp Inc. - Home


Financial and Operating Results:  




There were huge impairment charges taken in 2014 and 2015 that are reflected in the preceding snapshot. Most of the 2014 impairment charge related to the Cerro Negro mine in Argentina.





Goldcorp 2014 Annual Report at page 21l.pdf


The 2015 impairment charge was related to several mines and was based on changes in forecasts for long term commodity prices:






2015 Annual Report at page 6.pdf

Those impairments can change based on those long term price forecasts.


MINE Results 2016 3rd Quarter 




Financials-Q3-2016_FINAL.pdf



Goldcorp has been paying recently a nominal quarterly dividend: Dividends


Goldcorp Announces Sale of Los Filos Mine ("Goldcorp will receive estimated consideration of $438 million, consisting of $279 million in cash (subject to certain closing adjustments), $71 million in Leagold common shares, and retain certain tax receivables of approximately $88 million. The common shares issued to Goldcorp as consideration are expected to represent approximately 30% of the issued and outstanding shares of Leagold following the closing of the Transaction.  By closing of the Transaction, Goldcorp expects to recognize a reversal of a 2015 impairment in mining interests at Los Filos of approximately $30 to $60 million on a pre-tax basis.")


I may buy a Canadian ETF that owns gold stocks to soak up some of my CADs that are building back up after selling several Canadian reset ETFs.  


iShares S&P/TSX Global Gold Index ETF | XGD (expense ratio .61%)


Ishares Canada has two gold bullion ETFs: 


Hedged to the Canadian Dollar: iShares Gold Bullion ETF | CGL | COMMON HEDGE


Unhedged to the Canadian Dollar:  iShares Gold Bullion ETF | CGL.C | COMMON (expense ratio .5%).


GLD has a .4% expense ratio.

Disclaimer: I am not a financial advisor but simply an individual investor who has been managing my own money since I was a teenager. In this post, I am acting solely as a financial journalist focusing on my own investments. The information contained in this post is not intended to be a complete description or summary of all available data relevant to making an investment decision. Instead, I am merely expressing some of the reasons underlying the purchase or sell of securities. Nothing in this post is intended to constitute investment or legal advice or a recommendation to buy or to sell. All investors need to perform their own due diligence before making any financial decision which requires at a minimum reading original source material available at the SEC and elsewhere. A failure to perform due diligence only increases what I call "error creep".  Each investor needs to assess a potential investment taking into account their personal risk tolerances, goals and situational risks. I can only make that kind of assessment for myself and family members.