ADDED 2:17 P.M. 5/22/09: In a post from early this morning, I mentioned that I was considering paring BWX, as a means to manage the currency risk of owing an ETF with international bonds. (item # 1: Will Quantitative Easing Hurt the Dollar/More On Managing the Risk of Lost Opportunity) I sold late in the morning 50 shares, 1/2 of my first purchase with a limit order at $54.30, and my first purchase was the highest cost purchase. I use FIFO accounting. My last purchase for BWX discussed in this blog was at $47.35, BOND ETFS BWX AND TFI. Most purchases of BWX have not been discussed since I eliminated the position in the first half of 2008 and then re-started buying it once again. I am currently inclined to keep it as a non-correlated asset and as a play against the dollar, at least for now. I will most likely sell the other 1/2 of my first lot purchased if and when BWX crosses 56. The sale today, being part of the lot of the highest cost shares, lowers my cost for the remaining shares, and is viewed primarily as a means to manage currency risk. I would hope to buy the shares SOLD today back at less than $50, which would most likely require a strong rally by the U.S. dollar.
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1. RJI: COMMODITY ETN: I went ahead this morning and bought 200 RJI at 6.73 to replace the 50 GSG sold yesterday (item # 7: Morning Potpourri: March 21, 2009/Sold GSG). I am going to stay with RJI, now at 300 shares, as part of my asset allocation to commodities. My prior purchase was at $5.97 on 4/22/09. BOUGHT RJI/AT & T & IR/WFC & MS/PSEC/Goldman Puts Ford on Conviction Buy List/NYT: Torture approved at the highest level/
I view this as an exchange out of GSG, a profitable trade, to concentrate on an ETN with a broader array of commodities. This is a link to the web site for RJI's sponsor: ELEMENTS ETN Products
2. GOOGLE: Headknocker sometimes allows RB access to the keyboard, gives it a couple of grand, just to see what would happen. So, this morning, RB was turned loose and it bought 5 shares of Google at $395, adding to an existing position. RB said that it thought Google was really cool, and it really enjoyed seeing how people from around the world found this blog searching for whatever they were looking for. RB saw this morning someone arriving from "Akranes, Borgarfjararsysla". Wow, isn't that something RB purred, while practicing saying "Borgarfjararsyla" a few times, not sure exactly that it ever got the pronunciation quite right. LB said, "stop", RB is polluting its side of the mind with gibberish. None of this makes any sense, and RB said that virtually everyone arrived for the first time at Headknocker's blog by using Google, no need to say another word about that, argument with LB is over with another decisive victory by the Real Brain, RB.
LB said it was okay with Google, it is a cash machine, and advertisers will gravitate to wherever eyeballs actually look. LB read the analyst report on Google this morning from Barclays and thought the favorable report made sense to it. GOOG is reasonably priced based on its current P/E and projected growth rate. LB likes all of that cash on the balance sheet too, gives it a warm and cozy feeling.
This exhausts the cash flow kitty.
3. Sold 100 DKQ: I sold the TC DKQ containing a May Department store bond (now part of Macy's) at $15. This was a good profit with at least 1, maybe 2 interest payments. I discussed this TC in a couple of posts from last year. TRUST CERTIFICATE MACY'S BOND DKQ
I mentioned a desire to sell this one on any kind of pop in an earlier post. ROK/Balancing Risk & Reward on SNTA/Buy 100 NSSC at $1.02/Electronic Medical Records & the Stimulus Bill/M & DKQ
I am glad now that the prior GTC limit order was not filled at the $12 price mentioned in that post.
This TC has a 6.25% coupon, lower than the underlying bond at 6.9%. The underlying bond is trading around a 30 to 35% discount to par and the TC at 15 is at a larger discount to par value.
4. American General Finance Bonds: I noticed this morning that the third party price shown for my American Finance Bonds maturing in September had improved to over 80. I checked around, and found some improvement on pricing in Am Gen bonds maturing in 2011, close to 50, a major improvement over the 15 price found a couple of months ago. One thing about third party prices is that they may be way off, whenever an individual investor wants to buy or to sell, particularly a small lot. I sold 2 HSBC bonds the other day. The third party price was a tad over 91. I entered a limit order at 91. It was later reported filled at 94 and change, then the broker corrected it today to almost 97. Minutes Afternoon Staff Meeting/Bought BMLprg at $8.8/ Sold 2 HSBC Bonds
5. OSM Bond from Sallie Mae: I mentioned in an earlier post that I would decide by the end of May what to do with OSM. The return based just on capturing par value in less than 8 years is too large to give up without a more concrete, adverse development. OBAMA SALLIE MAE & MY HOLDING OSM
For now, I am going to put OSM on a tight price and news monitor. This means that I will look at the price at least once a day, read any material news at least every other day, and set a price alert from the broker on a fall below $8.
DISCLAIMER
I am not a financial advisor but an individual investor trying to navigate my way through a difficult market. I have never worked for a financial institution and never will. In these posts, I am acting as an unpaid financial journalist and an occasional political commentator. I am also aggregating financial news stories that I view as important and providing readers of these posts with links to those articles, sort of a filtered, somewhat intelligent, free search engine. Any discussion made by me of particular securities is not a recommendation to buy or to sell. Trade at your own risk. Consult with your financial advisor prior to making any purchase or sale. I will try to identify my sales too but it may take a few minutes after I implement them to create a post explaining my reasons. The sale may before or after the post. Before buying or selling any stock, even one recommended by a trusted financial advisor, please research it and make up your own mind which is what I always try to do. Research would include reading reports, reviewing financial records, earnings estimates, sec filings and prior earnings releases and news. In this post, and all others by me, I am merely describing my reasons for purchasing or selling securities, and the potential pitfalls that I identified prior to purchase or the reasons for a sale. The securities mentioned in this and all posts written by me may not be suitable for others based on their unique financial position and risk profile. By way of example, it is unlikely that I will ever need the funds contained in my retirement accounts. Always read the prospectus before buying a Trust Certificate, bond, preferred stock or other bond or bond like investments. Information contained in my posts has been obtained from sources believed to be reliable but cannot be guaranteed. It is always important to follow the investment process. the investment process/links to further information on canadian energy or royalty trustsInvestment Process Part II: Bonds and Bond Like Investments NOT A RESEARCH SERVICE/Add of PWE Last Week These posts by me do not constitute investment advice, nor shall they be construed as a guarantee of future results, or as an offer of any transaction in securities. All content in these posts is provided for informational and entertainment purposes only, and it is a form of entertainment for me. Anyone interested in a topic may want to review all discussions contained in the blog about it by using a relevant search term in the box at the top. Opinions are subject to change and they certainly evolve over time as information is assessed and analyzed for compatibility with prior opinions, the only process for a serious investor, and a topic of frequent discussion in this post.
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