Sold Sanofi/Aegon Upgrade by Morgan Stanley

1.  Sold Sanofi/Complied with Trading Rules In Effect:  The trading rules in effect required funds to be raised to cover the purchase of 100 IGE.  Mostly, for the past two years, I have adhered to the trading rules. Without a doubt, that adherence has saved me money, by simply avoiding a significant and premature re-entry into this nightmarish stock market.  

I narrowed the potential sale down to three stocks, with one of them being Sanofi, and wrote their respective symbols down on individual pieces of paper, shook the selections in a cupped hand as required, threw them high into the air, and the piece with the SNY symbol was not the closest to my big toe.  I then remembered a back up rule for trying to unfreeze my temporary bouts of indecision.  What is that rule?  When in doubt, just sell the French company! Now, I did receive SNY's annual dividend and did make some money on the shares sold at $29.42 which were bought at $27.53. BOUGHT SNY 

Along with the proceeds from the Given Imaging sale, and cash flow received today, I avoided the demerit by covering the purchase of IGE in the manner permitted by the trading rules developed in connection with the Vix Asset Allocation Model and the characterization of the current stock market as being in a long term secular bear market.

While Cramer scoffs at anyone who puts such labels on the market, viewing the move from the March lows as a bull market, I just look at it from a longer viewpoint, noting that we have not really done much of anything when measured from 1/1/2009. Moreover, the DJIA is back to where it was in February 1998. Going nowhere for over 11 years is consistent with my definition of a secular bear market. In 1982, you could look back 15 to 17 years and see that you had arrived in August 1982 about where you started the journey in 1966.   

The movement off the March lows is consistent with the kind of cyclical bull moves seen in a long term secular bear market, as in the 1930s or the late 1960s to 1982.  Ultimately, the events causing the secular bear move abate over time and a new long term secular bull market forms out of the ashes, and then the cycle starts anew.  The seeds of the next bear cycle are planted once again, nothing is learned, the same or slightly different mistakes are made again, and then the bull dies.  Maybe we have turned the corner and started a new bull market, or maybe not.   It would be best to remain cautious here at HQ and follow all of the trading rules (most of the time). 

2. Aegon Upgraded by Morgan Stanley:  I did not notice until last night that Aegon, the Dutch insurance company, had recently been upgraded by Morgan Stanley to overweight from underweight.  MS believes that Aegon's credit losses will be lower than the market currently anticipates. FOX    Market 

I currently own two equity preferred stocks issued by Aegon, with the largest position in AEB, a floating rate, perpetual equity preferred issue that pays the greater of 4% or 7/8% above three months Libor, with a $25 par value.  This is a link to the prospectus:  www.sec.gov 

My last two buys were at $4.8 and $5.5, and some around $8 with a total of 350 shares. AIG: Worse than Worthless/Ford & the UAW/Buy of 50 AEB at 4.8/sold CAT BOND/JPM Dividend Cut

I also own AEH bought in an IRA at $4.63. Buy of AEH in IRA/Aegon Statement of Intent to Pay Preferred Dividends/GE Loses AAA/

I would like to see a reinstitution by Aegon of its common share dividend which will provide the most legal protection to the continued payment of my preferred dividends. 

I was discussing AEB in this blog when it was below $3-an incredible and bizarre price.  At $3, the 4% guarantee would result in a 33.33% annualized yield.   

I did receive a 1099 covering dividend payments for AEB for 2008, and it was classified as a qualified dividend.  It is also listed at the quantum site as one of the preferred stocks paying qualified dividends, as are the other Aegon preferred stocks that I have discussed in this blog. Preferreds eligible for the 15% Tax Rate Table - QuantumOnline.comAgain, this site is free but registration is required. 

All of the AEGON preferred stocks have had enormous gains since March, many rising more than 300% in value (AEH, AEV, AEB, AEF, AED)

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.   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.  Everyone is responsible for their own investment decisions, and no one should ever make any decision unless they are willing to accept full personal responsibility for it.