1. Ariad Pharmaceutical (ARID) (owned): Ariad is a Lottery Ticket purchased before I started this blog. I discussed it briefly when, suffering from old age memory issues, I saw it in my portfolio and had no idea what it was doing there. Old Age Infirmities: Why is a Company called Ariad Pharmaceuticals in my Portfolio The focus of that earlier post was some corporate governance issues, and trying to reacquaint myself with why I bought ARIAD in the first place which was discussed in this post: More on Ariad To be frank, I did not have a clue what caused me to buy it as a LT. Trying to recreate what may have gone through my mind last summer when I bought 100 shares, I determined that it probably had something to do with a drug called deforolimus (or redaforolimus) for the treatment of metastatic cancer. I noted Merck was involved with Ariad on that drug. That drug is in stage 3 clinical trials. There was news this morning about another ARIAD drug, in early clinical trials for the treatment of advanced hematological cancers. This caused the stock to pop some in early trading today. I am certainly not equipped to evaluate these kind of matters, which is why I include these small biotech companies in the LT category and never (and I do mean never) invest much money, since their drugs, even the promising ones, often fail at some point during clinical trials. While Novartis and Pfizer can shrug off failures, they can be devastating for these small biotechs.
2. Webster Financial (owned-Lottery Ticket): WBS is a northeastern bank whose shares were bought at $4.58 as a Lottery Ticket. Buy of 50 WBS: Lottery Ticket The rationale for buying shares was discussed in that linked post. Today, the shares rose over 13% to near $11 in early morning trading based on a 115 million dollar investment by Warburg Pincus. Those shares were bought at $10, a small premium to the closing price on Friday.
For the older investors, or the younger ones with an interest in history, it is generally known that the banks periodically blow themselves up. The last near death experience for many of them occurred in the 1990-1991 period, and bad real estate loans were the primary culprit at that time. Financials: 3 Strikes and Your Out-Financials?/BAC/ Parallels to 1990-1991?/ While it is worse this time for the banks, I am confident that a bull market will arise out of the ashes, sooner or later, in the stocks of some of the financial institutions that survive the blood letting. I have no idea which will prosper in the next bull market for financial stocks, so my approach has been to just buy small amounts of a number of them, and just throw a few out occasionally, as I recently did with UCBH, and hold onto the rest to see what happens. All of these investments will be in what I call my Lottery Ticket category:LOTTERY TICKET PURCHASES: LINKS IN ONE POST I will not risk much capital in them since so many are just severely damaged, and it is too hard now to separate the wheat from the chaff (Matthew 3).
3. Pared PKM (see disclaimer): I sold 50 shares of my 150 PKM shares earlier in the day at $20.11. I bought shares in this TC in two phases, and my first purchase was at a higher cost than the second.Bought 150 TC PKM I mentioned in that post that I would likely reduce my position by 50 shares on a rally above $19 after the payment of the next semi-annual interest payment. Instead, while the ex interest date will be in August, I accomplish the same objective by waiting until the price crossed $20. By selling some of the first shares bought at $17.8, and using FIFO accounting, I lower my effective cost basis in the remaining shares while reaping a decent short term gain on the 50 shares. I did recently add 50 shares of another TC, KRH, that has the same junior bond as PKM as its underlying bond. Bought 50 KRH in IRA/
One thing about buying exchange traded bonds is that I can trade fairly easily most of the time in relatively small amounts. I had no trouble selling those 50 shares of PKM this morning.
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