Tuesday, December 23, 2008


I discussed the pricing difference today between two Aon TCs in an earlier post, DKK and KVW.  I have never owned DKK so I did not realize until a few minutes ago that it has a different ex interest date which explains most of the price difference.  DKK went ex interest on 12/16 whereas KVW goes ex on 12/29.   So KVW, unlike DKK, is still carrying the $1 semi annual interest payment.   Thus the pricing is rational right now.  If I did not want to buy the interest payment for KVW, a taxable event, and wanted to buy an AON TC, then and only then would DKK be a better choice now in my opinion.   

I am going to spend the remainder of my cash flow for this month buying one or two small caps whose earnings are not correlated much with the health of the economy, similar in that respect to ISIS which I still intend to sell at some point for the shares bought in my IRA and to keep the shares in my taxable account.  

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