Wednesday, December 31, 2008


I decided to keep myself at the Trading Desk here at HG HQ and just watch the Vandy game on the tube.  I have to wonder why Johnson has waited until now to play the redshirt freshman. 

No one needs to here my rationale for buying Microsoft which I did near the close with a market order filled at 19.48.   This replaces at position sold at around 8 bucks higher.  It does have a dividend yield of about 2.7% at that price and has certain characteristics of a utility now.  I would not expect much price movement.  Possibly, if it moves back to 25 to 30 within two years, I will sell it.  I do not view it as a screaming buy but it is selling about ten times the earnings estimate for fiscal 2009 and less than 10 times for fiscal 2010. Yahoo! Finance  There was a story today in Barron's, based on a report from Caris & Co, that Microsoft might accelerate its buybacks.  I mentioned in some earlier posts that I viewed many of these large cap tech stocks as attractive at current prices. AGC INZ AND TECH STOCKS

Since I take less risk in a retirement account, and manage risk far more aggressively in those accounts, I sold the 50 ISIS that I recently bought near the close after I noticed that it was trading over 14 after buying it a few days ago at 10.45 on 12/3     ISIS PHARMACEUTICALS (ISIS)
I mentioned the reasons for making a sale of those fifty shares and keeping the 50 bought in a taxable account in this post.  Random Observations: Madoff, Sarah, EMO AND EHL/CIT/ISIS/VLO

I discussed AEB and some of the other perpetual preferred stocks, AEH and AEF,  in a comment to this blog. Took Tax Loss on Linta  A comment was made about these other preferred stocks yielding more than AEB.  The current yield differential is about 5%.  AEB is currently at around 11.27% based on its guarantee and price.  AEB Stock Quote - Aegon N V Stock Quote - AEB Quote - AEB Stock Price  AEH does not have a float provision but has a current yield of  16.21% based on the calculation at MarketwatchAEH Stock Quote - Aegon N V Stock Quote - AEH Quote - AEH Stock Price   If I had to choose one, I would pick AEH over AEB because the yield differential of 5% is too much to pay for a floater.  The float provision does have a lot of value in a long term asset allocation model, when part of the criteria is buying some bonds that have inflation protection like a TIP or a WIP.  I do not view it as an either/or proposition.  I view it as limiting my exposure to a disfavored asset class by choosing my buys on an opportunistic basis.  The reason for my disfavor is the lack of a maturity date and the lowly seniority level.  So I am more inclined to add the floaters on an opportunistic basis which fills a niche in my asset allocation and trade the cumulative preferred stocks which has been successful so far for me. I will buy some perpetual preferred that are not floaters, which explains my buys of INZ and IND issued by ING. I am more likely to trade those issues, managing my risks as I did recently for INZ by selling the highest cost shares at a nice profit and keeping the lowest cost shares for the large dividend at my cost and a potential long term gain.  I am open to using my cash flow to buy another preferred and I am always interested in ones yielding more than 15%.  I do not now have a position in either AEH or AEF.  I am also an opportunistic buyer by asset class.  This caused me to be a heavy buyer of senior investment grade bonds in the September to November time frame, floaters in October and November, cumulative REIT preferred stocks since September, and I am now moving into common stocks with my cash flow, starting will small and mid cap stocks whose fortunes are not highly correlated with the economy and other stocks that I am willing to hold for many years after buying at the currently depressed prices. 

The FITCH ratings on the Aegon preference shares is A+, long term. Fitch Corporate


  I am not a financial advisor but an individual investor trying to navigate my way through a difficult market. 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 any reader of these posts, assuming there are more than a couple, 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.  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.  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. 

No comments:

Post a Comment