Friday, March 6, 2009

Buys of JWF KSA PJZ, DIS and NYX/SOLD Entire Position in TFI/ Just a Day of Ignoring My Own Rules

I sold out of my position in an ETF for municipal bonds, TFI,  at 21.71. The last purchase was made at $18.5 in October 2008. BOND ETFS BWX AND TFI  I am in the process of increasing my yields from bond holdings and this ETF was a low yielder. It did pay monthly dividends and I made a good profit on the holdings. 

I bought another 50 of the TP issue of Wells Fargo, JWF, when it tanked today at $9.15 which gives me a 15% or so current yield on that purchase plus another 7% or so per year assuming Wells Fargo survives to 2034 and I hold JWF until maturity. By splitting the order, I was able to lower my cost for 100 shares. Buy of 50 JWF in IRA 

I discussed JWF in more detail near the end of the above linked post. One advantage of splitting orders in this down market is that I will certainly have opportunities to average down until I complete my position which is why I am taking partial positions with virtually every purchase made for the last six or so months.

I also bought 50 of PJZ in a taxable account, a TC containing a senior bond issued by Valero after it fell to $17.88. Par value is $25 with a 7.25% coupon and a 4/15/2032 maturity.  Interest is payable in April and October. The underlying security is a 7.5% coupon Valero bond. This is a link to the prospectus:

My last sale on PJZ was around 24 last year. The current yield at my price is around 10%.

Valero's debt is a lower tier investment grade at BBB. 

The pricing for the underlying bond is close to the price to yield that I paid for PJZ. FINRA

The prospectus for the underlying bond can be found at 

Although I said that I would not buy a common stock, I did nibble at NYSE Euronext (NYX) at $14.76 so that I could say something else about Cramer. I passed on NYX when Cramer recommended it as his growth stock of the year when it was around $95 or about $80 so bucks higher than my purchase today. stockTagger I passed on it again in the twenties when he recommended it again. Black Swan is Relative/NYX?/SKYPE as a Disruptive Technology and Harbinger for things to Come/SNTA I am now in it at $14.76 and I just wanted to see who could time the purchase of NYX better, Cramer or moi, one of the hoi polloi, an average individual investor from the heartland.  NYX does have about a 8% dividend yield at my price but who can count on that these days. NYX Stock Quote 

While I am confessing to ignoring my own rules which I am prone to do whenever I grow bored, as now, I would add that I bought some Disney for the first time in years at 15.49.  

I also added a nibble to KSA at below 11. KSA Stock Quote - Corts Tr Provident Fing Tr I Stock Quote - KSA Quote - KSA Stock Price  This gives me around a 20% yield and is another average down from my recent last purchase at 16.31. BUY OF 50 KSA IN IRA AT 16.31/BAC Management: Failure is to Kind a Word to Use/CB & L

There does seem to be widespread panic among the holders of virtually every kind of security issued by just about any life insurance company.  

HIG has fallen to just $3.62.

Phoenix is fetching just 29 cents. PNX

Prudential, which traded as high as 89.82 within the past 52 weeks, hit intra-day a new 52 week low of $10.88. Met Life is down from its 52 week high of 65.5 to close today at 12.22.  Its floating rate preferred that I own, METPRA, has had its own meltdown this past week closing at 7.27. This non-cumulative preferred floats at the higher of 4% or 1% over 3 month Libor. The guarantee results in a 14.2% yield at a $7 cost which is where I made my last purchase. I was tempted today by AEB, but decided that I have had my fill with Dutch insurance company preferred stocks for now. AEB was trading around $2.5 when I saw it this afternoon. AEB Stock QuoteThat is getting close to a  40% yield at the guaranteed 4% rate on the $25 par for that floater. I think that you would have to assume the market believes in an Aegon bankruptcy as virtually a sure thing, or the current batch of sellers are being extremely irrational, one or the other. The yield would be out of sight at a 5% 3 month Libor rate.  I did those type of calculations in prior posts. If my memory serves me correct, the yield at a cost of $2.5 and a 5% Libor (7/8ths above 3 month Libor is the float) would be around 59%. LIBOR AND THE AEGON FLOATING RATE PREFERRED STOCK

  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 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.  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.  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.