1. Bought 100 MSPRA at $12.88 to diversify floating rate equity preferred sub-asset class: I think that I am just about done buying floaters. Today, primarily as a diversification move, I bought 100 shares at $12.88 of of the floating rate equity preferred, MSPRA, a security issued by Morgan Stanley. This security pays the greater of a 4% guarantee or .7% above 3 month LIBOR. This one is listed with those securities that pay qualified dividends at the quantumonline site. Preferreds eligible for the 15% Tax Rate Table - QuantumOnline.com This is a link to the prospectus: www.sec.gov
This is a typical equity preferred floater in terms of its advantages and disadvantages. Advantages and Disadvantages of Equity Preferred Floating Rate Securities
Since this one has a par value of $25 with a 4% guarantee, the yield at a $13 cost would be $1 divided by $13= 7.69%. At a 5% LIBOR the rate would increase to 10.96% at a $13 cost. At a 7% LIBOR, the rate increases to 14.8%. This was at best a marginal buy.
2. Added to closed end investment company Adams Express (ADX): I had some funds come into the account from the liquidation of an ETF by a sponsor. I just put those funds into my existing position in Adams Express (ADX) by buying shares at $8.34. As of yesterday, ADX was selling at a 15.63% discount to its NAV. This is a link to their web page: Adams Express Company - Welcome
This leaves my previous $3000 cash allocation available for investment in stocks intact.
3. GM Bankruptcy: It is hardly surprising that the GM bondholders turned down the offer of stock for their bonds. Although no one knows, I would anticipate that the GM bankruptcy will take much longer than currently expected and the bondholders will throw a wrench into any quick exit.
4. Commodities as a Non-Correlated Asset class: For this discussion, I am relying mostly on the data contained in this blog: Seeking Alpha