Thursday, December 17, 2009

Bought 50 TRST at 6.3/Bought 50 HRP at 6.46/Sold KEYPRB/ Pared CEF EBI/Added to LT HBAN/Electric Utility Stocks

The RB is still confused, but maybe the Beanpole has figured it all out, so there is no need for the RB to bust a brain cell. The President said the other day that the nation needs to spend a lot more money to save money. That is what the Headknocker needs to do, spend a lot more money on R & R, take a trip around the world, just let it all hang out. Maybe borrow a million or two to blow in far away lands.

RB noted that the financial geniuses at Saturday Night Live, along with Jon Stewart, have it all figured out anyway. Video: The Daily Show Video - The RB does not understand all this accounting crap, maybe debt is an asset, and anything that is off-balance sheet may just as well be out of sight out of mind. RB is getting a headache thinking about all this really hard stuff, time for some R & R. Who is the best looking female in financial news, RB asked, then RB cast its vote for Jeanna Lee at Fox.

Boy, those financial wizards who made 20 million a year really did a number on Citigroup, Reuters NYT Now, that is one ugly stock offering for the long suffering Citigroup shareholders, who may now be viewing their stock in the same way as that guy carrying a wheelbarrow full of Weimar Republic currency to buy a loaf of bread or a newspaper Time to get out the wheelbarrows? | ProsperityAgenda.US. PBS RB is wondering whatever happened to that guru Robert Rubin and the boys mentioned in this NYT article in its Reckoning series, and to Chuck who apparently did not know the meaning of CDO even though 43 billion dollars of the crap was on Citicorp's balance sheet when the wizards explained it to him. Cure for a Lush: A limitless supply of alcohol? I know what the LB said about Robert, that he was just an innocent bystander, a mere ornament hanging near the CEO's office who occasionally shot the bull with some big wig like that Saudi Prince: ROBERT RUBIN: CITIGROUP JUST AN INNOCENT BYSTANDER LB said that was sarcasm, NO WIT.

LB pleaded with HK to set the LB free of its current demeaning role of explaining what the OLD Geezer is doing as Head Trader, and to please, please instruct the RB to shut up. HK agreed to consider LB's plea, but HK feels that the OG will not make any bold moves before Christmas to risk HK's capital positions. This is comforting to HK now. HK instructed the RB to quit running at the mouth, what an embarrassment. HK apologizes in advance for anything said by the RB as always.

1. Utility Stocks (own ETFs, individual common and preferred stocks and bonds): This is a positive article from SmartMoney about Utility stocks in general, the ETF XLU (Bought 100 XLU), and three individual names, two of which I own-Consolidated Edison and Progress Energy. I am a long time holder of Consolidated Edison (ED), one of my individual names where I reinvest the dividends to buy additional shares, and I view ED to be one of my core electric utility holdings.

The other one mentioned in this article, Progress Energy (PGN) is currently a non-core holding. I do not reinvest the dividends and I will occasionally pare or add to the position. As an example, I recently added in October 50 shares of PGN common, and I also bought 50 shares of a Trust Preferred. Bought 50 Shares of FPCPRA & PGN I then added more to FPCPRA. I previously added 30 shares in PGN back in April at $35.77 Bought ABT and PGN which simply replaced some higher cost shares sold at $39.96, which had the effect of lowering my average cost on the remaining shares: Pared PGN (see also last discussion of earnings report: Utility Earnings: POM, DUK, GXP, PGN ). Selling shares at a small profit, which reduces the average cost basis of the remaining shares bought using FIFO accounting, is routine here at HQ.

I would add a caveat to the article in Smart Money. If inflation and interest rates move up significantly, more than currently expected by the market, this would be an adverse development for utility stocks. I would expect their prices to decline, and their dividend yields to rise, to compensate for such higher inflation and interest rate numbers. I am at best a short term holder of the ETFs, which I just bought, and prefer to own individual names. With individual names, I am more accustomed and comfortable with paring and adding to the position based on volatility up and down respectively.

2. UBS Negative On Regional Banks: The UBS analyst, Erika Penala, does not expect the losses in regional banks to peak until 2011. I would have no reason to disagree with that assessment when viewed as a group. Regional banks are always heavy into real estate loans, and generally do not have the kind of investment banking operations that are helping some of the big banks like J P Morgan. Her only buy is Associated Ban-Corp (ASBC). I do not own that one, but I do own 150 shares of its TP, ASBPRW (ABW-PA), with a small loss in that position. It just went ex interest for its quarterly payment and yields about 9.8% at its current price of around $19.4: ABW.PRA Stock Quote - Asbc Cap Tr I TOPRS 7.625% She has sell ratings on several that I have bought as Lottery Tickets, in Category 1, which means I have a negative view of those banks, and their management, unwilling to even risk more than $300 in capital.

I would agree with her assessment about Synovus & Marshall & Ilsley as sells, when viewed with a one year in the future perspective. She has a sell on Zions. I do not own Zions common, but do have a small position in its equity and trust preferred stocks. I do not own First Horizon, but would classify that one as a hold at the current prices rather than a sell. FHN is the largest bank in Tennessee and owns First Tennessee Bank. It made a huge mistake going national with its mortgage operation, but has returned to its roots.

She has a neutral rating on Huntington (HBAN), and I would not disagree with that rating at the current price of around $3.7. In fact, as an expression of the Old Geezers confidence in HBAN long term, the OG bought 40 more shares of HBAN at $3.69 to add to its 50 share LT position in this Ohio bank. (see disclaimer) And this add was done only after it was confirmed as prudent by the OG flipping the magic coin which came up heads. I hope the sarcasm came through loud and clear on that 40 share buy.

HBAN is now trading well below its low from the last time banks blew themselves up with their financial wizardry, the 1990-1991 debacle: Huntington Bancshares Price Chart | HBAN So what exactly have the highly compensated wizards at HBAN accomplished over the past two decades-what have they built and how much wealth have they destroyed? HBAN: Profile

The UBS analyst has a buy on Associated Banc. ASBC is hovering around $10.5 now, about where it was in 1995. Associated Banc-Corp Share Price Chart | ASBC It has been pretty much in a waterfall since peaking at around $35 in February 2007. Fitch recently downgraded the Bank's debt. Fitch Downgrades Associated Banc-Corp's Long-term IDR to 'BB+'; Outlook Negative

3. Bought 50 TrustCo (TRST) at $6.3 (see Disclaimer): Another bank that did not show any interest in accepting TARP funds is the TrustCo Bank of New York, based in Glenville. TARP I had previously owned this bank as a lottery ticket, prior to starting this post, and I believe that its dividend was higher during that prior ownership period. Based on my prior experience with TRST, I do not not believe that it has as much upside potential as some of my other recent purchases, possibly with a return to more normal economic conditions the stock price may move to 10 to 12. The current dividend yield at my cost is around 4%. The bank has remained profitable during the downturn, but earnings did decline in the 3rd quarter of 2009 to 10.3 cents from 11.9 cents in the year ago quarter. form10q.htm This is the bank's capital ratios as of 9/30/09:

The Company achieved the following ratios as of September 30, 2009 and 2008:

September 30,
Minimum Regulatory
"Tier 1 risk adjusted capital
12.45% 12.62% 4.00%
Total risk adjusted capital
13.71% 13.88% 8.00%

In addition, at September 30, 2009, the consolidated equity to total assets ratio (excluding the mark to market effect of securities available for sale) was 6.65%, compared to 6.73% at December 31, 2008, compared to a minimum regulatory requirement of 4.00%.

The decrease in capital ratios reflects growth in the overall consolidated balance sheet."
(PAGE 32)

I am placing TRST in Category 2 of my Regional Bank Stocks stratagem.

4. Bought 50 of HRPT Properties (HRP) at 6.46 (see Disclaimer): The Old Geezer was looking at the stocks Tuesday night that will go ex dividend today, and saw a name that sort of rung a bell? Was it currently owned and was it worth buying? The OG asked the LB to dig into it further. The LB reported back with the usual insults hurled at the OG, something about being in the early stages of senility or something along those lines. LB said 100 shares was owned, and dividends had been reinvested until the end of 2008, when LB changed the payment option to cash. The last shares were bought a tad above $3 with the dividend. HK owned 100 shares plus about 18 bought with dividends. LB thought that the last earnings report was okay under the circumstances, but the occupancy rate for this REIT's office buildings fell to 88% (down 110 basis points sequentially)

I expect that the vacancy rate will continue to increase some in the coming months. However, with an upturn in the economy, and the lack of overbuilding in the commercial office generally (and a near shutdown for almost 2 years in many localities) , it is possible for this downward trend to first stabilize in the coming months and then to start to drift up. The current dividend yield is over 7% at the price paid yesterday. S & P has it rated 4 stars with a $8 target. OG then bought 50 shares at$6.4, being at times a wild and crazy guy, and changed the distribution option back to reinvestment in additional shares.

As of 9/30/09 this REIT owned 330 office properties and 185 industrial properties, excluding properties held for sale. As of 9/30, HRPT owns 46.3% of another REIT, GOV: GOV: Summary for GOVERNMENT PROPERTIES

Price to book is currently listed at YF as .55: HRP: Key Statistics for HRPT PROPERTIES

5. Sold KEYPRB at $18.9 (see Disclaimer): Well, if HK can not get in the charitable mood for Christmas, the Old Geezer will continue to make charitable contributions in the HK's name. The most needy charity case that the OG knows is our favorite Uncle Sam, having to go hat in hand in every nook and cranny in the world to borrow money to make ends meet. OG is doing his part to help our Uncle out in its hour of need by selling stocks for short term gains, up now to over 15 grand or so in 2009. This one just went ex interest and was bought a few days ago at $17.74 Bought 50 of the TP KEYPRB

Just unbelievable, the LB noted, another transaction for a $25 profit, what's the old fool going to do now, buy the RFPRZ back, and hope to sell it again for another $25 profit. Sold RFPRZ at 23.46 Maybe someone needs to take the OG to play blackjack for $25 a hand. OG corrected the LB, that was a $40 or so in share profit on KEYPRB plus one quarterly dividend on 50 shares, so that is a lot of moola for someone who used to work for $2 an hour driving rotten stakes into the hard ground, almost equal to the compensation for a week's labor when the OG worked for his dad in the summer. (Item # 3 Sold SIMG) Maybe the LB has forgotten the value of a buck, the OG added for good measure.The RB who will defend the OG said the OG has his reasons even if they make no sense, then again it may be as the OG says, a desire to help our Uncle out that motivates these trades. It finally occurred to the LB that the OG was actually up to something. Maybe the OG was getting back at the LB for some slight, or offhand remark made by the LB, like calling the Old Goat senile. After all, the OG knows that the LB is solely responsible for preparing the tax returns, an exercise already requiring a herculean effort, and OG delights in creating more work for the LB during tax season.

6. Pared 100 of 400+ shares of the CEF EBI owned at$14.07 (see disclaimer): I have not discussed this CEF except in passing. The first 100 shares bought were the highest cost shares that I own, and I sold them at a loss to offset some of the ST gains taken year to date. This transaction lowers my average cost for the remaining 300+ shares. I used to reinvest the dividends. I was also not pleased with a dividend cut by EBI a few months ago, though I understand why it happened. This CEF closed with a nav on 12/16 of 16.46, so it is selling now at about a 14.6% discount to net asset value, which is one reason why I held onto the other 300 plus shares. This CEF is listed under world income funds at the WSJ closed end funds pages.

This link to Evergreen's web site may not work: Daily Fund Prices It is easier just to go to the SEC web site and find the latest quarterly report: This CEF is a balanced international fund, owning both stocks and bonds.

I have had more luck with ETFs than CEFs in the foreign stock and bond area. One foreign stock ETF that I bought in February in an IRA at about $10.4, which I will briefly mention now, is what use to be called the Claymore International Yield Hog fund. Maybe that sounded like it was named by an RB, so the name has since been changed to the Claymore/Zachs International Multi-Asset Income Index ETF, which does sound more reassuring and sophisticated. HGI - Claymore/Zacks International Multi-Asset Income Index ETF - Summary This ETF contains around 150 international companies that have potentially high income and risk return profiles as determined by Zachs.


  1. "...the long suffering Citigroup shareholders, who may now be viewing their stock in the same way as that guy carrying a wheelbarrow full of Weimar Republic currency to buy a loaf of bread or a newspaper"

    I am one. You know the saying, when you've fallen 19 stories, the last story doesn't really faze you.

  2. Cathie: it is too bad that those who caused the devastation to Citigroup are allowed to keep their compensation, without any recompense to those harmed by their reckless actions. The NYT story in the Reckoning series about Citigroup identifies the responsible persons.

    The U.S. government still wants to sell its boatload of shares, and I would expect more pressure on the shares as the government unloads its gigantic stake in the weeks and months ahead.

    The RB may give you some moral support by buying 50 shares of this stock as a Lottery Ticket sometime next year. But there has just been massive dilution of your interest with the stock issuances (the one today was pretty bad), and the conversions of preferred shares, both at extremely low prices historically which is why I compared those Citigroup stock certificates to the Weimar currency. Eventually, they will need to do a reverse stock split, something like 1 for 10.