Friday, January 27, 2017

Observations, Ruminations and Sample of Recent Trades (SGZA, NWHUF, CIOPRA, REXRPRA, ARESF): January 27, 2017/Trump and The New Alternate Reality Universe

Trump in ABC interview: Wall to be built within months, torture ‘absolutely’ works - MarketWatch (on torture, see Senate Intelligence Committee report on CIA torture-absolutely did not work) 

Trump Threatens to Cancel Mexico Leader’s Visit Over Wall - Bloomberg (Mexico's President stated in a video speech once again that Mexico will never pay for the GOP's wall) 


Trump responded with a Tweet (foreign policy by Tweet is the New Normal):  "If Mexico is unwilling to pay for the badly needed wall, then it would be better to cancel the upcoming meeting." CNN 


Mexico's President of course cancelled the meeting with our Dear Leader. Mexican president cancels meeting with Trump - CBS News


In my life, I do not recall a single President, other than Trump, threaten to cancel a foreign leader's visa, unless that leader first agrees to U.S. demands. The GOP applauds this approach to diplomacy. The U.S.A is the Center of the Universe and All Countries Need to Dance to Out Tune or Else. 


A negotiation that starts with one side making a non-negotiable demand that is clearly unacceptable to the other is not a negotiation. 


Trump is a dogmatic and naturally authoritarian person who will not tolerate any criticism, no matter how inconsequential.  


And, without question IMO, he has zero interest in acquiring anything remotely resembling complete and accurate information before forming an opinion. He is the most dangerous person by far ever to be elected President.  


The Age of Alternate Facts is now upon us in full bloom, and it does have a Nineteen Eighty-Four feel to it, more than just a little bit.  


It is hardly surprising that his chief advisor, Steve Bannon, has told the free press to keep their "mouth shut". Trump Strategist Steve Bannon Says Media Should ‘Keep Its Mouth Shut’ - The New York Times The GOP has been trying to marginalize a free press for several decades as a source of accurate information in order to acquire and maintain power.


Mexico is the second largest importer of U.S. goods. (U.S. Census Bureau Data)


Trump calls U.S.-Mexico trade one-sided — and here’s the reality - MarketWatch


More Mexicans Leaving Than Coming to the U.S. | Pew Research Center (the reverse will occur when U.S. factories are forced to abandon their Mexican factories;  a wall will interfere with that migration back to Mexico; and a 2000 mile wall will be breached in numerous places continually)


After Mexico refused to voluntarily pay for the GOP's wall, Trump purportedly endorsed  "a 20 percent tax on  imports to the United States.  


The  funds collected "from Mexico" will be used to build the GOP's wall. After that proposal created a firestorm, the White House backtracked a little saying that was one option on the table.  


A tariff on goods is not collected from the country of course, but the Trump True Believers will swallow hook, line and sinker any Trump statement that Mexico is paying for the GOP's wall through a tariff, when in reality they are paying for it through higher prices and higher inflation.  It is far easier to go through life as an ignorant person, probably more blissful too since doubts never come into being and shades of gray are never seen. Being informed takes time, an open mind, and work.    


It does not bother me to pay more for imported goods, but perhaps a few Trump supporters will have a light bulb go off before the next election and will be less than pleased with the reality of who is paying for the wall. The Mexican government will not pay to build the GOP's wall.  


Those adverse consequences might even include the loss of their job when Mexico retaliates in kind. There is a rough form of justice that sometimes goes around. The top 1% do not have to worry since massive tax cuts are coming their way, and they certainly paid good money to the GOP for that result. Maybe something will trickle down to the blue collar middle class that voted for the Orange King in droves. 


Sure, Mexico's economy will be hurt more in a tariff trade war, given the relative size of the two economies and Mexico's greater dependence on the U.S. 


U.S. would lose jobs as well. The hurt will be on both sides.


Mexico would also likely end all cooperation on drug trafficking and counter-terrorism matters. Why bother to help the U.S. on those issues when the U.S. government is openly hostile to Mexico's interests? 


More important for the future, China and Russia may quickly develop closer trade ties with Mexico replacing the U.S. as Mexico's largest main trading partner. Chinese leaders are not stupid. They can readily see the openings (more than one) being created by Trump that advance their economic and political interests. 


Relations with several European nations will be damaged as well since their manufacturers have located plants in Mexico to serve the entire North America market for their products. Trump IMO is doing whatever he can to break up the EU into pieces, praising BREXIT and criticizing traditional allies that remain in the EU. (the latest: As May heads to U.S., Trump’s guy in Europe expresses deep pessimism - MarketWatch)


The Sun King Louis XIV would be proud of his soulmate the Orange King.   


When Obama issued Executive Orders, the republicans were up in arms and many renewed their talk about impeaching him and throwing him into the slammer. 


If Hillary had won, the GOP House of Representatives would have started impeachment proceedings as soon as her hand was lifted off the Bible. It is all about maintaining power for economic reasons anyway, democracy just gets in the way of the "right" result. Chants of "lock her up" were even heard at Trump's inaugural when her name was mentioned casually. ‘Lock her up!’ chant by Trump supporters against Clinton - The Washington Post 


It is far different when the Orange King issues Executive Orders that requires a great deal of borrowed money to spent. You will not hear a peep from the True Believers about the Executive Order to build  a wall along the 1,954 mile border with Mexico. Tens of millions (62.979+M to be precise) are cheering about that EO. It is only EO's issued by a Democrat that are unconstitutional. 


A copy of that EO  can be found at Quartz.


How exactly is Trump going to build that wall in months? Will Congress be called upon the vote on any legislation and appropriations relating to that construction and the roughly $500M per year maintenance. 


Pooh on those elected representatives.  The Orange King has spoken. Build that Wall or pay the consequences.


The GOP believes that they have found a way around the Senate Democrats use of a filibuster. 


The idea is to fund the construction, which Mexico will later reimburse us for certain according to our Great Leader, under an existing piece of legislation called the Secure Fence Act of 2006: Text - H.R.6061 - 109th Congress (2005-2006): Secure Fence Act of 2006 | Congress.gov | Library of Congress


By 2009, the U.S. built 613 miles of fencing under that Act, but Congress thereafter failed to pass legislation to fund additional construction.


The Secure Fence Act of 2006 would be a Congressional authorization to finish the fence, provided the GOP can find a way to fund that construction without allowing the Senate Democrats to filibuster, but there is a major legal problem in following that path.


That law requires the Department of Homeland Security to find that the construction is "necessary and proper" (clause A).


In a 5 to 4 decision, the Supreme Court held in MICHIGAN v. EPA (J.Scalia) that "necessary and proper" language in the Clear Air Act required that agency to perform a cost/benefit analysis first. It is not enough that the agency find that the action is "necessary".


In a matter of weeks, Trump will find out more about the U.S. legal system and how opposition groups and their competent lawyers can throw monkey wrenches into his plans.


There will be a lawsuit filed that will require a cost/benefit analysis to be performed before any additional fencing is built. The Democrats will select a friendly Federal District Court in a friendly Appellate court district as the GOP has done in the past as well. If the lower courts follow the Michigan decision, and they have no choice in the matter, an injunction would be issued against the government until that study is completed and then there will be court challenges as to its sufficiency.


There is already a large body of evidence that the existing border wall has not been effective. People go under and over it.


Trump's immigration tab: $166 billion - POLITICO


As Donald Trump Calls for Wall on Mexican Border, Smugglers Dig Tunnels - The New York Times


What's More Effective Than a Wall on the Border? | The Report | US News and World Report


Feds Frustrated by Illegal Immigrants Passing Through Holes in New Border Fence | Fox News


Trump’s dubious claim that his border wall would cost $8 billion - The Washington Post (probably the same kind of cost estimate that Bush and Cheney gave us prior to launching the Iraq Invasion). 

The cost benefit analysis will not be decided by Trump signing an Executive Order where he orders the wall to be built.

  
I wonder what Trump would say about a judge that dares to defy him.  

We already know that he attacked a judge of Mexican descent when rulings in that Trump University fraud cause did not go his way. And that was a fraud by the way.



++++


Trump says he is an environmentalist and claims to have won many environmental awards


Trump’s unsupported claim he has ‘received awards on the environment’ - The Washington Post;


Donald Trump Says He’s “An Environmentalist,” Promptly Announces Plans to Destroy the Environment | Vanity Fair


So far, no one has been able to locate one of those rewards.


Has it occurred to anyone that Trump is unequivocally delusional? 


Trump has found several ways to protect the environment from pollution. 


He has appointed an anti-EPA person as the EPA's Administrator, gagged the EPA's employees, blocked the EPA's new research efforts, approved two new oil pipelines, and held out a carrot to the U.S. automakers that will allow them to pollute the air more in exchange for more U.S. jobs. We are now officially in an Alternate Universe where Reality Creations or Alternate Facts are the New Normal.


If Trump wants to adopt policies that will create a few more jobs in exchange for substantially more actual and potential pollution, then he needs to at least drop his asinine claim of being an environmentalist and to accept that he is precisely the opposite.  


He will not do so since the True Believers will never question any assertion made by the Great Leader. Truth is no longer relevant. Accurate information is per se false when it calls into question reality creations. 


In case there are any super models who regularly read this blog, and want to know more about the OLD GEEZER, he used to # play shortstop for the New York Yankees, regularly runs five miles a day in just twenty minutes and performs a warm up exercise each morning of 300 push-ups with each arm to keep his slim and muscular body in top physical condition for a man of his age-just 21 by the way, and has so much hair on the top of his head that he regularly donates some to those less fortunate.  Oh, forgot to mention, the OG won the Nobel Prize in Economics for his groundbreaking work titled "Efficient Markets Theory as BullShit: How True Believers and RBs Influence Irrational Pricing in Stock Prices"   ( # ALTERNATE FACTS )


++++++++++++


I may to cut back on my Trump, Pseudo Conservative and True Believer comments to avoid getting kneecapped on my way to the mailbox or having the full power of the U.S. government, which is no longer constrained or restrained by facts, unleashed on me. The GOP is not a conservative party. 


Trump has used litigation as a means to bully and browbeat others into submission and to avoid paying what he owes to small firms and blue collar workers according to many news reports. 


USA TODAY exclusive: Hundreds allege Donald Trump doesn’t pay his bills;


Dozens of lawsuits accuse Trump of not paying his bills, reports claim | Fox News;


Donald Trump Has a History of Not Paying His Bills. That Offers Some Insights Into His Personality;


Donald J. Trump Is A Libel Bully But Also A Libel Loser,


Fearing Trump, Bar Association Stifles Report Calling Him a ‘Libel Bully’ - The New York Times;


How ‘thin-skinned’ Donald Trump uses insults, threats and lawsuits to quiet critics - The Washington Post;


Rule of Trump vs. Rule of Law - The Washington Post;


The Miss USA hopeful sued by Trump: 'There are ways to stand your ground' | US news | The GuardianTrump used $258,000 from his charity to settle legal problems - The Portland Press Herald;


New York Times responds to Trump's lawsuit threat | PBS NewsHour


Donald Trump says he'll sue sexual misconduct accusers - CNNPolitics.com


Trump voters and supporters have no concerns. I do. 


Trump now has the full power of the federal government behind him and sycophants willing to do his bidding without questions or reservations. The reactionary
Jeff Sessions as the attorney general does not alleviate my concerns. Did Jeff Sessions forget about how he wanted to execute pot dealers? It is for the best to have a foggy memory about repeatedly calling a black  "boy". His memory losses are a matter of convenience.

It is precisely those kind of reports from a free press that need to be stifled, suppressed or at a minimum completely ignored in what is now a Pavlovian response to accurate information by tens of millions.


I was only half serious about being kneecapped by a Trump Acolyte,  since I doubt that the True Believers read my blog. 


At the White House's website, there are two "We the People" petitions that one or two readers may view as worthwhile signing. 


One calls for Trump to release his tax returns in order to comply with the Constitution's Emolument Clause. What is the ‘Emoluments Clause’? Does it apply to President Trump? - The Washington Post 


The other calls for Trump to divest his business interests or place them in a blind trust. He will of course ignore both. 


He never had any attention to release his tax returns. There are many likely reasons, and none are positive, including what I suspect to be a total lack of charitable giving, the use of offshore accounts, business ties with less than pleasant foreign countries and individuals, and the failure to pay taxes after losing a billion dollars when he actually tried to operate businesses rather than making boatloads of cash licensing his name.  



Petition the White House on the Issues that Matter to You | We the People: Your Voice in Our Government


Trump Made No Donations To 9/11 Charities | The Smoking Gun


Donald Trump may have lied about donating to 9/11 charities - NY Daily News



++++++


Trump's Press Secretary Sean Spicer, now called here at HQ the "Alternate Facts Guy", claimed that it was necessary to freeze federal employment due to their the "dramatic expansion in the federal workforce". 


That claim was rated "mostly false" by PolitiFact.


During Obama's 8 year administration, the number of federal employees grew from 2.78M to 2.8M or about 1% in 8 years. The use of the word "Dramatic" to describe that increase is a deliberate lie.


The Trump administration just told a whopper about the size of the federal workforce - The Washington Post


It is probably safe to assume that the Alternate Facts Guy is lying whenever his mouth appears to be moving, unless proven otherwise by real facts as opposed to his abundant reality creations told with an earnest face. The press should just laugh at him. Better to laugh than cry as my grandma use to say. 


++++++++++++++


Reduction in Stock Allocation Is Now In Progress 


I do not believe the stock market is correctly assessing the risks of a Trump presidency including the repercussions of his protectionist policies. From a geopolitical standpoint, he is providing important openings for China and Russia in both the Asia-Pacific region and in Mexico and possibly other Latin American countries as well who will react negatively when the U.S. wields its Big Stick to beat one or more of them into submission.


I am starting to sell into the current parabolic stock rally that is based on a belief, expressed with 100% certainty, that Trump's policies will in fact turbocharge the U.S. economy for many years to come.


As I noted earlier, I would lighten up on my stock allocations based on current valuations and my capital preservation focus anyway.


I will invariably sell into parabolic price spikes anyway.


The market has been good to me since March 2009. I have no financial need to push the envelope further.


As in 2007, most of the stock allocation reduction will be done first in U.S. stock funds.


The stock fund slash actually started in late 2006 and continued for about a year. I generally take my time but may be quicker than usual now.  


I will not sell any shares in T. Rowe Price stock funds as previously discussed which by itself maintains a meaningful allocation to U.S. stocks.


I will continue to maintain meaningful stock exposure in Vanguard mutual funds, but at a significantly lower level than now.   

The largest existing fund position is over $50K in the Vanguard Equity Income Fund-Admiral Class (VEIRX). I bought that position for my mother back in the early 1990s and I inherited it when she passed away in December 2015. 


The cost basis was stepped up to the price as of her DOD, so all of the profit from the original purchases will not be taxed up to that stepped up cost basis  when I sell shares.

As noted in previous comments, I have already pared the position by $9K late last year and will continue paring in $3K increments. I will stop paring when the market goes down meaningfully. A bear market decline (> 20%) that takes the S & P 500 below 2000 will probably result in a return to dividend reinvestment and small adds spaced in time. 

 VEIRX Vanguard Equity-Income Admiral Fund VEIRX (rated 5 stars by Morningstar). 

I may eliminate my vintage position in the Vanguard STAR (VGSTX) due to valuation and risk concerns involving both stocks and bonds. So far, I have only sold a few shares purchased with reinvested dividends. I initiated a position in that fund in 2009, along with several others, when I rotated out of cash and short term bonds into stocks and longer term bonds. 2. Pared Highest Cost Vanguard Star Fund shares Bought With DIVIDENDS: Update For Portfolio Management And Positioning As Of 10/24/15 - South Gent | Seeking Alpha   

I will not be including snapshots of the profits here since that would be misleading given the stepped-up cost basis. I will simply note that I have pared again by $3K.  

I am turning off the reinvestment option in all Vanguard stocks funds as I have already done with the T. Rowe Price funds.


Stock CEFs will probably be the first funds that will be jettisoned.


I will discuss some of those stock fund dispositions in the next blog. I mentioned in the last blog paring ADX. 


When I start this paring process, the first to go will be recently bought fund shares, selling at whatever profit is then available. Those shares were bought deep into a long bull market cycle, the second longest in history without a 20+% decline. 


11/16/16 Article: Why the 2,826-Day-Old Bull Market Could Be a Headache for Trump - Bloomberg (add more days to date)


I believe the longest run ever without a 20% correction started after the 1987 crash and ended with the 1990 bear market.  


It has also been a long time by historical standards since the last recession. nber.org/cycles The last one officially ended in June 2009. It is possible that the slower than normal recovery from a recession has prolonged the business cycle. The slower recovery was expected by me and others due to the conditions that caused the last downturn compared to a garden variety U.S. recession where housing and automobile sales lead an economic burst out of a relatively short term slowdown that lacks far reaching implications. Recoveries from financial meltdowns take much longer. Recovery from Financial Crises: Evidence from 100 Episodes (Reinhart and Rogoff/Harvard University)


++++++++++++++


Reduction of Potentially Long Duration Bond and Preferred Stocks Is In Progress But Slowing to A Trickle For the Time Being


Inflationary pressures are already building in the economy. I do believe that Trump and the republican Congress will add to those pressures through their trade policies, tax cuts and increases in federal spending. The Border Tax would add to inflationary pressures as would more specifically targeted tariffs for countries currently paying zero or close to it.


Until there is more clarity, I want to heavily weight my bond allocation in short term bonds and CDs.


An interest rate spike, greater than currently anticipated, in the short and intermediate term maturities would be an important consideration for buying more of the same as those short term instruments mature and pay off. That likelihood would increase with a dicey Big Picture environment where I view the risk of other asset classes to outweigh the potential rewards taking into account my capital preservation goal with income being the secondary objective.


++++++++


Vanguard Accounts: Treasury Bills/Low Yielding Short Term Bonds vs. Vanguard Prime Money Market: 

The Vanguard Prime Money Market fund is back up to a .79% yield as of 1/26/17: Vanguard - Vanguard Prime Money Market Fund The yield will likely go over 1% when the FED raises the FF rate by .25%, probably in the summer IMO.

In my taxable account, I bought $5K in treasury bills at auction that will mature soon. I will not roll them over. The MM fund will provide me with a higher short term yield.

I also see no reason to buy short term corporate bonds in my Vanguard accounts for the same reason.

Those purchases are concentrated in two taxable accounts where the brokerage companies pay next to nothing for idle cash: Schwab and Fidelity.

Fidelity money market funds have always had higher expense ratios than Vanguard.  The Vanguard Prime has a .16% expense ratio while the Fidelity Government MM Fund, one of the two funds now available to individual customers, has a .42% expense ratio and invests in lower yielding securities. The result is an acceptable in the current environment .17% yield.  SPAXX - Fidelity ® Government Money Market Fund | Fidelity Investments


+++++++++++


1.  Short Term Bond/CD Ladder Basket Strategy: 

A. Bought 1 Kraft Heinz Food 2% Senior Unsecured Bond Maturing on 7/2/18:

Vanguard Roth IRA Account: Commission $2 Per Bond 




FINRA Page: Bond Detail (prospectus linked at Finra page)

YTM at Total Cost (100.4) = 1.716% 

At least the income is tax free when paid into the ROTH IRA. 

Moody's RatingBaa3 (04/25/2016)
Standard & Poor's RatingBBB- (06/16/2015)
Fitch RatingBBB- (09/27/2016)



B. Bought 2 WFC 1.4% CDs (monthly interest payments) Maturing on 8/1/18. 

C. Bought 2 Bank of North Carolina (BNCN) .7% CDs (monthly interest payments) Maturing on 7/31/17 


Pinnacle Financial Partners Announces Agreement to Acquire BNC Bancorp (parent of Bank of North Carolina)


Pinnacle is the second largest bank based in Tennessee. 


D. U.S. Treasury .625% Maturing on 9/30/17


A. Bought Roth IRA: 1 TIP 2.375% Coupon Maturing on 1/15/2027 at 118.9844



Real Yield = .428

Inflation Factor: 1.19729
Adjusted Principal Value: $1,189.8438 (up from the original par value of $1K)
Premium to Adjusted Principal Value = $234.75

This TIP was originally sold in January 2007. 

I had to pay up to buy a 2.375% coupon ten year TIP. 


The 2.375% coupon is paid on the current adjusted principal amount of $1,189.8438 (as of 1/23/17) that will be adjusted further by future CPI numbers.    


Real yields on the 10 Year TIP were much better in 2007 than now and were even negative for almost two years back in 2011-2013: 





Real Yields: 10-Year Treasury Inflation-Indexed Security- St. Louis Fed


Stocks, Bonds & Politics: TIP Trading in the Secondary Market


Update On Buying TIPs In The Secondary Market - South Gent | Seeking Alpha


The Mechanics Of Purchasing A TIP In The Secondary Market - South Gent | Seeking Alpha


Stocks, Bonds & Politics: Advantages and Disadvantages of Treasury Inflation Protected Securities 


I sold into the negative yield prices viewing that period as the bond market equivalent to stocks in 1999.  

3. Continued Paring Recently Bought, Potentially Perpetual and Low Yielding Fixed Coupon Equity Preferred Stocks

Both of the securities referenced in this section are REIT equity preferred stocks that pay cumulative and non-qualified dividends on a $25 par value.  Both were recently issued in IPOs and proceeded to decline significantly in price when interest rates continued moving up last year. 



Stocks, Bonds & Politics: Advantages and Disadvantages of Equity REIT Cumulative Equity Preferred Stocks (profit snapshots at the end)


A. Sold 50 CIOPRA  at $25.21




Profit Snapshot: +$146.97





Quote: City Office REIT Inc. 6.625% Cumulative Preferred Series A Stock (CIO.PA)


Prospectus Supplement


I did receive the quarterly dividend that went ex on 1/11/17 bringing my total return to $172.27 or 15.49% in less than two months. 





CIO.PA Stock Chart 


B. Sold 50 REXRPRA at $23.2





Profit Snapshot +$17.97





Quote: Rexford Industrial Realty Inc. 5.875% Cumulative Preferred Series A Stock (REXR.PA)


REXR.PA Chart  


Prospectus


I did own this stock long enough to harvest one quarterly dividend:





That was the first dividend and covered more than 3 months as I recall. I did not double check that recall.


I will consider buying back any fixed coupon preferred stock that I have sold when the price is lower than my last purchase price.  


Needless to say, I am playing small ball here. I anticipate another downdraft in price relatively soon.   


4. Continued Paring Recently Bought Potentially Long Duration Exchange Traded Bonds


A. Sold 50 of 160 SGZA at $25.14


This senior unsecured exchange traded bond matures in 2043, but the issuer Selective Insurance has the option to call at the $25 par value on or after 2/2/18. Prospectus (asymmetric interest rate risk in favor of the issuer)


Quote:  Selective Insurance Group Inc. 5.875% Senior Notes due 2043 (SGZA)


SGZA Stock Chart 






I selected to sell the highest cost lot bought in my Schwab taxable account: 




In this particular taxable account, I now own 50 shares bought at $23.53. I will consider buying back the lot sold at $25.14 when and if the price is below $23. 


Profit Snapshot:   +$38.26





Moody's rate Selective's senior unsecured debt at Baa2.  

Fitch has a BBB+ rating. 

3rd Quarter Earnings Report  Selective Insurance SEC Filings


During the interest rate spike in 2013, and to highlight again the interest rate risk in these potentially long duration bonds, I bought SGZA at $20.6 in October 2013 (Item # 3 Snapshot). I sold that lot to quickly on 5/1/14: Item # 4 Sold 50 SGZA at $23.73 (realized gain snapshot= $140.58)


I am anticipating that rates will trend up this year throughout the maturity spectrum. I suspect that will be one or more rallies based on a flight to quality, possibly resulting from one or more actions by our new President. Talk is no longer likely to spur that kind of movement as investors adjust to the Trump's loose mouth and frequently bizarre statements.


5.  Equity REIT Common and Preferred Stock Basket Strategy


All of my Canadian REITs make monthly distributions and go ex on the same day which was today for January's distribution. The dividends are paid on the 15th day of the following month. 

A. Bought 100 NWHUF at USD $7.72: 


NWHUF is the USD priced ordinary shares of Northwest Healthcare Properties. a Canadian REIT that owns healthcare properties worldwide in Canada and several foreign countries. 


Home - NorthWest Healthcare Properties


Dividends (more appropriately called distributions): Northwest is currently paying a monthly dividend of C$.06667 per share or C$.80 annually. At a total cost per share of C$10.15, the dividend yield would be about 7.89%. The dividend yield for the NWHUF owners before taxes will depend on the conversion rate into USDs.   


NWHUF trades in the U.S. Grey Market which is a Dark Market with no bid and ask prices displayed by most brokers. Normally I do not trade in that market. 


A symbol that ends in the letter "F" denotes that the investor is buying the ordinary shares priced in USDs rather than an ADR. 


I bought this 100 unit lot in my Schwab account using a commission free trade. 


For Canadian stocks traded in the U.S. Grey Market, Schwab will display for Grey Market listed stocks the trading activity in Toronto, including the volume, bid and ask prices, but the bid and ask quotes will be converted into USDs rather than expressed in CADs. 


The volume will be for the ordinary shares traded in Toronto rather than the Grey Market. It is consequently easier to trade Grey Market securities at Schwab than at my other brokers. 


Nonetheless, I converted manually the CAD price into USDs to double check Schwab's conversion price, and it was accurate. 


Only 566 shares traded in the Grey Market on 1/24/17, the day of purchase. There is a major liquidity issue in the Grey Market for this security. 


The ordinary shares priced in CADs had volume of 795,187: 


Northwest Healthcare Properties Real Estate Investment Trust (NWH.UN:TOR) 

Closing Price 1/24/17:  C$10.15 -C$.3 or 2.87%

The price declined due to a share ("unit") offering: NorthWest Healthcare Properties Real Estate Investment Trust Announces $75 Million Bought Deal of Trust Units


The units were sold at C$10.1. 


I currently own 1,200 Northwest Healthcare Property REIT units that were bought in Toronto. My last two discussion in blog posts can be found here: 


1. Added 100 NWN.UN at C$9.58: Update For Equity REIT Basket Strategy As Of 5/5/16 - South Gent | Seeking Alpha


Bought 300 NWN.UN at C$ 7.68 Update For Equity REIT Basket Strategy As Of 7/24/15 - South Gent | Seeking Alpha


I also discussed a purchase in my Comment Blog # 6 (on 12/4/2016 at 11:06 A.M. discussing a purchase a C$9.6).  


NWHUF is identical to those units except the price is expressed in USDs, the distributions will be paid in USDs after a conversion from CADs, the security is traded on a U.S. exchange rather than in Toronto, and transactions are settled in USDs rather than CADs. The NWHUF price will be the CAD price converted into USDs at the time of the trade or close to it. Occasionally, there are differentials in the prices due to one or more factors (change in conversion rate after a market closes, uninformed individuals placing trades without limit orders in the Grey Market, etc.).  



Trade snapshot: 



Conversion of Ordinary Units Priced in CADs into USDs: 





Three Year Price Chart Comparison: 





NWH.UN Stock Chart


The ordinary shares priced in CADs started to outperform the ordinary shares priced in USDs in mid-2014 when the CAD started to lose value against the USD. The 15% or so difference in favor of the CAD priced shares reflects the decline in the CAD/USD exchange rate. The reverse will happen when the USD declines in value against the CAD which was the case on 1/24/17. The ordinary shares traded in Toronto declined by 2.87% while the Grey Market shares dropped 2.28%.


As noted many times previously, the sideal scenario now would be for the ordinary shares priced in CADs to gain value as the CAD increases in value against the USD.


If 1 CAD bought 1 USD today, then NWHUF would have closed at $10.15, the same closing price as the Toronto listed shares rather than at $7.72. That currency change would result in a 31.48% increase in the NWHUF price with no change from today's closing price in Toronto.


The value of the dividends converted into USDs and consequently the dividend yield at a constant cost basis would go up when the CAD gains value against the USD after purchase. And, since there is balance, the dividend yield would go down where where it was at the time of purchase with the CAD/USD declining.


Last Earnings Report for the 2016 Third Quarter: 



The number of units outstanding has increased substantially due to acquisitions and public share offerings.  


NorthWest Healthcare Properties REIT Provides Portfolio Update Reflecting Continued International Growth


NorthWest Healthcare Properties REIT Successfully Completes Brazil Hospital Acquisition 


NorthWest Healthcare Properties REIT Executes on $145 Million of Brazil Hospital Acquisitions (July 2016)


NorthWest Healthcare Properties REIT Announces Successful Completion of Public Offering of Trust Units and Convertible Debentures for Aggregate Gross Proceeds of $146 Million (July 2016)


NorthWest Healthcare Properties REIT announces acquisition of strategic interest and management rights to ASX Listed Generation Healthcare REIT (Generation Healthcare is an Australian REIT that exclusively invests in healthcare properties, Generation Healthcare REIT)

Northwest Healthcare Properties REIT Announces $100 Million Bought Deal Financing to Support $325 Million of Accretive International Acquisitions (July 2016)

NorthWest Healthcare Properties REIT Provides Update on Vital Healthcare Property (June 2016)

NorthWest Healthcare Properties REIT Announces Exercise of Over-Allotment Option in Connection with Recent Equity Offering For $80 Million in Aggregate Proceeds (April 2016)

NorthWest Healthcare Properties REIT Completes Acquisition of German Medical Office Building (April 2016).

 Etc. and So on

Northwest was a small REIT when I first bought shares and is growing fast through acquisitions financed in part by public unit and convertible bond offerings. There is always a danger that this kind of spree can end badly. It can also end up being a worthwhile transition to a much larger business. The acquisitions in Brazil are potentially riskier than the ones in Germany and Australia. Hard to say, but we do have a very long history of capital confiscation by Latin American countries. Countries like Argentina and Venezuela are just the worst examples.  

B. Added 50 ARESF at $9.5 (using commission free trade):




ARESF is the USD priced ordinary shares of the Canadian REIT Artis Real Estate Investment Trust (AX.UN:TOR).


Website: Artis REIT 


The shares are traded on the U.S. pink sheet exchange which displays bid and ask quotes. The liquidity is minimal for this security on that U.S. exchange however.


The CAD priced shares closed at C$12.45 on 1/25/17.




The same currency risk  issues discussed above equally apply to this security as reflected in a three year comparison chart:




And, as discussed above, the currency risk can turn into a currency conversion benefit when the CAD goes up in value against the USD. 


I have not had much luck with Artis since I sold a 300 share lot in Toronto back in 2014:  


Canadian REITs have significantly underperformed U.S. REITs since mid-2014 as shown in this 3 year chart comparing a Canadian REIT ETF with the Vanguard REIT ETF:
Stocks, Bonds & Politics: SOLD 300 AX-UN:CA at C$15.71 (9/26/14 Post)



Artis does have significant property exposure in Alberta which has not helped since June 2014, but maybe that cloud is lifting now slowly. Portfolio Map  As shown by that map, Artis has a significant presence in the U.S. 


Artis has maintained a monthly dividend of $.09 per unit for a long time. Distribution History I do not anticipate, based on what I know now, either a dividend raise or cut within the next two years. 


Using a C$12.45 unit price, that works out to about a 8.67% yield. The yield to owners of ARESF will vary with the exchange rate, up and down.    


There is nothing exciting about the recent earnings report due in large part to the downdraft in Alberta's economy caused by the crude oil price collapse in 2014-2016. 


Quarterly Reports 


I was going to read the latest report in French but decided that my foreign language skills have become rusty through disuse aggravated by a failure to learn one. 




Artis Real Estate Investment Trust Announces Disposition of Eight Industrial Properties and One Retail Property in Alberta (10/4/16)



+++++


At the start of this post, I referenced a statement by our Great Leader that torture works and it is okay for the U.S. to engage in torture. Those who conducted torture at the CIA claim that torture worked as do many republican representatives of course who voted against the Senate Intelligence Committee's finding to the contrary. I would suggest that one be skeptical of a claim by the torturer that torture works.  


The same CIA believed that Iraq had weapons of mass destruction, relying in part on a guy named Joe who had no expertise in gas centrifuges to enrich uranium but who was certain that aluminum tubes confiscated in Jordan were intended for such use, notwithstanding the contrary opinions of our nation's leading gas centrifuge experts at Oak Ridge. Joe's opinion fell neatly in line with what the Executive Branch want to do so pooh on our leading experts at Oak Ridge. 


Depiction of Threat Outgrew Supporting Evidence ("Gas centrifuge experts consulted by the U.S. government said repeatedly for more than a year that the aluminum tubes were not suitable or intended for uranium enrichment", and how many Americans knew about that fact even now-very few). 


Then the CIA relied on the ramblings of a known alcoholic that German intelligence had named Curveball and a patently forged document from Niger about Iraq's interest in acquiring yellow cake. Curveball has admitted that he made everything up.'Curveball': I lied about WMD to hasten Iraq war- NBC NewsMan whose WMD lies led to 100,000 deaths confesses all | The Independent


The Niger forgeries were possibly produced by two CIA officers in cooperation with Ahmad Chalabi, and then funneled to the U.S. government through a cooperating person in the Italian intelligence service in what is generally called a black-propaganda operation. Niger uranium forgeries - WikipediaYellowcake Uranium | Vanity Fair

So, I do not entirely disagree with Trump that the CIA's opinions are always based on reality, and perhaps Donald needs to listen more to McCain about torture rather than to the agency that committed the torture.  


+++

The most extreme reactionary among Trump's appointments to date is probably Mike Mulvaney who will be the new OMB director. He voted against providing relief after Hurricane Sandy and wanted to keep the government shutdown until the Democrats agreed to defund Planned Parenthood. An Extremist Holding the Purse Strings - The New York Times

I would agree with this commentator that the GOP is not even close to being a Conservative party, but I have been making that same point here for years: 

Stop calling the party of Donald Trump “conservative”: It’s a party of dangerous, destructive reactionaries - Salon.com

Perhaps some will wake up to that fact when the GOP replaces traditional Medicare with a voucher system that bankrupts the middle class in their retirement years and requires them to knock on their kids door for a place to stay (or something similarly onerous on them in exchange for more tax cuts for the top 1%). Just move the kids into one bedroom so Mom and Dad have a place to stay. Maybe Mom will grow some crops in the back yard to feed the family.  

GOP's Plan To Bankrupt the Middle Class (7/15/11 Post)

You have to have your eyes open to see it. 

I discussed in the last post how GOP constitutional orthodoxy, now nearing control over the Supreme Court, will limit the federal government's power to pass laws using the Commerce Clause and gradually return the clock back to early 20th Century and late 19th Century jurisprudence that will repeal or emasculate many progressive laws passed over the past 120 years. Donald Trump and the Beginning of the End of the Progressive Era

The liberals really do not understand-yet-the far reaching repercussions that go beyond the hot button social issues and extends into potential roll backs in civil rights, environmental protection, labor laws, consumer protection, etc. types of federal legislation. Let's see what happens in the next 20 years. 


Disclaimer: I am not a financial advisor but simply an individual investor who has been managing my own money since I was a teenager. In this post, I am acting solely as a financial journalist focusing on my own investments. The information contained in this post is not intended to be a complete description or summary of all available data relevant to making an investment decision. Instead, I am merely expressing some of the reasons underlying the purchase or sell of securities. Nothing in this post is intended to constitute investment or legal advice or a recommendation to buy or to sell. All investors need to perform their own due diligence before making any financial decision which requires at a minimum reading original source material available at the SEC and elsewhere. A failure to perform due diligence only increases what I call "error creep". Stocks, Bonds & Politics: ERROR CREEP and the INVESTING PROCESS Each investor needs to assess a potential investment taking into account their personal risk tolerances, goals and situational risks. I can only make that kind of assessment for myself and family members

17 comments:

  1. South Gent, I love reading your thoughts, especially now that you seem to have lost your politically correct shackles on SA!

    I'm generally not as left leaning as you, but I respect your opinion enough to listen to everything you have to say. I have admittingly not read enough about the commerce clause as you reference and have a good project to read this weekend.

    It seems as you don't see any good vehicles to invest in at this point. Is that correct? I'm reading that you are selling stocks, bonds and maintain cash and CDs. Do you still have the allocation to the permanent portfolio in the Gold/Silver mutual fund (and do you plan to increase that allocation at all)?

    ReplyDelete
  2. B: I view myself as a Conservative.

    I am not a conservative whose thinking is consistent with what the opinions of what I view as pseudo conservatives.

    Those who are truly conservative now IMO are viewed as liberals.

    For example, the First Amendment does not grant to the people the rights of free speech, free exercise of their religious briefs, and the right to assemble and petition the government for their grievances. The Founding Fathers believe those were natural rights.


    The First Amendment is couched in terms of preventing the government from interfering with the exercise of those rights which is a basis of true conservative ideology.

    Amendment I
    "Congress shall make no law respecting an establishment of religion, or prohibiting the free exercise thereof; or abridging the freedom of speech, or of the press; or the right of the people peaceably to assemble, and to petition the government for a redress of grievances."

    When a person reads the ten Amendments, the objective is clear: restrain the government in certain important areas, particularly those that are central to a properly functioning Democracy.

    https://www.billofrightsinstitute.org/founding-documents/bill-of-rights/

    The GOP IMO is actively trying to undermine the free press and voting rights through voter suppression, irresponsible accusations of voter fraud that call into question the very basis of our Democracy and sophisticated gerrymandering that is discussed in this book:

    https://www.amazon.com/Ratf-ked-Behind-Americas-Democracy/dp/1631491628/ref=sr_1_1?ie=UTF8&qid=1485542880&sr=8-1&keywords=rat+fu--ed+book

    I do not view an advocate for the Vietnam War or the Iraq War as a conservative, since going to war decisions should have no ideological component.

    "Going to War Decisions: Conservative or Liberal vs. Competent or Incompetent?"
    http://tennesseeindependent.blogspot.com/2008/12/boatloads-of-high-yieldhigh-risk.html

    Lying by public officials is not a conservative value. Since all politicians lie to some extent, I have to make allowances. Trump goes off the deep end here too.

    I still have an allocation to the Permanent Portfolio and have added to it recently.

    I own shares in two accounts. The Vanguard account requires a minimum $1000 addition so I have been adding to my position in a Schwab taxable account in $100 or $200 increments whenever the spirit moves me.

    I am adding to some position in the health sector and will nibble here and there on individual stocks. I discussed two nibbles in this post. I am knocking down my allocation to stocks primarily through reductions in stock fund holdings.

    I will also use commission free trades to buy GLD, SLV and PPLT in very small lots when the spirit moves me.

    The authority for most laws passed by Congress is derived from the Commerce Clause. A narrow reading of that clause is the easiest way to limit the federal government's power to regulate which is the core of the GOP's ideology. It is through a narrow reading of that clause that progressive legislation past over the past 125 years can be repealed or rolled back.

    You can get a flavor of the arguments in the civil rights area by reading the Heart v. Atlanta Hotel issued in 1964:

    https://supreme.justia.com/cases/federal/us/379/241/case.html

    That case was paired for trial with the Pickwick case that involved Lestor Maddox refusing to serve non-white people in his restaurant, a position that led to him being elected Governor of Georgia in 1966.

    http://crdl.usg.edu/events/heart_atl_pickrick_trial/?Welcome

    I do not consider racial and sex discrimination to be in furtherance of a conservative ideology.

    Were Strom Thurmond, George Wallace and Lestor Maddox conservatives? The media says yes, allowing them to call themselves conservatives without a challenge or question. I say no.

    Saturday, January 3, 2009
    What is the Appropriate Political Label
    http://tennesseeindependent.blogspot.com/2009/01/what-is-appropriate-political-label.html

    ReplyDelete
  3. Vanguard Equity-Income Admiral Class VEIRX

    As discussed in this post, I will be pairing my $50+K position in this fund gradually. I entered an order to sell $3K at today's closing price after publishing this blog.

    I am not making any large moves when others are so imbued with animal spirits and have so much faith that Trump is actually going to change things for the better. We shall see about that in the fullness of time. Let's just say that I have more than a few doubts that causes me to be more circumspect than the thundering bull herd.

    ReplyDelete
  4. "Hercules Announces Intention to Fully Redeem Its 7.00% Notes Due 2019"

    http://www.businesswire.com/news/home/20170125006185/en/Hercules-Announces-Intention-Fully-Redeem-7.00-Notes

    Exchange Traded Bond Symbol HTGZ

    In a recent comment, I noted that Hercules had just sold a convertible bond and was going to use the proceeds to redeem this ETB. I sold 2 lots, both 76 shares, using commission free trades after that announcement. I commented on those events here.

    I still own 176 shares in a Roth IRA account where I will simply take the $25 per share plus accrued interest.

    "The redemption price will be par $25.00 per Note plus accrued and unpaid interest through, but excluding, the redemption date, February 24, 2017."

    I realized a profit on the 152 shares previously sold. The other 48 shares were taken by Hercules in a partial redemption.

    6. Sold Two 76 Share Lots of the Exchange Traded Bond HTGZ Using Commission Free Trades:
    http://tennesseeindependent.blogspot.com/2017/01/observations-and-sample-trades-vivhy.html


    In the Roth IRA I am fine with breaking on this bond that was paying 7%. In the Roth IRA, that is a decent total return number before inflation number.

    In that IRA account, I bought my first 50 share lot at below par value:

    Friday, May 25, 2012
    3. Bought 100 HTGZ at $24.6 Yesterday-ROTH IRA
    http://tennesseeindependent.blogspot.com/2012/05/sold-3-tip-bonds-maturing-in-2019-at.html

    ReplyDelete
  5. "What is the alt-right? A refresher course on Steve Bannon's fringe brand of conservatism"

    http://www.latimes.com/nation/politics/trailguide/la-na-trailguide-updates-what-is-the-alt-right-a-refresher-1479169663-htmlstory.html

    Is this powerful movement in America based on anything remotely resembling conservative values?

    Several members are racists, xenophobes, and/or Neo-Nazis, the antithesis of true conservative values.

    The fact that Steve Bannon is a very close Trump advisor tells us a lot about Mr. Trump's soul. Bannon has many of the characteristics and beliefs of those who proudly call themselves Neo-Nazis.

    KKK, American Nazi Party praise Trump's hiring of Bannon
    http://thehill.com/blogs/blog-briefing-room/305912-kkk-american-nazi-party-praise-trumps-hiring-of-bannon

    "Steve Bannon: White supremacists celebrate Donald Trump's appointment of far-right Breitbart boss"
    http://www.independent.co.uk/news/people/steve-bannon-white-supremacists-celebrate-donald-trumps-appointment-of-far-right-breitbart-editor-a7416661.html

    'We're Not Going Away': Alt-Right Leader On Voice In Trump Administration
    http://www.npr.org/2016/11/17/502476139/were-not-going-away-alt-right-leader-on-voice-in-trump-administration

    Those people recognize a kindred spirit when they see one. So, tell me, when did White Nationalism become a conservative value in the U.S.?


    "Breitbart ran headlines such as: “Bill Kristol, Republican Spoiler, Renegade Jew,” “Gabby Giffords: The Gun Control Movement's Human Shield,” and “Birth Control Makes Women Unattractive and Crazy. Bannon has also made anti-Catholic comments about Speaker Paul Ryan (R-Wis.) on his radio show.”

    What conservative values are expressed in those headlines? Tolerance of Religious Diversity? Respect for Women?


    Or just look at his recent statements that show utter contempt for a free press which has been part of GOP's power playbook for years now:

    Trump Strategist Stephen Bannon Says Media Should ‘Keep Its Mouth Shut’


    https://www.nytimes.com/2017/01/26/business/media/stephen-bannon-trump-news-media.html?action=Click&contentCollection=BreakingNews&contentID=64842647&pgtype=Homepage&_r=1

    He was just echoing the comments made earlier by the GOP's leader who said he was in “a running war” with the media and called journalists “among the most dishonest people on earth.”

    "With False Claims, Trump Attacks Media"
    https://www.nytimes.com/2017/01/21/us/politics/trump-white-house-briefing-inauguration-crowd-size.html



    An important key to acquiring and maintaining political and economic power in the U.S. now is to denigrate, demonize and delegitimize the free press until millions no longer trust anything other than what is told to them by the GOP. This has already been accomplished. Trump is merely taking it to the next level.

    ReplyDelete
  6. Continuation of Prior Comment:

    The result is the powers that be can convince millions to vote against their own self interest.

    There were no repercussions, for example, when virtually every GOP representative voted to transform traditional Medicare into a voucher system that would double the premium cost to retirees.


    Figure 1 (voucher system would be applicable to those 55 or younger in 2011)

    https://kaiserfamilyfoundation.files.wordpress.com/2013/01/8179.pdf

    Will Republicans Try to Privatize Medicare in 2017?
    http://nymag.com/daily/intelligencer/2016/11/republicans-privatize-medicare-2017.html

    What I tell younger folks is that medical costs and private insurance premiums will accelerate at a faster rate than CPI. The exception would be a short term anomaly.


    They need to plan on paying much higher premiums while working and to pay far, far more than traditional Medicare would charge in their retirement.


    The GOP will at some point transition seniors to a voucher system that shifts costs away from the government and primarily on the middle class. This will be sold as a benefit to the electorate.

    Their supporters will not recognize what is being done to them until it is done and they see for themselves the consequences.

    I can do nothing about it other to point out to the few people who read this blog that medical costs will become a far bigger drain on their finances than on previous generations.

    The cost of a private nursing room in my county is now $9K.

    ReplyDelete
  7. South Gent,

    Re. "....The GOP will at some point transition seniors to a voucher system that shifts costs away from the government and primarily on the middle class....." is it somehow related to Druckenmiller's ginning up generational warfare on college campuses by trying to convince young people that they are being robbed by seniors using Social Security and Medicare?

    ReplyDelete
  8. Y: The voucher system would have passed in 2011 with a few less Democrat senators and a GOP President. There was virtually no opposition to ending traditional Medicare among GOP politicians. The Ryan budget plan passed in the House with no Democrat votes and was barely defeated in the Senate.

    House Vote 277 - Passes Ryan Budget Bill
    https://projects.propublica.org/represent/votes/112/house/1/277

    Only 4 at risk GOP members in districts that had not yet been gerrymandered by the GOP voted against it.

    The budget cuts for the poor and the removal of the Medicare safety net for the elderly was accompanied by more tax cuts for the rich in that budget.

    Drukenmiller wants tax cuts for himself and like minded multi-billionaires and consequently does not want to have his taxes raised to support safety nets like social security or Medicare.

    I have seen him talk about this generational wealth transfer.

    https://www.bloomberg.com/news/videos/b/8b99cecf-7afe-43e5-a825-8ce7266e3521

    Rather than fixing traditional Medicare, the GOP wants to end it.

    Of that, there can be no doubt.

    Druckenmiller, a republican and Trump supporter, will do what he can to stir up young people to support the end of traditional Medicare and to privatize or phase out social security.

    "Druckenmiller Throws His Support Behind Trump
    Administration,"
    http://www.benzinga.com/media/cnbc/16/11/8678975/druckenmiller-throws-his-support-behind-trump-administration-says-he-is-qui

    It would be political suicide to end it for seniors that are now receiving those benefits, who vote in higher percentages than younger people. Ryan had enough sense to start the voucher program with 55 and under as of 2011.

    Possibly there will also be an extension of the eligibility age as well.

    I do know that my per month insurance costs declined by about $600 per month when I enrolled in Medicare and a Medigap policy.

    Medicare is not something that the rich need but why turn it down.

    It is for the benefit of the middle class retirees.

    The poor have Medicaid but that will be cut back as well soon enough, with the Medicaid expansion program under Obamacare probably being the first to go.

    Many GOP legal scholars view both Medicare and Social Security as unconstitutional exercises of Congressional power under the Commerce Clause. IMO, if Medicare or SS was up today for a vote as new programs, they would not receive a single GOP vote or no more than 5 or so.

    I do agree that the U.S. is headed for a massive fiscal crack-up. Both political tribes will bear roughly equal responsibility and the Trump Presidency will make matters worse through tax cuts and more deficit spending occurring in a rising interest rate scenario where the interest expense becomes an ever increasing burden on the budget.

    The solution is not to throw retirees and the poor under the train however. Nor is a solution going to be found in allowing more pollution.

    ReplyDelete
  9. South Gent,

    Instead of going through this suffocating process (and who knows how long it will last) maybe we seniors should start looking for a place with internet in South America/Southeast Asia (for the warm weather and low living expenses) or in Canada (if there is a warm place)!?

    ReplyDelete
    Replies
    1. Y: The crunch will come for those who are now around 55 or younger.

      While Costa Rica may be an alternative for them in their golden years, perhaps a better option will be the Old China Option, where children become responsible for the care of their parents.

      Who will take care of China's elderly people?
      http://www.bbc.com/news/magazine-35155548

      Mom and Pop need to start bringing this subject up with a child after their second birthday and every day thereafter, emphasizing that it is the right thing to do.

      Unfortunately, there will be a few children who will balk and the GOP needs to put in place an enforcement mechanism.



      As a necessary addition to the voucher program, the GOP will need to require children to reimburse their parents for the costs of their upbringing with compounded interest at the per annum rate of 10%.

      Payments shall be made monthly over the average life span of their parents starting wen they turn 65.

      A failure to make timely payments will result in an automatic garnishment of their wages and a judgment lien on all of the children's' property which would lead to a forced liquidation of those assets within 30 days of the entire amount owed plus a 25% penalty.

      People are just going to have to find out the hard way about what lies ahead for them.

      Delete
  10. Intel (own): My INTC cost basis is $15.52 per share after selling my highest cost shares, prematurely as it turned out, for a $889.82 profit in late 2013 and in 2014.

    The last of my Intel pares occurred in March 2014 when I sold 40 shares at $24.61:

    Item #7 at http://tennesseeindependent.blogspot.com/2014/03/comments-on-realty-incomebdcs-and-index.html

    That post also has a snapshot that shows the average cost of my remaining 110+ shares.

    I mention the foregoing to highlight two issues. One is that I bought Intel shares starting in October 2008 during the market's collapse. That is the good news.

    See Snapshot at Item # 5

    http://tennesseeindependent.blogspot.com/2011/04/bought-50-dkf-at-2552jnj-ocfc-fnlc-fnfg.html


    The second point is that I lost patience with the stock after it stalled for months in the mid-20s. Patience is not one of my strong points.

    Intel's stock responded positively last Friday to the latest earnings report.

    $ 37.98 Change +0.42 +1.12%
    Dividend 0.26
    Div yield 2.74%
    Ex dividend date 2/3/17

    The current dividend yield at my total cost per share is 6.7%. I am now content to leave what's left alone.

    Intel reported an adjusted E.P.S. of $.79 beating the consensus estimate of $.75. For 2017, the company is currently forecasting and adjusted E.P.S. of $2.8 and an adjusted E.P.S. of $.65 for the 2017 first quarter compared to the consensus of 61 cents at the time of this announcement. Those estimates have ranges that can be found in this press release:

    https://www.sec.gov/Archives/edgar/data/50863/000005086317000003/earningsreleaseq42016.htm

    I am waiting patiently for Intel to develop a chip that can replace the misfiring chemical and electrical synapses in my brain and store information for easy retrieval. The file boxes are getting misplace more frequently now.

    ReplyDelete
  11. I am sure that everyone is feeling safer today after Trump appointed Steve Bannon to the National Security Council.

    http://abcnews.go.com/Politics/trump-controversial-adviser-stephen-bannon-seat-national-security/story?id=45122927

    "the president also downgraded the status of the director of national intelligence and the chairman of the joint chiefs of staff on the security council's principals committee."

    Bannon reportedly overruled the DHS interpretation's of Trump's EO that the order did not apply to legal residents of the U.S.

    "Friday night, DHS arrived at the legal interpretation that the executive order restrictions applying to seven countries -- Iran, Iraq, Libya, Somalia, Syria, Sudan and Yemen -- did not apply to people with lawful permanent residence, generally referred to as green card holders. The White House overruled that guidance overnight, according to officials familiar with the rollout. That order came from the President's inner circle, led by Stephen Miller and Steve Bannon. "

    http://www.cnn.com/2017/01/28/politics/donald-trump-travel-ban/

    Stephen Miller, another senior Trump advisor, started out working for Michele Backmann. He became a republican after reading the National Rifle Association CEO Wayne LaPierre's Guns, Crime, and Freedom. One of most influential acts was to support the Duke lacrosse players who were accused of rape:

    https://en.wikipedia.org/wiki/Stephen_Miller_(political_operative)

    This article is instructive about Mr. Miller who along with Bannon are passing laws in our country now.

    http://www.politico.com/magazine/story/2016/06/stephen-miller-donald-trump-2016-policy-adviser-jeff-sessions-213992

    ReplyDelete
  12. Well, I found it. I read it. I'm mad at google .

    I tried to send it to myself via the "send to friend via email" option under more at top of page. On that page it wants me to verify I'm a person ... but neglects to put the catcha-box.

    So I try to subscribe at the top right subscribe box, and it tells me I'm already subscribed (so why did the emails of new blog entries stop coming???)

    So I tried to subscribe via url. I get the url from "tenn..." link at top right for the blog. It says it doesn't recognize the url and would I like to try again?

    Okay, ranting won't fix it. Hoping one of those efforts in spite of some google programmer's best efforts to foil me, accidentally re-signed me up for emails to arrive.

    ----
    ----

    Paraphrasing, you commented "has anyone considered he's deluded?"

    There is no question. Many people do notice this. He's not healthy. I also do not consider this "conservative" behavior. It's it's own brand. No wonder he could brand well. He's quite "unique."

    My hope is that the admin as a whole does enough that crosses illegal lines, that there becomes no choice but for Congress regardless of what party is running it, to impeach the whole admin and run a special election for the first time in US history. That's my go-to dream.

    Some of his policies are interesting and potentially useful for the future. If he moves the US embassy to Jerusalem, it will create noise, but not much more and then be a done deal. That will help solidify the permanence of israel and connection to Jerusalem and therefore force more effort to make peace with that notion (rather than the endless "wipe out Israel" rhetoric). Strength always works better in Mid-East negotiations. I'm trying to think of another policy I like. Nothing yet. I really thought before current chaos I saw one or two things that made sense at shaking up the usual recalcitrant processes. Oh, I never liked the Iran deal. At first it sounded like a good idea, but then near the end it was watered down from position of weakness and has serious risks. I really thought there was something domestic that I liked too. Too much other Trump stuff clouding up my mind to remember from what was it?, 5 days ago?

    He's making the opposite of "make america great again" (an expression last used by Lindburgh's organizational efforts to stop Jewish immigration into the US among other "views" of his such as on person's of color (to describe them mildly)). Trump is doing the opposite of great, by making US an embarrassment. I'd say more but don't want to put words to it, too depressing.

    I was not aware of the aluminum containers nor the admission by the Germany drunk spy. That changes my views on several things including Bush and Iraq war. (I'd thought the stuff was a huge mistake to believe by Bush & Congress. I'm rethinking that.) Not that it matters much -- I'm far enough over on Bush that move them and there's not much further to go.

    I'd been pondering dipping into a general Mexico index now that it's been driven down. Seem like a decent play? Mexico isn't going anywhere (even if they would like to get on a plane and find another neigbhor to live next to). It will continue to develop. Peso will someday be "great" again.


    ReplyDelete
  13. Did you see my question on VIX vs. Vix futures being so different? Any ideas on that?

    VIX closing at around 10.5. While VIX futures (from finviz) were around 12.5.

    ReplyDelete
    Replies
    1. LMH: The "VIX" shows the market's expectation of volatility over a thirty day period. My VIX Asset Allocation Model uses that number. "The VIX Index uses SPX options with more than 23 days and less than 37 days to expiration and then weights them to yield a constant, 30-day measure of the expected volatility of the S&P 500 Index."

      There are a variety of futures and option contracts, with differing expiration dates, that are based on that index that will have different numbers.

      http://www.cboe.com/micro/vix/vixfuturesprices.aspx

      I would just focus on the closing numbers for the VIX.

      Delete
  14. LMH: The Bush administration knew that the nation's leading gas centrifuge experts at Oak Ridge had concluded that those aluminum tubes were not suitable for the enrichment of uranium.

    They chose instead to rely on a non-expert who had concluded otherwise since going with the best evidence would undermine their case for the Iraq Invasion.

    There is a footnote in the Administration's case for war sent to Congress that says the Energy Department disagreed with the Administration's opinion based on Joe's opinion. This was done without providing or furnishing any details about why the Energy Department disagreed with the Bush Administration.

    http://www.nytimes.com/2004/10/03/washington/us/the-nuclear-card-the-aluminum-tube-story-a-special-report-how.html?_r=0

    I view this history as susceptible to only one conclusion. Bush, Cheney, Rice, etc deliberately lied to the American people and the lies resulted in over 100,000 deaths, a greater security threat to U.S. interests, a more unstable Middle East, and over a $2 trillion increase in the national debt that will have to be financed and refinanced for as long as the U.S. exists or until the nation defaults on its debt.

    http://www.reuters.com/article/us-iraq-war-anniversary-idUSBRE92D0PG20130314

    ReplyDelete
  15. I shared this with someone already. I'm going to keep a copy. Creepy. And it gets worse from there. (I have the news on.)

    I see -- on VIX variability. That helps. I saw VIX and assumed it was the CBOE's (which is who's close I look at and was down to 10.5.. which I'd pegged as a reverse point. So far it's happening but I don't know if this will be a dip (little one) or not...)

    ReplyDelete