Observations and Recent Trades: 6/12/17

GE's Immelt is going to "retire" as of 8/1/17 and will be replaced by John Flannery who is currently the CEO of GE Healthcare. Immelt is 61 years old. Jeff Immelt to retire as GE CEO, Flannery to succeed | Reuters Perhaps GE will invest more in that sector as a result.

GE's stock price is up about 3% in pre-market trading as of 8:00 A.M. EST. GE Stock Price

I am down to owning 164+ GE shares after selling 80 shares last April. My average cost per share is now at $12.53. Item # 3.A


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1. Long Term Bond Strategy-Primarily Tennessee Municipal Bonds (with funding sources identified)-Some Funding from Selling Intermediate and Short Term Corporate Bonds:  

The purchases of the Harpeth Valley Utility District Bond and the other municipal bonds discussed in this section were funded from the following:

Sold 2 American Express 2.25% SU Bonds 5/15/21
Sold 2 Merck 1.3% SU Bonds 5/18/18
Sold 2 CVS 2.125% SU Bonds 6/1/21
Sold 1 Consolidated Edison 2% SU Bond 5/15/21
1 Bank of China .85% CD 10/30/17
2 Enterprise Bank .7% CDs 10/31/17
5 of 6 USTs .75% 10/31/17
$5K Recently Raised Cash-Vanguard Taxable Account

$20K

I am using the proceeds to buy the higher current yield bonds discussed in this section, as I play for incremental additions to current, after tax income generation. The short bond bonds and CDs referenced above will likely have negative total returns before adjusting for taxes and inflation. It is possible that the American Express and CVS 2021 bonds will have positive total return numbers, based on my total cost number, after adjusting for inflation only.

A. Sold 2 American Express 2.25% Senior Unsecured Bonds Maturing on 5/15/21: 

Profit Snapshot: + $12.24

Finra Page: Bond  Detail

I discussed this purchase at Item # 1.A. I bought this bond at a total cost of 99.288. The current yield at that total cost number was 2.266%, with the YTM at 2.427%. I sold the bond on 5/18/17 at 100, or 99.9 adjusted for the commission. The YTM then was at 2.276%.

B. Sold 2 Merck 1.3% Senior Unsecured Bonds Maturing on 5/18/18:

Sold at 100-Break-even/Proceeds at 99.9 after $2 Commission

C. Sold 2 CVS 2.125% Senior Unsecured Bonds Maturing on 6/1/21:

Profit Snapshot: +$12.64

Finra Page: Bond Detail

I sold this bond at 99.048 or 98.948 adjusting for the $2 commission. I bought these two bonds at a total cost of 98.316 (2/2/17). The current yield at that total cost number is 2.161%. The YTM is higher at 2.538%, but part of that additional yield was captured when I sold the two bonds at 99.048.

I discussed the purchase at Item # 2.C.

D. Sold 1 Consolidated Edison 2% Senior Unsecured Bond Maturing on 5/15/21:

Profit Snapshot: +$3.73

I sold this bond at $98.578 or $98.478 adjusting for the $1 commission. I bought this bond on 3/1/17 at a total cost of 98.105. Item # 1.E. The current yield at that total cost number was 2.038%.

I still own 1 bond held in an IRA account that was bought at a total cost of 98.08 (1/18/17). Item # 3.A

I have not owned the common stock since I sold a position back in 2011. Item # 2 Eliminated Position in ED at $53.7 (714/11 Post)(153+ Shares/profit $789.28) 

E. Bought 5 Harpeth Valley Utility District 4% Water/Sewer Revenue Bonds Maturing on 9/1/40: 

YTM at Total Cost (105.406) = 2.886%

Current Tax Free Yield = 3.79+% 

EMMA Page

Credit Rating:

S & P at AA

Service Territory (near HQ): 

Map of Service Territory:

Security: 

Tax Matters:  Federally Tax Free/AMT Free

Optional Redemption: AT PAR on or after 9/1/22 (call considerations apply given the coupon and reasonably anticipated interest rate conditions on the optional call date)

F. Bought 10 Metro Nashville Health and Education Facilities Board for Vanderbilt University 3.25% Bonds Maturing on 10/1/2037:

Vanderbilt University | Nashville, Tennessee

Bought 5 in Schwab Taxable Account:

EMMA Page
Credit Ratings:
Moody's at Aa2
S & P at AA
Fitch at AAA

YTM at Total Cost (99.95) = 3.266% (price includes $10 Commission)
Current Tax Free Yield = 3.25%

Bought 5 Vanguard Taxable Account (several days thereafter):

YTM at Total Cost (99.96) = 3.252%   ($10 Commission)


Optional Redemption: AT PAR on or after 10/1/22

Source of Payments:

The proceeds raised from selling the bonds are loaned to Vanderbilt University pursuant to an unsecured and unconditional loan agreement.

Tax Matters: Bond counsel states that the interest is tax free and AMT free for individuals.

A description of Vanderbilt University starts at page A-1 of the Offering Statement.

Offering Statement.pdf

This bond has not been available for purchase at Fidelity.

G. Bought 5 Knox County Tennessee 3% GO Bonds Maturing on 6/1/34:

EMMA Page
Credit Ratings:
Moody's at Aa1
S & P at AA+

YTM at Total Cost (99.252) = 3.056%
Current Tax Free Yield: 3.02%

Security:

TM: Federally Tax Free/AMT Free According to Bond Counsel.

Optional Redemption: AT PAR on or after 6/1/25

Official Statement.pdf

I have previously bought and discussed buying 10K in Knox County GOs:

Item 1.A Bought 5 Knox County Tennessee 3% GO Bonds Maturing on 6/1/33 at Stocks, Bonds & Politics: Tennessee Municipal Bonds

2.  Short Term Bond/CD Ladder Basket Strategy:

A. Bought 2 Bank of China 1% CDs Maturing on 8/30/17 (proceeds from redemption will not be applied to Tennessee Municipal Bond purchases BUT TO Another SHORT TERM CD): 

This may be the highest yield for a 3 month CD that I have received since the Near Depression. 

For comparison purposes, I have a 6 month Merrick Bank CD maturing on 8/28/17 that has a .7% coupon.

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.