Wednesday, July 12, 2017

Observations and Sample of Recent Trades: Pared GE Again

Trump & Vlad vs. Hillary and the Magnitsky Act:

Shortly after Trump clenched the GOP nomination, Kushner, Donald Trump Jr., and Paul Manafort met in a recently disclosed meeting with a Russian lawyer, Natalia Veselnitskaya on 6/9/16

On June 15, 2016, Russian intelligence, acting through Guccifer 2.0, announced that it had successfully hacked the DNC and would soon be posting DNC emails. Timeline: Everything We Know About Russia and President Trump
Timeline of Russia Investigation -

After being told about the meeting by the NYT, Kushner admitted attending, but claimed the meeting was merely a preliminary and introductory meeting about U.S. families adopting Russian children. Trump Team Met With Lawyer Linked to Kremlin During Campaign - The New York Times;
Russian lawyer: Trump aides wanted info 'so badly' - CNN

"Veselnitskaya is well known to advocates of sanctions against Russia, particularly the Magnitsky Act which prohibits U.S. interaction with Russians alleged to have committed human rights violations. Congress’s passage of the law in 2012 angered Putin and led him to retaliate by halting American adoptions of Russian children." (emphasis added)  Trump Jr. says he, Kushner and Manafort met with lawyer tied to Kremlin - The Washington Post

Magnitsky Act - Wikipedia

Hillary's involvement in the passage of the Magnitsky Act was one reason why Vlad wanted Donald to win the election. 

The NYT shortly thereafter published another article claiming that Kushner, Trump Jr. and Manafort met with Veselnitskaya to acquire dirt on Hilary. Trump’s Son Met With Russian Lawyer After Being Promised Damaging Information on Clinton - The New York Times

"But on Sunday, when the Times -- citing three advisers to the White House briefed on the meeting and two others with knowledge of it -- reported about the lawyer offering to provide information about the Democratic National Committee before he took the meeting, he acknowledged that Democrats and Hillary Clinton were discussed." emphasis added. Russian lawyer: Trump aides wanted info 'so badly' - CNN 

Donald Trump Jr. met with Russian lawyer after promise of Clinton information - CBS News

President’s son met with Russian lawyer during presidential campaign after being promised information helpful to father’s effort - The Washington Post

Donald Jr. then admitted that the meeting was set up to acquire dirt on Clinton. 

Shortly after the NYT published those first two articles, the NYT reported that Donald Jr. received an email prior to the meeting that stated that Ms. Veselnitskaya's had damaging information about Clinton acquired from the Russian government. Trump Jr. Was Told in Email of Russian Effort to Aid Campaign-The New York Times  

While the truth may never be known with clarity, it appears now that the June meeting with Veselnitskaya was possibly the first overt act in Trump's collusion with the Russians. 

Trump Jr. has now released his email exchange on this subject to show how "transparent" he is on this issue: Russian Dirt on Clinton? ‘I Love It,’ Donald Trump Jr. Said - The New York Times What can I say? Fox "News" buys it. 

This occurred only after he was told by the NYT that they had copies and were going to publish them. 

If Kushner and Trump Jr. wanted to be transparent, this June 2016 meeting would have been disclosed a long time ago and would not have been hidden and lied about until the "Fake News" Media acquired the relevant documents. Then and only then did Donald Jr. becomes "transparent". Kushner remains opaque.  I would not expect any of the Trumps to be truthful.  

Russian lawyer: Trump aides wanted information 'so badly' - CNN (she claims that she has never worked for the Russian government). She is called a "Russian government attorney" in one of the following emails: 

Passages from the Emails Released by Donald Jr.: 

Trump Jr. emails show how Russia’s government communicated to president’s campaign - MarketWatch

Donald Trump Jr. releases emails arranging meeting with Russian lawyer - CBS News

Here Are Trump Jr.’s Shifting Explanations for His Russia Meeting - Bloomberg

Reince Priebus, Trump's Chief of Staff, blamed the Democrats for the meeting attended by Ms. Veselnitskaya, Trump Jr., Manafort and Kushner. Priebus pushes back on Russia meeting story, suggests Democrats, opposition research involved | Fox News There may be a Trump supporter who views that claim with some skepticism. 

On June 14, 2016, Ms. Veselnitskaya was photographed in the front row seat at a House hearing on "U.S.  Policy Toward Putin's Russia" even though she claims to speak no English according to the WP.  

Russian lawyer who met with Trump Jr. has long history fighting sanctions - The Washington Post

Later that day, she attended a screening of a Russian propaganda film, which the House members refused to view, that was critical of the Magnitsky Act. 

Her visa for entry into the U.S. had been denied, and the reasons had not been given. She was able to enter the U.S. only on what is called a "parole letter" that allowed entry solely to defend her Russian client Preveson in a money laundering case. U.S. settles Russian money laundering case: Reuters Preveson had been accused by the U.S. of laundering money stolen in the $230M tax fraud case which was investigated by the Russian lawyer Magnitsky prior to his arrest for uncovering that fraud and who was later murdered by the Russians while in jail. All of this is of course denied by the Russians as you would expect. They have as much trouble telling the truth as The Donald.  Putin and Donald occupy the same ranking on truth telling.    

Natalia Veselnitskaya, Lawyer Who Met Trump Jr., Seen as Fearsome Moscow Insider - The New York Times

Trump tweets in defense of Donald Jr.: 

Trump claims that he did not know of the meeting. However, shortly after Donald Jr. confirmed the meeting with the Russian attorney, Trump made the following statements: "I think you’re going to find it very informative and very very interesting.
 We are going to be discussing all of the things that have taken place with the Clintons." Donald Trump held press conference promising more dirt on Clinton hours after Donald Trump Jr's Russia emails | The Independent

Fox "News" had to admit that the emails reproduced above were authentic since Donald Jr. produced them. Trump tweets defense of Donald Trump Jr., blasts 'Fake Media' |  Fox "News"


Jared Kushner Tried and Failed to Get a Half-Billion-Dollar Bailout From Qatar: Intercept (was that failure the reason Trump applauded Saudi Arabia and other Middle Eastern countries cutting diplomatic and business ties with Qatar?) 

Trump said that he and Vlad agreed to set up some kind of cyber security unit to prevent interferences in the U.S. election and other matters. Lawmakers blast Trump's plan to work with Russia on cybersecurity - The Washington Post (Sen. Lindsey O. Graham (R-S.C.) stated that Trump's plan was “not the dumbest idea I've ever heard, but it's pretty close.”)

Trump’s talk of cyber-alliance with Russia draws outrage, disbelief - MarketWatch

The Daily 202: Trump aides learn the perils of speaking for a president who changes his story - The Washington Post ( a recurring problem where Trump undercuts those who purport to speak for him, including his staff and cabinet members).   

Majority of Republicans Say Colleges Are Bad for America (Yes, Really): Newsweek (ignorance is bliss and an underrated virtue superior to even stupidity)

Sharp Partisan Divisions in Views of National Institutions | Pew Research Center


1. Intermediate Bond/CD Basket Ladder Strategy

A. Sold 2 Exxon 2.709% SU Bonds Maturing on 3/26/25:

Trade Snapshot: 

Profit Snapshot: +$45.84

Finra Page: Bond Detail

Sold at 100.02:
Current Yield at 100.02 = 2.7085%
Net at 99.902 ($2 commission) 
YTM at Net= 2.703%

Bought at 97.61
YTM Then at 3.045%
Current Yield at 2.78%

B. Sold 2 Apple 2.5% SU Bonds Maturing on 2/29/25

Trade Snapshot: 

Profit Snapshot: $21.14

Finra Page: Bond  Detail

Sold at 98.592
YTM Then at 98.592 =  2.705%
Current Yield at 2.54%
NET at 98.492 

Bought at Total Cost of 97.435
YTM at TC = 2.863%
Current Yield at TC = 2.57%

I still own 2 Apple 2.4% SU bonds maturing in 2023: Item # 1.B. 

C. Sold 2 Walgreens 3.45% SU Bonds Maturing on 6/1/26

Trade Snapshot: 

Profit Snapshot: +$34.04

FINRA page: Bond Detail

Sold at 100.727
YTM Then at 100.727: 3.353%
Current Yield: 3.43%
Net at 100.627 ($2 Commission)

Bought at Total Cost of 98.925
YTM at 3.589%
Current Yield at 3.49%

D. Sold 2 SYSCO 3.3% SU Bonds Maturing on 7/15/26:

Trade Snapshot:

Profit Snapshot: $39.12

FINRA Page: Bond Detail

Sold at 100.526

YTM Then at 3.231%
Current Yield at 100.526 = 3.28%
Net at 100.426 ($2 Commission)

Bought at a Total Cost of 98.388

Item # 1.A.
YTM Then at 3.505%
Current Yield = 3.35%

E. SOLD 2 Verizon 3.5% SU Bonds Maturing on 11/1/24:

Trade Snapshot:

Profit Snapshot: +$41.37 

FINRA Page: Bond Detail

Bought at Total Cost of 99.686 (3/29/17)

YTM Then at 3.587%
Current Yield at 3.51%
Item # 1.B.

Sold at 101.892

YTM at 3.2%
Current Yield at 3.44%
Net at 101.792 ($2 Commission IB account trading)

$10K in Dispositions 

2. Short Term Bond/CD Ladder Basket Strategy:

A. Bought 2 Southeast Bank 1.05% Two Month CDs:

B. Added 1 Stanley, Black & Decker 1.622% Subordinated Bond Maturing on 11/17/18:

Issuer: SWK Stock Price - Stanley Black & Decker Inc.

FINRA Page: Bond Detail (prospectus linked)
Credit Ratings:
Moody's at Baa2
Moody's assigns Baa2 rating to Stanley Black & Decker's subordinated notes
S & P at A-
Fitch Rates Stanley Black & Decker's Subordinated Notes 'BBB+'; Outlook Stable

YTM at Total Cost (99.924) = 1.677%

SWK Analyst Estimates

My last purchase was discussed in Item # 2.B.

2017 First Quarter Earnings Report

2016 Annual Report (debt discussed starting at page 69)(subordinated to senior unsecured debt)

With the recent rise in rates, I am placing more emphasis on adding to my short term bond/CD basket, staggering maturities as usual. 

3. Continued to Pare Stock Allocation:

A. Sold 40 GE at $28.76 (6/19/17):

Profit Snapshot: $587.38

Position after Pare: Average cost per share = $12.03

TOTAL Trading GE Trading Profits 2007 To Date = $3,579.4

Prior 2017 Trade: 80 Shares +$1,113.71

Item # 3.A. Sold Highest Cost 80 Shares

As discussed in that post, I have really soured on GE stock.

2016 Trade: 47 Shares +$684.69

2015 Trade: 240 Shares +$135.23 (some losses): 


As previously discussed, I was actively trading in 2008 as one method used to generate additional income and to otherwise soften the blows even after substantially paring my stock allocation in late 2006 and throughout 2007. I had one successful GE trade in 2008, noted below, and then a series of unsuccessful ones that resulted in small losses shown in the preceding snapshot. (samples of trades in one account from 2008: Stocks, Bonds & Politics)

2008 Trade: 105 Shares +$272.2

2007 Trade: 200 Shares +$786.19

I do not see any prospect for meaningful dividend growth, particularly given the substantial underfunding in GE's pension plan, currently estimated to be $31B+. The $31 Billion Hole in GE’s Balance Sheet That Keeps Growing - BloombergGE Botches Its Pension Math - Bloomberg Gadfly

A rise in interest rates will help pension funds reduce their funding deficits. How a Rate Hike Could Affect GE's Pension Liabilities - Market Realist

Subsequent to this latest pare, JPM reduced its GE price target to $22 per share. GE shares to drop 20% as uncertainty about stock greatest in ‘decades,’ JPMorgan says The shares responded to that lowered estimate by declining 3.8% on 7/6/17, closing at $26.31 and establishing that day a new 52 week low at $26.1. Volume was heavy at over 76.5M shares compared to an average three month daily volume of 36.9+M. 

Morningstar has a 4 star rating and a $32 fair value estimate. 

In its last report dated 4/21/17, Argus gave GE a buy rating with a $33 price target which was reduced from $36. 

S & P has a 4 star rating on GE's stock with a $36 price target (7/2/17 report). 

Credit Suisse has an outperform rating and a $34 price target (6/20/17 report). 

I mention the foregoing simply to highlight that some analysts have a more positive view than JPM. The Morningstar, S & P, Argus and Credit Suisse reports are available to Schwab customers. 

I did recently buy 50 GE shares for a family member, who did own any shares, when the price went below $26 as a trade.   

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.


  1. CAD/USD: Big rally today in the Canadian Dollar against the USD.

    The Bank of Canada raised its benchmark rate by .25%.

    This article has a USD/CAD chart which highlights the dollar's recent weakness, which I discussed in a recent comment.

    The USD/CAD was at 1.375 on 5/5/17 and is now down to 1.273 (i.e. 1 USD bought C$1.375 and now buys C$1.273)

    Yellen sounded more dovish today which may be contributing to the CAD's rise in value.

    Bonds are in a rally mode probably due to her comments.

    Many have referred to her recent comments as hawkish, which I view as a mischaracterization.

    She has only moved from extremely dovish to somewhat less dovish.

    For someone who has been around a few decades, raising the FF rate to 1% from a zero bound rate held in place for about seven years and maintaining a bloated FED balance sheet of over $4.2 trillion eight years into an economic recovery, is not hawkish but only slightly less dovish.

    The CAD, which is viewed by many as a commodity currency, is also probably getting a lift from the rise in crude oil over the past few days.

    From an investing standpoint, the increase in the CAD/USD exchange rate will cause USD priced Canadian stocks to outperform the same stocks traded in Toronto and priced in CADs.

    I gave earlier an illustration of my position in the USD priced Toronto Dominion shares.

    Based on the CAD's rise today, the outperformance of the USD priced shares have increased:

    The Toronto-Dominion Bank (TD)
    $51.25+0.86 (+1.71%)

    Toronto-Dominion Bank (TD.TO)
    Toronto Currency in CAD
    As of 3:32PM EDT
    C$65.30 +0.16 (+0.25%)
    As of 3:17PM EDT.

    I have not discussed here several USD priced Canadian stock purchases that I made when the CAD/USD was closer to .72. Those purchases include some Pink Sheet and Grey Market U.S. listings for Canadian REITs. All of those purchases are trades. As I have said previously, I will only use Schwab to buy Canadian Grey market listed securities since I can buy commission free and the price is already converted by the broker from CADs to USDs. An example would be the Grey Market listed ordinary shares of Northwest Healthcare Properties:

    Some of the Canadian REITs are listed on the easier to trade pink sheet exchange (e.g. AHOTF, ARESF, CDPYF, RIOCF )

    Some U.S. brokers will charge a huge fee for orders in the U.S. Grey Market. Fidelity will hit its customers with a $50 fee on some listed GM securities for example in addition to its normal commission rate. That kind of fee will not be paid by me.

  2. NVS-Own 130 + Shares Purchased with
    Annual Dividends

    NVS rose $1.22 to close at $83.21 today and is up another $1.79 in after hours trading so far:

    As expected, the FDA advisory panel recommended that the FDA approve tisagenlecleucel "to treat patients with relapsed B-cell acute lymphoblastic leukemia (ALL), the most common form of U.S. childhood cancer."

    The vote was 10-0.

    1. NVS: As I mentioned in the previous comment, it was expected that the FDA advisory panel would recommend approval of this drug. Consequently, it was hard to justify the after hours spurt in price.

      Today, NVS is giving up most of yesterday's gain made during regular trading hours.

      Novartis AG (NVS)
      $82.49 -$0.72 (-0.87%)
      As of 11:37AM EDT

      Still, the FDA panel's decision was an important milestone for CAR-T drugs:

  3. Fortress Biotech Inc. (FBIO):



    2017 First Quarter Report:

    I have been adding to my small cap biotech lottery ticket basket, primarily for my own entertainment. I may briefly discuss some of those adds in a subsequent post.

    I bought today, for example, 50 shares of FBIO, which is a strange company. I short circuited too many of my few remaining brain cells researching it. So I had to cut a cursory effort short and just buy 50 shares at $4.5 today.

    One oddity is that the company has bought a controlling interest in a small brokerage company that is used to take public what it calls subsidiary small biotech companies. That company is publicly traded and is called National Holdings (NHLD), which ran into some trouble a few years back:

    NHLD First Quarter Report:

    According to the last filed 10-Q for National, Fortress owns 56.6% of its stocks:

    Note 19 at page 21:

    Note 20: "During the three and six months ended March 31, 2017, Investment Banking revenues include approximately $5,916,000 and $8,581,000, respectively, of fees related to a private placement of shares and warrants for a subsidiary of Fortress."

    Diagram of Fortress Biotech Companies:

    Two of those companies have recently had their IPOs:

    Avenue Therapeutics (ATXI) Completes Initial Public Offering

    Checkpoint Therapeutics (CKPT) Commences Trading on the NASDAQ

    December 2016 Marketwatch article:

    Mustang Bio First Quarter Results:

    Mustang raised $95M in a private placement

    After spending some time looking into National Holdings, I bought 100 at $2.79 as part of my larger Lottery Ticket basket which has been reactivated:

    I am no longer tracking net profits and losses in that basket.

    As of 10/1//15, the net profit stood at $14,012.42 and is higher now. I have increased my exposure limit for a Lotto from $300 to $1K.

  4. FOLD:

    Might as well get this out of the way after a price surge:

    FOLD "announced the pricing of an underwritten offering of 18,367,347 shares of its common stock at $12.25 per share. The gross proceeds from the offering to Amicus are expected to be $225 million, before deducting underwriting discounts and commissions and estimated offering expenses payable by Amicus. In addition, Amicus has granted the underwriters a 30-day option to purchase up to an additional 2,755,102 shares of its common stock."

    "Amicus Therapeutics Prices Underwritten Offering of Common Stock"

  5. Over the past month, the three month Canadian treasury bill has been trending up in advance of yesterday's .25% increase in the Bank of Canada's benchmark rate. The 3 month T Bill was around .55% (6/20/17) and is currently near .75%.

    As I have discussed in previous posts, there are several Canadian reset equity preferred stocks that pay a spread over the 3 month Canadian T Bill rate. I have already taken profits in several of them that were bought at large discounts to their C$25 par values.

    I still own a few including two separate preferred stocks issued by Fairfax Financial.

    FFHPRD 3 month +3.15%
    Last Trade at $22.30

    Bought at C$17.78

    FFHPRF 3 month +2.16%
    Last Trade at $16.90

    Bought at C$12.36

  6. I have published a new post: