Observations and Sample of Recent Trades: ARESF, AZN, BRGPRA, GYC, VEIRX, VIAB /Bond-CD Cluster 11/1/17 through 1/31/18

Portfolio Management: 

While I am continuing to pare my stock allocation on a net basis, I will ponder buying some stocks that fall into my consider to buy range. 

One such stock is Viacom. I discuss buying 50 shares at $25.35 using a commission free trade in Item # 7 below. 

Viacom is not a stock on the radar for dividend growth investors and for good reason. The company slashed its dividend in September 2016 by 50%, going from a quarterly rate of $.4 per share to $20. The company needs the cash to pay down its huge debt load.  

This is one ugly chart that will drive most other investors away or to sell existing positions to harvest a tax loss, which is understandable. 

So Viacom's stock is clearly well within the falling knife category. 

But, I was not an owner of this stock when it made a move from $50 to almost $90, nor have I owned shares during the waterfall decline until I bought 50 shares at $25.35. So the dividend slash and huge price decline were out of the way when I made my nibble. There has been no stock splits over the past five years and the spin-off of CBS occurred long before the five year period pictured above. 

At my total cost per share of $25.35, the P/E on the next year fiscal year E.P.S., currently at $4.01, is about 6.32 and the dividend yield is about 3.16% at the slashed quarterly rate of $.2 per share. Viacom Inc. Cl B Analyst Estimates-MarketWatch

A 50 share buy was worth a small gamble for me, notwithstanding the bad juju. 

++++++

Tax Rates: 

Here are the actual tax rates the biggest companies in America pay - MarketWatch

++++++

Trump and the Modern Republican Party:  

While 79% of republicans view Donald as honest and trustworthy, the WP has now documented 1,318 false statements made by him starting with his inauguration last January through 10/9/17: The Fact Checker’s tally of Trump’s false claims since becoming president - Washington Post 

Trump Plays Down Health Hazard in Justifying Climate Rule Repeal - Bloomberg

The heart and soul of the modern day GOP called Senator Corker (R-TN) a disgrace: Steve Bannon calls GOP Sen. Bob Corker a "disgrace," calls on him to quit - CBS News  

Trump escalates feud with Corker - CNN: 

The NYT noted that Corker asked the reporter to record the conversation at the very start, which is contrary to the lie stated in Trump's tweet: Trump Claims We Tricked Bob Corker. Here’s the Truth. - The New York Times ("Far from being set up, Mr. Corker asked that I tape our conversation. . . And after Mr. Corker got off the phone, his two aides made sure I had recorded the call. Like the senator, they wanted to ensure his extraordinary charges were precisely captured." Corker's aide also taped the conversation which was known to the NYT reporter during the interview) Trump is unable to tell the truth about anything, even trivial matters like whether Corker knew that his conversation was being taped. 

Trump Implosion Watch: Adult Day-Care Center Edition

“I Hate Everyone in the White House!”: Trump Seethes as Advisers Fear the President Is “Unraveling” | Vanity Fair

Trump claims that he has a higher IQ than Tillerson. 

Trump challenges Secretary of State Rex Tillerson to 'compare IQ tests' - ABC News; 

Mensa offers to give IQ test to Trump and Tillerson -CBS News

Trump is also doing whatever he can to antagonize Democrats: 

The Democrats thought they had a deal with Donald on helping the Dreamers. 

Donald has reneged. Only a fool would trust Donald to keep his word.  

Donald will now hold the Dreamers hostage and will do nothing for the them unless the Democrats agree (1) to fund the wall that Mexico was supposed to pay for; (2) to fund the hiring of 10K new border patrol agents; (3) to agree that federal grants can be denied to "sanctuary cities"; (4) to end the policy allowing people to bring their extended families into the U.S. and (5) to toughen the laws for those seeking asylum in the U.S. (e.g. children fleeing violence in central America). White House Makes Hard-Line Demands for Any ‘Dreamers’ Deal - The New York Times Trump administration releases hard-line immigration principles, threatening deal on ‘dreamers’ - The Washington Post ("Trump had said several times over the past month that he did not expect a DACA deal to include funding for a border wall, emphasizing that the money could be included in separate legislation.") 

The Democrats will give something on some of those demands, but others are not negotiable which is what provoked Trump's outburst that Democrats do not care about the safety of the American people (unless they do exactly what Donald wants).   

Trump says that he will do something soon with the stroke of his pen (i.e. an Executive Order) that will bring "great" healthcare to many people: 

While Donald is being vague about how he is going to bring about great healthcare without involving Congress, his idea is reportedly to interpret the Obamacare law to allow certain organizations to offer skinny plans that do not include essential benefits. Trump Executive Order Could Gut Obamacare Markets

See also, Foiled in Congress, Trump Moves on His Own to Undermine Obamacare - The New York Times; Trump to sign order to eliminate ACA insurance rules, undermine marketplaces - The Washington Post

The purpose would be to undermine the Obamacare exchanges by siphoning off healthy people that will raise premiums for those who need or want more broader plans that actually cover potential medical problems. 

The essential services include coverage for pre-existing conditions, maternity and prenatal care, mental health and drug addition, emergency rooms, prescription drugs,  and rehabilitation services. Find out what Marketplace health insurance plans cover | HealthCare.gov In short, rather than bringing great healthcare plans to the people, Donald is just doing whatever he can to undermine Obamacare and to raise premiums for those who are covered under those plans. 

A ‘pressure cooker’: Trump’s frustration and fury rupture alliances, threaten agenda

Trump Wanted Tenfold Increase in Nuclear Arsenal, Surprising Military - NBC News ("President Donald Trump said he wanted what amounted to a nearly tenfold increase in the U.S. nuclear arsenal during a gathering this past summer of the nation’s highest-ranking national security leaders, according to three officials who were in the room.")  

Trump denied that he wanted a ten fold increase: 

Trump needs no help to demean himself. 

According to NBC, this was the meeting where Tillerson reportedly called Trump a "moron". NBC claims to have 3 people as sources who were at the meeting. Trump claims that NBC has no sources and invented the story. Trump suggests challenging NBC's broadcast license - POLITICO  Mattis then issued a statement that Trump did "not call for an increase". NBC did not use the word call but the word "want" and then made it clear that the generals talked him out of it. 

I would classify this Mattis statement as another example of a play on words, or what I call a lawyer's lie, that is a non-denial denial. Mattis denies a claim that was not made, while failing to address specifically the one that was made. And, importantly for the classification as a lawyer's lie, his statement appears at first glance to be a denial of what was written when it is not. Just too clever, like Tillerson's response to the NBC story that he called Trump a "moron after he was specifically asked whether he made the statement.     

The problem with Trump's denials is that he has already been categorized correctly IMO as a pathological liar by close to 50% of the electorate including me. 

Consequently, nothing that he says now, and I mean nothing, can be believed without independent confirmatory evidence that is not subject to reasonable doubt, even if he happens to be telling the truth for a change. I doubt that his denial on this matter is truthful. He may have been flippant when he said it.  So, in other words, he is now guilty until proven innocent and that is a bad place for any President to be when the need arises to unite the country on some national security issue. 

Trump would not leave the matter alone with a denial. He expressed a desire to take away the broadcast licenses of what he calls the Fake News Media: 

Trump threatens NBC, then says it's 'disgusting' press can 'write whatever it wants' - Oct. 11, 2017; Trump suggests challenging NBC's broadcasting license - CBS News

Trump has strong authoritarian tendencies. He is doing whatever he can to undermine institutions necessary to a properly functioning democracy.  

While part of the population is adamantly opposed to these efforts, a large and growing percentage agree with what Trump is doing and actually believe that he is being truthful and everyone who points out his false statements is lying. Truth is False, and False is True. 

If Trump could get away with it, he would shut down the free press. 

As I have been saying for well over a decade now, the biggest threat to our freedoms comes from within and the source of that threat is transparent and obvious.

Trump also claims that the Fake News Media is not covering the rise in stocks, just another lie: 

I wonder whether he will take the blame when the market goes down and unemployment goes up. That is not a question since the answer is obvious.  

‘He threw a fit’: Trump’s anger over Iran deal forced aides to scramble for a compromise - The Washington Post, republished at MSN. 

Trump’s Tough Talk on Nafta Suggests Pact’s Demise Is Imminent - The New York Times

Never before in U.S. history has it been so clear that a person is unfit to be President. 
++++

Roy Moore: The Next GOP Senator From Alabama

Moore claimed that he did not receive a "regular salary" for his "charity" work performed for a small charity that he founded to promote Christian values. 

"He collected more than $1 million as president from 2007 to 2012, compensation that far surpassed what the group disclosed in its public tax filings most of those years. When the charity couldn’t afford the full amount, Moore in 2012 was given a promissory note for back pay eventually worth $540,000 or an equal stake of the charity’s most valuable asset, a historic building in Montgomery, Ala., mortgage records show. He holds that note even now, a charity official said."

Undisclosed deal guaranteed Roy Moore $180,000 a year for part-time work at charity - The Washington Post 

This will not hurt Moore's chances in the general election IMO. 

One of Moore's primary donors over the years is a person who wants the south to secede from the Union and to form a theocratic government. Roy Moore’s Neo-Confederate Sugar Daddy Has Deep Ties To Secessionists – Talking Points Memo  

Moore's disrespect for the rule of law will help rather than hurt him in Alabama since he views his interpretation of God's will as superseding the Constitution.

And, this story published by the WP will be viewed as Fake News by most republicans in Alabama assuming they hear about it and many will deliberately avoid anything resembling responsible journalism. 

Trump won Alabama with 62.9% of the vote.    

+++++++

1. Short Term Bond/CD Ladder Basket Strategy: 

I have increased the cluster of CDs maturing between 11/1/17 through 1/31/18 as I continue to expect a .25% increase in the FF rate on or before the FED's December 2017 meeting. I am anticipating slight upticks in 1 to 12 month CDs assuming the rate is raised then.  

When I last compiled this cluster, the amount of maturing securities stood at $64K. Item # 1.F. Stocks, Bonds & Politics 2/27/17 

Additions to the cluster since then are in italics and underlined.  Many of those purchases were 2 and 3 month CDs that pay interest only at maturity.  

Current Short Term Bond/CD Cluster 11/1/17 through 1/31/18:  

Principal Value $1K per Bond or CD
SU = Senior Unsecured:
MI = Monthly Interest

4  4 Week Treasury Bills Maturing Per Month MI
2 Verizon 1.1% SU 11/1/17
1 Compass Bank .8% CD 11/8/17
1 Statoil 1.25% SU  11/9/17
2 TransCanada 1.25% SU 11/9/17
2 Morgan Stanley 1.2% CDs 11/10/17 
2 Merrick Bank MI 1.2% CDs 11/10/17
2 Bank of China 1.25% CDs 11/15/17
2 Microsoft .875% SU 11/15/17
2 People's United 1.2% CDs 11/16/17
1 Southern California Edison 1.25% SU 11/17/19
2 Bank of China 1.1.% CDs 11/20/17
2 Great Southern .75% CDs 11/22/17
2 Bank of China 1.15% CDs 11/28/17
1 Berkshire Bank 1.1% CD 11/28/17
2 Bank of Baroda 1.1% CDs 11/29.17
2 Trustmark 1.1% CDs 11/29/17
2 Synovus 1.1% CDs 11/30/17
2 Live Oak Banking 1.1% CDs 11/30/17 MI
3 U.S.T. .625% 11/30/17
1 U.S.T. .625% 11/30/17
2 Blue Hill Bank 1.2% 11/30/17
2 Potash 3.25% 12/1/17

2 AT & T 1.4% (YTM at 1.491%) Senior Unsecured Maturing Due 12/1/17

2 Disney 1.1% (1.043% YTM) Senior Unsecured Maturing 12/1/17
2 Southeast BK 1.15% CDs  12/4/17
2 GNB Bank 1.1% 12/5/17 MI
2 Citizens Bank 1.1% CDs 12/6/17
2 Bank of East Asia 1.1% CDs 12/6/17
1 Bank of China 1.2% CD 12/7/17
2 Towne Bank 1.1% CDs 12/7/17

2 Ecolab 1.45% (1.389% YTM) Senior Unsecured Maturing 12/8/17

2 Chevron 1.104% (YTM 1.224%) Senior Unsecured Maturing 12/8/17
2 Legacy Bank of Texas .8% CDs (monthly interest) 12/9/17
1 Bank of Baroda .85% CD 12/11/17
2 ZB Bank 1.1% CDs 12/12/17
2 ConocoPhillips 1.05% (1.203% YTM) Senior Unsecured Maturing 12/15/17

1 Costco 1.125% SU 12/15/17

2 Sherwin Williams  1.35% (YTM 1.294%) Senior Unsecured Maturing 12/15/17
3 Northpointe 1.2% CDs 12/18/17
2 Bank of China 1.1% CDS 12/18/17
2 Bank of China 1.15% CDs 12/20/17
3 First National 1.15% CDs 12/28/17 MI
3 Citizens Bank 1.25% CDs 12/28/17
2 Bank of China 1.25% CDs 12/28/17
2 Whitney Bank 1.25% CDs 12/29/17
2 ZB National 1.2% CDs 12/29/17
1 U.S. Treasury .75% (YTM .95%) Maturing 12/31/17  

1 U.S. Treasury Bill .888% (1 YR. Bought at Auction) Due 1/4/18 (scheduled 1 Yr reinvestment) 
2 Bank of India 1.2% CDs 1/10/18 

2 Everbank CDs 1.05% Due 1/11/18
2 Citizens Bank 1.2% CDs 1/11/18
3 First N.A. Bank 1.15% CDs 1/12/18 MI

4 BBT 1.45% Senior Unsecured Bonds Due 1/12/18 

2 C.R. Bard 1.375% (YTM at 1.363%) Senior Unsecured Bonds Due 1/15/18 

2 Dominion Resources 1.2% (YTM at 1.507%) Senior Unsecured Due 1/15/2018
1 U.S.T .875% 1/15/18
2 CR Bard 1.375% SU 1/15/18
2 Brown Forman 1% (YTM at 1.303%) Senior Unsecured Due 1/15/18

1 Deere 1.35% (YTM at 1.35%) Senior Unsecured Due 1/16/18

1 WFC 1.5% (YTM at 1.499%) Senior Unsecured Due 1/16/18

2 Royal Bank of Canada 1.5% (YTM at 1.457%) Senior Unsecured Due 1/16/18 

3 Anheuser Busch 1.25% (YTM at 1.342%) Senior Unsecured Due 1/17/18

1 Statoil 1.2% (YTM at 1.325%) Senior Unsecured Due 1/17/18
1 Compass Bank 1.25% CD 1/25/18
2 Bank of China 1.4% CDs 1/29/18
3 Enterprise Bank & Trust 1.3% CDs 1/29/18 MI
1 Bank of China 1% CD 1/30/18
2 Conerstone Bank 1.4% 1/30/18 MI
1 Bank of China 1% CD 1/30/18

2 Merck 1.1% (YTM 1.192%) Senior Unsecured Due 1/31/18

1 U.S. Treasury .75% (YTM .946%) Maturing on 1/31/18
1. U.S.T  .875% 1/31/18
1 UST Scheduled for Reinvestment January 2018.

Total Maturities = $138K

One reason for having a constant flow of maturities is that I may want to reallocate the proceeds, even on a daily basis, into stocks or asset categories. At the moment, I am keen on buying either bonds or stocks. 

Most of my CD purchases have been in my Schwab account where idle cash earns 1/10th of 1%. While I have been using recently received proceeds from lower yielding CDs and treasury bills to buy new CDs, I have slowed down that activity to a fraction of the received proceeds rates since CD rates have come down making them even more unappealing.    

A. Bought 2 Citizens Bank 1.2% CDs Maturing on 1/11/18 (3 month CDs): 

Holding Company:  Citizens Financial Group Inc.  (CFG)

B. Bought 2 Bank of India 1.2% CDs Maturing on 1/10/18 (3 month CDs):

C. Bought 2 Lakeside Bank 1.4% CD (Monthly Interest) Maturing on 8/13/18 (10 month CDs): 

This bank has a 5 star rating from Bankrate: LAKESIDE BANK Review

D. Bought 2 Lakeside Bank 1.55% CDs (monthly interest) Maturing on 2/13/19 (16 Month CDs):

E. Bought 2 Bank of China 1.1% CDs Maturing on 12/18/17 (2 month CDs) (2 month CDs):

$10K Inflow into Short Term Bond/CD Ladder Basket

2. Intermediate Bond/CD Ladder Basket: 

A. Sold 1 WFC 2.1% SU Bond Maturing on 7/26/21: 

Profit Snapshot: +$8.04

FINRA Page: Bond Detail

Sold at 99.082 
YTM Then at 2.353%
Current Yield at 2.12%

Bought at a Total Cost of 98.013
Stocks, Bonds & Politics: Item # 1.D. 
YTM THEN at 2.553%
Current Yield at 2.14%

This bond is actively traded and can be bought in 1 bond lots easily. 

B. Sold 1 AvalonBay Communities 2.95% SU Bond Maturing on 5/11/26-Fidelity Account ($1 Commission): 

Profit Snapshot: +$5.73

FINRA Page: Bond  Detail

Issuer: Avalonbay Communities Inc.  (AVB)

Sold at 98.225
YTM Then at 3.187%
Current Yield at 3%

Bought at a Total Cost of 97.511
Stocks, Bonds & Politics: Item # 1.C.
YTM Then at 3.265%
Current Yield at 3.025%

C. Sold 1 AvalonBay Communities 2.95% SU Bond Maturing on 5-11/26-Vanguard Roth IRA Account ($2 Commission):

Profit Snapshot: $4.04

Sold at 98.264
YTM Then at 3.182  
Current Yield at 3%

Bought at 97.322
Stocks, Bonds & Politics: Item # 1.C. 
YTM Then at 3.264%
Current Yield at 3.03%

My consider to repurchase price is less than 93. 

D. Sold 1 Citigroup 3.4% Bond Maturing on 5/1/26-Vanguard Roth IRA Account: 

Profit Snapshot: +$6.40

This bond was recently bought. I am just lowering my exposure to investment grade corporate bonds maturing in 2026 with coupons less than 3.5%. 

FINRA Page: Bond Detail

Issuer: Citigroup Inc.  (C)
C Analyst Estimates

Sold at 100.538
YTM Then at 3.327%
Current Yield at 3.38%

Bought at a Total Cost of 99.698
Stocks, Bonds & Politics:  Item # 1.B. (7/5/17 Post) 
YTM Then at 3.439%
Current Yield at  3.41%

My consider to repurchase price is less than 96. 

E. Sold 1 Boston Properties 2.75% SU Bond Maturing on 10/1/26: 

FINRA Page: Bond Detail

Issuer:  Boston Properties Inc.  (BXP)

Profit Snapshot: $24.32

Sold at 95.095
YTM Then at 3.388%
Current Yield at 2.89%

Bought at a Total Cost of 92.563
Stocks, Bonds & Politics: ITEM # 1.A. 
YTM Then at 3.679%
Current Yield at 2.971%

$5K Outflow from Intermediate Term Bond/CD Ladder Basket Strategy 

3. Sold 30 AZN: 

A. Sold 30 AZN at $34.2-Used Commission Free Trades Round Trip: 

I barely made a profit on this recently purchased position purchased on 5/15/17: 

Stocks, Bonds & Politics: Item $ 1.B. Bought 30 AZN (6/17/17 Post)   

Quote: AstraZeneca PLC ADR (AZN)

I did receive a semi-annual dividend amounting to $13.50 on that 30 share lot. The U.K. does not withhold a dividend tax. 

Shortly after my purchase, AZN released the results of a trial that undermined a primary reason for nibbling. 

This was the news that caused me to nibble: Imfinzi significantly reduces the risk of disease worsening or death in the Phase III PACIFIC trial for Stage III unresectable lung cancer (5/12/17 Press Release)

Then there was this press release from 7/27/17: AstraZeneca reports initial results from the ongoing MYSTIC trial in Stage IV lung cancer ("The combination of Imfinzi and tremelimumab did not meet the primary endpoint of improving PFS compared to SoC in patients whose tumours express PD-L1 on 25% or more of their cancer cells (as determined by the VENTANA PD-L1 (SP263) assay"). This drug may end up working in other indications, but that release was enough to cause me to start looking for an exit point since I lost interest pretty quick. On the day prior to this press release, the stock closed at $33.34 and slid to $28.44 the next day. Historical Quotes 

The stock started to rally based, starting in mid-September based in part on buyout chatter which was noted in a Sanford Bernstein upgrade on 9/22/17. Bernstein Upgrades AstraZeneca (AZN) to Outperform It is possible that Pfizer or some other large company will make a run at AZN. PFE failed in an earlier effort. 

4. Sold 50 of 100 BRGPRA at $26.26: 

Profit Snapshot: +$139.64

Quote: Bluerock Residential Growth REIT Inc. 8.25% Cumulative Preferred Series A Stock

Par Value $25
Dividends: Cumulative and Non-Qualified (pass through structure)
Optional Redemption: At Par Value on or after 10/21/2020
Capital Structure: Junior to All Bonds and bank loans/Senior only to common stock
Prospectus 

I have sold my common position down to just a 50 share lot. 

Over the short and intermediate term, I do not view the management internalization to be a positive because a boatload of stock will be paid to the current external manager to relinquish their management agreement. Bluerock Residential Growth REIT (BRG) Announces Agreement to Internalize Management

Of course, there are no proceeds realized by the company which would be the case for a stock offering sold to the public, and consequently no proceeds can be used to buy more properties. 

As a result of more shares and no cash paid for those shares that could be used to buy properties, the dividend will be reduced in 2018 to an anticipated range of $.65 to $.75. Bluerock Residential Growth REIT (BRG) Announces Potential Range of Anticipated Class A Common Stock Dividend for 2018 I would go with the low end number until proven otherwise. The current annual rate is $1.16 per share paid in monthly installments of  $0.096667 per share .

I discussed reducing that common share position in three posts from 2016: 

South Gent's Comment Blog # 4: Sold Another 100 BRG  

Item # 5. Eliminated BRG in One Taxable Account-Sold 220+ at $13.22: Update For Equity REIT Basket Strategy As Of 8/27/16 - South Gent | Seeking Alpha

Item # 5. Sold 100 BRG at $13.52 Update For Equity REIT Basket Strategy As Of 7/28/16 - South Gent | Seeking Alpha

The remaining 50 common shares were bought at $9.36 in my IB account on 2/16/16: Item # 2 Update For The Equity REIT Basket Strategy As Of 2/22/16 - South Gent | Seeking Alpha

I doubt that individual investors are attuned to the upcoming common share dividend slash.

5. Eliminated GYC: 

A. Sold Remaining 50 shares at $23.55: 

Profit Snapshot: +$130.02

This lot was bought at $20.95 and was discussed here.

2 Year History This Account: 

Quote: Corporate Asset Backed Corp. CABCO Series 2004-102 Trust SBC Communication Inc. Floating Rate Trust Certificates (GYC) 

GYC is a Synthetic Floater in in the Trust Certificate form of legal ownership.

For this security, UBS created a grantor trust, administered by an independent trustee, and sold to that trust senior unsecured SBC Communication bonds (now AT & T). Those bonds are commonly referred to as the underlying security. The AT & T bonds mature on 6/15/2034 and have a 6.45% coupon.

The grantor trust raised the funds to pay UBS through the public sale of trust certificates, each with a $25 par value.

UBS also entered into a swap agreement with the trustee. As a result of that agreement, the trustee delivers to the swap counterparty, originally identified in the GYC prospectus as UBS, the interest paid by AT & T, and the swap counterparty delivers to the trustee the amount owed to the GYC owners.

The owners of the trust certificate bear the credit risk of the underlying bond which is currently rated as follows:

For as long as the swap agreement remains in effect, the owners of GYC are entitled to receive quarterly interest payments at the greater of 3.25% or .65% over the 3 month Libor rate, with a 8% per annum cap, on a $25 par value. GYC Prospectus

Assuming no early termination of the swap agreement and/or the trust, GYC matures at the same time as the underlying bond which is 6/15/34.

Last Two Discussions: 

Stocks, Bonds & Politics: Item 2.A. Sold 50 GYC at $23.39 and Bought 50 GJP at $21.25 (4/26/17 Post) 

Item # 3. PARED GYC: Sold 50 at $24.01-Taxable Account: Update For Exchange Traded Bonds And Preferred Stock Basket Strategy As Of 8/16/16 - South Gent | Seeking Alpha

Both GJP and GYC have $25 par values.

Realized GYC Profits: $1,034.52 (prior tally at $904.5)

Snapshots can be found in Stocks, Bonds & Politics: Trust Certificates: New Gateway Post.

The owners of GYC are entitled to receive quarterly interest payments at the greater of 3.25% or .65% over the 3 month Libor rate, with a 8% per annum cap, on a $25 par value. The underlying bond in the GYC Grantor Trust, which is a 2034 senior AT & T bond, and the trust certificate GYC mature on the same date which is June 15, 2034. If AT & T pays off those bonds then, and there is no mishap with GYC, the owners of GYC would receive their par value as well which is $25 per trust certificate.

Prospectus 

The owners of GYC will receive a coupon increase when the 3 month Libor rate exceeds 2.6% during a quarterly computation date. 

As previously discussed, one problem with this security is that it is unclear what happens when the the 3 month Libor rate is ended. I am done owning this security due to that issue and other issues as previously discussed, including but not limited to the low current yield and YTM, with no prospect of an increase in that coupon likely until 2019, at the earliest IMO.   

GJP, on the other hand, has a float tied to the 3 month treasury bill and my last purchase was at a significant discount to its $25 par value. Interest is also paid monthly. 

Other Trades:  

Item # 2 Bought GYC at $15.5: Synthetic Floating Rate Bond (May 2009 Post); Item # 3 Added 50 GYC at $21.60 in Roth IRA (2/10/11 Post)- Sold 100 GYC at $22.22: Ongoing Reassessment of Synthetic Floaters (7/28/12 Post)(profit snapshot $357.45)

I also had a 40 share flip in the regular IRA: Item # 4 Sold GYC at $22.3 in regular IRA (11/22/2010 Post)-Bought TC GYC at $21

I have flipped more flipped some shares in the Roth IRA:Item # 8 Sold 50 of 100 GYC at $20.8 (10/31/13 Post) and Item # 5 Sold Roth IRA: 50 GYC at $22.3 (12/31/13 Post)(snapshot of profit on 100 shares, two 500 share lot positions=$167.98)-Item # 1 Bought Roth IRA: 50 GYC at $20 (9/7/13 Post)and Added 50 GYC at $18.66 (10/24/13 Post)

6. Stocks, Bonds & Politics: Gateway Post: Equity REIT Common and Preferred Stock Basket Strategy:

A. Sold 100 ARESF at $10.78-Used Commission Free Trade:

Profit Snapshot: +$109.48

The rise in U.S. interest rates has caused IMO a decline in the CAD's value against the USD. The price of ARESF is determined by taking the ordinary price expressed in CADs and converting that number into USDs. With the CAD falling in price, the ordinary shares priced in USDs will underperform the same shares priced in CADs.

Quotes:

Artis Real Estate Investment Trust (ARESF)(USD priced ordinary shares/pink sheet exchange)

Artis Real Estate Investment Trust (Canada: Toronto)(CAD priced ordinary shares)

Last Discussed at Item # 3.C.: Sold 100 of 300 ARESF at $10.4-Highest Cost Lot in my Schwab Account-Stocks, Bonds & Politics: (7/29/17 Post)

Other Discussions include:

Item # 1 SOLD 300 AX-UN:CA at C$15.71 (9/26/14 Post)

Item # 3.A. Pared Artis REIT: Sold 200 AX-UN.CA at C$12.94 (3/8/17 Post) 


7. Deeply Contrarian Value Basket Strategy-Used Commission Free Trade:  

A. Bought 50 Viacom at $25.35: 

Quote: Viacom Inc. Cl B

There is also a class "A" share class traded under the symbol VIA.

The only difference is that the Class A shares can vote and the owners of the "B" class can not.  Viacom Inc. - Frequently Asked Questions I bought the "B" shares. 

I discussed in the introduction section above the rationale for this nibble.  With a forward estimated P/E of below 7 and a dividend yield over 3.1%, maybe institutional investors have become too pessimistic about this owner of cable TV channels and Paramount Studios. 

The cable TV brands include BET, MTV, VHI, CMT, Comedy Central, TV Land and the Nickelodeon Group. Viacom

Last Earnings Report:  

SEC Filed Press Release

"Revenues in the third fiscal quarter increased 8%, or $257 million, to $3.36 billion, reflecting growth across Filmed Entertainment and Media Networks segments. Operating income declined 3% to $746 million, reflecting restructuring and programming charges of $59 million, principally resulting from the execution of strategic initiatives at Paramount. Adjusted operating income rose 5% to $805 million in the quarter. Net earnings from continuing operations attributable to Viacom grew 57%, or $248 million, to $680 million in the quarter, principally due to the gain on the sale of the Company's investment in EPIX. Adjusted net earnings from continuing operations attributable to Viacom grew 12%, or $52 million, to $471 million, driven by the increase in tax-effected adjusted operating income. Diluted earnings per share for the quarter increased $0.60 to $1.69, and adjusted diluted earnings per share increased $0.12 to $1.17."

"Media Networks revenues grew 2% to $2.56 billion in the quarter, with affiliate revenues up 4% to $1.19 billion and advertising revenues up 2% to $1.24 billion. Domestic revenues were substantially flat at $2.04 billion, and international revenues increased 8% to $522 million. Excluding foreign exchange, which had a 5-percentage point unfavorable impact, international revenues increased 13% in the quarter, primarily driven by the acquisition of Telefe."

"Filmed Entertainment revenues grew 36% to $847 million, reflecting continued increases across all revenue streams. Domestic revenues rose 19% to $388 million in the quarter, while international revenues increased 56% to $459 million."

Filmed Entertainment includes theatrical revenues ($263M up 189%), licensing revenues (up 1% to $300M), home entertainment revenues (up 14% to $218 M and ancillary revenues (up 61% to $61M)

There was a burst in profits and revenues from Paramount due primarily to its release of a Transformers picture: 

"Theatrical revenues increased 189% to $263 million, with revenues from current quarter releases up 199% compared to revenues from releases in the third quarter of fiscal 2016. The growth in theatrical revenues was primarily driven by the release of Transformers: The Last Knight. Domestic theatrical revenues rose 85%, while international theatrical revenues increased 296%."

Earnings Summary: 

GAAP to Non-GAAP Numbers: 

Debt and Bonds: 

I own some Viacom senior unsecured debt. 

Long term debt stood at $11.013B as of 6/30/17, down from $11.896B as of 6/30/16. Page 3 10-Q for the Q/E 6/30/17 Cash saved by the dividend slash is being used to reduce the debt load which is necessary IMO and just fine with me. The long debt debt number for the Q/E 9/30/15 was $12.267B. 

The company sold earlier this year $1.3B in junior bonds maturing in 2057, two separate fixed-to-floating rate junior debentures with a conditional deferrable interest right for up to 5 years. 

Prospectus So if the company does run into financial difficulty, it can eliminate the common stock dividend altogether and then defer the interest payments on these two junior bonds. 

The proceeds were used to repay senior debt as noted in the "Use of Proceeds" section at page S-10. 

These two junior bonds have $1K par values and trade in the bond market. They are rated Ba1 and BB: 

Bond Detail for the 5.875%

Bond Detail for the 6.25%

The junior bonds differ on the transition to Libor floaters and the floating rate. Note there is an alternative method for computing the floating rate when there is no Libor quote (Page S-13) As with other fixed to floating rate securities, the issuer has the right to redeem at par value when the security makes the transition from the fixed coupon to the floating rate and at anytime thereafter.

I have no interest in those junior bonds.

Currently Morningstar has a five star rating with a fair value estimate of $47.

In a report dated 9/30/17, S & P has a three star rating and a $45 twelve month price target. It is hard for me at least to fathom how those two numbers fit together.

8. Pared VEIRX by Selling $1K at $75.87: 

Closing Price 10/11/17: VEIRX $75.87 +$0.08 +0.11% : Vanguard Equity Income Fund Admiral Class 

As previously noted, when the value of this holding exceeds $51K, I will sell $1K. Since my last pare, I also received a quarterly cash dividend. 

The last pare was mentioned in Item # 5.A  Stocks, Bonds & Politics (9/14/17 Post) 

This is a very tightly control burn of this position that requires a greater than $1K increase in value before I sell $1K. 

This fund is currently rated 5 stars by Morningstar. Vanguard Equity-Income Admiral Fund (VEIRX)


Sponsor's Website: Vanguard Equity Income Fund Admiral Shares


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.