Economy:
The government reported a .1% seasonally adjusted increase in consumer inflation last month with core CPI rising .3%, the largest increase since January 2017. The non-seasonally adjusted headline number was up 2.1% Y-O-Y with core CPI rising 1.8%:
Consumer Price Index Summary
According to the government, health insurance costs did not increase at all on an unadjusted basis in 2017: Table 2. Consumer Price Index for All Urban Consumers (CPI-U): U. S. city average, by detailed expenditure category
The headline CPI number was held down some by a decline in gasoline prices month-over-month. As shown in the preceding table, gasoline prices rose 10.8% Y-O-Y.
With the recent rise in energy prices, I would expect the January energy price numbers to fuel an increase in headline CPI.
The following table shows daily WTI prices for January through March:
The government reported a .1% seasonally adjusted increase in consumer inflation last month with core CPI rising .3%, the largest increase since January 2017. The non-seasonally adjusted headline number was up 2.1% Y-O-Y with core CPI rising 1.8%:
Consumer Price Index Summary
According to the government, health insurance costs did not increase at all on an unadjusted basis in 2017: Table 2. Consumer Price Index for All Urban Consumers (CPI-U): U. S. city average, by detailed expenditure category
The headline CPI number was held down some by a decline in gasoline prices month-over-month. As shown in the preceding table, gasoline prices rose 10.8% Y-O-Y.
With the recent rise in energy prices, I would expect the January energy price numbers to fuel an increase in headline CPI.
The following table shows daily WTI prices for January through March:
Cushing, OK WTI Spot Price FOB (Dollars per Barrel)
The Heating oil price, calculated a NY Harbor, is moving rapidly highly: New York Harbor No. 2 Heating Oil Spot Price FOB (Dollars per Gallon)
The Heating oil price, calculated a NY Harbor, is moving rapidly highly: New York Harbor No. 2 Heating Oil Spot Price FOB (Dollars per Gallon)
+++++++
Market Commentary and Markets:
Tax reform's 'horrendous' timing may lead to weaker market by mid-2018-Morgan Stanley U.S. Equity Strategist: CNBC
The man who called a new bull market in 2012 says take your profits now -MarketWatch
The Barron's Roundtable panelists were generally upbeat about stocks this year. Bright Outlook for the Economy and Stocks - Barron's (subscription publication)
I would agree with several panelists that an unexpected rise in inflation and interest rates, both in the US. and Europe, would be negative items for stocks given their current valuations.
However, I have a caveat to that opinion.
When blood starts flowing in the streets of Bond Land, which has not happened yet, the initial reaction may be for large investors to rotate out of bonds and into stocks, sending the market higher than forecasters are currently predicting. The problem with the melt up is that the odds of a meltdown go way up as well. Major stock indexes did extremely well in 2013 when intermediate and longer term rates spiked starting in May 2013. The S&P 500 ETF (SPY) had a total return of +32.31% that year.
The more likely threat to emerge this year would be major disruptions in trade relations precipitated by Trump.
I also agree that the economy does not need a tax cut stimulus in 2018. The tax stimulus will pull demand forward into 2018 that would otherwise have occurred in 2019 or thereafter.
Assuming Trump does not initiate a trade war with Canada and Mexico, the economy is likely to be in good shape for the 2018 mid-term elections next November, given the tax stimulus, which will add maybe a 1/2 point to real GDP assuming no major uptick in inflationary pressures and interest rates.
Assuming that no economic downturn is in motion by November 2018, the republicans will have the wind at that back to maintain control over both the House and Senate, with a growing revulsion to Trump being a major wild card for them. The more likely transition to a Democrat controlled government would be after the November 2020 election.
I anticipate the commodity prices will continue to rise in 2018 and that will add to inflationary pressures.
I anticipate that the deficit will soar in 2018 and may go over $1 trillion dollars for the F/Y ending in September 2019. An acceleration in interest rates will simply add to that growing problem.
Government - Interest Expense on the Debt Outstanding
U.S. Goverment Debt to the Penny (Daily History Search Application)
The average interest rate on U.S. government debt has been trending up and I anticipate that trend to continue and to accelerate as the year progresses. Government- Average Interest Rates on U.S. Treasury Securities
If foreign nations reduce their purchases of treasuries, then interest rates could rise faster and further than anyone expects in 2018-2020.
The tax cuts will not have that much of an impact on average hourly earnings for the wage slaves. A $1K one time bonus is not equivalent to a consistent and meaningful rise in wages. Most of the tax cut benefits will accrue to the shareholder class, as public companies use their tax savings to increase dividends, to buy more stock and to buy other companies that will result in job layoffs.
I found it interesting that WMT raise its minimum wage to $11 and will offer employees "up to" a $1K bonus, which are positives for the economy this year, but then announced at the same time that it was closing 63 Sam's Club stores resulting in about 11K job losses. Walmart abruptly closes 63 Sam's Club stores, lays off thousands
The Barron's Roundtable panelists were generally upbeat about stocks this year. Bright Outlook for the Economy and Stocks - Barron's (subscription publication)
I would agree with several panelists that an unexpected rise in inflation and interest rates, both in the US. and Europe, would be negative items for stocks given their current valuations.
However, I have a caveat to that opinion.
When blood starts flowing in the streets of Bond Land, which has not happened yet, the initial reaction may be for large investors to rotate out of bonds and into stocks, sending the market higher than forecasters are currently predicting. The problem with the melt up is that the odds of a meltdown go way up as well. Major stock indexes did extremely well in 2013 when intermediate and longer term rates spiked starting in May 2013. The S&P 500 ETF (SPY) had a total return of +32.31% that year.
The more likely threat to emerge this year would be major disruptions in trade relations precipitated by Trump.
I also agree that the economy does not need a tax cut stimulus in 2018. The tax stimulus will pull demand forward into 2018 that would otherwise have occurred in 2019 or thereafter.
Assuming Trump does not initiate a trade war with Canada and Mexico, the economy is likely to be in good shape for the 2018 mid-term elections next November, given the tax stimulus, which will add maybe a 1/2 point to real GDP assuming no major uptick in inflationary pressures and interest rates.
Assuming that no economic downturn is in motion by November 2018, the republicans will have the wind at that back to maintain control over both the House and Senate, with a growing revulsion to Trump being a major wild card for them. The more likely transition to a Democrat controlled government would be after the November 2020 election.
I anticipate the commodity prices will continue to rise in 2018 and that will add to inflationary pressures.
I anticipate that the deficit will soar in 2018 and may go over $1 trillion dollars for the F/Y ending in September 2019. An acceleration in interest rates will simply add to that growing problem.
Government - Interest Expense on the Debt Outstanding
U.S. Goverment Debt to the Penny (Daily History Search Application)
The average interest rate on U.S. government debt has been trending up and I anticipate that trend to continue and to accelerate as the year progresses. Government- Average Interest Rates on U.S. Treasury Securities
If foreign nations reduce their purchases of treasuries, then interest rates could rise faster and further than anyone expects in 2018-2020.
The tax cuts will not have that much of an impact on average hourly earnings for the wage slaves. A $1K one time bonus is not equivalent to a consistent and meaningful rise in wages. Most of the tax cut benefits will accrue to the shareholder class, as public companies use their tax savings to increase dividends, to buy more stock and to buy other companies that will result in job layoffs.
I found it interesting that WMT raise its minimum wage to $11 and will offer employees "up to" a $1K bonus, which are positives for the economy this year, but then announced at the same time that it was closing 63 Sam's Club stores resulting in about 11K job losses. Walmart abruptly closes 63 Sam's Club stores, lays off thousands
+++++++
Trump and the White Nationalism of the Modern Day GOP:
Trump attacks protections for immigrants from ‘shithole’ countries in Oval Office meeting (Trump wants to stop or slow down brown and black skin people from immigrating to the U.S. and to bring more white people from countries like Norway)
Trump was referring to African nations as shithole countries.
For immigrants from Haiti, he just wanted "take them out" of the U.S. and send them back.
Trump aides predicted that his remarks would resonate with his base. How a bipartisan policy meeting devolved into vulgarity That should not come as a surprise to anyone.
According to his aids interviewed off-the-record by reporters, Donald was pleased with himself and was taking a victory lap in calls to friends Thursday evening.
Donald denies using the language, but then Donald has been proven beyond any reasonable doubt that he is a pathological liar:
Prior to being assaulted daily with Donald's lies, I would have thought that it was impossible for one human to lie so much.
Senator Insists Trump Used ‘Vile and Racist’ Language - The New York Times (Senator Durbin (D-Ill.): “I cannot believe that, in the history of the White House in that Oval Office, any president has ever spoken the words that I personally heard our president speak yesterday”.)
Durbin said that Trump repeatedly referred to "shithole" nations.
Sen. Tim Scott (R-SC): Graham says reports of Trump's 'shithole countries' comment 'basically accurate'-postandcourier.com
Jeff Flake stated that those in attendance relayed the President's comments to him shortly after the meeting broke up and those comments were "abhorrent and repulsive".
Flake, who was not at the meeting, heard about Trump's comments shortly after meeting from participants (plural) and "what I’ve heard reported is consistent about what I heard about the meeting.” Trump, condemned for ‘shithole’ countries remark, denies comment but acknowledges ‘tough’ language - The Washington Post
On Sunday, Flake appeared on "This Week" and stated again that participants in the meeting told him immediately afterward that "those words were used". That would be Senators Graham (R) and Senator Durbin (D).
Senator Perdue (R-GA), who attended the meeting, first stated in writing that he did not recall Trump using that language. One day later, his inability to remember magically turned into a flat out denial that Trump made those comments. That proves IMO that he lying in both statements.
I do not view Mr. Perdue as a credible person. I view Senator Cotton (R-ARK), who also attended the meeting, as a zealot who has the same memory issue that has inflicted Senator Perdue. Cotton IMO would do whatever it takes to advance his hard line immigration views, including lying to protect the President. Cotton is as trustworthy as Trump: Fact-checkers unanimous: Tom Cotton is a liar
In any event, the hard line immigration plan supported by Perdue and Cotton, which has been embraced by Trump, will not pass the Senate. Several republican senators have already expressed opposition and no Democrat will vote for their bill. Trump endorsed an immigration bill that probably won’t pass. It still matters. - Vox; RAISE Act - Wikipedia; Rubio: Trump-backed immigration bill won't pass Senate | TheHill; Slash Immigration, and GDP Is the Victim, Research Finds - NBC News
This is what Ronald Regan said about immigrants in his acceptance speech at the 1980 Republican convention:
Ronald Reagan: Address Accepting the Presidential Nomination at the Republican National Convention in Detroit
If a GOP candidate expressed those Ronald Reagan sentiments today, the candidate would instantly become a pariah and persona non grata in almost every republican primary (House, Senate, President). They would be tarred and feathered, doused with honey and placed in a steaming hot trunk with a beehive.
This is what Trump had to say about the status of the immigration and DACA legislation after he blew up the bipartisan deal to deal with those issues:
So the Democrats do not want to protect the DACA beneficiaries according to Donald. Can anyone name a single Democrat who supports Trump's rescission of DACA. If there is one, I am certainly unaware of it. Judge: Trump's racism may have been key to ending DACA - POLITICO; Trump administration forced to renew DACA permits as furor over the president's immigration slur persists-LA Times; TEXT of District Court Decision
+++++
Trump's Criticism of the Libel Law-Just Another Attack on the Conservative Values Embodied in the First Amendment:
Donald has spent a lifetime threatening to file and filing libel suits. He uses litigation and the threats of litigation to punish those who criticize him. I have discussed several examples from his past. Donald J. Trump Is A Libel Bully But Also A Libel Loser
For example, during the campaign, he repeatedly threatened to sue the women who claimed that he sexually assaulted them. No suits have been filed except by one lady who claims that Donald slandered her by calling her a liar. Donald's response to that lawsuit is to wrap himself in the First Amendment.
An example of a Trump libel lawsuit involved a libel claim against an architectural columnist who criticized one of Donald's buildings as one of the "silliest things anyone could inflict on New York or any other city." That Time Donald Trump Tried to Sue a Tribune Architecture Critic Into Oblivion | Chicago magazine | Politics & City Life August 2015; Paul Gapp, 64, Journalist, Dies-Architecture Critic Won Pulitzer - NYTimes.com
Trump has repeatedly stated that he wants to change the libel laws so that he can win this type of lawsuit and collect lots of money. Trump Again Blasts Libel Laws, Calling Them As 'A Sham'-NPR; Trump-O-Meter: Open up libel laws | PolitiFact; These Stories Have Made Trump Want to Change Libel Laws
That is for lawsuits that he wants to file against critics and not to lawsuits filed against him for libel.
Donald believes that he has the power to change the libel law, and repeatedly says that he is looking into it.
Unfortunately for Donald, who holds the First Amendment's protections for free speech in contempt, the libel law is not based on a statute passed by politicians, but on the Constitutional Right to free speech embodied in the First Amendment as defined by the Supreme Court. New York Times Co. v. Sullivan, (full text): 376 U.S. 254 (1964).
I doubt that many Trump supporters have ever read the Bill of Rights, though they would be familiar with their newly created right to have an arsenal of weapons. So I feel the need to quote the First Amendment:
Note that this Amendment is phrased as a restraint on the federal government, and became binding on the state and local governments through the 14th Amendment to the Constitution.
The framers believed that the rights expressed in this Amendment were inalienable natural rights that all Americans possessed. Consequently, there was no need to create and confer those rights in the First Amendment's language, but only to prevent a government and others from trying to take them away. Natural Rights-Constitutional Rights Foundation
This is one of Donald's weekend tweets:
Senator Flake (R-AZ) to denounce Trump media attacks as Stalinist in Senate speech - NBC News
+++++
Did Trump say "I have a good relationship with Kim Jong Un" or “I’d have a good relationship with Kim Jong Un,” Trump disputes North Korea quote in WSJ interview-MarketWatch (contains WSJ recording of the interview) Personally I hear in the recording "I have". But, the important points are that Trump thinks that he could have a good relationship (or has one now) and his reaction to the WSJ's good faith quote based on its crystal clear recording.
U.S. ambassador to Panama resigns, says cannot serve Trump
Trump Lawyer Arranged $130,000 Payment for Adult-Film Star's Silence; National Enquirer Paid to Kill Story of Playboy Model's Affair with Donald Trump: Report | PEOPLE.com
Porn Star Was Reportedly Paid to Stay Quiet About Trump - The New York Times
Madame Tussauds moves wax Trump to London embassy after he cancels visit | TheHill (Trump has to know that he is the quintessential Ugly American who is held in utter contempt by a majority of the U.K.'s population)
Opinion | Donald Trump’s Racism: The Definitive List - The New York Times
+++++++
Trump attacks protections for immigrants from ‘shithole’ countries in Oval Office meeting (Trump wants to stop or slow down brown and black skin people from immigrating to the U.S. and to bring more white people from countries like Norway)
Trump was referring to African nations as shithole countries.
For immigrants from Haiti, he just wanted "take them out" of the U.S. and send them back.
Trump aides predicted that his remarks would resonate with his base. How a bipartisan policy meeting devolved into vulgarity That should not come as a surprise to anyone.
According to his aids interviewed off-the-record by reporters, Donald was pleased with himself and was taking a victory lap in calls to friends Thursday evening.
Donald denies using the language, but then Donald has been proven beyond any reasonable doubt that he is a pathological liar:
Prior to being assaulted daily with Donald's lies, I would have thought that it was impossible for one human to lie so much.
Senator Insists Trump Used ‘Vile and Racist’ Language - The New York Times (Senator Durbin (D-Ill.): “I cannot believe that, in the history of the White House in that Oval Office, any president has ever spoken the words that I personally heard our president speak yesterday”.)
Durbin said that Trump repeatedly referred to "shithole" nations.
Sen. Tim Scott (R-SC): Graham says reports of Trump's 'shithole countries' comment 'basically accurate'-postandcourier.com
Jeff Flake stated that those in attendance relayed the President's comments to him shortly after the meeting broke up and those comments were "abhorrent and repulsive".
On Sunday, Flake appeared on "This Week" and stated again that participants in the meeting told him immediately afterward that "those words were used". That would be Senators Graham (R) and Senator Durbin (D).
Senator Perdue (R-GA), who attended the meeting, first stated in writing that he did not recall Trump using that language. One day later, his inability to remember magically turned into a flat out denial that Trump made those comments. That proves IMO that he lying in both statements.
I do not view Mr. Perdue as a credible person. I view Senator Cotton (R-ARK), who also attended the meeting, as a zealot who has the same memory issue that has inflicted Senator Perdue. Cotton IMO would do whatever it takes to advance his hard line immigration views, including lying to protect the President. Cotton is as trustworthy as Trump: Fact-checkers unanimous: Tom Cotton is a liar
In any event, the hard line immigration plan supported by Perdue and Cotton, which has been embraced by Trump, will not pass the Senate. Several republican senators have already expressed opposition and no Democrat will vote for their bill. Trump endorsed an immigration bill that probably won’t pass. It still matters. - Vox; RAISE Act - Wikipedia; Rubio: Trump-backed immigration bill won't pass Senate | TheHill; Slash Immigration, and GDP Is the Victim, Research Finds - NBC News
Ronald Reagan: Address Accepting the Presidential Nomination at the Republican National Convention in Detroit
If a GOP candidate expressed those Ronald Reagan sentiments today, the candidate would instantly become a pariah and persona non grata in almost every republican primary (House, Senate, President). They would be tarred and feathered, doused with honey and placed in a steaming hot trunk with a beehive.
This is what Trump had to say about the status of the immigration and DACA legislation after he blew up the bipartisan deal to deal with those issues:
So the Democrats do not want to protect the DACA beneficiaries according to Donald. Can anyone name a single Democrat who supports Trump's rescission of DACA. If there is one, I am certainly unaware of it. Judge: Trump's racism may have been key to ending DACA - POLITICO; Trump administration forced to renew DACA permits as furor over the president's immigration slur persists-LA Times; TEXT of District Court Decision
+++++
Trump's Criticism of the Libel Law-Just Another Attack on the Conservative Values Embodied in the First Amendment:
Donald has spent a lifetime threatening to file and filing libel suits. He uses litigation and the threats of litigation to punish those who criticize him. I have discussed several examples from his past. Donald J. Trump Is A Libel Bully But Also A Libel Loser
For example, during the campaign, he repeatedly threatened to sue the women who claimed that he sexually assaulted them. No suits have been filed except by one lady who claims that Donald slandered her by calling her a liar. Donald's response to that lawsuit is to wrap himself in the First Amendment.
An example of a Trump libel lawsuit involved a libel claim against an architectural columnist who criticized one of Donald's buildings as one of the "silliest things anyone could inflict on New York or any other city." That Time Donald Trump Tried to Sue a Tribune Architecture Critic Into Oblivion | Chicago magazine | Politics & City Life August 2015; Paul Gapp, 64, Journalist, Dies-Architecture Critic Won Pulitzer - NYTimes.com
Trump has repeatedly stated that he wants to change the libel laws so that he can win this type of lawsuit and collect lots of money. Trump Again Blasts Libel Laws, Calling Them As 'A Sham'-NPR; Trump-O-Meter: Open up libel laws | PolitiFact; These Stories Have Made Trump Want to Change Libel Laws
That is for lawsuits that he wants to file against critics and not to lawsuits filed against him for libel.
Donald believes that he has the power to change the libel law, and repeatedly says that he is looking into it.
Unfortunately for Donald, who holds the First Amendment's protections for free speech in contempt, the libel law is not based on a statute passed by politicians, but on the Constitutional Right to free speech embodied in the First Amendment as defined by the Supreme Court. New York Times Co. v. Sullivan, (full text): 376 U.S. 254 (1964).
I doubt that many Trump supporters have ever read the Bill of Rights, though they would be familiar with their newly created right to have an arsenal of weapons. So I feel the need to quote the First Amendment:
Note that this Amendment is phrased as a restraint on the federal government, and became binding on the state and local governments through the 14th Amendment to the Constitution.
The framers believed that the rights expressed in this Amendment were inalienable natural rights that all Americans possessed. Consequently, there was no need to create and confer those rights in the First Amendment's language, but only to prevent a government and others from trying to take them away. Natural Rights-Constitutional Rights Foundation
This is one of Donald's weekend tweets:
Senator Flake (R-AZ) to denounce Trump media attacks as Stalinist in Senate speech - NBC News
+++++
U.S. ambassador to Panama resigns, says cannot serve Trump
Trump Lawyer Arranged $130,000 Payment for Adult-Film Star's Silence; National Enquirer Paid to Kill Story of Playboy Model's Affair with Donald Trump: Report | PEOPLE.com
Porn Star Was Reportedly Paid to Stay Quiet About Trump - The New York Times
Madame Tussauds moves wax Trump to London embassy after he cancels visit | TheHill (Trump has to know that he is the quintessential Ugly American who is held in utter contempt by a majority of the U.K.'s population)
Opinion | Donald Trump’s Racism: The Definitive List - The New York Times
+++++++
Trump the Fox News Parrot:
While watching "Fox News" to learn his policy positions, Donald will tweet whatever is being said, sometimes out of context and incorrectly. He needs to do it quickly before he forgets what his policy position needs to be.
The latest example related to the House vote to reauthorize a key provision in the Foreign Surveillance Act. Judge Andrew Napolitano, a libertarian, stated at 6:46 A.M. that he did not understand why "Donald Trump is in favor of this".
Shortly thereafter, Trump tweeted that he was not in favor the bill that his Administration supported. Donald falsely stated in his tweet that this act, which has the word "Foreign" in it, allowed the Obama administration to "so badly surveil and abuse the Trump campaign".
Paul Ryan and General Kelly had to explain to Trump that this provision in the law had nothing to do with domestic surveillance. John E. McLaughlin, a former CIA Director, stated that Trump does not understand the issue.
Senator Mark Warner of Virginia replied as follows: “This is irresponsible, untrue, and frankly it endangers our national security. FISA is something the President should have known about long before he turned on Fox this morning.” Trump is ignorant and will remain ignorant for as long as he is President.
+++++++
Republican Obstruction of the Russia Investigation:
By taking control, Trump is referring to ending the investigation.
Republican politicians, particularly Devin Nunes, are engaging in a number of acts to obstruct the investigation and to divert attention from it.
Schiff: GOP blocking key witnesses in effort to scuttle House Russia inquiry - CNN
What the GOP really wants to do is to sweep the Russia investigation into some rabbit hole and to cause the Justice Department to indict Hillary and other Clinton associates. That is clear from their actions and statements.
If Hillary had been elected, and she was without question a terrible candidate given her baggage, the GOP House would have already voted for articles of impeachment against her, and a trial would be ongoing now in the Senate that was doomed to fail.
++++++
1. REGIONAL BANK BASKET STRATEGY:
A. Added 100 Arrow Financial at $33.95:
QUOTE: Arrow Financial Corp. (AROW)
Arrow Financial Corporation > Home
Headquartered in Glen Falls, NY (due north of Albany)
Arrow Financial owns two operating banks: Locations for Glens Falls National Bank and Trust Company and Locations for Saratoga Bank and Trust Company
Arrow owns Capital Financial that manages group health and employee benefits. I would sell that business.
Arrow also owns the Upstate Agency Insurance. A number of small banks owns insurance agencies. The justification is probably to enhance touch and feel with small businesses and individuals.
Owned Properties as of 12/3/16:
There is only one analyst estimate. The current forecast is for an E.P.S. of $2.08 last year and $2.43 in 2018. I suspect that the 2018 estimate includes the beneficial impact flowing from the corporate tax rate reduction, but I do not know for sure. The P/E on the 2018 estimate is about 13.48.
Since this bank operates in NY, investors may be questioning now how much the new tax law will impact mortgage originations.
I last discussed Arrow in my 12/12/2017 Post. I was highlighting there how Arrow satisfied several, though not all, financial metrics and characteristics that I view as favorable for a long term investment in this sector.
As noted in that discussion, I own 52 shares in my Interactive Broker's account where my average cost per share is currently at $24.76. I originally bought a 50 share lot at $26.25. Update For Regional Bank Basket Strategy As Of 3/17/16-South Gent | Seeking Alpha Stock dividends paid thereafter reduced my cost basis to $24.76.
Arrow Financial Corporation Declares Stock Dividend (8/30/17 Press Release)
Arrow Financial Corporation Declares Stock Dividend (8/31/16 Press Release)
Arrow is buying back stock. Arrow Approves 2018 Stock Repurchase Program The 2018 authorization allows for the repurchase of up to $5M over a 12 month period. Under the prior repurchase program, the company bought back $2.1M in stock. As of 9/30/17, the total number of diluted shares outstanding was 13.966M. I would like to see Arrow use some of its tax savings to buy more shares than in 2017.
I have nothing substantive to add to my recent December 2017 post discussing this small bank. I discussed at length in that December post the last earnings report and other matters including Arrow's effective tax rates. Arrow Third-Quarter Net Income Up 10.1%; Double-Digit Loan Growth Continues; 10-Q for the Q/E 9/30/17; 10-Q for the Q/E 9/30/17
I would just note that trading is generally light and the bid/ask spread can be significant at times. Relatively small orders can jerk the price up or down 1+%.
Closing Price Last Friday: $34.65 +$.30 +.87%
Market Cap at $34.65= $478+M
2. Canadian Reset Equity Preferred Stocks:
A. Sold 100 CPXPRA:CA at C$16.92:
Quote: Capital Power Corp. Series 1 Preferred Stock (CPX.PR.A:TOR)
Profit Snapshot: +C$670
Item # 3 Bought 100 CPXPRA at C$10.2: Update For Exchange Traded Bonds And Preferred Stocks Basket Strategy As Of 4/14/16 - South Gent | Seeking Alpha
Issuer: Capital Power Corp. Stock Quote (Canada: Toronto)
Capital Power Corporation - Home
In December 2015, this security reset its coupon to a 2.17% spread to the then existing 5 year Canadian government bond. The reset rate was 3.06% and will reset again in December 2020 at the same spread to the then existing five year Canadian government bond unless redeemed at that time at the C$25 par value, as more fully explained in the previously linked post.
I classify the Canadian reset equity preferred stocks in my floating rate equity preferred stock category. Trade snapshots can be found in this post: Stocks, Bonds & Politics: Advantages and Disadvantages of Equity Preferred Floating Rate Securities That post is an old one and does not contain a discussion of the Canadian reset equity preferred stocks. The total realized gain in Canadian reset equity preferred stocks is currently at C$10,643.5 and US$23,395.99 overall in this niche category of floating rate equity preferred stocks.
I estimate the U.S.D. value of the CAD profits realized based on the current exchange rate, which is not the way the profit will be reported to the IRS. The broker will convert the purchase cost and the proceeds amount into USDs at the time of those trades. The difference between those two sums is my profit or loss for U.S. tax reporting purposes. I will not have that number until the brokers provide me with the 1099 for the applicable year.
3. Canadian REITs:
Eliminated Pure Industrial REIT by selling 100 AAR.UN:CA at C$8.08 and 100 PDTRF at US$6.48
Pure Industrial agreed to be acquired by Blackrock for C$8.1 in cash per unit: PURE INDUSTRIAL REAL ESTATE TRUST ENTERS INTO DEFINITIVE AGREEMENT TO BE ACQUIRED BY BLACKSTONE FOR $8.10 IN CASH PER UNIT IN A $3.8 BILLION TRANSACTION
Trades:
Closing Prices Day of Trade (1/9/17):
AAR-UN.TO C$8.09 +C$1.37 +20.39%: Pure Industrial REIT
PDTRF US$ 6.5019 +US$1.0975 +20.31%: Pure Industrial REIT
Profit Snapshots:
 |
| 2018 PDTRF 100 Units +US$112.99 |
 |
| 2018 PDTRF 100 Units +C$144 |
I received a pop on the day of this merger announcement in my 1000 unit position in Dream Industrial: DIR-UN.TO C$9.15 +C$0.27 +3.04%: DREAM INDUSTRIAL REIT
Dream Industrial REIT December 2017 Monthly Distribution (monthly at C$.05833 per unit or $.7 per unit annually).
I last discussed a purchase here: Item 2.A. Added 100 DIR.UN:CA at C$8.75 (11/30/17 Post)
Dream Industrial has a smaller market capitalization than Pure Industrial.
Dream's market cap is about C$828M at a C$9.15 price. Pure Industrial's market cap is about C$2.06B at C$8.08.
All of my Canadian REITs make monthly distributions. I include snapshots of my round-trip Canadian and Australian REIT trades in this post: Stocks, Bonds & Politics: Gateway Post: Equity REIT Common and Preferred Stock Basket Strategy
4. Intermediate Term Bond/CD Ladder Basket Strategy:
A. Sold 2 Valero 3.4% SU Bonds Maturing on 9/15/2026:
Profit Snapshot: +$4.38
FINRA Page: Bond Detail
Issuer: Valero Energy Corp. (VLO)
VLO Analyst Estimates
Valero Energy Reports Third Quarter 2017 Results
Credit Ratings:
Sold at 100.3
YTM Then at 3.359%
Current Yield at 3.39%
Bought at a Total Cost of 99.981
Stocks, Bonds & Politics: ITEM # 2.A.
YTM at TC Then at 3.402%
Current Yield at TC = 3.4%
I will consider buying back when and if the price falls below 96 with no material adverse change in the credit profile.
I have been reducing my intermediate bond allocation over the past several months.
5. Short Term Bond/CD Ladder Basket Strategy:
A. Bought 2 Wells Fargo 1.85% CDs (monthly interest payments) Maturing on 6/24/19 (18 month CDs):
B. Bought 2 First Virginia 1.55% CDs (monthly interest payments) Maturing on 7/27/18 (7 month CDs):
Holding Company: FVCBankcorp Inc. (FVCP)
C. Bought 1 Dow Chemical 2.25% SU Bond Maturing on 3/15/19:
Dow Chemical is now part of DowDuPont Inc..
However, DWDP does not guarantee the debt of Dow and DuPont, its two subsidiaries. Page 35 Note 12 10-Q for the Q/E 9/30/17
Finra Page: Bond Detail (prospectus linked)
Bought at a Total Cost of 99.950
YTM Then at TC = 2.289%
Current Yield at TC = 2.251%
D. Bought 2 CVS 2.25% SU Bonds Maturing on 8/12/2019:
Issuer: CVS Health Corp. (CVS)
CVS Analyst Estimates
CVS Health to Acquire Aetna
Credit Ratings:
FINRA Page: Bond Detail (prospectus linked)
Bought at a Total Cost of 99.982
YTM at TC Then at 2.26%
Current Yield at TC= 2.2504%
Paid 99.882 (YTM at 2.322%)
Issuer: CVS Health Corp. (CVS)
CVS Analyst Estimates
CVS Health to Acquire Aetna
Credit Ratings:
FINRA Page: Bond Detail (prospectus linked)
Bought at a Total Cost of 99.982
YTM at TC Then at 2.26%
Current Yield at TC= 2.2504%
Paid 99.882 (YTM at 2.322%)
E. Bought 2 National Rural Utilities Cooperative Finance 1.65% SU Bonds Maturing on 2/28/19:
Issuer: National Rural Utilities Cooperative Finance Corporation (CFC) - NRUCFC
10-Q For the Q/E 8/31/17
Annual Report for the F/Y ending 5/31/17
SEC Filings
"CFC’s principal purpose is to provide its members with financing to supplement the loan programs of the Rural Utilities Service (“RUS”) of the United States Department of Agriculture (“USDA”). CFC makes loans to its rural electric members so they can acquire, construct and operate electric distribution, generation, transmission and related facilities. CFC also provides its members with credit enhancements in the form of letters of credit and guarantees of debt obligations. As a cooperative, CFC is owned by and exclusively serves its membership, which consists of not-for-profit entities or subsidiaries or affiliates of not-for-profit entities. CFC is exempt from federal income taxes under Section 501(c)(4) of the Internal Revenue Code. owned by and exclusively serves its membership, which consists of not-for-profit entities or subsidiaries or affiliates of not-for-profit entities. CFC is exempt from federal income taxes under Section 501(c)(4) of the Internal Revenue Code."
History - America's Electric Cooperatives
Credit Ratings:
Fitch - CFC Rating Report Sept 2017
National Rural Utilities Cooperative Finance Corporation (CFC) - Ratings & Research
Finra Page: Bond Detail
Bought at a TC of 99.748
YTM Then at 1.871%
Current Yield at 1.654%
Paid 99.648 (YTM then at 1.96%)
F. Bought 2 Exxon 1.708% SU Bonds Maturing on 3/1/19:
FINRA Page: Bond Detail
Credit Ratings:
Issuer: Exxon Mobil Corp. (XOM)
XOM Analyst Estimates
ExxonMobil Earnings Rise 50 Percent to $4 Billion on Solid Business Performance
Bought at a Total Cost of 99.875
YTM Then at 1.812%
Current Yield at 1.71%
G. Bought 2 Disney 1.85% SU Bonds Maturing On 5/30/19:
Finra Page: Bond Detail
Issuer: Walt Disney Co. (DIS)
DIS Analyst Estimates
Credit Ratings:
Fitch Rates Disney's Senior Unsecured Note Offering 'A' ; Outlook Stable
Bought at a Total Cost of 99.855
YTM at TC Then at 1.951%
Current Yield 1.853%
This is what the order book looked like when I placed the trade. The best available offer price allowed for a 2 bond buy. The numbers in parenthesizes are the minimum lots permitted for orders.
H. Added 1 Nextera 1.649% SU Bond Maturing on 9/1/18:
This buy was in a Roth IRA account. I own 5 bonds altogether scattered in three accounts.
FINRA Page: Bond Detail
Issuer: NextEra Energy Inc. (NEE)
NEE Analyst Estimates
NextEra Energy, Inc. Third Quarter 2017 Earnings Release
Credit Ratings:
Fitch Rates Nextera Energy Capital Holdings' Debentures 'A-'; Outlook Stable
Bought at a Total Cost of 99.915
YTM at TC Then at 1.768%
Current Yield at 1.65%
I. Bought 1 Cadence Bank 1.5% CD Maturing on 5/29/18:
Holding Company: Cadence Bancorp (CADE)
CADE Analyst Estimates
Cadence Bancorporation Reports Third Quarter 2017 Results
This bank has a four star rating from Bankrate: Cadence Bank, N.A. Reviews and Ratings - Bankrate.com
J. Bought 1 Metabank 1.4% CD Maturing on 3/1/2018 (2 month CD):
This bank has a five star rating from Bankrate: MetaBank Bank Reviews and Ratings - Bankrate.com
Holding Company: Meta Financial Group Inc. (CASH)
CASH Analyst Estimates
Meta Financial Group, Inc.® Reports Results for 2017 Fiscal Fourth Quarter and Fiscal Year
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.
Issuer: National Rural Utilities Cooperative Finance Corporation (CFC) - NRUCFC
10-Q For the Q/E 8/31/17
Annual Report for the F/Y ending 5/31/17
SEC Filings
"CFC’s principal purpose is to provide its members with financing to supplement the loan programs of the Rural Utilities Service (“RUS”) of the United States Department of Agriculture (“USDA”). CFC makes loans to its rural electric members so they can acquire, construct and operate electric distribution, generation, transmission and related facilities. CFC also provides its members with credit enhancements in the form of letters of credit and guarantees of debt obligations. As a cooperative, CFC is owned by and exclusively serves its membership, which consists of not-for-profit entities or subsidiaries or affiliates of not-for-profit entities. CFC is exempt from federal income taxes under Section 501(c)(4) of the Internal Revenue Code. owned by and exclusively serves its membership, which consists of not-for-profit entities or subsidiaries or affiliates of not-for-profit entities. CFC is exempt from federal income taxes under Section 501(c)(4) of the Internal Revenue Code."
History - America's Electric Cooperatives
Credit Ratings:
Fitch - CFC Rating Report Sept 2017
National Rural Utilities Cooperative Finance Corporation (CFC) - Ratings & Research
Finra Page: Bond Detail
Bought at a TC of 99.748
YTM Then at 1.871%
Current Yield at 1.654%
Paid 99.648 (YTM then at 1.96%)
F. Bought 2 Exxon 1.708% SU Bonds Maturing on 3/1/19:
FINRA Page: Bond Detail
Credit Ratings:
Issuer: Exxon Mobil Corp. (XOM)
XOM Analyst Estimates
ExxonMobil Earnings Rise 50 Percent to $4 Billion on Solid Business Performance
Bought at a Total Cost of 99.875
YTM Then at 1.812%
Current Yield at 1.71%
G. Bought 2 Disney 1.85% SU Bonds Maturing On 5/30/19:
Issuer: Walt Disney Co. (DIS)
DIS Analyst Estimates
Credit Ratings:
Bought at a Total Cost of 99.855
YTM at TC Then at 1.951%
Current Yield 1.853%
This is what the order book looked like when I placed the trade. The best available offer price allowed for a 2 bond buy. The numbers in parenthesizes are the minimum lots permitted for orders.
H. Added 1 Nextera 1.649% SU Bond Maturing on 9/1/18:
This buy was in a Roth IRA account. I own 5 bonds altogether scattered in three accounts.
FINRA Page: Bond Detail
Issuer: NextEra Energy Inc. (NEE)
NEE Analyst Estimates
NextEra Energy, Inc. Third Quarter 2017 Earnings Release
Credit Ratings:
Fitch Rates Nextera Energy Capital Holdings' Debentures 'A-'; Outlook Stable
Bought at a Total Cost of 99.915
YTM at TC Then at 1.768%
Current Yield at 1.65%
I. Bought 1 Cadence Bank 1.5% CD Maturing on 5/29/18:
CADE Analyst Estimates
Cadence Bancorporation Reports Third Quarter 2017 Results
This bank has a four star rating from Bankrate: Cadence Bank, N.A. Reviews and Ratings - Bankrate.com
J. Bought 1 Metabank 1.4% CD Maturing on 3/1/2018 (2 month CD):
This bank has a five star rating from Bankrate: MetaBank Bank Reviews and Ratings - Bankrate.com
Holding Company: Meta Financial Group Inc. (CASH)
CASH Analyst Estimates
Meta Financial Group, Inc.® Reports Results for 2017 Fiscal Fourth Quarter and Fiscal Year
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.
The Washington Post and other news organization are now reporting that Senator Cotton and Senator Perdue told the White House that they heard the President refer to African and Central American nations as "shithouses" rather than "shitholes".
ReplyDelete"Three White House officials said Perdue and Cotton told the White House that they heard "shithouse" rather than "shithole," allowing them to deny the president's comments on television over the weekend. The two men initially said publicly that they could not recall what the president said."
In short, Senators Cotton (R-ARK) and Perdue (R-GA) were being dishonest and intentionally mislead the public and their constituents to shield and protect Trump.
Their denials and attack on Senator Durbin's credibility was based on hearing a racist remark that has no difference in meaning.
The Washington Post story has already been republished at MSN and is available to non-WP subscribers.
https://www.msn.com/en-us/news/politics/inside-the-tense-profane-white-house-meeting-on-immigration/ar-AAuKqeg?li=BBnb7Kz
Hello southgent
ReplyDeleteUnfortunately, I am a dividend growth investor in retirement who depends on dividends as part of passive income. So while the markets meteoric rise has been breathtaking, it only heightens my anxiety and frustration as to how to manage the situation.
Paper profits are wonderful, but unless that are monetized, they are just a number on a piece of paper.
I have been planning to use your Vix asset allocation model to lighten up in a large way if and when it occurs.
I have been selling some dividend stocks on the way up that I consider advanced beyond rational p/e related to future earnings and cash flow, ; ie, I am soon preparing to sell Boeing.
I do believe that inflation will rise.
My specific question relates to the Vix asset allocation model,( I know it may not happen again.)
I was first planning to use your Vix alert. Then a trigger event plus a 5% move below the 200 day moving average of the S&P.
But I had several questions.
1. I cannot find how many days the VIX needs to be over 26 to constitute a trigger event.
2. The VIX has reached its lowest level ever. I wonder if a VIX of eight changes your phase VIX one and two levels movement which will constitute an alert.
So far there has been no movement up into the 15 to 20 range at all. While I am selling selected stocks, I'm still heavily invested.
3. Does the fact that the VIX complex hitting a new low change your 26 level empirically because you have seen that in the past looking at 2000 and 2008.
I know that 1987 did not have a formal VIX
Thanks in advance for your answer
SAM
Sam: While the VIX data goes back to 1990, there was volatility data on the S & P 100, a slightly less volatile index than the S & P 500.
DeleteChart for the CBOE S&P 100 Volatility Index: VXO
https://fred.stlouisfed.org/series/VXOCLS
(move left cursor all the way to the left to pick up data from 1986-1987)
There was a Trigger Event ("TE") prior to the 1987 crash. After the TE, the VWO returned to movement below 20 which provided an opportunity to lighten up before the crash at better prices than those prevailing during the TE. Similarly, in August 2007, there was a TE. The VIX thereafter returned to a short period of below 20 movement which ended in October. In that previous bull cycle, the high water mark for the S & P 500 was hit in early October 2007. Over the next few months, there were two Confirmation Events of the TE's signal.
I require at least five days of above 26 to declare a TE. When using just 5 to 7 days, I would want some of those days to be over 30. I would want more days to have confidence in the signal.
The August 2015 TE was declared after the following readings:
Aug 31, 2015 28.43
Aug 28, 2015 26.05
Aug 27, 2015 26.10
Aug 26, 2015 30.32
Aug 25, 2015 36.02
Aug 24, 2015 40.74
Aug 21, 2015 28.03
https://seekingalpha.com/instablog/434935-south-gent/4308586-trigger-event-vix-asset-allocation-model-8-31-15
Most of the time, there would be no question about it. There would be a long period of movement above 26 with several readings over 30.
The TE ushers in an Unstable VIX Pattern, a more dangerous market for individual investors, that will be marked generally by a lot of up and down chop going nowhere, possibly for an extended period of time measured in years.
What I would recommend doing is reviewing the following post on the subject and then ask me some questions that need clarification.
https://seekingalpha.com/instablog/434935-south-gent/4308586-trigger-event-vix-asset-allocation-model-8-31-15
Data about prior TEs is contained in that post.
The last TE was in August 2015, which was resolved with the formal of the Stable VIX Pattern, within one year which was an unusually short period for the Unstable VIX Pattern.
I later wrote a post published at SA that explore why that UVP was so short.
https://seekingalpha.com/instablog/434935-south-gent/4898841-update-portfolio-positioning-management-7-24-16
MERCK:
ReplyDelete$63.52 +$4.86 (+8.29%)
As of 10:36AM EST
Merck's Keytruda extends lung cancer survival in combination trial:
https://www.reuters.com/article/us-merck-co-study/mercks-keytruda-extends-lung-cancer-survival-in-combination-trial-idUSKBN1F51D8
http://investors.merck.com/news/press-release-details/2018/Mercks-KEYTRUDAR-pembrolizumab-Significantly-Improved-Overall-Survival-and-Progression-Free-Survival-as-First-Line-Treatment-in-Combination-with-Pemetrexed-and-Platinum-Chemotherapy-for-Patients-with-Metastatic-Nonsquamous-Non-Small-Cell-Lung-Cancer-/default.aspx
Last Discussed by me here:
2. Small Ball:
A. Bought 10 MRK shares at $54.29-Used Commission Free Trade:
https://tennesseeindependent.blogspot.com/2017/12/observations-and-sample-of-recent_7.html
Societe Generale downgraded Roche today to sell. I own a few shares of that one too. SC's price target for the ordinary shares priced in Swiss Francs was slashed to CHF 190 from CHF 250.
I own the ADR RHHBY.
1 ADR = 0.125 Ordinary
http://www.otcmarkets.com/stock/RHHBY/quote
The shares closed today in Switzerland at CHF 235.45:
https://www.marketwatch.com/investing/stock/rog?countrycode=ch
Roche's drug Tencentriq, when used in combination with other cancer drugs, doubled the number of lung cancer patients who survived more than one year without their disease advancing.
https://www.roche.com/media/store/releases/med-cor-2017-12-07.htm
VIX: CBOE Volatility Index
ReplyDelete11.26 +1.10 +10.83%
Last Updated: Jan 16, 2018 at 10:55 a.m. CST
S&P 500 Index
2,794.21 + 7.97 +0.29%
Last Updated: Jan 16, 2018 at 11:11 p.m. CST
Normally, the VIX movement is negatively correlated with the S & P 500 movement. VIX UP-SPX Down.
By normal, I am referring to around 70% to 75% of the time. There are periods of positive correlation which is what is happening so far today.
A number of those positive correlation days occur when there is an insignificant movement in both.
Today is more of an aberration with the VIX up currently almost 11% with the S & P moving up as well. On more significant moves up or down, the VIX percentage movement will generally far exceed the percentage movement in the SPX.
I would not draw any conclusions about today's movements. If I started to see the VIX move higher with SPX gaining as well, piling up a series of high VIX gains with modest increases in SPX, then I will start to worry.
Eventually, I would classify significant and persistent positive correlation as the VIX failing to confirm the upward move in stocks.
Looking at the 1999 VIX data, there was a massive Non-Confirmation Event. It is easy to arrive at that conclusion since there was a prolonged over 20 movement in the VIX with the market jaunting ever higher. The market was also in an Unstable VIX Pattern which flashes at a minimum a bright yellow caution light. Some of the readings from that year were over 25 and only a few days had closes below 20.
Today's action will probably trigger another $1K pare of my Vanguard Equity Income Fund-Admiral Class (VEIRX)
https://finance.yahoo.com/quote/VEIRX?p=VEIRX
My current balance as of last Friday's close was over $51.2K and will be higher than that number without the pare after today's close unless the market ends up down which does not appear likely at the moment. I am taking all dividend distributions in cash. The last $1K pare occurred shortly before the quarterly ex dividend date last December.
Item # 5
https://tennesseeindependent.blogspot.com/2017/12/observations-and-sample-of-recent_14.html
The abnormal positive correlation between the VIX and the SPX was resolved in afternoon trading with SPX losing its entire gain and ending down .35%. The VIX rose 1.5 or 14.76% to close at 11.66.
DeleteThe decline in the market and the trashing of the cryptocurrency brought some relief to the Bond Ghouls. Quality bonds rose slightly in price after being down most of the day.
iShares 7-10 Year Treasury Bond ETF
$104.62 +$0.05 0.05%
https://www.marketwatch.com/investing/fund/ief
Bitcoin was trashed:
Bitcoin USD
$10,370 -$3,549 -25.50%
Last Updated: Jan 16, 2018 at 4:38 p.m. EST
https://www.marketwatch.com/investing/cryptocurrency/btcusd
Gold rose some and the USD gave up early gains as measured by the DXY:
https://www.marketwatch.com/investing/future/gold
https://www.marketwatch.com/investing/index/dxy
Of this fits together IMO. The outlier during the day was the VIX up 10+% with SPX up .4% but that was resolved before the close.
Several REITs have fallen enough in price that I am starting to buy a few in small lots.
VNQ spent most of the day sliding from its positive opening and finished up only .19% at $78.76.
https://www.marketwatch.com/investing/fund/vnq
This REIT index ETF has been in a free fall since closing at $85.64 on 12/18/17.
Looking at a two year chart, there was a more significant decline last year, starting on 8/1/16 when the ETF closed at $92.45 and then preceded to decline before bottoming out near $78 in November.
https://www.marketwatch.com/investing/fund/vnq/charts
A lot will depend on whether the expected bear market emerges in bond land. The key for REITs is the actual and predicted/feared rise in intermediate term rates.
While the bond market is giving up some bearish vibes, the ten year has once again failed to penetrate the 2.6%-2.63% prior top levels yet and has turned back some after hitting the lower band of that range.
https://www.marketwatch.com/investing/bond/tmubmusd10y/charts?countrycode=bx
If I had to call the bond market as being in a bear cycle, then I would say a Koala Bear market. The high quality bonds may catch a bid with a flight to quality, possibly caused by a cryptocurrency crash, a meaningful scare in the stock market, and/or even a government shutdown proving once again that the U.S. government is severely dysfunctional.
The Democrats and sane Senate Republicans will try to bring a bipartisan immigration bill up for a test vote on Thursday provided the Majority Leader allows them to have a vote. The general idea is to find maybe 11 or more GOP senators and all Democrats willing to vote yes.
Nestlé S.A. ADR (NSRGY)
ReplyDelete$85.73 +$0.63 (+0.74%)
As of 12:46PM EST.
https://finance.yahoo.com/quote/NSRGY?p=NSRGY
Nutella Maker Pays $2.8 Billion for Nestle U.S. Chocolate Unit:
https://www.bloomberg.com/news/articles/2018-01-16/nutella-maker-pays-2-8-billion-for-nestle-u-s-chocolate-unit
That business includes the Butterfinger and Baby Ruth brands. Butterfingers are viewed as health food here at HQ, a unique and not widely shared opinion.
I currently own 50 shares of Nestle's ADR NSRGY.
My average cost per share is $67.86. My last transaction was to sell my highest cost 50 share lot.
Like many European companies, Nestle pays an annual dividend which go ex distribution in the Spring. The ADR last went ex dividend on 4/7/17. Switzerland withholds 15% as required by that nation's tax treaty with the U.S. but the investor's broker has to assert that treaty right. Otherwise, the rate will be 30% as I recall. Fidelity asserts my treaty rate to no more than a 15% withholding.
The dividend will be paid in Swiss Francs that will then be converted into USDs through the auspices of the ADR custodian. The dollar amount received will consequently depend on the exchange rate:
Swiss Franc/ US Dollar
https://www.marketwatch.com/investing/currency/chfusd
My lowest purchase price since the Near Depression was at $31.28 in March 2009. I later sold those shares.
Omega Healthcare (OHI):
ReplyDelete$26.64 +$0.53 +2.03%
Last Updated: Jan 17, 2018 at 11:15 a.m. EST
OHI is getting a lift today after raising its quarterly dividend by 1 cent per share.
https://www.businesswire.com/news/home/20180116006820/en/
There are at least two ways to look at this raise which is the 22nd consecutive quarterly dividend raise.
The bulls will say that this indicates management's confidence that OHI's tenant problems will be worked out without too much of a dent to AFFO and FAD.
The bears will counter that the action is irresponsible or at a minimum lacks prudence given the tenant problems, the lower FAD payout ratio, and potential risks involving government reimbursements.
Corus Entertainment Inc. (CJREF)
ReplyDelete$6.61-0.1851 (-2.72%)
As of 12:24PM EST.
Day's Range 6.60 - 6.80
52 Week Range 6.60 - 11.38
This is the USD priced ordinary shares traded on the U.S. pink sheet exchange. The bid/ask price is typically narrow.
The ordinary shares are traded in Toronto:
C$ 8.19 -$0.28 (-3.31%)
Day's Range 8.18 - 8.44
52 Week Range 8.18 - 14.10
As of 12:47PM EST
https://www.marketwatch.com/investing/stock/cjr.b?countrycode=ca
I bought 50 CJREF shares in a Roth IRA account this morning at $6.61. I will infrequently buy shares of both the U.S.D. and CAD price shares.
I last sold CJREF on 1/4/17 at US$9.82.
I last sold the CAD priced shares at C$13.19:
2. SOLD 100 CJR.B at C$13.19:
https://seekingalpha.com/instablog/434935-south-gent/4892411-update-portfolio-positioning-management-6-26-16
This is a risky and currently high yielding stock. I view it as generally inappropriate for my IRA account so I dealt with that issue by limiting my exposure to below inconsequential. This is a "C" corporation so I should avoid the withholding tax when held in a Roth IRA.
The company is currently paying a monthly dividend of C$.095 per share or C$1.14 annually. Using the CAD price quote above, that results in about a 13.92% yield.
https://www.prnewswire.com/news-releases/corus-entertainment-declares-monthly-dividend-for-class-a-and-class-b-shareholders-668574803.html
The market was disappointed in the last quarterly report released a few days ago, particularly the decline in TV advertising revenue which is of course a problem.
https://www.prnewswire.com/news-releases/corus-entertainment-announces-fiscal-2018-first-quarter-results-668574763.html
The question is whether the market and analysts have overreacted to this news. I suspect that the answer is yes but that is just an opinion.
https://seekingalpha.com/news/3322407-corus-sees-downgrades-disappointing-q1-earnings
SA Article on Earnings:
https://seekingalpha.com/article/4136897-corus-faceplants-sit-sidelines
I would note that TV ad revenue did increase in the prior quarter.
https://www.prnewswire.com/news-releases/corus-entertainment-announces-fiscal-2017-fourth-quarter-and-year-end-results-651409793.html
Personally, I would sell the radio stations and use the funds to reduce debt.
F/Y ending 8/31/17
TV Revenues: C1.015+B
Radio Revenues: C$155.7+M
Website:
http://www.corusent.com/
Today had the feel of a melt up.
ReplyDeleteDow Jones Industrial Average
26,115.65 +322.79 +1.25%
What I find interesting is that a DJIA gain of 322+ points amounts to +1.25%. Today's gain would be 32.2% when the index was at 1000 which I remember very well. The equivalent move at DJIA 1000 would be 1.25 points.
Back in the age of dinosaurs, and the OG is sort of one, I recall when it was a really big deal that the DJIA crossed over 1000. That index had a lot of trouble with that round number as shown in this long term chart:
http://stockcharts.com/freecharts/historical/marketindexes.html
Near the end of 1965, the DJIA bumped up against that level and had a lot of chop that ended up going nowhere for about 16 years.
That link has a long term SPX chart as well. The comparable number was 100 during that same period in the S & P 500.
When I was born, the S & P 500 had just started a 16 year secular bull market and was somewhere around 20. No I did not forget to add a zero. I mean 20.
I regrettably had no money to invest then even though I may have been able to pass the cognition test given to Donald when that bull was in its infancy.
I did inform my parents in baby babble to buy the S & P 500, even screamed my instructions, but to no avail.
I have money now, plenty of it, but I have become a squirrel preparing for the winter.
I could not help myself. I pared some positions near the close and sold some shares in a Vanguard stock mutual fund.
My two big forays was to buy 10 shares of SBRA at $17.9 and 50 shares of CJREF at $6.61 as noted above. The net reduction in my stock allocation was about $3K.
The Old Geezer is scared of nursing home REITs, and not because I have seen the insides of a few and am aware of the monthly cost for private rooms, both of which can scare just about anyone and are sobering pieces of information.
I may muster the courage the buy more of Sabra at lower prices, though I am no mood to throw caution to the wind. I am talking about more 10 share lots here.
Sabra Healthcare REIT Inc.
DAY RANGE
17.77 - 18.15
52 WEEK RANGE
17.77 - 29.10
YIELD 11.60%
https://www.marketwatch.com/investing/stock/sbra
I have published a new post:
ReplyDeletehttps://tennesseeindependent.blogspot.com/2018/01/observation-and-sample-of-recent-trades.html
Just want to say that I appreciate your posts. It truly is independent. As a Seeking Alpha writer/reader (that's how I came across your profile) I also appreciate your writings on less covered financial instruments. Even as an experienced investor, I'm learning a lot reading your posts. Thanks!
ReplyDeleteSomehow came across your post I do like the Canadian content such a refreshing change from the usual product push, enjoyed it while having a cup of tea in the cold Canadian north
ReplyDelete