Monday, February 26, 2018

Observations and Sample of Recent Trades: AGNC, NSRGY, PFLT, TDIV, TPVG

Economy:

Markit released on 2/21 its "flash" February U.S. PMI numbers for both services and manufacturing. The composite index was reported at 55.9, a new 27 month high. The services business activity index rose to 55.9 from 53.3 in January. The manufacturing PMI hit a 40 month high: Markit Economics

There was a slight pullback, however, in Markit numbers for the Eurozone: Markit Economics Eurozone composite index fell to 57.8 from 58.8 in January. 

Euro Inflation:


These inflation numbers, with an average of 1.6%, may be insufficient for the ECB to discontinue its extremely abnormal monetary policies, though it could decrease further its monthly asset purchases to avoid eventually running out of bonds to buy.   

Only 13% of business' tax cuts are going to workers, Morgan Stanley survey says - Feb. 9, 2018Well-Heeled Investors Reap the Republican Tax Cut Bonanza - The New York Times (43% to stock buybacks and dividends for investors; 19% to help pay for mergers; 17% for capital investment and 13% to wage increases and bonuses)


Companies buying back stock at record pace since Trump tax bill may aid market's comeback: CNBC


+++++++++

Markets and Market Commentary:

The stock market regained its footing and moved higher last Thursday and Friday after interest rates started to decline from the peaks hit on Wednesday. 


10 Year Treasury: 


2/23  2.88%

2/22  2.94%
2/21  2.92%   (FED Minutes Released)
2/20 2.88%

2017 Daily Treasury Yield Curve Rates


S & P 500: 


2/23  2,747.30

2/22  2,703.96
2/21  2,701.33 (FED Minutes Released)
2/20 2,716.26

Historical Data 


Fed on track for 3 rate hikes in 2018, but 4? No sign in report to Congress - MarketWatch


Nothing really happened last week to cause those gyrations. The uptrend in interest rates is still the dominant trend.  


The FED is still on track to raise the FF rate by .75% this year which will push up intermediate term yields. 


The inflationary and deflationary forces are still exercising their push and pull with inflationary forces finally becoming ever so gradually more powerful than the deflationary ones. Consumer Price Index Summary for January (all items +2.1% Y-O-Y with core up 1.8%); Underlying Inflation Gauge (UIG) - FEDERAL RESERVE BANK of NEW YORK= 3%



Ed Yardeni: I think inflation is dead: CNBC Video Interview (noting that he may be buried with that forecast)

Buffett has one big investing lesson in this year's annual letter: Do Not Borrow Money to Buy Stocks (I never have and only have cash brokerage accounts) 


Buffett's Last Letter To Shareholders. PDF (see page 10 on borrowing money to buy stocks)


Morgan Stanley Takes on Goldman, Buffett With Bullish Bond Call - Bloomberg


The 10 year treasury yield is down slightly in early trading this morning: U.S. 10 Year Treasury Note (2.85% as of 8:00 A.M. E.S.T. vs. 2.88% last Friday)


+++


Portfolio Management


Buffett Warns Investors That Safe-Looking Bonds Can Be Risky - Bloomberg 


I would agree with that statement when referring to most households. 


Investing in "safe" and low yielding investments, which are not likely to produce much, if any, real rates of return is just not going to result in a good outcome for most households.  


One of the biggest risks that most U.S. households face is whether their investments will grow sufficiently to meet their financial needs, particularly in retirement. 


I am primarily referring to both the total asset value and a realistic estimate of the money necessary to meet those financial objectives. 


Given the total investable assets which is a hard number and a realistic and informed estimate of future expenses, then the amount of growth and income necessary to meet or preferably beat the expense estimate will guide the investment decisions and asset allocations. 


Given my age, lack of any debt, frugal nature and financial resources, the assessment of those factors leads me to a defensive investment posture that focuses primarily on capital preservation and secondarily income generation. Return of my money is more important than the return on my money. 


Each individual has to make these assessments at each stage throughout their lives. An intelligent and informed assessment will in part dictate the risks that are either necessary or unnecessary to take.  


At the moment, I can buy bonds and CDs maturing in 10-12 months to secure a yield equal to the current 2% inflation rate or roughly a zero per cent real yield using the Bureau of Labor Statistics ("BLS") current annual inflation rate. A positive real yield after taxes would require buying bonds in the 2 to 2 1/2 year range. 


However, my inflation rate is lower than the headline or core numbers published by the BLS, since a number of the hot components do not apply to me. 


I believe it is important to have a handle on a person's individual inflation rate to know what is necessary to generate a positive real rate of return.  


My personal inflation rate is less than 1% Y-O-Y. So a 2% CD maturing in one year provides me at least a 1% real rate of return, which moves higher as the yields go up which I expect will happen throughout 2018. 


I have Medicare and own my own home, built in 1982, free and clear. "Owners equivalent rent" is consequently not a concept that applies to me. 


Medicare and Medigap premiums reduced my health insurance costs about $600 a month when I first became eligible compared to what I was paying for the Bronze Obamacare plan with a huge deductible.  


Since I have been on Medicare for more than a year, the lower premiums are no longer contributing to a substantial decline in expenses Y-O-Y, but a small Y-O-Y increase increase. On a 5 year basis, the savings in health insurance premiums would subsume all other increases in monthly expenses which would be a zero personal inflation rate. 


To pick up slightly more yield, I have started to buy back some intermediate term bonds that were sold last year. My purchase prices are below what I originally paid for those sold bonds. I am managing interest rate risk in part by trading intermediate term bonds. 


I am continuing to use some cash flow to increase my portfolio income through the purchase of disfavored high yielding securities in small lots using commission free trades. 


I am using what I call a "shotgun sprinkle" approach, defined as being a series of small purchases over time, averaging down only with additional purchases and spreading the purchases among a number of stocks within a disfavored sector. This creates a tiny fund in each disfavored sector where I am less dependent on individual stock performance and more focused on the overall total return of the basket.   


The disfavored sectors for me include MREITs, BDCs, and out-of-favor equity REITs. 


An additional criteria is usually that the stock is already at least 20% off its most recent 52 week high and at least has some investable features beyond the dividend yield. 


One of those features is a discount to net asset value per share for BDCs and MREITs. 


Another is no earnings debacle causing the recent decline in price which is more likely than not IMO related to institutional investors selling their positions throughout the sector and/or to market dynamics rather than individual company fundamentals.       


+++++++


Trump:

The Democrat's rebuttal memo was finally released after several redactions were made by Trump's Justice Department: Correcting The Record on the Russian Investigation


There is enough left after the redactions to prove IMO that Nunes and his republican colleagues were engaged in nothing more or less than a political stunt. The following is a sample of the redactions:





Note the statements that applications to renew the Page wiretap were supported by "multiple independent sources" and was justified by the "valuable intelligence" gathered in the previous wiretaps, though the specific corroborating information was blacked out by Trump's Justice Department.

Democrats’ Memo Released Countering GOP Account of Russia Probe - Bloomberg


Democrats' memo charges Republicans trying to undermine Russia probes: Reuters


What we learned from the Democratic response to the Nunes memo — and what we didn’t


5 Takeaways From the Release of the Democratic Memo - The New York Times (1) there was only a "narrow use" of the Steele memo; (2) the FISA court was informed that Steele had a political motive; (3) the Yahoo news article was not used to corroborate Steele; (4) only republican appointed judges approved of the FISA warrants;  and (5) the wiretaps of Carter Page revealed useful information). 


I would add to the NYT's list the following: (6) the FBI was interested in Page and his Russian contacts for several years prior to Steele being hired to investigate Trump and relied on that prior history to support the first FISA warrant application; (7) the Russia investigation started based on information supplied by a foreign intelligence service and was underway prior to the Page wiretap application; (8) contrary to the republican's assertion, the FBI never paid Steele and did inform the FISA court that Steele was terminated as a source due to his unauthorized media disclosure; and (8) the first FISA warrant was at least 56 pages long since the Democrats' memo referenced that page which proves that there was a lot of information contained therein other than the limited information about Page found in the Steele memo. 


Devin Nunes claimed that the Democrat's memo proved that the Justice Department, FBI and the Democrats were conspiring against Trump. This was his analysis in his own words: The Democrats' memo is “clear evidence that the Democrats are not only trying to cover this up, but they’re also colluding with parts of the government to help cover this up.” The GOP loves their conspiracy theories. 


Possibly, Nunes tried that incredibly bizarre reality creation out first on his dog, who dutifully barked when he was talking, which convinced him that the argument would work with the True Believers. Just about any reality creation, no matter how absurd or clearly false, will work, so there is no reason to do the dog barking test. 


+++


Special counsel Mueller files new charges in Manafort, Gates case

Read: Mueller’s new indictment of Paul Manafort and Rick Gates-Vox

That is one detailed indictment.  


Gates did what he had to do: Mueller probe: Manafort hit with new charges after Gates pleads guilty - NBC NewsWhat Rick Gates’ plea deal means for the Russia probe | PBS NewsHour


The charges filed against Gates and Manafort so far do not relate to the Russia investigation. 


If Manafort does not work out a deal with Mueller, and is convicted, he will be serving a lot of time in the slammer. I do not see the wisdom of taking that chance, and to expend a fortune in legal fees and other expenses to mount a defense that will most likely fail and appeal if convicted, unless Manafort has nothing much to offer Mueller against other currently unindicted co-conspirators. 


Personally, I would not believe Manafort's testimony, unless  it is supported by properly authenticated documents and possibly even tape recordings. Trump is IMO far less trustworthy than Manafort and will forever occupy the lowest possible rung possible in my credibility scale that is reserved for a few persons in history who are incapable of being honest about anything.  


++++


Trump compares immigrants to venomous snakes:


Trump snake story: the anti-immigrant fable in his CPAC speech - Vox


The rest of the world's press picked up that Trump comparison, even though U.S. coverage was negligible. 


E.G. Donald Trump reads sinister snake poem AGAIN comparing immigrants to treacherous reptiles | London Evening Standard


World's Approval of U.S. Leadership Drops to New Low

US slumps in global poll after Trump's 1st year - CNN


Trump Unpopular Worldwide, American Image Suffers | Pew Research Center


Confidence in the U.S. President (No confidence) (All) - Indicators Database | Pew Research Center


Yet another Trump Reality Creation: “the world is starting to respect the United States of America again.” World Opinion of Trump and U.S. - FactCheck.org


After testy call with Trump over border wall, Mexican president shelves plan to visit White House - The Washington Post ("both countries agreed to call off the plan after Trump would not agree to publicly affirm Mexico’s position that it would not fund construction of a border wall that the Mexican people widely consider offensive")


Trump Has Abdicated as Leader of the Free World written by Hans Brands 


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

Republicans and the Pennsylvania Supreme Court


Gerrymandering by both political tribes is inherently designed to undermine Democracy and is fundamentally anti-democratic.  


The republicans in Pennsylvania are most unhappy that the PA Supreme Court found their gerrymandering scheme "clearly, plainly and palpably" violated the Pennsylvania Constitution. 


Pa. Supreme Court rules congressional map unconstitutional in gerrymander case, orders change before May primary - Philly (The PA map was one of the most skewed. "Republicans have consistently won the same 13 of 18 House seats since it was drawn in 2011, even as votes cast in the state were evenly split between the parties.") 


This is a map of the old 7th Congressional District which was named Goofy Kicking Donald Duck in the butt: 




This district sliced and diced pieces of 5 counties and 26 municipalities to create a GOP district currently occupied by Pat Meehan


The purpose of this particular abomination was to pick up pockets of republican voters wherever they could be found and to exclude as many Democrats as possible. 


The map was drawn with software that could identify voter preferences block by block. 


In this particular map, a line is drawn through a schoolyard, bi-sects a cu-de-sac, heads north and then abruptly south in order to avoid Democrat voters in Coatesville. Congressman Meehan Combating Harassment Settled His Own Misconduct Case - The New York Times  


New 7th Congressional District: 





In other words, the GOP has and wants to continue their efforts to undermine Democracy and the election process in order to make it easier for republicans to win elections. 


They are not pleased that the 2018 election might actually be a fair one.


Their objection perversely claims that the Court is interfering with Democracy when it is their effort to subvert and undermine Democracy that was found unconstitutional. 


That Court gave the republicans a chance to redraw the map, but the result was more of the same. The Court then redrew the districts. New Pennsylvania map gives Democrats big boost in midterms - POLITICOPennsylvania's high court issues a new congressional district map - NBC News


Several republican politicians now wan to impeach the judges for their decision. Pennsylvania Republicans lost the redistricting battle. Now, they’re declaring war on the courts. - The Washington Post 


Republican representatives who are now at risk of losing their reelection bids are leading the charge for impeachment. 


Republican congressman Ryan Costello, who represents Pennsylvania's 6th congressional district, is now in danger of losing his reelection bid and called for impeachment. Rep. Costello calls for impeachment of Pa. justices for approving ‘corrupt’ map Senator Pat Toomay argued that the impeachment discussion now needs to be held.  



Since the PA Supreme Court relied on the state's Constitution rather than the U.S. Constitution, the U.S. Supreme Court will probably not intervene. 

The GOP will argue that the Pennsylvania Supreme Court violated the Election Clause of the U.S. Constitutions by redrawing the GOP's gerrymandered districts. That would require an expansive interpretation of that Clause which the current Supreme Court, now with a majority appointed by republicans, may do when it suits their political purposes as in their decision in Bush v. Gore, 531 U.S. 98 (2000)A Supremely Bad Decision: The Majority Ruling in Bush v. GoreJustice O’Connor Regrets | The New Yorker


Elections Clause:  Article I Section 4 U.S. Constitution





“We find no suggestion in the [Elections Clause] of an attempt to endow the legislature of the state with power to enact laws in any manner other than that in which the constitution of the state had provided that laws shall be enacted.” Smiley v. Holm, 285 US 355 Supreme Court 1932  

In other words, the Pennsylvania's State Legislature is required to obey the PA State Constitution when drawing election districts. 

Several reactionary Supreme Court Justices, mistakingly called "conservatives" by the mainstream media, will flush strict constructionism and prior precedents down the judicial toilet when an expansive interpretation is needed to reach the correct ideological result. The Citizens United decision is one example. Judicial activism based on ideology is omnipresent on both sides.  


+++++++

NRA Finally Comments on the Florida Shooting:


Notwithstanding Trump's rhetoric about background checks after the Florida shooting, he and other republicans in Congress are not going to pass legislation opposed by the NRA. The NRA’s new talking point about background checks is bullshitThe NRA Is Taking Credit For the Background Check System It Tried to SinkWhat Happened to the $1.3 Billion Congress Approved to Improve Federal Gun Background Checks? 


It is at least conceivable that Florida republicans will take one or more small measures applicable to their state. (e.g. increase the age from 18 to 21 for purchases of AR-15s and similar weapons). I would be surprised if they do anything other than wait and then do nothing. 


The NRA fought forcing the states to conduct any background checks in the courts and won their case in a 5-4 Supreme Court decision: Printz v. United States, 521 U.S. 898 (1997)(NRA filed an amicus brief arguing for the abolition of mandatory background checks) 


The NRA is invariably engaged in Fake News designed to mislead the public.


Trump's Budget Cuts Millions Of Dollars From Gun Background Check System


President Trump says he wants to improve background checks, but budget calls for cuts- ABC News


The NRA spokeswoman Dana Loesch said that many in the "legacy" media "loves mass shootings". She did manage to graduate from high school. 


Wayne LaPierre: ‘They hate the NRA, they hate the Second Amendment, they hate individual freedom’-MarketWatch LaPierre also launched into a tirade attacking the press, Democrats and the FBI. 


Just  more disgusting statements from Mr. LaPierre. Trump makes the same argument. The Democrats want to take away all of the guns  and are against individual freedoms which is of course hyperbole and deliberately assigns to the opposition an argument that is not being made by them in order to manipulate the weak minded. 


NRA lashes out at boycott movement as United, Delta and other corporations cut ties (let them spew their venom, so what)


Days After Parkland, It’s Business as Usual at a Florida Gun Show - Bloomberg


The True Source of the N.R.A.’s Clout: Mobilization, Not Donations (and the counter is for others to mobilize to smother at the voting booth that mobilization)


National Rifle Association Donations: All Recipients | OpenSecrets (all are GOP tribe members-no Democrats)


Barbara Comstock, a vulnerable republican congresswoman from Virginia's 10th congressional district, is #2 on that list. I doubt that NRA money will save her in the November 2018 election. Hillary carried that district with 52.2% of the vote. I would be surprised to see Comstock win reelection.  

Gun Rights vs Gun Control • OpenSecrets


The real reason Congress banned assault weapons in 1994 — and why it worked - The Washington Post ("But the 1994 assault weapons ban was never intended to be a comprehensive fix for “gun violence” writ large. Its purpose, according to gun violence experts and the lawmakers who wrote the bill, was to reduce the frequency and lethality of mass shootings like the ones in Parkland, Sandy Hook and elsewhere. And on that front, the data shows it had a significant impact.")  


Rampage Nation: Securing America from Mass Shootings: Louis Klarevas, Christopher Price-Amazon.com: Books


Then there is this kind of problem: Sheriff: Armed officer at school never entered building during shooting The officer resigned after being put on unpaid leave. There were multiple failures by governmental agencies and individuals to be sure. But the first act in that chain of events was the easy purchase of an assault weapon by a mentally disturbed young man. 


++++

1. Small Ball: BDCs and MREITs:

Both BDCs and MREITs are classified by me as disfavored income generating securities. For any such classified security, I am in a trading mode hoping to harvest a few dividends and then selling the security for whatever profit may be had. 


A. Bought 30 PFLT at $12.55:




Quote: PennantPark Floating Rate Capital Ltd.  (PFLT)

Website: PennantPark – PFLT

PFLT is an externally managed BDC that invests mostly in floating rate debt. The reference to PSSL in the following quote refers to PennantPark Senior Secured Loan Fund I LLC, or PSSL, an unconsolidated joint venture:


"As of December 31, 2017, our portfolio totaled $739.4 million and consisted of $619.3 million of first lien secured debt, $39.9 million of second lien secured debt, $45.4 million of subordinated debt (of which $42.7 million was invested in PSSL) and $34.8 million of preferred and common equity (of which $19.1 million was invested in PSSL). Our debt portfolio consisted of 99% variable-rate investments (including 4% where London Interbank Offered Rate, or LIBOR, was below the floor) and 1% fixed-rate investments. As of December 31, 2017, we had one company on non-accrual, representing 0.4% and 0.2% of our overall portfolio on a cost and fair value basis, respectively. Overall, the portfolio had net unrealized appreciation of $5.6 million. Our overall portfolio consisted of 84 companies with an average investment size of $8.8 million, had a weighted average yield on debt investments of 8.3%, and was invested 84% in first lien secured debt, 5% in second lien secured debt, 6% in subordinated debt (of which 6% was invested in PSSL) and 5% in preferred and common equity (of which 3% was invested in PSSL). As of December 31, 2017, all of the investments held in PSSL were first lien secured debt." (emphasis added)


Of the investments with Libor floors, only 4% were below the Libor floor. Loans with Libor floors require the Libor rate to go above the floor amount before the coupon is increased to a higher rate.  


A list of loans can be found starting at page 8 in the 10-Q SEC filing for the Q/E 12/31/17.


Last Earnings Report: This report released after the market closed on 2/8/18, caused the stock to slide. The shares closed that day at $12.98 and at $12.10 on 2/9/18. "Core net investment income" was below expectations at $.25 per share. The current monthly dividend amounts to $.285 per quarter. 




PennantPark Floating Rate Capital Ltd. Announces Financial Results for the Quarter Ended December 31, 2017


There were, however, some extraordinary expenses in the quarter relating to a renegotiation of PFLT's credit facility; and the issuance of a 2023 senior unsecured exchange traded bond. 


The 2023 SU bond has a 3.83% coupon and $138.6M in principal amount outstanding. This was a private placement made in Israel. SEC Filed Press Release "The principal on the 2023 Notes will be payable in four annual installments as follows: 15% of the original principal amount on December 15, 2020, 15% of the original principal amount on December 15, 2021, 15% of the original principal amount on December 15, 2022 and 55% of the original principal amount on December 15, 2023."


Dividend: Monthly at $.095 PennantPark Floating Rate Capital Ltd. Announces Monthly Distribution of $0.095 per Share


Last Ex Dividend Date: 2/15/18 (shortly after this purchase) 


Total Cost Per Share $12.58: With $1 IB Commission.


Dividend Yield at TC per share9.06%


Last Stock Offering in October 2017: 6M shares plus underwriters' option at $14.15 to the public- Prospectus


Net Asset Value Per Share: $13.86 as of 12/31/17


Discount to NAV at a TC of $12.55 per share = 9.45% (using $13.86 NAV)


Risk Summary: Starting at page 14 and ending at page 27 10-K


List of Investments10-Q for the Q/E 12/31/17 starting at page 8


Historical Net Asset Values Per Share: Consult  10-Qs


E.G. $14.12 as of 3/31/13 vs. $13.44 9/30/11 Form 10-Q

$13.73 as of 12/31/15 vs. $13.95 as of 9/30/15 Form 10-Q

I would call that relatively stable over time with short term blips both ways.


Prior Discussions:


Item # 2 Bought 50 PFLT at $11.28Update For Portfolio Management And Positioning As Of 10/16/15 - South Gent | Seeking Alpha


As discussed in that SA post, I sold the following lots for small profits totaling $15.58, noting then that I view a win in the BDC sector as exiting a position at any profit after collecting several dividend payments.  


Item # 2 Bought 50 PFLT at $14.24/ (6/2/13 Post) 


Item # 5 Added 100 PFLT at $14 (7/20/13 Post) 


Any profit is acceptable, no matter how small, when exiting an externally managed BDC position. The general idea has always been here at HQ's Trading Desk to escape with a total return in excess of the dividend yield. And, I do view the word "escape" as an appropriate word here. 


B. Bought 50 TPVG at $12.32




QUOTE: TriplePoint Venture Growth BDC Corp.  (TBVG) 


I may average down with up to five 10 share purchases.  


TPVG is an externally managed micro cap BDC.  


TPVG SEC Filings 


Current Portfolio Companies


This BDC had its IPO in March 2014. The offering price was $15


My last trade was to sell 50 shares at $13.39: Item 2.B. (3/4/2017 Post)(snapshot realized gain= $153.08).


I sold earlier in 2017 a 50 share lot at $12.33, realizing a $84.48 gain. Item # 3 (1/16/17 Post) I discussed purchasing that lot at $10.61 in Comment Blog # 3-South Gent | Seeking Alpha


Dividend: Currently Quarterly at $.36 


Yield at a Total Cost of $12.32 per share = 11.69%


Last Ex Dividend Date: 11/16/17


2017 Third Quarter ReportSEC Filed Press Release (latest one when I bought shares)


Net Investment Income: $.27 per share 


Net Asset Value Per Share = $13.39 as of 9/30/17


Discount to Net Asset Value Per Share Using the 9/30/17 Number =  7.99% at a Total Cost of $12.32 per share for the 50 share lot




In the highlights section for the third quarter, note that TPVG sold 1.6M shares at $13.54 to the "investment funds managed by the Alternative Investments & Manager Selection Group of Goldman Sachs Asset Management, L.P." 


TriplePoint Announces $22 Million Investment From Investment Funds Managed By Goldman Sachs Asset Management, L.P. in a Private Placement Offering


This quarter appears to me to be a transition one. TPVG's net income fell due to a number of repayments and it just took some time to redeploy the capital. The capital appears to have largely been redeployed in the 4th quarter:  




Sourced 8-K


TriplePoint Venture Growth Wells Fargo 2017 Presentation



This company recently redeemed a 6.75% senior unsecured bond that would have matured in 2020 and replaced it with a 5.75% senior unsecured bond maturing in 2022. TriplePoint Venture Growth BDC Corp. Prices Public Offering of $65 Million of 5.75% Notes Due 2022; Quote: TriplePoint Venture Growth BDC Corp. 5.75% Notes due 2022 (TPVY)Prospectus 2022 Note

I did not recall owning this BDC prior to purchasing this last lot. Some of my trading becomes a blur after several months.  

C. Started "10 Share Buying Program" in TPVG-Bought 10 at $12.01 Using Commission Free Trade


This purchase was in another account. I may buy up to 50 shares in this account at lower prices using commission free trades. 

I am attempting to use up my Fidelity commission free trades before they expire in August. With my newly minted and not currently copyrighted phrase "10 share buying program", I can only average down with each purchase. 


I will need to review the 2017 4th quarter report (and how the market reacts to it) before making any additional purchase decisions. sei

D. Added 10 Share of AGNC at a $18.57-Used Commission Free Trade


Dividends: Currently, monthly at $.18 per share ($2.16 annually)


Importantly, the net asset value declined from the $19.78 reported as of 12/31/17 to the estimated $19.39 as of 1/3/18. AGNC Investment Corp. Announces Fourth Quarter 2017 Financial Results

Based on the most recent estimate, the $18.57 price represents a 4.23% discount to the 1/31/18 estimated net asset value per share.   

The next ex dividend is 2/27/18. I am reinvesting the dividend. The first purchase was made one day after the January ex dividend date. 

Total Average Cost Per Share (60 Shares) = $18.69

Dividend Yield at Total Cost = 11.557%


Last Sells



There are a number reasons, previously discussed, why I disfavor MREITs. 

The end result of those reasons for AGNC is summarized in its dividend data and AGNC's chart. 

This company has cut its dividend several times. 

The quarterly rate was $1.5 per share in the 2009 second quarter and was sliced several times before hitting $.65 per share during 2014. 


AGNC then went to a $.22 monthly dividend payment, starting in October 2014 which was cut to $.20 and then to the current $.18. AGNC Investment Corp | Investors | Dividends 


I will trade the stock hoping to generate a total return in excess of the dividend yield which I have managed to do so far.



Total Annual Average Return 2/22/2013 through 2/22/20182.26%


So that total return number speaks for itself as to why AGNC is viewed with disfavor. If owned in a taxable account, a 2.26% total return would be a negative one after taxes and inflation. That is not going to work.  

I would also note that my first escape was at $30.14 (2/15/2012 Post), with the shares bought at at $29.29 (2/28/11 Post). 

Way to many individual investors are blinded by the dividend yield and fail to see the big picture risks for MREITs.

2. Sold 50 NSRGY at $81.51-Used Commission Free Trade:




Profit Snapshot: +$682.45



Added To Nestle (NSRGY) At $68.8 - South Gent | Seeking Alpha


South Gent's Comment Blog # 6: Added 30 NSRGY at $66.97


I did not like the earnings report released on 2/15/18. Nestl√© reports full-year results for 2017 | Nestl√© Global


Last Discussed: Item # 4.C. Sold 50 NSRGY at $77.5 (4/15/17 Post)


I will need to see better numbers and a lower price before buying back shares. Since I am a capital preservation stage, I am content with harvesting dividends and making whatever on the shares.


3. Eliminated TDIV: 


A. Sold 50 at $36.56




Quote: First Trust ETF VI NASDAQ Technology Dividend Index Fund (TDIV)


Holdings


Sponsor's Page: First Trust NASDAQ Technology Dividend Index Fund (TDIV)


Profit Snapshot: $250.01




Item # 4 Added 50 TDIV at $31.28 (7/29/17 Post)


Last DiscussedItem 2 Sold 50 TDIV at $37.07 (1/25/18 Post)(profit snapshot=$270.61)


Item # (4/29/17 Post)(snapshots of prior trades +$683.57)


B. Sold 50+ TDIV at $36:


History This Account:




Profit Snapshot: +$212.8





I am in a trading mode for this TDIV and was simply content in my total return numbers so I harvested them.


Trading Profits to Date: $1,416.99 plus dividends

4. Short Term Bonds/CD Ladder Basket Strategy:

A. Added 1 Treasury .875% Coupon Maturing on 10/15/18:

YTM = 1.737%



I now own 2 bonds.


I can buy fixed coupon treasuries commission free in this account.


B. Added 1 Treasury 1.25% Coupon Maturing on 10/31/18:

YTM = 1.756%



I now own 2 bonds.


C. Bought 2 Abbvie 2.5% SU Bonds Maturing on 5/14/20-A Roth IRA Account:




FINRA Page: Bond Detail (prospectus linked)


Issuer: AbbVie Inc. (ABBV)

ABBV Analyst Estimates
AbbVie Reports Full-Year and Fourth-Quarter 2017 Financial Results
Products
Pipeline

Credit Ratings:




Bought at a Total Cost of 99.756 (bought at 99.556)

YTM at TC Then at 2.616%
Current Yield at TC = 2.5061%

This was a marginal buy in a Vanguard Roth IRA given the current and reasonably foreseeable yield of the Vanguard Prime Money Market fund.


I justified the purchase based on the bond's current yield advantage, a current lack of concern about Abbvie's credit risk, the possibility that the MM fund will not provide a greater yield prior to the bond's maturity and the probability that the bond will provide a greater current yield for at least 16 more months.


D. Bought 2 Sherwin Williams 2.25% SU Bonds Maturing on 5/15/20:




FINRA Page: Bond Detail


Issuer: Sherwin-Williams Co. (SHW)

SHW Analyst Estimates
The Sherwin-Williams Company Reports 2017 Year-end and Fourth Quarter Financial Results

Credit Ratings:




Sherwin-Williams Completes Acquisition Of Valspar, Creates The Global Leader In Paint And CoatingsSherwin-Williams Wraps Up $11.3B Acquisition of Valspar - June 2, 2017 - Zacks.com

Bought at a Total Cost of 99.062

YTM at TC Then at 2.681%
Current Yield at TC = 2.271%

E. Bought 1 Treasury1.25% Coupon Maturing on 12/15/18:



YTM = 1.896+%
Current Yield = 1.2567%

I now own 4 bonds.


F. Bought 1 Treasury .625% Coupon Maturing on 6/30/18:

YTM = 1.577%



I now own 2 bonds. I also own two 1.375% coupon treasuries maturing on the same day.


This is what the Fidelity order book looked like when I bought this bond:


If I had bought the same bond at Schwab, I would have paid 99.66797 generating at that price a 1.513% YTM or .064% lower:




Vanguard had the same price as Fidelity, except its YTM calculation only went out 3 decimal points. The YTM would be the same as the bond purchased through Fidelity which was 1.576977%:




G. Bought 1 Northwest Natural Gas 1.545% SU Bonds Maturing on 12/5/18:



FINRA Page: Bond Detail (prospectus linked)


Issuer: Northwest Natural Gas Co. (NWN)

NWN Analyst Estimates

Credit Ratings:




Bought at a Total Cost of 99.603

YTM at TC Then at 2.043%
Current Yield at TC = 1.551%

Compared to the the Treasury note maturing on 12/15/18, discussed in Item F above, I pick up an additional .147% in YTM with this high quality corporate bond. The NWN corporate bond has a .2943% higher current yield. 


H. BOUGHT 1 MORE Northwest Natural Gas 1.545% SU Bonds Maturing on 12/5/18-IB Account:




Bought at a Total Cost of 99.486

YTM at TC Then at 2.193%
Current Yield at TC = 1.553%

DISCLAIMERI 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.