Observations and Sample of Recent Trades: BBT, BKLN, GMRE, GPT, HT, NHLD, SBRA

Economy: 

While the stock market has gyrated wildly recently, nothing fundamental has changed in the economy that would explain the heightened volatility and rapid up and down movements in stock prices and major stock indexes. However, it must be kept in mind that the stock market is forward looking, less concerned about the present than what will happen in the future. 

If those wild swings were caused by concerns over inflation and interest rates, those issues are still with us.  

The budget deficits are going to expand for 3 simple reasons: (1) interest costs are going up; (2) federal spending is going up and (3) federal revenue will go down due to the corporate and individual tax cuts. Federal borrowing needs will probably be over $1 trillion for the next three fiscal years ending 9/30 and will most likely get worse thereafter IMO.    

The FED is still on a glide path for 3 or possibly four .25% increases this year. 

Yesterday's Closing Prices Bond ETFs: 

IEF $102.31 -$0.30 -0.29%: iShares 7-10 Year Treasury Bond ETF 

TLT $118.82 -1.14 -0.95%: iShares 20+ Year Treasury Bond ETF 

ZROZ $109.89 -$1.76 -1.58% : PIMCO 25 Year Zero Coupon U.S. TREASURY ETF 

LQD $118.11 -$0.33 -0.28%: iShares Investment Grade Corporate Bond ETF 

BABS $66.97 -$0.23 -0.34%: SPDR Nuveen Barclays Build America Bonds ETF 

MUB $108.65 -$0.19 -0.17%: iShares National Muni Bond ETF 

JNK $36.09 -$0.14 -0.39%: SPDR Bloomberg Barclays High Yield Bond ETF (not really high yielding anymore)

EMB $113.47 -$0.20 -0.18% : iShares J,P. Morgan USD Emerging Market Bond ETF 

I do not own any shares in any bond ETF.  

Interest rates are rising in early trading today. 

U.S. 10 Year Treasury Note-MarketWatch 2.879% +.05% as of 9:46 A.M. E.S.T.

Germany 10 Year Government Bond .809% + .062% as of 3:47 CEST

The ten year U.S. treasury could barely make it out of bed when the stock market was falling into a black hole last Monday, indicating to me that the path of less resistance is for higher interest rates throughout the maturity spectrum. 

ISM services NMI index increased to 59.9% in January, up from 56 in December. The new orders component rose 8.2 to 62.7,  a robust reading. The employment component rose 5.3 to to 61.6. Prices rose 2 to 61.9. A number of commodities were up in price and in short supply, while only one, chicken products, was down in price. Overall, this report was a good one, but it also indicates that inflation is blooming.   

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Market Commentary and Markets:

I have not yet seen a tweet from our Great Leader taking the blame for the largest point drop in U.S. stock market history last Monday. I am anxiously waiting for it. If someone sees that tweet, please provide a link in the comment section. 

Someone came up with a suggestion for Donald: 

Or, Trump could just blame Obama which was Sean Hannity's spiel.

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The U.S. government is set to borrow nearly $1 trillion this year, an 84 percent jump from last year - The Washington Post

The estimate is for $955B in U.S. government borrowings for the fiscal year ending 9/30/18, up from $519B in the previous fiscal year.

The new $955B borrowing estimate includes the actual borrowing for the current fiscal quarter's first quarter, which ended on 12/31/17, and the recently released treasury estimates for the first and second quarters of the 2018 calendar year. Treasury Announces Marketable Borrowing Estimates | U.S. Department of the Treasury (1/29/18 Press Release) 

The $955B in borrowing number for the F/Y ending September 30, 2018 is taken from a survey of bond market participants that is based on the foregoing data and their own predictions. 

If the Senate's budget agreement becomes law, spending would increase an additional $370B over the next two years. Senate leaders strike budget deal ahead of government shutdown deadline - NBC News All of that additional spending will have to be funded with borrowed money. 

The current estimates call for over a trillion in federal government borrowings in the 2019 and 2020 fiscal years.  

The recently enacted tax cuts will add to the borrowing needs. CBO recently made an estimate of near term revenue loss. Federal Debt and the Statutory Limit, January 2018

The Federal Reserve is no longer a buyer and is reducing its holdings. Starting last October, the Fed announced its intention to shed $10B in assets each month and to gradually work up to $50B per month.

A former Reagan economist, Martin Feldstein, told Bloomberg that the debt is a problem "right now". U.S. Raises Longer-Term Debt Sales as Budget Deficit Worsens - Bloomberg

The rise in interest costs due to both a rise in interest rates and the increase in overall debt levels exacerbates the problem.

Risk of market contagion has reached a 6-year high, Deutsche Bank analyst says - MarketWatch

Volatility surge could trigger $100 billion in stock-market outflows: JPMorgan’s Kolanovic - MarketWatch

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Trump: 

According to Trump, the Democrats who do not agree with his policies are treasonous and anti-American. Trump supporters applauded those comments. 

Trump labels some Democrats 'treasonous' - CNN; 

Trump: Democrats' muted State of Union reaction 'treasonous' - NBC News

Trump Accuses Democrats of ‘Treason’ Amid Market Rout - The New York Times

Donald Trump thinks not clapping for him is 'treasonous' 

To prove that you are a real American now, it is necessary to clap wildly whenever Donald makes a statement, just like those poor souls in North Korea during one of Kim's speeches. Better to clap loudly, stand and smile than to be tied to a pole during an artillery practice exercise aimed at the pole. North Korean vice-premier one of 'two officials executed with anti-aircraft guns' after he 'dozed off in meeting'  

Just in case Big Brother is watching, I will stand and clap inside my house whenever I see Donald talking. 

Senator Orin Hatch does not have to worry about being sent to the electric chair for treason. 

Hatch previously told Donald that his Presidency may be the greatest one ever. 

The VP Pence probably has nothing to worry about now either, having said it "is just the greatest privilege of" his life to serve Donald. His cabinet members are probably safe from hanging at the moment after singing Trump's praises in flowery terms that would make Kim blush. 

The White House claims that Trump was just fooling around, meaning that he has no current intention to hang Democrats on the WH front lawn.  

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Trump called the minority leader of the House Intelligence Committee a liar and a leaker of confidential information without providing any proof as usual, which is not necessary for a leader who is fundamentally an autocrat:  

Trump is a pathological liar. When I make that claim, I present proof in my posts. There is an overwhelming abundance of proof that Trump is a liar, someone who is incapable of being truthful. It would probably be impossible to find anyone who lies as much as Donald, living or dead. I know of no one.    

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Trump thinks Devin Nunes is a "Great American Hero": 

And here I thought that he was just a groveling Trump sycophant. 

I wish that he had not used the phrase "Great American Hero" to describe Nunes. Why? There was a TV show from the early 1980s called The Greatest American Hero (TV Series 1981–1983) - IMDb. The theme song from that series was "Believe It or Not": The Greatest American Hero Theme Song - Believe it or Not - YouTube Now that song is playing continuously in my mind.

I do not give money to politicians. My one and only exception was a $200 donation to a cousin who successfully ran against an incumbent that had to be removed from the state capital offices and isolated elsewhere to prevent him from sexually harassing women. I was tempted to give a $100 to the guy running against Nunes viewing him as Trump's most slovenly bootlicker. Devin Nunes' Democratic opponents capitalizing on memo release - CNN  


The GOP's memo prepared under Nunes' direction focuses on a FISA surveillance warrant for Carter Page, who was no longer working in the Trump campaign when the DOJ first applied for the surveillance warrant.  

Trump and his compadres have spent a year distancing themselves from Mr. Page, and describe him as nothing more than a temporary and insignificant foreign policy adviser. Now, the republicans have placed him front and center, and have wrapped Page in an American flag as a True Patriot. 

The memo did provide Donald with another opportunity to make false statements about the Russian investigation being a Democrat hit job conducted by biased law enforcement officials.  

Donald specifically claimed in a tweet that the top leadership of the FBI and FBI investigators "have politicized the sacred investigative process". 

The Lying Don reveals the real reason why this memo was prepared by his political minions in these tweets:   

Trump attacks the leaders he picked at DOJ, FBI ahead of memo release-CNN

Trump’s Unparalleled War on a Pillar of Society: Law Enforcement - The New York Times

Nunes ‘abused’ his power on intelligence committee, former CIA director says I would view that as an obvious point. 

Democratic rebuttal calls Nunes memo 'deliberately misleading'-NBC News;  Nadler Memo.pdf

Trump claims that the memo totally vindicates him, which is of course untrue: 

Russian bots thereafter started to push the "#Little Adam Schiff" hashtag.
  
The GOP's memo is basically an argument, constructed with misleading and cherry picked pieces of information, designed to create a false narrative attacking law enforcement in order to provide cover for Donald. It is a political attack ad.   

Sen. John McCain On Nunes Memo Release: 'We Are Doing Putin's Job For Him' ("we" means Trump and most other republicans).

Experts warn: Dangerous politicizing of U.S. intelligence - NBC News

House Intelligence Committee Minority Response to Release of Chairman Nunes’ Misleading Memo | U.S. House of Representatives  

I would note that the GOP's memo acknowledges at the end that the FBI's Russian investigation about possible collusion between Russian intelligence and Trump campaign officials did not start with the Steele Dossier.

Instead, the investigation started based on information provided by a foreign intelligence agency. There are even some republican politicians who recognize that Russia did interfere in the U.S. election on behalf of Trump since the evidence is overwhelming and impossible for them to dismiss without looking as foolish as Donald to non-Trump followers.   

The republicans do not mention in their memo that Page was known to the FBI counter-intelligence division since a Russian spy ring attempted to recruit him in 2013. 

The republicans wish to sweep under the rug now this piece of information: Carter Page Touted Russia Contacts in 2013 Letter | Time

This is what Page, the new republican hero, said in that letter according to TIME:

“Over the past half year, I have had the privilege to serve as an informal advisor to the staff of the Kremlin in preparation for their Presidency of the G-20 Summit next month, where energy issues will be a prominent point on the agenda.”  (emphasis added)

Carter Page confirms he called himself an ‘informal advisor’ to Russia’s government -The Washington Post

A Former Trump Adviser Met With A Russian Spy in 2013 

Sometimes, when listening to one of the GOP's memo authors, you may hear some oblique reference to "other information" supporting the first of 4 warrant applications, meaning information unrelated to the Steele Dossier. That is the phrase used by Trey Gowdy (R-SC) over the weekend. Gowdy says surveillance warrant would not have been authorized without dossier - CBS News 

Gowdy gave us two plus years of a Benghazi investigation whose purpose was described by the GOP House Majority Leader Kevin McCarthy as follows: "Everybody thought Hillary Clinton was unbeatable, right? But we put together a Benghazi special committee, a select committee. What are her numbers today? Her numbers are dropping." 

Typically, a FISA warrant will run over 60 pages, so that "other information" known to Gowdy which he does not even want to discuss in a summary fashion, would probably be over 50 pages or so. The "other information" is ignored in the GOP's memo. 

The Memo is More Proof of Obstruction. - The New York Times (" The fact that the warrant was renewed three times indicates that the F.B.I. obtained useful intelligence each time — a judge wouldn’t have approved a renewal if the prior warrant came up empty.")  

As noted above, the FISA Court approved three more warrants after the first one which would not have happened unless the previous warrants produced useful information relating to the ongoing investigation. Where is that discussed in the GOP's memo? 

That is confirmed by a former FBI counterintelligence agent, Asha Rangappa, who now lectures at Yale University:  Devin Nunes tried to discredit the FBI. Instead, he proved it’s onto something.-The Washington Post ("In order for a judge to allow the surveillance to continue, the government has to demonstrate that the intercepted communications are, in fact, providing foreign intelligence.... If, 90 days later, the government had not obtained any new information about Page’s contacts and activities and the surveillance had ceased, that would show that Page probably was not working as a spy and that the evidence that had seemed to point in that direction was wrong. Instead, the continued renewals underscore that the government was able to persuade the court that Page continued his contacts and activities.")

Carter Page and the Nunes memo: the ex-Trump aide at the center of it, explained - Vox

Justice Department officials told the WP that the FISA Court was informed that a source, referring to Steele, was politically biased, contradicting the key allegation made in the GOP's memo. 

Justice Dept. told court of source’s political influence in request to wiretap ex-Trump campaign aide, officials say-The Washington Post (the "central allegation — that the government failed to disclose a source’s political bias — is baseless, the officials said." Further, "ample disclosure of relevant, material facts," to the FISA court, including that "the research was being paid for by a political entity.")

Congressman Schiff later confirmed that fact: Schiff: Steele dossier's political motivation disclosed in FISA application-CNN 

I would assume further that the authors of the GOP memo knew that was the case; and nonetheless deliberately neglected to mention that fact in their transparent effort to mislead the American public. That is the only fact that is transparent in that allegedly "transparent" memo.    

The GOP does not argue that the information about Page, contained in the FISA warrant submissions, was inaccurate. 

As to the alleged bias of Christopher Steele, he is a British citizen and a former Russia expert for MI-6 for over 2 decades. Steele was not directly hired by the Democrats. He was hired by a firm, Fusion, that was first hired by the Washington Free Beacon, a conservative publication and then by the Democrats to conduct research into Donald's history.  

The former head of MI6, Sir Richard Dearlove, told the WP recently that Steele's reputation was "superb" and he was the “go-to person on Russia in the commercial sector”. Hero or hired gun? How a British former spy became a flash point in the Russia investigation. - The Washington Post 

When he met with the FBI, "Steele gleaned that the bureau had independently developed information that appeared to match some of his reports — and that the FBI was particularly interested in a young Trump campaign foreign policy adviser named George Papadopoulos, he would later tell associates."

According to the GOP's memo, Steele apparently made a statement in October 2016 that he was opposed to Donald becoming President. 

Did he make that statement because he disliked Trump or had some disagreement with Trump's policies as a British citizen. There is no evidence of those reasons. 

When Steele made that statement, he was reporting to a DOJ employee the results of his Trump-Russia investigation. 

There is evidence in testimony given by Fusion's President, taken by the House Intelligence Committee, that Steele was concerned that Donald had been compromised by Russia and that Russia was helping him win the Presidential election. 

It was the results of his investigation that caused him to worry about Donald becoming President. Is that a bias worthy of any concern or discredits in any way the results of his investigation? The answer is no. 

That would not even be an issue for the GOP if Steele was reporting on Clinton or some other Democrat. The quote in the GOP's memo takes that Steele statement out of context in a deliberate effort to mislead the voters IMO.        

The republicans initially blocked the release of the Democrat's rebuttal memo. That would look unfair to non-Trump supporters, somewhat like a trial where a witness is able to make false and misleading statements and then the other side is prohibited from cross examination, a show trial that Stalin or any other dictator would favor. 

The republicans relented and voted to release the Democrat's rebuttal memo last Monday, and it is now up to Trump to make a decision to release it or suppress it. Committee Votes to Release Democratic Rebuttal to G.O.P. Russia Memo  

The narrative invented by Nunes through deception does play to a particular audience and is intended primarily for them. 

73% of republicans agree that “members of the FBI and Department of Justice are working to delegitimize Trump through politically motivated investigations.” Most Republicans believe FBI, Justice Dept. trying to 'delegitimize' Trump: Reuters/Ipsos poll  

Russians penetrated U.S. voter systems, top U.S. official says - NBC News (In an exclusive interview with NBC News, Jeanette Manfra, the head of cybersecurity at the Department of Homeland Security, said she couldn't talk about classified information publicly, but in 2016, "We saw a targeting of 21 states and an exceptionally small number of them were actually successfully penetrated.")

And, as previously noted, 72% of republicans believe that Donald is a good role model for their children. Republicans overwhelmingly praise Trump as a good role model for kids The Three Monkeys have an explanation as to how that is even conceivable. 

Wittes and Rauch: Boycott the Republican Party - The Atlantic

I have voted for republicans in the past including the GOP senators Corker and Alexander and the current governor Haslam. I agree with the authors of the Atlantic article that the GOP now needs to be boycotted. Embracing Donald Trump, nurturing and protecting him, is just a bridge too far.  

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I asked my dad back in the 1970 summer for a $.25 hourly raise to $2.25. He thought that was too magnanimous, saying that he was already paying me more than I was worth. Stocks, Bonds & Politics: Learning the Value of a Dollar

40 hours x. $.25 per hour = $10 per week in 1970 dollars, now worth about $65.22 per week

Paul Ryan would say that I hit a gold mine with that kind of raise.

Paul Ryan deletes tweet about tax cuts after Twitter backlash - CNN 

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Trump's Climate-Denying Coal Lobbyist Nominee Inches Closer To EPA’s No. 2 Job 

Trump tells Pentagon to plan a military parade for him-CNN; Pentagon evaluating dates for military parade in Washington at Trump's request - CBS News

The military parade will be just another prop for Trump in his new reality show. 

He’s a Nazi and He’s Probably Going to Be The Republican Nominee for Third Congressional District in Illinois

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1. REGIONAL BANK BASKET STRATEGY:

A. Pared BBT: Sold Highest Cost 50 shares at $55.45:

Quote: BB&T Corp. (BBT)
BBT Analyst Estimates

Profit Snapshot: +$1,061.02

After this pare, I own 71+ shares with an average cost per share of $32.07.

Closing Price Yesterday (2/7/18): BBT $53.82 +$0.11 +0.20% 

I quit reinvesting the dividend after the December 2016 dividend payment.

Several of those shares were acquired in exchange for my National Penn shares: BB&T closes National Penn acquisition So that worked out just fine. I received a premium price for the National Penn shares and then sold the BBT acquired through the merger at a good profit plus several years of BBT dividends.

I last pared my position by selling shares at $47.24. Those shares were then my highest cost lots. Item # 3.A. (profit snapshot= $586.45)

Last Earnings Report: Adjusted E.P.S. was reported at $.84 per share, up from $.73 per share in the 2016 4th quarter. The adjusted E.P.S. number beat the consensus estimate by 5 cents per share.

BB&T reports strong fourth quarter earnings and record quarterly revenues; Diluted earnings per share up 16.1% annualized compared to the third quarter 2017

Revaluation of a deferred tax liability and investments in affordable housing projects resulted in a net tax benefit of $43M. BBT adjusts that item by what it calls related expenses, including giving a one time bonus to employees who do not normally receive incentives and commissions and a $100M contribution to charity ($63M after tax) The net impact was an expense item of 5 cents per share.

Capital Ratios:

Asset Quality:

2.  Small Ball-Equity REIT Common and Preferred Stock Basket Strategy:

A.  Added 10 GMRE at $7.45 (used commission free Trade):

Quote: Global Medical REIT Inc. (GMRE)

This brings me up to 122+ shares.

Last Substantive Discussion: Item # 2.B. Bought 100 GMRE at an Average Cost Per Shares of $8.48 (two 50 share orders filled at $8.2 and $8.72)(12/26/17 Post) 

Based on the $.2 quarterly dividend rate per share, the dividend yield at $7.45 is about 10.74%.

The average cost per share is currently at $8.33. The yield at that number is 9.6%. I have received and reinvested one quarterly dividend so far.

Closing Price Yesterday (2/7/18): GMRE $7.23 +$0.12 +1.69% 

B. Sold 50+ HT at $18.58+ (used commission free trade):

Quote: Hersha Hospitality Trust Cl A (HT)

I intend to use the proceeds to add to my Apple Hospitality REIT position when and if the price falls below $17.7

History This Account

Profit Snapshot: +$59.07

Item 5.B. Bought 50 HT at $17.41 (12/18/17 POST)

Total HT Trading Gains to Date: $230.99 

In Item 5.A. to that 12/18/17 post, I discussed selling 50 APLE at $19.6.

Item # 6.B. Sold Highest Cost Lot in Schwab at $19.22 (10/19/17 Post)
Item 2.B.  Sold 100 APLE at $19.43 (5/25/17 Post)

APLE Shares Currently Owned:

Item # 2.B. Bought 50 APLE at $17.92-Schwab Account (8/29/17 Post)
Item #2.C. Bought 50 APLE at $18.3- A Roth IRA Account (5/25/17 Post)
Item 2.C. Bought 50 APLE at $18.22-Fidelity Account-Used Commission Free Trade (7/31/17 Post)

Apple Hospitality pays monthly dividends whereas Hersha pays quarterly. I have a somewhat better opinion about APLE's hotel portfolio and prospects.

I will also buy Hersha equity preferred stocks. I have eliminated all of my equity REIT preferred stocks. I am waiting for those preferred stocks to tank due to the rise in intermediate term interest rates before I consider buying one or more of them back.

For Hersha Hospitality Trust 6.5% Cumulative Preferred Series D Stock, for example, I would now want a price below $22 before buying even 50 shares. At a $21 total cost per share, the yield would be about 7.74% and 7.39% at a $22 TC per share.

My lowest price paid for that one was $22.28, which was bought on 12/20/16.

The ten year treasury yield had risen after the election, based on a widespread belief that Trump's policies, including his proposed tax cuts, would be inflationary. The ten year yield closed that day 2.57%, up from 1.88% on 11/8/16.

Closing Price Yesterday (2/7/18): HT $17.66 +$0.25 +1.44% 

C. Added 5 SBRA at $17.13-Used Commission Free Trade:

Quote: Sabra Healthcare REIT Inc. (SBRA)

This brings me up to 15 share in my Fidelity account.  I just bought a few days ago 10 shares at $17.90: Item 3.B. (1/21/18 Post) Based on the current $.45 quarterly dividend per share, the yield at a $17.13 cost is about 10.51%. 

As I mentioned in that post, SBRA is in a bearish downtrend and is trading well below its 50, 100 and 200 day SMA lines. Chart  IMO, there is no indication yet to me that the slide is over but the Lord does not ring a bell when that happens either.   

I have nothing to add to that recent discussion.

I may buy up to 50 shares in this account.

SBRA $17.10 -$0.08 -0.47% 

D. Added 5 GPT at $23.76 and 5 at $23.1-Used Commission Free Trades:

Quote:  Gramercy Property Trust (GPT)

This brings me up to 30 shares in my Fidelity account. The current average cost per share is $24.52. The current dividend yield at that number is about 6.12%. 

I discussed buying 20 shares in two ten share lots a few days ago: Item # 1.A. (2/3/2018 Post)

Awful Chart 

I have nothing to add to that recent discussion.

Closing Price Yesterday (2/7/18):  GPT $23.38 +$0.01 $0.04% 

3. Sold 101+ BKLN at $23.24 (commission free ETF for Schwab customers):  

Profit Snapshot: +$7.56

Quote: PowerShares Senior Loan Portfolio  (BKLN)

Sponsor's website

BKLN PowerShares Senior Loan ETF ETF Quote | Morningstar (rated 2 stars)

I will trade this fund only as a temporary depositary of excess cash.

Last Discussed a Purchase: Item # 6 Added 50 BKLN at $23.04 (9/28/17 Post)

Although the loans are secured, the debtors are high risk and even their secured loans are rated in junk territory:

I discussed my issues with this ETF in the introductory section of 1/21/18 post, noting that I would probably sell this security:

Gundlach recommended this ETF in the last Barron's Roundtable: Jeffrey Gundlach: Bullish on Commodities and Bank Loans-Barron's (subscription publication)

While there are advantages to loans whose coupons rise with short term rates, I can capture the kind of uptrend by stacking maturities with high quality paper. Defaults are not an issue in that approach but will hurt total returns in a leveraged junk loan portfolio. 

One consideration is that a rise in coupons is not a good thing for highly leveraged borrowers and will result in some defaults over time that will be accelerated by a recession or a downturn in the overall junk market caused by a supply/demand imbalance and other factors.  

I decided to use the proceeds to buy a higher yielding BDC that provides me with more compensation for the risk. BDC's invest in similar loans. 

Closing Price Yesterday (2/7/18): BKLN $23.17 -$0.01 -0.04% 

3. Short Term Bond/CD Ladder Basket Strategy: 

A. Bought 1 Wells Fargo 1.85% CD (monthly interest payments) Maturing on 2/19/18: 

WFC Analyst Estimates
Wells Fargo Reports Fourth Quarter 2017 Net Income of $6.2 Billion; Diluted EPS of $1.16  

A one year CD from WFC now yields 1.95%. 

B. Bought 2 Constellation Brands 2% SU Bonds Maturing on 11/7/19:

FINRA Page:  Bond Detail
Prospectus (November 2017); FWP

Issuer: Constellation Brands Inc. Cl A  (STZ)
STZ Analyst Estimates
SEC Filings
10-Q for the Q/E 11/30/17
SEC Filed Earnings Press Release for the Q/E 11/30/17 

Credit Ratings:
Moody's at Baa3

Paid 99.292
Bought at a Total Cost of 99.492 (with $2 per bond commission)

YTM at TC Then at 2.288%
Current Yield at TC = 2.0102%

C. Bought 2 BEAM 1.75% SU Notes Maturing on 6/15/18: 

FINRA Page: Bond Detail (prospectus linked)

Issuer: Premium Spirits Brands | Beam Suntory, a wholly owned subsidiary of  the Japanese company Suntory.

SUNTORY HOLDINGS TO ACQUIRE BEAM IN $16 BILLION TRANSACTION (2014)

Credit Ratings: 

Bought at a Total Cost of 100
YTM and Current Yield = Coupon Rate of 1.75%

This was another purchase of a bond near maturity where I secured a yield in excess of similarly rated paper maturing at about the same time when purchased. Based on a total cost per bond of $1,000, I will receive 1.75% for five months and will then receive my $2000 investment back.

D. Added 1 Anheuser Busch 1.9% SU Bond Maturing on 2/1/19:

FINRA Page: Bond Detail

Credit Ratings:

Issuer: Anheuser-Busch InBev S.A. ADR

Bought at a Total Cost of 99.891
YTM at Total Cost Then at 2%
Current Yield at 1.9021%

E. Bought 2 Citigroup 1.6% CDs Maturing on 6/26/18 (5 month CDs):

Holding Company: Citigroup Inc.
C Analyst Estimates
Citigroup Reports Fourth Quarter 2017 Financial Results

F. Bought 2 Citigroup 1.55% CDs Maturing on 5/29/18 (4 month CDs):

G. Bought 2 Discovery Communications 2.2% SU Bonds Maturing on 9/20/19: 

FINRA Page: Bond Detail
Prospectus

Credit Ratings: 

Issuer: Discovery Communications Inc. Series A (DISCA) 
DISCA Analyst Estimates 
SEC Filings
10-Q for the Q/E 9/30/17

Bought at a Total Cost of 99.752 (with $4 Vanguard Commission)
YTM at TC Then at 2.351%
Current Yield at TC = 2.2055% 

At the 99.552 purchase price, the YTM was then at 2.475%. 

H. Bought 2 FEDEX 2.3% SU Bonds Maturing on 2/1/2020:  

I have started to tip toe back into 2020 maturities. 

When I bought this bond, the two year treasury note closed at a 2.05% yield. I am not concerned about FedEx paying the principal amount when due. Some investors may not want to take that chance and would prefer buying the 2 year treasury that had about a .3% lower yield than this bond at the time of purchase. 

Why tip toe? I am expecting short term interest rates to rise throughout 2018. The BUD bond discussed in Item D above matures about one year earlier and provides a YTM about .35% less than this FDX bond. 

While I do not know for certain, of course,  it is reasonable to predict now that I would be better off buying more of those BUD bonds maturing on 2/1/19 and then reinvesting the proceeds for another year in a similarly rated bond rather than buying the FedEx bond with its 2.36% YTM. But, that remains to be seen. 

Something could happen that would make the FDX bond with its one year longer maturity the better deal. I deal with uncertainty by using a ladder approach and rejiggering weightings by month and year based on events as they develop. 


FINRA Page: Bond Detail (prospectus linked)

Credit Ratings: 

Issuer: FedEx Corp. (FDX) 
FDX Analyst Estimates 

Bought at a Total Cost of 99.872
YTM at TC Then at 2.365%
Current Yield at TC = 2.3029%


I. Bought 3 Metabank 1.35% CDs Maturing on 3/7/18 (one month CD):

I just bought this CD so this brief mention is out of time order. This purchase, were made in my Schwab account where I earn .1% in a sweep account. 

Holding Company: Meta Financial Group Inc.  (CASH) 

CASH Analyst Estimates 
Meta Financial Group, Inc.® Reports Net Income of $4.7 million for First Quarter of Fiscal 2018 

MetaBank Reviews and Ratings - Bankrate.com (5 STAR RATING)

J. Bought 2 Beal Bank 1.35% CDs Maturing on 3/14/18 (one month CD):

Both of these CDs offered more interest than the comparable maturity CDs offered by Fidelity: 

The CD offered by BEAL maturing on the same day is .05% lower than the one that I bought at Schwab. 

But I also earn close to 1% in Fidelity's sweep account.  

I would not buy a 1.3% one month CD in the Fidelity account when the same CD is offered at 1.35% at Schwab even though the dollar difference in the two rates is immaterial. 

I would not even consider buying that CD in my Vanguard account since the current yield paid by the Vanguard Prime MM fund was 1.45% on 2/2/18 and will likely rise over the next month. Vanguard - Vanguard Prime Money Market Fund

4. Sold 100 NHLD-Lottery Ticket Basket Strategy:

Profit Snapshot: +$92.12

Quote: National Holdings Corp (NHLD)

Fortress Biotech (FBIO) is a majority owner of NHLD. When discussing FBIO I have also discussed NHLD:

Item # 5.A. Bought 50 FBIO at $3.33 (1/4/18 Post)

I currently own 100 FBIO as part of my small cap lottery ticket basket.

Closing Price Yesterday (2/7/18): NHLD $4.3400 $0.5300 +13.9108% 

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.