Economy:
China's response to Trump's action has been restrained, so far at least. Trade war? China retaliates with only $3 billion in tariffs: CNBC It is my understanding that those tariffs are in response to the U.S. tariffs on China's steel and aluminum exports.
China warns U.S. it will defend own trade interests: Reuters
The U.S. is not in a trade war yet. The U.S. is on the verge of one.
Trump gutted the steel and aluminum tariffs by granting temporary exemptions for Australia, Brazil, the EU, Canada, Mexico, and South Korea.
The U.S. Trade Representative used the word "pause" the implementation to describe those temporary exemptions. The pause is clearly tied to those nations making trade concessions to the U.S.
On May 1, Trump will reconsider the exemptions for Mexico and Canada based on the NAFTA negotiations. Trump Sets Deadline on Metal Tariffs, Pressuring Nafta Talks - Bloomberg
The following series of events suggests that Trump is using the threat of tariffs as a cudgel to secure trade concessions.
Consequently, it is uncertain how Trump will carry through when and if he does not get what he wants.
++
China warns U.S. it will defend own trade interests: Reuters
The U.S. is not in a trade war yet. The U.S. is on the verge of one.
Trump gutted the steel and aluminum tariffs by granting temporary exemptions for Australia, Brazil, the EU, Canada, Mexico, and South Korea.
The U.S. Trade Representative used the word "pause" the implementation to describe those temporary exemptions. The pause is clearly tied to those nations making trade concessions to the U.S.
On May 1, Trump will reconsider the exemptions for Mexico and Canada based on the NAFTA negotiations. Trump Sets Deadline on Metal Tariffs, Pressuring Nafta Talks - Bloomberg
The following series of events suggests that Trump is using the threat of tariffs as a cudgel to secure trade concessions.
Consequently, it is uncertain how Trump will carry through when and if he does not get what he wants.
++
In a Barron's interview with Stephanie Pomboy, she asserts that the U.S. stock market has increased about $25 trillion since March 2009 which is five times the increases in GDP and 25 times the increase in profits. She also claims that households are "borrowing 90 cents for every incremental dollar they, up from 40 cents four years ago". Stephanie Pomboy: How the Fed Will Trigger the Next Crash - Barron's
++
Durable-goods orders snap back with 3.1% gain as business investment surges - MarketWatch; US durable goods orders leap 3.1% in Feb, vs 1.5% increase expected: CNBC
++
New Home Sales in February:
++
Durable-goods orders snap back with 3.1% gain as business investment surges - MarketWatch; US durable goods orders leap 3.1% in Feb, vs 1.5% increase expected: CNBC
++
New Home Sales in February:
News Release.pdf
The consensus estimate was for 630K. Sales declined from an upwardly revised January 2018 number and were up only .5% Y-O-Y.
The median sales price of $326,800 is almost 10% higher than a year ago. The average sales price was $376,700.
A continued rise in mortgage interest rates coupled with the increase in home prices have the potential to cause a slowdown in sales.
The situation would then be aggravated for buyers who lose some tax benefits related to home ownership due to the recently passed tax legislation.
Those buyers would generally be in states with relatively high state income and property taxes. The new tax legislation caps the deduction for those taxes at $10K. How The New Tax Law Will Impact Your Housing Costs: Forbes
30-Year Fixed Rate Mortgage Average in the United States-St. Louis Fed
4.45% is certainly better than 18.63% as of 10/9/1981.
The consensus estimate was for 630K. Sales declined from an upwardly revised January 2018 number and were up only .5% Y-O-Y.
The median sales price of $326,800 is almost 10% higher than a year ago. The average sales price was $376,700.
A continued rise in mortgage interest rates coupled with the increase in home prices have the potential to cause a slowdown in sales.
The situation would then be aggravated for buyers who lose some tax benefits related to home ownership due to the recently passed tax legislation.
Those buyers would generally be in states with relatively high state income and property taxes. The new tax legislation caps the deduction for those taxes at $10K. How The New Tax Law Will Impact Your Housing Costs: Forbes
30-Year Fixed Rate Mortgage Average in the United States-St. Louis Fed
4.45% is certainly better than 18.63% as of 10/9/1981.
++++++++
Market and Market Commentary:
JPMorgan Sees Market Overcoming Stock Rout, But Beware Trade War - Bloomberg
The S & P 500 index has broken below its 50 and 100 day SMA lines using a 1 year Yahoo Finance chart. CHART The 200 day line was at 2,583.82 last Friday. The day's low was at 2,585.89 with the close at 2,588.26, down -55.43 or -2.10%.
Regarding the Dow Theory Sell Signal, only one condition needs to be met before that signal is given. The Dow Transport average must close below 10,136.61. The close last Friday was at 10,163.53.32, down 190.14 points. DJT - Dow Jones Transportation Average - MarketWatch
A Dow Theory ‘sell’ signal could happen any day now - MarketWatch
The S & P 500 index is now down 85.35 points YTD, having closed last year at 2,673.61. Historical S & P 500 Data
The YTD total return for the SPDR® S&P 500 ETF (SPY) was at -2.91% as of last Friday. The annual average ten year total return is at 9.18%, near the long term average of 9.8% over the past ninety years. That period would include the last 9 months of 2008. Looking out over 15 years, SPY's annual average total return was 9.46% through last Friday.
There has only been 1 down year in total return since 2003, and that was in 2008. There were three consecutive down years in 2000, 2001, and 2002, which was the last multi-year bear period Historical Returns Since 1928 for the 10 Year Treasury Bond; 3 Month Treasury Bill and the S & P 500
The S & P 500 index has broken below its 50 and 100 day SMA lines using a 1 year Yahoo Finance chart. CHART The 200 day line was at 2,583.82 last Friday. The day's low was at 2,585.89 with the close at 2,588.26, down -55.43 or -2.10%.
Regarding the Dow Theory Sell Signal, only one condition needs to be met before that signal is given. The Dow Transport average must close below 10,136.61. The close last Friday was at 10,163.53.32, down 190.14 points. DJT - Dow Jones Transportation Average - MarketWatch
A Dow Theory ‘sell’ signal could happen any day now - MarketWatch
The S & P 500 index is now down 85.35 points YTD, having closed last year at 2,673.61. Historical S & P 500 Data
The YTD total return for the SPDR® S&P 500 ETF (SPY) was at -2.91% as of last Friday. The annual average ten year total return is at 9.18%, near the long term average of 9.8% over the past ninety years. That period would include the last 9 months of 2008. Looking out over 15 years, SPY's annual average total return was 9.46% through last Friday.
There has only been 1 down year in total return since 2003, and that was in 2008. There were three consecutive down years in 2000, 2001, and 2002, which was the last multi-year bear period Historical Returns Since 1928 for the 10 Year Treasury Bond; 3 Month Treasury Bill and the S & P 500
An X-ray of the stock market reveals a bad prognosis - MarketWatch
Bolton likely to turn up heat on Iran and boost oil prices: CNBC
+++++
Portfolio Management:
Last Friday, and particularly near the close, I bought a number of stocks, using my "sprinkle" purchase method. I had 9 separate trades in my Fidelity account, using commission free trades and buying mostly near the close, and spent $766 on all of them.
I will continue to do that for as long as I have commission free trades and the stocks that I am buying continue their declines.
In the current whipsaw VIX pattern, which started in February, I will do some light buying when the VIX moves over 20 and will increase the buying on spikes over 26. Then, I will lighten up some when and if the VIX returns to below 20 movement.
This chart reflects what I call a VIX "whipsaw pattern" which started in early February:
The pattern does not describe volatility movements at levels lower than 20, which I define as "stable", but a choppy pattern where there are bursts above 20 and then back below 20. The bursts over 20 indicate "instability".
The most ominous recent whipsaw pattern preceded the most significant part of the 2008 meltdown, which accelerated in September 2008 after Lehman's collapse:
The preceding chart uses weekly closing numbers and consequently looks a lot smoother than a chart using daily closing prices. On the far right side of the preceding chart, the VIX was about to go parabolic in September 2008; and there would be no further movement back to below 20 for some time. Or put another way, the volatility spike in October 2008 to 80 ended the whipsaw pattern depicted in this snapshot.
The whipsaw pattern started in August 2007: Stocks, Bonds & Politics: VIX Chart from 2007: Alerts and Triggers Major Disruption of Cyclical Stable Bull VIX Pattern
The following chart uses daily numbers starting in 2017 which shows low volatility movements below 15 until the February 2018 spike.
VIX Interactive Stock Chart
I am still deeply into risk off mode, where the return of my capital is more important than the return on my capital.
So sprinkle purchases is all that I am willing to do at the moment, and the commission free trades make that approach cost effective.
Next week, I will receive $18K in proceeds from maturing CDs. My total proceeds from maturing securities in April has expanded by $8K to $51K due to BUD redeeming bonds that I own on 4/23/18 which have 2/1/19 maturities (discussed below in Item # 4.G.).
None of those proceeds will be used to purchase CDs since the offerings now have yields below comparable maturity treasuries, even when I buy in 1 bond lots and receive the most disadvantageous price in the secondary market. Banks are notoriously slow to raise CD rates in a rising interest rate environment, though they find speed when market rates are falling.
I will probably hold onto most of the proceeds for a few days, but may use some funds to buy dividend paying stocks. I am keeping my cash balances in my Schwab and Fidelity accounts at less than $5K due to the low sweep account rates.
One benefit of having a constant flow of maturing fixed income investments is that I can redirect the proceeds to another asset class, including common stocks that provide higher yields than the fixed income securities whose yields are still low by historical standards.
Based on my financial situation, I see some benefit to light buying in 2023-2026 corporate bond maturities. In my fixed income allocation, I am buying only CDs, short term treasuries in the secondary market, high quality and longer term Tennessee Municipal bonds (mostly rated AA or better) and investment grade corporate bonds heavily weighted in short term maturities.
The intermediate term, investment grade corporate bond ETFs remained basically unchanged last Thursday and Friday as stocks were into the crapper.
iShares Investment Grade Corporate Bond ETF (LQD):
Vanguard Intermediate-Term Corporate Bond ETF (VCIT):
The iShares 7-10 Year Treasury Bond ETF (IEF), which has a similar effective duration to those two corporate bond ETFs, did produce a gain:
The following suggests that the flight to safety will be into treasuries. Investment grade corporates in the aggregate did not produce a positive return.
Starting in February, the German ten year bond yield has drifted down, closing last Friday at .529%, down from .766% on 2/2/18. Germany 10 Year Government Bond Interactive Chart
Switzerland's ten year bond was at .22% in mid February and closed last Friday at .06%. Switzerland 10-Year Bond Yield
Bolton likely to turn up heat on Iran and boost oil prices: CNBC
+++++
Portfolio Management:
Last Friday, and particularly near the close, I bought a number of stocks, using my "sprinkle" purchase method. I had 9 separate trades in my Fidelity account, using commission free trades and buying mostly near the close, and spent $766 on all of them.
I will continue to do that for as long as I have commission free trades and the stocks that I am buying continue their declines.
In the current whipsaw VIX pattern, which started in February, I will do some light buying when the VIX moves over 20 and will increase the buying on spikes over 26. Then, I will lighten up some when and if the VIX returns to below 20 movement.
This chart reflects what I call a VIX "whipsaw pattern" which started in early February:
The pattern does not describe volatility movements at levels lower than 20, which I define as "stable", but a choppy pattern where there are bursts above 20 and then back below 20. The bursts over 20 indicate "instability".
The most ominous recent whipsaw pattern preceded the most significant part of the 2008 meltdown, which accelerated in September 2008 after Lehman's collapse:
The preceding chart uses weekly closing numbers and consequently looks a lot smoother than a chart using daily closing prices. On the far right side of the preceding chart, the VIX was about to go parabolic in September 2008; and there would be no further movement back to below 20 for some time. Or put another way, the volatility spike in October 2008 to 80 ended the whipsaw pattern depicted in this snapshot.
The whipsaw pattern started in August 2007: Stocks, Bonds & Politics: VIX Chart from 2007: Alerts and Triggers Major Disruption of Cyclical Stable Bull VIX Pattern
The following chart uses daily numbers starting in 2017 which shows low volatility movements below 15 until the February 2018 spike.
VIX Interactive Stock Chart
I am still deeply into risk off mode, where the return of my capital is more important than the return on my capital.
So sprinkle purchases is all that I am willing to do at the moment, and the commission free trades make that approach cost effective.
Next week, I will receive $18K in proceeds from maturing CDs. My total proceeds from maturing securities in April has expanded by $8K to $51K due to BUD redeeming bonds that I own on 4/23/18 which have 2/1/19 maturities (discussed below in Item # 4.G.).
None of those proceeds will be used to purchase CDs since the offerings now have yields below comparable maturity treasuries, even when I buy in 1 bond lots and receive the most disadvantageous price in the secondary market. Banks are notoriously slow to raise CD rates in a rising interest rate environment, though they find speed when market rates are falling.
I will probably hold onto most of the proceeds for a few days, but may use some funds to buy dividend paying stocks. I am keeping my cash balances in my Schwab and Fidelity accounts at less than $5K due to the low sweep account rates.
One benefit of having a constant flow of maturing fixed income investments is that I can redirect the proceeds to another asset class, including common stocks that provide higher yields than the fixed income securities whose yields are still low by historical standards.
Based on my financial situation, I see some benefit to light buying in 2023-2026 corporate bond maturities. In my fixed income allocation, I am buying only CDs, short term treasuries in the secondary market, high quality and longer term Tennessee Municipal bonds (mostly rated AA or better) and investment grade corporate bonds heavily weighted in short term maturities.
The intermediate term, investment grade corporate bond ETFs remained basically unchanged last Thursday and Friday as stocks were into the crapper.
iShares Investment Grade Corporate Bond ETF (LQD):
Vanguard Intermediate-Term Corporate Bond ETF (VCIT):
The iShares 7-10 Year Treasury Bond ETF (IEF), which has a similar effective duration to those two corporate bond ETFs, did produce a gain:
The following suggests that the flight to safety will be into treasuries. Investment grade corporates in the aggregate did not produce a positive return.
Starting in February, the German ten year bond yield has drifted down, closing last Friday at .529%, down from .766% on 2/2/18. Germany 10 Year Government Bond Interactive Chart
Switzerland's ten year bond was at .22% in mid February and closed last Friday at .06%. Switzerland 10-Year Bond Yield
Trump:
In the latest Gallup Weekly Poll, Trump's approval rating was at 40%. Trump Job Approval (Weekly)
Trump Fires His National Security Advisor H.R. McMaster and Appoints A War Monger in his Place:
The conservative columnist George Will describes Bolton as the second most dangerous man in America leaving little doubt who is number 1. The second-most dangerous American - The Washington Post ("he will be the first national security adviser who, upon taking up residence down the hall from the Oval Office, will be suggesting that the United States should seriously consider embarking on war crimes.")
Bolton will likely support Trump's desire to end the Iran nuclear deal.
Iran Nuclear Deal Exit Strategy -- John Bolton Memo to Trump | National Review
Bolton is properly described as an ultra-hawk on steroids. I would describe him as shoot first kind of guy.
John Bolton, HR McMaster’s replacement as national security adviser, explained - Vox
The Untold Story of John Bolton’s Campaign for War With Iran | The American Conservative
He was in favor of the U.S. Iraq invasion. John Bolton: Bush-era war hawk makes comeback - BBC (diplomats describe his manner as abrasive)
Bolton has advocated for a U.S. first strike against Iran and North Korea. He wants diplomacy to fail with NK so that the military option is on the table.
To Stop Iran’s Bomb, Bomb Iran: By John Bolton (opinion article published by The New York Times on 3/26/15)
On 2/28/18, the WSJ published an opinion article from Bolton making the legal case for a first strike against NK without congressional authorization. His position is that the mere possession of nuclear weapons constitutes an imminent threat against the U.S. which allows the President to act without congressional approval. The Legal Case for Striking North Korea First-WSJ
Bolton is favored by the WSJ editorial writers and pundits on Fox "News" where he frequently appears as an "expert" and receives softball questions from fawning "news anchors".
Bolton has even advocated for a war with Cuba. Five Reasons John Bolton Is Unfit to Be Secretary of State (Trump did not nominate him since he did not like his mustache and could not be confirmed by the Senate. His appointment as National Security Advisor does not require Senate confirmation)
John Bolton named national security adviser. It's time to panic now.
Bolton will reinforce and nurture Trump's natural belligerence and disgust for diplomacy.
As expected, republicans applauded this selection:
Republicans Senators:
Lee Zeldin: Congressman representing the New York's 1st congressional district (eastern end of Long Island)
++++
Is There Anyone In the Trump WH That Can Spell Simple Words:
Those responsible for communications in the Trump White House are not going to win any spelling bees.
Both Trump and his communications team make numerous and obvious spelling errors. Spelling mistakes are commonplace in Trump’s White House - The Washington Post
Maybe they need to go back to grammar school and start over again.
The running list of typos from President Trump’s White House - NY Daily News; State of the Union Typo: Trump White House Misspelled Ticket | Fortune; Here are Trump's worst typos and spelling mistakes - Business Insider
+++
Trump--Possible Questions about Extramarital Affairs and Sexual Assaults Asked Under Oath While He Is President:
In the latest Gallup Weekly Poll, Trump's approval rating was at 40%. Trump Job Approval (Weekly)
Trump Fires His National Security Advisor H.R. McMaster and Appoints A War Monger in his Place:
The conservative columnist George Will describes Bolton as the second most dangerous man in America leaving little doubt who is number 1. The second-most dangerous American - The Washington Post ("he will be the first national security adviser who, upon taking up residence down the hall from the Oval Office, will be suggesting that the United States should seriously consider embarking on war crimes.")
Bolton will likely support Trump's desire to end the Iran nuclear deal.
Iran Nuclear Deal Exit Strategy -- John Bolton Memo to Trump | National Review
Bolton is properly described as an ultra-hawk on steroids. I would describe him as shoot first kind of guy.
John Bolton, HR McMaster’s replacement as national security adviser, explained - Vox
The Untold Story of John Bolton’s Campaign for War With Iran | The American Conservative
He was in favor of the U.S. Iraq invasion. John Bolton: Bush-era war hawk makes comeback - BBC (diplomats describe his manner as abrasive)
Bolton has advocated for a U.S. first strike against Iran and North Korea. He wants diplomacy to fail with NK so that the military option is on the table.
To Stop Iran’s Bomb, Bomb Iran: By John Bolton (opinion article published by The New York Times on 3/26/15)
On 2/28/18, the WSJ published an opinion article from Bolton making the legal case for a first strike against NK without congressional authorization. His position is that the mere possession of nuclear weapons constitutes an imminent threat against the U.S. which allows the President to act without congressional approval. The Legal Case for Striking North Korea First-WSJ
Bolton is favored by the WSJ editorial writers and pundits on Fox "News" where he frequently appears as an "expert" and receives softball questions from fawning "news anchors".
Bolton has even advocated for a war with Cuba. Five Reasons John Bolton Is Unfit to Be Secretary of State (Trump did not nominate him since he did not like his mustache and could not be confirmed by the Senate. His appointment as National Security Advisor does not require Senate confirmation)
John Bolton named national security adviser. It's time to panic now.
Bolton will reinforce and nurture Trump's natural belligerence and disgust for diplomacy.
As expected, republicans applauded this selection:
Republicans Senators:
Lee Zeldin: Congressman representing the New York's 1st congressional district (eastern end of Long Island)
++++
Is There Anyone In the Trump WH That Can Spell Simple Words:
Those responsible for communications in the Trump White House are not going to win any spelling bees.
Both Trump and his communications team make numerous and obvious spelling errors. Spelling mistakes are commonplace in Trump’s White House - The Washington Post
Maybe they need to go back to grammar school and start over again.
The running list of typos from President Trump’s White House - NY Daily News; State of the Union Typo: Trump White House Misspelled Ticket | Fortune; Here are Trump's worst typos and spelling mistakes - Business Insider
+++
Trump--Possible Questions about Extramarital Affairs and Sexual Assaults Asked Under Oath While He Is President:
The republicans felt triumphant when they secured a Supreme Court ruling that Paul Jones's sexual assault against Clinton could proceed while Clinton was still President; and that Bill could be deposed in that case. Clinton v. Jones, 520 U.S. 681 (1997)
The republicans could then require Bill to answer questions about his prior sexual conduct with women other than Hillary, knowing that he would lie about it. Then, they could then use those lies as an excuse to impeach him.
While the republicans merrily voted to impeach Bill for lying about having sex with someone other than Hillary, they would be aghast and indignant when and if the Democrats tried to impeach Donald for the same conduct, and they would never accept in any event the premise that Donald has lied under oath no matter how many women came forward to claim that he sexually assaulted them.
Now, that same Supreme Court decision will allow a lawsuit to proceed against Donald based on conduct occurring prior to his presidency.
The suit was filed by Summer Zervos who claimed Donald sexually assaulted her.
Donald of course called all of the women making such claims liars and Zervos responded with a defamation suit.
I frequently hear his supporters regurgitate his claim.
Yes, when living in an Alternate Reality where true is false and false is true, Donald is the one telling the truth and all of the 19 or so woman are lying. Maybe when that number goes over 100, some Trump True Believers will have a passing thought that Trump may be lying and the women are telling the truth.
But, to be sure, the evangelicals and family values republicans support him 100%, though they are finding it necessary to more frequently include Donald in their prayers.
I heard a joke that Donald brought his own bible to the inauguration and forgot to remove the cellophane wrapper until shortly before Justice Roberts gave him the Oath of Office. Is Donald a Christian? The answer is obvious. He does not even pretend to be one very well.
The court will allow the lawsuit to proceed against Donald. Trump, deemed not 'above the law,' must face defamation lawsuit
How Paula Jones Paved the Way for Donald Trump to Be Repeatedly Dragged Into Court as President
So, just another example of what goes around comes around. There is a measure of justice in the world.
How 75 pending lawsuits could distract a Donald Trump presidency: USA Today
CNN aired an hour long interview with McDougal where she convincingly claimed IMO that she had a 10 month sexual affair with Donald while he was married to Melania. Former Playboy Model Spills Details Of Alleged Affair: Trump Tried To Pay Her : The Two-Way : NPR; McDougal says she was intimate with Trump 'many dozens' of times- CNN; Karen McDougal to Melania: I'm sorry for sleeping with Donald Trump: USA Today The evangelicals may need to start praying harder for Donald.
At one of the 2020 Presidential debates, maybe the Democrat's candidate can bring Stormy, Karen and all of the NDA Trump women to sit in the audience and to attend a joint press conference prior to the debate, just like Donald did with Bill's women in one of the debate's with Hillary. Trump appears with Bill Clinton accusers before debate-CNN
+++++++
George Nader and Trump:
Mueller has given George Nader immunity from prosecution who is providing information on money flow from Saudi Arabia and the United Arab Emirates to a top Trump fund raiser Elliott Broidy who is the deputy finance chairman of the Republican National Committee. How 2 Gulf Monarchies Sought to Influence the White House - The New York Times
Broidy has been convicted of a crime relating to bribery. Elliott Broidy Pleads Guilty in New York Pension Fraud Case-The New York Times ("Elliott Broidy, a California venture capitalist, pleaded guilty on Thursday to charges that he helped his company land a lucrative deal with New York’s public pension fund by giving nearly $1 million worth of illegal gifts to state officials.") Broidy is one of Trump's close associates and friends.
Broidy and those those Arab nations were trying to convince Trump to fire Rex Tillerson as Secretary of State; back Saudi Arabia and the UAE in their confrontational approach with Qatar; and to abandon the nuclear deal with Iran.
Trump has fired Tillerson and has supported Saudi and the UAE against Qatar even though Qatar hosts the largest U.S. military base in the Middle East. What Trump's Qatar Tweets Revealed - The Atlantic
Trump is of course leaning toward terminating the Iran nuclear treaty. US prepares to leave Iran deal, even as talks with Europe continue-CNN;
Broidy has not registered as a agent of a foreign government. He maintains that he is acting solely as a patriot rather than for the payments made to Mr. Broidy as outlined in the NYT article.
Broidy also offered his services to a Russian attorney before Trump's inauguration to lobby the U.S. to remove Russian companies from the sanction list: Trump Fundraiser Offered to Help Lift Sanctions on Russian Firms-Bloomberg
Trump has or wants to develop businesses in Saudi and the U.A.E., but Qatar has not allowed him to enter. Trump’s Business Ties in the Gulf Raise Questions About His Allegiances - The New York Times(published 6/17/17)("President Trump has done business with royals from Saudi Arabia for at least 20 years, since he sold the Plaza Hotel to a partnership formed by a Saudi prince. Mr. Trump has earned millions of dollars from the United Arab Emirates for putting his name on a golf course, with a second soon to open. He has never entered the booming market in neighboring Qatar, however, despite years of trying.")
Will Trump supporters even ask themselves whether Trump's Middle Eastern policies are in furtherance of the nation's interest or in pursuit of his own financial interest?
The appointment of John Bolton feeds into this Saudi formulated or influenced U.S. Middle Eastern foreign policy. Saudi Arabia would like for the U.S. to take care of Iran for them.
Trumps attacks on Mueller have intensified based on this new area of inquiry and Mueller's subpoena served on the Trump organization.
Mueller subpoenas Trump Organization documents in Russia probe - CNN
The republicans could then require Bill to answer questions about his prior sexual conduct with women other than Hillary, knowing that he would lie about it. Then, they could then use those lies as an excuse to impeach him.
While the republicans merrily voted to impeach Bill for lying about having sex with someone other than Hillary, they would be aghast and indignant when and if the Democrats tried to impeach Donald for the same conduct, and they would never accept in any event the premise that Donald has lied under oath no matter how many women came forward to claim that he sexually assaulted them.
Now, that same Supreme Court decision will allow a lawsuit to proceed against Donald based on conduct occurring prior to his presidency.
The suit was filed by Summer Zervos who claimed Donald sexually assaulted her.
Donald of course called all of the women making such claims liars and Zervos responded with a defamation suit.
I frequently hear his supporters regurgitate his claim.
Yes, when living in an Alternate Reality where true is false and false is true, Donald is the one telling the truth and all of the 19 or so woman are lying. Maybe when that number goes over 100, some Trump True Believers will have a passing thought that Trump may be lying and the women are telling the truth.
But, to be sure, the evangelicals and family values republicans support him 100%, though they are finding it necessary to more frequently include Donald in their prayers.
I heard a joke that Donald brought his own bible to the inauguration and forgot to remove the cellophane wrapper until shortly before Justice Roberts gave him the Oath of Office. Is Donald a Christian? The answer is obvious. He does not even pretend to be one very well.
The court will allow the lawsuit to proceed against Donald. Trump, deemed not 'above the law,' must face defamation lawsuit
How Paula Jones Paved the Way for Donald Trump to Be Repeatedly Dragged Into Court as President
So, just another example of what goes around comes around. There is a measure of justice in the world.
How 75 pending lawsuits could distract a Donald Trump presidency: USA Today
CNN aired an hour long interview with McDougal where she convincingly claimed IMO that she had a 10 month sexual affair with Donald while he was married to Melania. Former Playboy Model Spills Details Of Alleged Affair: Trump Tried To Pay Her : The Two-Way : NPR; McDougal says she was intimate with Trump 'many dozens' of times- CNN; Karen McDougal to Melania: I'm sorry for sleeping with Donald Trump: USA Today The evangelicals may need to start praying harder for Donald.
At one of the 2020 Presidential debates, maybe the Democrat's candidate can bring Stormy, Karen and all of the NDA Trump women to sit in the audience and to attend a joint press conference prior to the debate, just like Donald did with Bill's women in one of the debate's with Hillary. Trump appears with Bill Clinton accusers before debate-CNN
+++++++
George Nader and Trump:
Mueller has given George Nader immunity from prosecution who is providing information on money flow from Saudi Arabia and the United Arab Emirates to a top Trump fund raiser Elliott Broidy who is the deputy finance chairman of the Republican National Committee. How 2 Gulf Monarchies Sought to Influence the White House - The New York Times
Broidy has been convicted of a crime relating to bribery. Elliott Broidy Pleads Guilty in New York Pension Fraud Case-The New York Times ("Elliott Broidy, a California venture capitalist, pleaded guilty on Thursday to charges that he helped his company land a lucrative deal with New York’s public pension fund by giving nearly $1 million worth of illegal gifts to state officials.") Broidy is one of Trump's close associates and friends.
Broidy and those those Arab nations were trying to convince Trump to fire Rex Tillerson as Secretary of State; back Saudi Arabia and the UAE in their confrontational approach with Qatar; and to abandon the nuclear deal with Iran.
Trump has fired Tillerson and has supported Saudi and the UAE against Qatar even though Qatar hosts the largest U.S. military base in the Middle East. What Trump's Qatar Tweets Revealed - The Atlantic
Trump is of course leaning toward terminating the Iran nuclear treaty. US prepares to leave Iran deal, even as talks with Europe continue-CNN;
Broidy has not registered as a agent of a foreign government. He maintains that he is acting solely as a patriot rather than for the payments made to Mr. Broidy as outlined in the NYT article.
Broidy also offered his services to a Russian attorney before Trump's inauguration to lobby the U.S. to remove Russian companies from the sanction list: Trump Fundraiser Offered to Help Lift Sanctions on Russian Firms-Bloomberg
Trump has or wants to develop businesses in Saudi and the U.A.E., but Qatar has not allowed him to enter. Trump’s Business Ties in the Gulf Raise Questions About His Allegiances - The New York Times(published 6/17/17)("President Trump has done business with royals from Saudi Arabia for at least 20 years, since he sold the Plaza Hotel to a partnership formed by a Saudi prince. Mr. Trump has earned millions of dollars from the United Arab Emirates for putting his name on a golf course, with a second soon to open. He has never entered the booming market in neighboring Qatar, however, despite years of trying.")
Will Trump supporters even ask themselves whether Trump's Middle Eastern policies are in furtherance of the nation's interest or in pursuit of his own financial interest?
The appointment of John Bolton feeds into this Saudi formulated or influenced U.S. Middle Eastern foreign policy. Saudi Arabia would like for the U.S. to take care of Iran for them.
Trumps attacks on Mueller have intensified based on this new area of inquiry and Mueller's subpoena served on the Trump organization.
Mueller subpoenas Trump Organization documents in Russia probe - CNN
++++++++
1. Small Ball-REGIONAL BANK BASKET STRATEGY:
A. Sold 30 BHB at $29.42:
Profit Snapshot: $41.02
Item 1.A. Bought 30 BHB at $28.05 (12/18/17 Post)
I am keeping the 250 shares owned in my Fidelity account that have an average cost per share of $17.79. Based on BHB's current dividend rate, those shares will produce $186.72 in annual dividends:
Quote: Bar Harbor Bankshares (BHB)
1. Small Ball-REGIONAL BANK BASKET STRATEGY:
A. Sold 30 BHB at $29.42:
Profit Snapshot: $41.02
Item 1.A. Bought 30 BHB at $28.05 (12/18/17 Post)
I am keeping the 250 shares owned in my Fidelity account that have an average cost per share of $17.79. Based on BHB's current dividend rate, those shares will produce $186.72 in annual dividends:
Quote: Bar Harbor Bankshares (BHB)
BHB Trading Gains to Date: $977.98 (prior trade= $936.96)
The prior realized gain was on a 100 share lot sold at $31.05 (2/11/2016):
Recent Earnings Report: Q/E 12/31/17
Bar Harbor Bankshares Reports Fourth Quarter Earnings: "Fourth quarter GAAP earnings were $6.6 million, or 43 cents per share. Core earnings totaled $9.0 million, or 58 cents per share. GAAP earnings included a $4.0 million income tax charge due to the revaluation of net deferred tax assets required by the Tax Cuts and Jobs Act of 2017 (“TCJA”). In addition, there was a net benefit of $2.6 million, which included the sale of the insurance subsidiary offset by other one-time charges."
Closing Price Last Friday: BHB $28.11 -$1.02 -3.50%
I will consider buying this lot back below $26.
2. Small Ball: Equity REITs, MREITs and BDCs:
A. Started "10 Share Buying Program" in ARCC-Bought 10 at $15.39 and Used Commission Free Trade:
I bought this lot after the last quarterly ex dividend date which was on 3/14/18. I will buy up to 50 shares in 10 share lots using commission free trades. Each lot has to be bought at a price lower than the other purchases.
Quote: Ares Capital Corp. (ARCC)
ARCC-Portfolio
Dividend: Quarterly at $.38 per share
Yield at $15.39 = 9.88%
I bought before the ex dividend date 50 shares in a Roth IRA and have nothing to add to that recent discussion: Item # 1.A. Bought 50 ARCC at $15.44-In a Roth IRA Account (2/22/18 Post)
Closing Price Last Friday: ARCC $15.71 -$0.17 -1.07%
B. Bought 10 GOV at $13.20-Used Commission Free Trade:
I discussed this deservedly hated REIT in my last post and have nothing to add. Item # 2.A. Bought 10 GOV at $13.67
Chart: Major Bear Trend; no evidence yet of a possible trend reversal
Total Position: 20 shares
Average Total Cost Per Share: $13.435
Dividend Yield (current payout) at Average Total Cost= 12.8%
I will reinvest the dividend until the price exceeds $16. I will likely sell whatever I own somewhere in the $16 to $18 range. If conditions deteriorate meaningfully, that range will be adjusted down.
As the reasons discussed in my prior post, I have reduced my buy and sell target ranges for this REIT, which I view with disdain and disgust.
Closing Price Last Friday (3/23): GOV $13.02 -$0.45 -3.34%
C. BOUGHT 10 LXP at $7.74:
Quote: Lexington Realty Trust
Website: Welcome to Lexington Realty Trust
Chart: Bear Trend with no indication yet of a trend reversal
At least my dividend yield is going up with each new purchase at a lower price.
Dividend: Quarterly at $.1775 ($.71 annually)
Next Ex Dividend Date: 3/28/18
Dividend Yield at $7.74 = 9.17%
Dividend Yield at Average Total Cost This Account (100 shares) = 8.05%
I will continue buying in this account in ten share lots until I hit 130 shares. Each purchase must be the lowest price in the purchase chain.
I will be reinvesting the dividend.
I recently discussed this REIT and have nothing to add to my prior discussion. Item 1.D. Bought 10 LXP at $7.95 (3/12/18 Post) and Item # 1 (1/4/18 Post)
Closing Price Last Friday: LXP $7.72 -$0.11 -1.40%
I would hope management is buying back stock at these price levels.
3. MORE SMALL BALL:
A. Bought 2 GIS at $49.95 and 3 at $45.12-Used Commission Free Trades:
General Mills is in disfavor. It would be fair to say that GIS has become even more disfavored after announcing the Blue Buffalo acquisition for $8B and matters relating to its recent earnings release and future guidance.
I was scheduled to buy 5 shares when there was a break below $50. Instead I bought 2 shares since Left Brain believed that it was more probable than not that GIS would disappoint investors when it released its earnings report the next day.
After GIS disappointed investors with its earnings report and forecast, I bought 3 shares at $45.12.
I summarized in a recent comment the problems faced by packaged food companies as follows:
"There are several reasons to be cautious about packaged food companies.
For several companies, including GIS, cash used to pay the dividends and to buy back stock significantly exceeds free cash flow.
Consequently, the dividend payments and share buybacks are being financed in part by increasing debt which made sense to corporate boards when interest rates were at historic lows.
Dividend Yield at $49.95: 3.92%
Dividend Yield at $45.12: 4.344%
Current Position: only 20 shares at an average cost per share of $50.1
Cash Flow: Dividends and share repurchases have exceeded free cash flow in the recent past:
Cash Flow for General Mills Inc (GIS) from Morningstar.com
Last Substantive Discussion: Item # 1.B. Bought 10 GIS at $50.7 (10/31/17 Post)(this lot was sold at $56.18)
Last Sold at $56.18: Item #2.A. Sold 10 GIS at $56.18-Used Commission Free Trade (12/21/17 Post)
Blue Buffalo Acquisition:
General Mills Accelerates Portfolio Reshaping With Acquisition of Blue Buffalo Pet Products ("General Mills will acquire Blue Buffalo for $40.00 per share in cash, representing an enterprise value of approximately $8.0 billion. The transaction establishes General Mills as the leader in the U.S. Wholesome Natural pet food category, the fastest growing portion of the overall pet food market.")
GIS will finance the deal with additional debt, cash on hand and "approximately $1.0 billion in equity". I will wait until that equity offering clears before buying more shares.
GIS summary of perceived benefits:
GIS says that the $40 per share in cash acquisition price represents an enterprise value of $8 billion and just under 22 times EBITDA including synergies. Page 4 General Mills' (GIS) CEO Jeff Harmening Discusses Acquisition of Blue Buffalo Pet Products - Call Transcript | Seeking Alpha
The Bishop family owns more than 50% of the Blue Buffalo's stock and will be paid in cash.
GIS expects the acquisition to be neutral to cash E.P.S. in 2019 and accretive in fiscal 2020. (page 5 transcript)
The market was not thrilled with this pricy acquisition. I am okay with it since revenues and profits are accelerating at a rapid pace. The price paid is too high and smacks of "growth desperation."
Blue Buffalo is currently a public company. BUFF Stock Price
Blue Buffalo 2017 Annual Report
General Mills Receives Antitrust Clearance for Blue Buffalo Acquisition (3/19/18)
GIS intends to "maintain" the annual dividend at the current rate and will suspend share buybacks until it reduces debt to more "normalized levels".
Slide: Investor Presentation
Last GIS Earnings Report: Q/E 2/25/18 (F/Y THIRD QUARTER)
The stock declined almost 10% in response to this report. The main problem was not the earnings report but the forward guidance:
Note that the guidance does not include the Blue Buffalo acquisition which will add some to organic growth after its consummation. The lowered guidance is for the 2018 fiscal year which only has the current quarter left in it.
One of the input cost increases involves freight:
"We're now having to go out to the spot market for close to 20% of our shipments versus the historic average of about 5%, and those spot market prices can be 30% to 60% higher than our contracted rates." Q3 2018 Results - Earnings Call Transcript | Seeking Alpha at page 2 (emphasis added)
While this increase may prove to be transitory, it is hard to know when this price pressure may subside. There is a shortage of truck drivers. Trucking Industry Struggles With Growing Driver Shortage : NPR
General Mills Reports Fiscal 2018 Third-quarter Results
The earnings for the third fiscal quarter met expectations:
Yogurt sales were down 8%, so that problem is a continuing one. I am not impressed with the new product "Oui" which comes in a glass container and has a $1.49 price tag at Kroger.
Gross margin decreased 220 basis points to 32.3% of net sales.
"Adjusted gross margin, which excludes certain items affecting comparability, decreased 250 basis points to 32.5 percent. This was driven by higher input costs, including increased freight and logistics costs, commodity inflation, and other operational costs, as well as higher merchandising expense."
Subsequent to this earnings release, several analysts reduced their price targets.
RBC cut its price target to $52 from $60 primarily due to the unanticipated increases in commodity and supply chain costs. The RBC analysts believe that GIS will be "disproportionately impacted" by freight costs due to its large volumes and more "freight-to-facility shipments".
Stifel cut the price target from $57 to $48.
JPM cut its price target to $44 from $54 citing their belief that management did not provide enough information on whether the third quarter problems are recurring or more temporary in nature. Hard to make that prediction because the future is not known.
All of those firms had and still have neutral/hold/sector perform ratings.
General Mills looks compelling to Susquehanna-Seeking Alpha (raises price target to $53 from $51; claims that free cash flow yield will be 8.3% with Blue Buffalo)
I currently own 2 GIS senior unsecured bonds: Item 3.F. Bought 2 General Mills 2.2% SU Bonds Maturing on 10/21/19-In a Roth IRA Account (2/12/18)
Closing Price Last Friday: GIS $44.21 -$0.24 -0.54%
B. Added 2 PG at $78.09, 1 at $76.55 and 2 at $76-Used Commission Free Trades:
Last Substantive Discussion: Item # 3.B. (3/19/18 post)
Chart: Bear Trend with no reversal in trend discernible
PG would be negatively impacted by the commodity and other pricing pressures discussed above in relation to GIS. It is unclear to me whether freight costs have the same kind of impact which would depend on part on the use of spot contracts.
I have nothing to add to my recent prior discussions. I am averaging down in small lots and will continue doing so. Each purchase has to be at a lower price than all other purchases in the series.
I am now up to 33 shares. I will continue buying at lower prices until I hit 50 shares.
Closing Price Last Friday (3/23): PG $75.91 -$0.50 -0.65%
PG Historical Prices (closed at $91.72 on 1/8/18; the percentage decline to $75.91 unadjusted for one quarterly dividend is 17.24%)
Bar Harbor Bankshares Reports Fourth Quarter Earnings: "Fourth quarter GAAP earnings were $6.6 million, or 43 cents per share. Core earnings totaled $9.0 million, or 58 cents per share. GAAP earnings included a $4.0 million income tax charge due to the revaluation of net deferred tax assets required by the Tax Cuts and Jobs Act of 2017 (“TCJA”). In addition, there was a net benefit of $2.6 million, which included the sale of the insurance subsidiary offset by other one-time charges."
Closing Price Last Friday: BHB $28.11 -$1.02 -3.50%
I will consider buying this lot back below $26.
2. Small Ball: Equity REITs, MREITs and BDCs:
A. Started "10 Share Buying Program" in ARCC-Bought 10 at $15.39 and Used Commission Free Trade:
I bought this lot after the last quarterly ex dividend date which was on 3/14/18. I will buy up to 50 shares in 10 share lots using commission free trades. Each lot has to be bought at a price lower than the other purchases.
Quote: Ares Capital Corp. (ARCC)
ARCC-Portfolio
Dividend: Quarterly at $.38 per share
Yield at $15.39 = 9.88%
I bought before the ex dividend date 50 shares in a Roth IRA and have nothing to add to that recent discussion: Item # 1.A. Bought 50 ARCC at $15.44-In a Roth IRA Account (2/22/18 Post)
Closing Price Last Friday: ARCC $15.71 -$0.17 -1.07%
B. Bought 10 GOV at $13.20-Used Commission Free Trade:
I discussed this deservedly hated REIT in my last post and have nothing to add. Item # 2.A. Bought 10 GOV at $13.67
Chart: Major Bear Trend; no evidence yet of a possible trend reversal
Total Position: 20 shares
Average Total Cost Per Share: $13.435
Dividend Yield (current payout) at Average Total Cost= 12.8%
I will reinvest the dividend until the price exceeds $16. I will likely sell whatever I own somewhere in the $16 to $18 range. If conditions deteriorate meaningfully, that range will be adjusted down.
As the reasons discussed in my prior post, I have reduced my buy and sell target ranges for this REIT, which I view with disdain and disgust.
Closing Price Last Friday (3/23): GOV $13.02 -$0.45 -3.34%
C. BOUGHT 10 LXP at $7.74:
Quote: Lexington Realty Trust
Website: Welcome to Lexington Realty Trust
Chart: Bear Trend with no indication yet of a trend reversal
At least my dividend yield is going up with each new purchase at a lower price.
Dividend: Quarterly at $.1775 ($.71 annually)
Next Ex Dividend Date: 3/28/18
Dividend Yield at $7.74 = 9.17%
Dividend Yield at Average Total Cost This Account (100 shares) = 8.05%
I will continue buying in this account in ten share lots until I hit 130 shares. Each purchase must be the lowest price in the purchase chain.
I will be reinvesting the dividend.
I recently discussed this REIT and have nothing to add to my prior discussion. Item 1.D. Bought 10 LXP at $7.95 (3/12/18 Post) and Item # 1 (1/4/18 Post)
Closing Price Last Friday: LXP $7.72 -$0.11 -1.40%
I would hope management is buying back stock at these price levels.
3. MORE SMALL BALL:
A. Bought 2 GIS at $49.95 and 3 at $45.12-Used Commission Free Trades:
General Mills is in disfavor. It would be fair to say that GIS has become even more disfavored after announcing the Blue Buffalo acquisition for $8B and matters relating to its recent earnings release and future guidance.
I was scheduled to buy 5 shares when there was a break below $50. Instead I bought 2 shares since Left Brain believed that it was more probable than not that GIS would disappoint investors when it released its earnings report the next day.
After GIS disappointed investors with its earnings report and forecast, I bought 3 shares at $45.12.
I summarized in a recent comment the problems faced by packaged food companies as follows:
"There are several reasons to be cautious about packaged food companies.
There is product pricing pressure and slowing sales coupled with rising input costs.
Together, those trends will place downward pressures on profit margins and earnings.
The stagnation in earnings growth will slow dividend increases and will continue to increase the dividend payout ratio.
With interest rates rising and debt expanding, however, those decisions may not look so hot in retrospect. All of these factors in combination may cause sooner or later a dividend cut. "
Dividend: $.49 per share General Mills Quarterly Dividend Declared
Due to the Blue Buffalo acquisition discussed below, the Board will maintain that rate until further notice. I would not expect a dividend increase this year or in 2019.
Dividend: $.49 per share General Mills Quarterly Dividend Declared
Due to the Blue Buffalo acquisition discussed below, the Board will maintain that rate until further notice. I would not expect a dividend increase this year or in 2019.
Dividend Yield at $49.95: 3.92%
Dividend Yield at $45.12: 4.344%
Current Position: only 20 shares at an average cost per share of $50.1
Cash Flow: Dividends and share repurchases have exceeded free cash flow in the recent past:
Cash Flow for General Mills Inc (GIS) from Morningstar.com
Last Substantive Discussion: Item # 1.B. Bought 10 GIS at $50.7 (10/31/17 Post)(this lot was sold at $56.18)
Last Sold at $56.18: Item #2.A. Sold 10 GIS at $56.18-Used Commission Free Trade (12/21/17 Post)
Blue Buffalo Acquisition:
General Mills Accelerates Portfolio Reshaping With Acquisition of Blue Buffalo Pet Products ("General Mills will acquire Blue Buffalo for $40.00 per share in cash, representing an enterprise value of approximately $8.0 billion. The transaction establishes General Mills as the leader in the U.S. Wholesome Natural pet food category, the fastest growing portion of the overall pet food market.")
GIS will finance the deal with additional debt, cash on hand and "approximately $1.0 billion in equity". I will wait until that equity offering clears before buying more shares.
GIS summary of perceived benefits:
GIS says that the $40 per share in cash acquisition price represents an enterprise value of $8 billion and just under 22 times EBITDA including synergies. Page 4 General Mills' (GIS) CEO Jeff Harmening Discusses Acquisition of Blue Buffalo Pet Products - Call Transcript | Seeking Alpha
The Bishop family owns more than 50% of the Blue Buffalo's stock and will be paid in cash.
GIS expects the acquisition to be neutral to cash E.P.S. in 2019 and accretive in fiscal 2020. (page 5 transcript)
The market was not thrilled with this pricy acquisition. I am okay with it since revenues and profits are accelerating at a rapid pace. The price paid is too high and smacks of "growth desperation."
Blue Buffalo is currently a public company. BUFF Stock Price
Blue Buffalo 2017 Annual Report
General Mills Receives Antitrust Clearance for Blue Buffalo Acquisition (3/19/18)
GIS intends to "maintain" the annual dividend at the current rate and will suspend share buybacks until it reduces debt to more "normalized levels".
Slide: Investor Presentation
Last GIS Earnings Report: Q/E 2/25/18 (F/Y THIRD QUARTER)
The stock declined almost 10% in response to this report. The main problem was not the earnings report but the forward guidance:
Note that the guidance does not include the Blue Buffalo acquisition which will add some to organic growth after its consummation. The lowered guidance is for the 2018 fiscal year which only has the current quarter left in it.
One of the input cost increases involves freight:
"We're now having to go out to the spot market for close to 20% of our shipments versus the historic average of about 5%, and those spot market prices can be 30% to 60% higher than our contracted rates." Q3 2018 Results - Earnings Call Transcript | Seeking Alpha at page 2 (emphasis added)
While this increase may prove to be transitory, it is hard to know when this price pressure may subside. There is a shortage of truck drivers. Trucking Industry Struggles With Growing Driver Shortage : NPR
General Mills Reports Fiscal 2018 Third-quarter Results
The earnings for the third fiscal quarter met expectations:
Yogurt sales were down 8%, so that problem is a continuing one. I am not impressed with the new product "Oui" which comes in a glass container and has a $1.49 price tag at Kroger.
Gross margin decreased 220 basis points to 32.3% of net sales.
"Adjusted gross margin, which excludes certain items affecting comparability, decreased 250 basis points to 32.5 percent. This was driven by higher input costs, including increased freight and logistics costs, commodity inflation, and other operational costs, as well as higher merchandising expense."
Subsequent to this earnings release, several analysts reduced their price targets.
RBC cut its price target to $52 from $60 primarily due to the unanticipated increases in commodity and supply chain costs. The RBC analysts believe that GIS will be "disproportionately impacted" by freight costs due to its large volumes and more "freight-to-facility shipments".
Stifel cut the price target from $57 to $48.
JPM cut its price target to $44 from $54 citing their belief that management did not provide enough information on whether the third quarter problems are recurring or more temporary in nature. Hard to make that prediction because the future is not known.
All of those firms had and still have neutral/hold/sector perform ratings.
General Mills looks compelling to Susquehanna-Seeking Alpha (raises price target to $53 from $51; claims that free cash flow yield will be 8.3% with Blue Buffalo)
I currently own 2 GIS senior unsecured bonds: Item 3.F. Bought 2 General Mills 2.2% SU Bonds Maturing on 10/21/19-In a Roth IRA Account (2/12/18)
Closing Price Last Friday: GIS $44.21 -$0.24 -0.54%
B. Added 2 PG at $78.09, 1 at $76.55 and 2 at $76-Used Commission Free Trades:
Last Substantive Discussion: Item # 3.B. (3/19/18 post)
Chart: Bear Trend with no reversal in trend discernible
PG would be negatively impacted by the commodity and other pricing pressures discussed above in relation to GIS. It is unclear to me whether freight costs have the same kind of impact which would depend on part on the use of spot contracts.
I have nothing to add to my recent prior discussions. I am averaging down in small lots and will continue doing so. Each purchase has to be at a lower price than all other purchases in the series.
I am now up to 33 shares. I will continue buying at lower prices until I hit 50 shares.
Closing Price Last Friday (3/23): PG $75.91 -$0.50 -0.65%
PG Historical Prices (closed at $91.72 on 1/8/18; the percentage decline to $75.91 unadjusted for one quarterly dividend is 17.24%)
4. Short Term Bond/CD Ladder Basket Strategy:
I am tip toeing into 2020 maturities. My Schwab sweep account pays .12%.
A. Bought 1 Wells Fargo 2.55% CD (monthly interest payments) Maturing on 3/30/20 (2 Year CD):
B. Bought 1 Treasury 1.5% Coupon Maturing on 3/31/19:
YTM at 2.081%
C. Added 1 Caterpillar Financial Services 1.8% SU Bond Maturing on 11/13/18:
I now own 5 bonds.
Finra Page: Bond Detail (prospectus linked)
Credit Ratings:
Bought at a Total Cost of 99.8
YTM at TC Then at 2.106%
Current Yield at TC = 1.8036%
CD Yields With 10/19/18 to 12/21/18 Maturities on Day of Purchase:
1.25% Coupon Treasury Maturing on 11/15/18- As of Day of Purchase 3/14/18):
For a one bond purchase, the YTM would have been 1.924%, better than any of the CDs listed above and .182% below the 2.106% YTM of the CAT bond maturing two days earlier.
The 1.25% Treasury bond has a 1.2556% current yield or .528% lower than the CAT bond.
If I had any question about CAT surviving to the maturity date, then the 1.25% treasury would be the better option since the slight current yield and YTM differentials in favor of the CAT bonds would not be worth the risk.
Since I have no concerns, I went with the CAT bond. I also own the 1.25% Treasury.
D. Bought 1 Anheuser Busch 2.15% SU Bond Maturing on 2/1/19:
FINRA Page: Bond Detail (prospectus linked)
Issuer: Anheuser-Busch InBev S.A.
Moody's at A3
Bought at a Total Cost of 99.662
YTM at TC Then at 2.545%
Current Yield at TC = 2.1582%
I now own 2 bonds.
I own 6 Anheuser 1.9% SU bonds maturing on the same day. The 2.15% coupon bond provided me with a higher current yield and YTM on the day of this last purchase (3/15/18). Since the two BUD bonds maturing on the same day are functionally equivalent, there would be no reason to buy the lower yielding one.
Last Friday, I received an email notice that both the 1.9% and 2.15% bonds maturing on 2/1/19 will be redeemed by BUD on 4/23/18. SEC Filed Notice of Redemption
With the early redemption of those bonds, my April redemption proceeds will be at $51K, up from $43 previously noted. Item # 5
E. Bought 1 Morgan Stanley 2.2% SU Bond Maturing on 12/7/18:
FINRA PAGE: Bond Detail (prospectus linked)
Issuer: Morgan Stanley (MS)
MS Analyst Estimates
2017 Annual Report
Credit Ratings:
Creditor Presentations
Bought at a Total Cost of 99.948
YTM at TC Then at 2.271%
Current Yield at TC = 2.2011%
F. Bought 2 Ecolab 2.25% SU Bonds Maturing on 1/1/2020-In a Roth IRA Account:
FINRA Page: Bond Detail (prospectus linked)
Issuer: Ecolab Inc. (ECL)
ECL Analyst Estimates
Ecolab Fourth Quarter Reported Diluted EPS $1.93; Adjusted Diluted EPS $1.39, +11%; Expects Full Year 2018 Adjusted Diluted EPS +12%-16% to $5.25 to $5.45 Range
2017 ANNUAL REPORT (Long Term Debt at page 72)
Last Debt Offering-August 2017: $500M of 2.375% SU notes maturing in 2022
Credit Ratings:
Bought at a Total Cost of 99.475
YTM at TC Then at 2.547%
Current Yield at TC = 2.2619%
5. Intermediate Term Bond/CD Ladder Basket Strategy:
A. Bought 1 McDonalds 2.625% SU Bond Maturing on 1/15/22:
FINRA Page: Bond Detail (prospectus linked)
Issuer: McDonald's Corp. (MCD)
MCD Analyst Estimates
2017 Annual Report
Credit Ratings:
Bought at a Total Cost of 98.244
YTM at TC Then at 3.058%
Current Yield at 2.6719%
I now own 2 bonds.
MCD's most recent bond issuances, offered a few days ago, were as follows:
$500M in 4.45% SU bonds maturing in 2047: Prospectus
$500M in 3.8% SU bonds maturing in 2028: Prospectus
$500M in 3.35% SU bonds maturing in 2023: Propsectus
B. Bought Back 2 Kellogg 2.65% SU Bonds Maturing on 12/1/23:
Finra Page: Bond Detail (prospectus linked)
Issuer: Kellogg Co. (K)
K Analyst Estimates
Kellogg Company Reports 2017 Fourth Quarter Results
Credit Ratings:
Bought at a Total Cost of 96.7
YTM at TC Then at 3.288%
Current Yield at TC = 2.7404%
Bought at 96.5
In my Fidelity account, I sold this bond on 9/19/17 at 99.7. Item # 1.A. (10/5/17 Post) The five and seven year treasury notes then had yields of 1.84% and 2.07% respectively. 2017 Daily Treasury Yield Curve Rates
On the day that I repurchased this bond (3/14/18), the 5 and 7 year treasury rates closed at 2.61% and 2.75% respectively. 2018 Daily Treasury Yield Curve Rates.
The only way for this fixed coupon Kellogg bond to adjust to the rise in treasury rates since September 2017 is to go down in price. There has not been any change in Kellogg's credit risk since that time.
After selling a number of 2023 maturities last year, I did not have any bonds maturing between 9/2/23 through 12/31/13 before this Kellogg bond purchase.
I would sell those two Kellogg bonds at greater than 99; and without reservation, at greater than 100.
I currently own only 4 bonds maturing after 7/2/23 through 12/31/23. I will rebuild that part of my intermediate term ladder slowly.
Another Kellogg bond that I sold last year, which I may back at less than 94, is the 3.25% SU maturing on 4/1/26. I sold that one at 100.234. Item # 3.A. (10/9/17 Post); 2026 K Bond Detail
5. Long Term Bond Strategy-Tennessee Municipal Bonds:
A. Bought 5 Tennessee Housing Development Agency 2.8% Bonds Maturing on 7/1/29:
EMMA Page
Credit Ratings:
Moody's at Aa1
S & P at AA+
THDA invests in first lien single-family mortgages that are insured as described in the following snapshots:
Bought at a Total Cost of 95.934
YTM at Total Cost Then at 3.232%
Tax Free Current Yield at TC = 2.9187%
Optional Call: At par value on or after 1/1/27
Security:
Tax Matters:
YTM at 2.081%
C. Added 1 Caterpillar Financial Services 1.8% SU Bond Maturing on 11/13/18:
I now own 5 bonds.
Finra Page: Bond Detail (prospectus linked)
Credit Ratings:
Bought at a Total Cost of 99.8
YTM at TC Then at 2.106%
Current Yield at TC = 1.8036%
CD Yields With 10/19/18 to 12/21/18 Maturities on Day of Purchase:
1.25% Coupon Treasury Maturing on 11/15/18- As of Day of Purchase 3/14/18):
The 1.25% Treasury bond has a 1.2556% current yield or .528% lower than the CAT bond.
If I had any question about CAT surviving to the maturity date, then the 1.25% treasury would be the better option since the slight current yield and YTM differentials in favor of the CAT bonds would not be worth the risk.
Since I have no concerns, I went with the CAT bond. I also own the 1.25% Treasury.
D. Bought 1 Anheuser Busch 2.15% SU Bond Maturing on 2/1/19:
FINRA Page: Bond Detail (prospectus linked)
Issuer: Anheuser-Busch InBev S.A.
Moody's at A3
Bought at a Total Cost of 99.662
YTM at TC Then at 2.545%
Current Yield at TC = 2.1582%
I now own 2 bonds.
I own 6 Anheuser 1.9% SU bonds maturing on the same day. The 2.15% coupon bond provided me with a higher current yield and YTM on the day of this last purchase (3/15/18). Since the two BUD bonds maturing on the same day are functionally equivalent, there would be no reason to buy the lower yielding one.
Last Friday, I received an email notice that both the 1.9% and 2.15% bonds maturing on 2/1/19 will be redeemed by BUD on 4/23/18. SEC Filed Notice of Redemption
With the early redemption of those bonds, my April redemption proceeds will be at $51K, up from $43 previously noted. Item # 5
E. Bought 1 Morgan Stanley 2.2% SU Bond Maturing on 12/7/18:
FINRA PAGE: Bond Detail (prospectus linked)
Issuer: Morgan Stanley (MS)
MS Analyst Estimates
2017 Annual Report
Credit Ratings:
Bought at a Total Cost of 99.948
YTM at TC Then at 2.271%
Current Yield at TC = 2.2011%
F. Bought 2 Ecolab 2.25% SU Bonds Maturing on 1/1/2020-In a Roth IRA Account:
FINRA Page: Bond Detail (prospectus linked)
Issuer: Ecolab Inc. (ECL)
ECL Analyst Estimates
Ecolab Fourth Quarter Reported Diluted EPS $1.93; Adjusted Diluted EPS $1.39, +11%; Expects Full Year 2018 Adjusted Diluted EPS +12%-16% to $5.25 to $5.45 Range
2017 ANNUAL REPORT (Long Term Debt at page 72)
Last Debt Offering-August 2017: $500M of 2.375% SU notes maturing in 2022
Credit Ratings:
Bought at a Total Cost of 99.475
YTM at TC Then at 2.547%
Current Yield at TC = 2.2619%
5. Intermediate Term Bond/CD Ladder Basket Strategy:
A. Bought 1 McDonalds 2.625% SU Bond Maturing on 1/15/22:
FINRA Page: Bond Detail (prospectus linked)
Issuer: McDonald's Corp. (MCD)
MCD Analyst Estimates
2017 Annual Report
Credit Ratings:
Bought at a Total Cost of 98.244
YTM at TC Then at 3.058%
Current Yield at 2.6719%
I now own 2 bonds.
MCD's most recent bond issuances, offered a few days ago, were as follows:
$500M in 4.45% SU bonds maturing in 2047: Prospectus
$500M in 3.8% SU bonds maturing in 2028: Prospectus
$500M in 3.35% SU bonds maturing in 2023: Propsectus
B. Bought Back 2 Kellogg 2.65% SU Bonds Maturing on 12/1/23:
Finra Page: Bond Detail (prospectus linked)
Issuer: Kellogg Co. (K)
K Analyst Estimates
Kellogg Company Reports 2017 Fourth Quarter Results
Credit Ratings:
Bought at a Total Cost of 96.7
YTM at TC Then at 3.288%
Current Yield at TC = 2.7404%
Bought at 96.5
In my Fidelity account, I sold this bond on 9/19/17 at 99.7. Item # 1.A. (10/5/17 Post) The five and seven year treasury notes then had yields of 1.84% and 2.07% respectively. 2017 Daily Treasury Yield Curve Rates
On the day that I repurchased this bond (3/14/18), the 5 and 7 year treasury rates closed at 2.61% and 2.75% respectively. 2018 Daily Treasury Yield Curve Rates.
The only way for this fixed coupon Kellogg bond to adjust to the rise in treasury rates since September 2017 is to go down in price. There has not been any change in Kellogg's credit risk since that time.
After selling a number of 2023 maturities last year, I did not have any bonds maturing between 9/2/23 through 12/31/13 before this Kellogg bond purchase.
I would sell those two Kellogg bonds at greater than 99; and without reservation, at greater than 100.
I currently own only 4 bonds maturing after 7/2/23 through 12/31/23. I will rebuild that part of my intermediate term ladder slowly.
Another Kellogg bond that I sold last year, which I may back at less than 94, is the 3.25% SU maturing on 4/1/26. I sold that one at 100.234. Item # 3.A. (10/9/17 Post); 2026 K Bond Detail
5. Long Term Bond Strategy-Tennessee Municipal Bonds:
A. Bought 5 Tennessee Housing Development Agency 2.8% Bonds Maturing on 7/1/29:
EMMA Page
Credit Ratings:
Moody's at Aa1
S & P at AA+
THDA invests in first lien single-family mortgages that are insured as described in the following snapshots:
Bought at a Total Cost of 95.934
YTM at Total Cost Then at 3.232%
Tax Free Current Yield at TC = 2.9187%
Optional Call: At par value on or after 1/1/27
Security:
Tax Matters:
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.
South Gent,
ReplyDeleteI seem to remember that you rotated back to the equities prior to the VIX stable state in 2009 so I am just curious about which of the following approaches will optimize the risk/reward equation:
The premise is that there is no imminent financial catastrophe in the fundamentals of the current economy.
Approach 1: Fill the full position when the VIX spikes near or abover its all time high.
Approach 2: Gradually increase the position prior to VIX spikes and continue to complete the full position through and after the VIX model reaches its stable state.
Thoughts?
Y: My movement back into stocks started in February 2009 and the VIX was still in an Unstable Vix Pattern. The VIX numbers were trending down. The movement back into stocks had nothing to do with the VIX but valuation and a belief that stocks were then priced for a Depression which had been taken off the table by the FED and the government. I also discussed in March 2009, shortly after the FED implemented QE, the strong positive reaction of stocks in 1933 when the FED started a QE program. There was also a turn up the occurring in the new orders component of the ISM manufacturing surveys which was also discussed as a reason back then for increasing my stock allocation.
ReplyDeleteI thought the situation was analogous to August 1982 in that the DJIA and S & P 500 indexes were lower than where they were 18 years lower even though financial conditions were changing for the better. Problematic inflation, the reason for an 18 year bear market in stocks and bonds, had been killed by the Volcker FED and stock prices were still reflecting a belief that those conditions were never going to get better. The bottom in bear markets is frequently based on that kind of fundamental change + valuations that do not even come close to reflecting those changes.
I do not see the same conditions now in the market. Instead, investors are unduly optimistic about the future, as they were in the late 1990s and valuations are high. The country was in a recession in 1982, one reason for low stock prices, whereas now there has been no recession since the last one ended in June 2009.
So I am more inclined now to look at what the VIX is telling me. The signal being sent is at best a flashing yellow light.
As I said in this post, I will be adding to stock positions in small odd lots using commission free trades as the VIX moves up and will likely lighten up some when and if there is a return to below 20 movement.
I will increase the buying based in part on the VIX levels, more at a crossing over 26 and then more with a spike over 30. I am talking about very small lots here.
If the VIX goes over 30 next week, then the market will be tanking. I am expecting buyers to emerge early tomorrow and will wait to do buying until late in the day when and if there is a significant decline into the close with a VIX spike. So I am playing it hour by hour, day by day now.
The VIX's all time high was in 10/24/2008 at 89.53. I was buying that day. The worst spike, which occurred before there was VIX data which starts on 1/1/1990, occurred during the October 1987 crash as shown in the S & P 100 volatility index (VXO). The numbers hit an intra-day high of 152.48 on 10/19/17 and at 172.79 the next day. Those numbers are the highs but that is rare.
Thanks for the great insights with a historical perspective.
ReplyDeleteI was expecting buyers to show up this morning, though I was not expecting this:
ReplyDeleteS&P 500 Index
2,634.65 +46.39 +1.79%
Last Updated: Mar 26, 2018 at 9:52 a.m. EDT
https://www.marketwatch.com/investing/index/spx
There were several news reports earlier today that caused the Stock Jocks to conclude that a trade deal with China was highly likely to happen. I am inferring that conclusion based on the market's rise this morning.
The reports do not justify that opinion, at least not now. Instead the news reports only mean that the U.S. and China would engage in discussions, which had to be expected last Thursday and Friday when stocks tanked, and that Mnuchin was "cautiously hopeful" that a trade war could be avoided.
So is it realistic now to expect China to agree to Mnuchin's bottom line: "Mnuchin said China must lower its tariffs on American goods and stop forced-technology transfer for U.S. companies entering its market."
https://www.cnbc.com/2018/03/26/mnuchin-says-hes-hopeful-us-can-reach-deal-with-china-to-avoid-trade-war.html
https://www.bloomberg.com/news/articles/2018-03-26/trump-veers-into-uncharted-trade-territory-as-markets-see-risks
I am starting to get seasick with all of this up and down motion. The market has entered a bungee jumping, YO-YO phase.
ReplyDeleteDaily moves greater than 1% have become more commonplace and that will likely continue IMO.
https://www.marketwatch.com/story/the-dow-and-sp-500-have-already-doubled-the-number-of-1-moves-seen-in-all-of-2017-2018-03-26
In part, today's action probably caught traders leaning the wrong way and caused a stampede to cover short bets. I do not view the tariff and trade situation as any better or worse than last Thursday and Friday. Of course, China and the U.S. are going to have discussions. That is not news. There were some soothing words today that were not substantive.
It is possible that Trump is bluffing on tariffs and will be satisfied with relatively small concessions so that he can claim a victory in a "trade war".
Trump does have a big mouth and enjoys being a bully.
So far, there has not been much follow through to his threat barrages on trade, other than steel and aluminum tariffs imposed on China and Japan with other nations receiving temporary exemptions.
Today did mark a reversal from last Friday's trading activity in Bond Land.
Treasury yields rose slightly and investment grade corporate bond yields fell.
iShares 7-10 Year Treasury Bond ETF (IEF)
$102.42 -$0.28 -0.27%
https://www.marketwatch.com/investing/fund/ief
iShares Investment Grade Corporate Bond ETF (LQD)
$116.13 +$0.41 +0.35%
https://www.marketwatch.com/investing/fund/lqd
The junk bond ETF JNK also rose in price today and had a greater percentage up day than the investment grade corporate bond ETF LQD:
SPDR Bloomberg Barclays High Yield Bond ETF
$35.84 +0.22 +0.62%
https://www.marketwatch.com/investing/fund/jnk
One reason for the out performance of corporate bonds today was a pullback from the flight to safety trade that benefited treasuries late last week but not LQD.
Currently, investors view treasuries as credit risk free while the corporate bonds have varying decrees of credit risk.
When investors become fearful that something bad may happen to economy, like the blowbacks from a trade war, the credit risk issue will cause investment grade corporates to underperform the credit risk free treasuries. The fact that JNK and LQD rose today while IEF fell is indicative that investors were more comfortable today than last Thursday or Friday on the credit risk issue.
The decree of differential between treasury and investment grade corporate yields can depend, at least in part, on the fear level relating to credit risk, both rational and irrational.
The most pronounced differential in the past decade occurred in October/November 2008 when BBB rated corporates spiked in yield as treasury notes and bonds rose in price and declined in yield.
The effective yield of BBB bonds rose around 6% in November 2007 to over 10% in November 2008.
https://fred.stlouisfed.org/series/BAMLC0A4CBBBEY
The ten year treasury yield went from about 4.2% in mid-November 2017 to 2.08% in Mid-December 2008.
When the DJIA was up over 200 points earlier today with the S & P 500 in positive territory, the Nasdaq was down led by a selloff in Facebook and technology shares. Bonds were then rallying in price and declining in yield. Those incongruities were resolved by the Nasdaq falling more, the VIX spiking, interest rates moving further to the downside, and the DJIA and S & P 500 doing a swan dive into the close.
ReplyDeleteThe VIX closed at 22.55, up 7.23% and traded between 19.84 and 24.06 during the day.
https://www.marketwatch.com/investing/index/vix
The iShares 7-10 Year Treasury Bond ETF closed at $103, up .57%:
https://www.marketwatch.com/investing/fund/ief
TLT did better with a 1.07% rise:
https://www.marketwatch.com/investing/fund/tlt
The longest duration treasury ETF was up 1.915%:
https://www.marketwatch.com/investing/fund/zroz
If my brokers priced my bonds correctly, and they never do, the my long duration Tennessee Municipal bonds would be up close to 1%. Brokers use third parties to price bonds who invariably underprice their values. It is commonplace for me to see a bond priced up to 2% below the current bid price that I could sell my bond lot. When I was selling a lot of intermediate term bonds last year, I was improving my account value in each transaction since my sale price was higher than the third party price included in my account value.
Investment grade corporates were also up meaningfully as reflected in the .36% gain in LQD:
https://www.marketwatch.com/investing/fund/lqd
I do not find much comforting in the current stock market whipsaw pattern. The market lacks stability now.
I sold my remaining Intel shares into that stock's robust rally yesterday, deciding that the profit was worth harvesting now, at least to the Old Geezer, rather than waiting for $60 to sell the remaining 60+ shares which were my lowest cost shares bought during the Near Depression period. The average cost per share was $15.09. The profit will be close to $2300 when the fractional shares are liquidated by Fidelity. I will have a snapshot in my next post of whatever it is.
See discussion in my 3/22/18 Post Item # 1 Sold 50 INTC at $50.51
https://tennesseeindependent.blogspot.com/2018/03/observations-and-sample-of-recent_22.html
South Gent,
ReplyDeleteMy positions in the high yielding sectors are down today, but performing better relative to the overall market. They have already been beaten down and their high dividends provide a cushion.
Maybe the market is going through a sector rotation and today is the high tech sector, S&P Tech is down 3.2%.
https://www.nasdaq.com/article/technology-sector-update-for-03272018-twtrrhtwattbvebcetogooglfbgoog-cm940595
Y: My equity REITs were mostly up today as interest rates declined and regional bank stocks fared worst than the S & P 500 most likely due to that decline.
ReplyDeleteVanguard Real Estate ETF (VNQ)
$73.71 +$0.28 (+0.38%)
SPDR S&P Regional Banking ETF (KRE)
$59.49 -$1.34 (-2.20%)
S & P 500 Down 1.73%
Iron Mountain had the largest % gain among my equity REITs at +2.01% due to GS initiating coverage today with a buy rating and a $41 price target.
There were good gains in several tech stocks yesterday. MSFT was down $4.31 today but was up $6.57 yesterday based on a broker report.
https://www.marketwatch.com/story/microsoft-shares-surge-as-morgan-stanley-note-teases-trillion-dollar-company-track-2018-03-26
So far the S & P 500 is staying above its 200 day SMA line:
https://www.marketwatch.com/story/charting-a-bearish-technical-tilt-sp-500-bounces-from-200-day-average-2018-03-27-121034519
Using a YF 1 year chart, the 200 day line is at 2587 now.
With interest rates drifting down some, equity REITs are managing to buck major market index declines. It probably helps that this sector has been beaten up prior to the recent spat of volatility.
ReplyDeleteVanguard Real Estate ETF (VNQ)
$75.56 +1.85 (+2.51%)
Earlier this year, as noted in this blog, I started a 5 share VNQ buying program in my Vanguard account, where I can buy this ETF commission free. I bought 30 shares, with each new purchase being at the lowest price. The lowest price in this "buying program" is $72.4 on 2/12/18. The highest price was at $78.12 shortly before the February stock market meltdown. The highest cost lot may be sold when and if there is a spurt above $80. Any additional purchase will have to be below $72.4.
The ETF went ex dividend for its quarterly distribution of $.706 on 3/26/18. I am currently reinvesting the dividend.
Through yesterday's close (3/27), VNQ had a total return of of -10.32:
http://performance.morningstar.com/funds/etf/total-returns.action?t=VNQ®ion=USA&culture=en_US
Several of my individual equity REIT stocks went ex dividend for their quarterly distributions and gained back the dividend's value and then some. Of my owned individual equity REIT stocks, 17 out of 17 rose in price today.
I thought today's major market index action was on the worrisome side. Any rally was sold and did not last for long.
The VIX closed at 22.87, up 1.64% but had several spikes to over 24 during the day with a high at 24.94.
https://finance.yahoo.com/quote/%5EVIX?p=^VIX
Intermediate term investment grade corporate bonds performed better than treasuries.
LQD +$.31
https://finance.yahoo.com/quote/LQD/?p=LQD
IEF -$.02
My Fidelity account which is bond heavy was up a few hundred yesterday even with every bond being priced too low in value (none too high), which is a systemic problem in all brokerage accounts.
Possibly the low assigned values are related to margin accounts and the bond liquidity issues.
I could probably sell every corporate bond that I own in about 5 trading days and make about $2K over the broker's assign values.
My Tennessee municipal bonds are far more illiquid and would take longer to sell. I have no intention of selling those municipal bonds but will trade the more liquid corporate bonds.
I only have cash accounts and would never even contemplate using borrowed money to purchase an at-risk security.
Hotel REITs received a lift today from Pebblebrook Hotel's (PEB) offer to acquire LaSalle Hotel Properties (LHO), which has already been rejected by LaSalle's Board:
ReplyDeletehttps://www.businesswire.com/news/home/20180328005384/en/
https://www.businesswire.com/news/home/20180328005805/en/
Hersha Hospitality (HT) was ex dividend today for its quarterly distribution and finished up 4.86% today:
https://finance.yahoo.com/quote/HT?p=HT
I also own Apple Hospitality (APLE) which had a more modest +1.22% gain:
https://finance.yahoo.com/quote/APLE/?p=APLE
Another Hotel REIT that I have owned in the past, Xenia Hotels (XHR), rose 3.79%:
https://www.marketwatch.com/investing/stock/xhr
I last eliminated XHR at $20:
Item # 2. C. Sold 50+ XHR Shares-Used Commission Free Trade:
https://tennesseeindependent.blogspot.com/2017/07/observations-and-sample-of-recent_19.html
My largest position is in APLE.
I have published a new post.
ReplyDeletehttps://tennesseeindependent.blogspot.com/2018/03/observations-and-sample-of-recent_29.html