Observations and Sample of Recent Trades: APLE, FHB, GOV, IRM, ORIT, PNNT, TRST

Economy: 

Private-sector hiring up 241,000 in March, ADP says - MarketWatch

ADP National Employment Report | March 2018

The ISM March 2018 Manufacturing PMI Index declined to 59.3 from 60.8 in February. The new order component declined to 61.9 from 64.2 while employment fell to 57.3 from 59.7. The numbers remain strong. I would not draw any conclusion about the declines yet. 

Construction spending up 0.1% in February: CNBC The construction spending number is consistent with growth slowing in the 2018 first quarter. The consensus forecast was for a .5% increase. February 2018 Construction Spending Release.pdf

Trump Pushing for Preliminary Nafta Deal by Mid-April, Sources Say - Bloomberg ("Negotiators have completed work on six chapters, or subject areas, so far, with about 24 still in progress.")

US names Chinese products under proposed tariffs: CNBC

List of Products Starting at Page 14 (before the tariffs are implemented, there will be a period of public comment that may result in changes to the product list) 

China has already responded with its own tariff list that will apply to approximately $50B in U.S. exports. China threatens U.S. cars, planes and soybeans with tariffs in response to Trump - MarketWatch 

Neither China nor the U.S. have implemented their respective $50B in new tariffs yet. 

Trump's response to China's response: 

Trump's chief economic advisor, the media personality Larry Kudlow, informed investors that there will be a "pot of gold" resulting from the trade tiff with China. The market responded favorably to Kudlow's prediction yesterday, moving off its intra-day lows soon after his reassurance that Wilber Ross and Trump will lead us to economic nirvana. Hopefully Wilber will not be falling asleep and drooling on his tie when negotiating with the Chinese. 

I want Larry to personally deliver my "pot of gold". 

All of this may be a game of chicken, but I doubt that either Trump or China are going to blink anytime soon. 

Midwest Farmers Have Trump to Thank for Their Latest Export Woes - Bloomberg (and they voted heavily for Donald: Farmers voted heavily for Trump. But his trade policies are terrible for them.-The Washington Post) 

Price & Chart for Soybeans

There are 25 congressional districts held by republicans where 60% of the U.S. soybean crop is grown and about one third of U.S. grown soybeans are sold to China. So maybe Trump can help the 2018 blue wave some by provoking China to levy a 25% tariff on U.S. soybean imports. 

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Markets and Market Commentary: 

The S&P 500 has already tripled the number of 1% moves seen in all of 2017 - MarketWatch

The S & P 500 did  break its 200 day SMA line last Monday.Tech Rout Sinks Stocks as Lines of Defense Crumble: Markets Wrap - Bloomberg  It has since surged back over that line. 

Rising Libor sinks stocks of companies loaded with floating rate debt - MarketWatch

Bank of America says Apple could save $500 million a year making its own PC chips: CNBC

Fed Officials Warn That Tariff Brawl Clouds Interest-Rate Path - Bloomberg

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Portfolio Management:

In my last post, I had several snapshots of cash flow deposited in my Fidelity account on 4/2/18. The following are snapshots of the recent cash flow into my Schwab taxable account, which is my second largest taxable account, with Vanguard at a close third.

This account is more CD heavy than the Fidelity account. I own no CDs in my Vanguard account. 

Most of the CDs owned shown in this snapshot pay monthly interest, though there are five that paid interest at maturity (BOFI, Sterling, Bank of China, Bank of California, and Safra) All of the WFC CDs pay interest monthly.

At a minimum, there is a one day delay before interest, dividends and redemption proceeds received by Schwab are credited by Schwab to my account.

I do not know whether Schwab or their customers earn interest on the funds during that one day delay. I do know that I can not invest the money received by Schwab until it is credited the day after receipt.

There were several Tennessee municipal bonds that paid semi-annual interest on Saturday 4/1, with the payments credited on Tuesday 4/3. Fidelity credited the payments on 4/2. 

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Trump: 

‘It’s war’: Trump reportedly seeking ways to hurt Amazon - MarketWatch; 

“Trump Is Like, ‘How Can I F--k with Him?’”: Trump’s War with Amazon (and The Washington Post) Is Personal | Vanity Fair  

What is being described is a clear abuse of presidential power. Trump is by nature strongly authoritarian which is viewed as "strong" by his supporters,  roughly 30% to 40% of the U.S. population.

EXCLUSIVE: More Cabinet trouble for Trump? EPA chief lived in condo tied to lobbyist 'power couple' - ABC News

Pruitt is Trump's anti-Environmental Protection Environmental Protection Agency Director.

EPA Chief's Family Also Stayed at Lobbyist's $50-a-Night Condo-Bloomberg EPA General Counsel said the ridiculously low rate for a two bedroom condominium was not a gift from an industry lobbyist because Pruitt paid some rent. Security officials had to break down the door to the building housing this unit, fearing Pruitt had taken ill and found him "groggy" after an "afternoon nap". Taxpayers paid $2,460 to pay the building's owner for the damage. Pruitt is now paying $4,100 a month for a one bedroom apartment.

EPA Chief Pruitt’s $50-a-Night Rental Raises White House Angst - Bloomberg This disclosure followed Pruitt's widespread use of first class airline travel, an expensive taxpayer paid trip to Italy for Pruitt and his staff and a $25,000 installation of a soundproof booth in EPA's headquarters. 

Pruitt security included Disneyland, Rose Bowl trips - CNN 

Trump is not draining the swamp. Trump is the swamp.  

Trump ally detained, served with Mueller subpoena at Boston airport

Trump threatens to terminate NAFTA unless Mexico does more to stop illegal immigration:

‘No more DACA deal,’ Trump says as he threatens to ‘stop’ NAFTA if Mexico doesn’t better secure border

When Trump mentions migrant ‘caravan,’ this is what he’s talking about - MarketWatch 

Trump threatens NAFTA, foreign aid to Honduras over refugee ‘caravan’ | Toronto Star

Trump: “A lot of people are coming in because they want to take advantage of DACA." To qualify for DACA the person must have continually resided in the U.S. since June 15, 2007: 

Consideration of Deferred Action for Childhood Arrivals (DACA) | USCIS

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Trump’s Tariffs Hurting American Factories as Prices Skyrocket-Bloomberg 

Since Trump is a Demagogue who is in a perpetual campaign mode throwing red meat to his True Believers rather than actually trying to effectively govern a diverse nation, he will implement policies that have a net harmful impact on the U.S. economy. 

The problem for investors is that it is impossible to know whether Trump will actually implement one or more threats made in a constant stream of tweets. Consequently, a large number of investors tend to ignore the tweets as hot air.  

The threats on tariffs, however, have already become real. Does anyone expect Donald to back down? 

President Trump is acting unhinged because that’s all he can do - The Washington Post (opinion column by a professor of international politics at the Fletcher School of Law and Diplomacy at Tufts University) 

Trump's authoritarian nature and his ceaseless efforts to undermine a free press were on display during a press conference attended by leaders from Baltic nations. Trump mocks American press during press conference with Baltic leaders | TheHill

Trump appointee at Defense Department resigns after birther postings revealed - CNN (he also shared a video that claimed Obama was the AntiChrist and similar conspiracy theories and wing-nut videos)

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Sinclair Broadcasting as a Trump Mouthpiece and Charter Member of the Fake News Media: 

Sinclair Broadcast Group Faces Backlash Over Scripted Promos 

Worth viewing: Sinclair's script for stations - YouTube

Sinclair tells stations to air media-bashing promos - and the criticism goes viral - Apr. 1, 2018

Sinclair Broadcast Group, the pro-Trump, "conservative" company taking over local news, explained

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1. Small Ball: Equity REITS, MREITS and BDCs:

All of the stocks mentioned in this section and the next one were recently discussed. I am not going to repeat the material in those recent posts, but will simply provide a link to those discussions. 

I still have over 200 commission free trades that expire in August, so these small ball purchases will be the norm for several more months. 

The following snapshot has the list of the stocks currently in my small lot buying program, along with the current lowest price paid for each stock. I failed to include ENB in my last snapshot. 

In this trading strategy, it is necessary to have at least five functioning brain cells to implement it once a stock is chosen for the program based on the criteria previously discussed here. The trading rule is simply that any subsequent purchase has to be below the price shown in the most current list. After each trade, I substitute the new lowest price to prevent a screw up.   

A. Bought 5 IRM at $30.93-Used Commission Free Trade: 

Quote: Iron Mountain Inc. (IRM)

Data & Records Management | Shredding | Iron Mountain

Last Discussed: Item 2.C. Bought 10 IRM at $32.69 and 10 at $31.95-Used Commission Free Trades  (3/19/18 Post)

I have no additional substantive discussion. I am using commission free trades to average down.

Position: 25 Shares
Average Total Cost Per Share: $32.04
Dividend: Quarterly at $.5875 (annually at $2.35)
Dividend Yield at Total Average Cost = 7.33%
Last Ex Dividend Date:  3/14/18 (owned 10 shares at this time)
Reinvestment of Dividends: Yes, until price exceeds $35 (last quarterly dividend was not reinvested)

Subsequent to this purchase, Goldman Sachs initiated coverage with a buy rating and a $41 target price.

Closing Price on 4/4/18: IRM $33.30 +$0.48 +1.46% 

B. Bought 5 GOV at $12.87-Used Commission Free Trade:

Quote: Government Properties Income Trust

Dividend: Quarterly at $.43 ($1.72 annually)
Government Properties Income Trust-Distributions
Position: 25 Shares
Average Cost Per Share: $13.32
Yield at Average Cost Per Share = 12.91%

Last Substantive Discussion: Item # 2.A. Bought 10 GOV at $13.67 (3/22/18 Post)(as mentioned in prior discussions, GOV is a deservedly hated REIT IMO) 

Closing Price on 4/4/18:  GOV $13.07 -$0.52 -3.83% 

C. Bought 10 APLE at $16.97-Used Commission Free Trade:

Quote: Apple Hospitality REIT Inc. (APLE)
Website: Apple Hospitality REIT
Hotel Map

Last Substantive Discussion: Item # 1.C. (3/8/18 Post) 

I am doing the 10 APLE share lot purchase approach in both my Fidelity and Schwab accounts using commission free trades available in both accounts. Each purchase has to be at a lower price than the previous purchases in each account excluding shares purchased with dividends.

Dividend: Monthly at $.10 per share
Apple Hospitality REIT Announces March 2018 Distribution
Last Ex Dividend Date: 4/2/18
Dividend Yield at $16.97: 7.07%
Shares This Account Only = 73+
Average Cost Per Share This Account: $17.71
Yield at Average Cost Per Share: 6.78%

I have turned the dividend reinvestment option on and off. I will reinvest the dividend for as long as the price is below $18. I previously allowed for share purchases using dividends above that level.

Two Year Trading History this Account Only:

In the preceding snapshot, there are three lots left that were bought in the open market:

50 at $17.92 (8/24/17)
10 at $17.25 (2/27/18)
10 at $16.97 (3/27/18)

So the next 10 lot purchase will have to be somewhere below $16.97.

Closing Price 4/4/18: APLE $17.63 -$0.04 -0.23% 

D. Added 15 PNNT at $6.7-Used Commission Free Trade:

Quote: PennantPark Investment Corp. (PNNT)

Last Discussions (all trades used commission free trades):

Item # 2.B. Added 10 PNNT at $6.99 Before Ex Dividend Date  and 10 at $6.8 after Ex Dividend Date (3/22/18 Post)

Item # 1.B. Bought 50 PNNT at $7.15 (3/5/18 Post)

Current Position: 85+ Shares

Average Total Cost Per Share: $7

Dividend: Quarterly at $.18 per share ($.72 annually)

PennantPark Investment Corporation Announces Quarterly Distribution of $0.18 per Share

Dividend Yield at Average Total Cost Per Share = 10.29%

Last Ex Dividend Date: 3/16/18

Reinvestment of Dividend: Yes

I received the quarterly dividend payment on 4/2/18. 

Closing Price 4/4/18: PNNT $6.81 -$0.01 -0.15%


2. Small Ball-REGIONAL BANK BASKET STRATEGY:

A. Bought 10 ORIT at $15.18-Used Commission Free Trade:

Quote: Oritani Financial Corp.
ORIT Analyst Estimates

Last Substantive Discussion: Item # 5.A.  (2/22/18 Post)

Position This Account Only: 80+ Shares

Dividend: Quarterly at $.25 per share  

Oritani Bank : Dividends

Average Total Cost Per Share This Account Only: $16.32

Dividend Yield at Total Cost = 6.1275%

Closing Price 4/4/18: ORIT $15.50 +$0.10  +0.65% 


B. Bought 5 FHB at $27.51-Used Commission Free Trade:

Quote: First Hawaiian Inc.
FHB Analyst Estimates

Last Substantive Discussion: Item # 1.A. (2/15/18 Post)

Position This Account Only: 60+ Shares 

Total Cost Per Share: $28.8

Dividend: Quarterly at $.24 per share ($.96 annually)

Dividend Yield at Average Total Cost: 3.33%

Last Ex Dividend Date: 2/23/18

On 3/14/18, KBW analyst Jacquelynne Bohlen upgraded FHB to outperform from market perform.   

Closing Price 4/4/18: FHB +28.06 +$0.26 +0.94% 


C. Bought 10 TRST at $8.5-Used Commission Free Trade:

Quote: Trustco Bank Corp. (TRST)
TRST Analyst Estimate (1 analyst at E.P.S. of $1 this year and next year)

Last Substantive Discussions: 

Item # 2.A. (12/30/17 Post)
Item # 2.A. Bought 50 TRST at $8.65 (1/28/18 Post) 

I discussed the 2017 4th quarter report in this comment. The company is expecting a 2018 effective tax rate of 23.5%. In the 2017 third quarter, the effective tax rate was at 37.3% and at 37.6% in 2016: 

Page 56 10-Q for the Q/E 9/30/17 
Page 27 10-K

Dividend: Quarterly at $.065625 per share ($.2625 annually)

TrustCo Declares Cash Dividend

Position: 161+ shares

Average Total Cost Per Share: $8.89

Dividend Yield at Average Cost: 2.95%

Closing Price 4/4/18: TRST $8.60 +$0.10 +1.18%

3. Short Term Bond/CD Ladder Basket Strategy:

A. Bought 1 Anheuser Busch InBev Finance 2.65% SU Bond Maturing on 2/1/21:

FINRA Page: Bond Detail ($7.5B outstanding)

Final Prospectus Supplement

This bond barely qualifies as short term which cuts off 3 years after the purchase date.

Issuer: Wholly Owned Subsidiary of Anheuser-Busch InBev S.A. who guarantees the notes

Credit Ratings: 

Fitch Affirms Anheuser-Busch InBev at 'BBB'; Outlook Stable (3/22/18)

Bought at a Total Cost of 99.026

YTM at TC Then at 3%

Current Yield at TC = 2.6761%

I will lose 8 BUD bonds maturing on 2/1/19 to an early redemption on 4/23/18. 

As is my custom, I will start to redeploy the proceeds into later maturities before actually receiving that $8K in principal amount.

4. Intermediate Bond/CD Ladder Basket Strategy:

A. Bought 1 Highwoods Realty L.P. 3.625% SU Bond Maturing on 1/15/23:

FINRA PAGE: Bond Detail (prospectus linked)

Issuing: Operating Entity for Highwoods Properties Inc. (HIW)
Website: Highwoods Properties
SEC Filings
2017 Annual Report

Credit Ratings:

Bought at a Total Cost of 99.349
YTM at TC Then at 3.774%
Current Yield at TC = 3.6488%

B. Bought 1 Liberty Property LP  3.75% SU Bond Maturing on 4/1/25:

Finra Page: Bond Detail (prospectus linked)

Issuer: Operating Entity for Liberty Property Trust (LPT) - MarketWatch
Website: Liberty Property Trust
Liberty Property Trust Announces 2017 Fourth Quarter and Full Year Results and Provides Guidance for 2018

2017 Annual Report
SEC Filings

Credit Ratings:
Moody's at Baa1
Fitch at BBB
Fitch Affirms Liberty Property Trust at 'BBB'; Outlook Stable (8/18/17)
S & P at BBB

Bought at a Total Cost of 99.752
YTM at TC Then at 3.791%
Current Yield at TC = 3.7593%

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.