Economy:
Trump seeks additional $200 billion in tariffs against China — and threatens even more - MarketWatch;
Trump threatens to hit China with new tariffs on $200 billion in goods | Reuters
China pledges it will fight back firmly if Trump publishes list of new tariffs: CNBC
Trump says he has asked USTR to identify $200 billion in Chinese goods for additional tariffs at 10% rate: CNBC
Federal Corporate Income Tax Revenues:
Remember, the republicans have practically guaranteed that the tax cuts will pay for themselves in more tax revenue rather than less.
U.S. Debt to the Penny (Daily History Search Application)(currently over $21 trillion, but was less than $1 trillion in 1981-Government - Historical Debt Outstanding - Annual 1950 - 1999)
Iowa farmers face hefty losses from U.S.-China trade war-CBS News (and they voted for Donald in overwhelming numbers); China tariffs on U.S. soybeans could cost Iowa farmers $624 million
Starbucks, Microsoft, Heinz: Trump inspires Canadians to boycott goods: USA Today
Existing-home sales sink as tight supply smothers market - MarketWatch
U.S. Debt to the Penny (Daily History Search Application)(currently over $21 trillion, but was less than $1 trillion in 1981-Government - Historical Debt Outstanding - Annual 1950 - 1999)
Iowa farmers face hefty losses from U.S.-China trade war-CBS News (and they voted for Donald in overwhelming numbers); China tariffs on U.S. soybeans could cost Iowa farmers $624 million
Starbucks, Microsoft, Heinz: Trump inspires Canadians to boycott goods: USA Today
Existing-home sales sink as tight supply smothers market - MarketWatch
+++++
Markets and Market Commentary:
Investors including Buffett, Tudor Jones aren’t worried about China trade war: CNBC That is the consensus opinion. The odds of a major trade war, involving several large economies, remains at zero as reflected in current stock prices.
Since the nation is going down a trade negotiation path whose outcome is not known, we can simply hope that everything works out just fine.
Donald's strong arm tactics are a new approach and have the potential to succeed or to cause great harm.
I can not say what the outcome will be, though I am reasonably confident that the stock market currently prices a favorable outcome at 100%, with any meaningful harmful economic impacts being of an insignificant duration.
“Damn the torpedoes!” Admiral Farragut ordered, ”Four bells, Captain Drayton, go ahead.” Damn the Torpedoes! - The New York Times Damn the Torpedoes has become an idiom for dismissing dangerous risks. The phrase is also the title of Tom Petty's third album. Tom Petty And The Heartbreakers - Here Comes My Girl - YouTube
Trump’s tariffs are scaring companies away from making new investments, Atlanta Fed chief says - MarketWatch
Russia cuts Treasury holdings in half as foreigners start losing appetite for US debt
Biogen shares fall as rival spinal muscular atrophy drug shows promise: CNBC (the article discusses trial results for a PTC Therapeutics Inc. (PTCT) drug called risdiplam for Type 1 Spinal Muscular Atrophy, which is co-developed with Roche)
Vote in Canada Paves the Way for Legalization of Marijuana
Russia cuts Treasury holdings in half as foreigners start losing appetite for US debt
Biogen shares fall as rival spinal muscular atrophy drug shows promise: CNBC (the article discusses trial results for a PTC Therapeutics Inc. (PTCT) drug called risdiplam for Type 1 Spinal Muscular Atrophy, which is co-developed with Roche)
Vote in Canada Paves the Way for Legalization of Marijuana
++++++++
Trump:
Regarding Donald's policy to separate children from their parents, he did something that the Orange King rarely if ever does. He slammed on the brakes and shifted in reverse, even though he had majority support for this policy from republicans. Trump reverses course, signs order ending family separations on southern border
Big majority disapprove of separating families at border - CNN (except for republicans of course with 58% approving of Donald's separation policy) Another poll found that 55% of republicans approved: More than half of Republicans support Trump’s policy of separating migrant families, poll finds - MarketWatch; National (US) Poll - June 18, 2018 (overall 67% of Americans oppose); What Trump supporters think of family separations at the border - CNN (Donald's slice of America blame the parents, claim that the separation at the border is required by law, and blame the news media for appealing to people's emotions)
While I don't want to be a stick in the mud, how could the separation be a result of the Democrats' "law", which has been Donald's contention for weeks, when he could change his administration's policy with a stroke of his pen on an Executive Order? Don't think too hard on that one.
The Trump administration changed its story on family separation no fewer than 14 times before ending the policy - The Washington Post In other words, just keeping telling stories, maybe one of them will resonate. 14 stories on one issue indicates a lack of integrity.
Flores agreement: the problem with Trump’s executive order to end family separation - Vox (this is a fairly complex legal issue that may require the government to separate the children again after 20 days or go back to catch and release. Hard to say at the moment whether the DHS can promulgate regulations that circumvent the Flores consent agreement as modified by the U.S. Court of Appeals for the Ninth Circuit)
I am still going to discuss some recent statements on this issue from Trump, Kirstien Nielson, and some prominent Trump supporters since those statements raise serious credibility issues and illustrate vividly the true character of certain person's souls.
Kirstjen Nielsen, who heads up Homeland Security, claimed that the Trump Administration does "not have a policy of separating families at the border. Period.”
How to mislead with statistics, DHS Secretary Nielsen edition - The Washington Post (for those who like to know more about how to lie with statistics, Nielsen is a good teacher but she lacks finesse and depends far too much on everyone being both ignorant and stupid when making her presentations)
"Kirstjen Nielsen, who on Sunday and Monday insisted that this wasn't an actual policy and that the administration's hands are tied, will now have to untie them as the White House will reverse the supposedly nonexistent policy."Analysis: Trump and Kirstjen Nielsen’s embarrassing surrender on separating families at the border
As long as the republicans can continue their success by lying and misleading voters, they are far more likely to double down rather than to lighten up.
Senator Ben Sasse (R-Nebraska) gave this reply:
"The administration’s decision to separate families is a new, discretionary choice. ... But some in the administration have decided that this cruel policy increases their legislative leverage. This is wrong. Americans do not take children hostage, period." Many Nebraskans this weekend asked me... - Senator Ben Sasse | Facebook
Senator Sasse at least makes an effort to discuss policy issues rationally using accurate information rather than the usual reality creations and demagoguery that is the norm among republican politicians and tribe members today.
My criticism of the preceding linked Facebook post written by Sasse is that he states a few opinions as facts, which is a common enough problem, and harmless enough, provided the reader is intelligent enough to distinguish facts from opinions and knows enough about facts to separate the opinions from the accurate information provided.
Trump states his opinions, which are frequently based on false information, as facts.
Trump immigration policy that's separating families-in pictures: CNBC
White House denies separating families is 'policy' but insists that separating children from their parents is necessary to protect the children.
Hundreds of Separated Children Have Quietly Been Sent to New York - The New York Times
GOP senator David Perdue calls child separation "current shiny object of the day" - CBS News
Stephen Miller, the Man Behind Family Separation - The Atlantic
Fox's Laura Ingraham Compares Child Immigrant Detention Centers To Summer Camps
Ann Coulter, a ranking member of the GOP's intelligentsia, had something to say on the matter that she considers brilliant:
I thought that she made her mark on Western Civilization when she claimed in 2008 that banks had changed their mortgage loan criteria to how well a borrower could hit a jump shot (a non-subtle derogatory reference to blacks) or have a missing child by the name of Caylee who later turned up murdered (a non-subtle derogatory reference to people that Coulter views as white trash). Ann Coulter - September 24, 2008 - THEY GAVE YOUR MORTGAGE TO A LESS QUALIFIED MINORITY
Donald is as close to 100% classless as any human could strive to be, and he strives awfully hard to be as classless, repulsive and disgusting as humanly possible. Coulter may even come closer than Donald to being 100% classless.
Donald also claimed that the "Fake News Media" was aiding and abetting human traffickers.
The Trumpsters love and respect Donald for being an "authentic" liar and demagogue, and want to export GOP values, as taught by Donald, throughout the western world as America's enduring contribution to the advancement of Western Civilization.
Though, it is difficult for me to understand how a liar, who routinely provides false narratives and information in an effort to manipulate the uninformed, is authentic. Prior to Donald's ascendancy, I did not believe it was possible to have an "authentic liar".
Maybe Donald can leave us a little red book, like Chairman Mao did, of his sayings, so we can read them over and over again at bedtime to our children and grandchildren and hand it down through the generations as a precious heirloom.
++
Trump takes aim at Merkel over immigration, crime in Germany (Germany recorded its lowest crime since 1992 with the crime rate falling more quickly among non-Germans); Trump Today: President uses false German crime assertion to defend separation policy - MarketWatch
Donald wishes to endear himself further with the Germans by continuously criticizing their government and leaders, injecting himself into Germany domestic issues, and accusing the German government of lying when it is Donald of course who is lying about German crime statistics:
Crime was down 10% in Germany last year. Trump says crime in Germany is way up. German statistics show the opposite. - The Washington Post
Just more demagoguery from Donald:
According to Donald, the Democrats want to infest the country with MS-13 who are viewed by Democrats as potential voters; and those Democrats "don't care about crime" either.
Trump is of course branding "illegal immigrants" to be less than human human when using the term infestation.
++
Regarding Donald's policy to separate children from their parents, he did something that the Orange King rarely if ever does. He slammed on the brakes and shifted in reverse, even though he had majority support for this policy from republicans. Trump reverses course, signs order ending family separations on southern border
Big majority disapprove of separating families at border - CNN (except for republicans of course with 58% approving of Donald's separation policy) Another poll found that 55% of republicans approved: More than half of Republicans support Trump’s policy of separating migrant families, poll finds - MarketWatch; National (US) Poll - June 18, 2018 (overall 67% of Americans oppose); What Trump supporters think of family separations at the border - CNN (Donald's slice of America blame the parents, claim that the separation at the border is required by law, and blame the news media for appealing to people's emotions)
While I don't want to be a stick in the mud, how could the separation be a result of the Democrats' "law", which has been Donald's contention for weeks, when he could change his administration's policy with a stroke of his pen on an Executive Order? Don't think too hard on that one.
The Trump administration changed its story on family separation no fewer than 14 times before ending the policy - The Washington Post In other words, just keeping telling stories, maybe one of them will resonate. 14 stories on one issue indicates a lack of integrity.
Flores agreement: the problem with Trump’s executive order to end family separation - Vox (this is a fairly complex legal issue that may require the government to separate the children again after 20 days or go back to catch and release. Hard to say at the moment whether the DHS can promulgate regulations that circumvent the Flores consent agreement as modified by the U.S. Court of Appeals for the Ninth Circuit)
I am still going to discuss some recent statements on this issue from Trump, Kirstien Nielson, and some prominent Trump supporters since those statements raise serious credibility issues and illustrate vividly the true character of certain person's souls.
"Kirstjen Nielsen, who on Sunday and Monday insisted that this wasn't an actual policy and that the administration's hands are tied, will now have to untie them as the White House will reverse the supposedly nonexistent policy."Analysis: Trump and Kirstjen Nielsen’s embarrassing surrender on separating families at the border
As long as the republicans can continue their success by lying and misleading voters, they are far more likely to double down rather than to lighten up.
Senator Ben Sasse (R-Nebraska) gave this reply:
"The administration’s decision to separate families is a new, discretionary choice. ... But some in the administration have decided that this cruel policy increases their legislative leverage. This is wrong. Americans do not take children hostage, period." Many Nebraskans this weekend asked me... - Senator Ben Sasse | Facebook
Senator Sasse at least makes an effort to discuss policy issues rationally using accurate information rather than the usual reality creations and demagoguery that is the norm among republican politicians and tribe members today.
My criticism of the preceding linked Facebook post written by Sasse is that he states a few opinions as facts, which is a common enough problem, and harmless enough, provided the reader is intelligent enough to distinguish facts from opinions and knows enough about facts to separate the opinions from the accurate information provided.
Trump states his opinions, which are frequently based on false information, as facts.
Trump immigration policy that's separating families-in pictures: CNBC
White House denies separating families is 'policy' but insists that separating children from their parents is necessary to protect the children.
Hundreds of Separated Children Have Quietly Been Sent to New York - The New York Times
GOP senator David Perdue calls child separation "current shiny object of the day" - CBS News
Stephen Miller, the Man Behind Family Separation - The Atlantic
Fox's Laura Ingraham Compares Child Immigrant Detention Centers To Summer Camps
Ann Coulter, a ranking member of the GOP's intelligentsia, had something to say on the matter that she considers brilliant:
I thought that she made her mark on Western Civilization when she claimed in 2008 that banks had changed their mortgage loan criteria to how well a borrower could hit a jump shot (a non-subtle derogatory reference to blacks) or have a missing child by the name of Caylee who later turned up murdered (a non-subtle derogatory reference to people that Coulter views as white trash). Ann Coulter - September 24, 2008 - THEY GAVE YOUR MORTGAGE TO A LESS QUALIFIED MINORITY
Donald is as close to 100% classless as any human could strive to be, and he strives awfully hard to be as classless, repulsive and disgusting as humanly possible. Coulter may even come closer than Donald to being 100% classless.
Donald also claimed that the "Fake News Media" was aiding and abetting human traffickers.
Though, it is difficult for me to understand how a liar, who routinely provides false narratives and information in an effort to manipulate the uninformed, is authentic. Prior to Donald's ascendancy, I did not believe it was possible to have an "authentic liar".
Maybe Donald can leave us a little red book, like Chairman Mao did, of his sayings, so we can read them over and over again at bedtime to our children and grandchildren and hand it down through the generations as a precious heirloom.
++
Donald wishes to endear himself further with the Germans by continuously criticizing their government and leaders, injecting himself into Germany domestic issues, and accusing the German government of lying when it is Donald of course who is lying about German crime statistics:
According to Donald, the Democrats want to infest the country with MS-13 who are viewed by Democrats as potential voters; and those Democrats "don't care about crime" either.
Trump is of course branding "illegal immigrants" to be less than human human when using the term infestation.
The GOP may regret the successful effort to allow the Paula Jones civil action to proceed against Bill Clinton while Clinton was still President.
Clinton v. Jones, 520 U.S. 681 (1997)
Clinton's conduct occurred prior to being elected President. The Court held that the Constitution did not require a federal court to delay a civil suit against a sitting President. The questions of whether a state court action can be delayed is still an open question for the U.S. Supreme Court. Justice Stevens, who wrote the decision, made the following statement:
“Because the claim of immunity is asserted in a federal court and relies heavily on the doctrine of separation of powers that restrains each of the three branches of the federal government from encroaching on the domain of the other two, it is not necessary to consider or decide whether a comparable claim might succeed in a state tribunal.”
What goes around, frequently comes around to bite you. Trump fails for the third time to stop the Summer Zervos defamation lawsuit This lawsuit is based on alleged defamation occurring prior to Donald becoming President.
It is invariably a bad idea to have a pathological liar testify under oath and subject themselves to perjury charges.
Ms. Zervos is a long way from successfully compelling Trump's attendance at a deposition. If the deposition is ever taken, it needs to be videotaped and uploaded to YouTube.
Clinton v. Jones, 520 U.S. 681 (1997)
Clinton's conduct occurred prior to being elected President. The Court held that the Constitution did not require a federal court to delay a civil suit against a sitting President. The questions of whether a state court action can be delayed is still an open question for the U.S. Supreme Court. Justice Stevens, who wrote the decision, made the following statement:
“Because the claim of immunity is asserted in a federal court and relies heavily on the doctrine of separation of powers that restrains each of the three branches of the federal government from encroaching on the domain of the other two, it is not necessary to consider or decide whether a comparable claim might succeed in a state tribunal.”
What goes around, frequently comes around to bite you. Trump fails for the third time to stop the Summer Zervos defamation lawsuit This lawsuit is based on alleged defamation occurring prior to Donald becoming President.
It is invariably a bad idea to have a pathological liar testify under oath and subject themselves to perjury charges.
Ms. Zervos is a long way from successfully compelling Trump's attendance at a deposition. If the deposition is ever taken, it needs to be videotaped and uploaded to YouTube.
++
Donald is as close to 100% untrustworthy as any human can possible be. 81% of Republicans view him as honest which makes rational debate using accurate information with them impossible and a waste of time and effort. Democrat politicians may want to give it a go, but I prefer at my age to avoid banging my head into the wall. Quinnipiac Poll (question # 6; question # 15: 69% of republicans view Donald as a role model for their children)
Steve Bannon stated recently that he has never known Trump to lie or even say something that misleads: Steve Bannon says Donald Trump has never lied. Yes, really-CNN; 'This Week' Transcript 6-17-18: Former White House Chief Strategist Steve Bannon - ABC News
In Bannon's Alternate Universe, inhabited by tens of millions of Americans, Trump does not lie, but simply "speaks in a particular vernacular that connects to people in this country."
The Trumpsters prefer Donald's "particular vernacular" to actual facts. Just tell them a story that they want to hear.
In TrumpWorld, an elitist is someone who is still interested in accurate information and values honesty. In the new vernacular, those misguided elitists are now known as subversives and liberals who have not come to accept yet that false is true and true is false.
Trump Misleads on IG Report - FactCheck.org
Trump Misleads on Opioid Epidemic Fight - FactCheck.org
What you need to know about the Trump administration’s zero-tolerance immigration policy | PolitiFact
President Trump directs creation of 'Space Force' as sixth military branch
The financial hole for Social Security and Medicare is even deeper than the experts say - MarketWatch
+++
Comparative Fault in Negligence Cases:
In a "comparative fault" state where there are multiple defendants in a negligence civil action for damages, a defendant is liable only for the percentage of damages assigned by the jury. The problem in that theoretical construct, which would be fair and just in principle, is that juries consist of human beings that will frequently assign blame based on who has the most money to pay someone who is seriously injured.
A recent jury decision awarding $45M to a woman seriously injured when a shopping cart was thrown by two adolescents, ages 12 and 13, off a second floor balcony that fell 79 feet before hitting her in the head. Jury Awards $45M for Woman Left Brain Damaged by Falling Shopping Cart | New York Law Journal
Based on that article, Target operated the store on the second floor while Costco had the first floor.
The second floor had a fence and the adolescents had to pick the cart up and heave it over the fence.
Target settled with the family before trial.
The remaining defendants were the property owners, the two children (probably their parents as well) and a security company. The jury assigned 65% of the responsibility to the property owners, 25% to the security company and 10% to the two youths whose conduct actually caused the severe injuries. There was no assignment to Target for actually placing the shopping carts outside the store, possibly due to the pre-trial settlement which would provide a credit to the remaining defendants' liabilities. In some states, the jury could assign fault to a defendant who has settled and to those who were never sued with the remaining defendants receiving a credit for any settlement amount. I do not know how NY deals with that issue.
The two teenagers caused the injuries and received 10% of the blame. The jury knew that the injured woman would probably receive nothing from them or their parents. Since they obviously wanted to compensate the victim, the blame that should have been assigned to the youths and their parents was shifted to defendants who could afford to at least pay some of the award.
Why were the property owners assigned 65% of the blame?
There was a sturdy and high fence in place. A security company had been hired. Target placed the carts outside the store. The two youngsters picked up the carts and threw them over the fence. Where were their parents? That might have taken less than 20 or 30 seconds, providing hardly enough time for anyone to react to what they were doing. The answer is that the jury wanted to compensate the victim from those who had at least some money to pay for the damages rather than the principles underlying comparative fault.
I seriously doubt that most of the verdict would be collectible against the commercial defendants due to its size. Commercial property owners will frequently organize ownership of structures into separate legal entities. If one entity gets smacked hard with a personal injury judgment or some other mishap, the option is to bankrupt just that entity and let the lenders suffer most of the pain with the owners losing whatever equity is left.
++++
My 1987 Mercedes 260E:
I am keeping this car in tip top shape, primarily to see just how long it can be kept as a reliable auto.
I mentioned that the car would not start recently until I moved the ignition key to start and then back to off several times. The fact that it did start indicated that the battery was not the problem which was confirmed by my battery tester. About four years ago, I gave the car its first tune up, replacing the ignition wires, distributor cap and spark plugs. So most of the ignition system was relatively new.
I later ruled out the starter motor since there was no clicking sound when the ignition was turned to start. That left the bushings in the shifter as my first choice and the ignition switch as the second option. Shifter Stabilizer Bushing Kit The bushings had disappeared and that was causing the shifter to rattle when the car was in motion. It is not surprising that this bushings would have disappeared in a car that had just seen its 31st birthday in April 2018.
It turned out to be the bushings which solved two problems with their replacement: the rattling come from the shifter and the occasional failure to start the ignition system due to an inadequate contact with the P/N safety switch.
++++
Sign In At Doctor's Office:
Earlier this week, I was visiting an office where visitors had to provide basic personal information on a large screen computer.
The software made it idiot proof or so I thought initially.
The visitor had to provide their name, age and phone number. The data could by entered by touching the appropriate letters and numbers on the computer screen, either using a finger or an attached flat-faced pen.
Notwithstanding my advanced age, declining brain functions and constantly misfiring chemical synapses, I managed to provide the information requested, and then sat down, though, in the interest of full disclosure, I did have to check my mobile phone number since my recall vanished suddenly.
The next 3 out of 5 people could not come to grips with the chore. It looked like the receptionist had given a rubik cube to a two year old and barked you have two minutes to solve this puzzle. The receptionist had to enter the information for them.
I was going to engage those voters on what they thought about Donald's many concrete and valuable concessions during the NK summit in exchange for NK agreeing to do what they have been saying they would do since 1992 (work toward denuclearization of the Korean peninsula) and have never done. I decided that silence was more advisable.
+++++
1. Small Ball:
A. Sold 10 FHB at $30.76-Used Commission Free Trade:
Quote: First Hawaiian Inc. (FHB)
FHB Analyst Estimates
First Hawaiian, Inc. Reports First Quarter 2018 Financial Results and Declares Dividend
Closing Price Yesterday: FHB $30.41 -$0.28 -0.91%
Position Before Pare:
Profit: +$17.55
My commission free trades are about to expire in my Schwab account. I will continue to reinvest the dividend, but will not make any additional open market purchases in this account. I am likely to sell the remaining shares at greater than $33.
Small ball buys will continue in my Fidelity account where I currently own 25+ shares with an average cost per share of $28.55.
First Hawaiian Upgraded By BofA To Buy On Capital Return Potential, Impending BNP Paribas Exit | Benzinga ($35 price target)
Dividend: Quarterly at $.24 per share
Last Ex Dividend Date: 5/25/18
Dividend Reinvestment: Yes
Last Purchase Discussions:
Item # 2.B. Bought 5 at $27.71 (4/5/18 Post)
Item # 1.A. Added 10 FHB at $28.4 and 5 at $27.7 (2/15/18 Post)
Item # 1.A. Bought 50 First Hawaiian at $29 and 10 at $29.11-Used Commission Free Trades (12/21/2017 Post)
Purchase Restriction: Small Ball Rule
Prior Round-Trip (held for 6 trading days):
Current Total Position: 76 shares
Last Earnings Report: Q/E 3/31/18
B. Bought 30 PRTK at $10.85-Used Commission Free Trade:
Quote: Paratek Pharmaceuticals Inc. (PRTK)
PRTK Analyst Estimates
Closing Price Yesterday: PRTK $11.00 +$0.35 +3.29%
Market Capitalization at $11: $347+M
Paratek Pharmaceuticals
2017 Annual Report
This is another lottery ticket purchase in my small/nano cap clinical stage biotech basket strategy.
Cantor Fitzgerald Thinks Paratek Pharmaceuticals' Stock is Going to Recover (price target $50 per share)
Prior Round Trip Discussion and Snapshots: +$92.47
I am not likely to be nominated as trader of the year based on the preceding round-trips.
I have only one blog discussion: Item # 1 Bought 50 PRTK at $13.2: Update For Healthcare Basket Strategy As Of 7/15/16 - South Gent | Seeking Alpha (Sold 12/13/16 at $14.26-$45.19 profit)
Chart-Major Bear Trend Since August 2017:
So, I sold my previously owned shares too early since the stock topped out near $29; but I would have had an unrealized loss if I still owned those lots.
I would add the usual caveat applicable to clinical stage biotech companies that have bet the farm on one or two compounds. If there is a trial failure or the FDA refuses to approve (or requests more information), the investor would have preferred never knowing about the stock. For PRTK, the main drug is omadacycline.
The other caveat is that I have no training or book knowledge about medical and science matters. My college majors were in history, political science and philosophy, all of which catered to my superior natural ability to engage in B.S. and then memory talents.
Current Position: 30 Shares
Paratek has two drugs currently waiting for a FDA decision.
Omadacycline: The FDA has new drug applications for the once-daily oral and intravenous formulations of omadacycline for the treatment of community-acquired bacterial pneumonia and acute skin and skin structure infections.
PRTK announced yesterday that the FDA Advisory Committee will meet to discuss this application on 8/18/18:
Paratek Announces FDA Advisory Committee Date for Omadacycline
The PFUDA date is in October. Paratek’s New Drug Applications for Oral and Intravenous Omadacycline Accepted for Priority Review by FDA
"In the two pivotal Phase 3 studies in ABSSSI (OASIS-1 and OASIS-2), omadacycline successfully met the primary endpoint for the FDA by demonstrating statistical non-inferiority based upon the Early Clinical Response, or ECR, assessment at 48 to 72 hours after the first dose of study medication in the modified intent‑to‑treat, or mITT, population (all randomized subjects without a baseline sole gram‑negative causative pathogen). In the same two pivotal Phase 3 studies in ABSSSI, omadacycline also successfully met the primary endpoint for the EMA by demonstrating statistical non-inferiority based upon the investigator’s assessment of clinical outcome at the post therapy evaluation, or PTE, visit (7 to 14 days after the subject’s last day of study therapy), in the mITT and the clinically evaluable, or CE, population (defined as all mITT subjects who received study medication, had a qualifying ABSSSI, an assessment of outcome, and met all other evaluability criteria). 10-K at page 6
Antibiotic Resistance - Paratek Pharmaceuticals
Paratek Presents New Analysis Highlighting Efficacy of Omadacycline in Treating Community-Acquired Bacterial Pneumonia by Measures of Disease Severity (5/22/18)
Paratek has entered into an exclusive license agreement with Zai Lab "develop, manufacture and commercialize omadacycline, or the licensed product, in the People’s Republic of China, Hong Kong, Macau and Taiwan, or the territory, for all human therapeutic and preventative uses other than biodefense. Under the terms of the Zai Collaboration Agreement, Paratek Bermuda Ltd. earned an upfront cash payment of $7.5 million, before taxes, and is eligible to receive up to $14.0 million in potential regulatory milestone payments and $40.5 million in potential commercial milestone payments, the next being $5.0 million upon approval by the U.S. Food & Drug Administration, or the FDA, of a New Drug Application, or NDA, submission in the CABP indication. Zai will also pay Paratek Bermuda Ltd. tiered royalties at a low double digit to mid-teen percent on net sales of the licensed product in the territory." 10-Q at page 10
Sarecycline: The FDA has accepted a new drug application for the treatment of moderate to severed acne. The company expects the FDA to act on the NDA during the 2018 second half. FDA Accepts New Drug Application For Seysara™ (Sarecycline) For The Treatment Of Moderate To Severe Acne
Paratek has granted Allergan an exclusive license to research, develop and commercialize this for use in the United States for the treatment of acne. "Allergan may be required, if the Company receives FDA approval, to pay the Company a future milestone payment of $12.0 million upon receipt of regulatory approval from the FDA. Allergan is also obligated to pay the Company tiered royalties, ranging from the mid-single digits to the low double digits, based on net sales." 10-Q at page 12
Recent Earnings Report: Q/E 3/31/18
Paratek Pharmaceuticals Reports First Quarter 2018 Financial Results ("As of March 31, 2018, Paratek had cash, cash equivalents, and marketable securities of $184.3 million. Based on current assumptions, including full commercial buildout and launch of omadacycline, Paratek’s existing capital resources as well as the $158.8 million in net proceeds from the Company’s April 2018 issuance of convertible senior subordinated notes, future contingent regulatory and commercial milestone payments from collaborations with Allergan and Zai Lab, and estimated omadacycline product sales will enable Paratek to fund operating expenses and capital expenditure requirements through the first quarter of 2021.")
Paratek Pharmaceuticals, Inc. Prices $140 Million of Convertible Senior Subordinated Notes due 2024 (4/19/28)
Prospectus for January 2019 Stock Offering
Paratek has "incurred significant losses since our inception in 1996." The "accumulated deficit at March 31, 2018 was $497.9 million". On the bright side, the company has loss carryforwards that can be used to shelter taxable income provided of course the company ever manages to become profitable.
C. Sold 50 IRT at $10.09-Roth IRA Account:
Quote: Independence Realty Trust Inc. (IRT)
List of Owned Apartment Buildings
Closing Price Yesterday: IRT $10.26 +$0.17 +1.68%
I sold the highest cost 50 share lot which was bought at a total cost of $9.45:
I have turned the dividend reinvestment option or and off several times. The dividend used to be paid monthly at $.06 per share. The last dividend was a quarterly payment at $.18 per share. I do not anticipate anytime soon a dividend raise.
Independence Realty Trust Announces Second Quarter 2018 Dividend
Profit Snapshot: + $27.12
Item # 1.A. Added 50 IRT at $9.35-Roth IRA Account (1/21/18 Post)
The general idea is to manage out-of-favor equity positions in Roth IRA accounts to a point where I own 100+ shares bought with dividends only.
Fidelity assigns a zero cost basis to shares bought in retirement accounts with dividends.
In this account, I am closer to meeting that particular goal with LXP (snapshot taken intra-day on 6/14):
IRT will require several more purchases and dividend reinvestments before reaching that objective.
Realized IRT Gains To Date: $447.9 ($420.78 in prior trades; snapshots in
I will consider repurchasing that lot at less than $9.45 prior to the next ex dividend date.
I still own 449 IRT shares in three taxable accounts.
A 177+ share lot has an average cost per share of $7.79:
A 150 share lot owned in my IB account has a $6.61 per share cost basis.
A 121+ share lot in my Schwab account has a $7.5 cost per share.
I have been trading IRT shares for several years in a typical trading pattern where I sell the highest cost lots on pops.
As of yesterday's close, I have a $1,320.8 unrealized gain in IRT shares.
Recent Stock Offering: IRT sold 14.375M shares at $9.25. The proceeds were used to purchase the apartment buildings referenced in the previous snapshot. Stock Offering Prospectus (September 2017)
Other Recent Buy Discussions:
Item # 1. Averaged Down: Bought 50 IRT at $6.18: Update For The Equity REIT Basket Strategy As Of 2/22/16 - South Gent | Seeking Alpha
Item # 2. Added 100 IRT at $6.8 as a Trade-IB Account: Update For EQUITY REIT Basket Strategy As Of 1/29/16 - South Gent | Seeking Alpha
Last Discussed Sells:
Update For Equity REIT Basket Strategy As Of 7/28/16 - South Gent | Seeking Alpha (Items 1, 2 and 3)
Last Earnings Report: Q/E 3/31/18
Independence Realty Trust Announces First Quarter 2018 Financial Results
I was not impressed. Even if an investor accepts IRT's core FFO number as representing cash available for distribution, and I do not not, the quarterly dividend was 100% of core FFO:
The 2018 core FFO per share guidance range is between $.74 and $.79. The annual dividend at $.18 per quarter will total $.72.
2018 Guidance:
The problem with the core FFO number is that it is not a free cash flow number IMO. For example, IRT disclosed that it spent $1.2M in the first quarter on "recurring capital expenditures". That is actually a low number for this REIT and would be abnormally low at $80 per unit for virtually any apartment REIT.
Apartments require routine maintenance expenditures. Money spent on those items is not available to support the dividend.
In the 2017 4th quarter, IRT spent $180 per unit on "recurring capital expenditures" and $532 per unit for 2017.
REITs want investors to value them based on their cash flow numbers, but few provide an accurate free cash flow number and instead prefer to dance around the cash available for distribution. Routine and recurring maintenance expenditures are frequently ignored in a FFO and even an AFFO number. Other items which are ignored include actual cash expenses that occur regularly such as leasing, refinancing, and acquisition costs. Non-cash revenue items, such as the pretend cash created by the straight line accounting convention, are not excluded by some REITS (e.g. OHI) when calculating AFFO which is supposed to be a FAD number according to the REIT association.
I have noted the few exceptions to the ongoing obfuscation efforts, which includes DEA and CIO. Compare these calculations with what has become normal among REITs:
DEA:
CIO:
D. BOUGHT 20 of the ETF ENY at $7.87-Used Commission Free Trade:
Quote: Invesco Canadian Energy Income ETF
Guggenheim sold this fund recently to Invesco.
This ETF has been hurt by the decline in both the CAD/USD and a number of owned stocks.
The Canadian Dollar will likely remain under some downward pressure due to concerns over the NAFTA renegotiation and Trump's hostility to Canada and other nations governed by the principles of western democracies ("liberals" in the Trump vernacular) rather than by whims of authoritarian leaders (the "new conservatives").
Why Goldman Sachs still sees oil peaking above $82 a barrel this summer - MarketWatch
I am basically using up some of my commission free trades that are about to expire in my Schwab account.
Last Purchase Discussions: Item # 5.D. Added 10 ENY at $7.57 (2/15/18 Post); Item # 1.A. (2/1/18 Post)
Last Sell Discussion: Item # 7 Sold 155+ ENY at $17.55 (7/5/14)(profit snapshot= $297.37)
Dividends: Quarterly at a variable rate
Since the holdings are Canadian stocks that pay dividends in CADs, the dividend yield will fluctuate with the CAD/USD exchange rate. The decline in the CAD/USD simply means that CAD dividends buy less USDs. The dividend yield can also be impacted on additions and deletions to the tracking index. Several years ago, the index that is tracked by this ETF did not include pipelines/energy infrastructure stocks which generally have higher yields than the pure E & P companies. The fund owns several energy infrastructure stocks including Enbridge, Enbridge Income, TransCanada, Pembina and Inter Pipelines. Exposure to that sector has not helped performance since 2014.
Charts for USD Priced Shares- 5 Years:
Enbridge Inc. Interactive Chart (own)
TransCanada Corp. Interactive Charts
Pembina Pipeline Corp. Interactive Chart
Enbridge Income Fund Holdings Inc. Interactive Chart (Grey Market)(own)
Inter Pipeline Ltd. Interactive Chart (Pink Sheet Market)
Sponsor's Website: Invesco-ENY
Holdings:
A. Sold 10 FHB at $30.76-Used Commission Free Trade:
Quote: First Hawaiian Inc. (FHB)
FHB Analyst Estimates
First Hawaiian, Inc. Reports First Quarter 2018 Financial Results and Declares Dividend
Closing Price Yesterday: FHB $30.41 -$0.28 -0.91%
Position Before Pare:
Profit: +$17.55
My commission free trades are about to expire in my Schwab account. I will continue to reinvest the dividend, but will not make any additional open market purchases in this account. I am likely to sell the remaining shares at greater than $33.
Small ball buys will continue in my Fidelity account where I currently own 25+ shares with an average cost per share of $28.55.
First Hawaiian Upgraded By BofA To Buy On Capital Return Potential, Impending BNP Paribas Exit | Benzinga ($35 price target)
Dividend: Quarterly at $.24 per share
Last Ex Dividend Date: 5/25/18
Dividend Reinvestment: Yes
Last Purchase Discussions:
Item # 2.B. Bought 5 at $27.71 (4/5/18 Post)
Item # 1.A. Added 10 FHB at $28.4 and 5 at $27.7 (2/15/18 Post)
Item # 1.A. Bought 50 First Hawaiian at $29 and 10 at $29.11-Used Commission Free Trades (12/21/2017 Post)
Purchase Restriction: Small Ball Rule
Prior Round-Trip (held for 6 trading days):
 |
| 2018 FHB 100 Shares +$40.11 |
Last Earnings Report: Q/E 3/31/18
B. Bought 30 PRTK at $10.85-Used Commission Free Trade:
Quote: Paratek Pharmaceuticals Inc. (PRTK)
PRTK Analyst Estimates
Closing Price Yesterday: PRTK $11.00 +$0.35 +3.29%
Market Capitalization at $11: $347+M
Paratek Pharmaceuticals
2017 Annual Report
This is another lottery ticket purchase in my small/nano cap clinical stage biotech basket strategy.
Cantor Fitzgerald Thinks Paratek Pharmaceuticals' Stock is Going to Recover (price target $50 per share)
Prior Round Trip Discussion and Snapshots: +$92.47
I am not likely to be nominated as trader of the year based on the preceding round-trips.
I have only one blog discussion: Item # 1 Bought 50 PRTK at $13.2: Update For Healthcare Basket Strategy As Of 7/15/16 - South Gent | Seeking Alpha (Sold 12/13/16 at $14.26-$45.19 profit)
Chart-Major Bear Trend Since August 2017:
So, I sold my previously owned shares too early since the stock topped out near $29; but I would have had an unrealized loss if I still owned those lots.
I would add the usual caveat applicable to clinical stage biotech companies that have bet the farm on one or two compounds. If there is a trial failure or the FDA refuses to approve (or requests more information), the investor would have preferred never knowing about the stock. For PRTK, the main drug is omadacycline.
The other caveat is that I have no training or book knowledge about medical and science matters. My college majors were in history, political science and philosophy, all of which catered to my superior natural ability to engage in B.S. and then memory talents.
Current Position: 30 Shares
Paratek has two drugs currently waiting for a FDA decision.
Omadacycline: The FDA has new drug applications for the once-daily oral and intravenous formulations of omadacycline for the treatment of community-acquired bacterial pneumonia and acute skin and skin structure infections.
PRTK announced yesterday that the FDA Advisory Committee will meet to discuss this application on 8/18/18:
Paratek Announces FDA Advisory Committee Date for Omadacycline
The PFUDA date is in October. Paratek’s New Drug Applications for Oral and Intravenous Omadacycline Accepted for Priority Review by FDA
"In the two pivotal Phase 3 studies in ABSSSI (OASIS-1 and OASIS-2), omadacycline successfully met the primary endpoint for the FDA by demonstrating statistical non-inferiority based upon the Early Clinical Response, or ECR, assessment at 48 to 72 hours after the first dose of study medication in the modified intent‑to‑treat, or mITT, population (all randomized subjects without a baseline sole gram‑negative causative pathogen). In the same two pivotal Phase 3 studies in ABSSSI, omadacycline also successfully met the primary endpoint for the EMA by demonstrating statistical non-inferiority based upon the investigator’s assessment of clinical outcome at the post therapy evaluation, or PTE, visit (7 to 14 days after the subject’s last day of study therapy), in the mITT and the clinically evaluable, or CE, population (defined as all mITT subjects who received study medication, had a qualifying ABSSSI, an assessment of outcome, and met all other evaluability criteria). 10-K at page 6
Antibiotic Resistance - Paratek Pharmaceuticals
Paratek Presents New Analysis Highlighting Efficacy of Omadacycline in Treating Community-Acquired Bacterial Pneumonia by Measures of Disease Severity (5/22/18)
Paratek has entered into an exclusive license agreement with Zai Lab "develop, manufacture and commercialize omadacycline, or the licensed product, in the People’s Republic of China, Hong Kong, Macau and Taiwan, or the territory, for all human therapeutic and preventative uses other than biodefense. Under the terms of the Zai Collaboration Agreement, Paratek Bermuda Ltd. earned an upfront cash payment of $7.5 million, before taxes, and is eligible to receive up to $14.0 million in potential regulatory milestone payments and $40.5 million in potential commercial milestone payments, the next being $5.0 million upon approval by the U.S. Food & Drug Administration, or the FDA, of a New Drug Application, or NDA, submission in the CABP indication. Zai will also pay Paratek Bermuda Ltd. tiered royalties at a low double digit to mid-teen percent on net sales of the licensed product in the territory." 10-Q at page 10
Sarecycline: The FDA has accepted a new drug application for the treatment of moderate to severed acne. The company expects the FDA to act on the NDA during the 2018 second half. FDA Accepts New Drug Application For Seysara™ (Sarecycline) For The Treatment Of Moderate To Severe Acne
Paratek has granted Allergan an exclusive license to research, develop and commercialize this for use in the United States for the treatment of acne. "Allergan may be required, if the Company receives FDA approval, to pay the Company a future milestone payment of $12.0 million upon receipt of regulatory approval from the FDA. Allergan is also obligated to pay the Company tiered royalties, ranging from the mid-single digits to the low double digits, based on net sales." 10-Q at page 12
Recent Earnings Report: Q/E 3/31/18
Paratek Pharmaceuticals Reports First Quarter 2018 Financial Results ("As of March 31, 2018, Paratek had cash, cash equivalents, and marketable securities of $184.3 million. Based on current assumptions, including full commercial buildout and launch of omadacycline, Paratek’s existing capital resources as well as the $158.8 million in net proceeds from the Company’s April 2018 issuance of convertible senior subordinated notes, future contingent regulatory and commercial milestone payments from collaborations with Allergan and Zai Lab, and estimated omadacycline product sales will enable Paratek to fund operating expenses and capital expenditure requirements through the first quarter of 2021.")
Paratek Pharmaceuticals, Inc. Prices $140 Million of Convertible Senior Subordinated Notes due 2024 (4/19/28)
Prospectus for January 2019 Stock Offering
Paratek has "incurred significant losses since our inception in 1996." The "accumulated deficit at March 31, 2018 was $497.9 million". On the bright side, the company has loss carryforwards that can be used to shelter taxable income provided of course the company ever manages to become profitable.
C. Sold 50 IRT at $10.09-Roth IRA Account:
Quote: Independence Realty Trust Inc. (IRT)
List of Owned Apartment Buildings
Closing Price Yesterday: IRT $10.26 +$0.17 +1.68%
I sold the highest cost 50 share lot which was bought at a total cost of $9.45:
I have turned the dividend reinvestment option or and off several times. The dividend used to be paid monthly at $.06 per share. The last dividend was a quarterly payment at $.18 per share. I do not anticipate anytime soon a dividend raise.
Independence Realty Trust Announces Second Quarter 2018 Dividend
Profit Snapshot: + $27.12
Item # 1.A. Added 50 IRT at $9.35-Roth IRA Account (1/21/18 Post)
The general idea is to manage out-of-favor equity positions in Roth IRA accounts to a point where I own 100+ shares bought with dividends only.
Fidelity assigns a zero cost basis to shares bought in retirement accounts with dividends.
In this account, I am closer to meeting that particular goal with LXP (snapshot taken intra-day on 6/14):
Realized IRT Gains To Date: $447.9 ($420.78 in prior trades; snapshots in
I will consider repurchasing that lot at less than $9.45 prior to the next ex dividend date.
I still own 449 IRT shares in three taxable accounts.
A 177+ share lot has an average cost per share of $7.79:
A 150 share lot owned in my IB account has a $6.61 per share cost basis.
A 121+ share lot in my Schwab account has a $7.5 cost per share.
I have been trading IRT shares for several years in a typical trading pattern where I sell the highest cost lots on pops.
As of yesterday's close, I have a $1,320.8 unrealized gain in IRT shares.
Recent Stock Offering: IRT sold 14.375M shares at $9.25. The proceeds were used to purchase the apartment buildings referenced in the previous snapshot. Stock Offering Prospectus (September 2017)
Other Recent Buy Discussions:
Item # 1. Averaged Down: Bought 50 IRT at $6.18: Update For The Equity REIT Basket Strategy As Of 2/22/16 - South Gent | Seeking Alpha
Item # 2. Added 100 IRT at $6.8 as a Trade-IB Account: Update For EQUITY REIT Basket Strategy As Of 1/29/16 - South Gent | Seeking Alpha
Update For Equity REIT Basket Strategy As Of 7/28/16 - South Gent | Seeking Alpha (Items 1, 2 and 3)
Last Earnings Report: Q/E 3/31/18
Independence Realty Trust Announces First Quarter 2018 Financial Results
I was not impressed. Even if an investor accepts IRT's core FFO number as representing cash available for distribution, and I do not not, the quarterly dividend was 100% of core FFO:
2018 Guidance:
The problem with the core FFO number is that it is not a free cash flow number IMO. For example, IRT disclosed that it spent $1.2M in the first quarter on "recurring capital expenditures". That is actually a low number for this REIT and would be abnormally low at $80 per unit for virtually any apartment REIT.
Apartments require routine maintenance expenditures. Money spent on those items is not available to support the dividend.
In the 2017 4th quarter, IRT spent $180 per unit on "recurring capital expenditures" and $532 per unit for 2017.
REITs want investors to value them based on their cash flow numbers, but few provide an accurate free cash flow number and instead prefer to dance around the cash available for distribution. Routine and recurring maintenance expenditures are frequently ignored in a FFO and even an AFFO number. Other items which are ignored include actual cash expenses that occur regularly such as leasing, refinancing, and acquisition costs. Non-cash revenue items, such as the pretend cash created by the straight line accounting convention, are not excluded by some REITS (e.g. OHI) when calculating AFFO which is supposed to be a FAD number according to the REIT association.
I have noted the few exceptions to the ongoing obfuscation efforts, which includes DEA and CIO. Compare these calculations with what has become normal among REITs:
DEA:
CIO:
D. BOUGHT 20 of the ETF ENY at $7.87-Used Commission Free Trade:
Quote: Invesco Canadian Energy Income ETF
Guggenheim sold this fund recently to Invesco.
This ETF has been hurt by the decline in both the CAD/USD and a number of owned stocks.
The Canadian Dollar will likely remain under some downward pressure due to concerns over the NAFTA renegotiation and Trump's hostility to Canada and other nations governed by the principles of western democracies ("liberals" in the Trump vernacular) rather than by whims of authoritarian leaders (the "new conservatives").
Why Goldman Sachs still sees oil peaking above $82 a barrel this summer - MarketWatch
I am basically using up some of my commission free trades that are about to expire in my Schwab account.
Last Purchase Discussions: Item # 5.D. Added 10 ENY at $7.57 (2/15/18 Post); Item # 1.A. (2/1/18 Post)
Last Sell Discussion: Item # 7 Sold 155+ ENY at $17.55 (7/5/14)(profit snapshot= $297.37)
Dividends: Quarterly at a variable rate
Since the holdings are Canadian stocks that pay dividends in CADs, the dividend yield will fluctuate with the CAD/USD exchange rate. The decline in the CAD/USD simply means that CAD dividends buy less USDs. The dividend yield can also be impacted on additions and deletions to the tracking index. Several years ago, the index that is tracked by this ETF did not include pipelines/energy infrastructure stocks which generally have higher yields than the pure E & P companies. The fund owns several energy infrastructure stocks including Enbridge, Enbridge Income, TransCanada, Pembina and Inter Pipelines. Exposure to that sector has not helped performance since 2014.
Charts for USD Priced Shares- 5 Years:
Enbridge Inc. Interactive Chart (own)
TransCanada Corp. Interactive Charts
Pembina Pipeline Corp. Interactive Chart
Enbridge Income Fund Holdings Inc. Interactive Chart (Grey Market)(own)
Inter Pipeline Ltd. Interactive Chart (Pink Sheet Market)
Sponsor's Website: Invesco-ENY
Holdings:
A. Bought 50 AHTPRI at $23.69-Used Commission Free Trade:
Quote: Ashford Hospitality Trust 7.5% Preferred Series I
Prospectus
Par Value: $25
Optional Call by Issuer: At par value plus accrued and unpaid dividends on or after 11/17/22
Capital Structure: Senior only to common stock
Stopper Clause: Yes (enforces preferred shareholders superior claim to cash vs. common shareholders only)
Dividends: Quarterly, Cumulative and Non-Qualified (pass through entity)
Dividend Yield at TC of $23.69: 7.9147%
Next Ex Dividend Date: 6/28/18, pay 7/16
Future Buys: Unlikely given my opinion about the credit risk
Last Earnings Report: Q/E 3/31/18
"At March 31, 2018, the Company had total assets of $4.6 billion. As of March 31, 2018, the Company had $3.7 billion of mortgage debt. The Company’s total combined debt had a blended average interest rate of 5.8%. After taking into account the recently announced refinancing, the Company’s total combined debt had a blended average interest rate of 5.5%."
Advantages and Disadvantages of Equity REIT Cumulative Equity Preferred Stocks
AHT's preferred stocks yield more than the common. Unlike the common dividend, the preferred share dividend can not be cut or eliminated short of a bankruptcy. For as long as any cash dividend is paid to the common shareholder, no matter how small, the entire preferred share dividend has to be paid in full. Deferral of the preferred share dividend can only occur when no cash dividend is paid to the common shareholder. Cash dividends have to be paid to the common shareholder whenever the REIT has net income.
Generally, deferred dividends accumulate, but no interest is paid on the deferred accumulated amounts.
Please note that several REITs do not have GAAP net income due to depreciation expenses. AHT had a GAAP loss in the first quarter of $32.649M. The depreciation expense, which is a non-cash expense, was $63.047M. AFFO was reported at $.28 per share.
Quote: Ashford Hospitality Trust 7.5% Preferred Series I
Prospectus
Par Value: $25
Optional Call by Issuer: At par value plus accrued and unpaid dividends on or after 11/17/22
Capital Structure: Senior only to common stock
Stopper Clause: Yes (enforces preferred shareholders superior claim to cash vs. common shareholders only)
Dividends: Quarterly, Cumulative and Non-Qualified (pass through entity)
Dividend Yield at TC of $23.69: 7.9147%
Next Ex Dividend Date: 6/28/18, pay 7/16
Future Buys: Unlikely given my opinion about the credit risk
Last Earnings Report: Q/E 3/31/18
"At March 31, 2018, the Company had total assets of $4.6 billion. As of March 31, 2018, the Company had $3.7 billion of mortgage debt. The Company’s total combined debt had a blended average interest rate of 5.8%. After taking into account the recently announced refinancing, the Company’s total combined debt had a blended average interest rate of 5.5%."
Advantages and Disadvantages of Equity REIT Cumulative Equity Preferred Stocks
AHT's preferred stocks yield more than the common. Unlike the common dividend, the preferred share dividend can not be cut or eliminated short of a bankruptcy. For as long as any cash dividend is paid to the common shareholder, no matter how small, the entire preferred share dividend has to be paid in full. Deferral of the preferred share dividend can only occur when no cash dividend is paid to the common shareholder. Cash dividends have to be paid to the common shareholder whenever the REIT has net income.
Generally, deferred dividends accumulate, but no interest is paid on the deferred accumulated amounts.
Please note that several REITs do not have GAAP net income due to depreciation expenses. AHT had a GAAP loss in the first quarter of $32.649M. The depreciation expense, which is a non-cash expense, was $63.047M. AFFO was reported at $.28 per share.
3. Short Term Bond/CD Ladder Basket Strategy:
I am not currently buying intermediate term bonds. I have started to focus more on late 2018 to December 2020 maturities.
A. Bought 2 LegacyTexas Bank 2% CDs (monthly interest payments) Maturing on 11/15/18:
Holding Company: Legacy Texas Financial Group Inc. (LTXB)
B. Bought 1 Treasury .75% Coupon Maturing on 10/31/18:
YTM at 1.942%
I now own 8 treasury notes maturing on 10/31/18, with two of them being this .75% coupon issue. The other two have coupons of 1.75% and 1.25%. This is what the order book looked like for a 1 bond purchase when I selected the .75% coupon to buy:
While it really does not make any material difference which one that I bought of course, the .75% did have the highest YTM. The current yield differential is irrelevant now since there is only one more coupon payment prior to maturity and that is on the 10/31/18 maturity date.
YTM at 1.942%
I now own 8 treasury notes maturing on 10/31/18, with two of them being this .75% coupon issue. The other two have coupons of 1.75% and 1.25%. This is what the order book looked like for a 1 bond purchase when I selected the .75% coupon to buy:
While it really does not make any material difference which one that I bought of course, the .75% did have the highest YTM. The current yield differential is irrelevant now since there is only one more coupon payment prior to maturity and that is on the 10/31/18 maturity date.
C. Bought 1 GATX 2.6% SU Bond Maturing on 3/30/20:
Finra Page: Bond Detail (prospectus linked)
I now own 2 bonds.
Issuer: GATX Corp. (GATX)
GATX Analyst Estimates
GATX Corporation Reports 2018 First-Quarter Results
GATX 2017 Annual Report (debt discussed starting at page 85)
Credit Ratings:
Bought at a Total Cost of 99.168 (with $1 Commission)
YTM at TC Then at 3.072%
Current Yield at TC = 2.6218%
D. Bought 2 Berkshire Hathaway Energy 2.4% SU Bonds Maturing on 2/1/2020:
FINRA Page: Bond Detail (prospectus linked)
Issuer: A consolidated subsidiary of Berkshire Hathaway Inc.
Operations:
2017 Berkshire Hathaway Energy Annual Report
10-Q for the Q/E 3/31/18
Credit Ratings:
Bought at a Total Cost of 99.433
YTM at TC Then at 2.752%
Current Yield at TC = 2.4137%
E. Bought 1 Wells Fargo 2.8% CD (monthly interest payments) Maturing on 6/6/20:
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.
While today was the DJIA's 8th straight daily loss, the Stock Jocks are not yet shaking in their boots. The S & P 500 has been in a trading range between 2600 and 2800 since February:
ReplyDeletehttps://www.marketwatch.com/investing/index/spx/charts
No one should be surprised to learn at year end that the high was made in February.
If the DJIA declines tomorrow, it will be the longest consecutive day losing streak in over 40 years, but the percentage decline in not meaningful-yet.
There was a flight to safety trade in vogue today, but the precious metals are not participating.
Higher quality bonds rose in price and declined in yield.
U.S. 10 Year Treasury Note
2.897% -0.04%
Last Updated: Jun 21, 2018 4:10 p.m. EDT
Since January the ten year yield has been meandering up and down, mostly in the 2.7% to 3% range, and was unable to hold for long a 3%+ yield.
https://www.marketwatch.com/investing/bond/tmubmusd10y/charts?countrycode=bx
The VIX did spike today but remains well below 20. My Vix Asset Allocation remains in a Stable Vix Pattern.
https://www.marketwatch.com/investing/index/vix
+++
It looks dicey whether the House republicans will be able to agree on any immigration bill. Their "conservative" version, which did not even provide a path to citizenship for the DACA children and would curb legal immigration by persons viewed as undesirable by republicans, was voted down 231-193. The vote on another bill, which would provide a path to citizenship from the dreamers, was postponed by Ryan apparently due to defections from the "conservative". Nonetheless, Trump blamed the Democrats for the republicans' inability to reach an agreement.
https://www.cnbc.com/2018/06/21/house-delays-vote-on-compromise-gop-immigration-bill-as-chances-of-passage-dim-nbc-news.html
The Stock Jocks are not concerned about the foregoing and are only starting to show a whiff of concern that a trade war might interfere with their projected earnings juggernaut.
Canada is considering changing it rules to penalize companies from countries that harm its economic interests.
https://www.reuters.com/article/us-usa-trade-canada-fighterjets-exclusiv/exclusive-canada-could-make-it-harder-for-u-s-to-win-fighter-bid-sources-idUSKBN1JH2IA
I have been harvesting some of my larger gains in the regional bank basket.
Crude oil and energy stocks are responding well to a reported OPEC agreement to raise output by 1 million barrels per day. While the 1M number was bandied about before the meeting, the agreement was better than expected for crude oil prices since the effective increase was closer to 600M barrels. Some OPEC members will not be able to increase their production by their allotted amount and those with spare capacity would not be able to make up the difference.
ReplyDeleteCrude Oil Aug 2018
$67.35 +$1.81 +2.76%
Last Updated: Jun 22, 2018 at 10:07 a.m. EDT
https://www.marketwatch.com/investing/future/crude%20oil%20-%20electronic
Fidelity MSCI Energy Index ETF
$21.18 $0.6248 +3.04%
Last Updated: Jun 22, 2018 at 10:07 a.m. EDT
https://www.marketwatch.com/investing/fund/feny
The energy infrastructure stocks, which have been in a bear market since the 2014 summer, are also rising today.
5 Year Chart AMJ:
https://www.marketwatch.com/investing/stock/amj/charts
Donald took the wind out of the market's momentum this morning. He tweeted his desire to slap 25% tariffs on European car exports. Donald neglected to mention in his tweet that the U.S. has a 25% tariff on pick-up imports that artificially inflate the prices for those vehicles made in the U.S. by several thousand dollars. Trumpsters do not mine paying that "tax" when buying U.S. made pick-ups since, of course, they have no idea that they are paying it. The buyers of Mercedes, BMWs, Volvos, etc. may be more aware that Trump wants to hike the price of those vehicles by imposing a 25% tax on their importation. .
ReplyDeleteBond prices responded by moving up in price and down in yield. The ten year treasury went down about 2 basis points in yield shortly after that tweet:
https://www.marketwatch.com/investing/bond/tmubmusd10y?countrycode=bx
Will foreign nations give into Donald's blackmail and take a knee? Hard to say whether that will happen. Part of the answer lies in their belief that Donald is a bully and untrustworthy. Another question is whether it has become domestically toxic for western democracies to take a knee. That may already be the case in countries like Canada and Germany.
Trump and his acolytes are doing whatever they can to undermine Merkel in favor of far right, anti-immigrant and anti-EU parties. This has not gone unnoticed in Germany.
The stock market faded into the close as did interest rates.
ReplyDeleteAfter spending the day in higher yield territory compared to yesterday's close, the U.S. ten year bond ended the day declining in yield slightly.
https://www.marketwatch.com/investing/bond/tmubmusd10y?countrycode=bx
Donald's threat to impose 20% tariffs on European car exports to the U.S. is nothing new. He has made that threat previously.
Today, the threat was possibly taken more seriously as the Europeans tariffs on U.S. exports went into effect as the tit-for-tat response to Donald's steel and aluminum tariffs.
Donald pretty much scuttled any possible compromise deal in the House, dominated by the GOP, with a tweet earlier today saying "why bother", just blame the Democrats for the GOP's inability to reach a compromise among themselves.
https://www.cnn.com/2018/06/22/politics/donald-trump-immigration-tweet/index.html
Trump has made it clear that he would shut down the government in late September, unless he receives funding to build the wall. The GOP does not want to make any concessions on their hard line immigration posture in order to secure those funds so they will shut down the government again unless the Democrats agree to provide those funds without the GOP giving the DEMs anything and then blame the DEMS for the shutdown.
Donald was probably told by Ryan that nothing was coming out of the House; and the modern day GOP would never craft a bill that could pass with minority support from republicans and majority support from Democrats. There is a name for that approach in the House-the Hastert Rule.
https://en.wikipedia.org/wiki/Hastert_Rule
Yesterday, the vast majority of House republicans voted for a bill that would not provide a path to citizenship for the dreamers. That bill had 47 republicans voting against it and failed 231 to 193.
193 republicans for, no Democrats for
41 republicans against, 190 Democrats against
http://clerk.house.gov/evs/2018/roll282.xml
If the GOP wanted to pass a bill that included that path to citizenship for the Dreamers (and they want to deport), no substantial changes in legal migration (possibly throw a bone to the republicans on that issue), and a huge expenditure to extend the wall and to otherwise increase border security, there would be enough Democrats to support that legislation. Reasonable compromise is anathema to them; so the probability of a government shutdown on 9/28 extending into the mid-term elections has increased. The republicans did shut down the government in 2013 when the Democrats refused to repeal Obamacare.
https://en.wikipedia.org/wiki/United_States_federal_government_shutdown_of_2013
Funds to build the wall will just be a new reason to cause chaos, though it remains to be seen whether Trump will follow through (likely IMO) and whether the voters will blame the Democrats for the shutdown.
Campbell Soup(CPB) has been rising briskly for several days now.
ReplyDeleteThe New York Post reported yesterday that Kraft Heinz is interested in buying the company. The report was published online at 10:49 P.M.
https://nypost.com/2018/06/22/kraft-interested-in-buying-campbell-soup/
Just my .02,... I like 2.05% 3-mo CDs now, laddering, all the trades don't work for me.
ReplyDeleteApprox $50K each, $250K total, obviously that's about $250.00 per 3 months FDIC no sweat on each. Have 2-month 1.95% too(Fidelity or TDAmer new issues only)
The dividend yield on the S & P 500 closed last Friday at 1.89%:
ReplyDeletehttp://www.wsj.com/mdc/public/page/2_3021-peyield.html?mod=mdc_uss_pglnk
The dividend yield paid by the Vanguard Prime Money Market fund closed at 2%.
https://personal.vanguard.com/us/funds/snapshot?TTVETF=VETFCNTRL&FundId=0030&FundIntExt=INT
Most of my spare cash in brokerage accounts is now being kept in the Vanguard Prime MM fund. The yield will continue to float up for as long as the FED keeps raising the federal funds rate.
I don't have an account w/ Vanguard but only use Treasury-only mm funds since the collapse of the "Reserve" fund breaking the buck, we were in the Treasury-only fund at the time. That's a good alternative assuming it's safe.
DeleteVMMXX? -see this? "Industry concentration risk: The chance that there will be overall problems affecting a particular industry. Because the fund will invest more than 25% of its assets in securities of companies in the financial services industry, the fund’s performance will depend to a greater extent on the overall condition of that industry."
DeleteI do not view any investment as perfectly safe including FDIC insured CDs, treasury bills or even cash placed in a safety deposit box.
ReplyDeleteThe major risk for most households is that the total return from "safe" investments will not be sufficient to meet their financial goals . The current three month CD and treasury bill rates have a negative real return before taxes based on the current CPI level. In that context, those investments are not safe for those who need to grow their capital at faster rates.
There is also the possibility that economic events may require the FED to lower interest rates.
When there is another major banking crisis, which will occur, the federal government is going to be in far worse shape than in the prior ones; and its options for dealing with the crisis, including bailing out the FDIC, will likely be limited in ways that can not be reasonably forecasted now.
The FDIC has insufficient assets to cover its potential liabilities in a major banking crisis.
The prime money market funds invest in short term paper issued by investment grade companies including banks. The Vanguard Prime MM fund will own about 30% or so in U.S. treasury bills and agency debt. The manager has leeway in reallocating proceeds from maturing securities into other more reliable issuers depending on the circumstances then existing.
When and if it becomes apparent that another major financial crisis is coming, the investor will then have to decide what are the safer investments for preservation of capital.
In the 2008 financial crisis, treasuries performed well, but that may not be the best option when the next one comes around. I did shuffle money around then based on risk considerations and would do so again under similar or worse circumstances.
About 18 months or so ago, many brokers abandoned their Prime MM funds as a money sweep option in response to a SEC rule change.
Instead, their customers were left to choose from a treasury or a federal MM fund. A Federal MM fund would include agency debt (e.g. Federal Home Loan Bank) which I would view as less "safe" than U.S. treasury bills.
Vanguard does not have a pure Treasury MM fund as a sweep option. It does have one that requires a $50K investment and it currently has a 1.81% yield.
Since I use treasury bills as part of my capital preservation allocation, and do not have to pay Vanguard, Schwab or Fidelity a commission when I buy or sell fixed coupon treasuries in the secondary market or at auction, which is the case for all of their customers, I see no reason to use the Vanguard Treasury MM fund. It is just as easy to pick up a higher yield by buying individual treasury bills.
Unlike my other brokers, Vanguard kept its Prime MM fund but it can not be used as a sweep account. My Vanguard sweep account is the Federal MM fund which currently pays 1.81%:
https://investor.vanguard.com/mutual-funds/profile/VMFXX
The Fidelity option in that category is its Government MM fund which currently has a 1.39% yield:
https://fundresearch.fidelity.com/mutual-funds/summary/31617H102
The lower yield compared to Vanguard's Federal MM fund is due mostly to Fidelity's higher expense ratio of .42% compared to .11% for the Vanguard Federal MM.
Dividends and interest payments, and proceeds from stock sales, are paid into the Vanguard settlement fund.
If I need more money to pay for an investment, I just move the money online from my Prime MM fund to the Federal MM fund. If the Federal MM becomes too large, I just move excess funds into the Prime fund online.
Some minor yield differences in yield result from mixes in owned securities and the average maturity weighting. The MM manager could now pick up slightly more yield by extending their weighted average maturity by a few days.
If I become concerned about any MM fund breaking the buck, and I currently do not, I can move the money quickly to a linked bank account or use the funds to buy a "safer" asset in the brokerage account.
Very explanatory.Thinking of adding to my 2 bonds here, probably min (2)they have good cashflow accrdg to latest S&P opinion?
DeleteKROGER CO NOTE CALL MAKE WHOLE 2.65000% 10/15/2026
501044DE8
I worked union grocery 14 yrs, Albertsons at end, but previous names, own few Safeway bonds too. Fyi Cerberus Capital (Albertsons LLC) actually my last employer when I took early 62 retirement, is busy buying up rest of RiteAid stores, they recently bought their ice cream/dairy operations I'm told.
DeleteI still own 1 Albertsons senior unsecured bond that was bought several years ago as part of a junk bond ladder basket. The broker currently has a third party price of 76.73 as of last Friday's close, which gives me an unrealized profit of $65.
Delete7.11% Maturing in 2027 rated at B- by S & P
http://finra-markets.morningstar.com/BondCenter/BondDetail.jsp?ticker=C58586&symbol=ABS3706801
I may sell it.
I own several Kroger senior unsecured bonds ranging in maturities from January 2019 to the 2026. Kroger recently reported good results and the common stock popped.
https://www.prnewswire.com/news-releases/kroger-reports-first-quarter-2018-results-300670087.html
The KR bonds do trade in minimum 2 bond lots.
The earliest maturity for me is the KR 2% maturing on 1/15/19 which closed last Friday with a YTM of 2.576% based on a 99.68 price (that would be before the brokerage commission)
http://finra-markets.morningstar.com/BondCenter/BondDetail.jsp?ticker=C645889&symbol=KR4326493
The next one that I own is the KR 1.5% maturing on 9/15/19 which closed last Friday with a 3.022% YTM based on a 98.13 price:
http://finra-markets.morningstar.com/BondCenter/BondDetail.jsp?ticker=C661961&symbol=KR4408812
I am no longer buying junk bonds, but I still own that Albertsons bond and a few that were bought several years ago when rated in junk territory that are now investment grade. When I was buying the junk bonds, my weighted average yield was close to 12%, but a similar ladder now would probably generated less than 1/2 of that which is not worth the risk.
You can review Moody's reports at their website which requires a register and sign in.
Moody's rates Kroger's new notes Baa1
https://www.moodys.com/research/Moodys-rates-Krogers-new-notes-Baa1--PR_369827
Fitch reports are available without registering.
https://www.fitchratings.com/site/search?content=fitchwire
The last Fitch report on Kroger was in 9/17: BBB with negative outlook
https://www.fitchratings.com/site/pr/1029373
I would not buy bonds using TD Ameritrade. Bonds are generally made available in a minimum 5 bond lot and the commission is based on a "net yield basis" except for Treasuries bought at auction.
It was only recently that the SEC started to require brokers to disclose their mark up.
https://www.bondbuyer.com/news/ready-or-not-here-comes-markup-disclosure
Prior to that a bond purchaser would not know how much the price was being marked up by the broker since the only price quoted and the price shown in the confirmation was the bond price marked up by whatever the broker was charging in commission. Purchasing treasuries at auction cost $25 at that broker.
Thank you. I periodically visit for your fixed-income ideas. I believe S&P has this KR bond BBBstable. I buy secondary bonds on Fidelity. It's paying about 4.25% now I think @ $88.40ish to par. thanks again. I can confirm as of this am Albertsons LLC (Cerberus)bought RiteAid ice cream operations, not sure if entire dairy.Rumor is addit'l stores Walgreens did not buy.
Deleteyes, S&P BBB/stable -current yield 4.27%/ fyi, Cerberus Capital has a "re- purpose space" subsidiary to remodel real estate holdings, which I read is very lucrative, I guess this comes at no surprise.
DeleteThe last Trade for the KR 2.65% maturing on 10/15/26 was at 88.436 which was a 2 bond lot.
Deletehttp://finra-markets.morningstar.com/BondCenter/BondDetail.jsp?ticker=C661963&symbol=KR4408810
The YTM at a total cost of 88.436 was shown by FINRA as being then 4.322%. A significant part of that yield is based on the profit realized at maturity when Kroger pays the principal amount. The profit would be $231.28 for a 2 bond lot. The current yield at 88.436 is 3%.
I recently bought the KR 3.5% maturing on 2/1/26 which had at my total cost number a 3.7% current yield and a 4.335% yield to maturity.
Item # 3.B.
https://tennesseeindependent.blogspot.com/2018/06/observations-and-sample-of-recent_11.html
A lot of the yield in those 2026 bonds can be picked up with a KR 2.8% maturing on 8/1/22. I bought 2 recently with a current yield of 2.87% and a YTM of 3.422%.
ITEM # 5.B.
https://tennesseeindependent.blogspot.com/2018/04/observations-and-sample-of-recent_2.html
I bought that one at a TC of 97.499. And it closed last Friday at 96.71, creating a 3.673% YTM at that price:
http://finra-markets.morningstar.com/BondCenter/BondDetail.jsp?ticker=C699617&symbol=KR4519631
On a YTM basis, I picked up close to 1% per year by going out almost 4 years with the 2026 bond purchase, but I would be giving up less if I bought that 2022 now.
One question is whether the additional yield, tied up in the gain realized at maturity, is worth the additional yield. And the answer is that it is impossible to know with any certainty. Generally, I prefer more money in my pocket now.
If interest rates are in a persistent rising mode, I would prefer getting my money back sooner.
On the other hand, rates may be declining again in a few years, and I would possibly want then the yield of the longer dated bond.
My answer is to buy up and down the maturity spectrum with an emphasis on the shorter term now.
My cost-basis is $2,793.78 for (2) I might be inclined to average-down for another two. Kroger, according to S&P has good cashflow> (S&P) We do not see issues with covenant headroom over the coming two years, with more than 35% cushion recently
ReplyDeleteavailable on its leverage covenant and more than 60% cushion on its fixed-charge coverage covenant.
I am assuming that is a typo on your cost basis. The KR 2.65% maturing in 2026 has never traded over par value so your cost for 2 could not exceed $2K.
DeleteSorry- I have (3)I'm down (142.62) thus why thinking aveng down. 5 might be too much, thanks, I thot I had 2.
DeleteI lose track of what I own too. I checked this morning and found that I actually own 2 Albertsons 7.11% maturing in 2027 rather than the 1 bond that I thought that I owned. My total cost per bond is 73.50 with the bonds bought on 3/9/2012. I could sell those bonds now at 77.45. The YTM for the buyer at that price would be about 11.05%. I am still electing to hold.
DeleteI have published a new post.
ReplyDeletehttps://tennesseeindependent.blogspot.com/2018/06/observations-and-sample-of-recent_25.html