Observations and Sample of Recent Trades: EQH, ORIT, RHHBY, RIGL, SPHS

Portfolio Management: 

Donald has guaranteed that a trade war is easy to win, disregarding the long history that proves otherwise. 

Opinions do differ on whether the U.S. will win the trade war initiated by Donald. Jim Cramer opined that Trump will win but needs to do so within a few months. Robert Samuelson penned an opinion piece arguing that the U.S. will lose. We’re going to lose this trade war - The Washington Post I would characterize Samuelson's view to be the minority one. 

The Stock Jocks are still predicting IMO that the U.S. will win the accelerating trade war with nothing other than a mild and short period of economic discomfort. Last Monday's action did contain a whiff that some investors are reconsidering that opinion.  That whiff did not change the consensus opinion expressed in current stock prices. 

Forget the tariff tantrum—S&P 500 is headed 10% higher in 2018, says Blackstone’s Wien - MarketWatch

Since that view appears overly optimistic to me, I have already adjusted my portfolio some based on both my different risk assessment regarding the accelerating trade war and my dominant portfolio objective which is capital preservation. 

The adjustments are relatively small and include selling several individual stock positions where I had significant percentage unrealized gains, continuing to pare other stock positions by selling the highest cost lots profitably, and lightening up some on stock funds.   

China won’t turn the other cheek in trade flap, warns President Xi - MarketWatch China simply does not appear likely to bow and take a knee before Donald. Xi does not not impress me as the kind of guy who will respond well to Donald's strong arm tactics. Donald will have to blink first and accept close to what China has already offered; or the trade war will continue for longer than the Stock Jocks expect.  

The slight dip in the market averages last Monday and yesterday still do not even begin to reflect IMO potentially adverse consequences that will naturally flow from the tariff wars.  

My current capital preservation posture, which is currently on steroids,  has led me to focus more on short term CDs and bonds. I have been moving deeper into my bunker waiting for incoming.  

In accounts where I am not paid a competitive rate on idle funds compared to short term CDs, I have run down my account balances to near zero. The cash in money market funds will quickly build back up as I receive redemption proceeds which occurs throughout each month. 

After I ran down my Fidelity Government Money Market fund balance, I started to receive this message:  

Yes, I know that I could apply for margin. But how do I consistently make money using margin borrowing? 

I only have cash accounts. I have never borrowed money from a broker to buy securities. Sure, it has been easier to make money using borrowed funds since March 2009, but that can change rapidly and with potentially severe adverse consequences. 

One alternative for a conservative investor is to buy funds that have access to borrowed money at substantially lower rates. I am referring to closed end funds that lever up with short term borrowings.     

I am reluctant to buy those funds now due to a persistent rise in short term borrowing rates and to what I view as an increasing risk of a market correction. 

A meaningful downdraft started in the bond market last September and that has caused, along with a rise in borrowing costs, a significant total return loss in leveraged bond funds.  

I eliminated my position in the leveraged bond CEF BTZ  due to those concerns: 5/8/17 Post The last disposition occurred on 5/1/17 at around $13.4. I have not yet bought back any shares. As noted in that May 2017 post, the previous disposition was to sell 470 shares at $13.62. Since 5/1/17, the total average annual return (which includes dividend reinvestment) was -2.66% through 6/27/18. DRIP Returns Calculator | Dividend Channel

Another problem with CEFs is that the discount to net asset value per share will generally expand when the net asset value per share starts to trend down, which increases the loss performance compared to a fund that redeems shares at net asset value (mutual fund) or sells at or near net asset value per share (ETF).  

As the discount to net asset value per share for BTZ increases over 15%, and the FED moves closer to ending its FF rate increases, I may consider restarting a position in BTZ as part of my small ball buying program. I am still anticipating more pain among leveraged bond CEFs. One longer term benefit from rising intermediate and long term rates is that the fund can frequently replace maturing bonds with higher yielding ones. 

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Marketing Firm Exactis Leaked a Personal Info Database With 340 Million Records | WIRED

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Economy:  

GDP might top 5% in the spring - MarketWatch

Steel tariffs put largest US nail manufacturer 'on brink of extinction'

It is beyond Donald's comprehension that far more jobs are connected to U.S. users of steel products than to those who make it.  

Oil prices extend rally after EIA reports biggest weekly drop in U.S. crude supplies year to date - MarketWatch

Durable-goods orders in May as auto demand slump - MarketWatch

Oil surges after State Department orders buyers to cut Iranian imports

Gas prices will be moving up. The Trumpsters can lay the blame either on Hillary or Obama who was born in Kenya in some kind of satanic group sex ritual conducted by a Muslim terrorist group. Blaming Woodrow Wilson may be a bridge too far for them. Obama and Hillary are after all still exercising the levers of the Deep State in a conspiratorial agreement hatched with the Enemy of the People (the free press for those unfamiliar with the new nomenclature) and the corrupt U.S. intelligence agencies who are so mean to Donald. 

Chicago Fed’s May national economic index retreats into negative as factories slowed - MarketWatch

Trump tariffs would be bad for the entire global auto industry, says Moody’s - MarketWatch

Why Trump thinks he can win a drawn-out fight over trade with other countries - MarketWatch

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Markets and Market Commentary: 

Trump's trade war is meant to protect American jobs — so why are businesses planning layoffs?

Harley-Davidson's stock sinks, sees EU tariffs adding $2,200 to average motorcycle cost - MarketWatch; Harley-Davidson moves work offshore to limit blow from Trump’s trade war - The Washington Post

In response to Harley's understandable decision, Donald threatened to destroy the company: Trump threatens Harley-Davidson with taxes ‘like never before’ and predicts its eventual collapse - The Washington Post

Just another clearly authoritarian statement made by Donald.  

This is what the stock-market indicator with the best track record is telling us - MarketWatch (the author is referencing the percentage of household financial assets invested in equities) There will be a time when savings accounts will outperform the S & P, sometimes by a large margin. The reason has nothing to do with their yield but simply due to their preservation of capital function.  

Stock outflows hit three-month high amid growing trade tensions - MarketWatch

Total Savings Deposits at all Depository Institutions-St. Louis Fed (over $9.2 trillion)

Why a major trade war could mean a ‘full-blown recession’ - MarketWatch

$34B in additional tariffs levied on China's exports will start on 7/6/18. The remaining $16B will be imposed shortly thereafter. China will respond on the same day: China announces retaliatory tariffs on $34 billion worth of US goods, including agriculture products

Trade-war tracker: Here are the new levies, imposed and threatened - MarketWatch

First U.S. cannabis-derived drug has been approved by the FDA - MarketWatch

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Supreme Court's 5 to 4 Decisions:

The GOP blockade of Obama's last Supreme Court nominee, the centrist Merrick Garland, is paying off for the republicans in a big way. 

The republicans took the position then that no hearing would even be permitted on Garland's nomination in an election year. It was of course just pure power politics and had nothing to do with the lofty motives advanced by the republicans about giving the voters an opportunity to decide. The republicans will not delay a hearing or vote on Trump's nominee until after the November 2018 election.  

The end result will probably be the same irrespective of when the vote is held since the GOP will probably pick up at least one Senate seat this November.  

Justice Kennedy, a republican who is 81, is going to retire which will allow Donald to appoint a younger version or someone further to the right which is likely. 

Kennedy was the swing vote on the 5-4 gay marriage decision. He has a slight libertarian streak that is not present in the other republican justices. 

He is a pivotal vote for the Democrats only in that decision and probably in an effort to completely reverse Roe v. Wade rather than to continue watering it down which he was willing to do. Toobin: Roe v. Wade is doomed because Trump won (Toobin predicts that abortions will be illegal in at least 20 states within 18 months. I suspect that most of those states would make it a felony to perform or receive one. Tennessee will be one of those.)

Several recent important decisions have split 5 to 4 in favor of the GOP with all 5 republican judges voting together in the majority and the 4 democrats voting in dissent. 

Justice Neil Gorsuch will be a reliable reactionary judge willing to turn back the clock about 50 to 100 years, maybe more. Time will prove me prescient on that remark. 

Three of the nine justices are now firmly in the strongly reactionary camp, with the other two being Alito and Thomas. The other two republicans, Justices Kennedy and Roberts, move in out of that camp depending on the issue. One of the key objectives, shared by all of the above, is to restrict federal power under the Commerce Clause.  

Now, more so than in the past, it is possible to predict how justices will vote on the hot button issues based on their political party affiliation which is not a good thing irrespective of one's beliefs.  

While I have some limited reservations about the government requiring a person to provide a piece of information, I believe the 5 to 4 majority decision in National Institute of Family and Life Advocates v. Becerra (06/26/2018) is based on the majorities personal biases against abortions rather than the purported reasons given by the majority. 

The government requires that a stunning amount of information must be given in a countless number of transactions. (e.g. a lender may prefer to avoid speaking about the true cost of a loan, but is required by the government to disclose that information). Can those regulations now be challenged and found unconstitutional based on the government forcing "speech".  I suspect that this decision will be used hereafter to limit the scope of federal and state regulations, particularly in the consumer protection space. 

In the Becerra decision, the Court held that it was unconstitutional for  the State of California to require pregnancy related clinics, licensed by the state, to post information about the availability of abortions. The reason is that governmental action violated the First Amendment rights of those who refused to post the information. According to the majority, it was just fine to deny the potential listener access to information that they may want to have when making a decision on whether to exercise a constitutionally protected right. What if the information does not even relate to the exercise of a constitutional right but to a financial transaction?  This could get ugly quick. 

I also view the decision as overruling and inconsistent with Planned Parenthood of Southeastern Pa. v. Casey 505 U.S. 833 (1992), which upheld the constitutionality of a state requirement of "informed consent" prior to an abortion. Kennedy voted in the majority decision in that case and in the Becerra decision. The inconsistency in Kennedy's decisions indicates to me that the common denominator is opposition to abortions.  

The end result is that it is constitutional to require a person to give information before a woman is allowed to have an abortion in an effort to dissuade her from having one, but it is unconstitutional to require that information be posted about the availability of an abortion which may cause the woman to exercise that current constitutional right.  

Overruling Roe v. Wade is the ultimate objective here which would also limit a person's privacy rights in other areas. That is likely to happen IMO, a major step away from personal freedoms in favor of government intervention and control. 

Supreme court largely backs Texas Republicans over electoral maps | Reuters (the current GOP leaning Supreme Court will largely back GOP efforts to interfere with voting rights, a situation that is more likely to get worse IMO, particularly if Donald wins a second term.)  

I predicted that the Supreme Court would split 5 to 4 on Donald's third iteration of his travel ban. 

That is a closer issue IMO than one would glean from reading the majority opinion and dissents. Trump v. Hawaii (06/26/2018); The Supreme Court’s ruling that Trump’s travel ban isn’t a ‘Muslim ban,’ annotated - The Washington Post

The decision was close only because of Donald's big mouth and his constant derogatory comments about Islam and Muslims. The first travel ban would have probably been found unconstitutional but that one was not before the court.

The majority opinion significantly downplayed Trump's anti-Muslim statements and was far too cozy with what is known as the "plenary power" doctrine in immigration cases, which gave the nation several racist and ill-advised Supreme Court decisions starting with The Chinese Exclusion Case, 130 U.S. 581 (1889) and Fong Yue Ting v. United States, 149 U.S. 698 (1893). To sum this decision up, if the President exercises his broad powers over immigration, his anti-constitutional motives are not relevant.  

The dissent of Justice Sotomayor, while placing proper emphasis on Trump's animus toward Islam and the First Amendment's Establishment Clause for non-western religions, does not adequately take into account the Constitution Lite history in immigration cases, the  national security concerns about inadequate screening of airline passengers in places like Venezuela, Somalia, Libya and Yemen, and the fact that several large Muslim nations, including the largest Indonesia, were never included in the ban. 

I view the case as close on the constitutional issue and could have gone either way even with purely non-ideological justices.  

Politically, it was not close for core republican and democrat voters.  

Yesterday, the Supreme Court issued another 5 to 4 decision, holding that unions can not compel non-members to pay fees. Janus v. State, County, and Municipal Employees (06/27/2018) 

The republican Justices overturned a 40 year old precedent in that one: Abood v. Detroit Board. of Education,  431 U.S. 209 (1977) 

And what happens now if the union wants to make a political contribution to a candidate and one or more of its members object based on their First Amendment rights? This kind of decision starts with the GOP's political objective to weaken unions and is then dressed up to look nice on the outside.    

The current majority is using the First Amendment offensively to strike down or limit laws where they have ideological differences, a process that started in earnest with Citizens United v. Federal Election Comm'n, (Opinion by Justice Kennedy) :: 558 U.S. 310 (2010) and has been gathering steam ever since.  

While I am generally in favor a broad interpretation of First Amendment rights, since that is the true conservative position, the newly discovered First Amendment rights are being used offensively as a means to weaken and interfere with unions, abortions, gay marriages and any reasonable limits on political donations by corporations.  


The growing wholesale abandonment of stare decisis by the republicans justices has only just begun. 

Justice Roberts must have had his fingers crossed when he testified under oath at his confirmation hearing that he would respect stare decisis which has proven to be a laughable assertion. What he meant to say was Stare Decisis binds the opposition Justices in a knot but not Roberts and other republican justices who have and will continue to cast aside prior precedents in bulk.    

Republicans have a better understanding than Democrats about what they want most of all and will take the time to actually vote to further their beliefs on one or two issues (lump abortion and gay marriages into one issue for them). That understanding is summed up in the phrase "elections matter".  The Trumpsters will be energized to vote in the mid-terms due to their desire for even more reactionary justices to solidify GOP political dogma into constitutional law for more than a generation.  

As a result of Democrat voter apathy and far more frequent laziness in their voting patterns, the GOP will probably have the power to shape constitutional law for decades based on their beliefs about abortions, voting rights, immigration, constitutional limitations on the government's regulatory authority under the Commerce Clause, gay marriage, constitutional rights of corporation, opposition to funding limits in political campaigns, and other divisive political and financial issues. 

The Democrats will be powerless to stop them until a Democrat President and a Senate controlled by Democrats are able to replace one or more of the 5 vote majority without Trump replacing one or more of the other 4 justices (Ginsberg, Breyer, Sotomayor or Kagan) with another relatively young reactionary like Gorsuch or Alito. Ruth Bader Ginsburg is currently 85 years old. Stephen Breyer is 79. 

So depending on your perspective, that is not so good or just great. The Trumpsters won. 

Those who favor gay couples being able to marry need to be the most concerned by Kennedy's retirement. Kennedy wrote the gay marriage decision in Obergefell v. Hodges, (Opinion by Justice Kennedy) 103 S.Ct. 2071  (2015) The other republican Justices have shown no reluctance whatsoever in reversing prior decisions, no matter how recently decided, and that would probably be the case for Kennedy's replacement. 
  
I am expecting a gradual return to late 19th century and early 20th century constitutional jurisprudence on major issues which will be guaranteed with Trump's reelection in 2020 with a 50/50 split or better in the Senate. That is the GOP's political objective which has been converted into constitutional terms by members of he Federalist Society (notable members have included Chief Justice Roberts, Antonin Scalia, Samuel Alito, Clarence Thomas and Neil Gorsuch, all currently sitting on the Court).   

The Democrats' heads are spinning full circle in response to these developments. Scared is the feeling that emanates from them now. Time to get out the vote is their new rallying cry. Put pressure on the republican senators to vote against Trump's nominee. Beg Mitch McConnell to adhere to his 2016 newly created McConnell Rule. Why Democrats Want Want to Wait to Replace Anthony Kennedy | Time  

I got a news flash for them. 

The die was cast in the 2016 election. 

All of the republican senators and three vulnerable Democrat senators voted for Gorsuch who is IMO a yes vote on reversing Roe v. Wade and Obergefell v. Hodges.   

U.S. Senate: U.S. Senate Roll Call Vote

The most likely outcome now is that the reactionaries will seize control over the Supreme Court before the next election and that control may be solidified further with the death or incapacitation of a progressive justice which could happen at anytime for two of them. It would take a near miracle to change that outcome. 

The election voting is most likely already done on what kind of Constitution the nation will have for the next three or four decades. Howling into the wind and trying to energize the Democrats base now is not going to change the result. It is about as close now to a fait accompli as one can have on such matters. The Democrats will make a show of resistance, lots of talk, and then reality will throw cold water on their too late initiatives as more decisions are made reversing long standing precedents.  

Trump Gets Chance to Influence American Life for Generations Through Supreme Court Pick

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Trump: 

More authoritarian talk from Donald: Trump Suggests Negative Media Coverage of The North Korea Summit is ‘Almost Treasonous’ In Trump's America, it is treason to criticize Donald based on facts and reasoned analysis. 

Donald has stated repeatedly that he trusts KIM who is viewed by the Duck as an honorable despot and mass murderer. The Duck has certainly lavished more praise on KIM than that mean Canadian P.M. who deserves a special place in hell for refusing to roll over on the Duck's command. 

North Korean nuclear site upgraded, despite vow at summit - MarketWatch

This is not surprising: Numb to Outrage, Republican Voters Feel a Deepening Bond to Trump

Illegal immigration is down, not up at the Mexican border:

BP Southwest Border Sector Apps FY1960 - FY2017.xls
Immigration and Crime - Oxford Research Encyclopedia of Criminology

One of the latest GOP reality creations is the false statement that undocumented immigrants murdered 63,000 U.S. citizens since 9/11/2001. 

FACT CHECK: Have Undocumented Immigrants Killed 63,000 American Citizens Since 11 September 2001?; 

FACT CHECK: Trump, Illegal Immigration And Crime : NPR; 

DOES UNDOCUMENTED IMMIGRATION INCREASE VIOLENT CRIME?* - LIGHT - 2018 - Criminology - Wiley Online Library   

Trump wants to deprive illegal immigrants of their Due Process Rights guaranteed to all persons in the United States. Trump advocates depriving immigrants living in the U.S. illegally of due-process rights - Chicago Tribune 

His recommendation is to snatch and deport without a civil hearing before an immigration judge which appeals to republicans. Donald opposes adding more immigration judges to handle the workload given his position on immediate deportation. 

The Supreme Court has held that illegal immigrants are entitled to due process rights under the 5th and 14th Amendments to the U.S. Constitution.  They are not entitled to a trial by jury when charged civilly for illegal entry. 

{e.g. Zadvydas v. Davis,  533 U.S. 678 (2001); Plyler v. Doe, 457 U.S. 202 (1982); Almeida-Sanchez v. United States, 413 U.S. 266 (1973) Wong Wing v. United States, 163 U.S. 228 (1896); Yick Wo v. Hopkins,  118 U.S. 356 (1886) It is certainly possible that the current Supreme Court would reverse 100 years of jurisprudence on this issue and give Donald what he wants} 

So there are several reports that the Trump administration is keeping parents separated from their children until the parents waive their asylum requests and go back to their native country. Detained migrants say they were promised they would be reunited with their children if they agreed to leave the country | The Texas Tribune 

This has now been confirmed by the HHS Secretary. Administration will not reunite any children with parents in custody, Cabinet secretary says  

Yesterday, a republican federal district court judge, Dana Sabraw scorched the Trump administration's slow walking the reunions and overall high level of incompetence. The court found that “the facts set forth before the court portray reactive governance — responses to address a chaotic circumstance of the government’s own making. They belie measured and ordered governance, which is central to the concept of due process enshrined in our Constitution.” ORDER GRANTING PLAINTIFFS’ MOTION FOR CLASSWIDE PRELIMINARY INJUNCTION

I would support a major extension of the existing border wall and to beef up the existing structures in high traffic areas. I would also support the hiring of more immigration judges to speed up deportation hearings, and the building of more structures to house immigrants waiting for a deportation decision rather than falling back on catch and release which is being caused by the failure to address those problems.      

The U.S. Border Patrol statistics reproduced above are just unacceptable to me and have been for my entire adult life. But, I would not demonize these people who are desparate and want a better life for themselves and their children. Many are fleeing violence caused frequently by America's drug addiction. Some are just trying to escape poverty and hopelessness and those are not grounds for entry outside of the normal immigration process. 

And, no one in this country, here legally or illegally, should be deprived of an opportunity for some kind of due process hearing as required by the 5th and 14th Amendments to the U.S. Constitution. 

Separating children from their parents is just barbaric. Poll: Trump policy separating migrant kids from parents gets GOP support - Business Insider

In a recent interview, Trump told Mike Huckabee that he wanted to cut off aid to countries like Honduras since they were sending the U.S. their worst citizens.An Exclusive Interview with President Donald Trump (Full Interview) | Huckabee-YouTube (also contains a statement that fact based criticisms of his deal with Kim are "almost treasonous")

In TrumpWorld, it is the Honduran government that is selecting their citizens to send to the U.S., just telling them to leave the country and walk to the U.S. I reckon. 

I’ve Been Reporting on MS-13 for a Year. Here Are the 5 Things Trump Gets Most Wrong 

Yesterday afternoon, Donald changed his position on the immigration bill just before the House vote, apparently recognizing that a strong republican vote against the bill would interfere with his efforts to lay all of the blame on the democrats: 

Notwithstanding the Duck's full flop, the GOP drafted bill failed 301-121. While the bill gave Donald $25B for the wall and placed restrictions on legal immigration which are anathema to Democrats, the bill also provided a pathway for Dreamers to secure citizenship which is a no go for too many republicans.  Final Vote Results for Roll Call 297 (112 GOP no votes). I do not know whether Democrats viewed that pathway as illusory or inadequate.   

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The following tweet is just more Trump demonization of the opposition that serves only to rile  the Trumpsters and to increase partisan divisions unnecessarily:

That comment, like thousands of others made by Donald, are consistent only with a raving demagogue with strong authoritarian tendencies who has no respect for checks and balances and the separation of powers embodied in the U.S. Constitution or any other provision in the Constitution for that matter other than the Second Amendment of course.  

Trump Vows to Open Minnesota's Superior National Forest to Mines

The four times Trump signed tax returns for his foundation that contained incorrect information

Trump slams Red Hen as 'filthy,' but Mar-a-Lago had 78 infractions (Red Hen just passed its safety inspection. Needless to say, I do not approve of the owner's decision to deny service to Sarah Sanders or the hecklers who interrupted  Nielsen's dinner based on common civility.)  

George Will: Opinions | Vote against the GOP this November; Conservative George Will says vote against Republicans in midterms - MarketWatch  

In the last analysis, it is important to recognize that almost 63M Americans voted for someone who was clearly a demagogue with strong authoritarian tendencies. Constant reaffirmation of those authoritarian tendencies since the election has only served to cement that bond with those voters rather than to cause a reconsideration.   

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I thought this was an interesting quote expressing Hillary's take on illegal immigration:  

“We have to send a clear message: Just because your child gets across the border, that doesn’t mean the child gets to stay. We don’t want to send a message that’s contrary to our laws or will encourage more children to make that dangerous journey.” 6 times Clinton sounded, acted like a candidate - CNN 

Trump has an effective red meat line that accuses the Democrats of being for open borders. While that is not true with some limited exceptions, it is nonetheless effective demagoguery since the Democrats are not effectively counterbalancing Trump's false summaries of their positions. 

Instead of emphasizing border security and the economic benefits of legal immigration that the GOP is attempting to emasculate in addition to other issues, the Democrats' message on immigration comes through as one focusing almost exclusively on the Dreamers' path to citizenship (effectively branded as "amnesty" by republicans) and crying babies separated at the border from their parents. So when Trump tags them as being for open borders, the branding sticks with tens of millions. I doubt that Trump's effort to brand the Democrats as being in favor of MS-13 and crime is as effective with voters other than the Trumpsters of course.  

GOP lawmaker said he doesn't want Muslims working at pork plants in his district

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1. SMALL BALL:

A. BOUGHT 5 RHHBY at $26.37-Used Commission Free Trade:

Roche Holding AG ADR (RHHBY)-USD Priced
Roche Holding AG (ROG:SWX)-CHF Priced

1 ADR = .125 Ordinary Shares

Swiss Franc to US Dollar Rates

Interactive Chart: Major Bear Trend

Current Position: 75 Shares

Average Cost Per Share: $30.33

Highest Cost Lot: 50 Shares at $31.44 (may be sold at $32+)

Dividend: Annual (received on 70 shares at US$1.08+ per share)

Roche has a history of dividend raises. The gross amount of the dividend will depend on the CHF/USD exchange rate.

Dividend Tax: 15% paid to Switzerland

If the broker does not claim its customers tax treaty rights, the dividend tax will be 35%. IB did not make such a claim and consequently I quit buying Swiss company shares at that broker. Fidelity and Vanguard have made "relief at source" claims in the past that has resulted in their customers being taxed at 15%.

Last Ex Dividend Date: 3/15/18

Maximum Position: 100 Shares

Purchase Restriction: Small Ball Rule

2017 Annual Report

Roche - Pipeline

Last Substantive Discussion:  Item # 1.A. Added 5 RHHBY at $28.74 (4/2/19 Post)

Last Sell Discussions:

Item # 3.B. Sold 30 RHHBY  at $33.25 (6/7/17 Post)

Item # 3.A. Sold 100 RHHBY at $31.61 (4/8/17 Post)

Trading Profits 2015 to Date: $383.61 

Recent News Since Last Discussion:

PTC Therapeutics Inc. (PTCT) recently reported positive results for a drug called risdiplam for Type 1 Spinal Muscular Atrophy, which is co-developed with Roche.

Roche announces new OCREVUS (ocrelizumab) data on long-term disability benefits in primary progressive multiple sclerosis and initiation of two global studies in progressive multiple sclerosis (6/14/18)

Roche - New long-term data confirm Roche’s Gazyva/Gazyvaro extends the lives of people with chronic lymphocytic leukaemia compared to MabThera/Rituxan (6/15/18)

Roche announces FDA approval for Venclexta plus Rituxan for people with previously treated chronic lymphocytic leukaemia (6/11/18)

European Commission approves Roche’s Perjeta for post-surgery treatment of HER2-positive early breast cancer at high risk of recurrence (6/1/18)

FDA grants Priority Review to Roche’s Hemlibra for people with haemophilia A without factor VIII inhibitors (6/5/18; Roche’s Hemlibra reduced treated bleeds by 96 percent compared to no prophylaxis in phase III HAVEN 3 study in haemophilia A without factor VIII inhibitors (5/21/18)


Recent Financial Report: Roche - Roche reports a strong start in 2018

B. Sold 50 of 150 SPHS at $3.71 ($1 Commission-IB):

Profit Snapshot: +$41.13

Quote: Sophiris Bio Inc. (SPHS)

Bungee Jumping: 

When I pared this position, SPHS was about to release the biopsy results in a Phase 2B trial of Topsalysin for prostrate cancer. I decided at that time to keep 100 shares owned in my Schwab account hoping that the trial results would be positive. Item # 2.A. Added 50 SPHS at $2.43 (3/28/17 Post)

The stock reacted poorly to the biopsy results released on 6/25/18, probably due to a recent patient death on the same day as the second administration of the drug. Sophiris Bio Reports Top-Line Interim Safety and Biopsy Findings For its Phase 2b Clinical Trial of Topsalysin in Localized Prostrate Cancer ("A single administration of topsalysin continues to demonstrate an ability to ablate targeted prostate cancer cells with 10 of 35 patients (29%) demonstrating a clinical response of which 6 patients had a complete ablation with no detectable cancer on targeted biopsy of the treated area. Separately, Sophiris was recently notified that a patient death occurred on the same day as their second administration. The company is currently investigating the cause and as a precaution no additional patients will receive a second administration of topsalysin.")

As shown in the previous snapshot, the stock crashed and burned on the day of the announcement and then staged a partial recovery on the next trading day. Part of the price recovery may be linked to comments made by an analyst:  Sophiris "worth sticking with" - Piper -Seeking Alpha

Apparently, 11 patients have received a second dose prior to SPHS suspending further second doses pending results of an investigation into the patient's death. 

My first discussion of a purchase, made at $2.8, was discussed in this comment.

This company may be an acquisition target based on the trials to date, provided it becomes clear that the patient death was not related to the drug. My belief on such matters is that far stronger evidence is needed to acquit the drug of any role under the circumstances (day of administration) than a case where the patient dies weeks after the drug administration. 

This drug is also being tested for benign prostatic hyperplasia (BPH). However, the company needs funding to proceed with a phase 3 trial. Page 10

My caution was due to a recognition of what happens if this drug is not approved by the FDA or fails in a trial, as well as my admitted ignorance in being able to predict the potential outcomes. This drug is the only one for this company. 

2017 Annual Report (Prostate cancer is the second most common form of cancer in men in the United States. According to the National Cancer Institute, there were approximately 161,000 new cases of prostate cancer in the United States identified in 2017 with approximately 80% of patients diagnosed with localized disease (disease that has not progressed beyond the confines of the prostate). In the United States, approximately 27,000 were expected to die from prostate cancer in 2017.")

Sophiris Bio Reports First Quarter 2018 Financial Results and Key Corporate Highlights

D. Bought 30 RIGL at $3.04-Small Cap Biotech Lottery Ticket Basket-Used Commission Free Trade:

Quote:  Rigel Pharmaceuticals, Inc.

The market capitalization is about $495+M at $3.04.

Prior Round Trip:

RIGL 150 Shares +$109.24

South Gent's Comment Blog # 4: Sold 150 RIGL at $2.93-Update For Healthcare Basket Strategy As Of 7/29/16: Bought 150 RIGL at $2.15

I sold that lot due to my concerns about the trial results for Fostamatinib in ITP: Rigel Announces Results from the Second FIT Phase 3 Study and the Long-Term Open-Label Extension (10/20/16 Press Release) As discussed below, the FDA has now approved the drug for that indication but only for patients who do not respond to existing therapies. 

Last April, the FDA approved RIGL's "fostamatinib disodium hexahydrate"  tablets "for the treatment of thrombocytopenia in adult patients with chronic immune thrombocytopenia (ITP) who have had an insufficient response to a previous treatment." 

"In patients with ITP, the immune system attacks and destroys the body's own blood platelets, which play an active role in blood clotting and healing. Common symptoms of ITP include excessive bruising, bleeding and fatigue.  The brand name is TAVALISSE™. 

RIGL started to market the drug a few weeks ago. Rigel Announces Availability of TAVALISSE™ (fostamatinib disodium hexahydrate) in the U.S.

This condition has existing treatments." However, RIGL claims that the existing therapies inadequately treat some patients and there is a "significant medical need for additional treatment options for patients with ITP. Rigel Announces First Quarter 2018 Financial Results and Provides Company Update

Recent Stock Offering: RIGL used the FDA approval to sell some stock at $3.9. Prospectus 

Last Financial Report: Q/E 3/31/18; 10-Q

The company is also conducting trails using fostamatinib to treat  "Autoimmune hemolytic anemia." The summary of trial results to date is provided by the company here:  

A Safety and Efficacy Study of R935788 in the Treatment of Warm Antibody Autoimmune Hemolytic Anemia (AIHA) - Full Text View - ClinicalTrials.gov

Trials using this drug to treat  Immunoglobulin A Nephropathy, or IgAN did not reach the level of statistical significance and further trials for that indication are on hold.

Pipeline:  

Partnered Compounds: 

"Total future contingent payments to us under all of these current agreements could exceed $532.4 million if all potential product candidates achieved all of the payment triggering events under all of our current agreements (based on a single product candidate under each agreement). Of this amount, up to $145.5 million relates to the achievement of development events, up to $345.6 million relates to the achievement of regulatory events and up to $41.3 million relates to the achievement of certain commercial or launch events. This estimated future contingent amount does not include any estimated royalties that could be due to us if the partners successfully commercialize any of the licensed products. Future events that may trigger payments to us under the agreements are based solely on our partners’ future efforts and achievements of specified development, regulatory and/or commercial events. Because we do not control the research, development or commercialization of the product candidates generated under these agreements, we are not able to reasonably estimate when, if at all, any contingent payments would become payable to us. As such, the contingent payments we could receive thereunder involve a substantial degree of risk to achieve and may never be received in the next 12 months or thereafter. Accordingly, we do not expect, and investors should not assume, that we will receive all of the potential contingent payments provided for under these agreements and it is possible that we may never receive any additional significant contingent payments or royalties under these agreements." 

2017 Annual Report_10-K  

Rigel Initiates Phase 1 Clinical Trial of R835, an IRAK1/4 Inhibitor for Autoimmune and Inflamatory Diseases 


E. Sold Highest Cost 20 share of ORIT at $16.91-Used Commission Free Trade:

Quote: Oritani Financial Corp. (ORIT)

History in this Account:

Average Cost Per Share This Account After Pare: $15.51

Profit: $1.38

Average Cost Per Share in Schwab Account: $16.08

In the Schwab account, I will sell the highest cost 50 share when and if the price exceeds $17.5. That lot was bought at $16.73: Item # 1.A. Bought 50 ORIT at $16.73 (12/26/17 Post)

I lost track of how many shares that I owned and in which account I was pursuing a small ball purchase program. That is a polite way of saying that I confused myself. I was actually implementing a small ball purchase program in both my Fidelity and Schwab taxable accounts and had also bought 50 shares in a Vanguard Roth IRA.

Dividend: ORIT has a much higher than average dividend yield for a small regional bank stock.

The regular quarter dividend is $.25 per share. The dividend was raised from $.175 per share effective for the 2019 first quarter. The dividend raise was a response to a lower effective tax rate and would be viewed by me as a one off kind of event. 

Oritani Bank : Dividends

The special dividend last year was connected to a $20.6M pre-tax gain resulting from the "sale of the Company’s last remaining investment in real estate joint ventures."  

Last Discussion: Item # 3.A. Bought 20 ORIT at $15.14 -Used Commission Free Trade in Schwab Account (5/19/18 Post) 

Last Substantive Discussion: Item # 5.A. Bought 20 ORIT at $15.88 in Schwab Account (2/22/18 Post)

Last Earnings Report: Fiscal Q/E 3/31/18

Oritani Financial Corp. Announces 3rd Quarter Results and Dividend Nasdaq:ORIT

E.P.S. $.30
Efficiency Ratio: 34.33% Oritani Bank : Financial Highlights
NIM: 2.74% (includes prepayment penalties)
NPL Ratio: .33%
NPA Ratio: .3%
Effective Tax Rate: 26.1% (includes state income taxes and expected to fall further: "The Company’s estimated effective tax rate is expected to decrease further in the periods following the conclusion of its fiscal year, ending June 30, 2018")

As with most banks, Oritani had to take a 2017 4th quarter non-cash charge related to the revaluation of its deferred tax asset: 

F. Added 5 EQH at $20.9 and 5 at $20.24: 

Quote: AXA Equitable Holdings Inc.

I discussed starting a position with a 20 share buy in my last post. Item # 3.B. (6/25/18 Post)

I neglected to mention the recent earnings report. 

Current Position: 30 Shares

Average Cost Per Share: $21.11

Maximum Position: 100 Shares

EQH Analyst Estimates

Purchase Restriction: Small Ball Rule (each subsequent purchase has to be at the lowest price in the chain)

Dividend: Quarterly at $.13 ($.52 annually)

This stock has not yet declared its first dividend. The IPO prospectus states that the intent is to start out at $.13 per share. Prospectus

Dividend Yield at a TC of $21.11 = 2.446%

Dividend Reinvestment: Yes at below $28

Recent Earnings Report: Q/E 3/31/18

AXA Equitable Holdings Reports First Quarter 2018 Results 

This was a mostly incomprehensible report which is typical IMO for companies engaged in selling life insurance and annuities. I am no different from other individual investors in my inability to understand accounting for those products. 

EQH also has an asset management business.

EQH has a 65% ownership interest in Alliance Bernstein (page 12 10-Q)

Just pick an E.P.S. number kind of deal. 

The GAAP E.P.S. was reported at $.30 while the non-GAAP was at $.83.  

The analysts will use non-GAAP numbers. 

The significant difference between the two numbers suggests to me that some skepticism is warranted by ignoring GAAP. That view is share by investors in the low P/E ratio afforded to the non-GAAP E.P.S. in my opinion. 

Three of the large additions to GAAP are items called variable annuity product features (+$.38), "net actuarial (gains) losses related to pension and other postretirement benefit obligations" ($.23), and "other adjustments at $.16 per share.  

The company explains these adjustments to GAAP earnings as follows: 

3. Short Term Bond/CD Ladder Basket Strategy:

I am still recycling a number of bonds and CDs bought 12 to 16 months ago when short term interest rates were meaningfully lower than now.  

July Maturities (light month):  

SU: Senior Unsecured Bonds

MI: Monthly Interest Payments

2 Southern Power 1.55% SU 7/1/18 (bought December 2016)
1 Kraft Heinz 2% SU 7/2 (bought January 2017)
2 Capital One 1.4% CDs 7/11 (6 month CD)
2 Beal Bank 1.45% CDs 7/11 (10 Month CD)
2 Bank of India 1.7% CDs (1 Month CDs)
1 Whitney Bank 1.6% CD 7/12 (6 month CD)
2 Treasury .875% 7/15
2 Franklin Synergy 1.1% CDs MI 7/16 (1 Year CD)
1 Beal Bank 1.45% CD 7/18 (7 month CD)
1 Bank of China 1.7% CD 7/18 (3 month CD)
2 First N.A. 1.6% CDs MI 7/25/18 (6 month CD)
1 Bank of India 1.7% CD 7/25/18 (3 month CD)
2 First Virginia 1.55% CDs MI 7/27 (7 month CD)
2 Merrick Bk 1.45% CDs (MI) 7/27 (1 Year CD)
1 Brand Banking 1.5% CD MI 7/30 (7 month CD)
2 Wells Fargo 1.45% CDs MI 7/30 (1 Year CD)
2 Bank of China 1.75% CDs 7/30 (2 month CD)
1 Seattle Bank 1.75% CDs 7/30 (2 month CD)
2 Bank of Baroda 1.9% CDs 7/30 (1 Month CD)
3 Treasury 1.375% 7/31
1 Treasury .75% 7/31

$35K

A. Bought 2 NetApp 2% SU Bonds Maturing on 9/27/19:

FINRA Page: Bond Detail (prospectus linked)

Issuer: NetApp Inc. (NTAP)
NTAP Analyst Estimates
NetApp Reports Fourth Quarter and Fiscal Year 2018 Results

Credit Ratings:

Bought at a Total Cost of 98.866
YTM at TC Then at 2.898%
Current Yield at TC = 2.0229%

B. Bought 1 Union Pacific 2.25% SU Bond Maturing on 2/15/19: 

Finra Page: Bond Detail (prospectus linked)

Issuer: Union Pacific Corp. (UNP)
UNP Analyst Estimates

UNP 2018 1st Quarter Results 
Union Pacific Reports Fourth Quarter and Full Year 2017 Results

UNP SEC Filings

UNP 2017 Annual Report 

Credit Ratings: 

Bought at a Total Cost of 99.854
YTM at TC Then at 2.466%
Current Yield at TC = 2.2533%

C. Bought 2 Enerbank 1.95% CDs (monthly interest payments) Maturing on 10/15/18:  

D. Bought 1 Ryder 2.5% SU Bond Maturing on 5/11/20:

FINRA PAGE: Bond Detail (prospectus linked)

Issuer: Ryder System Inc. (R)
R Analyst Estimates

Ryder Reports First Quarter 2018 Results

2017 Annual Report

Credit Ratings:

Fitch Expects to Rate Ryder's Senior Unsecured Notes 'A-' (2/21/18)

Bought at a Total Cost of 99.23
YTM at TC Then at 2.916%
Current Yield at TC = 2.5194%

E. Bought 2 Xilinx 2.125% SU Bonds Maturing on 3/15/19: 

Finra Page: Bond Detail (prospectus linked)

Issuer: Xilinx Inc. (XLNK)
XLNX Analyst Estimates
Xilinx Reports Record Annual And Quarterly Revenues

Annual Report for F/Y Ending 3/31/18 (balance sheet at page 45)

Credit Ratings:
Moody's at A3

Bought at a Total Cost of 99.781
YTM at TC Then at 2.417%
Current Yield at TC = 2.1297%

F. Bought 2 Bank of Baroda 1.9% CDs Maturing on 7/30/18 (1 month CDs):

There were no intermediate bond purchases to discuss in this post. I have not made any purchases this month for the reasons previously explained. 

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.