Economy:
The economy generated 223K new jobs last month, better than the consensus estimate of 200K. The unemployment rate fell to 3.8%. Average hourly earnings rose $.08 and are up 2.7% Y-O-Y. The previously reported numbers for March and April were revised by a combined +15K. The average work week was unchanged at 34.5 hours. Employment Situation Summary
The seasonally adjusted U-6 number fell to 7.6% from 7.85, while the non-adjusted number rose to 8.1% from 7.4%. Table A-15. Alternative measures of labor underutilization
News Release: Personal Income and Outlays for April:
Note that non-inflation adjusted personal income rose .3% as personal consumption expenditures increased by .6%. The savings rate was 2.8% down from 3.1% in March. Personal Saving Rate Chart
Pending home sales declined 1.3% in April according to the National Association of Realtors. Pending Home Sales Lose Steam in April, Decline 1.3 Percent | www.nar.realtor The NAR attributed the decline to supply constraints. If only more people would put their home up for sale, then there would be an increase in pending sales. That is the benign explanation for the decline which is what I would expect to be the line peddled by the NAR. The less favorable rationale would be a decrease in housing affordability.
Construction spending throttles higher in April on home-building boost - MarketWatch
Trump's steel and aluminum tariffs provoke retaliation from biggest US allies
EU ambassador to US: Retaliatory tariffs coming in the next few weeks: CNBC
Pending home sales declined 1.3% in April according to the National Association of Realtors. Pending Home Sales Lose Steam in April, Decline 1.3 Percent | www.nar.realtor The NAR attributed the decline to supply constraints. If only more people would put their home up for sale, then there would be an increase in pending sales. That is the benign explanation for the decline which is what I would expect to be the line peddled by the NAR. The less favorable rationale would be a decrease in housing affordability.
Construction spending throttles higher in April on home-building boost - MarketWatch
Trump's steel and aluminum tariffs provoke retaliation from biggest US allies
EU ambassador to US: Retaliatory tariffs coming in the next few weeks: CNBC
Canada announces retaliatory tariffs against US; Notice of intent to impose countermeasures action against the United States in response to tariffs on Canadian steel and aluminum products
Justin Trudeau attacks Mike Pence for throwing Nafta deal in jeopardy with five-year expiration date ultimatum | The Independent (“I had to highlight that there was no possibility of any Canadian prime minister signing a Nafta deal that included a five year sunset clause, and obviously the visit didn't happen,” Mr Trudeau said on Thursday.'); Trudeau says NAFTA negotiations stalled after Pence demanded sunset clause | TheHill Why would Canada want to do this protracted negotiation again in less than five years?
Trump continues to make false claims about a trade deficit with Canada:
The U.S. frequently has a trade surplus with Canada. Canada | United States Trade Representative (" U.S. goods and services trade with Canada totaled an estimated $673.9 billion in 2017. Exports were $341.2 billion; imports were $332.8 billion. The U.S. goods and services trade surplus with Canada was $8.4 billion in 2017." emphasis added) I would also note that Trump has already imposed tariffs on Canadian soft wood lumber exports.
Since Trump has repeatedly made this kind of false claim, I am going to characterize it as a deliberate effort to deceive U.S. voters. The Canadians are not so easily fooled by Trump's Fake News.
The Canadian government is slapping the US with massive tariffs — and they might be even bigger than expected
Justin Trudeau attacks Mike Pence for throwing Nafta deal in jeopardy with five-year expiration date ultimatum | The Independent (“I had to highlight that there was no possibility of any Canadian prime minister signing a Nafta deal that included a five year sunset clause, and obviously the visit didn't happen,” Mr Trudeau said on Thursday.'); Trudeau says NAFTA negotiations stalled after Pence demanded sunset clause | TheHill Why would Canada want to do this protracted negotiation again in less than five years?
Trump continues to make false claims about a trade deficit with Canada:
Since Trump has repeatedly made this kind of false claim, I am going to characterize it as a deliberate effort to deceive U.S. voters. The Canadians are not so easily fooled by Trump's Fake News.
The Canadian government is slapping the US with massive tariffs — and they might be even bigger than expected
+++++++++
Markets and Market Commentary:
The unemployment report and the resolution of the latest Italian political crisis snuffed out a brief rally in bonds late last week. The market is unconcerned about the increase in trade tensions, believing that the matters will be resolved after a period of posturing.
Fed’s Mester says market unease over Italy, flattening yield curve hasn’t made her more cautious - MarketWatch (Mester is a voting FED member this year)
Fed’s Mester says market unease over Italy, flattening yield curve hasn’t made her more cautious - MarketWatch (Mester is a voting FED member this year)
Morgan Stanley says we're in a bear market but investors just don't realize it yet: CNBC
+++++++
Portfolio Management:
2018 is shaping up as a year where a 5% total return may be a good one for a balanced portfolio. Bonds are likely to lose value and stock returns have been anemic so far.
Total Return YTD Through 5/31/18 Based on NAV:
S&P 500 ETF (SPY) Total Return = -.78%
iShares 7-10 Year Treasury Bond ETF (IEF) Total Return = -2.07%
iShares Investment Grade Corporate Bond ETF (LQD) Total Return= -3.61%
I still expect interest rates to trend up throughout the maturity spectrum for the remainder of this year. There are several potential events that could change that outlook, including a trade war that causes a slowdown in world GDP.
While I will be discussing intermediate term buys in the next several posts, which I have already made, I am going to put the kibosh on further buys until the ten year treasury yield moves back over its 2018 high.
I will emphasize instead ploughing proceeds from maturing short term bonds and CDs into more of the same and into purchases made under my expanding small ball buying program.
The difference in yield between securities maturing in 1 and 5 years is narrowing. Last week, for the first time in a long time, I was able to purchase a 5 month 2% CD that paid monthly interest.
My investment strategy will continue to focus on a constant stream of income payments with the primary objective being capital preservation. The return of my money is more important to me than the return on my money.
The cash flow stream occurs throughout the month, but reaches its highest levels on the first and last days and on the 15th.
My Tennessee municipal bonds pay semi-annual interest on the first day as do many corporate bonds.
Other corporate and treasury notes generally pay on the 15th and the last day of the month. CD interest payments are generally scattered throughout the month, with many making monthly interest payments.
I am now attempting to increase my total portfolio yield to 4% which will require interest rates to continue moving higher.
The following snapshots show cash flow into one taxable account for 6/1/18:
This is a snapshot of my current small ball list showing the lowest price for each stock in the chain:
When a stock is sold, it is removed for the list. I am using this strategy to exhaust my commission free trades.
iShares Investment Grade Corporate Bond ETF (LQD) Total Return= -3.61%
I still expect interest rates to trend up throughout the maturity spectrum for the remainder of this year. There are several potential events that could change that outlook, including a trade war that causes a slowdown in world GDP.
While I will be discussing intermediate term buys in the next several posts, which I have already made, I am going to put the kibosh on further buys until the ten year treasury yield moves back over its 2018 high.
I will emphasize instead ploughing proceeds from maturing short term bonds and CDs into more of the same and into purchases made under my expanding small ball buying program.
The difference in yield between securities maturing in 1 and 5 years is narrowing. Last week, for the first time in a long time, I was able to purchase a 5 month 2% CD that paid monthly interest.
My investment strategy will continue to focus on a constant stream of income payments with the primary objective being capital preservation. The return of my money is more important to me than the return on my money.
The cash flow stream occurs throughout the month, but reaches its highest levels on the first and last days and on the 15th.
My Tennessee municipal bonds pay semi-annual interest on the first day as do many corporate bonds.
Other corporate and treasury notes generally pay on the 15th and the last day of the month. CD interest payments are generally scattered throughout the month, with many making monthly interest payments.
I am now attempting to increase my total portfolio yield to 4% which will require interest rates to continue moving higher.
The following snapshots show cash flow into one taxable account for 6/1/18:
This is a snapshot of my current small ball list showing the lowest price for each stock in the chain:
When a stock is sold, it is removed for the list. I am using this strategy to exhaust my commission free trades.
+++++++++
Trump:
Trump visited my hometown, Nashville, last Wednesday to support the reactionary Know Nothing Marsha Blackburn to replace the conservative republican Senator Bob Corker. I voted for Corker.
When mentioning Corker's name during this campaign rally, the True Believers booed in unison. During Trump's rambling one hour speech, his demagoguery was on steroids to the crowd's delight. Trump once again claimed that Mexico will pay for the wall and added "they're going to enjoy it". He asserted that Democrats were for open borders and infiltration of MS-13 into the nations communities (Trump: “MS-13-loving Nancy Pelosi”) Trump won Tennessee by 26 points and remains popular in the state.
Trump’s ‘zero tolerance’ at the border is causing child shelters to fill up fast - The Washington Post ("Under the “zero tolerance” approach rolled out last month by Attorney General Jeff Sessions and Homeland Security Secretary Kirstjen Nielsen, anyone who crosses into the United States illegally will face criminal prosecution. In most cases, that means parents who arrive with children stay in federal jails while their children are sent to HHS shelters." Trump recently blamed the Democrats for separating the children from their parents.)
Trump visited my hometown, Nashville, last Wednesday to support the reactionary Know Nothing Marsha Blackburn to replace the conservative republican Senator Bob Corker. I voted for Corker.
When mentioning Corker's name during this campaign rally, the True Believers booed in unison. During Trump's rambling one hour speech, his demagoguery was on steroids to the crowd's delight. Trump once again claimed that Mexico will pay for the wall and added "they're going to enjoy it". He asserted that Democrats were for open borders and infiltration of MS-13 into the nations communities (Trump: “MS-13-loving Nancy Pelosi”) Trump won Tennessee by 26 points and remains popular in the state.
Trump’s ‘zero tolerance’ at the border is causing child shelters to fill up fast - The Washington Post ("Under the “zero tolerance” approach rolled out last month by Attorney General Jeff Sessions and Homeland Security Secretary Kirstjen Nielsen, anyone who crosses into the United States illegally will face criminal prosecution. In most cases, that means parents who arrive with children stay in federal jails while their children are sent to HHS shelters." Trump recently blamed the Democrats for separating the children from their parents.)
Trey Gowdy (R-SC): FBI’s Use of Informant for Trump Campaign Was Appropriate Until recently, Gowdy has been one of the most partisan and conspiracy minded republicans in Congress since he was elected in 2010. He has become less so after announcing that he would not run for reelection. Since Trump has remade the GOP in his image, and enjoys overwhelming support among republicans, it would be political suicide for any republican running for office in 2018 to criticize Donald's demagoguery.
++++
It is not surprising that Michael Cohen was Donald's personal lawyer for years. LISTEN: How Michael Cohen Protects Trump By Making Legal Threats : NPR
E.G.: Transcript of Cohen Talking to a Reporter
CIA says North Korea won't give up nukes, but might open a burger joint
Trump disparaged pardons in the past. He’s been generous with them as president.
The White House receives the jobs report the night before it is released to the public. One hour before its release Friday morning, Trump decided to comment on it:
Trump breaks protocol, sends markets a clear signal on jobs report before numbers are released - The Washington Post; Trump’s jobs report tweet in advance of release appears to have violated federal rules - MarketWatch
EPA’s Pruitt spent $1,560 on 12 customized fountain pens from Washington jewelry store - The Washington Post
Mueller investigation polling: most don’t know crimes have been found - Vox
It is not surprising that Michael Cohen was Donald's personal lawyer for years. LISTEN: How Michael Cohen Protects Trump By Making Legal Threats : NPR
E.G.: Transcript of Cohen Talking to a Reporter
CIA says North Korea won't give up nukes, but might open a burger joint
Trump disparaged pardons in the past. He’s been generous with them as president.
The White House receives the jobs report the night before it is released to the public. One hour before its release Friday morning, Trump decided to comment on it:
Trump breaks protocol, sends markets a clear signal on jobs report before numbers are released - The Washington Post; Trump’s jobs report tweet in advance of release appears to have violated federal rules - MarketWatch
EPA’s Pruitt spent $1,560 on 12 customized fountain pens from Washington jewelry store - The Washington Post
Mueller investigation polling: most don’t know crimes have been found - Vox
+++++++++
1. Small Ball-All Purchases With Commission Free Trades:
A. Bought 10 COTY at $13.8 and 10 at $13.24:
Quote: Coty Inc. Cl A (COTY)
Brands
In this 5/5/18 article published at Reuters, it is noted that Soros Fund Management increased its COTY stake from 130.1K to 1.1M shares.
Last Substantive Purchase Discussion: Item # 1.B. Bought 10 COTY at $15.66 and $10 at $14.32 (5/14/18 Post)
Current Position: 50 Shares
2018 Trading Profits (30 shares): +$126.02
Item 2.C. Sold 10 COTY at $21.46 (2/19/18 Post)
Item 1.D. Sold 20 COTY at $20.89 (1/28/18 POST)
Purchase Restriction: Small Ball Rule (each purchase in the chain has to be at a lower price)
Average Cost Per Share in this Chain: $14.7
Highest Cost Lot in Chain: 10 shares at $16.47: Item # 2.B.
Dividend: Quarterly at $.125 per share ($.5 annually)
As I mentioned in my last discussion, it would be prudent to eliminate that dividend IMO for at least five years and to use the funds to deleverage.
Last Ex Date: 5/30/18
Dividend Yield at Average Cost = 3.4%
Maximum Position: 100 Shares
Chart: Bear Trend Since August 2016/Falling Knife Since February 2017
The stock did look like it was breaking out of that bear trend starting last October but peaked near $21.7 last February before rolling over and accelerating its decline after the last earning report was released on 5/9. The prior earnings release caused the stock to pop. I do not believe that any conclusion can be drawn from the last two quarterly reports about Coty's long term value.
Institutions have been dumping the stock since Coty released its last earnings report. There is no indication yet that a sustained up move is in the offing. Coty will need to materially improve free cash flow generation and organic revenue growth before the stock can sustain an uptrend.
My general belief is that this stock lacks individual and institutional support and is consequently subject to volatile and whipsaw moves caused by traders including short sellers. Coty Becomes #2 Most Shorted S&P 500 Component, Replacing Garmin: Forbes (10/26/17 article).
A better than expected earnings report with no or immaterial flaws can easily cause a short squeeze. On the day of my last purchase, the last reported short interest was 56.91 million shares or 12.96% of the float (defined as shares outstanding that are not owned by insiders). Coty Key Statistics-Yahoo Finance
B. Sold 10 LTC at $39.42:
Profit Snapshot: +$17.28
Quote: LTC Properties (LTC)
Equity REIT Common and Preferred Stock Basket Strategy
This trade was in a Schwab account where I will soon run out of commission free trades. Since that is the case and I am not interested in buying more at the current price, I decided to jettison the position.
Item # 2.B. Bought 10 LTC at $37.7 (4/12/18 Post)
A. Bought 10 COTY at $13.8 and 10 at $13.24:
Quote: Coty Inc. Cl A (COTY)
Brands
In this 5/5/18 article published at Reuters, it is noted that Soros Fund Management increased its COTY stake from 130.1K to 1.1M shares.
Last Substantive Purchase Discussion: Item # 1.B. Bought 10 COTY at $15.66 and $10 at $14.32 (5/14/18 Post)
Current Position: 50 Shares
2018 Trading Profits (30 shares): +$126.02
Item 2.C. Sold 10 COTY at $21.46 (2/19/18 Post)
Item 1.D. Sold 20 COTY at $20.89 (1/28/18 POST)
Purchase Restriction: Small Ball Rule (each purchase in the chain has to be at a lower price)
Average Cost Per Share in this Chain: $14.7
Highest Cost Lot in Chain: 10 shares at $16.47: Item # 2.B.
Dividend: Quarterly at $.125 per share ($.5 annually)
As I mentioned in my last discussion, it would be prudent to eliminate that dividend IMO for at least five years and to use the funds to deleverage.
Last Ex Date: 5/30/18
Dividend Yield at Average Cost = 3.4%
Maximum Position: 100 Shares
Chart: Bear Trend Since August 2016/Falling Knife Since February 2017
The stock did look like it was breaking out of that bear trend starting last October but peaked near $21.7 last February before rolling over and accelerating its decline after the last earning report was released on 5/9. The prior earnings release caused the stock to pop. I do not believe that any conclusion can be drawn from the last two quarterly reports about Coty's long term value.
Institutions have been dumping the stock since Coty released its last earnings report. There is no indication yet that a sustained up move is in the offing. Coty will need to materially improve free cash flow generation and organic revenue growth before the stock can sustain an uptrend.
My general belief is that this stock lacks individual and institutional support and is consequently subject to volatile and whipsaw moves caused by traders including short sellers. Coty Becomes #2 Most Shorted S&P 500 Component, Replacing Garmin: Forbes (10/26/17 article).
A better than expected earnings report with no or immaterial flaws can easily cause a short squeeze. On the day of my last purchase, the last reported short interest was 56.91 million shares or 12.96% of the float (defined as shares outstanding that are not owned by insiders). Coty Key Statistics-Yahoo Finance
B. Sold 10 LTC at $39.42:
Profit Snapshot: +$17.28
Quote: LTC Properties (LTC)
Equity REIT Common and Preferred Stock Basket Strategy
This trade was in a Schwab account where I will soon run out of commission free trades. Since that is the case and I am not interested in buying more at the current price, I decided to jettison the position.
Item # 2.B. Bought 10 LTC at $37.7 (4/12/18 Post)
As I mentioned in that post, I was not enthusiastic with the purchase. It is difficult to generate any excitement for a senior living/nursing home REIT that yielded 6.05% at an all-in purchase price of $37.7.
I did stay around long enough to collect two monthly dividends. The stock was ex dividend for its $.19 per share dividend on 5/22/19.
C. Sold Highest Cost GOV 10 Share Lot at $14.11:
Profit Snapshot: +$4.4
Government Properties Income Trust (GOV)
This pare reduces my average cost per share to $12.64 from $12.87. This is typical small ball trading which involves averaging down in small lots and then selling the highest cost lot when the stock pops. The purpose is to lower my average cost per share which raises my dividend yield, reduces my downside risk, and minimizes short term capital gains using FIFO tax accounting.
Dividend Yield at New Average Cost Number of $12.64= 13.08%
Position Prior to Pare:
Remaining Shares after Pare:
I hold this REIT in extreme disfavor for the reasons discussed in several prior posts. My total exposure will always be well below immaterial and even that light exposure will be tightly controlled using small ball trading rules. The general goal will always be dividend harvesting and escaping the position at whatever profit may be available from time to time.
Last Substantive Buy Discussion: Item # 2.A. (3/22/18 Post) I ripped into this REIT pretty good in that post.
Last Buy Discussion: Item # 2.C. Bought 10 GOV at $12.5, 5 at $12.38 and 5 at $11.99-Used Commission Free Trades (4/12/18)
Prior Trades:
Item # 2 Sold 50 GOV at $26 (3/5/13)(profit snapshot =$231.42)-Item # 2 Added 50 GOV at $21.22 (6/18/12)
Item # 4 Sold 50 of 100 GOV at $23.45 (7/19/12 Post)-Item # 3 Bought 50 GOV at $22.9-ROTH IRA (5/21/12 Post)
Item # 1: Sold 50 GOV at $24.5 at $24.5 Roth IRA (10/17/12 Post)(profit snapshots for 2 Roth IRA 2012 trades = $143.89)-Item # 4 Bought Back GOV at $21.78 Roth IRA (8/6/12 Post)
Current Position: 35 shares
Dividend Reinvestment: Never
Trading Profits to Date= $375.31
Dividend: Quarterly at $.43 ($1.72 annually)
Last Ex Dividend Date: 4/27/18
I received a quarterly cash dividend on 45 shares:
D. Sold 50 GMRE at $8.69-Highest Cost Lot:
Position Before Pare:
Quote: Global Medical REIT Inc. (GMRE)
I reduced my average cost per share from $8 to $7.72 and increased my dividend yield to 10.36%.
Profit Snapshot: +$6.81
Chart: Possible double bottom near $6.78, erratic and volatile movement mostly between $7 to $10 since the IPO in June 2016 at $10.
Dividend: Quarterly at $.2 per share (not covered with cash flow).
Dividends - Global Medical REIT
Last Ex Dividend Date: 3/21/18
Dividend Reinvestment: Yes at below $9
Last Substantive Discussion: Item # 1.B. Added 10 GMRE at $7.19 and 10 at $6.77 (3/8/18 Post)
Rational: This is another nano cap REIT that I view as high risk. I consequently control my risk tightly through small lot orders, buying under my small ball rule, and selling on pops when profitable and irrespective of the profit using commission free trades.
GMRE Trading Profits to Date: $211.78 (prior trades: $204.97-very hard to generate)
Prior Round-Trips:
Item # 3.C. Sold 50 GMRE at $10.01 (5/23/2017 Post)
Item 3.A. Bought 50 GMRE at $8.36 (2/23/17 Post)
South Gent's Comment Blog # 7: Eliminated GMRE
South Gent's Comment Blog # 2: Bought 50 GMRE at $9.11
E. Bought 5 CPB at $33.28-Used Commission Free Trade:
Quote: Campbell Soup Co. (CPB)
Chart: Major Bear Trend/Falling Knife
I am starting a chain in my Fidelity account with this purchase. I have another chain in my Schwab account which is not doing so well. CPB is a stinker. I recently discussed why: Item # 1.C. (5/28/18 Post)
One reason for starting a separate chain is that I may be able to generate a profit with a lower cost basis while holding the lots bought in another account longer term.
I am keeping my maximum exposure at 100 shares: 50 shares in my Fidelity account and 50 shares in my Schwab account. I currently own 35 shares in my Schwab account with an average cost per share of $40.97. Since I am running out of free trades in that account, I will probably use one of the remaining ones to average down with a 15 share lot purchase. Then I will start to average down in my Fidelity account until I hit 50 shares. I would probably round up to 50 shares when and if the price sinks below $30.
Dividend: Quarterly at $.35 ($1.4 annually)
Dividend Yield at $33.28: 4.21%
The best option now for shareholders would be for the Dorrance family, who control CPB, to sell the company.
Institutions are in a liquidation mode with no end in sight yet.
2. Intermediate Term Bond/CD Ladder Basket Strategy:
A. Bought 2 CSX 3.35% SU Bonds Maturing on 11/1/25:
Issuer: CSX (CSX)
Last Bond Offering: February 2018
Credit Ratings:
Bought at a Total Cost of 96.656
YTM at Total Cost Then at 3.869%
Current Yield at TC = 3.4659%
B. Bought 2 Canadian Natural Resources 3.45% SU Bond Maturing on 11/15/21:
FINRA PAGE: Bond Detail (prospectus linked)
Issuer Canadian Natural Resources Ltd. (CNQ)
Canadian Natural Resources Ltd. Analyst Estimates
Canadian Natural Resources - Home
Canadian Natural Resources - World Class Assets
Canadian Natural Resources Limited Announces 2018 First Quarter Results Toronto Stock Exchange:CNQ
CNQ SEC Filings
CNQ 2017 Annual Report
Credit Ratings:
"The Company is rated “BBB+” with a negative outlook by Standard & Poor’s (“S&P”), “BBB (high)” with a stable outlook by DBRS Limited (“DBRS”) and “Baa3” with a stable outlook by Moody’s Investors Service (“Moody’s”)."
Bought at a Total Cost of 99.997
YTM at TC Then at 3.451%
Current Yield at TC = 3.45%
C. Bought 2 Campbell Soup 3.95% SU Bonds Maturing 3/15/25:
FINRA Page: Bond Detail (prospectus linked)
This bond was recently issued as part of the debt financing required to purchase Snyder-Lance. This bond was sold at an offering price of 99.746:
Issuer: Campbell Soup Co (CPB)
CPB Analyst Estimates
CPB SEC Filings
10-Q for the Q/E 1/28/18
Last Substantive Common Stock Purchase Discussion: Item # 1.C. Bought 5 CPB at $34.65 and 5 at $33.52 (5/28/18)
The current yield of this bond is higher than the common stock dividend yield.
Credit Ratings:
Bought at a Total Cost of 98.302
YTM at TC Then at 4.238%
Current Yield at TC = 4.0182%
B. Bought 2 Canadian Natural Resources 3.45% SU Bond Maturing on 11/15/21:
FINRA PAGE: Bond Detail (prospectus linked)
Issuer Canadian Natural Resources Ltd. (CNQ)
Canadian Natural Resources Ltd. Analyst Estimates
Canadian Natural Resources - Home
Canadian Natural Resources - World Class Assets
Canadian Natural Resources Limited Announces 2018 First Quarter Results Toronto Stock Exchange:CNQ
CNQ SEC Filings
CNQ 2017 Annual Report
Credit Ratings:
"The Company is rated “BBB+” with a negative outlook by Standard & Poor’s (“S&P”), “BBB (high)” with a stable outlook by DBRS Limited (“DBRS”) and “Baa3” with a stable outlook by Moody’s Investors Service (“Moody’s”)."
Bought at a Total Cost of 99.997
YTM at TC Then at 3.451%
Current Yield at TC = 3.45%
C. Bought 2 Campbell Soup 3.95% SU Bonds Maturing 3/15/25:
FINRA Page: Bond Detail (prospectus linked)
This bond was recently issued as part of the debt financing required to purchase Snyder-Lance. This bond was sold at an offering price of 99.746:
CPB Analyst Estimates
CPB SEC Filings
10-Q for the Q/E 1/28/18
Last Substantive Common Stock Purchase Discussion: Item # 1.C. Bought 5 CPB at $34.65 and 5 at $33.52 (5/28/18)
The current yield of this bond is higher than the common stock dividend yield.
Credit Ratings:
Bought at a Total Cost of 98.302
YTM at TC Then at 4.238%
Current Yield at TC = 4.0182%
3. Short Term Bond/CD Ladder Basket Strategy:
A. Bought 2 Scripps Networks Interactive 2.75% SU Bonds Maturing on 11/15/19:
FINRA PAGE: Bond Detail (prospectus linked)
FINRA PAGE: Bond Detail (prospectus linked)
Issuer: Scripps Networks was acquired by Discovery on 3/8/18.
Discovery Inc. Series A (DISCA)
DISCA Analyst Estimates
Discovery, Inc. Reports First Quarter 2018 Results
10-Q for the Q/E 3/31/18 (this bond is listed as a Discovery obligation at page 25)
Credit Ratings:
Bought at a Total Cost of 99.445
YTM at TC Then at 3.131%
Current Yield at TC = 2.7653%
B. Bought 1 Treasury 2.25% Coupon Maturing on 2/29/20:
YTM= 2.5%
I am starting to extend my ladder for U.S. treasury notes into 2020 maturities.
Current Total Bond Principle Amount Maturing in February 2020: $16K
C. Bought 1 Treasury 2% Coupon Maturing on 1/31/20:
YTM = 2.483%
Current Total Bond Principal Amount Maturing in January 2020= $25K
The general idea is to gradually build up the total principal amount maturing in a given month to a range between $40K to $60K. Some months may have less due to an overall lack of available options.
Discovery Inc. Series A (DISCA)
DISCA Analyst Estimates
Discovery, Inc. Reports First Quarter 2018 Results
10-Q for the Q/E 3/31/18 (this bond is listed as a Discovery obligation at page 25)
Credit Ratings:
Bought at a Total Cost of 99.445
YTM at TC Then at 3.131%
Current Yield at TC = 2.7653%
B. Bought 1 Treasury 2.25% Coupon Maturing on 2/29/20:
YTM= 2.5%
I am starting to extend my ladder for U.S. treasury notes into 2020 maturities.
Current Total Bond Principle Amount Maturing in February 2020: $16K
C. Bought 1 Treasury 2% Coupon Maturing on 1/31/20:
YTM = 2.483%
Current Total Bond Principal Amount Maturing in January 2020= $25K
The general idea is to gradually build up the total principal amount maturing in a given month to a range between $40K to $60K. Some months may have less due to an overall lack of available options.
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.
"Trump recently blamed the Democrats for separating the children from their parents."
ReplyDeleteTrump, of course, will blame the Democrats for anything. I blame the parents who are illegally entering the country, dragging their unfortunate children along. I wonder if Trump's "zero tolerance" immigration policy is an effective solution. It's definitely great source material for his sleazy demagoguery.
Cathie: The Trump policy now is to charge anyone entering into the country illegally with a crime. The parents can not take their children to a prison and consequently the children have to be separated from their children due to Trump's policy. There is no law requiring that children be separated and the separation is the inevitable by product of Trump's decision to treat illegal entry as a crime rather than as a civil matter.
DeleteThe Trump policy does not make a distinction between an illegal "immigrant" and a refugee/asylum seeker.
https://www.cbsnews.com/news/sen-jeff-merkley-says-images-of-migrant-processing-center-seared-in-my-mind/
https://www.humanrightsfirst.org/press-release/administration-will-prosecute-parents-illegal-entry-separating-refugee-families
I would want to walk in the parents shoes before blaming them for bringing their children with them. They have to be extremely desparate due to a variety of factors including violence in their native land and a lack of economic opportunities. That does not excuse their illegal entry but merely explains it.
It does appear that the children are treated in an inhuman manner that goes beyond being separated from their parents (see previous link to CBS News article and video).
Putting aside the merits of the policy and the probable inhuman treatment of children by the U.S. government, there is still a serious problem that Trump deliberately misleads the public as to whose policy is causing those results and a large percentage of the population believe him. That makes a fact based discussion of policy impossible with Trump followers.
You're right, I shouldn't judge the actions of desperate people seeking asylum or safety from horrible conditions for their children.
DeleteI didn't realize there was no distinction in this policy between asylum seekers and illegal immigrants.
The problem is complex and seemingly intractable, unfortunately. There are no simple solutions.
"The Trump administration’s practice of separating children from migrant families entering the United States violates their rights and international law, the United Nations human rights office said on Tuesday, urging an immediate halt to the practice."
Deletehttps://www.nytimes.com/2018/06/05/world/americas/us-un-migrant-children-families.html
Trump called the U.N. "ignorant".
The U.S. is the only country in the world that has not adopted the Convention on the Rights of the Child.
https://en.wikipedia.org/wiki/Convention_on_the_Rights_of_the_Child
TherapeuticsMD, Inc. (TXMD)
ReplyDelete$6.59 +$0.77 (+13.23%)
Volume 8,315,418
Avg. Volume 2,714,096
I own 60 shares as part of my small/nano cap biotech lottery ticket basket strategy.
The company did host an analyst day yesterday where it discussed the FDA recent approval of Imvexxy with a black box warning label.
https://www.reuters.com/article/us-therapeuticsmd-fda/therapeuticsmds-therapy-for-menopause-related-condition-gets-approval-idUSKCN1IV16D
The initial response on the first trading day after approval was to take the stock down. Perhaps, some investors are reconsidering their first response.
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"Medicare’s hospital insurance fund will be depleted in 2026, said the trustees who oversee the benefit program in an annual report. That is three years earlier than projected last year."
https://www.marketwatch.com/story/medicares-finances-are-getting-worse-as-social-security-taps-into-fund-for-first-time-in-36-years-2018-06-05
The federal government's budget deficit problems are likely to become worse.
https://www.thebalance.com/current-u-s-federal-budget-deficit-3305783
A robust day for stocks as bonds sold off. The bond decline started in Europe with news that the ECB would discuss at its next meeting easing out of its quantitative easing program.
ReplyDeletehttps://www.bloomberg.com/news/articles/2018-06-06/draghi-s-ecb-is-on-the-verge-of-watershed-for-its-bond-purchases
https://www.marketwatch.com/story/treasury-yields-climb-on-hints-ecb-will-debate-timetable-for-ending-qe-2018-06-06
The German ten year bond leaped .09% to .47%. The ten year U.S. treasury is moving back to 3% and is currently near 2.98%. The feel is that investors are moving out of bonds before the losses become too large and reallocating into stocks.
The rise in interest rates caused a widespread out performance in regional bank stocks.
SPDR S&P Regional Banking ETF
$65.49 +1.17 +1.82%
https://www.marketwatch.com/investing/fund/kre
S&P 500 Index
2,772.35 +23.55 +0.86%
I am lightly paring my equity REITs into the price surges.
Vanguard Real Estate ETF (VNQ)
$79.91 +0.19 +0.24%
VNQ was near $72 last February.
https://www.marketwatch.com/investing/fund/vnq/charts
The VIX remains in a Stable Vix Pattern, closing today at 11.64:
https://www.marketwatch.com/investing/index/vix
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Showboat Rudy probably needs to shut his mouth. He is quoted as saying today that Kim got on his knees and begged Donald for the summit.
https://www.politico.com/story/2018/06/06/rudy-giuliani-kim-jong-un-beg-628697
That is not the kind of thing that anyone with any sense would say publicly.
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My 1987 Mercedes is over 31 years old now and is becoming finicky. I am trying to keep it running and in good shape until it can be gifted to one of the youngsters. The car did not start yesterday and the problem was not the battery since a good charge was showing. The issue was somewhere in the starter system, possibly the starter motor, which I am not able to test. The car did start when I toggled the ignition about 10 times between off and start.
I have published a new post:
ReplyDeletehttps://tennesseeindependent.blogspot.com/2018/06/observations-and-sample-of-recent_7.html