Observations and Sample of Recent Trades: AGRD, FDRR, FSTA, PRISX, T, VLY

Economy and Trade: 

It is hardly newsworthy that central banks have been waging a silent trade war through monetary policies that in effect devalue their currencies or restrain their appreciation against weaker currencies. Currency War Erupts, Threatening to Ripple Across Global Markets - Bloomberg  

The general view is that China, contrary to Donald's assertions, has propped up the value of its currency. In response to Donald's tariff war, China has apparently allowed the Yuan to fall significantly in value against the USD over the past several weeks. 

This makes U.S. exports to China more expensive and China's exports to the U.S. less expensive.

It looks like the Yuan will be allowed to fall about 10% in value against the USD which will offset a 10% U.S. tariff that the Duck has threatened to apply to the Chinese products that are not yet subject to a tariff. The decline in the Yuan's value started in late April 2018. USD/CNY Currency Chart. US Dollar to Chinese Yuan Renminbi Rates

In effect, this Yuan devaluation will have significant ripple effects for U.S. trade as well as China's trade with other countries. 

Further, the net result for U.S. consumers and businesses would be to increase the cost of goods while losing market share in China and other countries where China's products become cheaper due to the currency devaluation. 

Trump threatens EU with ‘tremendous retribution’ via auto tariffs - MarketWatch

Tariffs Imperil a Hometown Business in South Carolina: BMW - The New York Times

Euro zone growth risks serious, could lead to hard landing, IMF warns | Reuters

A few days ago, the media personality Larry Kudlow, Trump's economic advisor, claimed that the EU's President Jean Claude Juncker would bring a substantial trade offer when he visits Donald today. The EU says that Juncker will not be bringing a "specific" offer, contradicting Kudlow's happy talk on the issue.  EU's Juncker will not bring trade offer to Trump talks: Commission | Reuters  

Juncker will apparently bring Trump two general paths to follow on a possible trade deal. Both options have been floated by the Europeans prior to today's meeting. What Juncker is prepared to offer Trump on trade 

The Trump team is also talking up a conclusion in the NAFTA negotiations. Trump said he is working with Mexico's newly elected President on "something dramatic, very positive for both countries". The Mexican President replied that he did not know exactly what Donald was exactly talking about. Mexico’s president-elect reportedly seeks quick Nafta deal - MarketWatch The Mexican President did send the Duck a letter calling for both sides to start a new chapter based on "mutual respect". Mexico Wants August Nafta Deal as Trump Vows ‘Dramatic’ Action - Bloomberg Maybe something could be worked out before the U.S. election that will allow Donald to claim victory even after abandoning several key demands that have kept the parties apart for months. That appears to me to be a real possibility. 

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

Administration announces $12 billion in aid to farmers hurt by Trump's trade war; Trump's $12 billion aid for farmers risks unintended consequences: CNBC 

Some commentators believe that the aid announcement means that Trump is contemplating a struggle with China. Trump wants $12 billion in aid to U.S. farmers suffering from trade war | Reuters 

First Law of Holes: When you find yourself in one, quit digging.

++++++

Markets and Market Commentary:

Second quarter earnings reports have been generally favorable so far.  

Why is this market more troubled by rising U.S. interest rates than trade tariffs? Ed Yardeni - MarketWatch Yardeni is assuming that the trade war will have a happy ending before causing serious damage to the world economy. I see no reason to make that assumption.

Trump lays into the Fed, says he's 'not thrilled' about interest rate hikes: CNBC; Trump criticizes Federal Reserve, breaking long-standing practice - The Washington Post

Trump's Fed criticism is nearly without precedent in US history: CNBC

Trump Hated Low Interest Rates. Then He Became President - Bloomberg

Goldman’s Abby Joseph Cohen warns of inflection point that could ‘spook’ markets - MarketWatch 

U.S. deficit now projected to top $1 trillion starting next year - MarketWatch Are the republicans fiscal conservatives?  

U.S. Government Debt to the Penny (Daily History Search Application):

U.S. Government Monthly Interest Expense on the Debt Outstanding (interest rates are rising as the debt expands parabolically)

Government - Average Interest Rates on U.S. Treasury Securities

Government - Interest Expense on the Debt Outstanding (fiscal year ends in September)

The problem with the accelerating federal debt is not in the immediate future. The Stock Jocks could care less when there is money to be made in the here and now. If things go south in a big way, just move to Switzerland.  

A short sighted approach, which is how the U.S. government manages its finances, is to sacrifice long term fiscal health in exchange for spending and borrowing more money now which has political benefits. 

Cutting taxes substantially and increasing spending will stimulate the economy and allow the current occupant of the White House to crow about being a stable genius. 

The GOP's gibberish about their tax cuts paying for themselves will prove to be false, of course, but the republicans will never accept that clear result and will simply state unequivocally that the cure is more tax cuts for the job creators. That was their response to the Bush tax cuts failing to usher in their envisioned perpetual growth machine.  

The President who inherits the inevitable fiscal train wreck-with no good options remaining-will be the one blamed for Financial Armageddon. 

If Trump is reelected in 2020, which is certainly a real possibility, it is possible that a catastrophic event, which I define broadly to include a series of failed treasury auctions, could occur in the second term, though the event is more likely in the 2024 to 2034 time frame based on what I know now and reasonable projections about the future. Interest on the federal government's debt will go over $1 trillion per year in that time frame, possibly within 7 to 10 years from now. The total debt was less than $1 trillion in 1980.  

Oil prices could top $120 before year-end - MarketWatch

Trump’s Damage to International Trade Will Take Years to Repair - Bloomberg

++++

Trump: 

Trump and Russia:

Trump's Two Hours Alone With Putin Still Rattling Washington

It is commonplace for clandestine Russian activities to be conducted with an aura of deniability, even though they are being directed and orchestrated by the Russian government. 

One means used by Putin is to have fellow members of his Kleptocracy, otherwise known as the Oligarchs, fund and/or direct the activities. (e.g. Russian billionaire with U.S. investments backed alleged agent Maria Butina, according to a person familiar with her Senate testimony). The Internet Research Agency, which has been indicted by a U.S. grand jury for U.S. election interference, was allegedly funded, at least superficially, by Yevgeny Prigozhin known generally as Putin's chef. 

Internet Research Agency Indictment.justice.gov; 

Internet Research Agency 

I first read about this Russian front organization in a NYT magazine article several years ago. The Agency - The New York Times (published 6/2/15); see also The Russian Troll Farm That Weaponized Facebook Had American Boots on the Ground | Vanity Fair (October 2017). 

Trump again reverses course on Russian interference, calls it ‘all a big hoax’ - The Washington Post; 

After week of walkbacks, Trump points to "big hoax" in Russian interference - CBS News 

Donald managed to stay on scrip for almost 24 hours. He is now back to the Russian investigation being a "big hoax", and he has apparently already forgotten Putin's admission that Russia wanted Trump to win.    

If Obama had stated that Russia was trying to help Donald win the election before the November 2016 election, the screams from Donald and the Trumpsters about election interference from the Democrats-not Russia-would have shattered everyone's eardrums. It would be irrelevant of course that any such statement from Obama was actually true. Facts do not matter in TrumpWorld and never will.  

It goes without saying that Donald's attack on Democrat institutions would have gone parabolic in the event Hillary had won and have accelerated substantially since the election even after Trump won. 

Before the November 2016 election, Donald was claiming that the election was rigged against him and that was without public disclosure that Russia was trying to help him win. 

And even after winning, Trump claimed that several million people voted illegally and ALL OF THEM voted for Hillary.  Stocks, Bonds & Politics: Trump and Massive Voter Fraud Allegations-Cover For Voter Suppression 

TRANSCRIPT: ABC News Anchor David Muir Interviews President Trump - ABC News Never before in American history has there been a President so clearly authoritarian and so intent on undermining democratic institutions. 

He was loudly and persistently declaring before the election that he would not accept the results unless he won

This is just two examples of Trump's pre-election attacks on what he viewed as a "rigged" election:  

Election 2016: Why Donald Trump's talk of a rigged vote is so dangerous - CNN; Donald Trump Continues to Claim Election Is Rigged | Time; The Truth Behind Trump’s Rigged-Election Paranoia | Vanity Fair

++

World Economic Leaders Condemn President Trump's Twitter Trade Rants at G-20 Summit

Trump "incapable of stating the facts," Bush adviser Fran Townsemd says - CBS News (of course that is the case)

+++

Donald and the Free Press:

I will be calling Donald Trump by some new monikers including Lying Don, Cheating Don, Don the Demagogue and Don the Con. Trump is fond of giving people nicknames which are frequently unjustified. I view all of my nicknames for Donald to be based on hard facts. 

Donald & The Trumpsters can not stand anyone who corrects the Duck's demonstrably false statements with facts. Those scoundrels are the "enemy of the people". All of their factually based criticisms can also be dismissed by using just one word to describe those who voice them: "liberal". A liberal is someone who believes in telling the truth and other conservative values including those embodied in the Constitution.    

For Donald, the Fake News Media includes every responsible journalist in America. All of them are "the enemy of the people". 

In perhaps his first use of this phrase as President of the United States, Don the Demogogue identified some of the news outlets who were the enemy of the people:

Enemy of the People 2/17/17  

What upset Donald at that point in time were accurate news stories relating to Trump's National Security Advisor published in the aforementioned media outlets. The fact that the news stories were true was of course irrelevant. It is important in TrumpWorld to label any factual article as Fake News, particularly those that contradict Donald's reality creations.  

The phrase "enemy of the people" ha been used in the past by the likes of Joseph Goebbels, Lenin and Stalin as a means to crush dissent. History of Trump's phrase an 'enemy of the people'-Business Insider 

While Trump's Lying Press dog whistle has now been replaced by the phrase"Fake News", which means the same thing, the origins of this line of attack have the same kind of historical sources as "enemy of the people". The ugly history of ‘Lügenpresse,’ a Nazi slur shouted at a Trump rally - The Washington Post These are just facts. 

The goal of the authoritarian is to control the narrative. False narratives, Donald's speciality, work the best when believed by enough people who no longer even bother to discover actual facts since it is the press who lies rather than the authoritarian. 

Sean Hannity and similar ilk, who lavish boundless praise on Donald, never correct any of his demonstrably false statements made several times virtually everyday, and generally present the Duck as the leading truth teller and greatest leader in world history, are the non-Fake News Media in TrumpWorld and to the pseudo conservatives who will forever inhabit that reality creation bubble with Donald. Collectively, they can be accurately called Trump Media, Trump News ("Fox") or the state's media. 

It is important to make that distinction when Donald calls the media "the enemy of the people", as he has done repeatedly including several recent tweets.

Enemy of the People 7/19/18

Enemy of the People 7/12/18

Putin, Stalin and Joseph Goebbels could not agree with Donald more. At this point in time, and we are already way past that point, the silence of republican politicians on Donalds repeated attacks on a free press can only be interpreted as assent to them. Acceptance of those attacks is now part of the GOP's DNA. 

All republican politicians at whatever level of government need to be held accountable for their silence and their embrace of Don the Demagogue in November. There can be exceptions where the candidate has clearly distanced themselves from Trumpism. 

Many republican politicians have gone beyond a full embrace and have explicitly adopted Trump's Fake News labelling of any factual article that places them in an unfavorable light. 

Another reason for holding republicans accountable in the upcoming elections is that the narrative of the republican party since the Nixon years has been to denigrate the free press so that millions will not even access responsible journalism and will dismiss any and all facts that contradict or call into question the republican stories and narratives. 

Lastly, Trump is the kind of candidate and President that the rank and file republicans support with limited exceptions. In the weekly Gallup poll for the period ending 7/22/18, Trump enjoyed a 42% approval rating. Trump Job Approval (Weekly) His approval among republicans are at their high point after the Helsinki meeting with Putin. So it is not a stretch at all to hold republican politicians responsible for Donald and the merger of the GOP into Trumpism.  

The result of the GOP's multi-decade attack on institutions necessary to a properly functioning Democracy, which includes the press and voting rights, is that tens of millions view a pathological liar, who is clearly a demagogue,  to be an honest straight shooter who tells it like it is.  

All of the above is inconsistent with the principles of American Democracy and need to punished repeatedly in upcoming election cycles.

{I will be voting in the Tennessee republican primary on 8/2. Among the GOP candidates for governor, the only one who has not adopted Donald full throttle is Beth Harwell, the current House Speaker whose ads focus on her accomplishments without mentioning Donald. That is a sure fired losing strategy in Tennessee. The other candidates are pure Trumpsters, falling over one another in their bids to be purer Trumpsters than Trump.  Harwell will come in 4th place but will nonetheless receive my vote as the only competent republican running for the job and as a protest vote against the Duck. Since she will lose the GOP nomination, being a competent candidate who refuses to wallow in Trumpism, is a bridge too far for republican tribe members, my vote for Governor in November will go to the centrist Democrat Karl Dean, the former major of Nashville, who will lose whichever Trumpster wins the GOP nomination}
    
In other tweets published on 7/19/18, Don the Demagogue heaped more of his venom on the press:

And in tweets published on last Sunday and Monday, Lying Don continued to blame the press for his pathetic performance in Helsinki:

One typical approach that Donald uses is to falsely summarize a critics position and then to rebut that false characterization.

An example is provided above where Lying Don claimed that the "Corrupt" and "Fake News" media talked negatively about his Putin's meeting based on what Donald gave up which is not the case. 

Trump then claims that he gave up nothing which is not knowable to an objective observer. 

We only know that Russia claims that verbal agreements were reached in the two hour one-on-one meeting; and that Trump claims that there was no such agreements but only discussions about "future benefits for both countries".

++++++

Don The Con and the FISA Warrants for Carter Page: 

Just more demagoguery from Don the Con: 

This latest rant by Demagogue Don was occasioned by the Justice Department's release of 412 pages of heavily redacted documents relating to the Carter Page FISA warrants. The redactions were to protect sources and methods.  Senator Mark Rubio (R-FL) stated that the warrant was justified, one of the few republican politicians who have challenged Lying Don's narrative on this issue.

Without Evidence, Trump Claims Vindication From Release of Carter Page Documents - The New York Times 

The first FISA surveillance warrant was sought after Carter Page left the Trump campaign. All four judges (Rosemary M. Collyer, Michael W. Mosman, Anne C. Conway, and Raymond J. Dearie) who signed off on the warrants were Republican appointees. Trump Administration Releases Classified Warrants For FBI Wiretap Of Carter Page : NPR; FBI believed Carter Page 'collaborated and conspired' with Moscow-The Guardian 

So a simple question to ask Don the Con is how was the Page surveillance  spying on your campaign when the surveillance did not even start until weeks after Page left your campaign?  

And let's hear for a change what proof Donald and his minions in the House have that the Page FISA warrants were done for political gain at the behest of Hillary and the DNC, who did not know of the top secret FISA applications, rather than legitimate concerns about Page's loyalties. 

Maybe some criticism needs to be directed at Donald for allowing a creature like Page to become a foreign policy advisor which shows a lack of judgment on Donald's part. Trump adviser Carter Page has Russia ties that run deep | News & Observer 

Why doesn't Lying Don discuss those issues and facts? I would also like to see the several hundred pages of redactions. When they are released to the public years from now, how well do you think Don the Con's narrative will hold up then?  

I did listen to Carter Page try to explain away a line in a letter, which he admittedly wrote, that he was an "informal advisor to the staff of the Kremlin". Carter Page denies he was an adviser to Kremlin - CBS News; Carter Page Touted Russia Contacts in 2013 Letter | Time He also tries to explain away his contacts with known Russian intelligence operatives like Victor Podobnyy. Carter Page Admits He Only Kind of Helped the Russian Government | Vanity Fair

Trump Again Falsely Claims Russia Investigation Started With Steele Dossier - The New York Times (even the Trump toads on the House intelligence committee admit that the investigation started in July 2016 when a foreign intelligence service provided U.S. intelligence with information on George Papadopoulos, a foreign policy adviser to the Trump campaign, who has now pled guilty to lying to the FBI)

Is it even possible to find a person living or dead who lies as often Donald Trump? Perhaps, there is one in the world's history. I certainly would not want to spend years trying to find one.  
  
++++

The Trumpette Roseanne Barr issued an apology of sorts to Valerie Jarrett, the subject of her earlier racist tweet, stating that she "thought the bitch was white". Roseanne Barr: I thought Valerie Jarrett was white; Roseanne Barr Compares Obama Aide Valerie Jarrett To A Monkey - YouTube

Microsoft discloses first known hacking attempts in midterm elections

Nunes used political dollars for $15K in Celtics tickets, winery tours and Vegas trips

Over 460 migrants separated from their children have potentially been deported by U.S. (as I understand the U.S. argument now, those parents lost the right to be reunited with their children after the Trump administration separated them and then deported the parents and kept the children) 

Donald Trump is taking US down the path to tyranny (opinion written by Jeffrey Sachs) - CNN (I doubt that republican tribe members will agree with Mr. Sachs, viewing themselves as members of the individual freedom party.)

+++

Wilbur Ross False Testimony: 

Trump's Commerce Secretary mislead Congress three times under oath when he claimed that it was the Justice Department who initiated the request to include a citizenship question in the 2020 census. It was Ross who made the request to the Justice Department. Commerce Secretary Grew Impatient Over Census Citizenship Question, Emails Reveal : NPR ("It now appears that the idea of adding the citizenship question originated with Secretary Ross, not the Department of Justice, and that its origins long predated the December 2017 letter from the Justice Department," Judge Jesse Furman said in Manhattan federal court during a hearing on July 3) 

This is from a Ross email dated 5/2/2017: "I am mystified why nothing has been done in response to my month's old request that we include a citizenship question. Why not": Page 3699 Of Administrative Record For Census Citizenship Question Lawsuit

The reply to the Ross  email came from Commerce employee Earl Comstock: 

Page 3710 Of Administrative Record For Census Citizenship Question Lawsuit - Document Viewer : NPR

Ross Testimony: Hearing with Commerce Secretary Ross - YouTube (the request to include a citizenship question was initiated by the Justice Department, not the Commerce Department)

The documents provide considerable evidence that the Justice Department's reason for including the question was bogus.  

Why Was a Citizenship Question Put on the Census? ‘Bad Faith,’ a Judge Suggests - The New York Times

Ross sees no conflict at all between his testimony and what he said in emails. I would view that claim to be baseless. But then, we are have at least one foot in a world where true is false and false is true.  


+++++++++

1. Small Ball:

A. Bought 30 ARGD at $25.33-Used Commission Free Trade:

Quote: Argo Group International Holdings Ltd. 6.5% Senior Notes Due 2042 (ARGD)

This bond formerly traded under the AGIIL ticker symbol

Final Prospectus Supplement

Category:  Stocks, Bonds & Politics: Exchange Traded Baby Bonds

Stocks, Bonds & Politics: Exchange Traded Bonds

Issuer: Argo Group U.S.

Guarantor: Argo Group International Holdings Ltd. (ARGO)
ARGO Analyst Estimates
ARGO SEC Filings
ARGO 2017 Annual Report (risk discussion starts at page 14; bond discussion starts at page F-45

Capital Structure Placement: Senior Unsecured Bond

Interest Payments: Quarterly at $.40625 per share  (.065% x. $25= $1.625 annually)

Trades: Flat (whoever owns the security on the ex interest date receives the entire interest payment with no accrued interest paid to the bond seller)

Yield at $25.33 (assuming no call): 6.42%

Par Value: $25

Optional Call Date: At par value whenever issuer chooses

Maturity: Unless redeemed early at issuer's option, the bond matures on 9/15/42;

Interest Rate Risk: Asymmetric in favor of issuer

Bond Rating: According to Quantumonline, the bond has a BBB- rating from S & P.

Next Ex Interest Date: 8/30/18

Current Position: 80 Shares

Last Round-Trips:

Item # 4 Sold 100 AGIIL (9/25/17 Post)(profit snapshots = $30.09)-South Gent's Comment Blog # 8: Bought 50 AGIIL at $24.98 (bought back 50 shares sold at $26.69 in May 2016) and Item # 5. Bought 50 AGIIL at $24.6 in IB Account-Update For Exchange Traded Bonds And Preferred Stock Basket Strategy As Of 1/22/16 - South Gent | Seeking Alpha

During that 2013 price plunge, I did buy some shares. Item # 6 Bought 50 AGIIL at $20.2 (December 2013 Post) I sold that lot at $24.21: Item # 2 Sold 50 AGIIL at $24.21-Roth IRA (6/28/14 Post)(profit snapshot=$186.48 plus two quarterly interest payments totaling $40.62; total return 22.33% in about 6 months)

Another 50 share lot was bought in October 2013: Item # 3 Bought: 50 AGIIL at $21.11 (10/13/2013 Post). I sold the lot bought in October 2013 at $24.48: Item # 2 Sold: 50 AGIIL at $24.48 (6/7/14 Post)(profit snapshot=$152.58; total return of $193.2 or 18.17$ in about 7 months).

Trading Profits to Date = $369.15

I do not anticipate generating any profit on this last 30 share lot purchase. The general idea is to be content with a 6.42% income distribution for as long as it lasts. If the bond is called at par value, I will lose most of one quarterly payment to the capital depreciation from my $25.33 purchase price. I am not excited by this purchase.   

B. Bought 5 AT & T at $31.14-Used Commission Free Trade: 

Current Position: 42 Shares

Maximum Position: 100 Shares

Average Cost Per Share: $33.3

Purchase Restriction: Small Ball Rule (the next purchases will be in 10 share lots)

Highest Cost Lot in Chain: 10 shares at $35.42

Last Substantive Discussions: Item # 2.A. (5/3/18 Post); Item 1.B.  (4/2/18 Post)

Dividend: Quarterly at $.5 per share

AT&T Historical Dividends

Dividend Reinvestment: Yes at below $35 per share 

Dividend Yield at Average Cost Per Share= 6%

Chart: Bear Trend Since June 2016  

A  6 year chart shows that this stock was trading over $37 back in April 2013. 

My overall impression is that this stock has been a poor total return vehicle for several years using a buy and hold approach. For the five year period ending 7/23/18, the average annual total return was 2.41%. DRIP Returns Calculator-Dividend Channel 

Recent Trades: I sold 10 shares at $37.77 last January. Item # 1.E. Sold 10 T at $37.77 (1/28/18 Post)  I sold a 50 share lot at $37.36 and a 30 share lot at $36.41 last year. I am engaged in a dividend harvesting strategy for AT &T shares and will no longer even take a 100+ share position using that strategy. The strategy now is a profit + dividend harvesting which is the primary goal. 

The last 100+ share position was sold in 2010: 

202+ Shares +$750.6

T Analyst Consensus E.P.S. Estimates (as of day of trade)
2018: $3.39
2019: $3.44

The stock renewed its downtrend after the DOJ announced it would appeal the District Court ruling that permitted the Time Warner merger to proceed. AT&T-Time Warner deal: Justice Department appeals approval; US court OKs speedy appeal of AT&T-Time Warner tie-up

Talking heads argue that this creates uncertainty, which it does. A lot of things that are uncertain create uncertainty.

I would regard a reversal of the district court decision to be a low probability event, made more so by what I would view as an appellate court's reluctance to unscramble the egg in addition to the weaknesses in the DOJ's case and the difficulty in overturning the District Court judge's finding of facts.

Last Earnings Report: Q/E 6/30/18

AT&T Investors Say ‘Show Me’ to Newly Minted Media-Telecom Giant - Bloomberg

AT&T revenue misses Wall Street estimates, shares slip in after hours trading | Reuters

AT & T reported after the close yesterday. SEC Filed Press Release 

Adjusted E.P.S. was reported at $.91 vs. the consensus estimate of $.87 per share. 

 2018 Outlook: 

Details:  The results include 16 days of Time Warner results.  

Entertainment Group: Problems 

SEC Filing  

C. Sold 10 FDRR at $31.16 and 10 FSTA at $21.41-Commission Free ETFs for Fidelity Customers: 

Profit Snapshots: $35.67

Quotes: 

Fidelity MSCI Consumer Staples Index ETF  (FSTA)

Fidelity Dividend ETF for Rising Rates (FDRR)

2. REGIONAL BANK BASKET STRATEGY:

A. Sold 51+ VLY at $12.76-Used Commission Free Trade:  

Quote: Valley National Bancorp  (VLY)
VLY Analyst Estimates

Profit Snapshot: +$61.76

Last Substantive Discussions: I have a negative opinion about this bank which does not keep me from trading the stock. 

Item # 2.B. Sold 60 VLY at $12.52-Used Commission Free Trade (1/28/18 Post)

Item 1.B. Added 50 VLY in 3 Commission Free Trades (12/7/17 Post)

Item # 4 Bought 50 VLY at $11.89 (10/23/17 Post)

Last Earnings Report: Q/E 3/31/18

Valley National Bancorp Reports First Quarter Net Income And Strong Organic Loan Growth

I may try again at price lower than $11.5.   

Net Realized Gains Regional Bank Basket= $50,035.85 (small lots-measured risks, start date April 2009)

3. Eliminated the Mutual Fund PRISX:

Quote: T Rowe Price Financial Services Fund Overview

PRISX T. Rowe Price Financial Services Fund Price | Morningstar

T. Rowe Price Financial Services Fund (PRISX) Fund Performance and Returns

This is what my position looked like the day prior to the elimination:

The net asset value decline slightly on 7/19/18: PRISX $29.41 -$0.17 -0.57%

Profit Snapshot: +$1,891.16

I am taking more chips off the table. As part of that process, I have been eliminating my smallest positions in T. Rowe Price mutual funds. Prior eliminations were discussed in these posts:

Item # 4 Eliminated RPGAX (7/15/18 Post)

Item # 1 Eliminated PRMSX (4/19/18 Post)

Realized 2018 Gains T. Rowe Price Funds =  $4,082.17 

I am concerned that financial stocks do not properly reflect actual facts about net interest margin expansion. There is also an abundance of optimism about the economy and a long term continuation of low charge offs and non-performing loans.  

4. Short Term Bond/CD Ladder Basket Strategy: 

A. Bought 2 Ecolab 2% SU Bonds Maturing on 1/14/19: 

Finra Page: Bond  Detail (prospectus not linked)

Issuer: Ecolab Inc. (ELC) 

ECL Analyst Estimates 

Ecolab First Quarter Reported Diluted EPS $0.84 Adjusted Diluted EPS $0.91, +14%; Raised Full Year 2018 Adjusted Diluted EPS Forecast to $5.30 to $5.50 +13%-18% 

Credit Ratings 

Bought at a Total Cost of 99.791

YTM at TC Then at 2.43%

Current Yield at TC = 2.0042%

I currently own 2 Ecolab 2.25% SU bonds maturing on 1/1/2020. Item # 4, F (3/25/18 Post)

B. Bought 1 Treasury 1.375% Coupon Maturing on 1/15/20:
YTM at 2.509%

I have only started to buy treasuries maturing in 2020. I currently own 6 bonds and five of those maturing in the January-May time frame. My practice is to gradually add to treasury holdings as the maturity dates move closer and to use them to fill gaps in my ladder and/or to secure a better YTM than comparable maturity CDs.

Note that I did not pick up much in YTM going out 1 year beyond the Ecolab bond which is one reason why I am only nibbling on 2020 treasuries. I recognize the possibility, perhaps around 15% to 20%, that the FED will stop raising the federal funds rates late this year or early next year in response to a deteriorating economy with the first or second move in 2019 being a decrease in the FF rate which would then make the 2.509% YTM for a 1/15/20 treasury look better than now.

C. Bought 1 Treasury .75% Coupon Maturing on 2/15/19:
YTM= 2.173%

With one semi-annual interest payment remaining, and that one will paid on the maturity date, the coupon and current yield is irrelevant. The relevant yield number is YTM.

D. Bought 1 U.S. Bancorp 2.2% SU Bond Maturing on 4/25/19:

FINRA Page: Bond Detail (prospectus linked)

Issuer: U.S. Bancorp (USB)
USB Analyst Estimates

Credit Ratings:

Bought at a Total Cost of 99.87
YTM at TC Then at 2.369%
Current Yield at TC =  2.2029%

E. Bought 1 Treasury 1.625% Coupon Maturing on 8/31/19:
YTM = 2.43%

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.