Observations and Sample of Recent Trades: SDIV, TANNL, TPVG

Economy: 

U.S. budget deficit this year already 21% higher than last year - CBS News

US budget deficit increases 21%, on track for biggest gap in six years

The cost of servicing that ballooning deficit is also rising. The tax cuts will IMO have some net positive benefits for the real economy. The major benefit will be boost corporate profits that will largely be channeled into more stock buybacks and dividend increases for publicly traded companies. 

The 2019 Y-O-Y growth in corporate profits will not be favorably impacted by the corporate federal income tax cut.  

Tax cut triggers $437 billion explosion of stock buybacks; 

Companies to pour $2.5 trillion into buybacks, dividends, M&A in 2018 

The result so far is a powerful boost to stock prices while real wage growth has stagnated at near zero based on current inflation numbers.  

Ultimately, the health of the American economy will not depend on how rich the top 1% become, but on the financial health of the bottom four quintiles. The tax cuts will have no net benefit for them since whatever tax savings may exist (and many will face tax increases) will be offset by other factors including a lack of real wage growth, increasing levels of consumer debt and interest rates thereon, rising rents and home costs (e.g. property taxes, home insurance), and rising health care costs.  

Consumers turning more pessimistic about wages, stocks, home prices, taxes - MarketWatch

Total Household Debt Rises for 16th Straight Quarter - FEDERAL RESERVE BANK of NEW YORK ("total household debt increased by $82 billion (0.6%) to $13.29 trillion in the second quarter of 2018. It was the 16th consecutive quarter with an increase, and the total is now $618 billion higher than the previous peak of $12.68 trillion, from the third quarter of 2008.")

Consumer debt is set to reach $4 trillion by the end of 2018 

Consumer debt is at an all-time high. Should banks be worried? | American Banker

The return of consumer debt | Deloitte Insights

Household Liability Level and a Percentage of Disposable Personal Income 

Millions of households have benefited longer term by locking in abnormally low home mortgage rates. That has contributed to a decline in debt service payments as a percentage of disposable income.  

Household Debt Service Payments as a Percent of Disposable Personal Income 

The problem is more in the future than the present. 

The current abnormally low ratio is not going to hold for that much longer, as the level of consumer debt increases along with the cost of servicing the debt. 

And, when the 15 year mortgages roll over and adjustable rate mortgages reset to higher rates, the favorable impact from abnormally low mortgage rates on debt services costs will wear off and become more burdensome. 

Then there is the natural rise in consumer financial stress, delinquencies  and defaults that occur during a recession which exposes the improvident extensions of credit.  

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Don the Demagogue spewed more venom at Harley Davidson over the weekend and applauded Americans boycotting Harley Davidson motorcycles made in the U.S.. Trump applauds Harley Davidson boycott, says it's a 'really bad move' 

Motorcycles sold in the U.S. are manufactured in the U.S. 

The Duck did not mention that his trade war caused Europe to impose a 31% tariff on U.S. exports of Harleys, up from 6%, which understandably caused Harley to move its European market production to overseas plants in order to remain competitive. Don the Con will not take any responsibility for U.S. job losses caused by his tariff wars-even when he urges a boycott of products made in the U.S. 

Canadian job creation surges in July - MarketWatch

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Markets and Market Commentary: 

I hope that the U.S. stock market's directional moves will soon cease to be positively correlated with the movement of the USD/TRY. Yesterday, Turkey's lira bounced up and U.S. stocks had an up day. Dollar hits fresh 14-month high, but Turkish lira rebounds - MarketWatch I expect the USD/TRY to have wild swings that will be unpredictable day to day. Lira crisis: Emerging markets, US dollar, Turkey-EU relations impacted I am not seeing any positive actions being taken by Turkey's government to deal with its currency crisis. 

Bull trend absorbs shot across bow, Dow industrials maintain trendline support - MarketWatch

Behold the ‘scariest chart’ for the stock market-MarketWatch (the median price to sales ratio for the S & P 500 is now about two times higher than it was in 2000. The cap weighted P/S ratio is about equal to its high point in 2000). 

Trump's Swelling Budget Deficits Lead to Record Treasury-Bond Sales - TheStreet

Russia says will ditch U.S. securities amid sanctions: RIA | Reuters

Major Foreign Owners of U.S. Debt (Russia is not even on the list. Russia can not cause even a small ripple by selling U.S. securities).

Germany says Trump's tariffs, sanctions destroy jobs and growth | Reuters

China revs up spending plan as economy cools, investment growth at record low | Reuters

That sinking feeling? Sterling traders prepare for Brexit meltdown | Reuters

The cryptocurrency market has shed more than $600 billion from its peak — what exactly happened? - MarketWatch I have never own any and view the entire cryptocurrency market mania as a big con.  

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Trump: 

Demagogue Don continues to swing at anyone who has come into contact with the Russia investigation. As usual Trump focuses on personal ad hominem attacks: 

Note that Donald continues to blame the Attorney General for allowing the investigation to proceed, stating that Sessions is "scared stiff" to stop the "Witch Hunt" and is "Missing in Action" meaning that the Attorney General is not doing what he is supposed to do and that is to protect Our Supreme and Great Leader from any and all investigations. 

I would note also that Bruce Ohr worked in counternarcotics at the DOJ rather than counterintelligence.   

Donald's attacks have become even more venomous after the onset of Manafort's criminal trial and as the Mueller investigation circles around Roger Stone. Mueller investigation: Roger Stone allies continue to be questioned - Vox  

Judge holds Roger Stone associate in contempt for refusing to testify in Russia investigation  

Roger Stone posts then deletes Nazi Space Force meme. He says he didn’t notice the swastikas. (impossible to miss)

Once ‘No Longer a Nuclear Threat,’ North Korea Now in Standoff With U.S.

As midterms approach, conservative ‘Never Trumpers’ find allies outside the lines

President Trump’s new favorite trade talking point falls apart under scrutiny - The Washington Post

Four Biggest Takeaways From Bombshell Leaked Audio Of Rep. Devin Nunes (It is hardly surprising that Nunes and other House republicans will do whatever they can do to obstruct investigations that could potentially lead to Donald's impeachment or to unfavorable revelations about him. Their ongoing obstruction efforts now includes a baseless effort to impeach the Deputy Attorney General, though Nunes says the House republicans will not impeach Rosenstein until the Senate confirms Kavanaugh to the Supreme Court in order to avoid distraction. Devin Nunes leaked audio reveals House plans to impeach Rod Rosenstein.)

Yes, Donald Trump has been linked to the mob | PolitiFact; 

Just What Were Donald Trump's Ties to the Mob? - POLITICO Magazine; 

Trump’s résumé is rife with mob connections - The Washington Post; 

A Brief History of Donald Trump and the Mafia - VICE

Maybe there are a growing number of voters who have difficulty believing Donald is an Honest Stable Genius. Donald's approval rating slipped to 39% for the week ending 8/12/18: Gallup Trump Job Approval (Weekly)  

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States fight Trump on non-ObamaCare health plans (Trump is misleading the public on the poor coverages provided by these coverage lite plans). 

'Hitler was right': Republican KC area winner of Missouri House primary leaves trail of bigotry

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1. Intermediate Term Bond Ladder Basket Strategy:

A. Bought 30 TANNL at $23.99-Used Schwab Commission Free Trade:

Quote: TravelCenters of America LLC 8% Senior Notes due 12/15/29 Stock Quote (TANNL) - MarketWatch

Yesterday's Closing Price (ex-interest): TANNL $23.4082 +$0.0382 

This is a high risk exchange traded baby bond issued by TravelCenters of America LLC (TA). If this bond was rated, which it is not, the bond would be somewhere in junk territory. My best guess is that the grade would start with the letter "C" or be at or near the lowest "B" junk rating. 

TANNL is a senior unsecured bond with a $25 par value that makes quarterly interest payments. 

TA Analyst Estimates

TA SEC Filings

TravelCenters of America LLC Announces Second Quarter 2018 Financial Results; Robust Performance by Travel Centers Segment Including Truck Service Growth Programs; Quarterly Loss Due to Impairment Charge 

10-Q for the Q/E 6/30/18 

2017 Annual Report (debt discussed starting at page F-15; risk summary starts at page 20 and more risks are highlighted in pages 2-5 under a "Warning" label)  

Prospectus (risk summary starts at page S-5)

Stocks, Bonds & Politics: Exchange Traded Baby Bonds

Last Ex-Interest Date: Yesterday 8/14/18 TravelCenters of America LLC (TANNL) Dividend Date & History - NASDAQ.com (shortly after my purchase)

I will receive that interest payment. 

Yield at $23.99 = 8.34%

The issuer has the option to call at par value on or after October 15, 2018. I would be surprised to see that happen since the issuer would probably be unable to refinance at a lower coupon.

I have periodically traded the three TravelCenter exchange traded senior bonds and have so far managed to do so profitably. It remains to be seen whether I have gone to the well one time too often.  

My last foray into TA exchange traded debt involved the purchase of  the TravelCenters of America LLC 8% Senior Notes due 10/15/30 (TANNZ) I bought 30 shares at $17.25. Item # 5 Bought 30 TANNZ at $17.25 (9/3/17 Post) The bond was then in free fall, which periodically happens, due to a really lousy earnings report from the issuer. Item # 1: Sold 30 TANNZ at $24.27 (10/19/17 Post)(profit snapshot = +$211.47). I held that bond long enough to receive one quarterly interest payment. I have learned to shoot first and ask questions much later when it comes to TA debt issues. 

TANNL Round-Trips (previously traded under the symbol TANO): 

Item # 4.B. Sold Remaining TANNL at $25.46 (4/14/17 Post)(profit $11.57); Item # 5. Sold 50 TANO in Roth IRA: Update For Exchange Traded Bond And Preferred Stock Basket Strategy As Of 3/28/16 - South Gent | Seeking Alpha (profit snapshot=+$55.47)- Item # 2. Bought 50 TANO at $23.2-ROTH IRA: Update For Exchange Traded Bond And Preferred Stock Basket As Of 12/18/15 - South Gent | Seeking Alpha; Item # 4.A Stocks, Bonds & Politics: Observations and Sample of Recent Trades: 3/1/17-Item # 2. Added 50 TANO at $24: Update For Exchange Traded Bonds And Preferred Stock Basket Strategy As Of 2/3/16 - South Gent | Seeking Alpha

2. Short Term Bond/CD Ladder Basket Strategy: 

Short term treasuries continue to provide a better yield than bank CDs. 

A.  Bought 1 Treasury 1.625% Coupon Maturing on 7/31/19: 

YTM = 2.429%

B. Bought 1 Suntrust 2.25% SU Bond Maturing on 1/30/20-Roth IRA:

Finra Page: Bond Detail (prospectus not linked)

Issuer: SunTrust Banks Inc. (STI)
STI Analyst Estimates

2018 Second Quarter Earnings Report
STI SEC Filings
STI 2017 Annual Report

Credit Ratings (see confirmation)

Bought at a Total Cost of 99.1 (with $2 Vanguard Commission)
YTM at TC then at 2.874%
Current Yield at TC = 2.2704%

C. Bought 1 GATX 2.5% SU Bond Maturing on 7/30/19:

I now own 2 bonds. This bond was purchased on 8/2. The 1 year treasury closed that day at a 2.45% yield. 2018 Daily Treasury Yield Curve Rates

FINRA Page: Bond Detail (prospectus linked)

Issuer: GATX Corp. (GATX)
GATX Analyst Estimates
GATX Corporation Reports 2018 Second-Quarter Results

GATX SEC Filings
2017 Annual Report (debt listed at page 85)

Credit Ratings:

Bought at a Total Cost of 99.798
YTM at TC Then at 2.709%
Current Yield at TC = 2.5051%

D. Bought at  8/6/18 Treasury Auction $2,000 in principal amount of 13 week bills maturing on 11/18/18 and $1,000 in principal amount of a 26 week bill maturing ion 2/7/19:

The three month treasury bill was auctioned off to yield 2.01%: Auction Results 13 week.pdf (investment yield at 2.048%)

I also bought one in my Treasury Direct account which is linked to my bank checking account.

U.S. 3 Month Treasury Bill-MarketWatch

The six month treasury bill was auctioned off to yield 2.18%. Results for 26 week bill auction.pdf (investment rate at 2.235%) The investment rate is the "equivalent coupon-issue yield". 

The auction result was $98.897889 per $100. Schwab took only the first four fractional digits without rounding the last fractional digit up:  

The interest per $1000 is $11.02. If I invested $1K to buy a 2.18% coupon 6 month bond, the interest would be $10.9. It is my understanding that the "investment rate" is higher at 2.235% since my cost for this 1 bond purchase is $988.98 rather than $1,000. The same is true for all treasury bills (4, 13, 26, 52 weeks) and the equivalent coupon yield moves up slightly as the duration increases.  

2018 Daily Treasury Yield Curve Rates

3. Income Generation:

A. Bought 30 SDIV at $20.41-Used Commission Free Trade:

Quote: SDIV Fund - Global X SuperDividend ETF Overview

Yesterday's Closing Price: SDIV $20.55 +$0.17 +0.83% 

This ETF has a poor total return track record which makes it IMO an inappropriate long term holding which is reflected in its two star rating from Morningstar. 

The ETF owns a number of lower quality stocks that pay high dividends.

The 5 year total annual average total return through 8/14/18 was 4.98%. 

Whenever you see a total return lower than than the dividend yield, which is the case for this ETF, you know instantly that the share price has declined and taken away some of the dividend's value, which is not a good thing.

Among the categories of stocks owned by this fund are MREITs and high yielding equity REITs. 

I own some of these stocks-at the moment-including AGNC, GOV, IRT, LXP, MPW, NLY, SBRA, SIR, SNR, and STWD. 

Most of those positions were purchased under the "small ball buying program". NLY is a long term position in a Roth IRA where I only own now shares purchased with dividends and am reinvesting the dividends to buy more shares. 

I recently pared my GOV, IRT and SIR positions. 

Sponsor's Website: ETF

Expense Ratio: .58%

Top 10 Holdings as of 8/10/18:

Dividends: Monthly at a variable rate

Last Ex Dividend Date: 8/3/18   

Purchase Restriction: Small Ball Rule  

Prior Trades: I have not traded this security much and my holding period tends to be short term. I probably have not discussed in my posts all of the trades. I did find these prior discussions:

Item # 2  Sold 105+ SDIV at $22.54 (8/3/13 Post)(profit snapshot = $93.2)-Item # 1 Added 50 of the ETF SDIV at $20.43-Roth IRA (June 2012 Post) and Item # 1 Bought 50 SDIV at $22.33 (February 2012)

B. Added 30 TPVG at $13.28 and 10 at $13.02-Used Schwab Commission Free Trades: 

Quote: TriplePoint Venture Growth BDC Corp. (TPVG) 

Website: TriplePoint Venture Growth 

Yesterday's Closing Price: TPVG $13.13 +$0.04 +$0.31% 

This was an average up in this account where my commission free trades have now expired. I used almost all of the 500 granted in August 2016. 

Average Cost Per Share This Account: $12.59

Dividend: Quarterly at $.36 per share ($1.44 per share annually)

TriplePoint Venture Growth BDC Dividends

Next Ex Dividend Date: 8/30/18

Yield at Total Cost: 11.44%

Last Discussed: Item # 2.B. Added 10 TPVG at $11.6 (3/19/18 Post); Items 1.B. and 1.C. Bought 50 TPVG at $12.32 and 10 at $12.01 (2/26/18 Post) 

The shares fell on 8/7/18 due to a public offering of common stock that I viewed as favorable to existing shareholders. The offering was priced above the last reported net asset value per share of $13.45. TriplePoint Venture Growth BDC Corp. Prices Public Offering and Concurrent Private Placement of Common Stock 

As shown in the following snapshot, TPVG's external manager paid the underwriters' discount of $.41 per share, a cost normally deducted from the proceeds of the offering, and added another $.04 per share to the proceeds realized by TPVG: 

Prospectus

TriplePoint Venture Growth BDC Corp. Announces Record Investment Income of $16.6 Million and Net Investment Income of $0.50 Per Share for the Second Quarter of 2018 

Given the favorable offering price and net proceeds per share, the drop in the share price to $13 on 8/8/18 is difficult to understand unless the underwriters had to dump some of the shares below what they paid TPVG which was $13.25. 

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.