Sunday, September 30, 2018

Observations and Sample of Recent Trades: DES, FHB, GDO, GOOD, MFC

Economy

As expected, the FED raised the federal funds rate by .25%. The new range is 2% to 2.25%. The FED removed language in its policy statement that monetary would "remain accommodative". The Fed - Federal Reserve issues FOMC statement


The FED also released its economic projections for the economy and predictions about the future course of rate hikes. A majority of FED members currently predict one more .25% increase this year  and at least three .25% increases next year. The Fed - September 26, 2018: FOMC Projections materials, accessible version


I would emphasize that the current FF, adjusted for the current level of inflation, produces a negative real rate.


It is also my opinion that the current FF rate will do nothing to slow the economy or restrain inflation.  


New homes sales in August were 12.7% above the August 2017 estimate of a seasonally adjusted annual rate of 558K. The most interesting part of this report was the prior three month numbers were revised down significantly. Calculated Risk: New Home Sales increase to 629,000 Annual Rate in August

Home prices rise at a slower rate in July: S&P Case-Shiller (Up +6% Y-O-Y in July)

Is everything really going as well as it seems or is the economy in the final stages of a sugar high? As Debt Rises, the Government Will Soon Spend More on Interest Than on the Military - The New York Times It depends on whether you measure time in months or years. 


A chart in that article, which is based on CBO projections, has the interest on the federal government's debt hitting $915B in 2028. My prediction is that the interest on the federal government's debt will exceed $1 trillion per year before 2026. Within that time frame, interest rates will rise for the simple reason that supply will far outstrip demand, which will cause the budget deficits to swell even more. 


What evidence is their that either political party has the faintest interest in fiscal responsibility when judged by their actions rather than their words? Being responsible in the present is not going to win elections. Spending boatloads of borrowed money and reducing taxes is the path to power in the here and now. The end result will be someone else's problem. 

++++

Markets and Market Commentary

Brent hits four-year high as US sanctions on Iran tighten supply The Duck will never acknowledge that U.S. sanctions on Iran have contributed to a rise in U.S. gasoline prices. 


Iran sanctions could push oil prices above $100, strategists say


Tariffs cost Ford $1 billion in profit and hurt sales in ChinaTrump metals tariffs will cost Ford $1 billion in profits, CEO says | Reuters This is Fake News in TrumpWorld. 


More US corporate giants warn tariffs will mean price hikes


I respect Yardeni's judgment, with the caveat that future predictions are after all about the future which is ultimately unknowable with any certainty Yardeni: Only one thing can snare this stock market in a bear trap - MarketWatch His view is that only a recession will stop the bull run. 

Cramer: 'Call me a buyer' of Comcast despite stock's drop post-Sky win

SEC charges Tesla CEO Elon Musk with fraud This was not a surprise, although Tesla investors treated as one. (9/28 Close:
TSLA $264.77 -$42.75 -13.90%)


Musk's tweet that he was considering taking the public private for $420 per share, representing that he had secured the funding, was just idiotic if the funding was not secured: 



Musk is another narcissistic loose canon.  

Musk and Tesla settled the SEC lawsuit on terms that were far too lenient IMO: Elon Musk forced to step down as Tesla chairman to settle SEC fraud charges - MarketWatch Musk can remain as CEO but has to step down as Chairman for 3 years.


++++++

Trump

The Washington Post tallied 125 false and misleading statement made by Demagogue Don over just 120 minutes on 9/7/18, which is a new daily record for the Duck. It may be a world history record. He made 74 false statements on 9/6/18. 


Donald is now averaging 8.3 false statements per day, based on the WP's most recent tally which is growing exponentially by the day, and those are only the false statements that he has made publicly. President Trump has made more than 5,000 false or misleading claims - The Washington Post 


Can you even imagine anyone in the White House correcting Donald's false statements whenever he makes one? They would be shown the door on their first day. 


I listened to about 10 minutes of Trump's news conference last Wednesday. He was in his usual mode, spreading lies and insults at a breakneck pace. ‘Give it to me’: Trump lets loose with 81 minutes of bluster, falsehoods and insults - The Washington PostChecking 6 Claims From Trump’s News Conference - The New York Times


I quit watching when the Duck made this assertion:


“I have 145 judges I will be picking by the end of a fairly short period of time, because President Obama wasn’t big on picking judges. When I got there I said, how is this possible? I have 145, including Court of Appeals judges. And they just didn’t do it, you know why? They got tired, they got complacent — something happened.”


Federal court appointments is something that I follow. Obama successfully appointed 334 judges to the federal court. Late in his term, the senate republicans simply refused to confirm his nominees which left a lot of vacancies. Of the 71 nominations made in 2015 and 2016, the republicans held up 51 and "blue slipped" more. In the case of Obama's last Supreme Court nominee, Merritt Garland, the senate republicans refused to even hold a hearing. There was nothing the democrats could do since the GOP controlled the senate. 


What is noteworthy, though not surprising, is that 75% of republicans view Donald as honest according to a recent poll: Question 8 National (US) Poll - June 6, 2018 - U.S. Voters Have Trump's Back It is important to emphasize IMO that these voters are not reachable with accurate information and making any attempt to do so is entirely futile.  


While at the U.N., Trump called the Kavanaugh allegations as a "big fat, con job". Trump calls Kavanaugh allegations 'a big, fat con job' - CNNTrump called the allegations made against Kavanaugh false-CBS News When Trump calls the accusations a "con job", he is making two readily identifiable claims: (1) all of the women making the accusations are lying; and (2) the Democrats are controlling them and coordinating  their false accusations for ulterior and bad motives.  


The Duck also claimed China was interfering in the 2018 mid-term election to defeat republican candidates: “Regrettably, we found that China is attempting to interfere in our upcoming 2018 election, coming up in November, against my administration.” They do not want me, or us, to win, because I am the first president ever to challenge China on trade. And we are winning on trade, we are winning at every level.”

Of course, no proof was offered by Donald to substantiate that election interference claim. Dan Coats would only confirm that the intelligence services were looking into possible interference by China, Russia, North Korea and Iran. President accuses China of attempting to interfere in U.S. midterm elections - MarketWatch


Donald is in a persistent and perpetual reality creation mode. 


He may be blaming China for interfering in the election by responding to the Duck's tariffs with tariffs on U.S. exports, particularly farm products. 


But, alas, who is to blame for China slapping a tariff on U.S. soybean exports after Donald imposed tariffs on China's exports to the U.S.?  Tit-for-tat tariffs is not election interference issue, but a natural event that flows from the tariffs wars started by the Duck.  

Trump: I rejected a meeting with Canada's Trudeau (Canada says that no meeting was ever requested)-Cramer on Trump's Canada jab: This is now 'the art of destruction' Apparently, today is the latest deadline for Canada to kneel before the Duck. 

+++++

Kavanaugh and Julie Swetnick


Ms. Swetnick may have some issues: 


Julie Swetnick, a Brett Kavanaugh accuser, faced misconduct allegations at Portland company | OregonLive.com


FACT CHECK: Does Kavanaugh Accuser Julie Swetnick Have a Restraining Order Against Her by a Former Boyfriend? The answer is no. An ex-boyfriend did file a request for a restraining order in 2001 but quickly dismissed it. Questions Surround Richard Vinneccy, Ex-Boyfriend of Third Kavanaugh Accuser, Julie Swetnick | Miami New Times (the ex-boy friend has issues) 


The WP detailed a history of tax liens filed against her, which were eventually paid off: Who is Julie Swetnick, the third Kavanaugh accuser? - The Washington Post What is happening here is a concerted effort to discredit her by looking at her entire life, with the results fed to reporters. Some of what is being fed is intentionally distorted to make her look bad. 


The White House has reportedly excluded Ms. Swetnick's allegation from the FBI's investigation: White House limits scope of the FBI's Kavanaugh investigation


New allegations against Kavanaugh submitted to Senate committee - CNN (Julie Swetnick claims that she attended well over 10 parties in high school, where Kavanaugh was present, and saw him "drink excessively at many of these parties and engage in abusive and physically aggressive behavior towards girls, including pressing girls against him without their consent, 'grinding' against girls and attempting to remove or shift girls' clothing to expose private body parts."); Read the full statement from Brett Kavanaugh accuser Julie Swetnick


Ms. Swetnick is represented by the Trump nemesis and fellow narcissist Michael Avenatti, who Trump attacked as presenting false allegations. Avenatti who is not bashful returning fire, responded with his own accusations: 




Avenatti was probably a good choice for Stormy to hire but not Ms. Swetnick. 
++

Kavanaugh Confirmation Hearing

Video: Kavanaugh's former Yale classmate says he perjured himself with obvious lies about boozing Liz Swisher is a forceful witness IMO that Kavanaugh lied under oath about his drinking. Elizabeth M Swisher is currently a professor and division director, and gynecologic oncology adjunct professor in the University of Washington School of Medicine’s Division of Medical Genetics. She received her M.D. from the University of California at San Diego in 1992. Lynne Brookes & Dr. Elizabeth Swisher: 5 Fast Facts You Need to Know | Heavy.com 


American Bar Association calls for FBI investigation into Kavanaugh allegations, delay in confirmation votes 



The Senate republicans needed Senator Jeff Flake's yes vote to move the Kavanaugh confirmation out of the Senate Judiciary Committee onto the Senate floor. If he had voted against the confirmation, the vote would have been 10 yes and 11 no. 

Flake apparently demanded as a condition an FBI investigation of the sexual assault claims. The investigation was limited to "current credible allegations". Statement from the Senate Judiciary Committee | United States Senate Committee on the Judiciary 


Flake was joined in that request by Senator Lisa Murkowski (R) and the one wavering democrat Senator Joe Manchin of West Virginia. Senator Collins joined the brake squad apparently after the train had already stopped. Those 4 senators would be more than sufficient to block Kavanaugh's nomination assuming the remaining republicans pushed a vote without an additional FBI investigation. 


The other republican senators were clearly willing to vote for Kavanaugh without an investigation and were hell bent on jamming the nomination through regardless of the facts. The FBI has never investigated the particular allegations that have been recently made against Kavanaugh.  

Senate Republicans Agree to One Week Delay in Final Kavanaugh VoteUnder pressure, Trump orders FBI to investigate Kavanaugh amid sex misconduct allegations


All of the republicans are using the criminal trial requirement of guilt beyond a reasonable doubt when assessing the allegations made against Kavanaugh. A confirmation vote for a lifetime appointment to the Supreme Court, basically a job promotion for Kavanaugh, is not a criminal trial where prior bad conduct has to be proven beyond a reasonable doubt, particularly when the "jury" is prevented from hearing from investigators on material matters at issue and material witnesses are not allowed to testify.  


I spent about 30 minutes watching Ms. Ford's testimony just to form an opinion on whether she is credible. I view her as a credible witness. 

This does not mean that her testimony, without more credible corroborating evidence and impeachment evidence devaluing Kavanaugh's denial, would warrant a finding of Kavanaugh's guilt using a reasonable doubt standard applicable in a criminal trial. 


The evidence in my opinion falls short of meeting that high standard. 


It would be a close call, which could go either way, in a civil trial where the evidentiary standard is preponderance of the evidence, a statement which is just my opinion.  


I regard the testimony as sufficient to justify a no vote for any Supreme Court Justice regardless of ideology.    


Christine Blasey Ford Testimony Rivets the Nation 


Kavanaugh accuser Christine Blasey Ford offers Senate four people who corroborate her assault claims


Kavanaugh wrapped himself in victimhood, calling the entire inquiry a "national disgrace."  


Excerpt from Kavanaugh's Opening Statement: 


"This whole two-week effort has been a calculated and orchestrated political hit, fueled with apparent pent-up anger about President Trump and the 2016 election. Fear that has been unfairly stoked about my judicial record. Revenge on behalf of the Clintons. and millions of dollars in money from outside left-wing opposition groups." 


Kavanaugh hearing: Transcript - The Washington Post


Kavanaugh Angrily Denies Assault Allegation After Ford Testimony


Brett Kavanaugh says he's a target of a 'revenge' plot 'on behalf of the Clintons' 


The number of citizens who view the Supreme Court as a mere extension of partisan politics is growing, and Kavanaugh's performance only reinforced that opinion. 


Based on his performance last Thursday, Democrats and many independents will now view Kavanaugh as just another republican hack rather than an impartial umpire calling balls and strikes as Chief Justice Roberts claimed he would do during his confirmation hearing. At least Justice Roberts managed to maintain a thin veneer of impartiality, while Kavanaugh exploded that facade into smithereens.    

Kavanaugh Hearing Cold Open - SNL - YouTube

Weekend Update: Brett Kavanaugh and Dr. Ford Testify - SNL - YouTube

Kavanaugh made that angry denunciation without offering any proof. He accused the Democrats of ruining his life, but offered no proof that the Democrats were behind Ms. Ford, or his other accusers, coming forward. While it was likely that a Democrat leaked Ms. Ford's letter to the press, that is not proof that the democrats were behind her coming forward, or conspiring with her to give false testimony against Kavanaugh.   


I could see Kavanaugh being both angry and self-entitled when drunk. His demeanor at the last hearing was not what I would expect from a jurist under similar circumstances.  
  
Kavanaugh's freshman roommate told the New Yorker that he was belligerent and aggressive when drunk. As shown by his demeanor during last Thursday testimony, he can be belligerent, disrespectful, unhinged and unduly aggressive when sober as well. 

Kavanugh repeated the falsehood, made earlier by Graham, that all of the other people allegedly at the party denied being there. Graham Goes Too Far in Kavanaugh's Defense-FactCheck.org 


Two of the four simply said that they do not remember. Mark Judge, who was allegedly involved, could not remember being at the party but denied ever seeing Kavanaugh committing such an act. The republicans refused to subpoena Judge and put him under oath. Republican senators defeat motion to subpoena Mark Judge to testify 


Since the two other attendees who gave statements had nothing to do with the alleged attempted rape, there would be no reason why they could recall attendance at a party
36 years later or even remember Kavanaugh. 

Kavanaugh Mistakes Maryland Drinking Age in Senate Testimony | Time

Donald published the following tweet, calling the hearing a "sham": 




Senator Lindsey Graham (R-SC) called the hearing "an unethical sham". Lindsey Graham erupts during Kavanaugh hearing 


Lindsey Graham tells Democrats "you better watch out for your nominees" if Brett Kavanaugh fails to be confirmed - CBS News Graham is now officially a 100% Pure Trumpster, no longer restrained by John McCain. 

Graham angrily shouted that the hearing was the "most despicable thing I have seen in my time in politics.”  

Graham is auditioning to be Trump's attorney general, willing to do his bidding, after Sessions is fired. It is consequently very important for him to attach a megaphone to his inner Trumpster. 

Senator John Cornyn (R-Texas) called the hearing allowing Ms. Ford to tell her story was the most “embarrassing scandal for the United States Senate since the McCarthy hearings.” Cruz calls Kavanaugh hearing 'shameful.' Cornyn says it's worst embarrassment for Senate since McCarthy hearings-Dallas News


{I would note that it is not surprising that the democrats would oppose Kavanaugh's nomination based on what the republicans did to Obama's nomination of Garland. What Happened With Merrick Garland In 2016 And Why It Matters Now: NPR}

Kavanaugh's attorney, Beth Wilkinson, claimed that Kavanaugh's drinking history is irrelevant to the allegations made by Ms. Ford. CBS News 

At a minimum, testimony on Kavanaugh's drunken forays adds corroboration to Ms. Ford's allegations that Kavanaugh attempted to rape her while drunk. If no one remembered seeing Kavanaugh as falling down drunk, that would tend to support Kavanaugh's denial. 


Second, information relating to Kavanaugh's drinking is also relevant to his credibility since he has now denied being a participant in the hard drinking culture at his elite private schools. Kavanaugh’s ‘choir boy’ image on Fox interview rankles former Yale classmates 


Third, drinking to excess will result in a loss of inhibitions which can result in someone doing something that would be out of character when sober. 


Kevin Cramer, the GOP's senate candidate in North Dakota, offered his perspective on Ms. Ford's allegations: “The point was there was not type of intercourse or anything like that. Nothing happened in terms of a sexual event beyond obviously the attack ... Even if it’s all true, does it disqualify him?” New Digital Ad Highlights Cramer’s Comments on Kavanaugh Allegations, Women 


Usually, you only hear that kind of comment from republicans when they are not being taped. The thrust of the comment is that an attempted rape is not a disqualification for a republican nominated Supreme Court Justice, provided it happened way in the past. Lying under oath for a republican nominee willing to overrule Roe v. Wade is perfectly fine for the self-described "conservatives" as well.  

When listening to republicans claiming that the women accusing Kavanaugh of sexual misconduct are controlled by the democrats and are part of a vast left wing conspiracy, a common position among republicans, I had some thoughts about how this imaginary scenario may have unfolded. 


I thought about the "Jane Hawk" novels, written by Dean Koontz, where there was a conspiracy to take over the world through implanting nanotechnology in peoples' brains that would allow the sinister forces to control conduct over the internet. Maybe that is how Hillary and George Soros are controlling Kavanaugh's accusers and everyone else who contradicts his choir boy image. 


If Kavanaugh is confirmed by the Senate, and the Democrats win control over the House after the mid-term elections, then I would anticipate that the House of Judiciary committee will open an impeachment investigation focusing on whether Kavanaugh committed perjury during his confirmation hearings. 


Even if the evidence warrants impeachment, and I will reserve my final judgment on that issue until I hear all of the evidence, no republican senator would convict in the Senate where a 2/3rds majority is required. The republicans would apply one standard to Bill Clinton and another to Bret Kavanaugh as will their tribe members.  


The result would simply to be to inflame partisans on both sides and increase the nation's divide with Kavanaugh remaining a Justice.  


Yearbook lies may end up giving Kavanaugh something to cry about - Chicago Tribune


Brett Kavanaugh, “Devil’s Triangle,” and “boof,” explained - Vox

‘BEACH WEEK’: Kavanaugh’s calendar points to a booze-soaked D.C.-area high school tradition - The Washington Post

How many people still have a calendar from 1982 listing their appointments and activities? I am convinced that Kavanaugh lied about the entries in his yearbook that referred to sexual acts. It was also idiotic for him to produce that yearbook in his defense. There was a period of time where he identified a party where Mark Judge and P.J. would be present to drink "skis" which is short for brewskies or beer, and those were the people identified by Ms. Ford as being at the party before she knew about the calendar. Brett Kavanaugh’s July 1 calendar entry that could help Ford’s case, explained - Vox
  
Here’s where Kavanaugh’s sworn testimony was misleading or wrong - The Washington Post

Could Brett Kavanaugh Be Impeached? Democrats Appear to Be Gearing up to Start Process If He' Confirmed;


Brett Kavanaugh Really, Really Likes to Perjure


GOP voter on Kavanaugh: What boy hasn't done this in high school? - YouTube (the video is instructive on how republican women view the hearing and the allegations made against Kavanaugh) It is important IMO to keep in mind that republicans dismissed Donald's 16 accusers even when there was a tape where Donald admitted to sexual misconduct. 


++++


The leaders of Italy's governing "populist" parties have appointed Marcello Foa as Chairman of Italy's state broadcaster RAI. Mr. Foa has claimed in the past that Hillary attended satanic dinners and is a fan of Putin. He questions the evidence that Russia poisoned a former Russia spy in England on the grounds that it was "too obvious".  There is a strong Alternate Reality trend in most western democracies including of course the U.S. 'Fake news' journalist made chair of Italy's state broadcaster | World news | The Guardian   


++++++

1. Small Ball-Income Generation

A. Bought 30 GOOD at $19.33-Used Fidelity Commission Free Trade:


Quote: Gladstone Commercial Corp. (GOOD)

Closing Price Last Friday: GOOD $19.15 +$0.23 +1.22%


Equity REIT Common and Preferred Stock Basket Strategy


Website: Gladstone Commercial | Monthly Dividend REIT


Maximum Position in this Account: 100 Shares


Current position this Account: 30 shares


Dividend: Monthly at $.125 per share ($1.5 per share annually)


Dividend Yield at a $19.33 Total Cost: 7.76%


Last Ex Dividend Date: 9/18/18 (after purchase)


Purchase Restriction: Small Ball Rule


Prior DiscussionItem # 3.A. Bought 50 GOOD at $19.4-Used Schwab Commission Free Trade  (8/8/2018)


I have nothing to add to that recent prior discussion.


B. Added 15 GDO at $16.15-Used Commission Free Trade:




Quote: Western Asset Global Corp Defined Opportunity Fund Inc.  (GDO)


Closing Price Last Friday: GDO $16.20 +$0.02 +0.09% 


Current Position: 134+ shares


Average Cost Per Share: $16.66


Dividends: M
onthly at $.101 per share


Last Ex Dividend Date: 9/20/18


Dividend Yield at Total Average Cost Per Share= 7.27%


Purchase Restriction: Small Ball Rule


My next purchase will be 20 shares at below $16.


Data Date of Purchase (9/26/18)

Closing Price: $16.2
Closing NAV Per Share: $17.85
Discount to NAV = -9.24%
1 year average historical discount: -7.39%

Sourced: GDO Page at CEF Connect


I still view leveraged bond CEFs as dicey due to the ongoing Triple Whammy: (1) decline in bond prices; (2) rise in short term borrowing costs; and (3) expansion of the discount due to (1) and (2). It is not a good idea to buy assets declining in price with borrowed money.   


I recently discussed this leveraged term bond CEF, the only one that I currently own, and have nothing further to add to that discussion: Item # 1.C. Bought 15 GDO at $16.27-Used Fidelity Commission Free Trade (9/16/18 Post)


2. Short Term Bond/CD Ladder Basket Strategy

A. Bought 2 Public Storage 2.375% SU Bonds Maturing on 8/15/22-In a Vanguard Roth IRA Account


Finra Page: Bond Detail (prospectus not linked)



Credit Ratings: 


Bought at a Total Cost of 96.57
YTM at TC Then at 3.29%
Current Yield at TC = 2.4594%

This company has a lot of equity preferred stock, which is junior in the capital structure, to this senior unsecured bond. A list can be found at page F-21. I have bought and sold only one of them: Item # 4.A. Sold 50 PSAPRE at $22.37 (3/10/17 Post)-South Gent's Comment Blog # 6: Bought 50 PSAPRE at $21.35 (11/24/2016)

I have recently decided to quit buying bonds in my Vanguard account due to the narrowing yield spreads, likely to become narrower, between the Vanguard Prime Money Market and the yields from the bonds. 
VMMXX - Vanguard Prime Money Market Fund | Vanguard

B. Bought Two 3 Month Treasury Bills at Auction: Schwab taxable

Investment Rate = 2.151%



Auction Results:



Auction 9/10/18.pdf

C. Bought 1 Deere Capital 2.25% SU Bonds Maturing on 4/17/19: Fidelity Taxable




Finra Page: Bond Detail (prospectus linked)

Issuer: Wholly owned subsidiary of Deere & Co. (DE)

Deere Announces Third-Quarter Net Income of $910 Million

Annual Report for the F/Y Ending on 10/29/17


Credit Ratings:




Fitch Affirms Deere's IDR at 'A'; Outlook Stable (Deere Capital has the same rating as its parent)


Bought at a Total Cost of 99.866

YTM at TC Then at 2.476%
Current Yield at TC =  2.253%

D. Bought 1 Treasury 1.375% Coupon Maturing on 2/15/20: Schwab taxable 

YTM = 2.619%



E. Bought 1 Morgan Stanley 2.5% SU Bond Maturing on 4/21/21: Vanguard Taxable 




Issuer: Morgan Stanley  (MS)

MS Analyst Estimates
Earnings Press Release for the Q/E 6/30/18

Form 10-Q for the Q/E 6/30/18

10-K: 2017 Annual Report

Credit Ratings:




Bought at a Total Cost of 97.982 (with $2 Vanguard Commission)

YTM at TC Then at 3.313%
Current Yield at TC = 2.5515%

3. Intermediate Term Bond/CD Ladder Basket Strategy (defined to mean maturities from 3 years to 10 years from the date of purchase:

A. Bought 1 Morgan Stanley 2.625% SU Bond Maturing on 11/17/21: Vanguard Taxable 




I now own two bonds.


FINRA Page:  Bond Detail

See Item # 2.E. above

Bought at a Total Cost of 97.68 (with $2 Vanguard Commission)

YTM at TC Then at 3.4%
Current Yield at TC = 2.6873

This purchase is barely outside my 3 year classification limit for short term bonds. 


4. More Small Ball:


A. Added 30 FHB at $27.86 and 20 at $27.3-Used Schwab Commission Free Trades


Closing Price Last Friday: FHB $27.16  +$0.05 + 0.18% 

Quote: First Hawaiian Inc. (FHB)
FHB Analyst Estimates

REGIONAL BANK BASKET STRATEGY GATEWAY POST (contains profit/loss snapshots since Spring 2009 inception = net at +$50,041.1)

Regional bank stocks have been in a downdraft mode for several days now. There is increasing concern that loan growth will slow and net interest margins will continue to stagnate. The SPDR S&P Regional Banking ETF (KRE) closed at $65.74 on 6/8/18 and has gradually drifted down around $59.42 close last Friday. 


I sold all of my regional bank stocks earlier this year that had meaningful unrealized gains and have been in a small ball trading mode since substantially paring my regional bank basket allocation. 


History in This Account





I am now done with buying shares in this account except through dividend reinvestment.

Dividend: Quarterly at $.24 per share ($.96 per share annually)


Average Total Cost Per Share in this Account = $28.22


Dividend Yield at Average Total Cost Per Share =3.4%


Last Ex Dividend Date: 8/24/18


Dividend Reinvestment: Yes


Realized FHB Gains to Date = $57.55


Last Buy Discussions


Item # 2.B. Bought 5 at $27.71 (4/5/18 Post)


Item # 1.A. Added 10 FHB at $28.4 and 5 at $27.7 (2/15/18 Post)


Item # 1.A. Bought 50 First Hawaiian at $29 and 10 at $29.11-Used Commission Free Trades (12/21/2017 Post)


Last Sell Discussions


Item # 1.A. Sold 10 FHB at $30.76 (6/21/18 Post)


Currently, a price in excess of $30 would likely trigger a pare, where I would sell the 50 shares bought $29.  


BNP Paribas and FHB


BNP Paribas has been selling off its stake in FHB. The most recent disposition occurred in early September: First Hawaiian, Inc. Announces Pricing of Secondary Common Stock Offering In the prior Paribas stock offering, FHB bought a number of shares in the offering but declined to do so in the latest. First Hawaiian, Inc. Announces Pricing of Secondary Common Stock Offering ("in connection with the public offering, the Company has also agreed to repurchase from the selling stockholder a number of shares of common stock equal to approximately $50 million (the “direct share repurchase”).  The per-share purchase price to be paid by the Company in the direct share repurchase is equal to the per-share purchase price paid by the underwriters in the public offering.") 


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


During the quarter, FHB repurchased "approximately 2.968 million shares of FHI common stock from a wholly owned subsidiary of BNP Paribas at a total cost of approximately $81.8 million." 


"The effective tax rate was 26.0% for the first and second quarters of 2018 and 37.1% in the second quarter last year.  The lower effective tax rate in the second quarter of 2018 compared to the same quarter last year was due to the lower corporate tax rate resulting from the Tax Cuts and Jobs Act." (emphasis added) The effective tax rate includes state taxes.  


First Hawaiian, Inc. Reports Second Quarter 2018 Financial Results and Declares Dividend 


E.P.S.                   $.5

NIM                     3.18% Okay under the circumstances
ROA                     1.38% better than average
ROTA                  1.45% better than average
ROE                   11.23% Better than average
NPL Raio             .11% Excellent 

Charge Off Ratio     .13% Excellent

Efficiency Ratio       48% Excellent
Total Capital Ratio  13.23% Okay  
Tangible Equity to Tangible Asset Ratio 7.51% Okay

Tangible Book Value Per Share: $10.71

Book Value Per Share: $18

CEO Robert Harrison on Q2 2018 Results - Earnings Call Transcript | Seeking Alpha


B. Bought 5 FHB at $27.15-Used Fidelity Commission Free Trade: 




See Discussion above. 


I have a small ball FHB buying program in this account, where I currently own 30+ shares. The maximum position is 100 shares in the Fidelity account. Further purchases are subject to the small ball purchase rule.   


C. Bought 10 MFC at $17.64-Used Fidelity Commission Free Trade:




MFC Website 

Manulife Investor Relations

Quotes


USD Priced Shares: Manulife Financial Corp.  (MFC)

CAD Priced Shares: Manulife Financial Corp (Canada: Toronto)

Closing Price Last Friday: MFC $17.88 -$0.13 -0.72% 


MFC Analyst Estimates


At the time of purchase, the consensus E.P.S. estimate for this year was at $2.04 and $2.2 for 2019.


Current Position: 40 Shares


Average Cost per share = $18.07


Maximum Position: 100 Shares


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


Last Substantive Purchase Discussion:  Item 2.A. (4/12/2018 Post) 


Last Sell: 100 shares at $18.28 (profit = $481.06)-Item # 1 Added 50 MFC at $13.1: Update For Portfolio Positioning And Management As Of 7/24/16 - South Gent | Seeking Alpha and Item # 1 Bought 50 MFC at $13.78 Update For Portfolio Positioning And Management As Of 3/13/16 - South Gent | Seeking Alpha


Dividend: Quarterly at C$.22 


The dividend yield for MFC will depend on the CAD/USD conversion rate. When owned in a non-retirement account, Canada is entitled to withhold a dividend tax of 15% under its tax treaty with the U.S.


Dividend Rates


Manulife Financial Corporation declares dividends


Last Ex Dividend Date: 8/20/18


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


I thought this was a good report. 




Manulife reports 2Q18 net income of $1.3 billion, and core earnings of $1.4 billion with double-digit growth across all operating segments


CEO Roy Gori on Q2 2018 Results - Earnings Call Transcript | Seeking Alpha

D. Bought 5 DES at $29.7-Commission Free ETF at Vanguard:




Quote: WisdomTree U.S. SmallCap Dividend Fund Overview


Closing Price Last Friday: DES $29.71 +$0.11 +0.37% 


Sponsor's WebsiteWisdomTree U.S. SmallCap Dividend Fund


Last DiscussedItem # 1.C. (9/23/18 Post)


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


Current Position: 20 shares


The general idea is to increase the dollar purchases during major market downdrafts.


Maximum Position: 300 Shares


Dividend Reinvestment: Yes


Dividend: Monthly at a variable rate


WisdomTree U.S. SmallCap Dividend Fund (DES) Dividend Date & History - NASDAQ.com


Last Ex Dividend: 9/25/19 at $.11976 per share


WisdomTree ETFs Declare Distributions 


5. Cash Flow Fidelity Account 10/1/18


I will have a snapshot of cash flow paid into my Schwab account in my next post. The problem with Schwab is that payments made on 9/30 and 10/1 will not show up in that account until 10/2. 


My investment strategy now focuses on capital preservation and income generation with capital appreciation being a distant third. 


The income generation is geared toward a continuous flow of dividends and interest. When using $1K par value bonds to generate that cash flow, there will be concentrations occurring on the 1st, 15th and last business day. 


All of my Tennessee municipal bonds pay semi-annually on the 1st business day, and I had several of those bonds pay interest on 10/1. 


I own a number of corporate bonds that pay interest on other days in the month. CD interest payments occur throughout the month, with a large number paying monthly. 


Cash flow is aggregated and then redeployed into more of the same. 






I am focused on the aggregate numbers rather than the individual components. 


DisclaimerI 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.