Economy:
Consumers keep on spending in July, pushing key inflation gauge to 6-year high - MarketWatch
The core PCE price index rose to 2% Y-O-Y with the total PCE price index number rising 2.3% Y-O-Y.
July 2018 Personal Income and Outlays
In response to higher than expected inflation numbers, high quality bonds declined in yield.
The government increased its estimate for 2nd quarter real GDP growth to 4.2% from 4.1%. There will be one more estimate. Consumer spending was revised down to 3.8% from 4%. Government spending was revised up to 2.3% from 2.1%. Second Estimate
Gross Domestic Product | U.S. Bureau of Economic Analysis (BEA)
The Bond Ghouls were unperturbed by this GDP report:
Closing Prices Day of Release:
TLT $121.02 +$0.16 +0.13%: iShares 20+ Year Treasury Bond ETF
IEF $102.40 -$0.03 -0.03%: iShares 7-10 Year Treasury Bond ETF
Apathetic is an appropriate word to describe their response to all of the giddiness about a new era of growth.
The Bond Ghouls were unperturbed by this GDP report:
Closing Prices Day of Release:
TLT $121.02 +$0.16 +0.13%: iShares 20+ Year Treasury Bond ETF
IEF $102.40 -$0.03 -0.03%: iShares 7-10 Year Treasury Bond ETF
Apathetic is an appropriate word to describe their response to all of the giddiness about a new era of growth.
Home sales hit a fresh low in July as housing market looks for direction - MarketWatch
40% of Americans struggle to pay for at least one basic need like food or rent - MarketWatch
Jack Daniel's maker feels sting of tariffs - MarketWatch (referring to 25% EU tariff on whiskey exports from the U.S.
Jack Daniels is manufactured in Lynchburg TN. Welcome To Lynchburg | Jack Daniel's
Trump Is Said to Back $200 Billion China Tariffs Next Week - Bloomberg I would not call this new news, but it does indicate that trade negotiations with China are probably not going well.
Donald also threatened to pull out of the WTO if it does not "shape up". Trump Bloomberg Interview: Trump Says May Pull Out of WTO - Bloomberg
40% of Americans struggle to pay for at least one basic need like food or rent - MarketWatch
Jack Daniel's maker feels sting of tariffs - MarketWatch (referring to 25% EU tariff on whiskey exports from the U.S.
Jack Daniels is manufactured in Lynchburg TN. Welcome To Lynchburg | Jack Daniel's
Trump Is Said to Back $200 Billion China Tariffs Next Week - Bloomberg I would not call this new news, but it does indicate that trade negotiations with China are probably not going well.
Donald also threatened to pull out of the WTO if it does not "shape up". Trump Bloomberg Interview: Trump Says May Pull Out of WTO - Bloomberg
The Duck is doing his best to sabotage a new trade deal with Canada: Bombshell leak to Toronto Star upends NAFTA talks: In secret ‘so insulting’ remarks, Trump says he isn’t compromising at all with Canada | The Toronto Star Donald added with regret that he could not kill the Canadians.
Insulting the people that are necessary to conclude a deal is part of Donald's "Art of the Deal", just more B.S.
It is not generally known among Americans that the U.S. did in fact invade Canada and came up empty due in large part to inadequate planning, poor leadership and a lack of communication. How U.S. Forces Failed to Conquer Canada 200 Years Ago - HISTORY Now, if the "Stable Genius" had commanded U.S. forces, the U.S. would have experienced the greatest military victory in the universe's history since the Big Bang, and Canada would now be part of the U.S.
Link to painting of Trump Crossing the Delaware, incorrectly attributed to George Washington by the Fake News Media: “TRUMP CROSSING THE DELAWARE” | Mad Magazine
Donald was not happy about his off-the-record comments made during his Bloomberg interview were leaked to the Canadians:
Donald and others in his administration have publicly referred to the Canadian P.M. in highly derogatory terms. Trump's trade advisor Peter Navarro said there as a special place in hell for Trudeau. Donald called Trudeau dishonest and weak. ‘Meek, mild and dishonest’: Trump lashes out at Trudeau after PM contradicts him in public - National | Globalnews.ca
Trade talks with Canada are currently expected to resume next week. U.S. Alerts Congress of Mexico Deal, Says Canada Can Still Join - Bloomberg
Don the Demagogue lies constantly about U.S. trade with Canada. The U.S. has a trade surplus with Canada and about 8 million U.S. jobs are dependent on trade with Canada. The Facts on NAFTA -U.S. Chamber of Commerce 2017.pdf
"U.S. goods and services trade with Canada totaled an estimated $673.1 billion in 2017. Exports were $340.7 billion; imports were $332.3 billion. The U.S. goods and services trade surplus with Canada was $8.4 billion in 2017." (emphasis added) United States Trade Representative
You would not know that the U.S. had a trade surplus with Canada by reading tweets published by Don the Con yesterday:
The fact that Donald views a termination of NAFTA as a positive demonstrates that this demagogue has no idea what he is talking about and of course has no interest in learning either.
Insulting the people that are necessary to conclude a deal is part of Donald's "Art of the Deal", just more B.S.
It is not generally known among Americans that the U.S. did in fact invade Canada and came up empty due in large part to inadequate planning, poor leadership and a lack of communication. How U.S. Forces Failed to Conquer Canada 200 Years Ago - HISTORY Now, if the "Stable Genius" had commanded U.S. forces, the U.S. would have experienced the greatest military victory in the universe's history since the Big Bang, and Canada would now be part of the U.S.
Link to painting of Trump Crossing the Delaware, incorrectly attributed to George Washington by the Fake News Media: “TRUMP CROSSING THE DELAWARE” | Mad Magazine
Donald was not happy about his off-the-record comments made during his Bloomberg interview were leaked to the Canadians:
Donald and others in his administration have publicly referred to the Canadian P.M. in highly derogatory terms. Trump's trade advisor Peter Navarro said there as a special place in hell for Trudeau. Donald called Trudeau dishonest and weak. ‘Meek, mild and dishonest’: Trump lashes out at Trudeau after PM contradicts him in public - National | Globalnews.ca
Trade talks with Canada are currently expected to resume next week. U.S. Alerts Congress of Mexico Deal, Says Canada Can Still Join - Bloomberg
Don the Demagogue lies constantly about U.S. trade with Canada. The U.S. has a trade surplus with Canada and about 8 million U.S. jobs are dependent on trade with Canada. The Facts on NAFTA -U.S. Chamber of Commerce 2017.pdf
"U.S. goods and services trade with Canada totaled an estimated $673.1 billion in 2017. Exports were $340.7 billion; imports were $332.3 billion. The U.S. goods and services trade surplus with Canada was $8.4 billion in 2017." (emphasis added) United States Trade Representative
The fact that Donald views a termination of NAFTA as a positive demonstrates that this demagogue has no idea what he is talking about and of course has no interest in learning either.
+++++++
Markets and Market Commentary:
Nearly $1 Billion Flees Third-Largest Debt ETF as Caution Rules - Bloomberg The reference is to the iShares Investment Grade Corporate Bond ETF (LQD).
Trump's NAFTA replacement may help labor, but hurt business, economy
Nearly $1 Billion Flees Third-Largest Debt ETF as Caution Rules - Bloomberg The reference is to the iShares Investment Grade Corporate Bond ETF (LQD).
Trump's NAFTA replacement may help labor, but hurt business, economy
Goldman Sachs thinks the market is wrong about Fed Chair Powell ("the Goldman economist sees indications of an even more aggressive Fed than thought. That means two more hikes this year, as the Fed has indicated, along with four more next year")
The Trump tax cuts were supposed to depress housing prices. They haven’t. Give it time for people to adjust their behavior, which is showing up first in slowing sales of existing and new homes. Also, the wealth effect for the top 20% in household incomes is in full bloom with the stock market reaching new highs. The cure for high home prices will be high prices, usually accompanied by one or more factors like a steep decline in the stock market and significantly higher after tax debt service costs. The fact that home prices are still accelerating a few months after "tax reform" became effective does not mean that the current trend will last.
The Trump tax cuts were supposed to depress housing prices. They haven’t. Give it time for people to adjust their behavior, which is showing up first in slowing sales of existing and new homes. Also, the wealth effect for the top 20% in household incomes is in full bloom with the stock market reaching new highs. The cure for high home prices will be high prices, usually accompanied by one or more factors like a steep decline in the stock market and significantly higher after tax debt service costs. The fact that home prices are still accelerating a few months after "tax reform" became effective does not mean that the current trend will last.
This is what will stop the record stock market - MarketWatch (Martin Feldstein believes that a rise in interest rates will kill the bull)
Chart of shame: The S&P 500 vs. everyone who said the market was about to crash - MarketWatch (Click to enlarge chart which stars in July 2012. Far more hand wringing and inaccurate future predictions would show up by extending the chart back to February 2009)
Chart of shame: The S&P 500 vs. everyone who said the market was about to crash - MarketWatch (Click to enlarge chart which stars in July 2012. Far more hand wringing and inaccurate future predictions would show up by extending the chart back to February 2009)
+++
Trump-The Swamp King:
Washington consultant for Ukraine party pleads guilty to violating lobbyist disclosure law - The Washington Post (Patten also plead that he steered an illegal $50K to The Swamp King's inauguration from a foreign national using a U.S. citizen as a straw-man); Patten Caused Foreign Money to Be Paid to Inaugural Committee - Bloomberg
What may prove to be potentially troublesome for the Duck is Patten's connection with Cambridge Analytica (co-founded by Steve Bannon) and his ties to Konstantin Kilimnik who has been identified by the FBI as a Russian intelligence operative.
Natasha Bertrand may have been the first journalist to write about Patten's connection with the alleged Russian intelligence operative. A Suspected Russian Spy, With Curious Ties to Washington - The Atlantic
When Patten work as a consultant for a Nigerian politician, he reportedly hired Israeli hackers to steal emails from the opposition. Manafort associate Sam Patten’s guilty plea could help Mueller nail Cambridge Analytica for rigging 2016 election
Washington consultant for Ukraine party pleads guilty to violating lobbyist disclosure law - The Washington Post (Patten also plead that he steered an illegal $50K to The Swamp King's inauguration from a foreign national using a U.S. citizen as a straw-man); Patten Caused Foreign Money to Be Paid to Inaugural Committee - Bloomberg
What may prove to be potentially troublesome for the Duck is Patten's connection with Cambridge Analytica (co-founded by Steve Bannon) and his ties to Konstantin Kilimnik who has been identified by the FBI as a Russian intelligence operative.
Natasha Bertrand may have been the first journalist to write about Patten's connection with the alleged Russian intelligence operative. A Suspected Russian Spy, With Curious Ties to Washington - The Atlantic
When Patten work as a consultant for a Nigerian politician, he reportedly hired Israeli hackers to steal emails from the opposition. Manafort associate Sam Patten’s guilty plea could help Mueller nail Cambridge Analytica for rigging 2016 election
Trump Privately Urges Pastors to Help Him From the Pulpit in Midterms; After all, it was God who selected the Duck to become President. The 62+M who voted for the Duck had nothing to do with it.
Opinion | Trump’s Ludicrous Attack on Big Tech - The New York Times (opinion article authored by Kara Swisher who has been covering tech for a long time)
Donald generates a ceaseless flood of bull shit from every hole and pore.
A number of tweets from last Wednesday were ladened with the usual assortment of reality creations and outright lies. FBI pushes back on unfounded Trump claim that China hacked Hillary Clinton’s email - The Washington Post ( "The FBI on Wednesday pushed back on an unfounded claim by President Trump that Hillary Clinton’s emails were hacked by China, saying it had found no evidence that the private servers she used while secretary of state had been compromised.")
The FBI has been telling the Duck that his statements on this matter had no evidentiary support for awhile, but Lying Don like Joseph McCarthy does not need any evidence before making an accusation. His own self serving reality creations are sufficient in The Swamp King's Alternate Reality.
Google denies Trump's claim it ignored his speeches to Congress
No, 96% of Google news stories on Trump aren't from left-wing outlets | PolitiFact (note the analysis of what is considered to be left wing and the chart used as the basis for Trump's statement which categorized Alex Jones' Infowars as slightly right of center which is bogus beyond words)
These kind of knowingly false tweets are abuses of presidential power.
They constitute a deliberate and persistent effort to deceive the public.
Many will believe Donald's false statements due to an incorrect assumption that the Duck has access to information, which if made public, would prove the veracity of Donald's lies.
I suspect that Demagogue Don will exceed 20,000 lies in his first term. The WP has clocked 4,229 from his inauguration through 7/30/18 and noted that the average number per day had accelerated to 7.9: President Trump has made 4,229 false or misleading claims in 558 days - The Washington Post
Trump cancels federal employee pay increases, citing financial concerns - CBS News (the wage increase was 2.1%) Donald basically said, though not in so many words, that the government needed to save the money because the tax cuts to the top 1% cost the government too much money.
++++++
1. Bought 100 AEG at $6-Used Schwab Commission Free Trade:
USD Priced ADR Quote: Aegon N.V. ADR (AEG)
Euro Priced Ordinary Share Quote: Aegon N.V. (Netherlands: Euronext Amsterdam)
1 ADR Share = 1 Ordinary Share Priced in Euros
It is possible that the Euro may decline against the USD over the coming weeks as Italy's debt problems mount. Investors watch for Italy debt-rating downgrade, amid fears of forced selloff - MarketWatch
A decline in the EUR/USD exchange rate will cause the AEG ADR to underperform the shares priced in Euros. EUR / USD Currency Chart. Euro to US Dollar Rates
I occasionally trade AEG and its hybrid securities. I no longer own any of the hybrids. Stocks, Bonds & Politics: Aegon Hybrids: Gateway Post (total realized gain = $4,712.33-all small lots) Most of the Aegon hybrids have been redeemed by the company at par value. Most of the gains were concentrated in AEB which still trades but is unattractive to me at its current price. AEB Stock Price
Aegon is based in the Netherlands and the main market for its common stock is in Amsterdam. The company is primarily engaged in providing life insurance, retirement plans, asset management and annuities.
Aegon owns Transamerica which operates in the U.S.
AEG Closing Price Day of Trade (8/17/18) = AEG $6.005 -$0.185 -2.99%
The stock had a mild downdraft in response to earnings.
AEG Analyst Estimates:
Per Share:
2018: $.73
2019: $.82
Dividends: Semi-Annually
Last Dividend: €.14 per share with ex dividend on 8/14 (shortly after purchase)
Last Earnings Report: Q/E 6/30/18
Aegon reports strong first half 2018 results
Capital Position:
CEO Alex Wynaendts on Q2 2018 Results - Earnings Call Transcript | Seeking Alpha
Links to Most Recent Sell Trade: Item # 2.A. Sold 200 AEG at $5.69 (3/22/17 Post)
Links to Some Prior Discussions: Item # 4 Bought 100 AEG at $5.53 Update For Portfolio Positioning And Management As Of 4/1/16 - South Gent | Seeking Alpha (and links provided therein)
Morningstar currently has a 3 star rating on the stock with a $7.6 fair value estimate.
2. Short Term Bond/CD Ladder Basket Strategy:
A. Bought 2 DuPont 2.2% SU Bonds Maturing on 5/1/20:
FINRA Page: Bond Detail (prospectus not linked)
Issuer: Wholly owned subsidiary of DowDuPont Inc. (DWDP)
2017 Annual Report (debt discussed starting at page 128, the holding company does not guarantee the debt of either DuPont or Dow, its wholly owned subsidiaries)
Credit Ratings:
Bought at a Total Cost of 98.909
YTM at TC Then at 2.859%
Current Yield at TC = 2.2243%
B. Bought 1 Dominion Energy Gas 2.5% SU Bond Maturing on 12/15/19:
FINRA Page: Bond Detail (prospectus linked)
Issuer: Wholly owned subsidiary of Dominion Energy Inc. (D)
D Analyst Estimates
Dominion Energy Announces Second-Quarter 2018 Earnings
Dominion Energy SEC Filings
10-K Dominion Energy 2017 Annual Report (Dominion Gas is consolidated with Dominion Energy but the annual report does break out its results separately in the Annual Report starting at page 84)
Credit Ratings:
The credit ratings for Dominion Energy Gas are higher than the holding company Dominion Energy. That is also the case with Virginia Electric Power.
Bought at a Total Cost of 99.503
YTM at TC Then at 2.885%
Current Yield at TC = 2.5125%
The YTM was higher than the 10 year treasury yield at the time of purchase.
C. Bought 1 Wells Fargo 3% SU Bond Maturing on 1/22/21:
FINRA Page: Bond Detail (prospectus linked)
Issuer: Wells Fargo & Co. (WFC)
WFC Analyst Estimates
Credit Ratings:
Bought at a Total Cost of 99.838 (includes a $1 commission)
YTM at TC Then at 3.069%
Current Yield at TC = 3.0049%
On the day of purchase, the ten year treasury closed at a 2.87% yield. Daily Treasury Yield Curve Rates
D. Bought 2 Wells Fargo 2.45% CDs (monthly interest payments) Maturing on 9/30/19 (13 month CDs):
3. Small Ball-Income Generation MREITs:
A. Sold 50+ AGNC at $19.37-Used Commission Free Trade:
Quote: AGNC Investment Corp.
Closing Price Last Friday (8/31/18): AGNC $19.02 -$0.12 -0.63%
2 Year History Schwab Account:
Profit Snapshot: +$37.15
Item # 2.A. Bought 50 AGNC at $18.64 (7/9/18 Post)
I am using a dividend harvest strategy for this MREIT. While I like the monthly dividend, I do not like the current premium price to net asset value per share and the overall recent historical downtrend in both the dividend and the net asset value.
Estimated Tangible Book Value Per Share: $18.33 as of 7/31/18
Dividend: Monthly at $.18 per share
Other Prior Buy Discussions:
Item 1.B. Bought 10 AGNC at $18.15 (3/15/18 Post)
Item 1.D. Added 10 AGNC at $18.57 (2/26/18 Post)
Item # 6 Bought 50 AGNC at $18.72-Used Commission Free Trade (2/1/18 Post)
Last Sell Discussions:
Item 1.B. Sold 71+ AGNC at $19.03 (5/3/18 Post)
Item 3.A. Sold 54+ AGNC at $20.71- Vanguard Roth IRA Account and Item 3.B. Sold 53+ AGNC at $20.71-Schwab Taxable Account (5/23/17 Post)
Item # 5.B. Sold 50 AGNC at $19.94 Vanguard IRA Account and Item # 3.C. Sold 50 AGNC at $20.01 Schwab Taxable Account (4/14/17 Post)
Item # 4 Sold AGNC at $30.14 (2/15/12 Post)
Recent Stock Offerings: They are too frequent now IMO.
AGNC Investment Corp. Announces Pricing of Public Offering of Common Stock (July 2018) I am slightly aggravated by AGNC's failure to disclose the public offering price per share in its press releases. I calculated the price at $18.9.
AGNC Investment Corp. Announces Closing of Public Offering of Common Stock (5/29/18); Prospectus
Recent Earnings Report: Q/E 6/30/18
AGNC Investment Corp. Announces Second Quarter 2018 Financial Results
Tangible book value per share was at $18.41 as of 6/30/18, down from $18.63 as of 3/31/18.
Tangible book value per share was at $19.69 as of 12/31/17: Page 27 Annual Report
AGNC Trading Profits: $348.44 (prior trades = $311.29)
4. Small Cap Canadian E & P Companies:
A. Added 100 SGY:CA at C$2.27 (C$1 IB Commission):
I now own 600 shares with 400 of those being the CAD priced shares traded in Toronto. IB charges a C$1 commission to buy 100 shares.
Quotes:
CAD Priced Shares: Surge Energy Inc (Canada: Toronto)
USD Priced Shares: ZPTAF (pink sheet exchange ordinary shares)
Last Purchase Discussion: Stocks, Bonds & Politics:Item # 1.C. Bought 100 SGY:CA at C$2.39 (7/15/18 Post) I discussed the first quarter report in that post.
Dividend: Monthly at C$.008333 per share (C$.10 annually)
Dividend Yield at C$2.27 = 4.4%
Dividend Info - Surge Energy Inc.
Recent Earnings Report: Q/E 6/30/18
Surge Energy Inc. Announces Second Quarter 2018 Results; Current Production Exceeds 2018 Exit Rate; Adjusted Funds Flow Per Share Up 38 Percent Over Q1/18
The production increases and adjusted cash flow numbers continue to look good.
5. Intermediate Term Bond/CD Ladder Basket Strategy:
A. Sold 1 Boston Properties 3.8% SU Bond Maturing on 2/1/24:
Profit Snapshot: +$5.93
Item # 3.C. Bought at a Total Cost of 99.54 (5/14/18 Post)
YTM at TC Then at 3.9%
FINRA Page: Bond Detail
Issuer: Boston Properties Inc. (BXP)
Sold at 100.233
YTM at at 100.233 = 3.75%
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.
FINRA Page: Bond Detail (prospectus linked)
Issuer: Wholly owned subsidiary of Dominion Energy Inc. (D)
D Analyst Estimates
Dominion Energy Announces Second-Quarter 2018 Earnings
Dominion Energy SEC Filings
10-K Dominion Energy 2017 Annual Report (Dominion Gas is consolidated with Dominion Energy but the annual report does break out its results separately in the Annual Report starting at page 84)
Credit Ratings:
Bought at a Total Cost of 99.503
YTM at TC Then at 2.885%
Current Yield at TC = 2.5125%
The YTM was higher than the 10 year treasury yield at the time of purchase.
C. Bought 1 Wells Fargo 3% SU Bond Maturing on 1/22/21:
FINRA Page: Bond Detail (prospectus linked)
Issuer: Wells Fargo & Co. (WFC)
WFC Analyst Estimates
Credit Ratings:
Bought at a Total Cost of 99.838 (includes a $1 commission)
YTM at TC Then at 3.069%
Current Yield at TC = 3.0049%
On the day of purchase, the ten year treasury closed at a 2.87% yield. Daily Treasury Yield Curve Rates
D. Bought 2 Wells Fargo 2.45% CDs (monthly interest payments) Maturing on 9/30/19 (13 month CDs):
3. Small Ball-Income Generation MREITs:
A. Sold 50+ AGNC at $19.37-Used Commission Free Trade:
Quote: AGNC Investment Corp.
Closing Price Last Friday (8/31/18): AGNC $19.02 -$0.12 -0.63%
2 Year History Schwab Account:
Profit Snapshot: +$37.15
Item # 2.A. Bought 50 AGNC at $18.64 (7/9/18 Post)
I am using a dividend harvest strategy for this MREIT. While I like the monthly dividend, I do not like the current premium price to net asset value per share and the overall recent historical downtrend in both the dividend and the net asset value.
Estimated Tangible Book Value Per Share: $18.33 as of 7/31/18
Dividend: Monthly at $.18 per share
Other Prior Buy Discussions:
Item 1.B. Bought 10 AGNC at $18.15 (3/15/18 Post)
Item 1.D. Added 10 AGNC at $18.57 (2/26/18 Post)
Item # 6 Bought 50 AGNC at $18.72-Used Commission Free Trade (2/1/18 Post)
Last Sell Discussions:
Item 1.B. Sold 71+ AGNC at $19.03 (5/3/18 Post)
Item 3.A. Sold 54+ AGNC at $20.71- Vanguard Roth IRA Account and Item 3.B. Sold 53+ AGNC at $20.71-Schwab Taxable Account (5/23/17 Post)
Item # 5.B. Sold 50 AGNC at $19.94 Vanguard IRA Account and Item # 3.C. Sold 50 AGNC at $20.01 Schwab Taxable Account (4/14/17 Post)
Item # 4 Sold AGNC at $30.14 (2/15/12 Post)
Recent Stock Offerings: They are too frequent now IMO.
AGNC Investment Corp. Announces Pricing of Public Offering of Common Stock (July 2018) I am slightly aggravated by AGNC's failure to disclose the public offering price per share in its press releases. I calculated the price at $18.9.
AGNC Investment Corp. Announces Closing of Public Offering of Common Stock (5/29/18); Prospectus
Recent Earnings Report: Q/E 6/30/18
AGNC Investment Corp. Announces Second Quarter 2018 Financial Results
Tangible book value per share was at $18.41 as of 6/30/18, down from $18.63 as of 3/31/18.
Tangible book value per share was at $19.69 as of 12/31/17: Page 27 Annual Report
AGNC Trading Profits: $348.44 (prior trades = $311.29)
4. Small Cap Canadian E & P Companies:
A. Added 100 SGY:CA at C$2.27 (C$1 IB Commission):
I now own 600 shares with 400 of those being the CAD priced shares traded in Toronto. IB charges a C$1 commission to buy 100 shares.
Quotes:
CAD Priced Shares: Surge Energy Inc (Canada: Toronto)
USD Priced Shares: ZPTAF (pink sheet exchange ordinary shares)
Last Purchase Discussion: Stocks, Bonds & Politics:Item # 1.C. Bought 100 SGY:CA at C$2.39 (7/15/18 Post) I discussed the first quarter report in that post.
Dividend: Monthly at C$.008333 per share (C$.10 annually)
Dividend Yield at C$2.27 = 4.4%
Dividend Info - Surge Energy Inc.
Recent Earnings Report: Q/E 6/30/18
Surge Energy Inc. Announces Second Quarter 2018 Results; Current Production Exceeds 2018 Exit Rate; Adjusted Funds Flow Per Share Up 38 Percent Over Q1/18
The production increases and adjusted cash flow numbers continue to look good.
5. Intermediate Term Bond/CD Ladder Basket Strategy:
A. Sold 1 Boston Properties 3.8% SU Bond Maturing on 2/1/24:
Profit Snapshot: +$5.93
YTM at TC Then at 3.9%
FINRA Page: Bond Detail
Issuer: Boston Properties Inc. (BXP)
Sold at 100.233
YTM at at 100.233 = 3.75%
Proceeds at 100.123 after $1 Commission
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.
Hi,
ReplyDeleteCould you please explain why you like these short term bonds (e.g. B. Bought 1 Dominion Energy Gas 2.5% SU Bond Maturing on 12/15/19:), when similar duration treasuries (15 months) pay about the same?
I am struggling to understand, and fear I may be missing something.
Thx!
A treasury maturing on the same day, with a 2 bond purchase, would produce a YTM of 2.48% with no commission vs. the 2.885% YTM for the Dominion Gas bond after a $2 commission. While the difference is slight it mounts up for me when looking at my entire bond portfolio and considering the compounding effect over time.
DeleteI am not concerned currently about the credit risk.
The Dominion Gas bond was bought at a discount that increases the current yield. The yield to maturity (YTM) includes that profit at maturity on 12/15/19; or earlier if redeemed early by the issuer or sold at a profit prior to maturity. I do a fair amount of trading. I recently included multiple snapshots of my 2017 bond trading profits in one taxable account.
To elaborate on my prior discussion about YTM (yield to maturity), the treasury that matured on 12/15/19 has a 1.375% coupon and could be bought last Friday at 98.617 to produce a YTM of 2.48%.
DeleteThe current yield on that treasury is 1.3943% calculated by dividing the coupon rate of 1.375% by the cost number of 98.617.
Bond quotes are not current yield numbers but YTMs.
So it would not be accurate to compare the YTM for the treasury with the current yield of the Dominion Gas bond bought at a discount to par value.
You have to compare YTM to YTM and current yield to current yield.
So the Dominion Gas bond with its current yield of 2.515% is 1.14% higher than the treasury maturing on the same day and consequently produces more in current income.
Since both the treasury and Dominion Gas bonds pay semi-annually, and mature in December 2019, there are only 3 interest payments left and one of those three are made by both bonds on 12/15/19.
The treasury will then pick up at maturity more yield (that part of the yield which consists of profit) than the Dominion Gas bond since it was bought at a greater discount to par value. The treasury has more of its yield contingent on receiving par value at maturity.
The main point that I made when discussing the Dominion Gas bond purchase was that the YTM exceeded the ten year treasury YTM then and now.
The difference in current yield and YTM becomes more important to me when the maturity date is farther out in time.
If I had two bonds from the same issuer that matured in September 2024, both having YTM's of 4% but one having a 4% coupon sold at par value and another having a 2% coupon sold at a discount to par value that produced the 4% YTM, I would go with the 4% coupon that has the much higher current yield since I am focused on current income generation.
TravelCenters of America LLC (TA)
ReplyDelete$6.00 +$1.65 +37.93%
Last Updated: Sep 4, 2018 at 9:50 a.m. EDT
https://www.marketwatch.com/investing/stock/ta
I do not own TA's common stock but a few shares in one of its three senior unsecured bonds TANNL:
TravelCenters of America LLC 8% Sr. Notes 12/15/29
$24.14 +$.3892 +1.64%
https://www.marketwatch.com/investing/stock/tannl
TA now has the option to redeem this bond at its $25 par value plus accrued and unpaid interest.
TANNZ (8%) can be redeemed at par on or after 10/15/18:
https://www.sec.gov/Archives/edgar/data/1378453/000104746915007650/a2226175z424b5.htm
TANNI (8.25%) can be redeemed now at par value.
TA announced this morning that it was selling it standalone convenience store business for $330.8M and will use the proceeds to reduce leverage and/or invest in its travel center growth initiatives:
https://www.businesswire.com/news/home/20180904005246/en/
Note that the use of the proceeds is an "and/or" proposition. The principal amount of the outstanding senior unsecured debt is $330M.
Lexington Realty Trust (LXP):
ReplyDelete$9.0 -$0.34 -3.64%
Last Updated: Sep 4, 2018 at 11:51 a.m. EDT
I eliminated my LXP positions in two Roth IRA accounts early today by selling shares at $9.06 and $9.08. I am keeping for now the shares own in two taxable accounts.
LXP announced this morning that it was selling 21 office buildings for $726M to a joint venture where it will have a 20% interest. Those properties were 98.6% leased and had a GAAP and cash capitalization rates of 8.6% and 8.1%, respectively. For the 6 months ending 6/30/18, these properties produced $27.9M in AFFO.
I can not judge the adequacy of the price. My gut says the buyer got a good deal.
Due to the disposition, LXP lowered its AFFO guidance for this year to "$0.92 to $0.94 per diluted common share, which is a decrease from its previous guidance of $0.95 to $0.98 per diluted common share."
The capitalization rates for industrial properties are lower than the the office properties. No guidance was given in the press release for 2019. I would anticipate a lower 2019 AFFO number than the revised 2018 number but the range is speculative now until more is known about how LXP uses the proceeds.
LXP will be cutting its dividend in 2019, but the amount of the slash in not known now.
LXP will keep its current quarterly rate for the current quarter and the 2018 4th quarter. The rate will then be reset in the first quarter to an anticipated range between "55% to 65% of 2019 Adjusted Company FFO."
If I used the top of that range (65%) and used the high revised estimate for 2018 ($.94), I arrive at a $.611 annual dividend. If I used the bottom of 55% and assumed a .94 AFFO per share which will likely be too high for 2019, I compute a $.517 annual dividend or about $.13 per quarter. My last assumption is to use 55% and a .88 per share AFFO, and that gives me a $.12 quarterly dividend.
The current quarterly dividend is $.1775 so I am anticipating a dividend cut starting with the 2019 first quarter. The magnitude is yet to be determined given the wide range of 55% to 65% of 2019 AFFO and LXP's guidance for 2019 AFFO which I anticipate to be lower than 2018 given the office property disposition.
Interest rates are moving up today.
ReplyDeleteU.S. 10 Year Treasury Note
2.897% +0.035%
Last Updated: Sep 4, 2018 12:32 p.m. EDT
https://www.marketwatch.com/investing/bond/tmubmusd10y?countrycode=bx
The 3 month treasury bill was auctioned today to produce an "investment rate" of 2.135%.
https://www.treasurydirect.gov/instit/annceresult/press/preanre/2018/R_20180904_1.pdf
The prior week auction produced an investment rate of 2.12%.
https://www.treasurydirect.gov/instit/annceresult/press/preanre/2018/R_20180827_1.pdf
Thank you for advising/opinion on me selling a 1-month T-Bill before maturity to buy 13-week, you said something like "you might have a better rate of interest...if you wait for next auction"
Deletefwiw, I read that the GDP is up about 38% since 2009, and the SPY is up 300%, I know there are lots of variables, like the market always "is a forward looking mechanism", but I thought I saw Stockman say GAAP (reported earnings) for S&P in 2014 were $ 109.00, now they are $117.00 if you strip out tax windfall, so in upcoming quarters, it will be interesting to see if year-over-year, once you strip-out lower tax rate, what happens. And from everything I read, stock buybacks have peaked. That should be stripped-out also, unless you think this will continue at over $1TRILLION /yr/ I will be putting $102K into the 13-week Treasury auction on Monday morning, and wait this fake -debt-based economy out.Thank you for your great blog.
I have published a new post:
ReplyDeletehttps://tennesseeindependent.blogspot.com/2018/09/observations-and-sample-of-recent_5.html