Observations and Sample of Recent Trades: AEG, FSIC, MLNT, TTOO, TWO

Economy: 

Inflation was tame in August. The annual increase in CPI was reported at 2.3% and at 2.2% for core CPI: 

The Alternate Reality number for health insurance costs remained in force, with the BLS claiming that this cost rose only 1% over the past year. Table 2. Consumer Price Index for All Urban Consumers (CPI-U): U. S. city average, by detailed expenditure category That is up from zero or close to it for the prior several months. 

Is there a single person in the U.S. experiencing that rate of inflation for health insurance? Is the number even remotely consistent with what the BLS reports on health care cost increases? 

Mnuchin warns China against weakening its currency The Yuan has gone down in value since the spring, which makes U.S. exports to China more expensive, even before China's tariffs, and reduces the cost for U.S. buyers of China's exports. The decline in the Yuan's value started in the spring when it became more obvious that Donald's trade war threats would result in a tariff war with China. Currency Chart. US Dollar to Chinese Yuan Renminbi Rates The Yuan's decline since the spring would offset the 10% tariffs imposed by the U.S. 

North Dakota soybean farmers, caught in the trade war, watch the season run out on their crop (their soybean crop will soon be harvested but they have lost their biggest customer by far due to the tariff war. Storing the harvest is more expensive due to shortages in bins which are now too expensive to build due to the tariffs on steel and aluminum. The soybean farmers interviewed still support the Duck and plan on voting republican in the upcoming election) 

Trump Claims Trade Victories but Businesses Struggle Under His Approach

IMF warns some emerging-market countries could face ‘severely adverse’ capital outflows - MarketWatch

Weekly mortgage applications fall 1.7%; 30-Year Fixed-Rate Mortgages Since 1971 - Freddie Mac; 15-Year Fixed-Rate Mortgages Since 1991 - Freddie Mac

Trump says the Federal Reserve has 'gone crazy' Trump doubles down on Fed attacks, saying it's 'going loco' Teflon Don referred to the Fed Chairman as "wild", probably the first time that anyone referred to Powell as the wild one in his life. Trump then claimed that the FED's rate increases were "ridiculous". Trump calls Fed ‘too cute’ in third straight day of criticism - MarketWatch; Trump says the stock market correction caused by the Federal Reserve

When Yellen was keeping interest rates low, Donald attacked her for penalizing savers. Trump says Fed chief Yellen should be ashamed; Donald Trump says Federal Reserve Chair Janet Yellen ‘should be ashamed of herself’ - The Washington Post; Will Trump drop his grumbling about Fed and favor low rates? | Fox Business 

Before the election, low rates in Trump's view created a "false economy" and an "artificial stock market". He said then that savers were "getting creamed". So the Duck supported higher rates. 

The interest rate rise over the past two years has given savers some relief in that the real return on short term assets like savings accounts is less negative now than over the 8 year lifespan of ZIRP. 

Yet, as savers start to realize some return on their safe money, even though it remains negative for short term savings, Donald is now up in arms. Total deposits in saving account is currently at $9.3 trillion:  

Total Savings Deposits at all Depository Institutions | FRED | St. Louis Fed That chart is derived from information in the Table 6 of the FED's weekly H.6 Release (data as of 10/11/18). Another $508+B was in small denomination time deposits and $773B in retail money market funds. That is a lot of cash earning almost nothing. That data does not include other short term instruments that individuals own including treasury bills and short term bonds and bond funds. 

One reason for the slow recovery from the Near Depression, which is usually overlooked, is that the hoard of money in short term deposits earned zero or very close to it for almost a decade. That deprived the Savings Class of disposable income that could have been spent to power the economy. The sum is not inconsequential and would total in the $300 to $500B in annual lost household income compared to what would have been earned at a weighted average yield of 3% to 4% rather than zero. Quantitative Easing Helps the Big Wheels and Hurts Everyone Else - The Big Picture

The Federal Funds rate is substantially below a normalized rate and is below the current CPI Y-O-Y inflation rate of 2.3% (negative real return before taxes):

Effective Federal Funds Rate-St. Louis Fed 

The FF rate is even now ridiculously low given the unemployment and GDP growth rates. 

The FED has only raised the federal funds rate from zero to an historically abnormal level. Only those who want a continuation of free money are upset about the minuscule rise in rates.   

Trump is already well into the process of blaming the Federal Reserve for the stock market decline. Jim Cramer is in the same camp and has become a full bore Trumpster. Cramer: Fed could cause 2019 slowdown with aggressive rate hike agenda The bottom line is that the rise in interest rates is nowhere close yet to damaging the real economy, but there is a psychological impact on investors who have grown use to near zero short term rates.   

The recent decline in the stock market, starting with the big drop on 10/11, occurred notwithstanding a slight decline in intermediate and long term interest rates and corresponded precisely with more tough talk by Trump and others in his administration regarding China. Trump says Chinese 'lived too well for too long' - BBC News

For the remainder of Donald's first term, budget deficits will likely exceed $1 trillion per fiscal year. Inflation, stoked by the GOP's tariffs and Trump's Iran policy, is already at the highest level in years and is more likely than not IMO to increase in the 2018 4th quarter and into 2019.   

++++++++

Markets and Market Commentary: 

SPX lost 4.1% last week. It could have been worse. The DJIA popped over 400 points soon after the opening last Friday, but started to decline fast and even slid into negative territory. If the Stock Jocks had not mounted a charge into the close, Friday could have been another down day. 

The rally after a two day drubbing was so difficult that I doubt the waves of selling are over. 

According to Barchart.com, only 41+% of the S & P 500 components are currently above their 200 day SMA lines. 

Most of the S & P 500 stocks are already in correction territory. Most S&P 500 stocks are deep in correction territory | Reuters

I am continuing to emphasize short term bond and CD purchases with proceeds from maturing securities. 

With the recent share price declines, I have stepped up my small ball purchases, focusing on BDCs, equity REITs and regional bank stocks. 

KRE $56.06 -1.15 -2.01%: SPDR S&P Regional Banking ETF 

KRE hit an intra-day 52 week high of $66.04 on 6/7/18. The decline from that high to last Friday's close was $9.98 per share or 15.11%. The concerns appear to be continued stagnation in net interest margins and a slowdown in loan growth. Some investors may also be concerned that charge-offs have already hit rock bottom for the economic growth cycle starting after the last recession ended in June 2009. Still, P/E  ratio are in the high single digits or low double digits and dividend yields for my small lot purchases are generally in the 3% to 4% range.  

JP Morgan (JPM) declined 1.09% after reporting better than expected earnings. Based on the current consensus 2019 E.P.S. estimate of $9.99, the P/E at last Friday's closing price of $106.95 was 11.19. 

I did sell earlier this year all of my regional bank positions where I had a decent unrealized gain: 

Item # 1.A. Sold Remaining BBT at $50.72  (7/12/18 Post) 
Item # 1 Sold 100 BHB at $39.69 (7/15/18 Post) 
Item # 1.A. Sold 50 BHB at $30.02 (5/21/18 Post) 
Item # 2.A. Sold 50 WASH at $61.53 (7/25/18 Post) 
Item # 1.A. Sold 52 AROW at $37.5 (7/2/18 Post) 
Item # 3.A. Sold 100 HBAN at $16.12  (2/3/18 Post)
Item # 1. A. Sold Highest Cost 50 BBT Shares at $55.45 (2/8/18 Post)
2018 Realized Gains Regional Bank Stocks = $9,210.95
Basket Net Realized Profit =  $50,041.1 Snapshots at Stocks, Bonds & Politics: REGIONAL BANK BASKET STRATEGY GATEWAY POST

My exposure now is very light. I am adding shares only pursuant to the small ball trading strategy which minimizes risk and is a tailored strategy to purchasing stocks and sectors in bear trends of unknown durations. 

Blackstone’s Byron Wien says S&P 500 on track for year-end rally to 3,000 despite stock-market wreckage - MarketWatch I doubt it. 

The near-term outlook for the market isn't very good

Trade tensions could trigger another global financial crisis: IMF

Cramer: China more vulnerable than mainstream depicts; Trump right Cramer is parroting the majority view that China will cave to Trump's demands. The better question may be whether China can withstand the pain of an all out trade war better than the U.S. Just wait until Donald increases the tariff rate to 25% from 10% on 1/1/19 and we will find out.   

Trump’s tariffs against China are hurting U.S. tech companies instead - MarketWatch

Morgan Stanley: Stocks at tipping point because of higher rates, dump growth stocks for value

Fed’s Kaplan sees risk of higher oil prices ahead - MarketWatch

Oil prices are ‘entering the red zone,’ warns International Energy Agency chief - MarketWatch

If you own bank stocks, 'you better lighten up,' analyst Dick Bove says

The Titanic as ‘an iceberg loomed’ is how Guggenheim’s Minerd thinks of today’s stock market - MarketWatch

++++

Trump: 

Trump continues to follow the advice given by Steve Bannon, who said the "way to deal with {the media} is to flood the zone with shit". Has Anyone Seen the President? - Bloomberg

Remember Trump's claim that he was going to bring back coal mining jobs. It was just another B.S. P.R. stunt for the weak minded. 

Bureau of Labor Statistics Data

The GOP has exchanged more air and water pollution for no increase in coal jobs. That is their real trade-off rather than the pretend one about creating jobs. Coal is Killing the Planet. Trump Loves It. - The New York Times

U.N. Sponsored Report on Global Warning.pdf; UN climate change panel says 'unprecedented changes' needed to prevent rapid global warming No need to worry since Donald will save our children and grandchildren. The Duck of course dismissed the report. 

There is considerable scientific evidence that climate change is contributing to the strength of adverse climate events including hurricanes. There is a debate among scientists whether climate change is resulting in more hurricanes. Hurricanes and Climate Change — Center for Climate and Energy Solutions; Hurricanes and Climate Change 

The Category 4 hurricane Michael hit the panhandle region of Florida, a solidly republican area, last Wednesday. The historical record, which goes back to 1851, shows that Michael was the first Category 4 hurricane to hit this geographic region. Michael was also the strongest hurricane to hit the U.S. in October. 

My best guess is that a handful of republicans (perhaps more than 10), who previously accepted the GOP's anti-science dogma on climate change and who live in Florida's panhandle, will start to question whether Trump and the GOP are right in dismissing the scientific evidence. 

The pro-pollution/pro-global warming party is hostile to science since knowledge and facts do not square with their ideology or, more importantly, the profit motives of those that pay the campaign bills. 

I would characterize environmental protection as a conservative value, which is yet another reason why the modern day GOP is not a conservative party.  

The money spent by the government responding to catastrophic weather events is now and will continue to be a major expense category due in large part to climate change. 

It does not help matters that FEMA does not prudently spend major chunks of the money borrowed by the federal government. 

The NYT recently explored that topic in this article: As Storms Keep Coming, FEMA Spends Billions in ‘Cycle’ of Damage and Repair - The New York Times 

For example, there is a picture in that article of the Plaquemines Parish Detention Center which was rebuilt at a $108M cost after Katrina. The structure was built in a Louisiana marsh. Literally, it looks like a good rain could submerged the facility into fish territory. So there is a cycle of rebuilding in areas that will surely flood again with the federal government footing the bill. Some people quaintly claim that the taxpayer is footing the bills which is an odd thing to say when the nation's budget deficits are around $1 trillion per year. 

++++

Marsha Blackburn and Susan Collins-Problems in Telling the Truth: 

Senator Collins has trouble with the truth, particularly when it pieces her charade of being a moderate. Susan Collins’s wrong claim on Planned Parenthood and Supreme Court justices - The Washington Post

One of my favorite topics involves an analysis of how and why lying works far better in American politics than telling the truth. Telling the truth is a prescription for defeat. Using one liners, tweets and cliches work far better than providing details and reasoned judgment.

In the Tennessee senate race, where the Trumpette Marsha Blackburn is running against the centrist multi-millionaire businessman and former governor Phil Bredesen, everyone of the attack ads run by Ms. Blackburn or her handlers (The Koch Brothers' PAC or Mitch McConnell's PAC) that I have seen contains blatantly false and misleading information. 

Those ads will help Blackburn, who has done nothing in her life other than being a far right politician and passionate Know Nothing Wingnut, win the election. 

See Jon Meacham's Column: In Tennessee, a Microcosm of the Midterms - The New York Times

As I have said, lying works so easily in political campaigns because far too many voters are willfully ignorant or filled to the gills with nothing other than propaganda, which they will parrot as their own thoughts, and reality creations prepared and disseminated by those who wish to manipulate them.

One of the more recent Blackburn ads claims that Bredesen gave licenses to illegal immigrants. 

Actually, there was such a law passed, which was cited by Blackburn in her ad that had that outcome, but the law was passed one year prior to Bredesen becoming governor and was signed into law by the then republican governor Don Sundquist. Tennessee elections: Blackburn ad attacks Bredesen over driver's licenses 

Sundquist approved of the measure to insure that people had insurance and to address national security concerns. I am not saying here that this was a good or bad policy, only that it was passed while the republican Sundquist was the governor. Bredesen acted to repeal the law. 

The fact that Blackburn lies as easily as Trump comes as no surprise to me. Lying works in American politics when millions are permanently ensconced in an impenetrable Alternate Reality Bubble. 

Attack ad falsely says Bredesen backed gas, sales tax hikes that never happened | PolitiFact

Another problem for Bredesen is that he has turned off many traditional Democrats by positioning himself in the center. In Tennessee, a Democrat scrambles to turn out voters as polls show slide | Reuters Those voters IMO need to consider more carefully the republican nominee. 

+++

Trumpster "Lock Her Up" Chants Spreading to More Women:

The Trumpsters are now chanting "Lock her Up" when Trump refers to Senator Diane Feinstein. Trump claims that he is 99% sure that Senator Feinstein leaked the Ford letter. 

Demagogue Don makes that claim without proof of course, which is unnecessary in Trump's America. 'Lock her up': Sen. Dianne Feinstein a new target of Trump rally chant


Republican Rhetoric, Reality and Logical Fallacies: 

I am hearing more republicans refer to democrats as the "demonrats". 

The republicans are increasingly painting all democrats as holding the same opinions as the far left wing of that party. One example is to say that Democrats want to abolish ICE when that is at best a very small minority position in the party. 

Republicans are more frequently now using the word "mob" to describe demonrats. Kentucky Trump rally (Trump asserted that Democrats were an "angry mob"). I have seen a Marsha Blackburn ad along those lines which is funny in a way since I have never seen Phil Bredesen angry or even to raise his voice. He was mayor of Nashville for 8 years and governor for 8 as well.  

If for example there are a few protestors who are loud, which was the case for a few hundred protestors during the Kavanaugh confirmation process, the  republicans characterizes those protestors, who are passionate about their opinions, as a mob and then proceed to label all democrats as part of the mob.  

For those who remain thoughtful and observant, you will see republicans increasingly making gross and sweeping generalizations from isolated facts and  opinions. Faulty generalization - Wikipedia Trump is leading that charge.   

++++++

1. Small Ball-Income Generation- BDCs and MREITs: 

A. Added 50 FSIC at $7.15-Used Schwab Commission Free Trade: 

Quote: FS Investment Corp. (FSIC)

As with all BDC purchases, the general idea is to harvest the dividend and to escape at whatever profit is available. 

Website: Home | FS Investment Corporation

A comprehensive recent article on this BDC has not yet disappeared as of 10/14 behind SA's paywall: Why I Sold This 11.1% Yielding BDC That Could Now Be A 'Buy'-FS Investment Corporation (NYSE:FSIC) | Seeking Alpha

Dividends: Quarterly at $.19 per share ($.72 per share annually)

Both the dividend amount and dividend yield exclude any future special dividends. The last special dividend was paid in 2014. Dividend Information | FS Investment Corporation

Dividend Yield at a TC of $7.15 = 10.07%

Last Ex Dividend Date: 9/18/18 (shortly before this 50 share purchase)

Dividend Reinvestment: Yes at greater than a 10% discount to net asset value per share  

Management: External 

FS Investment Corporation 2017 Annual Report (risk summary starts at page 29 and ends at page 57)

Current Position This Account: 102+ Shares

I am now at my maximum position in this account except for shares bought with dividends. 

Average Cost Per Share This Account: $7.25

Last Discussed: Item # 2.A Bought 50 FSIC at $7.33-Used Schwab Commission Free Trade (3/19/18 Post) 

Net Asset Value ("NAV") Per Share History-Recent Trend Unfavorable:

6/30/18:  $8.87

3/31/18:   $9.16

12/31/17: $ 9.3

12/31/16: $ 9.41

12/31/15: $ 9.1

12/31/14: $ 9.83

12/31/13: $10.18

12/31/12: $ 9.97

Discount to NAV per share at $7.15 and $8.87 NAV Per Share = -19.39%

I do not regard that -19.39% discount to be a good cushion given the recent drops in NAV per share. 

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

Net investment income was reported at $.19 per share, barely covering the $.19 per share quarterly dividend. The company did have a realized gain of $.13 per share however. Unrealized losses per share accelerated in a worrisome manner. Net asset value per share decreased $.29 per share from the prior quarter. Overall, this was a poor report and has contributed IMO to small price declines since its release.   

Sourced SEC Filed Press Release 

FS Investment Corporation (FSIC) Q2 2018 Results - Earnings Call Transcript | Seeking Alpha (2 companies on non-accrual representing less than 1% of portfolio's fair market value. "The fund’s net asset value declined from $9.16 per share as of March 31, 2018 to $8.87 per share as of June 30, 2018, driven primarily by mark-to- market unrealized losses in our investments in ThermaSys, Advanced Lighting, Hudson Technologies, Logan's Roadhouse and Global Jet Capital, partially offset by realized gains on our equity investments in Sequel Industrial Products and The Stars Group, as well as the positive impact of share repurchases." Page 4 of SA Transcript, emphasis added)

Investment Portfolio as of 6/30/18: 

First Lien at 67%

Floating Rate at 69.8%

Sourced Page 51 SEC Form 10-Q

FS Investment Corporation 10-Q for the Q/E 6/30/18 (investments listed starting at page 5)

The following snapshot highlights the migration of more loans to categories 4 and 5:

Pending Merger: FS/KKR Announces Agreement to Merge FS Investment Corporation and Corporate Capital Trust (CCT) FSIC will be the surviving corporation. I received the merger proposal in the mail. The thickness was significantly greater than the Nashville metropolitan area phone book. If I started to read it now, and read two hours per day, I doubt that I would finish reading it prior to Christmas. The document was thrown in the trash where it belongs. 

Other News: FS Investments and KKR Close Transaction; FS/KKR Advisor Announces the Closing of a New Five-Year, $3.435 Billion Revolving Credit Facility

B. Added 15 FSIC at $7 and 15 at $6.8 -Used Fidelity Commission Free Trades: 

See previous discussion above

FSIC is part of my small ball buying programs in my Fidelity account where I have an abundance of free trades. 

Current Position This Account: 51+ shares
Average Cost Per Share = $7.1
Maximum Position in this Account: 100 shares + shares bought with dividends

C. Bought 30 TWO at $15.24, 20 at $14.68 and 15 at $14.36-Used Commission Free Trades: 

The thirty share lot was bought shortly before the ex dividend date and the 20 share lot was bought shortly after that date. Quote: Two Harbors Investment Corp. (TWO) - MarketWatch

TWO is a MREIT. Two Harbors Investment Corp.

As with all MREIT purchases, the goal is to harvest the dividends and to escape with whatever profit may be available, no matter how small. 

Dividend: Quarterly at $.47 ($1.88 annually)

The third quarter quarterly dividend has been dividend into two parts due to the CYS acquisition. The first part was $0.158370 per share and went ex dividend prior to my 30 share purchase (7/24/18). The remaining part  of $0.311630 per share went ex dividend on 9/28/18 and was paid only on my 30 share purchase made on 9/24/18. 

Dividend History | Two Harbors Investment Corp. Investor Center

2017 Tax Treatment of Dividends:

TWO's regular dividends will not be classified as qualified. There is a significant ROC component that is not taxable in the year paid for U.S. taxpayers but does reduce the cost by the amount so classified. The reference to Granite Point in the previous snapshot involved a special distribution of stock. Two Harbors Investment Corp. Announces Special Dividend of Granite Point Mortgage Trust Inc. Common Stock and One-for-Two Reverse Stock Split; Two Harbors Investment Corp. Announces Final Distribution Ratio for its Special Stock Dividend of Granite Point Mortgage Trust Inc. Common Stock and Completion of Reverse Stock Split 

Last Ex Dividend Date: 9/28/18

Dividend Reinvestment: Yes at a discount to net asset value per share

Dividend Yield at $15.24 = 12.3%
Dividend Yield at $14.68 = 12.81%
Dividend Yield at $14.36 =  13.09%
Dividend Yield at Average Total Cost Per Share = 12.64%

Maximum Position: 100 shares

Current Position: 65 Shares

Average Total Cost Per Share = $14.87

Dividend Reinvestment: Yes for as long as shares sell at a discount to net asset value per share. 

Two Harbors Equity Preferred Stock Current Positions: 

50 Shares of the fixed-to-floating rate TWOPRC: Item # 1 Bought 50 TWOPRC at $24.4 (8/9/18 POST); Two Harbors Investment Corp. 7.25% Cumulative Preferred Series C Stock

100 Shares of the 7.75% cumulative equity preferred TWOPRD-Roth IRA Account (previously a CYS obligation prior to its acquisition by TWO: Two Harbors Investment Corp. and CYS Investments, Inc. Announce Closing of Merger )

Book Value as of 6/30/18: $15.69

Discount to that $15.69 BV at $15.24 TC = -2.87%
Discount to that $15.69 BV at $14.68 TC = -6.44%
Discount to that $15.69 BV at $14.36 TC = -8.48%

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

Two Harbors Investment Corp. Reports Second Quarter 2018 Financial Results   

While I am certainly no expert on MREITs, I am generally aware that their yield spreads between the costs of borrowed funds and the yields on investments have been under pressure, a problem similar to what has been happening with bank net interest margins. In short, a flattening yield curve is bad for them. MREITs are highly leveraged with a lot of moving parts that make them hard to analyze. 

As with BDCs, I will at most take small positions and hopefully exit the position at a profit, no matter how small, after collecting one or more dividends. My preference is to collect at least one year of dividends before exiting the position.   

2. Short Term Bond/CD Ladder Basket Strategy: 

A. Bought 2 Verizon 2.625% SU Bonds Maturing on 2/21/20: 

FINRA Page: Bond Detail (prospectus linked)

Issuer: Verizon Communications Inc. (VZ)
VZ Analyst Estimates
Verizon ends first-half 2018 with strong operating results

Credit Ratings:

Bought at a Total Cost of 99.556
YTM at TC Then at 2.95%
Current Yield at TC = 2.6367%

At the time of purchase, I could have bought 2 treasuries maturing on 2/15/20 with a 2.719% YTM and a 1.4% current yield:

B. Bought 1 Wisconsin Electric Power 2.95% SU Bond Maturing on 9/15/21-In a Roth IRA Account:

I now own 2 bonds, with the other one owned in a taxable account. 

FINRA Page: Bond Detail (prospectus linked)

Issuer: Wholly owned subsidiary of WEC Energy Group Inc. (WEC)
WEC Analyst Estimates
WEC Energy Group posts strong second-quarter and first-half results

WEC SEC Filings
2017 Annual Report (debt of parent and subsidiaries are listed starting at page 80)

Credit Ratings:

Wisconsin Electric Power has a higher credit rating than its parent holding company.

Bought at a Total Cost of 99.303
YTM at TC Then at 3.198%
Current Yield at 2.9707%

C. Bought 1 Wells Fargo 2.95% CD (monthly interest payments) Maturing on 10/13/20:

This purchase and the one discussed in Item D. below were financed with the proceeds from a 1.45% CD that paid monthly interest and had a 1 year term.

D. Bought 1 Treasury 2.75% Coupon Maturing on 9/30/20:
YTM at 2.828%
Current Yield = 2.7542%

Assuming interest rates continue to rise, I will likely purchase more in one bond lots.

This bond was auctioned on 9/26/18. I decided to buy this one, rather than vintage treasuries maturing at about the same time, due to a higher current yield. The following snapshot was taken at the time of purchase:

The yields, which are shown in the far right column, are YTMs rather than current yields. The 1.375% coupon maturing on 9/30/18, for example, has a current yield of 1.4143% at the price shown.

E. Bought 2 Broadcom Cayman L.P. 2.375% SU Bonds Maturing on 1/15/20:

Finra Page: Bond Detail (prospectus linked)

Issuer: Broadcom Inc. (AVGO) and Broadcom Cayman
AVGO Analyst Estimates

Broadcom Inc. Announces Third Quarter Fiscal Year 2018 Financial Results and Quarterly Dividend
10-Q for the Q/E 8/5/18

As I understand it, Broadcom Cayman L.P. was merged into Broadcom earlier this year. Page 7

Credit Ratings:

Fitch Affirms Broadcom at 'BBB' on CA Acquisition Announcement; Revises Outlook to Stable (7/13/18)

Bought at a Total Cost of 98.922
YTM at TC Then at 3.234%
Current Yield at TC = 2.4%

3. Small Ball-Lottery Tickets: 

The following two stocks are not doing so well. My entry points so far have been less than optimal. 

A. Bought 30 TTOO at $6.31-Used Commission Free Trade:  

Quote T2 Biosystems Inc. Stock Quote
T2 Biosystems Home

"T2 Biosystems, an emerging leader in the development and commercialization of innovative medical diagnostic products for critical unmet needs in healthcare, is dedicated to improving patient care and reducing the cost of care by helping clinicians effectively treat patients faster than ever before. T2 Biosystems’ products include the T2Dx Instrument, T2Candida® Panel, and T2Bacteria Panel and are powered by the proprietary T2 Magnetic Resonance (T2MR®) technology. T2 Biosystems has an active pipeline of future products, including products for the detection of additional species and antibiotic resistance markers of sepsis pathogens, and tests for Lyme disease." (emphasis added)

Pipeline

Maximum Position: 50 to 70 shares

Last Share Offering: Sold 6.1M shares (plus greenshoe) at $7.5 Prospectus (May 2018)

TTOO 5 Year Chart: Awful (traded at over $20 in January 2015)

Subsequent to my purchase, the shares popped in response to this news release. New Data Suggests T2 Biosystems’ T2Lyme™ Panel is More Accurate than Other Diagnostics for Identifying Borrelia Infections for Patients Suspected of Having Early Lyme Disease Anything that differentiates this company's tests  as better than a competitor's product would be viewed positively by investors. 

The pop in price did not last long as the reality of losses and the struggle toward profitability pierced and then exploded the temporary ebullience.  

This company has revenues, but is still burning cash: T2 Biosystems Reports Second Quarter 2018 Financial Results and Provides Corporate Update 

10-Q for the Q.E. 6/30/18 

2017 Annual Report 

I would view it as highly unlikely that this company will become profitable before 2021. I view this lottery ticket to be a long term hold. A buyout by a larger diagnostic company, like Roche, is a possibility.

B. Bought 20 MLNT at $4.1-Used Schwab Commission Free Trade:  

Quote: Melinta Therapeutics Inc. (MLNT)

Last Discussed: Item # 1.A. Bought 30 MLNT at $6.1 (7/22/18 Post)

This is a buy and forget Lotto position. It will be awhile before this small antibiotic company will turn profitable, with no assurance that will ever happen. The decline since my initial purchase at $6.1 was due to a disappointing second quarter report coupled with antibiotic drug companies being considerably out of favor in the biotech universe.

The company does have several marketable antibiotics. Two antibiotics, which have received FDA approval, are awaiting a decision from the European regulator.

Products-Melinta Therapeutics

Pipeline - Melinta Therapeutics

Current Position: 50 Shares

Average Cost Per Share = $5.3

Press Releases Release After Last Discussion: 

Melinta Therapeutics Reports Second Quarter 2018 Financial Results (net loss of $57.78M or $1.38 per share on revenues of $12.022M)

Melinta Therapeutics and Menarini Group Enter Commercial Agreement for Vabomere™ (meropenem and vaborbactam), Orbactiv® (oritavancin) and Minocin® (minocycline) for Injection in 68 Countries 

Menarini Group - Menarini (MLNT exclusive licensee in 68 countries)

Melinta Therapeutics Publishes Complete Results from Phase III TANGO 2 Study of Vabomere™ (meropenem and vaborbactam) 

Melinta Therapeutics Receives Positive CHMP Opinion for Vabomere™ (meropenem and vaborbactam) 
 
4. Sold 100 AEG at $6.74-Used Schwab Commission Free Trade: 

I collected the semi-annual dividend on this 100 share lot. The Netherlands withheld a 15% dividend tax. The shares popped on 9/25 by almost 4% possibly due to this press release: Aegon’s US capital position to benefit significantly from merger of legal entities 

Quote: Aegon N.V. ADR (AEG)

Closing Price Last Friday: AEG $6.13 +0.04 +0.66% 

Profit Snapshot: +$74.21

Item # 1 Bought 100 AEG at $6 (9/2/18 Post) 

With the recent interest rate pop, the remaining Aegon hybrid securities have fallen in price. Stocks, Bonds & Politics: Aegon Hybrids: Gateway Post

I have the following on my monitor list now, but will need further price deterioration before considering a purchase: 

AEH $25.10 -$0.05 -0.20% 
AED $25.34 -$0.02 -0.08% 

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.