Observations and Sample of Recent Trades: GMRE, PBCT, PGX, TDIV

Economy:

This is a reasonable prediction IMO: Trump economy expected to slow down in 2019, before possible recession in 2020

Harvesting in a trade war: U.S. crops rot as storage costs soar | Reuters

GM to slash over 14,000 jobs from North American workforce

In a 2016 rally before auto workers in Warren County, Michigan, Trump made the following commitment which elicited cheers from the Trumpsters: “If I’m elected, you won’t lose one plant, you’ll have plants coming into this country, you’re going to have jobs again, you won’t lose one plant, I promise you that.” The rally was held about one mile from GM's plant in that county which is going to be closed. Donald Trump Campaigns Warren Michigan, Oct 31 2016 | Video | C-SPAN.org; GM’s Plant Closures Confirm the President is a Liar and a Fool | The Nation; GM to halt production at several plants, cut more than 14,000 jobs; Trump promised to return lost jobs to industrial America. Why is General Motors laying off 15,000? GM has already got what they wanted from the Duck, a relaxation of emission rules and a big tax cut. 

Trump threatened to take away GM's subsidies, apparently referring to the tax credit that is available to consumers-NOT GM-who buy electric cars: GM stock tumbles after Trump threatens to cut all subsidies - CNN

Trump says ‘highly unlikely’ that China will avoid facing tariff hikes - MarketWatch

Larry Kudlow previews Trump-Xi talks on tariffs and trade at G-20 summit; Ahead of G20 summit, Trump will meet with Xi to discuss 'fair' trade deal (Trump believes there is a "good possibility" of a trade deal with China) Donald stated last April there was a "very good chance" of a trade deal with China. Very good chance of a U.S.-China trade deal: Trump | Reuters (4/24/18 article)

Trump says US could slap 10% tariffs on iPhones, laptops from China

The Stock Jocks are becoming more optimistic that a trade deal is in the works. I hope so, but view that renewed optimism to be more delusional than factual.  

Trump attacks Fed Chair Powell: 'I'm not even a little bit happy with my selection of Jay'

+++++++

Markets and Market Commentary:

Yesterday, there were 20 new highs on the NYSE and 233 new lows:  NYSE New Highs & Lows - Markets Data Center As of yesterday, only 38% of the S & P 500 components were above their 200 day SMA lines. S&P 500 Index Chart, Components, Prices - Barchart.com

Trading guru Bollinger: U.S. stock market just flashed not one, but two, buy signals - MarketWatch

Grim Stock Signals Piling Up as Wall Street Mulls Recession Odds - Bloomberg

$9 trillion corporate debt bomb is 'bubbling' in the US economy

Facebook admits targeting George Soros after he criticized company - MarketWatch

Shale Boom Raises Specter of New Glut: Gulf Coast Oil Terminals - Bloomberg

Morgan Stanley upgrades emerging markets, downgrades US

+++++

Trump:

Scientists have not yet accepted the Professor Don's erudite conclusion that climate change is a Chinese hoax. Major Trump administration climate report says damages are ‘intensifying across the country'; The Three Most Chilling Conclusions From the Climate Report

Donald claimed to have read some of the climate report before reaching a decision that he did not believe it. I doubt the Duck read more than the headline and two sentences. Trump: 'I don't believe' climate change report - CNN Video

Donald is a "Stable Genius" who knows everything or so we are told by none other than the Duck himself. 

Trump on climate change: ‘People like myself, we have very high levels of intelligence but we’re not necessarily such believers.’-The Washington Post (11/27/18 statement by the Duck); Trump to reporter: I'm a very stable genius - CNN Video

The Stable Genius does not need to read books, gather facts from reliable sources, or talk with experts before arriving at an opinion. God is apparently giving him his wisdom through the "gut". Trump: My gut tells me more than anybody's brain - CNN Video

Some skeptics may argue that it was Donald's gut decisions that led to his six business bankruptcies. 

Professor Don knows more about military technology than anyone in the military. Just ask him and he will pontificate: Trump questions technology central to Pentagon’s plans for launching aircraft at sea - The Washington Post  

Those who believe that Trump knows nothing other than his own reality creations and bull shit have not yet seen the light by basking in the Duck's brilliance and profound erudition.  

Stable Genius with a High Level of Intelligence or Just a Lying and Ignorant Carnival Barker and Demagogue suffering from several mental illnesses?  

Trump brushes aside CIA assertion that crown prince ordered killing, defends him and Saudi Arabia - The Washington Post According to the Duck, the CIA had "feelings" that possibly the Crown Prince ordered the Khashoggi assassination, adding that the "crown prince hates it more than I do.”  

Trump has given his marching orders: increase spending, cut taxes and lower the ballooning federal budget deficits. Trump demands action to reduce deficit, pushes new deficit spending I call this miracle economics.  

Mia Love slams Trump in concession speech- CNN 

Trump uses immigration crisis to call for border wall funding (and once it is built, migrants will go over or under the wall, though some would be deterred)

The chaos behind Trump's family separation policy at the Mexican border - 60 Minutes investigation finds separations were greater in number than the Trump administration admits - CBS News

Trump's Response to 60 Minute Programs: 

Donald is simply repeating lies that he has told many times previously in those tweets. Trump attacks ‘Fake 60 Minutes’ for ‘phony story’ on family separations at the border - The Washington Post 

60 minutes did not use the photo referenced by Trump, but did use images "released by Customs and Border Protection in June of a facility in McAllen, Tex.,  that showed children being held in similar cagelike areas."  

Obama did not have a zero tolerance policy, which was Trump's unique policy notwithstanding his repeated lies and false denials on the subject. 

Trump's policy required that all parents be arrested and that policy then resulted in their children being routinely separated from them and sent to a different facility. The Trump Administration's Family Separation Lies, Laid Bare | Cato Institute; Trump migrant separation policy: Children 'in cages' in Texas - BBC;No, Donald Trump’s separation of immigrant families was not Barack Obama’s policy | PunditFact 

Trump claims that only "safe" tear gas was used on the migrants that included women and small children in diapers. Trump defends using very "safe" tear gas as DHS claims 600 migrants are convicted criminals - CBS News President Donald Trump: Migrants Sprayed With "Very Safe" Tear Gas At Border-YouTube Homeland Security Secretary Kirstjen Nielsen claimed that more than 600 of the migrants were convicted criminals. The border patrol claimed that over a 1000 migrants tried to storm the border last Sunday. Mexico said it was about 500. I view Ms. Nielson to be about as credible as the Duck. 

Tear gas is banned by the Geneva Convention as a chemical weapon when used in a war. What Tear Gas Does to Its Victims; Chemical Weapons Convention | OPCW There is no such thing as "safe" tear gas, notwithstanding's the Duck's usual ignorant claim to the contrary, let alone "very safe" tear gas.  

Trump claims that 97% of asylum seekers failed to attend their court hearings. In the 2017 fiscal year, the number was 11%. Trump’s Falsehood-Laden Speech on Immigration - The New York Times "Of the asylum seekers who participated in a pilot program tested as an alternative to detention,... 100 percent turned up for court hearings." Trump terminated that program. Trump ends program for mothers, children seeking asylum - CNN 

I would agree that there are those who seek asylum who are gaming the system, including those who simply want to escape poverty in Central America and have no legitimate asylum claims. One way to deal with the no-shows is to place angle bracelets on the adults and to require periodic check-ins, until their asylum application reaches a final decision.      

Trump says 'thank you President T,' 

++++++

1. Small Ball-Commission Free ETFs: 

A. Bought 5 TDIV at $35 (commission free for Vanguard customers):

Quote: First Trust ETF VI NASDAQ Technology Dividend Index Fund (TDIV)

Closing Price Yesterday: TDIV $35.25 +$0.17 +0.48% 

Expense Ratio: .5%

Holdings

Distribution History: Quarterly at a variable rate 

Current Position: 5 shares

Maximum Position: 100 Shares

Purchase Restriction: Small Ball Rule 

Last Sell Discussions: Items # 3.A. and 3.B. Eliminated TDIV Sold 50 at $36.56 and Sold 50+ at 36 (2/26/18 Post)(profit snapshots =$462.81); Item 2 Sold 50 TDIV at $37.07 (1/25/18 Post)(profit snapshot = $270.61); Item # 5 (4/29/17 Post)(snapshots of prior trades +$683.57)

Trading Profits to Date: $1,416.99 

B. Bought 30 PGX at $14, 10 at $13.9 and 10 at $13.71 (commission free for Schwab Customers):

Quote: PGX Fund - Invesco Preferred ETF Overview

Closing Price Yesterday: PGX $13.70 -$0.02 -0.15% 

This ETF would also be commission free to Vanguard brokerage customers.

Fidelity offers a functionally similar ETF commission free: iShares U.S. Preferred Stock ETF (PFF)

PGX Two Year History This Account:

Sponsor's Website: Invesco

Dividends: Monthly at Variable Rate

Prior Sell Discussions: Item # 2  Sold 100 PGX at $13.65 (9/14/13 Post); Sold: 200 PGX at $14.38

PGX Net Trading Profit (-$116.54 and +$155.66) = +$39.12

Maximum Position: 100 shares I prefer to own individual equity preferred stocks and exchange traded bonds.

Purchase Restriction: Small Ball Rule

Dividend Reinvestment: Not until I hit 100 shares

As previously discussed, the "preferred" stock ETFs own more than traditional preferred stocks. Owned positions include bonds that pay interest including a variety of exchange traded bonds.

You can not spot those securities looking at the descriptions provided by the sponsor: Holdings More descriptive detail is given in the annual report. For example, all of the holdings described in the following snapshot are senior unsecured baby bonds:

E.G.

TBC-AT&T Inc. 5.625% Global Notes due 2067
TBB-AT&T Inc. 5.35% Global Notes due 2066
CTY-Qwest Corp. 6.125% Notes due 2053
TDA - Telephone & Data Systems Inc. 5.875% Sr. Notes due 2061
VZA Verizon Communications Inc. 5.9% Notes due 2054

Other owned baby bonds include:

Subordinated = junior unsecured bond (generally rated one or two notches below senior unsecured debt)

Debenture = bond, not equity capital

AFGE-American Financial Group Inc. 6.25% Subordinated Debentures due 2054

ALL.PB- Allstate Corp. 5.1% Fixed-To-Floating Rate Subordinated Debentures due 2053

ARGD- Argo Group International Holdings Ltd. 6.5% Senior Notes Due 2042

CMSA-CMS Energy Corp. 5.625% Junior Subordinated Debentures Due 2078

CMSC Stock Price-CMS Energy Corp. 5.875% Junior. Subordinated Notes due 2078

EBAYL-eBay Inc. 6% Notes due 2056

GMTA- GATX Corp. 5.625% Senior. Notes due 2066

SGZA  - Selective Insurance Group Inc. 5.875% Senior Notes due 2043 

SOJB-  Southern Co. 5.25% Junior Subordinated  Notes due 2076 

SWJ-Stanley Black & Decker Inc. 5.75% Junior Subordinated Debt Due 2052

THGA - Hanover Insurance Group Inc. 6.35% Subordinated Debentures due 2053

TMK.PC - Torchmark Corp. 6.125% Junior Subordinated Debentures due 2056

WRB.PE -  W.R. Berkley Corp. 5.7% Subordinated Debentures due 2058

There are several more.

Of the preceding linked bonds, I currently own only ARGD and SGZA but have bought and sold EBAYL, GMTA, SOJB, SWJ and THGA. I will trade them given their potentially long durations.

2. Short Term Bond/CD Ladder Basket Strategy:

December Maturities: 

SU = Senior Unsecured Bond ($1K par value per bond)

CD = Certificate of Deposit ($1K par value per CD)-FDIC Insured

MI = Monthly Interest Payments
Treasury: U.S. Treasury Debt ($1K par value per bill, note or bond)

IR: Investment rate for T Bills Bought at Auction 
Secondary Market Treasury Purchases: All Commission Free

4 Wisconsin Public Service 1.65% SU 12/4 (various purchase dates)

2 Northwest Natural Gas 1.545% SU 12/5 (bought in February 2018)

2 Beal Bank 1.5% CDs 12/5 (16 month CDs, semi-annual interest)

2 Starbucks 2% SU 12/5 (bought in March 2018)

2 Treasury 1 Year T Bill 1.694% IR 12/6  (bought at auction)

1 Citigroup 2.05% SU 12/7   (bought in March 2018)

2 Morgan Stanley 2.2% SU 12/7 (bought in March 2018)

2 Pacific Premier 1.45% CDs MI 12/10 (15 month CDs)
2 Treasury IR 2.207% 12/11 (1M 25 day T Bills Bought at Auction)
5 Treasury IR 2.234% 12/11 (1 month T Bills bought at auction)
2 Black Hills 2.5% SU 12/11 (early redemption)

2 Deere 1.95% SU 12/13 (bought in February 2018)
2 Treasury 2.151% Investment Rate 12/13 (bought at auction)

2 Sonabank 1.65% CDs MI 12/14 (1 Year CD)

6 Treasury 1.25% 12/15 (multiple secondary market purchases)

2 Tyco Electronics 2.375% SU 12/17 (bought in March 2018)
2 Treasury Bills (1MO & 25 days) IR 2.218% 12/18 (bought at auction)

2 Citizens Bank 2.1% CDs 12/20 (6 month CDs)
2 Treasury 13 Week Investment Rate 2.166% 12/20 (bought at auction) 

1 Parkway Bank 1.75% CD MI 12/22 (1 Year CD)

2 Wells Fargo 1.5% CDs MI 12/24 (13 month CDs)
3 Treasury  2.243% IR  55 day T Bills (bought at auction) 

1 Stifel BK 2.1% CD MI 12/27 (6 month CD)
2 Treasury 13 Week Investment Rate 2.223%  12/27 (bought at auction)

1 Merrick Bank 1.75% CD MI 12/28 (1 Year CD)
1 GATX 2.5% SU Early Redemption 12/28 (maturing on 3/15/19)

1 Bank of China 2.2% CD 12/28 (6 month CD)

4 Treasury 1.5% 12/31 (multiple secondary market purchases)

2 Treasury 1.25% 12/31 (")

$64K (added early redemption of 1 GATX bond on 12/28/18 and early redemption of 2 Black Hills SU bonds maturing on 1/11/19 )

A. Bought 1 Wells Fargo 3% SU Bond Maturing on 1/22/2021:

I now own 2 bonds.

FINRA Page: Bond Detail (prospectus linked)

Issuer: Wells Fargo & Co. (WFC)
WFC Analyst Estimates
Wells Fargo Reports $6.0 Billion in Quarterly Net Income; Diluted EPS of $1.13 

Credit Ratings:

Bought at a Total Cost of 99.171
YTM at Total Cost Then at 3.398%
Current Yield at TC = 3.0251%

B. Bought 2 J.P. Morgan 2.75% SU Bonds Maturing on 6/23/20-In a Roth IRA Account:

FINRA Page: Bonds Detail (prospectus not linked)

Issuer: JPMorgan Chase & Co.  (JPM) 
JPM Analyst Estimates 

Credit Ratings:

Bought at a Total Cost of 99.469    (includes $4 Vanguard commission)
YTM at TC Then at 3.094%
Current Yield at TC = 2.7647%

I am replacing in advance two JPM SU bonds that mature in this ROTH IRA account next March.

C. Bought Two  53 Day Treasury Bills at Auction Maturing on 1/15/19:
IR = 2.34%

Auction Results:

3. REGIONAL BANK BASKET STRATEGY:

A. Bought 100 PBCT at $15.65:

Quote: People's United Financial Inc (PBCT)

Closing Price Yesterday: PBCT $16.00 -$0.21 -1.30% 

PBCT Consensus Analyst E.P.S. Estimates (as of date of purchase)

2018: $1.29

2019: $1.43

Y-O-Y Projected E.P.S. Growth = 10.85%

P/E Using $15.65 price and $1.43 E.P.S. = 10.94

Dividend: Quarterly at $.175 ($.7 annually)

Dividend Yield at $15.65 =   4.47%
Dividend Yield at $15.7 TC per share = 4.46%

Last Ex Dividend Date: 10/31/18

Last Round-Trip: Item # 4 Sold 100 PBCT at $14.61 (9/21/13 Post)(profit snapshot =$298.47)- Item # 1 Bought 100 PBCT at $11.47 (6/14/12 Post)

The reason for selling back in 2013 was overvaluation. The consensus E.P.S. for 2014 was then $.9. With the recent price contraction from over $20, and earnings growth since 2013, the valuation has become cheap IMO.

Current and Maximum Position: 100 shares + dividend reinvestment

Last Earnings Report: Q/E 9/30/18

People's United Financial Reports Third Quarter Net Income of $117.0 Million, or $0.33 per Common Share

Comparisons with 2017 Third Quarter:

E.P.S. $.33, up from $.26
NIM: 3.15% up from 3.04% (right direction, slow progress)
Efficiency Ratio: 56.7%, down from 57.3% (right direction)
ROA: 1.06% (average)
ROTE: 14.5%
Charge Off Ratio: .09% (excellent)
Coverage Ratio: 147.8% (good/originated loans only)
NPA Ratio: .57% (okay for this stage in credit cycle)
Total Risk Based Capital Ratio: 13.6% (okay, well in excess of minimum)
Tangible Book Value Per Share: $9.19, up from $8.68
Tangible Equity to Assets Ratio: 7.6%

"The effective income tax rate was 21.6% for both 3Q18 and the first nine months of 2018, compared to 27.8% for the full-year of 2017." The bank owns municipal bonds.  

4. Elimination:  

A. Eliminated GMRE-Sold 98+ shares at $9.41: 

Equity REIT Common and Preferred Stock Basket Strategy:

Closing Price Yesterday: GMRE $9.45 +$0.01 +0.11%: Global Medical REIT

Profit Snapshot: +$159.01

Last Buy Trades: Item # 1.A. Bought 10 GMRE at $7.19 and 10 at $6.77-Used Commission Free Trades (3/8/18 Post) 

I view this stock as a high risk REIT given its debt levels; its use of expensive equity capital to fund purchases; the external management structure and its cost; and GMRE's excessive free cash payout ratio. 

Last Earnings Report: Q/E 9/30/18 SEC Filed Earnings Press Release

10-Q For the Q/E 9/30/18

This relatively new REIT has gradually increased AFFO per share to the $,20 per share quarterly dividend:

GMRE Trading Profits to Date: $363.98 ($204.97 from prior trades)

Links to Prior Sell Discussions:

Item # 3.C. Sold 50 GMRE at $10.01 (5/23/2017 Post)

South Gent's Comment Blog # 7: Eliminated GMRE

I still own a small position in Global Medical REIT Inc. 7.5% Cumulative Preferred Series A Stock. I may add to that position on weakness. 

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.