Observations and Sample of Recent Trades: CFG, CIOPRA, CGBD, FHB, GMREPRA, NMFC, NRZ

Economy: 

CPI for all items declined by .1% on a seasonally adjusted basis due to a decline in energy prices. On a non-seasonally adjusted basis, the annual all items CPI rate was 1.9%. Core CPI was up 2.2% last year. 

Consumer Price Index Summary

Table 2. Consumer Price Index for All Urban Consumers (CPI-U): U. S. city average, by detailed expenditure category

New home sales tank 19 percent to end 2018 (the government shutdown has prevented release of its data compilation, so this information comes from a private service)

Shutdown highlights that 4 in 5 US workers live paycheck to paycheck (an important factoid when assessing the potential ramifications of an economic downturn)

Despite wage growth, the average American suffers as cost of living rises at a faster pace - MarketWatch

Beijing issues statement on US-China trade talks (China says the recently concluded meeting established a "foundation" for a resolution. That sounds less optimistic than Donald's recent pronouncements) 

Chinese middle class buying up American residential real estate

Fitch warns of possible downgrade to U.S. AAA credit rating if shutdown persists - MarketWatch

Fed minutes show ‘many’ think officials think they can be ‘patient’ on interest rates going forward - MarketWatch

Powell says Fed is ‘watching and waiting’ on interest rates - MarketWatch

Powell says Fed can be patient as U.S. economy evolves in 2019 | Reuters (10/10/19, reiterating a statement made on 1/4/19) 

Fed Chairman Powell says he is 'very worried' about growing amount of U.S. debt I discussed this Powell comment here. 

Gundlach: Stocks breaking down, bonds overvalued, Fed's on suicide mission

Mortgage rates hit a 9-month low as government shutdown is already biting the housing market - MarketWatch

In a Barron's video interview, Jeffrey Gundlach notes that the estimated unfunded liabilities of the federal government is currently about $122 trillion. Jeffrey Gundlach on the Growth of U.S. Debt - Barron's

U.S. Economy Is Floating on an 'Ocean of Debt', Gundlach Warns | Fortune This will end in a fiscal catastrophe.  
  

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Markets and Market Commentary: 

Computer models to investors: Short everything

Why bulls say the stock market could echo its 2016 rebound - MarketWatch

Gundlach says this is how stock-market investors can survive the ‘zigzags’ of 2019 - MarketWatch

We're finding out now why the stock market tanked in December (earnings warnings)

The stock market is too damaged for a sustained rally, Morgan Stanley equity strategist says - MarketWatch; Top strategist who called the market sell-off says it's not safe to buy stocks yet

IPhone sales are 'collapsing,' investor Dan Niles warns

Cramer: Chinese consumers are taking sides in US-China trade war  As stated in previous comments, and in earlier blogs, I suspect that China's consumers are boycotting American products due to the trade frictions. It is not possible to know the numbers of course. I made the following statement last July:  

(7/12/2018 Post)

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Trump: 

Manafort filing reveals alleged campaign communications with Russian operative - CBS News; Paul Manafort shared 2016 polling data with Russian associate, according to court filing - The Washington Post; Why the latest Paul Manafort news is a very big deal (the evidence points directly to collusion involving Trump's then campaign chairman Paul Manafort and Russian intelligence, but falls short of directly implicating Trump); Paul Manafort Shared Trump Campaign Polling Data with Russian Oligarch Oleg Deripaska in 2016

Misleading Border Crime Statistic - FactCheck.org

False Claim of Immigrant Children Deaths Under Obama - FactCheck.org

Trump’s Claim of Terrorists Streaming Over Border ‘Simply Isn’t True,’ Experts Say - The New York Times

Last Thursday, VP Pence ruled out a deal to protect the dreamers in exchange for funding the wall. Pence to Democrats: No wall, no deal-Axios The GOP's policy has been to send the Dreamers back to their country of origin, notwithstanding jive expressed to the contrary by some of them.  

FDA has cut back on food inspections because of shutdown - MarketWatch There is a wing of the republican party that wants to abolish the FDA as an unjustified interference in the free markets. Protection from contaminated food and unsafe drugs diminish their conception freedom. Trump’s Big Libertarian Experiment - The New York Times 

How much longer can Mitch McConnell sit it out?

Mercurial Trump Has Made Path Out of Shutdown Much Harder to Find

Poll: Majority of GOP say shutdown is 'embarrassing for the country'

Perhaps the most ridiculous articulation that selling harmful products is part of an individual's freedom right comes from Glen Beck who frequently railed against the republican President Theodore Roosevelt's support for the  Meat Inspection Act of 1906 and  the Pure Food and Drug Act {no rats in the ground beef vive Upton Sinclair  who authored the 1906 novel The Jungle)} The Reactionary Philosophy of Glen Beck 

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Watergate Hearings and Nixon's Popularity: 

Nixon's downfall started with the Watergate hearings that provided the American public with concrete information on his criminal activities. How the Watergate crisis eroded public support for Richard Nixon | Pew Research Center  

The House Democrats are about to start public hearings that will provide more information about Don the Con. Sure, the Trumpsters will stand by him no matter what is revealed or how much evidence is produced about his unethical and criminal activities. The issue for GOP politicians in 2020 will be  how to hold onto to the Trumpsters, the core of the modern day GOP, without aligning themselves too closely with Trump as they have done up to now.  

It was only when Nixon's popularity numbers sunk into the 20s, deep into those hearings, with clear and convincing evidence of his criminal actions in clear public view, that enough Senate republicans abandoned him to insure his impeachment conviction which then led to his resignation. Nixon was told by Senators Goldwater and Scott on 8/7/1974 that only 15 republican senators would vote for acquittal. In 1974, Goldwater and Rhodes told Nixon he was doomed I doubt that a single republican senator would now vote to impeach Trump even with evidence proving his commission of high crimes and misdemeanors beyond any reasonable doubt. Perhaps Corker or Flake would have done so, but they refused to run for reelection in 2018.  

Micheal Cohen will be giving public testimony before a House committee next month. That is just the start. 

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Ocean Warming Is Accelerating Faster Than Thought, New Research Finds - The New York Times; How fast are the oceans warming? | Science

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1. Income Generation-Small Ball REITs and BDCs: 

A. Added 10 NRZ at $15.81; 10 at $15 and 10 at $14.2-Used Commission Free Trades: 

Quote: New Residential Investment Corp. (NRZ)

Closing Price Last Friday: NRZ $15.78 +$0.05 +0.32% 

Website: New Residential Investment Corp.

SEC Filings

2017 Annual Report (risk factor summary starts at page 13 and ends at page 56)

Last Discussed: Item # 1.A. Bought 10 NRZ at $16.38 and 5 at $16.18 (3/15/18 Post)

Last Stock Offering: New Residential Announces Pricing of Public Offering of Common Stock (11/1/18)

NRZ Interactive Chart

Current Position: 45 shares

Maximum Position: 100 shares (viewed as risky)

Average Cost Per Share: $15.44

Highest Cost Lot in Chain: TC of $16.38 (2/28/18)

Purchase Restriction: Small Ball Rule.

Dividends: Quarterly at $.5 per share

New Residential Declares a Fourth Quarter Dividend of $0.50 per Common Share (payable on 1/25/19)

New Residential Announces Tax Treatment of 2017 Dividends

Dividend Yield at Average Cost Per Share = 12.95%

Last Ex Dividend Date: 12/28/18 (35 of 45 shares participated)

New Residential bounces as KBW advises buying the dip-Seeking Alpha

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

New Residential Announces Third Quarter 2018 Results

B. Added 10 CBGD at $13.95; 10 at $13.5 and 10 at $12.6 -Used Commission Free Trades:

Quote: TCG BDC Inc. (CGBD)

Closing Price Last Friday: CGBD $14.39 $0.12 +0.84% 

BDC Buzz published an article about CGBD on 1/3/19, which is not yet behind SA's paywall: I Just Bought More TCG BDC, Which Is About To Rally With A Safe 13% Yield - TCG BDC Inc (NASDAQ:CGBD) | Seeking Alpha

SEC Filings

2017 Annual Report (risk factor summary starts at page 21 and ends at page 45)

Last Discussed: Item # 1.B. Bought 10 CGBD at $16.2 and 10 at $15.7  10/21/18 Post)

TCG BDC Inc. Interactive Chart: Bear Trend

Current Position in this Account: 70 Shares as of 1/13/19 (last dividend to be reinvested in shares on 1/17/19)

Maximum Position: 100 Shares (raised from 50 shares due to price decline-viewed as risky)

Average Cost Per Share: $15.1

Net Asset Value Per Share as of 9/30/18 = $17.66

Discount to 9/30/18 NAV at TC of $15.1 = -14.5%

TC = Total Average Cost Per Share

Dividend: Quarterly at $.37 per share ($1.48 annually)

Special Dividend: $.20 per share

Dividend Yield at TC (regular dividend only) = 9.8%

Last Ex Dividend Date: 12/27/18; Regular + Special = $.57 per share:

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

Net investment income was reported at $.41 per share. 

The company did record a $.31 net realized loss + net change in unrealized depreciation on investments. One borrower, Product Quest Manufacturing filed for bankruptcy, which is always a risk in loans made by BDCs. Another borrower, Tweddle Group, emerged from bankruptcy and part of CGBD's first lien debt was exchanged for equity. That reorganization resulted in a $4.1M loss. Tweddle lost a major customer early in 2018. 

The main Product Quest loan was for $33M and was valued at $19.487M as of 12/31/17 (page 19) That loan was valued at zero as of 9/30/18 (page 9) That kind of decline over a 9 month period suggests that the 12/31/17 mark was not realistic when made which is another hazard for BDCs. CGBD claimed on the conference call that prior management did not disclose quality control problems at its Florida manufacturing facility. New management disclosed the problem after July 2018.  

A loan to SolAero Technologies remained on non-accrual status and was written down by $2.9M. 

"As of September 30, 2018, the weighted average yields for our first and second lien debt investments on an amortized cost basis were 9.07% and 11.01%, respectively, with a total weighted average yield of 9.25%."

"As of September 30, 2018, on a fair value basis, approximately 0.8% of our debt investments bear interest at a fixed rate and approximately 99.2% of our debt investments bear interest at a floating rate, which primarily are subject to interest rate floors." (emphasis added) 

TCG BDC, Inc. Announces Third Quarter 2018 Financial Results and Declares Fourth Quarter 2018 Dividend of $0.37 Per Share

TCG BDC Inc (CGBD) CEO Michael Hart on Q3 2018 Results - Earnings Call Transcript | Seeking Alpha

10-Q for the Q/E 9/30/18 (list of investments and basic loan terms start at page 7)

Risk Ratings as of 9/30/18: While the external managers provide these risk ratings, the individual investor lacks both the expertise and raw information necessary to evaluate each loans risk classifications. 

C. Added 10 NMFC at $12.6-Used Commission Free Trade:

Quote: New Mountain Finance Corp. (NMFC)

Closing Price Last Friday:  NMFC $13.35 -$0.02 -0.15% 

Website: New Mountain Finance Corporation

SEC Filings

10-Q for the Q/E 9/30/18 (investments listed starting at page 7)

Last Buy Discussion: Item # 3.B. Bought Back 50 NMFC at $13.54 (4/23/18 Post)

Last Sell Discussion: Item # 1 A. Sold 50 NMFC at $14.06 (8/19/18 Post)

As with all BDCs, the goal is to collect the dividends and to escape at whatever profit may be available. 

Net Asset Value Per Share (relatively stable for a BDC):

9/30/18:   $13,58 10-Q at page 3 

6/30/18:   $13.57
3/31/18:   $13.60 10-Q at page 3
12/31/17: $13.63
12/31/16 $13.46
9/30/15   $13.73
12/31/14 $13.83
9/30/14   $14.33
12/31/13 $14.38
6/30/13   $14.32

12/31/12 $14.06 Sourced from 10-Qs

IPO Price: $13.75 Prospectus (filed 5/23/11)

Dividend: Quarterly at $.34 or $1.36 annually

Last Ex Dividend Date: 12/13/18

Dividend Yield at Total Cost = 10.16%

Dividend Reinvestment: No, in this account

Current Position This Account: 60 Shares

Average Cost Per Share: $13.38

Maximum Position This Account:

Last Earnings Report: Q/E  9/30/18

Net asset value per share was reported at $13.58, down from $13.63 as of 12/31/17. Net investment income per for the quarter was $.36.   

New Mountain Finance Corporation Announces Financial Results for the Quarter Ended September 30, 2018

2. Short Term Bond/CD Ladder Basket Strategy:

Purchases = $7K

I would note that the 3 and 6 months treasury bills have drifted down some in yield recently. At the auction on 12/31/18, the 3 month treasury bill auction resulted in a 2.515% investment rate. Auction Results.pdf  As noted in Item 2.D. below, the 3 month treasury bill was auctioned last Monday at a 2.458% investment rate. Next Monday's auction, the investment rate may fall below 2.4%. For a small lot secondary market purchase, the yield would be less. 

Treasury bills are not "safe" for most households since they do not produce a sufficient inflation adjusted return. That is an obvious point. Nonetheless, some investors are hopelessly confused about the meaning of safety. 

A treasury bill or 3 month CD is not safe when a household needs to grow their savings at a far faster rate to meet reasonably anticipated future expenses and obligations. Annual Returns on Stocks, 10 Year Treasury Notes and 3 month Treasury Bills Starting in 1928: NYU Stern School of Business It is okay for me to buy treasury bills and short term CDs in bulk since I have zero situational risks and an abundance of capital and other assets.     

Others may be mistaken about their future situational risks and the capital necessary to meet them, which is frequently the case in my experience. 

One item that I frequently mention in that regard is health expenses during retirement, which are estimated to  $280K for a couple retiring at 65 now, and that does not include items that are not covered by Medicare (e.g. 24/5 caregiver, nursing home with limited exceptions). How to plan for rising health care costs - Fidelity Nor does that estimate include changes in Medicare that increase the costs over currently projected levels. The GOP's 2011 plan to replace traditional Medicare, for example, would have cost insureds twice as much as traditional Medicare, which I called at the time the republican plan to bankrupt the middle class in their golden years while giving the top 1% huge tax cuts. 

I have mentioned in the past that over $1M was spent for 24/7 caregivers for my mother so she could stay in her home rather than a nursing home until she passed.  

A. Added 2 More Bank of China 2.45% CDs Maturing on 4/15/19:

B. Bought 1 Citigroup 2.5% SU Maturing on 7/29/19:

FINRA Page: Bond Detail (prospectus not linked)

This purchase is a filler in my July 2019 maturity schedule. I picked up about .2% more in yield than a comparable maturity treasury at the time of purchase. 

There will come a time, probably within the next two years, when I will transition totally out of Citigroup debt. 

At the current time, this issuer's debt is highly liquid, which is also frequently the case for 1 bond lots, with relatively small spreads between the bid and ask prices. 

I do recall what happened to Citigroup during the Near Depression which is summarized in this 2008 article: Citigroup Saw No Red Flags Even as It Made Bolder Bets - The New York Times  

Issuer: Citigroup Inc. (C)
C Analyst Estimates

Credit Ratings:

Bought at a Total Cost of 99.851
YTM at TC Then at 2.764%
Current Yield at TC = 2.5037%

C. Bought 1 Treasury 1% Coupon Maturing on 8/31/19:
YTM = 2.544%

D. Bought 3 Treasury 3 Month at Auction Maturing on 4/11/19:
IR = 2.458%

Auction Results:

3. Small Ball- REGIONAL BANK BASKET STRATEGY:

A. Added 5 FHB at $23.62; 5 at $22.95 and 5 at $21.68-Used Commission Free Trades:

Quote: First Hawaiian Inc. (FHB)

Closing Price Last Friday: FHB $24.33 +$0.10  +0.41% 

FHB Analyst Estimates

SEC Filings

Last Discussed: Item # 5.A. (10/24/18 Post)

Last Substantive Discussion: Item # 4.A. (9/30/18 Post)

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

Current Position in This Account: 66+ shares

Average Cost Per Share in this Account: $26.18

Maximum Position: 100 Shares + Shares purchased with dividends

Purchase Restriction: Small Ball Rule

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

Dividend Yield at Total Average Cost Per Share = 3.67%

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

GAAP E.P.S. increased to $.50 from $.42 in the 2017 third quarter. Core E.P.S. was reported at $.52 compared to $.41. The reconciliation of GAAP to Non-GAAP is set out in the release. The most important adjustment was a charge related to a settlement in a class action suit that alleged improper fees for overdrafts.  

The performance ratios remained good, with the exception of NIM which is understandably stagnant: 

The non-accrual loans to total loan ratio is excellent at .09%. The charge off ratio was excellent as well at "0.12% of average loans and leases on an annualized basis."

Capital ratios are fine but not stellar: 

Effective Tax Rate (includes state and federal income taxes): 

Page 65 10-Q for the Q/E 9/30/18

10-Q

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

First Hawaiian, Inc. (FHB) CEO Robert Harrison on Q3 2018 Results - Earnings Call Transcript | Seeking Alpha

B. Added 5 CFG at $30.85:

Quote:Citizens Financial Group Inc. (CFG)

Closing Price Last Friday: CFG $32.63 +$0.39 +1.21% 

SEC Filings 

CFG Analyst E.P.S. Estimates  (as of 1/11/19)
2018: $3.51 (soon this will be an actual number)
2019: $3.85 

If that 2019 estimate is hit and 2018 ends at $3.51, the Y-O-Y E.P.S. growth would be 9.69%, and the P/E  using a TC of $30.85 per share and the 2018 estimate would be 8.01. 

Last Discussed: Item # 3.A.  Bought 25 CFG at $35.61-Used Commission Free Trade (11/4/18 Post)

I discussed the 2018 third quarter report in that previously linked post. 

Citizens Financial Group, Inc. Reports Third Quarter Net Income of $443 Million with Diluted EPS of $0.91 up 34% Year over Year; Underlying Net Income of $450 million and EPS of $0.93, up 37% Year over Year

Current Position: 30 Shares

Average Total Cost Per Share = $34.82

Maximum Position: 100 Shares

Purchase Restriction: Small Ball Rule

Dividend: Quarterly at $.27 per share ($1.08 annually)

Dividend History – Citizens Bank

Dividend Yield at Average Total Cost Per Share = 3.1%

Dividend growth has been good since CFG went public. 

Effective Tax Rates: "Income tax expense was $133 million and $165 million in third quarter 2018 and 2017, respectively. Our effective income tax rates in third quarter 2018 and 2017 were 23.2% and 32.2%, respectively. The decrease in the effective income tax rate was driven by the impact of December 2017 tax reform. Income tax expense was $370 million and $423 million in the first nine months of 2018 and 2017, respectively. Our effective income tax rates in the first nine months of 2018 and 2017 were 22.8% and 30.0%, respectively." Page 19 

CFG 1 Year Chart: Major Bear Trend starting in September 2018 with the price over $41 per share.

4. Equity REIT Common and Preferred Stock Basket Strategy:

With the declines in REIT equity preferred stocks, I have been adding gingerly to positions, lowering my average cost per share and raising my dividend yields.

When and if there is a pop in share prices, I may elect then to sell my highest cost lots provided I can do so profitably. Otherwise, I will just wait and collect the dividends.

I generally view REIT preferred stocks as a disfavored asset class for the reasons explained in the following linked post, which also contains snapshots of prior round-trip trades: 

Advantages and Disadvantages of Equity REIT Cumulative Equity Preferred Stocks (trading profits at $8,068.83 starting in 2008) Trades are generally in 30 to 100 share lots. 

A. Added 50 CIOPRA at $21.67-Used Commission Free Trade:

Quote: City Office REIT Inc. 6.625% Cumulative Preferred Series A Stock

Closing Price Last Friday: CIO-PA $22.79 -$0.18 -0.78% 

CIO.PA Stock Chart

Last Discussed: Stocks, Bonds & Politics: Item # 2.A. Bought 50 CIOPRA at $23.73-Used Commission Free Trade(4/9/18 Post)

Current and Maximum Position: 100 Shares

Average Total Cost Per Share = $22.7

Dividend: Cumulative, non-qualified and quarterly

Dividend Yield at TC = 7.3%

Last Ex Dividend Date: 1/10/19 (all shares participated)

Security Description:

Par Value: $25
Prospectus Supplement
Issuer: City Office REIT Inc.  (CIO); Form 10-K
Optional Redemption: On or after 10/4/21 at par value plus accrued and unpaid dividends
Dividend Stopper Clause = Yes (page S-22 of the prospectus)
Change of Control Provision: Yes

Last Sold CIOPRA: 

Item 3.A. Sold 50 CIOPRA at $25.21 (1/27/17 Post)(profit snapshot= $146.97) I discussed the purchase at $22.23 in this comment.

Last Common Share Sell Discussions (no position currently): 

Item # 1.C. Sold 10 CIO at $11.58 (5/17/2018 Post) 

Item # 8 Sold 100 CIO at $13.5: Update For Equity REIT Basket Strategy As Of 7/28/16 - South Gent | Seeking Alpha (profit snapshot= $207.97);

Item # 1. Sold 50 CIO at $12.38: Update For Equity REIT Basket Strategy As Of 3/7/16 - South Gent | Seeking Alpha (profit snapshot $61.04 plus one dividend


I regard the common share payout of $.235 as too large given the free cash flow numbers, which has been the case since this office REIT went public. A dividend cut is likely in the future IMO, whereas the preferred stock dividend can not be cut. The preferred share dividend can only be deferred after CIO ceases paying a common share dividend in cash. 

Last Earnings Report: 9/30/18 City Office REIT Reports Third Quarter 2018 Results

Note that the cash available for distribution was reported at $.2 per share:

The common share quarterly dividend needs to be cut to about $.16-$17 from the current $.235. It is not a plus for the preferred shareholder that the common dividend is not covered by free cash flow.  

So far, the cash flow deficit has been papered over through share offerings. "During the quarter, the Company issued 3,410,802 shares of its common stock through its ATM program at an average price of $12.79 per share".    

City Office REIT, Inc. Announces Closing of Upsized Public Offering of Common Stock and Full Exercise of Underwriters' Option (12/21/17)

B.  Bought 70 GMREPRA at $22.75:

Quote: Global Medical REIT Inc. 7.5% Cumulative Preferred Series A Stock  (GMREPRA)

Closing Price Last Friday: GMRE-PA $24.95 -$0.45 -1.77% 

Issuer: GMRE - Global Medical REIT Inc.

November 2018 GMRE Investor Presentation

GMRE SEC Filings

Last Discussed: Item # 1.C. Bought 30 GMREPRA at $24.35 (5/14/18 Post)

The 70 share purchase rounds this position up to 100 shares. I may sell the higher cost 30 share lot when and if the price exceeds $25 after the ex dividend date on 1/14/19. 

Current and Maximum Position: 100 shares

Average Cost Per Share: $23.28

Prospectus 

Par Value: $25

Coupon: 7.5% per annum ($1.875 per share annually)

Issuer Optional Call: On or after 9/15/22

Position in Capital Structure: Equity Preferred Stock superior only to common stock in the capital structure.

Dividend: Paid Quarterly, cumulative and non-qualified as a pass through entity

Last Ex Dividend Date:  10/12/18 

Next Ex Dividend Date: 1/14/19

GMREPRA Yield at a TC of $23.28:  8.05% 

Stopper Clause: Yes. 

The company can not pay a cash common stock dividend and defer payment of the preferred stock dividend. This clause is the means by which the preferred shareholders superior claim to cash is enforced against the common shareholders.

I recently sold my remaining GMRE common shares. Item #4.A. Sold 98+ GMRA at $9.41 (11/28/18 Post I mentioned in that post the possibility of buying the preferred stock given its similar yield with greater dividend protection.  

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

SEC Filed Earnings Press Release

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

Other GMRE Sell Discussions: Item # 3.C. Sold 50 GMRE at $10.01 (5/23/2017 Post); South Gent's Comment Blog # 7: Eliminated GMRE 

GMRE Trading Profits to Date: +$363.98 (all small lots)

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.