Economy:
China posts slowest economic growth since 1990 - MarketWatch (6.6% for 2018)
This report caused the Stock Jocks to have the shakes yesterday, creating yet another anxiety attack possibly exacerbated with a growing realization among a slightly growing minority that Donald may not be the best negotiator in world history.
S & P 2,632.90 -37.81 -1.42%
US cancels trade planning meeting with China, source says I mentioned in a recent comment that some skepticism was warranted about happy talk on a successful resolution, citing this Bloomberg article and my "feel" that China will not want to be pinned down to a deal that is specific and enforceable.
This report was published last night. Trump won't soften hardline on China to make trade deal: advisers | Reuters
So far today, the favorable earnings reports (e.g. IBM, PG) acted as chill out pills for the Stock Jocks.
This report caused the Stock Jocks to have the shakes yesterday, creating yet another anxiety attack possibly exacerbated with a growing realization among a slightly growing minority that Donald may not be the best negotiator in world history.
S & P 2,632.90 -37.81 -1.42%
US cancels trade planning meeting with China, source says I mentioned in a recent comment that some skepticism was warranted about happy talk on a successful resolution, citing this Bloomberg article and my "feel" that China will not want to be pinned down to a deal that is specific and enforceable.
This report was published last night. Trump won't soften hardline on China to make trade deal: advisers | Reuters
So far today, the favorable earnings reports (e.g. IBM, PG) acted as chill out pills for the Stock Jocks.
++++++
Markets and Market Commentary:
This is not news: Government shutdown exposes a harsh truth: Most Americans are unprepared for the next recession Foreclosures will spike in the next recession since far too many households are leveraged too much and have inadequate savings to make mortgage payments after losing a job.
This is not news: Government shutdown exposes a harsh truth: Most Americans are unprepared for the next recession Foreclosures will spike in the next recession since far too many households are leveraged too much and have inadequate savings to make mortgage payments after losing a job.
The investor known as the ‘Warren Buffett of Boston’ rattles Davos crowd with this warning - MarketWatch (the reference is to Seth Klarman who heads up the Baupost, one of the largest hedge funds). The story is based on a letter written by Klarman to his investors that was obtained by the NYT. Chilling Davos: A Bleak Warning on Global Division and Debt - The New York Times This is a quote from the letter that echos the concerns that I have expressed here for years: “There is no way to know how much debt is too much, but America will inevitably reach an inflection point whereupon a suddenly more skeptical debt market will refuse to continue to lend to us at rates we can afford.” By the time such a crisis hits, it will likely be too late to get our house in order.”
++++++
Trump:
Book by Former Staff Member Describes a White House ‘Out of Control’; Exclusive: The making of Trump's Enemies List - Axios; Team of Vipers: My 500 Extraordinary Days in the Trump White House: Cliff Sims
To end the shutdown for now, Trump made a meaningless offer to the Democrats that outraged the Trumpsters. In exchange for $5.7B in wall funding, Donald would give a temporary deportation reprieve to the DACA children for 3 years. Trump proposes extending DACA, TPS protections in exchange for wall funding - CNN; Trump proposes wall-for-DACA in bid to end shutdown | Reuters
By way of background, the Deferred Action for Childhood Arrivals (DACA) is an executive order issued by President Obama that prevented deportation of children who were brought illegally to the U.S, provided they do not have felonies or serious misdemeanors on their record.
Other requirements include living in the U.S. continuously since 6/15/17 and arrived in the U.S. before their 16th birthday. Unlike the DREAM Act which did not become law, the DACA program provided no path to citizenship for those children.
Trump repealed that Obama executive order that would have resulted in the deportation of those children. So the republicans are offering to temporarily give back what they have taken.
The core of the GOP wants to send the Dreamers back to their country of origin which explains their opposition to Obama's executive order.
Allowing them to stay and providing a path to citizenship is anathema to them and is immediately labelled as amnesty.
Republican politicians, unlike their core supporters, will frequently support the deportation result but claim that their motive is to defend separation of powers from Obama's alleged unconstitutional usurpation of Congress's power to pass laws. The Imperial Presidency argument only concerns them in this limited matter.
Republican controlled states filed legal challenges to the constitutionality of Obama's DACA executive order. Multiple federal district courts have enjoined Trump from implementing the GOP's deportation efforts and to continue the DACA program pending a trial. Status of Current DACA Litigation - National Immigration Law Center
So why is Trump's 3 year offer meaningless? His administration is under court order to continue the DACA program, so he is offering only to do what he has already been ordered to do by the courts. Someone who is a capable negotiator knows that such offers will not lead to a successful resolution.
It may take two or three years before the courts to reach a final resolution. Until that happens, the GOP can not deport these children to their native countries anyway.
Yesterday, the Supreme Court refused to consider an expedited appeal from the injunctions. DACA news: Supreme Court again takes no action, leaving policy in effect for now - CNN
Senate Republicans all but surrender to Trump on wall despite shutdown’s toll - The Washington Post
Book by Former Staff Member Describes a White House ‘Out of Control’; Exclusive: The making of Trump's Enemies List - Axios; Team of Vipers: My 500 Extraordinary Days in the Trump White House: Cliff Sims
To end the shutdown for now, Trump made a meaningless offer to the Democrats that outraged the Trumpsters. In exchange for $5.7B in wall funding, Donald would give a temporary deportation reprieve to the DACA children for 3 years. Trump proposes extending DACA, TPS protections in exchange for wall funding - CNN; Trump proposes wall-for-DACA in bid to end shutdown | Reuters
By way of background, the Deferred Action for Childhood Arrivals (DACA) is an executive order issued by President Obama that prevented deportation of children who were brought illegally to the U.S, provided they do not have felonies or serious misdemeanors on their record.
Other requirements include living in the U.S. continuously since 6/15/17 and arrived in the U.S. before their 16th birthday. Unlike the DREAM Act which did not become law, the DACA program provided no path to citizenship for those children.
Trump repealed that Obama executive order that would have resulted in the deportation of those children. So the republicans are offering to temporarily give back what they have taken.
The core of the GOP wants to send the Dreamers back to their country of origin which explains their opposition to Obama's executive order.
Allowing them to stay and providing a path to citizenship is anathema to them and is immediately labelled as amnesty.
Republican politicians, unlike their core supporters, will frequently support the deportation result but claim that their motive is to defend separation of powers from Obama's alleged unconstitutional usurpation of Congress's power to pass laws. The Imperial Presidency argument only concerns them in this limited matter.
Republican controlled states filed legal challenges to the constitutionality of Obama's DACA executive order. Multiple federal district courts have enjoined Trump from implementing the GOP's deportation efforts and to continue the DACA program pending a trial. Status of Current DACA Litigation - National Immigration Law Center
So why is Trump's 3 year offer meaningless? His administration is under court order to continue the DACA program, so he is offering only to do what he has already been ordered to do by the courts. Someone who is a capable negotiator knows that such offers will not lead to a successful resolution.
It may take two or three years before the courts to reach a final resolution. Until that happens, the GOP can not deport these children to their native countries anyway.
Yesterday, the Supreme Court refused to consider an expedited appeal from the injunctions. DACA news: Supreme Court again takes no action, leaving policy in effect for now - CNN
Senate Republicans all but surrender to Trump on wall despite shutdown’s toll - The Washington Post
Exactly How Bad Is Trump At Making Deals? Even Worse Than You Think
Donald Trump's weak negotiation skills caused government shutdown: USA Today
Trump did not mention in his televised address that his compromise negotiated with his advisor Stephen Miller makes drastic changes to existing immigration laws, including a prohibition on children applying for asylum at the U.S. border and making it more difficult for those seeking asylum based on persecution and violence in their home countries. Senate Leaders Plan Competing Bills to End Shutdown - The New York Times
The Miller proposal was intended to be a bad faith one that was guaranteed to be a non-starter with all Democrats.
When the GOP has at least 6o republican votes in the Senate, Miller's immigration agenda might have a chance with Trump as President and the republicans in control of the House. A few republican senators, who will probably lose in 2020, may vote against the Miller-Trump immigration compromise.
To condition the reopening of the government on this proposal simply demonstrates Trump's recklessness, irresponsibility and pathetic negotiating skills.
It also proves his lack of leadership and a governing style that relies on demagoguery and lies designed to appease the Trumpsters at whatever cost to the nation's interest.
It is hardly surprising this Know Nothing reptilian brain is responsible for the longest shutdown in U.S. history.
If the Democrats gave into republican demands in order to gain the release of 700+K hostages taken by the GOP, there would be no stopping their demands. The GOP previously shutdown the government when the Democrats refused to repeal Obamacare. The GOP's approach to getting what they want, when they lack the votes, is extremely irresponsible.
Donald Trump's weak negotiation skills caused government shutdown: USA Today
Trump did not mention in his televised address that his compromise negotiated with his advisor Stephen Miller makes drastic changes to existing immigration laws, including a prohibition on children applying for asylum at the U.S. border and making it more difficult for those seeking asylum based on persecution and violence in their home countries. Senate Leaders Plan Competing Bills to End Shutdown - The New York Times
The Miller proposal was intended to be a bad faith one that was guaranteed to be a non-starter with all Democrats.
When the GOP has at least 6o republican votes in the Senate, Miller's immigration agenda might have a chance with Trump as President and the republicans in control of the House. A few republican senators, who will probably lose in 2020, may vote against the Miller-Trump immigration compromise.
To condition the reopening of the government on this proposal simply demonstrates Trump's recklessness, irresponsibility and pathetic negotiating skills.
It also proves his lack of leadership and a governing style that relies on demagoguery and lies designed to appease the Trumpsters at whatever cost to the nation's interest.
It is hardly surprising this Know Nothing reptilian brain is responsible for the longest shutdown in U.S. history.
If the Democrats gave into republican demands in order to gain the release of 700+K hostages taken by the GOP, there would be no stopping their demands. The GOP previously shutdown the government when the Democrats refused to repeal Obamacare. The GOP's approach to getting what they want, when they lack the votes, is extremely irresponsible.
++++++
1. Small Ball-Income Generation:
A. Added 1 IBM at $108.48-Used Commission Free Trade:
Quote: International Business Machines Corp.
Closing Price Last Tuesday: IBM $122.52 -$1.30 -1.05%
There was up over $8 per share bounce in after hours trading yesterday. IBM released its earnings after the close which I have only cursorily reviewed so far.
IBM Shares Jump After Beating Earnings and Guidance Expectations - TheStreet
The enthusiasm has carried over into early morning trading today: IBM $133.84 +$11.31 +9.24% as of 8:42 C.S.T.
SEC Filings
The enthusiasm has carried over into early morning trading today: IBM $133.84 +$11.31 +9.24% as of 8:42 C.S.T.
SEC Filings
IBM Consensus 2019 Analyst EPS (as of 12/26/18) = $13.91
Last Substantive Discussion: Item # 1.A. (11/21/18 Post)
Dividend: Quarterly at $1.57 per share ($6.28 annually)
Last Ex Dividend Date: 11/8/18
Dividend Reinvestment: Yes at less than $150 per share
I picked that share price in part based on a five year chart, which shows the price above that level for most of that period:
Current Position: 12+ shares
Average Cost Per Share =$135.38
Dividend Yield at Total Average Cost = 4.64%
Average Cost Per Share =$135.38
Dividend Yield at Total Average Cost = 4.64%
Maximum Position: 20 Shares + shares purchased with dividends
Purchase Restriction: Small Ball Rule
To say that my IBM buys are cautiously tepid is a gross understatement of what I am doing.
Last Earnings Report (released yesterday and not yet reviewed): IBM Reports 2018 Fourth-Quarter and Full-Year Results | Business Wire
To say that my IBM buys are cautiously tepid is a gross understatement of what I am doing.
Last Earnings Report (released yesterday and not yet reviewed): IBM Reports 2018 Fourth-Quarter and Full-Year Results | Business Wire
B. Bought 5 VNQ at $71.38-Commission Free for Vanguard Customers:
Quote: Vanguard Real Estate ETF Overview
I prefer to own individual REITs but will engage in some very light trading in this ETF.
Closing Price Last Tuesday: VNQ $79.19 -$0.24 -0.30%
Last Discussed: Item # 3.A. Bought 5 VNQ at $77.71(11/14/18 Post)
Sponsor's Website: Vanguard (expense ratio = .12%; 190 stocks)
Last Eliminations: Item #2.A Sold 10 VNQ at $81.08 (7/5/18 Post); Item # 1.D Sold 10 VNQ at $79.89 and 10 at $80.06 (6/14/18 Post); Item # 3 Sold at $83.36 Update For Equity REIT Basket Strategy As Of 3/21/16 - South Gent | Seeking Alpha; Item # 3 Sold 10 VNQ at $80.74: Update For Equity REIT Basket Strategy As Of 11/5/15 - South Gent | Seeking Alpha
2018 VNQ Trading Profits (30+ shares) = $134.35
Top Holdings as of 12/31/18:
C. Added 20 ORKLY at $7.76-Used Commission Free Trade:
Quote: Orkla ASA ADR
Closing Price Last Tuesday: ORKLY $8.22 -$0.06 -0.72%
1 ADR = 1 Ordinary Share
The ordinary shares are priced in Norwegian Krone: ORKLA ASA (ORK.OL)
Chart: Norwegian Krone to US Dollar Rates
Website: Orkla.com
About Orkla
Orkla Foods - Orkla.com
Orkla Confectionery & Snacks - Orkla.com
Orkla Care - Orkla.com
Orkla Food Ingredients - Orkla.com
Orkla has significant investments in businesses unrelated to food and personal care products. Hydro Power; Financial Investments; and a 42.6% stake in the paint and powder coating manufacturer Jotun.
Last Discussion: Bought 20 ORKLY at $8.15-Used Commission Free Trade (7/22/18 Post)
Average Cost Per Share = $9.41
Dividends: Annual (paid in Norwegian Krone and converted into U.S. Dollars for ORKLY owners)
Dividend and treasury shares - Orkla.com
I am close to break-even on a total return basis which includes a special dividend of 5 NOKs per share that was paid in 2017. That dividend was paid in connection with this transaction: Orkla ASA: Orkla to sell its interest in Sapa to Hydro
The last regular annual dividend was 2.6 NOKs per share. The dividend is paid usually in April.
Last Earnings Report: Orkla Third quarter 2018
Orkla ASA ADR (ORKLY) CEO Peter Ruzicka on Q3 2018 Results - Earnings Call Transcript | Seeking Alpha
Recent News:
Orkla acquires well-known brand in Danmark - Orkla.com
Orkla completes the offer to acquire Kotipizza - Orkla.com
Last Sell Discussions:
Sold 100 ORKLY-Update On Portfolio Positioning And Management - South Gent | Seeking Alpha August 2015 (+$51.08)- Bought Back 100 Orkla (ORKLY) At $7.285 - South Gent | Seeking Alpha December 2014
Item # 4 Sold 100 ORKLY at $9 (9/6/14 Post)(profit snapshot $122.48)-Item # 2. Bought 100 ORKLY at $7.61 (1/13/14 Post)
Total ORKLY Trading Profit: $239.01
Maximum Position: 200 Shares
Current Position: 160 Shares
I prefer to own individual REITs but will engage in some very light trading in this ETF.
Closing Price Last Tuesday: VNQ $79.19 -$0.24 -0.30%
Last Discussed: Item # 3.A. Bought 5 VNQ at $77.71(11/14/18 Post)
Sponsor's Website: Vanguard (expense ratio = .12%; 190 stocks)
Last Eliminations: Item #2.A Sold 10 VNQ at $81.08 (7/5/18 Post); Item # 1.D Sold 10 VNQ at $79.89 and 10 at $80.06 (6/14/18 Post); Item # 3 Sold at $83.36 Update For Equity REIT Basket Strategy As Of 3/21/16 - South Gent | Seeking Alpha; Item # 3 Sold 10 VNQ at $80.74: Update For Equity REIT Basket Strategy As Of 11/5/15 - South Gent | Seeking Alpha
2018 VNQ Trading Profits (30+ shares) = $134.35
Top Holdings as of 12/31/18:
C. Added 20 ORKLY at $7.76-Used Commission Free Trade:
Quote: Orkla ASA ADR
Closing Price Last Tuesday: ORKLY $8.22 -$0.06 -0.72%
1 ADR = 1 Ordinary Share
The ordinary shares are priced in Norwegian Krone: ORKLA ASA (ORK.OL)
Chart: Norwegian Krone to US Dollar Rates
Website: Orkla.com
About Orkla
Orkla Foods - Orkla.com
Orkla Confectionery & Snacks - Orkla.com
Orkla Care - Orkla.com
Orkla Food Ingredients - Orkla.com
Orkla has significant investments in businesses unrelated to food and personal care products. Hydro Power; Financial Investments; and a 42.6% stake in the paint and powder coating manufacturer Jotun.
Last Discussion: Bought 20 ORKLY at $8.15-Used Commission Free Trade (7/22/18 Post)
Average Cost Per Share = $9.41
Dividends: Annual (paid in Norwegian Krone and converted into U.S. Dollars for ORKLY owners)
Dividend and treasury shares - Orkla.com
I am close to break-even on a total return basis which includes a special dividend of 5 NOKs per share that was paid in 2017. That dividend was paid in connection with this transaction: Orkla ASA: Orkla to sell its interest in Sapa to Hydro
The last regular annual dividend was 2.6 NOKs per share. The dividend is paid usually in April.
Last Earnings Report: Orkla Third quarter 2018
Orkla ASA ADR (ORKLY) CEO Peter Ruzicka on Q3 2018 Results - Earnings Call Transcript | Seeking Alpha
Recent News:
Orkla acquires well-known brand in Danmark - Orkla.com
Orkla completes the offer to acquire Kotipizza - Orkla.com
Last Sell Discussions:
Sold 100 ORKLY-Update On Portfolio Positioning And Management - South Gent | Seeking Alpha August 2015 (+$51.08)- Bought Back 100 Orkla (ORKLY) At $7.285 - South Gent | Seeking Alpha December 2014
Item # 4 Sold 100 ORKLY at $9 (9/6/14 Post)(profit snapshot $122.48)-Item # 2. Bought 100 ORKLY at $7.61 (1/13/14 Post)
Total ORKLY Trading Profit: $239.01
Maximum Position: 200 Shares
Current Position: 160 Shares
2. Short Term Bond/CD Ladder Basket Strategy:
Purchases: $7K
A. Bought 2 CVS 2.8% SU Maturing on 7/20/20:
FINRA Page: Bond Detail (prospectus linked)
Issuer: CVS Health Corp. (CVS)
CVS Analyst Estimates
Credit Ratings:
Bought at a Total Cost of 99.476 (includes $4 Vanguard Commission)
YTM at TC Then at 3.156%
Current Yield at TC = 2.8147%
The purchase price was at 99.276. The $4 commission raises the cost number by .2. I had to pay $27.07 in accrued interest to the seller. I got that back from the issuer when the semi-annual payment was made on 1/20/18. I received with that payment a few more days of interest.
B. Bought 2 Abbott 2.8% SU Bonds Maturing on 9/15/20:
Finra Page: Bond Detail (prospectus linked)
Issuer: Abbott Laboratories (ABT)
ABT Analyst Estimates
Abbott Reports Third-Quarter 2018 Results
Credit Ratings:
Bought at a Total Cost of 99.5
YTM at TC Then at 3.109%
Current Yield at TC = 2.8141%
Comparable Maturity Treasury Order Book at time of Purchase:
C. Bought 3 Treasury 3 month Bills at Auction Maturing on 4/18/19:
IR = 2.453%
Auction Results:
Purchases: $7K
A. Bought 2 CVS 2.8% SU Maturing on 7/20/20:
FINRA Page: Bond Detail (prospectus linked)
Issuer: CVS Health Corp. (CVS)
CVS Analyst Estimates
Credit Ratings:
Bought at a Total Cost of 99.476 (includes $4 Vanguard Commission)
YTM at TC Then at 3.156%
Current Yield at TC = 2.8147%
The purchase price was at 99.276. The $4 commission raises the cost number by .2. I had to pay $27.07 in accrued interest to the seller. I got that back from the issuer when the semi-annual payment was made on 1/20/18. I received with that payment a few more days of interest.
B. Bought 2 Abbott 2.8% SU Bonds Maturing on 9/15/20:
Finra Page: Bond Detail (prospectus linked)
Issuer: Abbott Laboratories (ABT)
ABT Analyst Estimates
Abbott Reports Third-Quarter 2018 Results
Credit Ratings:
Bought at a Total Cost of 99.5
YTM at TC Then at 3.109%
Current Yield at TC = 2.8141%
Comparable Maturity Treasury Order Book at time of Purchase:
C. Bought 3 Treasury 3 month Bills at Auction Maturing on 4/18/19:
IR = 2.453%
Auction Results:
3. Added 50 GAINL at $24.18:
Quote: Gladstone Investment Corp. Preferred Series E Stock (GAINL)
Closing Price Last Tuesday: GAINL $24.92 +$0.11 +0.44%
Closing Price Last Tuesday: GAINL $24.92 +$0.11 +0.44%
Last Discussed: Item # 1 Bought 50 GAINL at $25.14-Used Schwab Commission Free Trade (10/17/18 Post)
This purchase rounds up my position to 100 shares. That is my maximum position as well.
Average Total Cost Per Share: $24.71
Prospectus There is also a mandatory redemption when the issuer fails to meet a certain defined asset coverage level.
Maturity Date: 8/31/25
This is a term equity preferred stock which is highly unusual. Almost all equity preferred stocks are potentially perpetual unless the issuer exercises an option to redeem early at par value. The monthly dividends are also unusual for an equity preferred stock.
Issuer Optional Redemption: On or after 8/31/20 at par plus accrued and unpaid dividends
Dividends: Monthly at $.1328 per share ($1.5938 annually)
Dividend Yield at Total Cost = 6.45%
Last Ex Dividend Date: 1/17/19
Gladstone Investment Corporation (GAINL) Dividend Date & History - Nasdaq
Last Earnings Report: Q/E 9/30/18
Gladstone Investment Corporation Reports Financial Results for its Second Quarter Ended September 30, 2018
2017 Annual Report SEC Form 10-K
4. Income Generation-Small Ball:
A. Added 10 GDO at $14.83-Used Commission Free Trade:
Quote: Western Asset Global Corp Defined Opportunity Fund Inc. (GDO)-A leveraged global bond CEF
Closing Price Last Tuesday: GDO $15.58 +$0.01 + 0.06%
Sponsor's Website: WA Global Corporate Defined Opportunity Fund Inc. | Legg Mason
Last Substantive Discussion: Item # 1.C. Bought 15 GDO at $16.27-Used Fidelity Commission Free Trade (9/16/18 Post)
Last Discussion: Stocks, Bonds & Politics: Item # 1.B. Bought 15 GDO at $15.17 and 15 at $14.99-Used Commission Free Trades (12/12/18 Post)
Data Date of Purchase (12/26/18)
Closing Market Price: $14.84
Closing Net Asset Value Per Share: $16.75
Discount: -11.4%
Average Discounts:
1 YR -8.93%
3 YR -8.02%
5 YR -9.15%
Sourced: GDO- CEF Connect
Leveraged: Yes
SEC Filed Shareholder Report for the Period Ending 9/30/18
Dividend: Monthly at $.101 Per Share ($1.21 annually)
Last Ex Dividend Date: 1/17/19
Legg Mason Partners Fund Advisor, LLC Announces Distributions for the Months of December 2018, January and February 2019
Average Total Cost Per Share: $16.13
Dividend Yield at Average Cost: 7.5%
Current Position: 223+ shares
Maximum Position: 300 Shares + shares purchased with dividend
Dividend Reinvestment: Yes at greater than a 5% discount
Purchase Restriction: Small Ball Rule
B. Bought 10 THQ at $16.6-Used Commission Free Trade:
Quote: Tekla Healthcare Opportunities Fund (THQ)
Closing Price Last Tuesday: THQ $17.42 +$0.02 +0.11%
Sponsor's website: Tekla Capital Management LLC
Last SEC Filed Shareholder Report: F/Y ending 9/30/18
Last Discussed: I recently eliminated my position: Item # 6 Eliminated THQ at $17.65 (12/29/18 Post) I am back up to owning 60+ shares.
Current Position: 60+ Shares
Maximum Position: Now at 300 shares
Average Cost Per Share =$17.01
Data Date of Trade (1/4/19)
Closing Net Asset Value Per Share = $18.42
Closing Market Price: $16.46
Discount: -10.64%
Average Discounts:
1 YR -10.4%
3 YR -9.49%
Sourced: THQ Page at CEF Connect
Dividends: Monthly at $.1125 per share (supported by ROC)
Tekla Healthcare Opportunities Fund Declares Monthly Cash Distribution
Dividend Yield at Average Total Cost Per Share = 7.94%
Last Ex Dividend Date: 1/17/19
Dividend Reinvestment: Yes
5: Income Generation on Canadian Dollar Stash:
A. Averaged Down: Bought 50 PWF:CA at C$25.5 (C$1 IB commission):
Quote: Power Financial Corp. (Canada: Toronto)
Closing Price Last Tuesday: PWF.TO C$27.00 -C$0.32 -1.17%
The ordinary shares can be purchases on the U.S. pink sheet exchange using U.S. Dollars: OTC Markets | POFNF
Power Financial Corporation | Home
Last Discussed: Item # 4.A. Bought 50 PWF:CA at C$27.73 (12/23/18 Post).
I discussed the last earnings report in that post and have nothing to add.
Dividends: Quarterly at C$.433 per share (C$1.732 annually)
Power Financial Corporation | Dividends
Dividend Reinvestment: No
I do not reinvest any dividends in my IB account.
Average Total Cost per share = C$26.64
Total cost includes two C$1 brokerage commissions.
Dividend Yield at Total Cost Per Share: 6.5% (assumes no change in the penny rate)
Last Ex Dividend Date: 12/28/18 (50 shares participated)
Maximum Position: 150 shares
Current Position: 100 shares
Trading Plan: I will consider buying another 50 at less than C$23 per share. If that purchase is made, I will sell the highest cost lot when and if I can do so profitably. The overall goal is to earn a total return of 8% to 10% per annum with most of that return coming from the dividend. Trading plans assume no significant negative or possible events which would change the parameters and plan.
4. Income Generation-Small Ball:
A. Added 10 GDO at $14.83-Used Commission Free Trade:
Quote: Western Asset Global Corp Defined Opportunity Fund Inc. (GDO)-A leveraged global bond CEF
Closing Price Last Tuesday: GDO $15.58 +$0.01 + 0.06%
Sponsor's Website: WA Global Corporate Defined Opportunity Fund Inc. | Legg Mason
Last Discussion: Stocks, Bonds & Politics: Item # 1.B. Bought 15 GDO at $15.17 and 15 at $14.99-Used Commission Free Trades (12/12/18 Post)
Data Date of Purchase (12/26/18)
Closing Market Price: $14.84
Closing Net Asset Value Per Share: $16.75
Discount: -11.4%
Average Discounts:
1 YR -8.93%
3 YR -8.02%
5 YR -9.15%
Sourced: GDO- CEF Connect
Leveraged: Yes
SEC Filed Shareholder Report for the Period Ending 9/30/18
Dividend: Monthly at $.101 Per Share ($1.21 annually)
Last Ex Dividend Date: 1/17/19
Legg Mason Partners Fund Advisor, LLC Announces Distributions for the Months of December 2018, January and February 2019
Average Total Cost Per Share: $16.13
Dividend Yield at Average Cost: 7.5%
Current Position: 223+ shares
Maximum Position: 300 Shares + shares purchased with dividend
Dividend Reinvestment: Yes at greater than a 5% discount
Purchase Restriction: Small Ball Rule
B. Bought 10 THQ at $16.6-Used Commission Free Trade:
Quote: Tekla Healthcare Opportunities Fund (THQ)
Closing Price Last Tuesday: THQ $17.42 +$0.02 +0.11%
Sponsor's website: Tekla Capital Management LLC
Last SEC Filed Shareholder Report: F/Y ending 9/30/18
Last Discussed: I recently eliminated my position: Item # 6 Eliminated THQ at $17.65 (12/29/18 Post) I am back up to owning 60+ shares.
Current Position: 60+ Shares
Maximum Position: Now at 300 shares
Average Cost Per Share =$17.01
Closing Net Asset Value Per Share = $18.42
Closing Market Price: $16.46
Discount: -10.64%
Average Discounts:
1 YR -10.4%
3 YR -9.49%
Sourced: THQ Page at CEF Connect
Dividends: Monthly at $.1125 per share (supported by ROC)
Tekla Healthcare Opportunities Fund Declares Monthly Cash Distribution
Dividend Yield at Average Total Cost Per Share = 7.94%
Last Ex Dividend Date: 1/17/19
Dividend Reinvestment: Yes
5: Income Generation on Canadian Dollar Stash:
A. Averaged Down: Bought 50 PWF:CA at C$25.5 (C$1 IB commission):
Quote: Power Financial Corp. (Canada: Toronto)
Closing Price Last Tuesday: PWF.TO C$27.00 -C$0.32 -1.17%
The ordinary shares can be purchases on the U.S. pink sheet exchange using U.S. Dollars: OTC Markets | POFNF
Power Financial Corporation | Home
Last Discussed: Item # 4.A. Bought 50 PWF:CA at C$27.73 (12/23/18 Post).
I discussed the last earnings report in that post and have nothing to add.
Dividends: Quarterly at C$.433 per share (C$1.732 annually)
Power Financial Corporation | Dividends
Dividend Reinvestment: No
I do not reinvest any dividends in my IB account.
Average Total Cost per share = C$26.64
Total cost includes two C$1 brokerage commissions.
Dividend Yield at Total Cost Per Share: 6.5% (assumes no change in the penny rate)
Last Ex Dividend Date: 12/28/18 (50 shares participated)
Maximum Position: 150 shares
Current Position: 100 shares
Trading Plan: I will consider buying another 50 at less than C$23 per share. If that purchase is made, I will sell the highest cost lot when and if I can do so profitably. The overall goal is to earn a total return of 8% to 10% per annum with most of that return coming from the dividend. Trading plans assume no significant negative or possible events which would change the parameters and plan.
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.
Hello South Gent,
ReplyDeleteI thought I had asked the question about what level of S&P and Moody's debt ratings, you would consider safe. I did look back at my questions and your notes and could not find an answer. I saw today some concern on your part of the Moody's rating,
Baa1 which looks to be a rating near the S&P rating of BBB +. This is certainly considered investment-grade but when you listen to certain people i.e. Jeff Gundlach, he is concerned about a lot of Russell 2000 companies which at least have BBB bonds and are not truly profitable companies. And when this debt is rolled over , there may well be a problem.
I wonder for the average investor who does not have to take the risk of capital appreciation, if there is a level of S&P and Moody's which you think is not safe. I do understand that nothing is guaranteed, but I did see your comment on the above bond rating for Moody's which apparently you limit the amount of dollars.
Since it appears now that at least to me, even though some companies on paper are selling at reasonable prices, that given all the questions about economies, politics . debt , recession etc. that the risk of stock ownership in the present environment is problematic.
Thanks
G: It may be helpful to start by copying a chart that compares the grading scales.
Deletehttps://en.wikipedia.org/wiki/Credit_rating
BBB+ from S & P equal Baa1 from Moody's.
I do not recall making a negative comment about BBB+/Baa1 rated debt.
I did state that the yield differential between BBB-/Baa3 and BBB+/Baa1 rated debt was so small that I did not generally view the credit risk for the BBB-/Baa3 as worth their additional credit risks.
https://tennesseeindependent.blogspot.com/2019/01/observations-and-sample-of-recent_20.html?showComment=1548194707483#c3630486086755142282
Part of my evaluation of the credit ratings include my knowledge of the issuers and an analysis of whether or not the Bond Ghouls agree or disagree with the ratings through their pricing of identically rated bonds.
I am comfortable with the credit risks of the BBB/Baa2 and BBB+/Baa1 bonds that I own. I am not comfortable with many bonds rated at that level which is why I do not own them. For example, GE Capital has been downgraded several times and is currently rated but the rating is still at BBB+/Baa1. I do not own any GE Capital bonds.
The treasury rates would be acceptable without going further for most investors. I am buying now in the 3 to 6 month range where the yields capture most of the yields provided by the the 1 year bill and the 2, 3, 5, 7 and 10 year treasury notes.
https://www.treasury.gov/resource-center/data-chart-center/interest-rates/Pages/TextView.aspx?data=yield
Since I have a 7 dollar figure bond portfolio, a 1% addition in average weighted yield adds up to about $12K per year and so on. IMO, since I am being selective of what I buy to capture higher yields, I view it as worthwhile to capture that $12K to $24K per year in additional income compared to an all treasury portfolio with a similar duration.
My Tennessee municipal bond portfolio has a weighted average yield of 3% that is tax free.
Outside of my bond portfolio, I am raising my averaged weighted portfolio yield through a variety of common and preferred stock, CEF and ETF purchases. You can see the yield numbers for most of those purchases since they are displayed in my posts.
I can not give you or anyone else advice on what risks to take or how to structure their portfolios. I am not a financial advisor, as I have said here many times. The focus is on how I achieve my financial needs given the total absence of situational risks.
I am also comfortable with some risks, particularly where I have knowledge.
The risk is controlled through a variety of methods including the overall dollar exposure to each security and securities issued by the same company throughout the capital structure, a variety of trading rules (e.g. small ball trading rules which I am mostly following now for individual stock and stock ETF purchases), and my opinions about the strong secular forces that move economies longer term.
My normal limit on exposure to securities from one issuer is $15K out-of-pocket. Many limits are in the <$1K to $5K range which is established based on my judgment and my financial objectives.
I do not have a firm dollar limit on AAA rated bond. So I buy treasuries when it makes sense to me given my financial objectives. I also own AAA rated Tennessee municipal bonds in excess of $15K, GO's from Williamson County TN are an example. I also go through periods where I am an active seller of bonds.
As to stocks, I view them to be in a fluid state where a big move up or down can happen based on events occurring soon. And, there is no way to know for certain what will happen on those issues. So the investor has to cope with fluid and unpredictable events. That is never going to change.
I do view it as important that SPX may not be able to hold the 2632 level for long. There was a move earlier today below that line.
S&P 500 Index
2,634.12 +1.22
DAY RANGE 2,612.86 - 2,653.19
Last Updated: Jan 23, 2019 at 2:04 p.m. EST
https://www.marketwatch.com/investing/index/spx
Oritani Financial Corp. (ORIT)
ReplyDelete$16.70+0.45 (+2.77%)
As of 11:20AM EST.
https://finance.yahoo.com/quote/ORIT?p=ORIT
I own 338+ shares spread over 2 taxable and 1 Roth IRA accounts.
The move up today is in response to the earnings report:
https://www.nasdaq.com/press-release/oritani-financial-corp-announces-dividend-and-2nd-quarter-results-20190124-00436
The regular quarterly dividend is $.25 per share.
I do not see anything in the report that would cause me to change my trading plan. When and if the price goes over $17, I intend to sell my highest cost 50 share lot.
I am reinvesting the dividend. When computing ORIT's dividend yield, I prefer to exclude the special dividends and to calculate my yield just based on the regular dividend. Even without the periodic special dividends, ORIT is the highest yielding regional bank in my basket. ORIT paid a special dividend of $.15 per share last December:
https://www.nasdaq.com/press-release/oritani-financial-corp-announces-015-special-dividend-20181120-00663
There are a lot of investors who do not have clue whether some items need to be ignored or considered in adjusting GAAP earnings.
ORIT, like other regional banks, had to take a non-cash charge charge in the 2017 4th quarter (ORIT's fiscal second quarter) to reflect a revaluation of its tax deferred asset which become less valuable due to the lowering of the federal corporate tax rate. That item is properly ignored, making the non-GAAP number for that quarter the relevant one.
The charge is non cash and ORIT is a major beneficiary in cash earnings and net income from the lower tax rate as I have explained in prior posts.
Earlier this morning I eliminated my UMPG position by selling 101+ shares at $18.34. While I earned a quick profit, harvesting that profit was not the main reason for selling.
ReplyDeleteI reviewed the UMPQ earnings report released after the market closed yesterday and found it far too difficult to figure out whether it was good or bad or neutral. My eyes just rolled back in my head after examining the report for what I considered to be far too long. The gut reaction was that the report was not positive.
Earnings Report:
https://www.prnewswire.com/news-releases/umpqua-reports-quarterly-and-annual-results-300782595.html
It was the most complicated report that I have read from a regional bank and I just lost patience with the bank as being just too hard.
The bank reported a GAAP number that was below expectations but there were a number of unusual cash and non-cash adjustments that lowered that number.
After initially rising in price, the Stock Jocks have decided that it was not a good report:
Umpqua Holdings Corp. (UMPQ)
$17.33 -$0.855 -4.70%
Last Updated: Jan 24, 2019 at 2:38 p.m. EST
https://www.marketwatch.com/investing/stock/umpq
The non-cash item that does not concern was the "$13.1 million loss on the fair value of the MSR asset attributable to the decrease in long-term interest rates during the quarter." That valuation goes up and down and simply detracts from core earnings and occasionally make earnings look worse than they are. The MSR became less valuable due to the decline in interest rates that make future class flows, discounted to present value, less valuable or at least that is my layman's understanding of the accounting issue:
https://www.ft.com/content/82beeb42-01d7-11e8-9650-9c0ad2d7c5b5
MSR = Mortgage Servicing Rights
https://www.richeymay.com/wp-content/uploads/2015/09/Accounting-for-Mortgage-Servicing-Rights-Public-Version-September-2015.pdf
Hello South Gent,
ReplyDeleteThe market seems to be on a one-way trip to the stars again. Despite the claim of a very quick and brutal bear market in December and January, it is not clear to me why the market is moving up so much.
I know there was a somewhat reset of P/E ratios during that time. But I have never seen a bear market be so quick and orderly and be done in such a short period of time.
Given the news that I see in the world, I am very suspect of this rally. I saw today that home sales recently were way below trend and it seemed like it was mostly due to affordability.
Also, Europe seems like it is caught between a rock and a hard place with the continued problems of the difficulty of ever being able to raise rates.
China while still growing seems to be slowing and the possibility of a slow growth economy next year or even a recession is a significant threat.
So I understand that the market can remain irrational longer than I can remain solvent! But I wonder if this risk on sentiment due to the Fed promising a standstill for now is kosher?
I know the Fed says they will become data dependent but as you have said over and over again' there will be a slow rise of rates over time. And it is not clear to me that the Fed will not raise in the second half of the year.
Personally, I'm being cautious. But it is very difficult to see the market take off and and an emotionally based investor can make a lot of bad decisions during this risk on, low rate environment
Any thoughts?
Thanks
G: I do not regard it as unusual to have a sharp rally after a significant and quick decline. Those sharp movements like the recent one do not occur that often however.
DeleteThe decline can be in one day, as shown by the October 1987 crash. SPX closed at 282.7 on Friday 10/16/87 and at 224.84 on Monday October 19 or a one day decline of 20.47%, similar to the recent decline. On the next day, SPX closed at 236.83 and then at 258.38 on the the 21st, reducing the one day slam to a a 8.6% lost.
The recent decline was from a closing high at 2,923.43 (10/18) to a closing low at 2,351.10 (12/24), which was a 19.58% (slightly over 20% using the intra-day high number). The close today was at 2664.76 which reduced the decline from the closing high to 8.85%. Sound familiar?
Usually the sharp declines can occur over weeks or even months followed by a sharp rally that fails to take out the old high.
Some of the sharpest rallies in stock market history were in bear markets with the most famous one starting after FDR was elected in 1932 and the FED started its first QE program. The rally on a percentage basis was huge and occurred between 1933 to 1937 when the FED tightened, fiscal stimulus was lowered, and fiscal drag was added through collection of social security taxes for the first time.
There has been a long history of sharp declines and snap back rallies. E.G. in late July 2011 the SPX was near 1350 and at 1120 on 8/8/11.
I use the phrases "Stock Jocks" and "Bond Ghouls" for a reason. The Jocks are more inclined to less inclined to react emotionally with manic states at times. They are generally far more optimistic about the future with or without a solid foundation. And, when the world hits them in the head with a 100MPH fast ball, they become some melancholy that the future is bad and will get worse and will never get any better.
This latest drop was a good one for me to stress test my portfolio which I gave a A+. And I used the decline to add to yield positions at lower prices.
I have published a new post:
ReplyDeletehttps://tennesseeindependent.blogspot.com/2019/01/observations-and-sample-of-recent_27.html