Observations and Sample of Recent Trades: ENB, GMREPRA, MNRPRC, TANNL, TDIV

Economy: 

On a non-seasonally adjusted basis, CPI was up 1.6% over the 12 month period ending in January 2019. Core CPI rose 2.2%.

A significant decline in energy costs lowered CPI below core CPI. One of the quirky items is health insurance costs. The Y-O-Y increase was reported at 6.5%. Table 2. Consumer Price Index for All Urban Consumers (CPI-U): U. S. city average, by detailed expenditure category

Retail sales were so bad, it's either suspect or a recession warning

The report from WMT yesterday softened the doom and gloom over the government's December retail sales report. Walmart isn’t seeing the consumer downturn that the December retail sales collapse suggested - MarketWatch

WMT $102.20 +$2.21 +2.21% 

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Markets and Market Commentary: 

No recession but global growth will slow down, Janus Henderson says

'Panic buying' likely to drive stock market higher in the near term

Japan's economy bounces back in Q4 - MarketWatch (1.4% growth annualized compared to -2.6% in the prior quarter)

Stocks rally on US-China trade deal but bond investors fear recession

A big change in accounting puts $3 trillion on corporate books

New York Mayor de Blasio Rips Amazon's 'Abuse' of Power - TheStreet There is a strong tendency among many democrats to kill the goose that lays the golden egg.  

I never understood why Amazon would want to establish a NYC headquarters. Nashville, one of the contenders, has a far lower cost of living, no state income taxes, and a more welcoming attitude to businesses. Berkshire’s Charlie Munger has a very blunt response to those ‘driving rich people away’ as Amazon scraps HQ2 - MarketWatch 

There are states and cities in the U.S. who are driving people and businesses away, leaving fewer businesses to finance their spending, public employee pensions, and debt service obligations. Their taxes will continue to rise, driving even more away to less costly areas, primarily growing metropolitan areas in the south. I have been noting for years the migration of businesses and individuals to middle Tennessee from high tax, nanny states with an abundance of regulations. That trend will accelerate rather than diminish in the coming years.  

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Trump:

Intimidation, Pressure and Humiliation: Inside Trump’s Two-Year War on the Investigations Encircling Him - The New York Times (a comprehensive report); republished at MSN:Intimidation, Pressure and Humiliation: Inside Trump’s Two-Year War on the Investigations Encircling Him  

This Trump performance is why people talk about the 25th Amendment - The Washington Post; You won't believe what Trump just said: 6 eye-popping moments (Trump's admiration for authoritarian leaders is boundless as is his contempt for western democracies and the institutions necessary to support them)

In three successive tweets, Donald stated that he has a 52% approval rating, the press is the enemy of the people, and that NBC needs to be investigated by the FEDs for airing a satirical skit on SNL that made fun of him: 

Satirical comedy uses exaggeration and works best when it exposes the truth more clearly through comedy. Before Trump, other Presidents took the satirical skits in stride. 

Trump did not like the cold opening where Alex Baldwin, as Trump, performed a satirical version of Trump's national emergency declaration. The skit was spot on. SNL’s Trump emergency declaration vs. the real thing - YouTube

At Don the Con's recent El Paso rally, the Trumpsters cheered when Don Jr. called teachers a bunch of losers who try to indoctrinate children "on socialism since birth".  Why Donald Trump Jr.’s ‘loser teachers’ comment was ‘a chilling moment’ for educators around the world Perhaps one of those losers could educate Don Jr. on what the word "socialism" means. Though, admittedly, it is too late to educate any Trump or the Trumpsters in general on anything.  

How Popular Is Donald Trump? | FiveThirtyEight

85% of republicans approve of Donald's national emergency declaration. Trump’s national emergency declaration unpopular among majority of Americans | PBS NewsHour 

It is not possible to be a true conservative and approve of that declaration. 

That poll is useful in that identifies the percentage of republicans who are not conservatives.  

FactChecking Trump's National Emergency Remarks - FactCheck.org

FactChecking Trump's El Paso Rally - FactCheck.org

Trump stated that he had the "absolute right" to declare a national emergency. Spoken like the authoritarian that he is. 

Senator Graham (R-SC): More urgent for kids in Kentucky to have secure border than new school; Gun violence deaths in US in year after Parkland: 1000+ kids | McClatchy Washington Bureau

For the most part, the self-described "conservative" GOP Senators have already made it clear that they will do nothing to stop Trump from usurping the constitutional powers of Congress, while expressing their usual weak-kneed "concerns". “I would have my doubts” (Sen. Ron Johnson) or “I’m not enthusiastic about it” (Sen. Pat Toomey) or “I have some concerns” (Sen. Roy Blunt), or even “I wish he wouldn’t have done it” (Sen. Chuck Grassley). 

There is a recognition among GOP politicians that the republican base could care less about the constitutional restraints on a republican president's power and their efforts to undermine institutions necessary for a properly functioning democracy.   

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More on My Ancestors:

Another movie idea involves the trials, tribulations and successes of Beth Slater Whitson, my first cousin two times removed. Her father was a brother of my grandfather.

Beth Slater (many Southerners have two first names) was born in the middle of nowhere Nunnelly, an unincorporated spot in rural Hickman County Tennessee. She would become the most well known person who was born in that county.

When she was young, she decided to leave her home and go to Chicago. This is an excerpt from her autobiography written in 1925:

Beth Slater was probably the most prolific songwriters in early 20th century America. Perhaps her most well known song was "Let Me Call You Sweetheart". Though, I would not focus much on playing those old tunes in a movie other than a verse or two. Tastes in music have changed, to say the least.  

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1. Pares: 

I am continuing to sell my highest cost lots into both the stock and bond rallies. 

The purpose is primarily part of my capital preservation strategy that involves some exposure to risk assets. 

By selling the highest cost lot, I incur less tax liability, reduce my average cost per share, and raise my dividend yield, while reducing my overall dollar exposure. 

The dollars raised can then be redeployed at lower prices. 

For those securities subject to the small ball purchase restriction, any subsequent purchase has to be at the lowest price in the chain. 

A. Pared GMREPRA - Sold 30 GMREPRA at $24.84: 

I sold the highest cost lot and kept the 70 share lot bought at $22.75. Item # 4.B. Bought 70 GMREPRA at $22.75 (1/13/19 Post) Just another example of small ball trading.  

Dividend Yield at $22.75 =  8.24%

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

Closing Price Yesterday: GMRE-PA $24.96  +$0.13 +0.52% 

History: 

Profit: +$9.79

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

Category: Advantages and Disadvantages of Equity REIT Cumulative Equity Preferred Stocks

There is a website devoted to preferred stocks. This is a link to its page on GMREPRA: Global Medical REIT Inc | 7.50% Series A Cumulative Redeemable Preferred Stock (GMRE.PRA) Information Page | Preferred Stock Channel

Strategy: Equity REIT Common and Preferred Stock Basket Strategy

Issuer: GMRE - Global Medical REIT Inc.

November 2018 GMRE Investor Presentation

GMRE SEC Filings

Prospectus 

Par Value: $25

Dividends: Cumulative, Non-Qualified and Paid Quarterly  

Last Ex Dividend Date:  1/14/19   (before sell) 

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

B. Pared ENB-Sold 15 ENB at $37.61-Used Fidelity Commission Free Trade: 

Quote: Enbridge Inc. (ENB)
Website: Home - Enbridge Inc.

Closing Price Yesterday: ENB $36.29 +$0.47 +1.31% 

I sold my two highest cost lots which reduced my average cost per share from $34.77 to $34.05. Since my first purchase in this chain, the stock has trended down until recently. 

I have used the rally in stocks to sell my highest cost lots, a trading rule dictated by the small ball strategy.  

Position After Pare: 

Profit: +$9.29

I noticed that UBS downgraded Enbridge to neutral from buy shortly after this sell. I do not have a copy of that report.

Last  Buy Discussions: Item # 3 Bought 2 ENB at $29.95 and 2 at $30.89-Used Commission Free Trades (3/29/18 Post); Item # 2 Added 5 ENB at $32.28 2 at $31.92 and 2 at $31.45-Used Commission Free Trades (3/15/18 Post); Item # 2 Added 9 ENB at an Average Total Cost Per Share of  $32.18 (3/15/18 POST)

Last Earnings Report: Q/E 12/30/18

Enbridge Inc. Reports Strong Fourth Quarter and Full Year 2018 Results

Discussed Briefly at  Enbridge quarterly profit beats estimates-Reuters

Dividends: Quarterly and paid in USDs after conversion from Canadian Dollars. 

Subject to a 15% Canadian withholding tax when held in a U.S. citizen's taxable account, but not in a retirement account. 

Penny Rate: Currently at C$.738 per share, raised from C$.671 per share in the 2018 4th quarter. Dividends and Common Shares - Enbridge Inc. 

The dividend yield will depend on the currency conversion rate. If I assumed a quarterly rate of $.738 and a conversion rate of .75, then the annual dividend would be about $2.21 and the dividend yield at a total cost per share of $34.05 would be about 6.5% without a tax adjustment. 

I am generally able to recover all foreign dividend taxes as a credit on my tax return. 

ENB qualifies for my definition of "bond substitute". Any return in excess of the dividend is viewed as gravy.  

Dividend Reinvestment: Yes 

Last Dividend Reinvestment Price: $33.4 

Last Ex Dividend Date: 2/14/19

Purchase Restriction: Small Ball Rule (each purchase, other than through dividend reinvestment, has to be at the lowest price in the chain)

Lowest Price Paid in Current Chain: $29.95 

Maximum Position: 100 shares + shares purchased with dividends 

Current Position: 46+ shares

Last Sell Discussions: Item # 3 Sold 50 ENB at $39.03 (12/21/17 Post); Sold 10 ENB at $40.14

ENB Preferred Stocks: 

I have bought and sold ENB's reset equity preferred stocks on the Toronto exchange but do not currently have a position. The largest gain was on a 300 and 200 share lot of ENB.PRP

+C$963

+US$1,458.25 (converted by Fidelity from CAD purchase and sell numbers)

Enbridge Inc. 4% Pfd. Series P (Canada: Toronto) This was reset in January 2019: Enbridge Provides Notice of Series P Preferred Shares Conversion Right and Announces Reset Dividend Rates

The other one that I have bought and sold is ENB.PRF: 

Enbridge Inc. Cumulative Preferred Series F Stock (Canada: Toronto)(reset 6/1/2018 to a quarterly rate of C$.29306 per share) 

I have started to look again at Canadian reset equity preferred stocks due to their price declines. Part of the problem is that many have recently or will soon reset at disappointing rates or lower than anticipated by those who bought at higher prices. 

For the 5 year resets that are based on a spread to the 5 year Canadian government bond, there is a conversion into another security that floats at the same spread but the float is over the 3 month Canadian treasury bill. Those floaters will then trade separately and have a right to convert back to the 5 year bond spread on the next reset date. There is a lot to consider and the decisions have to based in part on future interest rate forecasts through the next reset date.   

The resets require a lot of effort which is focused on comparing the terms of a large number of them. ENB has a large number of different ones outstanding, for example. Preferred Shares and Hybrid Securities-Enbridge But another pipeline, Pembina or TransCanada, may have ones that provide the better option at a particular moment in time.   

C. Pared TDIV-Sold 15 TDIV at $36.48-Commission Free for Vanguard Customers: 

I sold my two highest cost lots. 

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

Closing Price Yesterday: TDIV $37.00 +$0.05 +0.14% 

Sponsor's Page: First Trust NASDAQ Technology Dividend Index Fund (TDIV)

Holdings

Profit Snapshot: $13.45

Purchase Restriction: Small Ball Rule 

Maximum Position: 100 Shares

Current Position: 15 shares (I am admittedly at a low ebb in my risk taking)

I would pick up the dollar amount of my purchases at below $30. 

Lowest Price Paid in the Current Chain: $32.3 

Item # 5.B. (12/23/18 Post) 

Dividends: Quarterly at a variable rate

Distribution History

Last Ex Dividend Date: 12/18/18 at $.312 per share 

2018 Dividends Per Share = $.9834

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: $1,430.44 ($1,416.99 in prior trades)

The lowest prices paid for this ETF occurred in 2012, soon after its IPO. 

Item # 3 Added 50 TDIV at $19.2 (10/15/12 Post) 

Item # 1 Bought 50 TDIV at $19.94-ROTH IRA (10/3/12 Post) 

Item # 1 Bought 50 TDIV at $19.95 (8/12/12 Post) 

D. Pared MNRPRC-Sold 50 MNRPRC at $24.57: 

Quote: Monmouth Real Estate Investment Corp. 6.125% Cumulative Preferred. Series C Stock; MNR.PC Stock Chart

Closing Price Yesterday: MNR-PC $24.01 0.11 0.46% 

Category: Advantages and Disadvantages of Equity REIT Cumulative Equity Preferred Stocks

Monmouth Real Estate Investment Corp | 6.125% Series C Cumulative Redeemable Preferred Stock (MNR.PRC) Information Page | Preferred Stock Channel

Strategy: Equity REIT Common and Preferred Stock Basket Strategy

I kept the lower cost shares that I recently bought at $23.12. Item # 3.B. Bought 50 MNRPRC at $23.12 (12/16/18 Post) 

Yield at $23.12 = 6.62%

Profit Snapshot: +$23.75

Item # 3.B. Bought 50 MNRPRC at $24 (7/12/18 Post)

Security Description: 

Issuer: Monmouth Real Estate Investment Corp. Cl A (MNR)
MNR SEC Filings
MNRPRC Prospectus
Par Value: $25
Dividends: Quarterly, Cumulative and Non-Qualified
Stopper Clause: Yes
Issuer Optional Redemption: At par value on or after 9/15/21

Previous Round-Trip: Item 5.A. Sold 100 MNRPRC at $24.85 (1/21/17 Post)(profit snapshot = $71.93).

2. Eliminations:

A. Sold 30 TANNL at $25.36:

2 Year History Schwab Account:

Quote: TravelCenters of America LLC 8% Senior Notes due 12/15/29 (TANNL)

Closing Price Yesterday: TANNL $24.89 -$0.09 -0.36% 

Category: Exchange Traded Baby Bonds

Issuer: TravelCenters of America LLC (TA)

TA Analyst Estimates

TA SEC Filings

Prospectus

Profit Snapshot: +$36.35

Item # 1.A. Bought 30 TANNL at $23.99-Used Commission Free Trade (8/15/18 Post)

I view this senior unsecured bond to be high risk. In the past, the bottom has fallen out with the price spiraling down.

One recent purchase was during one of those events. Item # 5 Bought 30 TANNZ at $17.25 (9/3/17 Post) That is another TA exchange traded bond: TravelCenters of America LLC 8% Senior Notes due 10/15/30 (TANNZ)

I will tread lightly in TravelCenter bonds and will generally be looking for an exit point soon after buying a few shares. I view those bonds to be a short term rental rather than a buy and hold. 

The exchange trade TravelCenter bonds are not rated but would be in junk territory IMO if rated. 

List of Trades in TANNL (formerly traded under the TANO symbol):

Item # 4.B. Sold Remaining TANNL at $25.46 (4/14/17 Post)(profit $11.57); Item # 5. Sold 50 TANO in Roth IRA: Update For Exchange Traded Bond And Preferred Stock Basket Strategy As Of 3/28/16 - South Gent | Seeking Alpha (profit snapshot=+$55.47)- Item # 2. Bought 50 TANO at $23.2-ROTH IRA: Update For Exchange Traded Bond And Preferred Stock Basket As Of 12/18/15 - South Gent | Seeking Alpha; Item # 4.A Stocks, Bonds & Politics: Observations and Sample of Recent Trades: 3/1/17-Item # 2. Added 50 TANO at $24: Update For Exchange Traded Bonds And Preferred Stock Basket Strategy As Of 2/3/16 - South Gent | Seeking Alpha

I seriously doubt that I would own this bond for long when the price goes over the $25 par value.

3. Short Term Bond/CD Ladder Basket Strategy:

A. Bought 3 Treasury Bills Maturing on 7/5/19 (secondary market purchase): 
YTM = 2.436%

This security is a 6 month treasury bill originally auctioned on 12/31/18 at 98.726625: Treasury Auction Results.pdf

B. Bought 1 Wells Fargo 2.15% SU Maturing on 1/30/20: 

FINRA Page Bond Detail (prospectus linked)

I now own 3 bonds. 

Bought at a Total Cost of 99.455
YTM at TC Then at 2.725%
Current Yield at TC = 2.1618%

For higher quality short term bond maturing within 18 months of purchase, I am not influenced by the current yield number but only by the yield-to-maturity. This bond has just one more semi-annual interest payment before paying its last payment along with the principal amount next January. 

The spread to the 1 year treasury was about 25 basis points for a lot equal to or greater than $25K and about 28 basis points for a 1 bond secondary market purchase. 

Many investors would prefer to go with the treasury, given the small yield difference and the state income tax issue. I look at it as having some minor importance only on a total bond portfolio basis, where a .25% added yield does amount to more than small change (somewhere in the $3K to $4K range annually). In addition, I am not personally concerned about the credit risk; and the state tax issue is not relevant for me.   

I am buying more short term treasuries now than comparable maturity investment grade corporate bonds based on the spread differential narrowing.  


C. Bought 3 Treasury Bills Maturing on 1/2/20: 
YTM = 2.532%

This bond was a 52 week treasury bill auctioned on 12/31/18 at 97.426722: Treasury Auction Results.pdf

As a treasury bill, it was sold without a coupon. Interest consists of the difference between the purchase price and par value or $66.36 for this purchase.

The bill had a slightly higher YTM than the bill maturing in January 2019 that had coupons. It was also purchased from Schwab's inventory which generally has a slightly better yield than those available from other sellers.    

D. Sold 1 Wells Fargo 2.5% SU Maturing on 3/4/21: 

Profit Snapshot: +$9.21

This bond was purchased on 5/14/18 at a total cost of 97.899. 

I in effect exchanged this bond for the 1 WFC bond maturing on 1/30/20 that has a slightly lower YTM, but matures 13 months sooner, as described in Item 3.B. above. As the 1/30/20 bond near maturity, I may buy back this bond, in effect, rolling the proceeds into the bond that I sold.   

Finra Page: Bond Detail

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.