Observations and Sample of Recent Trades: AHTPRI, EPRPRG, EWL, FCOM, PPLT

Economy:

Retail sales March 2019 Sales increased a seasonally adjusted 1.6% from February 2019. Excluding gasoline and autos, retail sales rose .9%. Some characterized this rise as a "surge", which is hyperbole. The February number remained unrevised at -.2%. The December number was revised from a -1.2% to a -1.6% last month: Retail sales January 2019 (the January number was +.2%) It is hard to generate bullish enthusiasm for consumer spending from those numbers. 

Expectations for first-quarter growth have suddenly surged past 2% The Atlanta Fed's GDP model now estimates 2.8% real GDP growth for the 1st quarter. GDPNow - Federal Reserve Bank of Atlanta

Housing starts lurch to a near 2-year low - MarketWatch

U.S. homebuilding near two-year low; permits extend decline - Reuters

China reports first-quarter GDP; March industrial output, retail sales (industrial production rose 8.5% in March Y-O-Y vs. the consensus estimate of 5.9 percent)  

Fed may need to buy more bonds than before crisis to manage U.S. rates: official - Reuters The Fed comes up with several reasons explaining their "intent" when buying large quantities of treasuries. The result looks no different than debt monetization by the Fed. U.S. To Monetize Its New Jumbo Fiscal Deficit If the FED ramps up substantially bond buying again, creating new money that is not needed in the real economy to finance those purchase, then it will be only a question of when it will  turn the USD into so much confetti.

++++++

Markets and Market Commentary: 

The Bond Ghouls still assign a zero chance that the FED will raise the FF rate on or before the January 2020 meeting. The probability of a .25% cut is roughly 50/50 as of last Friday. Countdown to FOMC: CME FedWatch Tool

U.S. stock-market euphoria may be nearing a dangerous level, says RBC strategist - MarketWatch

UnitedHealth stock continues fall as Medicare for All worry investors

Why the health-care stock selloff may actually be a good thing - MarketWatch

++++++

Trump:

If you pointed a loaded gun at someone, and pulled the trigger, would you be guilty of attempted murder even if you missed or the gun misfired with the bullet never leaving the chamber? The answer is clearly yes. 

Mueller Report: "The President's efforts to influence the investigation were mostly unsuccessful, but that is largely because the persons surrounding the President declined to carry out order or accede to his requests". The Mueller Report Is Clear: Donald Trump Repeatedly Tried to Obstruct Justice | The New Yorker

In Article 1 of the Nixon impeachment articles, he was charged with obstruction of justice on less compelling evidence and 6 republican members of the House Judiciary Committee voted to impeach him on that charge. Analysis of House Judiciary Committee Impeachment Votes  

After reading the report, republican politicians were either supportive of Trump or silent with one exception.

Senator Mitt Romney (R-UT) did provide the only reaction that is justified by the facts: Mueller report: Republican Mitt Romney appalled over Trump's conduct ("I am sickened at the extent and pervasiveness of dishonesty and misdirection by individuals in the highest office of the land, including the President. I am also appalled that, among other things, fellow citizens working in a campaign for president welcomed help from Russia."); Mitt Romney on Mueller report: I am 'sickened' by 'dishonesty and misdirection' of President Donald Trump - CNN 

Both Nixon and Trump were ultimately unsuccessful in their efforts to interfere with ongoing federal investigations. 

It is clear now, IMO, that the Attorney General, William Barr, deliberately misled the American public in his letter summarizing the Mueller report and will continue to act in a purely partisan manner as Trump's defense attorney rather than the lead attorney for the U.S. government. That is not surprising given U.S. history where Presidents of both parties have placed political partisans in that position. 

How Barr’s Excerpts Compare to the Mueller Report’s Findings - The New York Times; 

What Attorney General Barr said vs. what the Mueller report said - The Washington Post; 

William Barr’s incredibly misleading words - The Washington Post

Mueller report lays out obstruction evidence against the president

Mueller Reveals Trump’s Efforts to Thwart Russian Inquiry-The New York Times

A Portrait of the White House and Its Culture of Dishonesty - The New York Times

Mueller report: what you actually need to know, explained - Vox

Sarah Sanders admits she lied about FBI trust in Comey - and other false statements revealed in Mueller report: USA Today; Mueller report documents Sean Spicer and Sarah Sanders lying to press - Vox

Mueller Investigation Report: Read NPR's Analysis And Annotated Highlights: NPR

About 10% of the report is blacked out.

Trump and his associates had 140 contacts with Russia and WikiLeaks. Mueller report: collusion findings are devastating for Trump - Vox; Robert Mueller’s Six Cases for Collusion | Vanity Fair ("Mueller’s report makes it clear that Manafort didn’t just share polling data with Kilimnik once, but several times during the 2016 election." The understanding was that Kilimnik would pass the information on to the Putin linked oligarch Oleg Deripaska. However, Mueller did not have any proof on whether Trump's internal polling data was delivered to the Russian government and then used in its campaign targeting. I thought that might be the end result when I commented on this episode earlier. These events point to a possible criminal conspiracy but the proof was at best circumstantial. ‘It’s all a lie,’ Russian billionaire Deripaska says of U.S. accusations in Mueller probe | PBS NewsHour

There was not enough evidence to conclude that Trump entered into a conspiracy "agreement" with the Russians.  Conspiracy is defined in criminal law as an agreement between two or more people to commit a criminal offense and then to perform at least one act in furtherance of that agreement. Was the Trump campaign's conduct collusion? Maybe.

Ask yourself what would the Trumpsters say if Hillary had been elected with Russia's assistance and then made every statement and committed every act attributed to Donald relating to the subsequent investigation? 

Trump has claimed that he has "one of the great memories of all time" and "the world's greatest memory". TRUMP: I have 'one of the great memories of all time' - Business Insider; Amid Latest Controversy, Trump Claims 'World's Greatest Memory' - NBC News Yet, when responding to written questions from Mueller, Trump claimed more than 30 times that he did not remember events occurring in 2016. 

That is not unusual for Trump, the person having the greatest memory in world history. He claimed a lack of memory 24 times and 35 times when answering questions in two depositions involving the Trump University, one of Trump's huckster frauds. In Trump U. Lawsuit Deposition, Trump Can't Remember 'World's Greatest Memory' Boast  

++++++

1. Intermediate Term Bond/CD Ladder Basket Strategy: 

As previously discussed, there is mounting evidence that the Bond Ghouls were too pessimistic about the U.S. economy when taking the ten year treasury yield down to 2.39% (3/28/19) from 3.24% (11/8/18). The ten year yield closed last week at 2.69%. 

While it is far from certain, the worm may have turned again on the dominant direction in interest rates. My hunch (best guess) is that the ten year treasury bottomed in late March 2019 and will proceed in a dominant upward path with the usual choppy up and down moves in yields. It is not currently possible to make a reasonable future prediction about the time duration of the up move but informed guesses can be made as more data is revealed.   

This judgment call which results in a possibility assessment has caused me to lighten up intermediate term bonds hoping to buy many of them back at lower prices down the road. A similar history can be found in 2017 when I hollowed out my intermediate term corporate bond allocation and then proceeded in 2018 to buy many of the bonds sold back at lower prices. Snapshot of 2017 Short Term Bond Trading Profits Fidelity Account 

While there is only so much profit that can be generated with small lot bond buys, I have generated close to $500 in profits so far this year with $1K par value bond trades.  

Most of the proceeds have been used to buy short term bonds. Given the flat yield curve, I do not give up much in current yield selling corporate bonds maturing in 2022-2026 and reinvesting the proceeds into bonds maturing within 2 years. Still, for this trading to work, I will need interest rates to go up some rather than down. And, no one really knows with any decree of certainty where the dominant trend now will be up rather than the downtrend resuming after a brief period.     

A. Sold 1 Entergy Arkansas 3.5% First Mortgage Bond Maturing on 4/1/26:

Profit Snapshot: +$20.5

Stocks, Bonds & Politics: Item # 3.A. Bought 1 Entergy Arkansas 3.5% First Mortgage Bond Maturing 4/1/26 at a 99.83 TC (5/7/2018 Post) 

Bonds Detail

Sold at 101.98

YTM at 101.98 = 3.172%

Current Yield at 101.98: 3.432%

Proceeds at 101.88

I also recently pared my position in an exchange traded Energy Arkansas FM bond: Item # 4.B. Sold 30 EAI at $24.73 Used Commission Free Trade (3/17/19 Post); Entergy Arkansas LLC First Mortgage Bonds 4.875% due 2066. I kept this lot: Item # 5.A. Bought 10 EAI at $21.73-Used Commission Free Trade (12/16/18 Post) I also sold 50 shares of another Entergy Arkansas exchange traded FM bond (EAE): Item # 4.A.  Sold 50  EAE at $24.73 (3/6/19 Post); Entergy Arkansas Inc. First Mortgage Bonds 4.75% Series Due June 1, 2063 (EAE)    

I will just wait for lower prices before considering a purchase of this 2026 FM bond.

I still own the Entergy Arkansas $1K par value first mortgage bond maturing in 2023. Bond Detail

B. Sold 1 Morgan Stanley 3.125% SU Maturing on 1/23/2023: 

Finra Page: Bond Detail

Profit Snapshot: +$20.56

Item # 3.B. Bought 1 MS 3.125% SU Maturing on 1/23/23 at a TC of 97.962 (5/24/18 Post)

Sold at 100.118
YTM at 100.118 = 3.091%
Current Yield at  100.118 = 3.1213%

I will consider buying back this bond when and if the price falls sufficiently to perk my interest. This bond can generally be bought and sold in 1 bond lots at the best bid/ask prices. Liquidity is good.  

2. Short Term Bond/CD Ladder Basket Strategy:

$10K in adds

A. Bought 1 Dominion Energy 2.579% Junior Bond Maturing on 7/1/20:

FINRA Page: Bond Detail (prospectus not linked)

Prospectus

Issuer: Dominion Energy Inc. (D)
D Analyst Estimates
Dominion SEC Filings
10-K for 2018

Last Fixed Coupon Bond Offering: March 2019

Prospectus

Credit Ratings:

Fitch Rates Dominion Energy's Senior Notes 'BBB+' (3/19/19)

Bought at a Total Cost of 99.653
YTM at TC Then at 2.864%
Current Yield at TC = 2.588%

B. Bought 1 Dominion Energy 2.579%  Junior Bond Maturing on 7/1/20:

This is the same bond discussed above, except I bought this one in my IB account.

I now own 4

Bought at a TC of 99.650
YTM at TC then at 2.87%
Current Yield at TC = 2.5881%

C. Bought 1 Ventas L.P. 2.7% SU Maturing on 4/1/20:

I now own 6 bonds.

FINRA Page: Bond Detail (prospectus linked)

Issuer: Operating subsidiary of Ventas Inc. (VTR) who guarantees the notes

Issuer Website: Ventas REIT; Our Portfolio
2018 Annual Report (senior debt listed at page 102)

Last Bond Offering: February 2019

Prospectus

Credit Ratings:

Bought at a Total Cost of 99.9
YTM at TC Then at 2.71%

I could have bought 1 Treasury maturing on 3/31/19 at a 2.355% YTM, so the bond gives another .355%. I am not concerned about the credit risk.

D. Bought 2 Harris 2.7% SU Maturing on 4/27/20:

I now own 4 bonds. The last purchase was made at a total cost of 99.277 and a YTM of 3.198%. Item #2.B. (10/10/18 Post)

Finra Page: Bond Detail (prospectus linked)

Issuer: Harris Corp. (HRS)
HRS Analyst Estimates
Website: Harris

Annual Report for the Period Ending on 6/29/18 (long term listed at page 78)
10-Q for the Q/E 12/28/18

Harris Corporation and L3 Technologies Stockholders Approve Merger; Harris Corporation and L3 Technologies to Combine in Merger of Equals | Harris

Bought at a Total Cost of 99.95
YTM at TC Then at 2.748%
Current Yield at TC = 2.7014%

I am not concerned about the credit risk prior to this bond's maturity.

E. Bought 1 Treasury 1.75% Coupon Maturing on 11/30/19:
YTM = 2.421%

I now own 2 bonds. For treasuries maturing on 11/30/19, I now own 12 bonds.

F. Bought 1 Treasury 1% Coupon Maturing on 11/15/19:
YTM = 2.408%

I now own 5 bonds.

G. Bought 3 Treasury Bills at Auction Maturing on 6/18/19:
IR = 2.439%

Auction Results: 56 Day Bill

3. Eliminations and Pares:

A. Eliminated EPRPRG-Sold 50 at $23.05 (used commission free trade):

Quote: EPR Properties 5.75% Cumulative Preferred Series G

Profit Snapshot: $149.68

Item # 1.B. Bought 50 EPRPRG at $21.06-Used Commission Free Trade (12/29/18 Post)

Issuer: EPR Properties (EPR)-An Equity REIT
EPR SEC Filings
EPR Properties Website

2018 Annual Report 

Q/E 12/31/18 Earnings Press Release 

Prospectus

Category: Advantages and Disadvantages of Equity REIT Cumulative Equity Preferred Stocks, part of the Equity REIT Common and Preferred Stock Basket Strategy

Par Value: $25

Capital Structure Placement: Junior to all bonds and mortgages and senior only to common stock 

Coupon: 5.75% per annum ($1.4375 per share annually)

Issuer Optional Call: On or after  10/30/22

Stopper Clause: Yes. (see page S-25 of the prospectus)

B. Sold 50 of 100 AHTPRI at $23.16:

Profit Snapshot (tax cost basis reduced by ROC):

Item # 2.A Bought 50 AHTPRI at $23.69-Used Schwab Commission Free Trade  (6/21/18 Post)

Since I received one quarterly dividend on this lot this year, the tax cost basis will likely be furthered reduced by ROC when Ashford publishes the tax characteristics of its 2019 dividends increasing the reportable profit but having no impact on before tax total return. 

The entire dividend paid in 2018 was classified as ROC:  

AHT 2018 Tax Reporting Info Press Release

Total Return Calculation:

4 quarterly dividends = +$93.96
Loss on Shares without ROC Adjustment = -$31.18
Total Return = +$62.78

Quote: Ashford Hospitality Trust 7.5% Preferred Series I

I kept the lowest cost 50 shares: Item 1.B. Bought 30 AHTPRI at $21.86-Used Commission Free Trade (12/26/18); Added 20 AHTPRI at $18.52 Used Commission Free Trade (12/29/18 Post) The second purchase was when the security was in a falling knife mode.

Average Cost Per Share Remaining Shares: $20.52 (before ROC Adjustment)

Dividend Yield on Remaining Shares = 9.14% (before ROC adjustment)

I view AHT preferred stocks to be high risk. Consequently, I was willing to sell the high cost lot for a positive total return even though there was a loss on the shares before the ROC adjustment to the tax cost basis.

Issuer: Ashford Hospitality Trust Inc (AHT)-A HOTEL REIT
Prospectus
Par Value: $25
Optional Call by Issuer: At par value plus accrued and unpaid dividends on or after 11/17/22
Capital Structure: Senior only to common stock
Stopper Clause: Yes (enforces preferred shareholders superior claim to cash vs. common shareholders only)
Dividends: Quarterly, Cumulative and Non-Qualified (pass through entity)
Last Ex Dividend Date: 3/29/19

Category: Advantages and Disadvantages of Equity REIT Cumulative Equity Preferred Stocks, part of the Equity REIT Common and Preferred Stock Basket Strategy

SEC Filings 

2018 Annual Report 

C. Eliminated PPLT-Sold 17 at $83.75 (used commission free trade): 

Profit Snapshot: +$19.68  

Quote: Aberdeen Standard Physical Platinum Shares ETF Overview

It has become just too difficult for the Old Geezer to profitably trade precious metal ETFs. And, the effort made to generate any profit is not worth the time. 

4. Small Ball-Commission Free ETFs: 

A. Bought 10 FCOM at $32.81-Commission Free for Fidelity Customers: 

Quote: Fidelity MSCI Communication Services Index ETF Overview

Closing Price Last Friday: FCOM $33.60 +$0.03 +0.09% 

Expense Ratio: .084%

Some Top Holdings:

Sponsor's Page: FCOM | ETF Snapshot - Fidelity

Morningstar Page: FCOM (currently rated 4 stars)

B. Bought 10 EWL at $35.64-Commission for Fidelity Customers: 

Quote  iShares MSCI Switzerland ETF Overview

Closing Price Last Friday: EWL $35.80 -$0.01 -$0.03% 

Holdings as of 4/3/19: 

Sponsor's Website: iShares MSCI Switzerland ETF | EWL

Average Annual Total Returns Through 4/4/419

3  Years: +8.95%
5  Years: +3.29%
10 Years: +10.8%

Expense Ratio: .47%

Morningstar Page: EWL

Dividends: Annually with June ex dividend dates

This ETF will compliment my position in the CEF Swiss Helvetia Fund Inc. (SWZ). I recently restarted a position. Item # 1 Bought 100 SWZ at $7.53-Used Commission Free Trade(2/27/19 Post); SWZ Fund - Schroders

SWZ Annual Average Total Returns:

3 Years:   +8.06%
5 Years    +2.87%
10 Years: +9.91%

Swiss Helvetia Fund Inc (SWZ) Total Returns (through 4/4/19)

The Swiss stock market has underperform the S & P 500 over those time periods. Maybe the past is prologue or maybe Swiss stocks will outperform in the coming years. One thing is for certain, the past five years has not been kind to this country sector, particularly in comparison to the S & P 500.   

Part of the multi-year problem for USD price funds that own Swiss stocks is the Swiss National Bank's Jihad against the Swiss Franc.

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.