Observations and Sample of Recent Trades: FIE:CA, HTA, PFF, TPVG

Economy: 

Core CPI rose .3% in June, the largest monthly increase since January 2018. Core CPI rose 2.1% Y-O-Y through June, up from 2% Y-O-Y in May. All items CPI rose .1%, dragged down by energy prices which have been trending up so far this month. All items CPI rose 1.6% Y-O-Y through June, held back by over a 5% Y-O-Y decline in energy prices.  

Consumer Price Index Summary

China and U.S. Differ Over Agricultural Purchases Trump Boasted About - The New York Times  On 6/29/19, Donald claimed that China  is going to be buying a tremendous amount of food and agricultural product, and they’re going to start that very soon, almost immediately.” China denies making an explicit commitment and has not yet started to ramp up purchases. "Chinese officials have maintained that any further purchases would be made only as part of a trade deal rather than as a unilateral concession."

Soybean Prices - 45 Year Historical Chart | MacroTrends

The longer the U.S. Treasury yield curve stays inverted, the better it predicts recession, analysts say - MarketWatch I do not believe that there is any dispute on that point. 

CBO estimates effects of House Democrats $15 minimum wage plan  (While millions would be better off with a minimum wage increase to $15 per  hour, the CBO estimates that over 1M will lose their jobs. Those in favor of a political action will frequently downplay or ignore the negative consequences).  

Morgan Stanley sees Fed cutting by half percentage point at July meeting 

Trump has reportedly tasked aides to find a way to weaken the US dollar

Fed’s Bullard expects a total of a half-point ‘insurance’ rate cut by year end, largely owed to trade jitters - MarketWatch

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Markets and Market Commentary: 

The SPX triple top never formed since the next major move after re-entering the 2945-2955 resistance range was up. As I noted earlier, the failure to form a triple top does not provide any concrete guidance on how high the stock market will go before running into a new resistance level. 

It is my opinion that the Stock Jocks are over estimating the FED's power to generate growth and underestimating the potential decline in stock prices when a recession occurs, probably worldwide, with U.S. stock prices at elevated levels.  

Why does the economy need monetary stimulus when interest rates are already abnormally low by any historical standard, the massive tax cuts went into effect just over a year ago, and the federal government is spending $1 trillion or so per year more than it takes in revenue? Does a .25% or .5% cut in the federal funds rate even address the causes of the current worldwide economic slowdown?

I am not comforted by the recent stock surge. I find it as a bit scary and irrational. 

I am more certain that longer term bond prices and yields are even more undesirable than stocks. U.S. treasury bill yields will soon fall below the inflation rate and are already near the 2.1% Y-O-Y core inflation rate: 

The treasury bill yields are below the sticky inflation rate which was 2.5% Y-O-Y through June.  Sticky-Price CPI - Federal Reserve Bank of Atlanta The median CPI Y-O-Y rate was 2.8% through June. Median CPI: Latest Data

Fastenal just gave us a glimpse into this earnings season as it tanks on tariff costs; Fastenal Company Reports 2019 Second Quarter Earnings ("While we successfully raised prices as one element of our strategy to offset tariffs placed to date on products sourced from China, those increases were not sufficient to also counter general inflation in the marketplace. We have taken additional actions in the third quarter of 2019 to counter the broader pressures we are experiencing on our costs as well as the additional tariffs that were levied on China-sourced products in May 2019.")

Blackstone strategist: Market is too dovish on Fed, correction coming: NBC The argument is that the FED will probably make a .25% cut this month as "insurance", but further cuts will not happen which will cause the Stock Jocks to throw a hissy fit. 

Weaker growth will offset a Fed rate cut—so sell stocks, warns Morgan Stanley - MarketWatch

Yield gap between risky corporate debt and investment grade sinks to 12-year low - MarketWatch I have been staying away from junk rated bonds, viewing their yields compared to investment grade rated bonds to be inadequate compensation for their additional credit risks.  

France passes digital tax on US tech firms despite trade threat (3% tax on French revenues)

Singapore GDP down 3.4% for the second quarter compared to the 1st The consensus forecast was for +.1%. 

30-year Treasury yield hits nearly six-week high after ‘borderline shocking’ debt auction - MarketWatch

The cure for abnormally low rates may be higher than expected inflation numbers which force central bankers to raise short term rates or a buyers' strike. There may come a time when investors worldwide refuse to buy negative nominal yield bonds or negative real yield bonds that have nominal positive rates. 

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TPVG | TriplePoint Venture Growth BDC Corp. Overview 
Closing Price Last Friday: TPVG $14.48 -$0.03 -0.21% 

Website: TriplePoint Venture Growth
TPVG SEC Filings
2018 Annual Report

Based on TPVG's history to date, I view this BDC as one of the best externally managed ones. 

The stock may enjoy a bump on Monday based on Scott Black recommending it in this week's Barron's. Small-Cap Stock Picks for an Expensive Market, According to Delphi Management’s Scott Black - Barron's He is forecasting net investment income at $1.67 per share this year, which is about 10 cents higher than the consensus estimate.  

When Black was interviewed for the article, TPVG was selling at $14.23. He claimed that this price was  "right around its net asset value per share." I would not have phrased that claim in the same way. The last reported net asset value per share was $13.59 as of 3/31/19: 10-Q at page 3  I do not view a $14.23 price as being "right around its net asset value per share".  

Last Friday's closing price of $14.48 represented a 6.55% premium to net asset asset value as of 3/31/19. 

I have pared my position but still own over 100 shares. 

The largest of two positions is in my Schwab account: 

I took the last quarterly dividend in cash since I viewed the likely reinvestment price as being outside of my fair value range. 

2 Year History Schwab Account: 

If the shares pop enough next week, I will probably sell that position and keep the smaller position in my Fidelity account where purchases are subject to the small ball restriction. 

Sell Discussions: Item # 4.C. Eliminated  TPVG in Roth IRA Account (4/17/19 Post); Item # 3.B.(4/14/19 Post); Item 3.A. Sold 40 TPVG at $13.44-Schwab Account and Item #3B Sold 50 TPVG at $13.39 Vanguard Roth  IRA (3/13/19 Post); Item 2.B. Sold 50 TPVG at $13.39 (3/4/2017 Post); Item # 3 Sold 50 TPVG at $12.33 (1/16/17 Post)

Buy Discussions: Item # 4.A.  Bought 50 TPVG at $12.11-In A Roth IRA Account (12/5/18 Post); Item # 3 D. Bought 10 TPVG at $11.2-Used Commission Free Trade (1/9/19 Post); Item # 4.A.  Bought 50 TPVG at $12.11-In A Roth IRA Account (12/5/18 Post); Item # 3.A. Added 50 TPVG at $13.28 and 10 at $13.02-Used Schwab Commission Free Trades (8/15/18 Post); Item # 2.B. Added 10 TPVG at $11.6-Used Commission Free Trade (3/19/18 Post); Items 1.B. and 1.C. Bought 50 TPVG at $12.32 and 10 at $12.01-Used Commission Free Trades (2/26/18 Post); Comment Blog # 3-South Gent: Bought 50 TPVG at $10.61 | Seeking Alpha

TPVG Trading Profits to Date: $406.71

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Trump: 

Trump Says Mainstream Media Is Not Free Speech; Trump: Mainstream Media Is Not Free Speech, People Who ‘Write Bad’ Are Dangerous 

Donald and his Trumpsters will be the ones who will decide what is protected free speech in the U.S. Perhaps, they will be more lenient than Kim is in North Korea or Putin in Russia. Trump should be able to close news outlets, Republicans say in poll: USA Today  

‘It Could Have Been Any of Us’: Disdain for Trump Runs Among Ambassadors - The New York Times

Trump rails against ‘Fake News’ in bizarre tirade, warns industry will fold when he leaves office 

Trump on 'Unfair' U.S.-Japan Security Treaty - FactCheck.org Just another example of Clueless Don proving his own boundless ignorance. 

No Evidence Kim Jong Un Rebuffed Obama's 'Begging' - FactCheck.org Just another Donald reality creation. 

Trump Posts Fake Ronald Reagan Quote Predicting a Trump Presidency Trump's representation was rated Pants on Fire by PolitiFact.

Trump calls the people planning to boycott Home Depot ‘vicious and totally crazed’ - MarketWatch Donald routinely describes himself when attacking others. Donald is one vicious and crazy person. Donald Trump slams 'Radical Left' over Home Depot boycott threats - The Washington Post Trump frequently requests his True Believers to boycott products made by companies who have offended his sensibilities. For example, Don the Hypocrite called for a boycott of Macy's. Donald Trump calls for a Macy’s boycott - The Washington Post

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Donald the Environmental Champion:

After recent polling showed more Americans becoming concerned about environmental issues and global warming, Donald delivered one of his Alternate Reality speeches.

Flanked by former lobbyists for the coal and oil industries, who he appointed to senior EPA positions, Donald claimed to be leading the U.S. charge for a cleaner environment. 

One environmental expert called Donald's remarks a true "1984 moment". Trump Saw Opportunity in Speech on Environment. Critics Saw a ‘“1984” Moment.’ - The New York Times 

It is impossible to keep track of those moments since Donald became President but I suspect the number would easily exceed 10,000. 

Donald claimed he wanted cleaner water as his administration was rolling back clear water and stream regulations. 

Donald took credit for the decline in CO2 levels that occurred during prior administrations, while neglecting to mention that his policies would result in more CO2 emissions from coal plants. 

Demagogue Don did not even mention climate change and global warming for the obvious reason that he is without question the Climate-Change-Denier-In-Chief. Bush's EPA Chief Slams Trump's Environment Speech: 'He's Living In His Own Reality' 

It is important to understand that tens of millions actually believe Donald when he is making obviously false statements that are demonstrably contradicted by facts.  

Donald and the Census Citizenship Question: 

Donald caved on adding a citizenship question to the census form Trump abandons effort to include citizenship question on census - CBS News Trump admitted that citizenship information could be gathered from other government sources which was always the case. The reasons for adding the question to the census were to throw red meat to the Trumpsters and to disadvantage the blue states politically. 

The short form, which has been in use since 1970, has never had a citizenship question. 

The long form, which was sent to about 1/6 of  households contained a citizenship question for the 1970 through 2000 censuses.Questionnaires - History - U.S. Census Bureau

The Census Bureau now collects citizenship information in its annual American Community Survey which is sent to about 3.5 million households. American Community Survey (ACS) The 2018 ACS is scheduled for release next September. Schedule for Income, Poverty and Health Insurance Statistics and ACS  

Prior to Donald's effort to add a citizenship question to the short form, the government had never requested citizenship status for every person in a household. FACT CHECK: Has Citizenship Been A Standard Census Question? : NPR; Citizenship questions on the census have no historical pedigree - Los Angeles Times There were previously questions about where each individual was born. 

Prior to the 1850 census, only the head of household would be identified by name which makes genealogical research more difficult.    

In the 1980 census, there was a question about whether household members were naturalized which hopelessly confused a large segment of the population. 22% of native born Americans claimed to be naturalized. The Long History of the U.S. Government Asking Americans Whether They Are Citizens - The New York Times 

The Constitution directs that an "enumeration" of persons living in the U.S. be conducted every 10 years. That provision, contained in Article 1, requires that persons rather than just citizens be counted in each census. Census in the Constitution  

Claims That Obama ‘Yanked’ Citizenship Question From Census Are False - The New York Times

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1. Added 100 FIE:CA at C$6.84 (C$1 IB Commission):

Current Position: 500 shares.

Maximum Position: 1000 shares

Quote: iShares Canadian Financial Monthly Income ETF
Sponsor's Website: iShares Canadian Financial Monthly Income ETF

Closing Price Last Friday: FIE.TO C$6.95 -C$0.02 -0.22% 

Last Discussed: Item # 2. Bought 100 FIE:CA at C$6.92(4/7/19 Post)

Dividends: Monthly at C$.04 per share

Last Ex Dividend Date: 6/19/19

Dividend Yield at C$6.84 = 7.02%

Dividend Reinvestment: No

Last Sell Discussions: Item # 5. Sold 300 FIE:CA at C$7.64 (11/26/17 Post); Item # 4.A. Sold 100 FIE:CA at C$7.57 (10/30/17 Post)

A price over C$7.5 would likely trigger an elimination.

Top 10 Holdings:

The top holding has been in a bear market since January 2018. Chart: Ishares Canadian Preferred Stock Index ETF (CPD:CA) Using a one year chart, the shares have pierced to the upside the 50 and 100 day SMA lines but the current price is still well below its 200 SMA line. 

I have been buying some Canadian reset equity preferred stocks since their dividend yields are more attractive due to share price declines than similarly rated U.S. equity preferred stocks. Most U.S. equity preferred stocks are selling above their $25 par values, whereas the Canadian reset equity preferred stocks are selling at significant discounts to their C$25 par values. I am for the most part buying back Canadian resets that were sold at higher prices.   

That ETF owns both fixed coupon and reset equity preferred stocks. The Canadian reset preferred stocks suffered a sea change in investor sentiment based on five year resets occurring at lower coupons than previously anticipated by investors, even though several of them reset at higher coupons than the ones prevailing during their respective fixed coupon periods.  

Canada 5 Year Government Bond Advanced Charts 

2. Intermediate Term Bond Ladder Basket Strategy: 

A. Sold 2 Public Storage 2.37% SU Maturing on 9/15/22-A Roth IRA Account: 

Profit Snapshot: +$51.11

Item # 2.A. Bought 2 PSA 2022 SU at a TC of 96.57 (9/30/18 Post) 

FINRA Page: Bond Detail

Prospectus

Issuer: Public Storage (PSA) 

PSA SEC Filings

Sold at 99.950

YTM at 99.950 = 2.386%

I am replacing these lower yielding intermediate term bonds with higher yielding securities that carry greater risks.  

3. Small Ball ETF Buy "Programs":

A. Restarted PFF-Bought 10 at $36.85 (Commission free for Fidelity Customers):

Quote: PFF | iShares Preferred & Income Securities ETF Overview

Closing Price Last Friday: PFF $37.00 +$0.09 +0.24% 

Sponsor's Website: iShares Preferred and Income Securities ETF | PFF

The so called "preferred stock" ETFs will own equity preferred stocks and exchange traded bonds. Only the equity preferred stocks that are issued by non-pass through entities pay qualified dividends.  

Expense Ratio: .45% (view as high)

Dividend: Monthly at a variable rate

Last Ex Dividend:  7/2 (after purchase)

Number of Holdings as of 6/28/19: 466

Last Elimination: Item # 5 Sold 75 PFF at $39.45-Commission Free at Fidelity-Update For Exchange Traded Bond And Preferred Stock Basket Strategy As Of 5/26/2016 - South Gent | Seeking Alpha (net profit = $38.43) Of those 75 shares, I sold a 25 share lot at -$2.54  loss that was bought at $39.55. Increasing Cash Flow In A World Without Risk Free Yield-Bought 25 Shares of The ETF PFF at $39.55- South Gent | Seeking Alpha (1/15/15 Post)

Last Purchase Discussion: Item # 1 Update On Bond And Equity Preferred Stock Basket Strategy As Of 8/14/15 - South Gent | Seeking Alpha

Current Position: 10 shares

Maximum Position: 100 shares

Purchase Restriction: Small Ball Rule

Dividend Reinvestment: No, until I reach 50 shares

I do not regard this security as a suitable long term buy and hold given its five year total return history. Morningstar: IShares Preferred and Income Securities ETF (PFF) Total Returns The five year annual average total return through last Thursday (7/11) was 4.29%, which is lower than the dividend yield throughout that period. I always regard that result as a major negative. 

Morningstar currently has a 2 star rating. 

I view this ETF and a similar one that can be bought at Schwab commission free (PGX) which I have traded as well, as alternatives to low yielding sweep account rates. The objective is simply to earn a return in excess of the dividend yield over a relatively short period of time. 

4. Bought 50 HTA at $26.88-Used Commission Free Trade:

The ex dividend date occurred on the day after this purchase. 

Closing Price Last Friday: HTA $27.85 -$0.05 -0.18% 

While I normally do not buy a tax event, HTA's price had declined by more than the value of the dividend when I purchased this lot on Monday 7/1. 

The closing price on the previous Friday was $27.43. Moreover, the stock price had closed at $29.15 on 6/20/19. 

When those percentage declines occur just prior to an ex dividend date, I do not view the purchase as buying a tax event.

Quote: Healthcare Trust of America Inc. (HTA)

MOB = Medical Office Building

"Healthcare Trust of America, Inc. (NYSE: HTA) is the largest dedicated owner and operator of MOBs in the United States, comprising approximately 23.2 million square feet of GLA, with $6.8 billion invested primarily in MOBs." 

Website: HTA – Healthcare Trust of America, Inc.

Key Markets HTA – Healthcare Trust of America, Inc.

Healthcare Trust of America Inc. Interactive Chart

Dividend: Quarterly at $.31 per share ($1.24 annually)

Last Ex Dividend Date: 7/2/19 (after purchase)

Healthcare Trust of America, Inc. (HTA) Dividend Date & History 

Dividend Yield at $26.88 = 4.61%

Last Earnings Report: Healthcare Trust of America, Inc. Reports First Quarter 2019 Earnings

The knock that I have is the decline Y-O-Y in the FFO numbers and in funds available for distribution ("FAD")

Normalized FAD per share for the Q/E 3/31/19 was $.35 per share, so there is some room for dividend growth (divide $73.153M in FAD by 208.999M average weighed diluted shares)  

I would likely sell the position at over $30 per share preferably after collecting 4 quarterly dividends. 

Bond Ownership: I also own 8 HTA $1K par value bonds:

2 HTA 3.375% SU Maturing on 7/15/21
4 HTA 2.95% SU Maturing on 7/1/22
2 HTA 3.5% SU Maturing on 8/1/26

When I am in a profit taking mode for bonds, focusing on intermediate term ones, the most likely HTA bond to be sold would be the 2026 one. I see no reason to harvest profits in the 2021 and 2022 maturities.

The following is a snapshot of HTA's outstanding bonds:

Prices as of the Close on 6/28/19

There are two listings for the same 3.7% SU maturing on 4/15/23. 

When you see that at FINRA, it simply means that the bond was initially sold as a private placement to qualified institutional investors. Thereafter, an SEC prospectus was filed and the privately issued bonds were exchanged for identical ones with a different CUSIP that could then be publicly traded without restrictions on who could buy them.

Due to the recent price appreciation in the bonds, the common stock increased its yield advantage compared to the "safer" senior unsecured bonds.   

Prior Trades: I have only nibbled at this "blue chip" MOB REIT due to its low dividend yield and lackluster dividend growth. 

With the ten year treasury hovering near 2%, I have become more sanguine about accepting a 4% to 5% dividend yield from a quality REIT.  

Item # 1.A. Sold 15 HTA at $28.57-Used Commission Free Trade(9/12/18 Post)(profit snapshot = $46.12); Item # 2 Sold 50 HTA at $26.25 Update For REIT Basket Strategy As Of 10/28/15 - South Gent | Seeking Alpha (profit snapshot = $124.1)-Item # 5 Bought 50 HTA at $23.45 Update For REIT Basket Strategy As Of 9/8/15 - South Gent | Seeking Alpha

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.