Observations and Sample of Recent Trades: AMU, SRET

Economy: 

U.S. services sector slows; orders hit three-year low - Reuters

China halting new US agricultural purchases and may tariff farm goods recently bought: Report

China pulling out of US agriculture is a devastating blow to an already struggling industry

US Treasury designates China as a currency manipulator

Trump: "Trade wars are good, and easy to win" (March 2018)

U.S. exports fall 2.1% in June amid festering China trade dispute and faltering global economy - MarketWatch

Prospective Fed nominee Shelton global economy in 'very dangerous situation' like 1930s

Tech-spending alarms are ringing amid Trump’s latest China-trade volley - MarketWatch

NY Fed Nowcasting Report: As of 8/2/2019, the NY Fed is estimating third quarter real GDP growth at 1.6%. 

Calculated Risk: Public and Private Sector Payroll Jobs During Presidential Terms

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Portfolio Management: 

I am continuing to sell investment grade corporate bonds into the bond rally. 

I have used some of the proceeds to buy Tennessee municipal bonds that have higher current yields than the bonds being sold, providing me with a higher yield before tax that is enhanced further by the muni bonds' tax free interest payments.

I am also using some proceeds from bond sales and proceeds from maturing bonds to buy common stocks and ETFs that provide a significantly higher yield than the bonds that are either being sold or redeemed by issuer. 

I am continuing to buy common stocks that fit my profile of contrarian value stocks.  

I sold my double short SPX ETF near the close on Monday. I mentioned that transaction in this comment. I may buy it back on a SPX move over 3000.

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Markets and Market Commentary: 

China is just getting started using yuan in trade war, analysts say

XE: CNY / USD Currency Chart. Chinese Yuan Renminbi to US Dollar Rates Use a two year chart in order to see how the Yuan's value started to decline against the USD last year when the GOP's trade war started.

Why a falling Chinese yuan crushed the stock market and intensified the trade war - MarketWatch

Yesterday, China did stabilize the Yuan's value.

The superrich are selling stocks, buying properties and keeping cash ready - MarketWatch

NetApp stock plunges warning that earnings, revenue will come in well below forecast-MarketWatch; 

8/2/19 Close: NTAP $46.04 -$11.67 -20.22% 

This highly accurate stock-market predictor just hit its most bearish level since the internet bubble - MarketWatch

Short sellers are increasing bets that cannabis stocks will fall - MarketWatch I have periodically bought and sold the Horizons Marijuana Life Sciences Index ETF (HMMJ:CA) I currently have no position and view any purchase as a short term trade. 

Apple’s stock takes a ‘gut punch’ from Trump’s tariff threat - MarketWatch

Berkshire Hathaway profit falls as insurance underwriting declines and tariffs bite

Stock indexes are falling from record highs — and that spells danger - MarketWatch


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Trump: 

Donald and other republicans, including Tennessee's new Senator Marsha Blackburn (R), have repeatedly referred to illegal immigration as an "invasion" One White Nationalist supporter responded to the "invasion" with a mass shooting in El Paso. We Can No Longer Ignore Trump’s Role in Inspiring Mass Shootings

Trump tweets about Mexicans under scrutiny in wake of El Paso shooting

How the Trump Campaign Used Facebook Ads to Amplify His ‘Invasion’ Claim

El Paso Shooting Suspect’s Manifesto Echoes Trump’s Language - The New York Times

"The suspect, identified as Patrick Crusius, 21, told investigators following his arrest that he allegedly set out to kill as many Mexicans as he could, according to authorities."Alleged shooter cased El Paso Walmart before rampage that killed 22: Officials

A Ohio republican blamed the El Paso shooting on drag queen advocates, homosexuals, legalization of marijuana, former President Obama, hatred for the nation's veterans and the Democrats. Ohio GOP lawmaker blames mass shootings on Obama, 'fatherlessness' and 'drag queen advocates' While that person may be viewed by some as an outlier, I view her sentiments and "thought process" to be fairly typical for Trump cult members. 

Trump claims he'll 'end the AIDS epidemic,' 'cure childhood cancer' at Cincinnati rally  

#LostTrumpHistory: Trump’s 9/11 claims become a George Conway-pushed meme After 9/11, Donald did brag that he now owned the tallest building in NYC. There is no evidence that he went to ground zero after 9/11 as he now claims: "And I was down there also, but I’m not considering myself a first responder. But I was down there. I spent a lot of time down there with you.” A brief history of Trump making 9/11 about himself - The Washington Post

Trump's War on Science: Reuters 

Maybe Donald will require school children to visit the Creation Museum in Kentucky and see what really happened as Adam and Eve stroll next to the dinosaurs. Creation Museum: Adam and Eve in the Land of the Dinosaurs - Religion - The New York Times; A. A. Gill on Kentucky's Creation Museum | Vanity Fair  

Trump's Interior Secretary Picks Opponent Of U.S. Public Lands To Oversee Them 

Trump claims wind turbine 'noise causes cancer' | TheHill

Justice Department suddenly eliminates funds for human trafficking victims-The Washington Post

Trump and Putin discussed need for new ambassador during phone call 

Disgusting Don made the following comment about an attempted robbery at Elijah Cummings home: 

Under Betsy DeVos, defrauded students find it hard to get rid of debt

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1. Bought 100 AMU at $14.97-In A Roth IRA Account: 

Quote: ETRACS Alerian MLP Index ETN Overview 

Closing Price Yesterday: AMU $14.96 -$0.12 -0.80% 

Last Sell Transactions: Item # 2.A Sold 72+ AMU at $17.63 and Item # 2.B. Sold 53+ AMU at $18.09 (8/15/18 Post)(profit snapshots = $37.59); Item # 4 A. Sold 209+ AMU Shares at $21.27 (profit snapshot= $267.76) 

AMU is viewed as a dividend harvest security. The goal is to escape with a total return in excess of the dividend yield. 

Using the distributions paid in 2018 ($1.1838 per share), the dividend yield at a total cost of $14.97 is 7.91%. 

Last Substantive Buy Discussion: Item # 2.A. (12/11/17 Post) 

Security: ETN

AMU is an Exchange Traded Senior Note issued by UBS that tracks before costs the Alerian MLP Index. AMU-ETRACS Alerian MLP Index ETN (click "key considerations" for sponsor's summary of risks)

The Alerian MLP Index consists of MLPs involved in various aspects of the energy business, including pipelines, production, storage, gathering and processing.

Index Weightings Over 1%: 

I generally keep my exposure to ETNs limited, since that form of ownership exposes me to the issuer's credit risk, in addition to the numerous risks associated with the index being tracked by the ETN as well as other risks relating to this kind of product. "Exchange-Traded Notes Avoid Unpleasant Surprises- FINRA; NYSE Publication: "What You Should Know about Exchange Traded Notes.pdf.

As discussed previously, the energy infrastructure MLPs generally have a small or no direct exposure to energy prices. However, those companies have high fixed costs and their cash flow is dependent on the volume of product that needs to be transported, stored and/or processed. A decline in energy prices can negatively impact production from several fields and consequently result in lower toll collections as fixed costs continue going up. 

Chart: This ETN has been smashed in price due to declines in its components. AMU Stock Chart Energy infrastructure MLPs have been in a bear market since the 2014 summer. 

ETN Performance Numbers: Through my date of purchase (8/6/19), the total return of this security YTD was + 10.68% and the three year  average annual was at -2.81 %. Over five years, the total annual average return was a minus 7.99%. At least I am not chasing this one. 

So that is pretty pathetic and reflects the secular bear market trend. Total returns include dividend reinvestment. 

UBS ETRACS Alerian MLP Index ETN (AMU) Total Returns

Distributions: Quarterly at a Variable Rate:  

Last Ex Distribution Date: 5/28/19

Some components (Quote/Distribution Info): 

ETP-Energy Transfer Partners L.P. 
EnergyTransfer.com-Distribution History

EPD-Enterprise Products Partners L.P.
Distribution Payments | Enterprise Products

MMP-Magellan Midstream Partners L.P
Magellan Midstream Partners Distributions

PAA-Plains All American Pipeline L.P.

Quarterly Distributions

MPLX-MPLX L.P. 
MPLX - Distributions

BPL-Buckeye Partners L.P. 

Distribution History

I will not buy a MLP directly due to the K-1 hassle. 

UBS ETRACS Alerian MLP ETN (AMU) Quote | Morningstar (rated 2 stars)

Current Position in this Account: 100 shares 

Average Cost Per Share: $14.97

Maximum Position in this Account: 100 shares + Shares purchased with dividends

Purchase Restriction: Small Ball Rule 

2. Bought 100 SRET at $14.81 and 10 at $14.35-Commission Free for Vanguard Brokerage Customers: 

Quote: Global X SuperDividend REIT ETF Overview 

Closing Price Yesterday: SRET $14.50 +$0.14 +0.97% 

Sponsor's webpage: SuperDividend® REIT ETF

This ETF will own high yielding equity and mortgage REITs. The performance has been restrained by the mortgage REIT positions. The fund will own some equity REITs operating in foreign countries which exposes the SRET owners to currency risk. I only noted three in the current list, which included Australian REIT Stockland (SGP.AX) that I have bought and sold on Australia's stock exchange several times. 

The goal for this out-of-favor ETF is a total return in excess of the dividend yield. 

Dividends: Monthly, currently at $.0998 per share ($1.1976 annually)

Last Ex Dividend: 8/5/19

Average Cost Per Share (110 Shares) = $14.76

Dividend Yield:  8.11% (assumes continuation of current penny rate)

Last Sold: Item # 1. B. Sold 50 SRET at $14.79-In A Roth IRA Account-Commission Free for Vanguard customers (4/3/19 Post) 

I decided to buy this ETF again due to the rabid decline in interest rates substantially narrowing my reinvestment options for proceeds received from maturing bonds and CDs.  

Last Purchase Discussion: Item # 3.C. Bought 50 SRET at $13.88-In a Roth IRA Account-Commission (1/27/19 Post) 

Expense Ratio: .59% (viewed as slightly high for this kind of ETF)

Top 10 Holdings (as of 7/31/19): 

Global X SuperDividend® REIT ETF (SRET) Total Returns

3. Intermediate Term Bond Ladder Basket Strategy: 

A. Sold 2 Verizon 2.45% SU Maturing on 11/1/22-In a Roth IRA Account:

Profit Snapshot: +$18.83

Item # 5.A. Bought 2 VZ 2022 SU at a TC of 98.935 (12/4/17 Post) The purchase was at 98.735. The Vanguard brokerage commission adds $4 to the tax cost number or .2. 

FINRA Page:  Bond Detail

Issuer: Verizon Communications Inc. (VZ) 

Verizon Communications Inc. Analyst Estimates 

Sold at 100.413

YTM at 100.413 = 2.309%

B. Sold 1 Northern States Power 2.6% First Mortgage Bond Maturing on 5/15/23: 

Profit Snapshot: +$23.95

Item # 1.A. Bought 1 Northern States 2.6% First Mortgage Bond Maturing in 2023 at a TC of 98.222 (2/17/19 Post) This bond was recently bought. I will be looking for an opportunity to buy it back at less than 98. 

FINRA Page: Bond Detail

Issuer: Wholly owned subsidiary of Xcel Energy Inc. (XEL) who does not guarantee the bond. 

Sold at 100.792

YTM at 100.792 = 2.352%

Proceeds at 100.692 (after $1 IB commission)

4. Bought 5 Treasury Bills at Auction Maturing on 11/7/19: 
IR =  2.033% 

Auction Results: 

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.