Observations and Sample of Recent Trades: BPOPRP, HT, CLDT, VLY

Economy: 

Donald has demanded that the FED cut the FF rate to zero or less. Trump says Fed should cut interest rates to zero 'or less' - MarketWatch 

In TrumpWorld, there is no inflation in the U.S. 

Mnuchin: US-China have 'conceptual' trade enforcement agreement I have no idea what is meant by Mnuchin's allegation that China has agreed to a "conceptual" trade enforcement agreement. 

If China agreed that there needs to be an enforcement mechanism, then conceptually it has agreed to one. Based on what is known publicly, China has not agreed to specific U.S. demands on that issue including the main one that tariffs remain in effect as an enforcement mechanism. 

Most likely IMO, Mnuchin wanted to convey a positive message that had no substance as part of the Trump's administration ongoing effort to mislead investors regarding the status of the trade negotiations. The purpose to prop up the stock market.

Eventually, if no trade deal is finalized, and it becomes obvious that no agreement is likely before the 2020 election, the Stock Jocks may conceivably quit listening to positive spin from Trump, Mnuchin and Kudlow.  

Consumer borrowing expands in July at fastest rate in nearly two years - MarketWatch I do not view consumer spending sourced from more debt as a positive.

Powell: Fed's lower rates are helping the economy stay in good place

Trump did not like this Powell comment: Fed chief Powell says trade policy is weighing on investment decisions 

Trump, who is a debt junkie and a major beneficiary of lower interest rates, responded by demanding again that the FED slash interest rates. Trump calls on Fed to slash interest rates as Powell says he doesn’t expect recession-MarketWatch 

His concern is not what the country needs, which is not interest rates at lower than Great Depression levels, but what Donald believes is needed (1) to improve his reelection chances; (2) to lay the blame on the FED for an economic slowdown or recession rather than GOP policies, actions and inactions; and (3) to lower his own financing costs. Trump’s company could save millions if Fed cuts interest rates  

The FED will cut the FF rate by a quarter point in a few days. 

Effective Federal Funds Rate -St. Louis Fed

I would note, however, that the odds are no longer at 100%: 

Countdown to FOMC: CME FedWatch Tool

China exports to US fall sharply as Trump escalates trade war

Japan's economy grew slower than expected in Q2 - MarketWatch (1.3% annualized vs. 1.8% consensus estimate)

In August, U.S. railroads originated 4.6% fewer carloads compared to August 2018. Container shipments declined 5.4%. The railroad trade association representative noted that "the portion of the economy which generates freight-manufacturing and goods trading-has weakened significantly." Rail Traffic for August and the Week Ending August 31, 2019 - Association of American Railroads This is the kind of data, relating to transportation shipments, that is being ignored by the Stock Jocks. 

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Markets and Market Commentary: 

Treasury yields have been moving up this month, except for the short term bills:

A sudden transformation in the stock market unnerved investors (the article is referring to value stocks outperforming growth stocks)

Investors flocked to bonds and away from stocks in August at the fastest pace on record, says TrimTabs - MarketWatch

Stocks will ‘rally into the end of the year’ after upside earnings surprise, says J.P. Morgan’s Matejka - MarketWatch

Mark Mobius on investing in gold as central banks and Fed cut rates

The ECB’s challenge: Pushing rates further into negative territory without wrecking eurozone banks - MarketWatch

Trump says it's 'great news' activist investor involved with AT&T Why? According to Donald, it is because CNN is "bad for the USA", a totally ludicrous, juvenile and idiotic response to what Elliott is doing.

Oil prices rise as API data reportedly show U.S. crude supplies down by more than 7 million barrels - MarketWatch

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Trump: 

While Donald can certainly cause the Trumpsters to chant "CNN Sucks" at his pep rallies, that reflects more on Donald and his cult members than on CNN. It is emblematic of the Duck's pre-pubescent maturity level. 

Republican State parties move to nix primaries in show of support for Trump  It is  not surprising that the republicans do not see these actions as anti-democratic and fundamentally authoritarian. Trump would probably win those primaries being axed, since Donald is the Republican Party, but that decision is not up to a few state party leaders to decide. 

Trump denied suggesting that the VP Pence stay at the Trump International Golf Links & Hotel in Doonbeg, Ireland  at taxpayers expense. Rather than staying in Dublin overnight, Pence's entourage traveled 180 miles at taxpayer's expense to stay at Donald's golf resort. 

Pence's Chief of Staff had told reporters that it was indeed Trump who suggested that Pence stay at the Trump resort. Trump made 'suggestion' Pence stay at president's Irish golf club, VP's chief of staff says; Mike Pence stayed at a Trump hotel 180 miles away from his Ireland meetings — for “safety” - Vox; Trump denies ever suggesting that Pence stay at a Trump-owned hotel in Ireland - The Washington Post Since Donald has negative credibility, where the reasonable assumption is always that he is lying until proven otherwise, I will go with the representation made by Pence's Chief of Staff. 

White House to Relax Energy Efficiency Rules for Light Bulbs - The New York Times Trump wants to do whatever he can to increase greenhouse gases since he is a self proclaimed "environmentalist". Eliminating inefficient bulbs, which Trumps wants to save to protect an individual's freedom to pollute, would save electricity equivalent to 25 large power plants "enough to power all homes in New Jersey and Pennsylvania, according to an estimate by the The Natural Resources Defense Council."

Trump Doubles Down on Inaccurate Hurricane Forecast - FactCheck.org When Donald claimed that Dorian could hit Alabama on 9/1, the NWS in Birmingham stated correctly that this hurricane would have no impacts in Alabama. 

Donald can not tolerate being contradicted with accurate information. 

The National Oceanic and Atmospheric Administration ("NOAA") chastised the NWS for providing accurate information to the public about Dorian's path 

NOAA disavows National Weather Service tweet that refuted Trump's claim Dorian was headed toward Alabama 

NOAA draws backlash after disavowing Weather Service tweet that refuted Trump

NWS is part of NOAA, a branch of the Department of Commerce. NOAA backs President Trump on Alabama Hurricane Dorian forecast over its own meteorologists - The Washington Post ("The federal agency that oversees the National Weather Service has sided with President Trump over its own scientists in the ongoing controversy over whether Alabama was at risk of a direct hit from Hurricane Dorian.") 

The NOAA statement was unsigned and was not attributed to any particular person. As it turns out, the statement was made in response to political pressure. Commerce Chief Threatened Firings at NOAA After Trump’s Hurricane Tweets, Sources Say ("The Secretary of Commerce threatened to fire top employees at NOAA on Friday after the agency’s Birmingham office contradicted President Trump’s claim that Hurricane Dorian might hit Alabama". It was that threat from Wilbur Ross that led to NOAA backing Trump over its own scientists.)  

Trump’s Dorian Brawl Leads to Dispute Within U.S. Weather Agency (Dan S0bien, the president of the National Weather Service Employees Organization, tweeted "the hard working employees of the NWS had nothing to do with the utterly disgusting and disingenuous tweet sent out by NOAA management tonight.” Dan Sobien on Twitter) 

Washington Post: Trump was the one who altered Dorian trajectory map with Sharpie When asked by a reporter who drew a line extending into Alabama with a sharpie, Lying Don said he did not know 3 times. Trump: "I don't know. I don't know. I don't know;" 

Trump’s Altered Dorian Map Shows Hurricane Threatening Alabama - Bloomberg; 

Why President Trump’s Sharpied weather map was likely a crime — and should be - The Washington Post 

The Fake News President has now Trumpified weather. NOAA staff warned in Sept. 1 directive against contradicting Trump

Water-Gate or Sharpie-Gate is just another example of Donald's numerous and serious character flaws and that is why it is important. The episode is also important to show how Donald routinely abuses his presidential powers. And, I do not believe anything said by anyone in Trump's administration until I have proof that the statements are accurate. 

Donald could have just admitted that he was wrong when he tweeted on 9/1 that Alabama could be impacted by Dorian. 

Instead, Lying Don later altered a weather map with his sharpie in a ridiculous effort to prove that he was correct when he knew that he was wrong and then denied knowing who altered the weather map. He then had Wilbur Ross threaten the NOAA political appointees, who then caved to political pressure and chastised the NWS for correcting Donald's false and incorrect tweet.   

Former NOAA chief official calls statement defending Trump Alabama claim agency's 'darkest day' | TheHill  

Internet mocks Trump's doctored weather map - YouTube

NOAA’s backing of President Trump’s Alabama hurricane tweets over its own scientists causes uproar in Weather Community- The Washington Post (Kathryn Sullivan, a former NASA astronaut who ran the agency, made this comment: “The anonymous and disingenuous statement NOAA tweeted out is a major breach of scientific integrity that damages the NWS and stains the agency’s leadership.”; Jane Lubchenco, who preceded Sullivan as NOAA's head chimed in as follows: “This looks like classic politically motivated obfuscation to justify inaccurate statements made by the boss. It is truly sad to see political appointees undermining the superb, life-saving work of NOAA’s talented and dedicated career servants.”)

NOAA acting chief scientist Craig McLean slams agency response to Trump’s Alabama Dorian claims in email - The Washington Post

It would be fair to say that Demagogue Don can not stand quality journalism since it contradicts or casts doubt on his endless supply of "DISGUSTING & FAKE" News: 

WP Response to This Tweet: “The Washington Post is immensely proud to have these two superb journalists on staff. Philip Rucker and Ashley Parker have consistently demonstrated their integrity in covering the White House. We stand fully behind them and their important work. The president’s statement fits into a pattern of seeking to denigrate and intimidate the press. It’s unwarranted and dangerous, and it represents a threat to a free press in this country.”  

Trump counts as an accomplishment executive orders that merely state his policy objectives but do not implement them or are clearly unconstitutional exercises of presidential powers.  

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1. Elimination:

A. Sold  102+ VLY at $10.51-Used Commission Free Trade:

Quote: Valley National Bancorp  (VLY)
VLY SEC Filings

Profit Snapshot: +$33.13

VLY Analyst E.P.S. Consensus Estimates (as of 8/26/19): 
2019 =  $.92
2020 = $1.01 
P/E at $10.51 price and $1.01 E.P.S. = 10.41

Last Substantive Purchase Discussions: Item # 1.A. (3/20/19 Post); Item 3.B. (11/11/18 Post)

Last Sell Discussions: Item # 2.A. Eliminated VLY Sold 51+ VLY at $12.76 (7/25/18 Post); Item # 2.B. Sold 60 VLY at $12.52 (1/28/18 Post)

Dividend History: Unfavorable 

The penny rate was reduced from $.1625 to $.11 per share effective for 2014 4th quarter payment and has not been raised since that slash. 

Valley National Bancorp (VLY) Dividend  History - Nasdaq

Dividend: Quarterly at $.11 per share

Dividend Yield at $10.51 = 4.57%

Next Ex Dividend Date: 9/12/19

Valley National Bancorp Interactive Chart: Awful

Last Earnings Report (Q/E 6/30/19)

"Valley National Bank, today reported net income for the second quarter of 2019 of $76.5 million, or $0.22 per diluted common share, as compared to the second quarter of 2018 earnings of $72.8 million, or $0.21 per diluted common share, and net income of $113.3 million, or $0.33 per diluted common share, for the first quarter of 2019. Excluding all non-core charges and income, our adjusted net income was $78.8 million, or $0.23 per diluted common share, for the second quarter of 2019, $75.2 million, or $0.22 per diluted common share, for the second quarter of 2018, and $74.9 million, or $0.22 per diluted common share, for the first quarter of 2019."

Press Release for 2019 2nd quarter earnings 
10-Q for the Q/E 6/30/19 

I have been reducing my small exposure to regional banks in anticipation that net interest margin suppression and compression will get worse.

I may restart positions at meaningfully lower prices and higher dividend yields. 

For VLY, most lowest purchase price within the past 12 months was at $9.45  (10/25/18). I would probably want to see a price below $9 before considering a restart of a small ball purchase program.  

VLY Realized Gains = $381.69

Of all of the regional bank stocks that I have owned, VLY has been one of the most difficult to generate positive total returns. 

The recent uptick in interest rates has contributed to a rally in regional bank stocks as shown by the SPDR S&P Regional Banking ETF price uptrend: 

Other catalysts include dividend yields, valuations and the recent buying interest in the downtrodden and beaten up stocks. 

Nothing has changed IMO that would signal less pressure on bank net interest margins. 

2. Canadian Reset Equity Preferred Stocks:

A. Added 50 BPOPRP at C$13.86 (C$1 Commission):

Quote: Brookfield Office Properties Inc. Cl AAA Pfd. Series P Overview

Last Discussed: Item # 1.A. Bought 50 BPOPRP at C$15.95 (7/27/19 Post)

Closing Price Yesterday: BPO-PP.TO C$15.65 +C$0.33 +2.15% 

The coupon for this preferred reset at a 3% spread to the five year Canadian bond in March 2017. This resulted in a new coupon of 4.161%. The next reset date will be in March 2022.

Par Value = C$25

At a C$13.86 price, the current dividend yield is about 7.51% which is more than a 6% premium to the current Canadian five year bond yield.

Canada 5 Year Government Bond Overview

I am surprised by the weakness of the Canadian reset equity preferred stocks given their current yields. The only rational explanation for the continue weakness is a consensus belief that the coupon will reset at a substantially lower rate in the future. But even if the 5 year Canadian bond was at 1% when the coupon resets again in 2022, the coupon would then be 4%, almost unchanged from the current one.  

Current Position: 100 Shares

Maximum Position: 200 shares (bought in 50 share lots, averaging down using the small ball purchase restriction)

Average Total Cost Per Share = $14.93

Ex Dividend Date: 9/12/19 

Current Yield at Total Average Cost = 6.97%

Category: I classify the Canadian Reset equity preferred stocks as part of my Equity Preferred Floating Rate basket strategy. Realized gains in that niche category currently stands at $23,749.06 (see snapshots in previous link). The total realized gain in Canadian resets is C$10,643.5 so far, but all of my recent purchases are in the red. 

2.  Equity REIT Common and Preferred Stock Basket Strategy:

A. Added 30 HT at $13.92  ($1 IB commission):

HT Closing Information Day of Purchase (established a new 52 week low):

Quote: Hersha Hospitality Trust Cl A (HT)
Company Website: Hersha Hospitality Trust
Our Hotels | Hersha Trust

Closing Price Yesterday: HT $15.09 +$0.61 4.21% 

I mentioned this purchase in a 8/22/19 comment.

"Hersha Hospitality Trust (NYSE: HT) is a self-advised real estate investment trust in the hospitality sector, which owns and operates high quality upscale, luxury and lifestyle transient hotels in urban gateway markets and coastal destinations. The Company’s 48 hotels totaling 7,644 rooms are located in New York, Washington, DC, Boston, Philadelphia, Miami and select markets on the West Coast."

6 core, strategic markets, including Boston, New York City, Philadelphia, Washington, DC, Miami, and West Coast.

10 Year Chart (as of day of purchase 8/22)- Bear Market Action Starting in 2014 interrupted by one cyclical bull rally in 2018

Last Discussed: Item # 4.A. Bought 50 HT at $16.27  (7/7/19 Post)

Dividend: Quarterly at $.28 per share ($1.12 annually)

Dividends - Hersha Hospitality Trust

Last Ex Dividend: 6/27/19

Average Cost Per Share  = $15.12

Yield at Average Total Cost = 7.41%

Debt: Discussed starting at page 25, 10-Q for the Q/E 6/30/19

The total debt was at $1.1194B as of 6/30. 

Of that amount, the largest component was $698.559M in unsecured bank loans. Interest payments on those loans are based on a spread to the one month libor rate which can reasonably be expected to go lower. 1 Month LIBOR Rate: Historical Chart 

The second largest component are mortgages that have either fixed or variable rates.

Last Earnings Report (Q/E 6/30/19): 

AFFO was reported at $.77 per share, down from $.86 per share in the 2018 second quarter. The 2018 second quarter AFFO number included insurance settlements of $6.4M paid in connection with business interruption losses due to hurricanes. 

Excluding those funds, "AFFO increased by $2.9 million or 9.5% during the second quarter 2019." 

"Revenue per available room (“RevPAR”) at the Company's 37 comparable hotels increased 3.0% to $214.36 in the second quarter 2019.  The Company’s average daily rate (“ADR”) for the comparable hotel portfolio increased 0.9% to $247.53, while occupancy grew 175 basis points to 86.6%. Hotel EBITDA margins for the comparable hotel portfolio remained consistent at 37.8%."

I would note that the AFFO calculation does not subtract routine cash maintenance expenses that needs to be deducted from FFO. 

HT recently completed some major capital improvements that have led to increases in REVPAR. (see press release) Those expenditures of course drain cash that is not available to pay dividends. Th expenses that increase a property's value are not deducted from FFO to arrive at AFFO using the NAREIT definition.  

Hersha Hospitality Trust Announces Second Quarter 2019 Results 

2019 Outlook: Adjusted AFFO of $2.07 to $2.19 per share

Current Position: 80 shares

Maximum Position: 110 shares

Purchase Restriction: Next 30 share purchase has to be below $13.

Last HT Round Trips:

Item # 2.B. Sold 50 HT at $19.02-In a Roth IRA Account (4/23/18 Post)-Item # 4.A. Bought 50 HT at $17.37-In a Roth IRA Account (3/1/2018 Post)

Item # 2.C. Sold 10 HT at $19.11-Used Commission Free Trade (4/23/18 Post)-Item 4.B. Bought 10 HT at $16.83 Used Commission Free Trade (3/1/2018 Post)

Item # 2.B. Sold 50 HT at $18.58-Used Commission Free Trade (2/8/18 Post)-Item 5.B. Bought 50 HT at $17.41 (12/18/17 POST)

HT Trading Profits to Date: $322.21

B. Bought 50 CLDT at $16.88-Used Commission Free Trade:

Quote: Chatham Lodging Trust  (CLDT) 

Closing Price Yesterday: CLDT +$18.28 +$0.77 +4.40% 

Website: Chatham Lodging Trust

Hotel Portfolio – Chatham Lodging Trust

Chatham Lodging Trust is "a lodging real estate investment trust (REIT) that invests in upscale, extended-stay hotels and premium-branded, select-service hotels and owns 135 hotels wholly or through joint ventures."

SEC Filings

2018 Annual Report (risk factor discussion starts at page 14; property list with data at page 34; debt discussion starts at page F-20)

10 Year Chart (day of purchase 8/22):

The high was hit near $31 in January 2015. The price sank below $10 in the 2014 summer when SPX declined almost 20%.  

This is my first purchase of this out-of-favor hotel REIT.

Dividend: Monthly at $.11 per share ($1.32 annually)

Chatham Lodging Announces Monthly Dividend

Last Ex Dividend Date: 8/29/19 (after purchase)

Dividend Yield at a TC of $16.88 = 7.82%

Dividend Reinvestment: Yes at depressed prices

Total Returns Through 8/23/19: Awful 

1 Year       -17.71%
3 Years      -1.8%
5 Years      -0.25%

Needless to say, an investor is not going to pay for their nursing homes expenses with those kind of total return numbers. 

Trading Strategy: 

When looking at the past share price history, the only strategy that could produce a total return would be one that sells the rips after harvesting one or more quarterly dividend payments. 

Over the past two years, the first dip started in January 2018 near $23 and ended in late February near $18. The first rip started then and took the price up to near $22 in July 2018. 

The most recent dip started last April with the price near $20.5 and has shown no indication yet of bottoming and turning back into another rip higher.    

Current Position: 50 Shares

Maximum Position: 100 shares

Purchase Restriction: Small Ball Rule   

Last Earnings Report (Q/E 6/30/19): 

3rd quarter and 2019 Guidance (slight reduction from previous): 

Debt: 

And see pages 15-16 last filed 10-Q Mortgage is non-recourse except for instances of fraud or misapplication of funds. Mortgage debt is at fixed rates. Borrowings on a senior unsecured credit facility is based on various spreads to short term rates (p.15)

3. Short Term Bond/CD Ladder Basket Strategy: 

A. Sold 2 out of 4 Eversource Energy 2.5% SU Maturing on 3/15/21: 

Profit Snapshot: +$25.18

Item # 1.D. Bought 2 ES 2021 SU at a TC of 99.105 (4/5/17 Post) 

FINRA Page: Bond  Detail

Prospectus

Issuer: Eversource Energy (ES)

ES Analyst Estimates

Eversource SEC Filings

Sold at 100.464

YTM at  = 2.18%

Proceeds at 100.364 (after $1 per bond commission)

I will keep the two bonds bought last February until the issuer redeems them. Item # 2.A. Bought 2 ES 2021 SU at a TC of 98.938 (2/23/19 Post)

B. Sold 1 Federal Reality 3% SU Maturing on 8/1/22-In A Roth IRA Account:

Profit Snapshot: $25.76

Item # 3.B. Bought 1 FRT  2022 SU at a Total Cost of 98.922 (5/7/18 Post)

FINRA Page: Bond Detail (prospectus linked)

Issuer: Federal Realty Investment Trust (FRT)
FRT SEC FILINGS
10-Q for the Q/E 6/30/19

FRT sold last month $100M of 3.2% SU notes maturing in 2029: FWP

Sold at 102.02
YTM at  = 2.223%

C. Early Redemption Notices: 

In my Fidelity account, I own 2 Healthcare Trust of America 2.95% SU bonds maturing in 2022 that the issuer has called effective 9/20. This notice does not show the make whole payment which will be paid in addition to the $4K in principal amount and accrued interest. 

I also own 2 bonds in my IB account. 

Item # Bought 2 HTA SU 2022 at a TC of 98.91 (3/31/19 Post); Item # 4.A. Bought 2 HTA 2022 SU IB Account at a TC of 98.807 (2/22/18 Post) 

HTA 2022 Make Whole Provision

I am not set up to calculate make whole payments. 

The make whole payment for this bond could be  somewhere close to 2% of the $1K principal amount, just making eyeballing guesstimate here. 

The present value calculation of the principal amount plus all remaining interest payments uses a discount rate of a comparable maturity treasury + 20 basis points. The 3 year treasury is trading around 1.61%, up from 1.38% on 9/3/19. Daily Treasury Yield Curve Rates 

Discounting the sum of principal amounts and all remaining interest payments at a low rate ends up increasing the make whole amount compared to a higher discount rate.  

Issuer: Healthcare Trust of America 

I currently own 50 shares of the common as a "bond substitute". Item # 4. Bought 5 HTA at $26.88-Used Commission Free Trade  (7/13/19 Post) 

HTA is financing the redemption with the completed sale of new bonds:

Prospectus ("We intend to use the net proceeds of this offering (i) to redeem all of our outstanding 2021 Notes and 2022 Notes, (ii) to repay a portion of the outstanding indebtedness under our unsecured revolving credit and term loan facility and (iii) for general corporate purposes, including, without limitation, working capital and investment in real estate.")

I also received an early redemption notice for 4 Associated Banc SU notes that would have matured on 11/15/19: 

Issuer: Associated Banc-Corp.  (ASB) 

Item # 2.D. Bought 2 ASB SU Maturing on 11/15/19 at a TC of 99.8  (4/10/19 POST); Item # 3.C. Bought 2 ASB 2019 at a TC of 99.515 (7/5/18 Post) 

Since the redemption will occur one month prior to maturity, Associated will not owe a make whole payment.   

4. Intermediate Term Bond Basket Ladder Strategy:

A. Sold 2 Old Republic 3.875% SU Maturing on 8/26/26:

Profit Snapshot: +$145.88

Item # 5.A. Bought Back 2 ORI 2026 SU at at  TC of  98.488 (4/2/18 Post)

FINRA Page:  Bond Detail

I previously eliminated a 2 bond position at 101.074 in 2017: Item # 3.B. (12/30/17 Post)

Issuer: Old Republic International Corp
ORI | Old Republic International Corp. Analyst Estimates
Old Republic Reports Results For The Second Quarter And First Half 2019

Sold at 105.872
YTM at 105.872  = 2.931%

B. Sold 1 National Rural Utilities Cooperative Finance 3% SU Maturing on 1/15/26-In a Roth IRA Account:

Profit Snapshot: +$18.29

Item # 1.C. Bought 1 National Rural 2026 at a TC of 99.076-In a Roth IRA Account (5/8/17 Post)

This $1K par value bond is not liquid and is unusual in that it pays interest monthly.

Credit Ratings

FINRA Page: Bond Detail (prospectus linked)

Sold at 101.105
YTM at 101.105 = 2.811%

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.