Economy:
The Stock Jocks have ignored the worldwide deterioration in manufacturing data.
The lowest reading in ISM's manufacturing PMI since the Near Depression, released yesterday, may have awakened them to this prevailing trend that has been ongoing for months. I use the word "may" since the Stock Jocks are still in a frame of mind where negative economic data is viewed as either immaterial or merely temporary. Negative economic news can be shaken off before the market opens the next day.
The September ISM manufacturing PMI was reported at 47.8, down from 49.1 in August. The new orders component remains in contraction territory at 47.3. ISM Report - September 2019 Manufacturing While the September PMI of 47.8 was the lowest reading since June 2009, I would emphasize that this index was in a rising mode back in June 2009, flashing a leading indicator since early Spring that the recession had ended or was about to end. The situation is different now since the index is in a declining mode.
Slumping manufacturers experience worst month since Great Recession, ISM finds - MarketWatch
Clueless Don blamed the FED for the manufacturing slowdown even though the contraction is worldwide:
Euro Area Manufacturing PMI | 2019 ("The IHS Markit Eurozone Manufacturing PMI fell to 45.7 in September of 2019 from 47.0 in the previous month") So if the U.S. manufacturing decline was currency related as claimed by Doofus Don, why is manufacturing contracting in Europe with lower PMI readings than in the U.S.
German manufacturing PMI for September fell to 41.7: German manufacturing recession deepens, growth outlook darkens- Reuters
Construction spending rose .1% in August, below the consensus estimate of a .4% gain. The July gain was revised down slightly to flat. Construction spending up 0.1% in August after revised flat reading in July - MarketWatch
Consumers are really starting to worry about the trade war
The Stock Jocks have ignored the worldwide deterioration in manufacturing data.
The lowest reading in ISM's manufacturing PMI since the Near Depression, released yesterday, may have awakened them to this prevailing trend that has been ongoing for months. I use the word "may" since the Stock Jocks are still in a frame of mind where negative economic data is viewed as either immaterial or merely temporary. Negative economic news can be shaken off before the market opens the next day.
The September ISM manufacturing PMI was reported at 47.8, down from 49.1 in August. The new orders component remains in contraction territory at 47.3. ISM Report - September 2019 Manufacturing While the September PMI of 47.8 was the lowest reading since June 2009, I would emphasize that this index was in a rising mode back in June 2009, flashing a leading indicator since early Spring that the recession had ended or was about to end. The situation is different now since the index is in a declining mode.
Slumping manufacturers experience worst month since Great Recession, ISM finds - MarketWatch
Clueless Don blamed the FED for the manufacturing slowdown even though the contraction is worldwide:
Euro Area Manufacturing PMI | 2019 ("The IHS Markit Eurozone Manufacturing PMI fell to 45.7 in September of 2019 from 47.0 in the previous month") So if the U.S. manufacturing decline was currency related as claimed by Doofus Don, why is manufacturing contracting in Europe with lower PMI readings than in the U.S.
German manufacturing PMI for September fell to 41.7: German manufacturing recession deepens, growth outlook darkens- Reuters
Construction spending rose .1% in August, below the consensus estimate of a .4% gain. The July gain was revised down slightly to flat. Construction spending up 0.1% in August after revised flat reading in July - MarketWatch
Consumers are really starting to worry about the trade war
Average cost of employer-provided family health coverage clears $20,000-a-year mark - MarketWatch; 2019 Employer Health Benefits Survey | The Henry J. Kaiser Family Foundation
Money spent on health insurance by individuals, an already major expense, can not be spent on discretionary consumer purchases.
Record U.S. tariff award over Airbus aid could fuel trade tensions - Reuters; Trump's global trade war comes to Alabama A potential trade war with the EU is simmering in the background.
Goldman Sachs CEO: Negative rates are a ‘failed experiment’ - Financial News
Money spent on health insurance by individuals, an already major expense, can not be spent on discretionary consumer purchases.
Record U.S. tariff award over Airbus aid could fuel trade tensions - Reuters; Trump's global trade war comes to Alabama A potential trade war with the EU is simmering in the background.
Goldman Sachs CEO: Negative rates are a ‘failed experiment’ - Financial News
+++++
Markets and Market Commentary:
Treasury yields sink after ISM manufacturing gauge stays in contraction territory - MarketWatch
Peter Navarro: Reports that US would bar Chinese firms are 'fake news' The report last Friday was not that the U.S. "would" bar Chinese firms from U.S. listings, but that this matter was being considered by the Trump administration. Navarro refused to specify which claims in the report were false.
Treasury yields sink after ISM manufacturing gauge stays in contraction territory - MarketWatch
Peter Navarro: Reports that US would bar Chinese firms are 'fake news' The report last Friday was not that the U.S. "would" bar Chinese firms from U.S. listings, but that this matter was being considered by the Trump administration. Navarro refused to specify which claims in the report were false.
US pulling investments from China would be an 'unmitigated disaster'; Trump administration deliberates block on all US investments in China
Chinese companies rethink U.S. IPOs after Trump's delisting threat - Reuters
This issue is too amorphous to have any impact on my investment decisions.
I would view it as a major negative to ban all Chinese companies from listing on U.S. exchanges.
There are bills pending in Congress that would require more accounting transparency and Nasdaq is moving to restrict listings. Exclusive: Nasdaq cracks down on IPOs of small Chinese companies - Reuters I have no problems with that private regulatory move.
Kyle Bass: IP reform needs to be included in US-China trade deal
Bank of America says European stocks should climb as market starts quarter lower - MarketWatch
Chinese companies rethink U.S. IPOs after Trump's delisting threat - Reuters
This issue is too amorphous to have any impact on my investment decisions.
I would view it as a major negative to ban all Chinese companies from listing on U.S. exchanges.
There are bills pending in Congress that would require more accounting transparency and Nasdaq is moving to restrict listings. Exclusive: Nasdaq cracks down on IPOs of small Chinese companies - Reuters I have no problems with that private regulatory move.
Kyle Bass: IP reform needs to be included in US-China trade deal
Bank of America says European stocks should climb as market starts quarter lower - MarketWatch
Charles Schwab is eliminating online commissions for trading in US stocks and ETFs TD Ameritrade quickly responded by lowering its commissions on the same products to zero, effective 10/3. TD Ameritrade joins race to the bottom on fees -- announces zero-commission trades to match Schwab - MarketWatch
+++++
Trump:
As we all know, Donald is an "Extremely Stable Genius" or just a "Very Stable Genius", since he has told us so many times. Of course, anyone who is actually stable and/or a genius does not have to make those claims once.
The fact of the matter is that Donald is probably the most ignorant person of average intelligence in world history that has a megaphone capable of delivering false and misleading information daily to tens of millions.
And, the Duck must enjoy sending out vicious and false tweets designed to stoke divisions in the country since he regularly does so. The Trumpsters really eat that stuff up.
The purpose of Donald's tweets is not to inform but to mislead for his own personal political gain.
Just a nutcase: Trump promotes conspiracy theory: Clinton's deleted emails are in Ukraine; CrowdStrike myth gets new life in Trump's call with Ukraine's President-The Washington Post
Trump Was Repeatedly Warned That Ukraine Conspiracy Theory Was ‘Completely Debunked’
The Fake News President routinely gives a megaphone to conspiracy theories that have no factual foundation.
Whistleblower's lawyer says Trump endangering his client And that is obviously the case.
Trump asks if Schiff should face 'arrest for treason' over impeachment probe
Trump Raises Idea of Arresting House Chairman for Treason - The New York Times If Donald could get away with it, Schiff would simply be among the first 100 American citizens executed by Donald for what he views as treason, which is defined in Trump's America as making accurate statements that Donald does not like.
Donald, the undisputed leader of the GOP, is an authoritarian demagogue to his core. That is not a debatable opinion, but a fact.
Just more tweets from an obviously mentally unstable President of the United States who is an authoritarian demagogue:
The Inspector General rebutted Donald's claim that all of the information provided by the whistleblower was second hand. ICIG Statement on Processing of Whistleblower Complaints.pdf (dated 9/30/19)
Will that statement made by the IG cause republicans to change their false assertions?
Of course not.
Trump and other republican politicians know that false narratives will work on a slender majority of Americans, so why tell the truth when it is so inconvenient to maintaining their power.
Perhaps Donald needs to read the summary of his call with Ukraine's President with some brain cells in working order.
Zelensky then added that Ukraine was "almost ready to buy more Javelins from the United states for defense purposes". What are Javelin missiles and why did Trump discuss them in call with Ukraine's president? - ABC News To receive its first order of Javelins in 2018, Ukraine had to cease investigating Paul Manafort. Ukraine, Seeking U.S. Missiles, Halted Cooperation With Mueller Investigation - The New York Times (5/2/18)
Donald's immediate reply was as follows:
This summary obviously supports the statements made by the whistleblower.
Disgusting Don of course wants the whistleblower's name which will come out soon enough. Trump Wants to ‘Interview’ Whistle-Blower - The New York Times
Donald just wants to publicly tar and feather the whistleblower with false statements that are specifically contradicted by the summary reproduced in part above. Republicans are rewriting the transcript into something unrecognizable, knowing that only a tiny fraction of voters will actually read it and many who read it will not care since the republicans are giving them what they want (possible overturn of Roe v. Wade decision; and tax cuts for the GOP's wealthy donors).
Secretary of State Pompeo has now admitted that he was on the call and knew then that Donald had put a hold on military aid to the Ukraine. Pompeo confirms he was on Trump’s call with the leader of Ukraine - The Washington Post
Pompeo and AG Barr will do whatever they can to obstruct the impeachment investigation since they are now implicated in it and will do anything possible to protect Donald even if they were not directly implicated.
The Daily 202: Mike Pompeo and Bill Barr are increasingly implicated in the impeachment inquiry - The Washington Post
The Latest: Pompeo Says Impeachment Depositions Not Feasible-US News;
Giuliani, Pompeo Drawn Deeper Into Trump Impeachment Inquiry - Bloomberg;
Pompeo says State Dept. officials won’t show up for scheduled impeachment depositions this week
Live updates: House committee chairs counter Pompeo, say secretary should stop intimidating witnesses
Donald's own words are incriminating on several issues which explains why Barr and Pompeo will do whatever they can to stymie and delay an investigation knowing it will take months, or even a year or more, for the courts to finally resolve the issues.
First, Trump explicitly tied U.S. cooperation with Ukraine on the Ukraine doing a personal favor for him. The favor was to investigate Joe Biden. The clear inference was that the result of the investigation needed to be unfavorable to Biden's candidacy for President. Donald went beyond asking a foreign government to interfere in the 2020 election. He made it clear what the end result of that interference needed to be.
Second, Donald was willing to use the machinery of the U.S. government, including a rogue U.S. Attorney General, to help implement his personal favor.
Third, it would have been clear to the Ukrainians that U.S. military aid was linked to opening an investigation of Biden. Trump wanted dirt on Biden, former Ukrainian lawmaker says "It was, like, well-known fact in Ukraine" according to Serhiy Leshchenko, a former advisor to Ukraine's President. Trump wanted "compromising" information on Biden, former Ukrainian lawmaker says - CBS News
Republican senators are busy attacking the whistleblower rather than criticizing Donald which could have been predicted with 100% accuracy. GOP senators attack whistleblower's credibility
It is just ludicrous to believe that any of the republican senators would vote for impeachment based on the Ukraine matter or anything divulged to date.
Maybe two or three would vote to convict, provided the ballot was cast in secret and God guaranteed that their identity would never be known by anyone. Donald enjoys around 90% support among republicans and a clear majority view him as honest and a role model for their children. In a recently released poll, 43% of republicans said that it was proper for Trump to request a foreign government to investigate a political opponent. Impeachment Support Up Slightly But Trump Job Rating Steady | Monmouth University Polling Institute
The Democrats need to accept that fact and realize the futility of seeking removal through the impeachment process.
The better course would be to continue their investigations, produce evidence for the public to examine (which will of course be ignored or dismissed by the Trumpsters no matter how credible), pursue all court cases to compel testimony and document production and then vote on a censure resolution in the House. It would probably help IMO on the document and testimony requests for the House to pass a formal impeachment investigation bill.
The people can then decide whether to reelect Donald and his senate enablers and protectors in just over a year from now.
The censure motion could include those in Trump's administration who obstructed the investigation including Barr and Pompeo.
Instead, the Democrats will successfully pass one or more Articles of Impeachment within a few months, and there will be another impeachment trial in the senate starting early next year, probably in the Spring, that will not result in a conviction.
How a Shadow Foreign Policy in Ukraine Prompted an Impeachment Inquiry Notwithstanding the findings of the intelligence community, supported by strong evidence, that Russia was responsible for interfering in the 2016 election, Donald "was driven to seek proof that the meddling was linked to Ukraine and forces hostile to him, even fixating on a fringe conspiracy theory suggesting that Hillary Clinton’s missing emails might be found there."
I am curious whether Putin put these ideas in the Duck's head. Possibly we will find out down the road when more is known about his conversations with Vlad.
As we all know, Donald is an "Extremely Stable Genius" or just a "Very Stable Genius", since he has told us so many times. Of course, anyone who is actually stable and/or a genius does not have to make those claims once.
The fact of the matter is that Donald is probably the most ignorant person of average intelligence in world history that has a megaphone capable of delivering false and misleading information daily to tens of millions.
And, the Duck must enjoy sending out vicious and false tweets designed to stoke divisions in the country since he regularly does so. The Trumpsters really eat that stuff up.
The purpose of Donald's tweets is not to inform but to mislead for his own personal political gain.
Just a nutcase: Trump promotes conspiracy theory: Clinton's deleted emails are in Ukraine; CrowdStrike myth gets new life in Trump's call with Ukraine's President-The Washington Post
Trump Was Repeatedly Warned That Ukraine Conspiracy Theory Was ‘Completely Debunked’
The Fake News President routinely gives a megaphone to conspiracy theories that have no factual foundation.
Whistleblower's lawyer says Trump endangering his client And that is obviously the case.
Trump asks if Schiff should face 'arrest for treason' over impeachment probe
Trump Raises Idea of Arresting House Chairman for Treason - The New York Times If Donald could get away with it, Schiff would simply be among the first 100 American citizens executed by Donald for what he views as treason, which is defined in Trump's America as making accurate statements that Donald does not like.
Donald, the undisputed leader of the GOP, is an authoritarian demagogue to his core. That is not a debatable opinion, but a fact.
Just more tweets from an obviously mentally unstable President of the United States who is an authoritarian demagogue:
The Inspector General rebutted Donald's claim that all of the information provided by the whistleblower was second hand. ICIG Statement on Processing of Whistleblower Complaints.pdf (dated 9/30/19)
Will that statement made by the IG cause republicans to change their false assertions?
Of course not.
Trump and other republican politicians know that false narratives will work on a slender majority of Americans, so why tell the truth when it is so inconvenient to maintaining their power.
Perhaps Donald needs to read the summary of his call with Ukraine's President with some brain cells in working order.
Zelensky then added that Ukraine was "almost ready to buy more Javelins from the United states for defense purposes". What are Javelin missiles and why did Trump discuss them in call with Ukraine's president? - ABC News To receive its first order of Javelins in 2018, Ukraine had to cease investigating Paul Manafort. Ukraine, Seeking U.S. Missiles, Halted Cooperation With Mueller Investigation - The New York Times (5/2/18)
Donald's immediate reply was as follows:
This summary obviously supports the statements made by the whistleblower.
Disgusting Don of course wants the whistleblower's name which will come out soon enough. Trump Wants to ‘Interview’ Whistle-Blower - The New York Times
Donald just wants to publicly tar and feather the whistleblower with false statements that are specifically contradicted by the summary reproduced in part above. Republicans are rewriting the transcript into something unrecognizable, knowing that only a tiny fraction of voters will actually read it and many who read it will not care since the republicans are giving them what they want (possible overturn of Roe v. Wade decision; and tax cuts for the GOP's wealthy donors).
Secretary of State Pompeo has now admitted that he was on the call and knew then that Donald had put a hold on military aid to the Ukraine. Pompeo confirms he was on Trump’s call with the leader of Ukraine - The Washington Post
Pompeo and AG Barr will do whatever they can to obstruct the impeachment investigation since they are now implicated in it and will do anything possible to protect Donald even if they were not directly implicated.
The Daily 202: Mike Pompeo and Bill Barr are increasingly implicated in the impeachment inquiry - The Washington Post
The Latest: Pompeo Says Impeachment Depositions Not Feasible-US News;
Giuliani, Pompeo Drawn Deeper Into Trump Impeachment Inquiry - Bloomberg;
Pompeo says State Dept. officials won’t show up for scheduled impeachment depositions this week
Live updates: House committee chairs counter Pompeo, say secretary should stop intimidating witnesses
Donald's own words are incriminating on several issues which explains why Barr and Pompeo will do whatever they can to stymie and delay an investigation knowing it will take months, or even a year or more, for the courts to finally resolve the issues.
First, Trump explicitly tied U.S. cooperation with Ukraine on the Ukraine doing a personal favor for him. The favor was to investigate Joe Biden. The clear inference was that the result of the investigation needed to be unfavorable to Biden's candidacy for President. Donald went beyond asking a foreign government to interfere in the 2020 election. He made it clear what the end result of that interference needed to be.
Second, Donald was willing to use the machinery of the U.S. government, including a rogue U.S. Attorney General, to help implement his personal favor.
Third, it would have been clear to the Ukrainians that U.S. military aid was linked to opening an investigation of Biden. Trump wanted dirt on Biden, former Ukrainian lawmaker says "It was, like, well-known fact in Ukraine" according to Serhiy Leshchenko, a former advisor to Ukraine's President. Trump wanted "compromising" information on Biden, former Ukrainian lawmaker says - CBS News
Republican senators are busy attacking the whistleblower rather than criticizing Donald which could have been predicted with 100% accuracy. GOP senators attack whistleblower's credibility
It is just ludicrous to believe that any of the republican senators would vote for impeachment based on the Ukraine matter or anything divulged to date.
Maybe two or three would vote to convict, provided the ballot was cast in secret and God guaranteed that their identity would never be known by anyone. Donald enjoys around 90% support among republicans and a clear majority view him as honest and a role model for their children. In a recently released poll, 43% of republicans said that it was proper for Trump to request a foreign government to investigate a political opponent. Impeachment Support Up Slightly But Trump Job Rating Steady | Monmouth University Polling Institute
The Democrats need to accept that fact and realize the futility of seeking removal through the impeachment process.
The better course would be to continue their investigations, produce evidence for the public to examine (which will of course be ignored or dismissed by the Trumpsters no matter how credible), pursue all court cases to compel testimony and document production and then vote on a censure resolution in the House. It would probably help IMO on the document and testimony requests for the House to pass a formal impeachment investigation bill.
The people can then decide whether to reelect Donald and his senate enablers and protectors in just over a year from now.
The censure motion could include those in Trump's administration who obstructed the investigation including Barr and Pompeo.
Instead, the Democrats will successfully pass one or more Articles of Impeachment within a few months, and there will be another impeachment trial in the senate starting early next year, probably in the Spring, that will not result in a conviction.
How a Shadow Foreign Policy in Ukraine Prompted an Impeachment Inquiry Notwithstanding the findings of the intelligence community, supported by strong evidence, that Russia was responsible for interfering in the 2016 election, Donald "was driven to seek proof that the meddling was linked to Ukraine and forces hostile to him, even fixating on a fringe conspiracy theory suggesting that Hillary Clinton’s missing emails might be found there."
I am curious whether Putin put these ideas in the Duck's head. Possibly we will find out down the road when more is known about his conversations with Vlad.
Trump’s false claims about Hunter Biden’s China dealings - The Washington Post; The gas tycoon and the vice president’s son: The story of Hunter Biden’s foray into Ukraine Based on what I have read so far, Giuliani has manufactured a case against Joe Biden and is largely the instigator for the mess that Demagogue Don finds himself now. Donald is ultimately responsible for listening to Showboat Rudi and acting upon what Giuliani told him. And, I would add that Biden should have told Hunter Biden to stay away from Ukraine, a known hot bed for corrupt officials.
White House Classified Computer System Is Used to Hold Transcripts of Sensitive Calls This is the computer system where the White House hides information that would hurt Donald politically. Russia warned the U.S. about releasing transcripts of Putin's calls with Trump. Kremlin says it hopes U.S. would not release Trump-Putin calls, like it did with Ukraine
Kurt Volker, Trump’s Envoy for Ukraine, Resigns
Rudy Giuliani's former DOJ colleagues believe he committed crimes in pushing Biden probe There is no way that AG Barr would permit a federal criminal prosecution irrespective of the evidence supporting an indictment against Giuliani.
Fact check: Trump and other Republicans falsely claim whistleblower rules changed just before Ukraine complaint
Last week, Trump referred to the press as "scum" and "animals". Fox News
Don the Authoritarian attacks the press, the judiciary, and scientists as arbiters of facts for one simple reason. His purpose is purely authoritarian.
Donald wants voters to view him and his acolytes as the only truth tellers and to dismiss accurate information as Fake News generated by "scum","animals" and "enemies of the people".
Government Watchdog Lawsuit Seeks To Force Trump To Preserve Records Of All Calls With Foreign Leaders. Justice Department Hesitates to Assure Records will not be destroyed
White House Classified Computer System Is Used to Hold Transcripts of Sensitive Calls This is the computer system where the White House hides information that would hurt Donald politically. Russia warned the U.S. about releasing transcripts of Putin's calls with Trump. Kremlin says it hopes U.S. would not release Trump-Putin calls, like it did with Ukraine
Kurt Volker, Trump’s Envoy for Ukraine, Resigns
Rudy Giuliani's former DOJ colleagues believe he committed crimes in pushing Biden probe There is no way that AG Barr would permit a federal criminal prosecution irrespective of the evidence supporting an indictment against Giuliani.
Fact check: Trump and other Republicans falsely claim whistleblower rules changed just before Ukraine complaint
Last week, Trump referred to the press as "scum" and "animals". Fox News
Don the Authoritarian attacks the press, the judiciary, and scientists as arbiters of facts for one simple reason. His purpose is purely authoritarian.
Donald wants voters to view him and his acolytes as the only truth tellers and to dismiss accurate information as Fake News generated by "scum","animals" and "enemies of the people".
Government Watchdog Lawsuit Seeks To Force Trump To Preserve Records Of All Calls With Foreign Leaders. Justice Department Hesitates to Assure Records will not be destroyed
+++++++
1. Bought 100 EAF at $13.06:
Quote: GrafTech International Ltd. (EAF)
Closing Price Yesterday: EAF $12.73 -$0.07 -0.55%
Website: GrafTech International Ltd. - Home
GrafTech International Ltd. - Investors
EAF | GrafTech International Ltd. Analyst Estimates (as of 9/24)
2019 $2.67
2020 $2.89
P/E at $13.06 and $2.88 E.P.S. = 4.53
EAF is "a leading manufacturer of high quality graphite electrode products essential to the production of electric arc furnace (or EAF) steel and other ferrous and non-ferrous metals. We believe that we have the most competitive portfolio of low-cost graphite electrode manufacturing facilities in the industry, including three of the five highest capacity facilities in the world (excluding China). We are the only large scale graphite electrode producer that is substantially vertically integrated into petroleum needle coke, the primary raw material for graphite electrode manufacturing, which is currently in limited supply. This unique position provides us with competitive advantages in product quality and cost."
The company is an integrated producer since it owns Seadrift Coke that provides 75% of the petroleum needle coke used by EAF.
I have zero expertise in EAF's products which explains why I am simply quoting EAF's own description of its business.
My decision to buy is based primarily on the P/E ratio, some dividend support, and contracts locking in most revenues for the next several years.
More detailed information about this company can be found in the 2018 Annual Report.
EAF had its IPO in 2018 with a shareholder selling 35M shares at $15. Prospectus
Risks and Major Negative:
I view the substantial cash dividends paid out to the selling shareholder to be a major negative. See 8-K and pages 56-57 from 2018 Annual Report
Another major risk is the volatility of graphite electrode prices based in substantial part on the price of steel. Graphite electrode prices declined to about $2,500 per MT in 2016
Chart Since IPO:
EAF Information:
Last Earnings Report: GrafTech Reports Second Quarter 2019 Results
GAAP:
Non-GAAP:
Long Term Debt as of 6/30/19: $1.991+B
Locked in Revenues Through Take or Pay Contracts:
MT = Metric Tons
Page 10 SEC Form 10-Q for the Q/E 6/30/19
Broker Reports:
I have access to only one brokerage report.
Credit Suisse (8/7/19): Outperform with a 12 month PT of $18
I am most likely at my maximum position with this 100 share purchase.
Consider to Sell Range: $15 to $18
1. Bought 100 EAF at $13.06:
Closing Price Yesterday: EAF $12.73 -$0.07 -0.55%
Website: GrafTech International Ltd. - Home
GrafTech International Ltd. - Investors
EAF | GrafTech International Ltd. Analyst Estimates (as of 9/24)
2019 $2.67
2020 $2.89
P/E at $13.06 and $2.88 E.P.S. = 4.53
EAF is "a leading manufacturer of high quality graphite electrode products essential to the production of electric arc furnace (or EAF) steel and other ferrous and non-ferrous metals. We believe that we have the most competitive portfolio of low-cost graphite electrode manufacturing facilities in the industry, including three of the five highest capacity facilities in the world (excluding China). We are the only large scale graphite electrode producer that is substantially vertically integrated into petroleum needle coke, the primary raw material for graphite electrode manufacturing, which is currently in limited supply. This unique position provides us with competitive advantages in product quality and cost."
The company is an integrated producer since it owns Seadrift Coke that provides 75% of the petroleum needle coke used by EAF.
I have zero expertise in EAF's products which explains why I am simply quoting EAF's own description of its business.
My decision to buy is based primarily on the P/E ratio, some dividend support, and contracts locking in most revenues for the next several years.
More detailed information about this company can be found in the 2018 Annual Report.
EAF had its IPO in 2018 with a shareholder selling 35M shares at $15. Prospectus
Risks and Major Negative:
I view the substantial cash dividends paid out to the selling shareholder to be a major negative. See 8-K and pages 56-57 from 2018 Annual Report
Another major risk is the volatility of graphite electrode prices based in substantial part on the price of steel. Graphite electrode prices declined to about $2,500 per MT in 2016
Chart Since IPO:
EAF Information:
GAAP:
Non-GAAP:
Long Term Debt as of 6/30/19: $1.991+B
Locked in Revenues Through Take or Pay Contracts:
MT = Metric Tons
Page 10 SEC Form 10-Q for the Q/E 6/30/19
Broker Reports:
I have access to only one brokerage report.
Credit Suisse (8/7/19): Outperform with a 12 month PT of $18
I am most likely at my maximum position with this 100 share purchase.
Consider to Sell Range: $15 to $18
2. Eliminations:
A. Sold 50+ KR at $25.68-Used Commission Free Trade:
Quote: Kroger Co. (KR)
KR | Kroger Co. Analyst Estimates | MarketWatch
Closing Price Yesterday: KR $25.59 -$0.19 -0.74%
Profit Snapshot: +$227.05
Item # 1 Bought 50 KR at $21.16-Used Commission Free Trade (7/24/19 Post)
Given my capital preservation objectives, I am not likely to leave a 22+% total return, achieved in less than 2 months, to the whims of fate.
There were some parts of the recent earnings and conference call that supported the decision to harvest the gain. I discussed those issues, relating to forward guidance, in this comment.
See also, Kroger retreats on light earnings call guidance-Seeking Alpha
Last Earnings Report: Kroger Reports Second Quarter 2019 Results
B. Sold 100 MNRPRC at $25.1-Used Commission Free Trade:
Quote: Monmouth Real Estate Investment Corp. 6.125% Cumulative Preferred. Series C Stock
MNR.PC Stock Chart
Profit Snapshot: +$76.24
This transaction eliminated my position in the Fidelity account.
I still own 50 in my Schwab account. Item # 3.B. Bought 50 MNRPRC at $23.12 (12/16/18 Post)
Category: Advantages and Disadvantages of Equity REIT Cumulative Equity Preferred Stocks
Investment Strategy: Equity REIT Common and Preferred Stock Basket Strategy
Last Ex Dividend: 8/14/19
Dividend Received on Lot:
Issuer: Monmouth Real Estate Investment Corp. Cl A (MNR)
Issuer Website: Monmouth Real Estate Investment
Par Value: $25
Dividends: Quarterly, non-qualified and cumulative
Last Ex Dividend Date:
Optional Call: On or after 9/15/21
Prior Sells: Item 5.A. Sold 100 MNRPRC at $24.85 (1/21/17 Post)(profit snapshot = +$71.93); Item # 1.D. Sold 50 MNRPRC at $24.57 (2/20/19 Post)(profit snapshot = +$23.75)
MNRPRC Realized Gains To Date: $171.92
At the moment, it would be difficult IMO to generate more than razor thin capital gains in most new equity REIT purchases, given that many of them are selling at premium to par prices and have less than 6% yields at available prices.
There are exceptions but those generally come with a significant decree of credit risk.
I am not likely to hold onto for long a REIT preferred stock selling at more than its par value.
In the past, I have not had to wait that long for a more reasonable price for a re-entry.
3. Short Term Bond/CD Ladder Basket Strategy:
A. Sold 1 Deere Capital 2.875% SU Maturing on 3/12/21:
Profit Snapshot: $17.04
Item # 3.A. Bought 1 Deere Capital 2021 at a Total Cost of 98.631 (5/21/18 Post) YTM was then at 3.019%.
FINRA Page: Bond Detail
Issuer: Wholly owned subsidiary of Deere & Co. who does not guarantee the notes
Sold at 101.411
YTM at 101.411 = 1.928%
Proceeds at 101.311 (after $1 commission)
B. Sold 1 Paccar Financial 2.5% SU Maturing on 9/14/19:
Profit Snapshot: +$8.86
Item #1.B. Bought 1 Paccar Financial 2.5% SU at a TC of 99.508 (3/13/19 Post)
Finra Page: Bond Detail (prospectus linked)
Issuer: Wholly owned subsidiary of Paccar Inc. (PCAR)
PCAR | Paccar Inc. Analyst Estimates | MarketWatch
PACCAR Achieves Record Quarterly Revenues and Excellent Profits
Truck makers log sharply lower orders
Sold at 100.494
YTM at 100.494 = 1.966%
Proceeds at 100.394 (after $1 commission)
C. Sold 2 Stryker 2.625% SU Maturing on 3/15/21:
Profit Snapshot: $22.41
Item # 5.A. Bought 2 Stryker 2021 SU at a Total Cost of 99.156 (3/19/18 Post) YTM was then at 2.919% at TC.
FINRA Page: Bond Detail
Issuer: Stryker Corp. (SYK)
SYK Analyst Estimates
Sold at 100.885
YTM at 100.885 = 2%
Proceeds at 100.685 (after Vanguard $2 per bond commission)
D. Bought 3 NASB Financial 2% CDs Maturing on 11/4/19:
Frequently the size of a purchase is dependent on the proceeds received in an account on the day of purchase.
Holding Company: NASB Financial Inc.
E. Bought at Auction 10 Treasury Bills 56 Day Maturing on 11/12/19:
1.958%IR
Auction Results:
Profit Snapshot: +$8.86
Finra Page: Bond Detail (prospectus linked)
Issuer: Wholly owned subsidiary of Paccar Inc. (PCAR)
PCAR | Paccar Inc. Analyst Estimates | MarketWatch
PACCAR Achieves Record Quarterly Revenues and Excellent Profits
Truck makers log sharply lower orders
Sold at 100.494
YTM at 100.494 = 1.966%
Proceeds at 100.394 (after $1 commission)
C. Sold 2 Stryker 2.625% SU Maturing on 3/15/21:
Item # 5.A. Bought 2 Stryker 2021 SU at a Total Cost of 99.156 (3/19/18 Post) YTM was then at 2.919% at TC.
FINRA Page: Bond Detail
Issuer: Stryker Corp. (SYK)
SYK Analyst Estimates
Sold at 100.885
YTM at 100.885 = 2%
Proceeds at 100.685 (after Vanguard $2 per bond commission)
D. Bought 3 NASB Financial 2% CDs Maturing on 11/4/19:
Holding Company: NASB Financial Inc.
E. Bought at Auction 10 Treasury Bills 56 Day Maturing on 11/12/19:
1.958%IR
Auction Results:
4. Pared JRI-Sold Highest Cost 100 Shares out of 300 at $17.23-Used Commission Free Trade:
Quote: Nuveen Real Asset Income & Growth Fund Overview
Closing Price Yesterday: JRI $17.42 -$0.09 -0.51%
Sponsor's Website: JRI - Nuveen Real Asset Income and Growth Fund | Closed-End Fund | Nuveen
Profit Snapshot: +$40.45
I sold this lot: Item # 5 Added 100 JRI at $16.83-Used Commission Free Trade (8/24/19 Post)
I kept the 100 share lot bought first in this account and the 100 shares bought in my IB account: Item # 4 Bought 100 JRI at $16.47 (IB Account) and 100 at $16.59-Used Fidelity Commission Free Trade Fidelity (6/26/19 Post)
Remaining Shares This Account: Average Cost = $16.59
Data Date of Trade (12/12/19):
Closing Market Price: $17.24
Closing Net Asset Value Per Share = $19.31
Discount: -10.72
The discount on the date of purchase was -11.11%, with the net asset value per share then at $18.9 (8/21/19).
Sourced: JRI Nuveen Real Asset Inc & Growth CEF Connect
The surge in interest rates caused me to lighten up.
Dividends: Monthly at $.1060 (partial ROC support)
Last Ex Dividend Date: 9/12/19 (day of sell)
5. Lottery Ticket Basket:
A. Bought 100 RIGL at $1.71-Used Commission Free Trade:
Quote: Rigel Pharmaceuticals Inc.
Closing Price Yesterday: RIGL $1.7300 -$0.1400 -7.49%
Website: Rigel Pharmaceuticals
This purchase was an average down from two prior odd lot buys (20 shares at $2.65 and 30 shares at $3.04 using commission free trades); Item # 1.B. (8/26/18 Post) and Item # 1.D. Bought 30 RIGL at $3.04 (6/28/18 Post)
Current Position: 150 shares with an average cost per share of $2.1.
I have no expertise whatsoever in medicine or science.
I noted that JP Morgan had resumed its coverage with a buy rating and a $7 price target. Rigel Pharmaceuticals assumed with an Overweight at JPMorgan RIGL - The Fly Even though I do not have access to that report, the mere existence of that price target caused me to risk $171 by buying a 100 share lot.
I also noted this development: Rigel's fostamatinib Enters Phase 3 Clinical Trial in Japan with Kissei Pharmaceuticals for the Treatment of Chronic Immune Thrombocytopenia
Rigel entered into a licensing agreement with Kissei in October 2018 "for the development and commercialization of fostamatinib in all current and potential indications in Japan, China, Taiwan and the Republic of Korea." Kissei made an upfront payment of $33M to Rigel as well as "the potential for an additional $147 million in development and commercial milestone payments and will receive product transfer price payments in the mid to upper twenty percent range based on tiered net sales."
Rigel Pharmaceuticals Enters Collaboration and License Agreement with Kissei Pharmaceutical Co., Ltd. to Develop and Commercialize TAVALISSE™ (fostamatinib disodium hexahydrate) in Japan and other Asian Countries
The U.S. brand name for fostamatinib is Tavalisse, which has been approved by the FDA. Product sales increased 26% during the 2nd quarter to $10.2M. Rigel Announces Second Quarter 2019 Financial Results and Provides Business Update
Pipeline:
Rigel pipeline
Rigel Enrolls First Patient in Phase 3 Clinical Trial of Fostamatinib Disodium Hexahydrate in Warm Autoimmune Hemolytic Anemia
I have one round-trip: South Gent's Comment Blog # 4: Sold 150 RIGL at $2.93 ($109.24 profit)-Update For Healthcare Basket Strategy As Of 7/29/16: Bought 150 RIGL at $2.15
H.C. Wainwright Sticks to Its Buy Rating for Rigel (RIGL)(9/24/19/PT of $8)
Chart:
6. Cash Flow into Fidelity Taxable Account 9/30 and 10/1/2019:
Closing Price Yesterday: JRI $17.42 -$0.09 -0.51%
Sponsor's Website: JRI - Nuveen Real Asset Income and Growth Fund | Closed-End Fund | Nuveen
Profit Snapshot: +$40.45
I sold this lot: Item # 5 Added 100 JRI at $16.83-Used Commission Free Trade (8/24/19 Post)
I kept the 100 share lot bought first in this account and the 100 shares bought in my IB account: Item # 4 Bought 100 JRI at $16.47 (IB Account) and 100 at $16.59-Used Fidelity Commission Free Trade Fidelity (6/26/19 Post)
Remaining Shares This Account: Average Cost = $16.59
Data Date of Trade (12/12/19):
Closing Market Price: $17.24
Closing Net Asset Value Per Share = $19.31
Discount: -10.72
The discount on the date of purchase was -11.11%, with the net asset value per share then at $18.9 (8/21/19).
Sourced: JRI Nuveen Real Asset Inc & Growth CEF Connect
The surge in interest rates caused me to lighten up.
Dividends: Monthly at $.1060 (partial ROC support)
Last Ex Dividend Date: 9/12/19 (day of sell)
5. Lottery Ticket Basket:
A. Bought 100 RIGL at $1.71-Used Commission Free Trade:
Quote: Rigel Pharmaceuticals Inc.
Closing Price Yesterday: RIGL $1.7300 -$0.1400 -7.49%
Website: Rigel Pharmaceuticals
This purchase was an average down from two prior odd lot buys (20 shares at $2.65 and 30 shares at $3.04 using commission free trades); Item # 1.B. (8/26/18 Post) and Item # 1.D. Bought 30 RIGL at $3.04 (6/28/18 Post)
Current Position: 150 shares with an average cost per share of $2.1.
I have no expertise whatsoever in medicine or science.
I noted that JP Morgan had resumed its coverage with a buy rating and a $7 price target. Rigel Pharmaceuticals assumed with an Overweight at JPMorgan RIGL - The Fly Even though I do not have access to that report, the mere existence of that price target caused me to risk $171 by buying a 100 share lot.
I also noted this development: Rigel's fostamatinib Enters Phase 3 Clinical Trial in Japan with Kissei Pharmaceuticals for the Treatment of Chronic Immune Thrombocytopenia
Rigel entered into a licensing agreement with Kissei in October 2018 "for the development and commercialization of fostamatinib in all current and potential indications in Japan, China, Taiwan and the Republic of Korea." Kissei made an upfront payment of $33M to Rigel as well as "the potential for an additional $147 million in development and commercial milestone payments and will receive product transfer price payments in the mid to upper twenty percent range based on tiered net sales."
Rigel Pharmaceuticals Enters Collaboration and License Agreement with Kissei Pharmaceutical Co., Ltd. to Develop and Commercialize TAVALISSE™ (fostamatinib disodium hexahydrate) in Japan and other Asian Countries
The U.S. brand name for fostamatinib is Tavalisse, which has been approved by the FDA. Product sales increased 26% during the 2nd quarter to $10.2M. Rigel Announces Second Quarter 2019 Financial Results and Provides Business Update
Pipeline:
Rigel pipeline
Rigel Enrolls First Patient in Phase 3 Clinical Trial of Fostamatinib Disodium Hexahydrate in Warm Autoimmune Hemolytic Anemia
I have one round-trip: South Gent's Comment Blog # 4: Sold 150 RIGL at $2.93 ($109.24 profit)-Update For Healthcare Basket Strategy As Of 7/29/16: Bought 150 RIGL at $2.15
H.C. Wainwright Sticks to Its Buy Rating for Rigel (RIGL)(9/24/19/PT of $8)
Chart:
6. Cash Flow into Fidelity Taxable Account 9/30 and 10/1/2019:
I will redirect the $10K from a maturing treasury bill into a 58 day treasury bill that will be auctioned tomorrow.
I would not personally buy any of the bonds referenced in the preceding snapshots at current prices. All were bought at less than par value.
Overall, I owned 9 DTE bonds that matured on 10/1, with the other 3 owned in other brokerage accounts
DTE Profit = $88.78
The municipal bonds would be hard to sell.
On a total portfolio basis, the owned Tennessee municipal bonds have a current tax free yield of about 3% and a weighted average cost about $4K below their combined par values.
Several Maury County, Tennessee GO bonds are referenced in the preceding snapshots. For bonds, I am sitting on meaningful unrealized gains in them:
The Maury County GO bonds are rated Aa2 by Moody's.
The Williamson County, Tennessee GO bonds referenced in a snapshot above are rated AAA. I have unrealized gains in them as well.
The two Montgomery County, Tennessee GO bonds referenced in a snapshot above are among my shortest maturities:
Montgomery County can call at par value the 3% 2027 GO on or after 4/1/22 which I expect to happen. The 2022 call date for that bond will restrain price increases above par value. The 2.125% Montgomery County GO maturing in 2026 is of course less likely to be called than the 3% coupon, and the optional call date at par value is on or after 4/1/23. The Montgomery County GO bonds are rated Aa2/AA+.
Overall, the Tennessee municipal bond positions are up over $10K assuming it was possible to sell them at the prices indicated in my account. I have not even attempted to sell any of them.
Some of the stocks referenced in the snapshots were recently purchased in small odd lots using commission free trades (e.g. 30 shares of Macy's).
The CEF JRI was also purchased recently and pared already as well as noted above.
Bank CD interest payments are monthly.
The primary problem revealed by the snapshots above is what to do with the proceeds ($21K) from maturing bonds and treasury bills.
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.
I would not personally buy any of the bonds referenced in the preceding snapshots at current prices. All were bought at less than par value.
Overall, I owned 9 DTE bonds that matured on 10/1, with the other 3 owned in other brokerage accounts
DTE Profit = $88.78
The municipal bonds would be hard to sell.
On a total portfolio basis, the owned Tennessee municipal bonds have a current tax free yield of about 3% and a weighted average cost about $4K below their combined par values.
Several Maury County, Tennessee GO bonds are referenced in the preceding snapshots. For bonds, I am sitting on meaningful unrealized gains in them:
 |
| As of 9/30/19 |
The Williamson County, Tennessee GO bonds referenced in a snapshot above are rated AAA. I have unrealized gains in them as well.
 |
| As of 9/30/19 |
 |
| As of 9/30/19 |
Overall, the Tennessee municipal bond positions are up over $10K assuming it was possible to sell them at the prices indicated in my account. I have not even attempted to sell any of them.
Some of the stocks referenced in the snapshots were recently purchased in small odd lots using commission free trades (e.g. 30 shares of Macy's).
The CEF JRI was also purchased recently and pared already as well as noted above.
Bank CD interest payments are monthly.
The primary problem revealed by the snapshots above is what to do with the proceeds ($21K) from maturing bonds and treasury bills.
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.
I mentioned in a previous comment that Elizabeth Warren would likely become the Democrat's presidential candidate when and if Bernie dropped out of the race. Senator Warren is already running about even with Biden in the polls. Most of Bernie's supporters would probably go to Warren. Part of the decline today may be attributable to Bernie having a heart operation to insert some stents. Sanders is 78. If he wants the Democrats to move to nominating a candidate who espouses similar positions, he needs to drop out of the race.
ReplyDeletehttps://www.npr.org/2019/10/02/766402754/bernie-sanders-has-heart-procedure-cancels-events-until-further-notice
I will not be pleased if my alternatives are Donald and Elizabeth. My displeasure will be far greater with that selection than the one I had to make in 2016. Of course, I view Donald as a permanent stain on America and would never vote for him.
Agree. I'll be glad to see Bernie drop back. But being left with Warren, is not a choice I want left with.
DeleteLand: Bernie will be participating in the next debate scheduled for 10/15.
Deletehttps://www.marketwatch.com/story/sanders-representative-says-he-will-participate-in-democratic-debate-oct-15-2019-10-03?mod=mw_latestnews
His ego will not allow him to quit.
If he stays in the race through the primaries, Biden's chances go up and Warren becomes far less likely as the ultimate winner.
The anxiety attack triggered by the prospect of a Warren presidency was thereby relieved with this development and that may in part be responsible for the turnaround today.
I cringe at the mere thought of Trump and Warren being my choices.
I view myself as a true conservative that leans liberal on a few social issues (not abortion by the way) and environmental protections. I do not view the modern day GOP as a conservative party, but a deeply reactionary one that is also trending toward accepting beliefs that lead to authoritarianism (hostility to the press, easy acceptance of reality creations and demonstrably false narratives, opinions inconsistent with the conservative values embodied in the Constitution)
And the democrats are moving away from a center left party led by the Clintons, Biden and Obama. Republicans who are reactionaries would improperly characterize Biden as a liberal since anyone left of Sean Hannity in their Alternate Reality is a liberal, which would include all true conservatives being similarly improperly labelled.
Another factor weighting on the stock market today was the U.S. decision to impose tariffs on $7.5B of European imports.
ReplyDeletehttps://www.marketwatch.com/story/us-wins-wto-backing-for-tariffs-on-eu-goods-in-airbus-case-2019-10-02?mod=mw_latestnews
Unlike the tariffs imposed by Donald on foreign country exports to the U.S., the upcoming tariffs on European exports have the WTO's stamp of approval. The WTO had previously ruled that the EU had violated the rules by unlawfully subsidizing Airbus. So the U.S. could lawfully retaliate.
Trump started the trade wars with tariffs on steel and aluminum imports, claiming those tariffs promoted national security interests.
Section 232 of the Trade Expansion Act of 1962
https://www.law.cornell.edu/uscode/text/19/1862
https://fas.org/sgp/crs/misc/IF10667.pdf
Article XXI of the General Agreement on Tariffs and Trade (GATT) permits measures to protect a nation's "essential security interests".
https://www.wto.org/english/docs_e/legal_e/gatt47_02_e.htm#articleXXI
Once those kind of claims are made to justified a tariff, there is no stopping other countries from making similar claims and imposing tariffs on U.S. exports or just cook up some other lame excuse for retaliation.
Then the countries fight it out for years at the WTO.
The U.S. filed the Airbus unlawful subsidy complaint in 2004.
I would anticipate that the Europeans will retaliate notwithstanding that the new U.S. tariffs are sanctioned by the WTO for the EU's trade rule violation.
As a practical matter, there are no rules left when countries start cooking up reasons to impose tariffs without receiving the WTO's approval.
This is a big deal. It should be rattling the markets even more. This is trade wars but with real officials involved, so a process that can take on a life, as a "legit" one.
DeleteIt wasn't brought up in the news, that I saw.
Hello SG , I wonder if you explain to me your feelings about collateralized loan obligations and their risks? It appears they are popular given that their rate of returns are higher, than bonds but they appear to have some of the echo of mortgages from 2008.
ReplyDeleteThanks
https://www.insurancejournal.com/news/national/2019/10/02/544199.htm
G: There is nothing inherently risky in a collateralized loan obligation which is simply a pool of loans. At the most basic level, a CLO is like a mutual fund.
DeleteThe risks start with the kind of assets that are placed into the CLO. The next general level of risk creation relates to slicing the CLO into tranches with the highest yielding tranche being the riskiest and the first to take a hit when the loans go bust.
see generally:
My discussion in Item # 4:
Monday, January 25, 2010
https://tennesseeindependent.blogspot.com/2010/01/ge-intel-yahooconspiracy-of.html
Bloomberg Article: "The Bomb That Blew Up in 2008? We’re Planting Another One Collateralize" ("The credit quality of the leveraged loans which underlie the bulk of CLOs is poor, typically not investment-grade. Borrowers are highly leveraged. The loans increasingly have minimal investor protection, with over 70 percent lacking any covenants.")
https://www.bloomberg.com/opinion/articles/2019-03-03/collateralized-loan-obligations-are-riskier-than-most-realize
"Recipe for Disaster: The Formula That Killed Wall Street"
https://www.wired.com/2009/02/wp-quant/?currentPage=all
Shortly after your commission posted info, I got an email from Ameritrade about ending their commissions. It's great for me. In part because it's their commission structure was confusing about what and when something was free. (I found that hard to believe that they made it confusing and when I asked questions, they didn't seem bothered at corporate level by it at all.)
ReplyDeleteCouldn't this have a big effect, and matter a lot to the market?
It increases trading. Encourages it by small investors. I also haven't spotted why now. What suddenly has led to this big shift in policy. They all liked to hand out free trades for bringing in new money. But otherwise were sticklers on free trades.
Land: Free commissions on trading will contribute to more trading by individual investors. Most individual investors will not benefit by following that path. There have been a number of studies confirming that observation.
DeleteI will use free trades to make my small ball trading system work better. I regard that system and frequent trading to be a risk mitigation strategy for maintaining some exposure to stocks when I really do not need to have any.
It works for me given my financial goals.
Earlier this morning, I looked at the total return for SPY over the past year through 10/2/19. The number was +.78%.
https://www.morningstar.com/etfs/arcx/spy/performance
My largest account is with Fidelity and it was up +7.76% over the past 1 year. That is with about 1/6 of the total in a MM fund yielding now around 1.65%.
As long as I can push a heavily conservative portfolio up 5% to 8% on an average annual basis, which includes a lot of stock trading, then that result is satisfactory to me. I will take advantage of commission free trades to implement my risk mitigation strategies, while generating profits along the way, lowering my average cost per share and increasing my dividend yields.
Well, I'd like to be able to duplicate your returns!
DeleteI am not as convinced as you that impeachment is a mistake. I think a year is a long time for him to operate with immunity. While impeachment vote doesn't stop him directly or remove him... it may stall some of his impunity. For a sociopath it's one of the few things that could - an actual LARGE visual label can get their attention in a way that a censure would be completely dismissed.
ReplyDeleteRegardless, the DNC still hasn't shown much spine. So it's irrelevant what I think would work. They simply aren't doing what's needed to get the material into the public view through hearings. They needed to have, and need to fine and jail everyone who misuses "executive privilege" that doesn't exist.
I truly do not understand the difficulties some people in congress, politics, media, still have figuring out what trump is and how he will act. Even when they know it's bad, too many operate like he's a normal guy who's a little out of wack. Not like he's the strongly typed sociopath that he is, with all the underlying manipulations that go with that.
Coming from a psych background, it's very obvious stuff. Anyone who's volunteered for a domestic violence shelter can recognize all of this.
So why is there so much veneer on it? Clinton in interview on Maddow last night said, she knows the GOP people who are propping him up, and simply doesn't get it.
It doesn't seem to be simple blackmail or convenience. Maybe it that much allure of gaining power, that they fell for. But the DNC is also not all together together on all of this.
I'm pulling for all the pressure and stopped to be put into this, and all sorts of investigation data to come out. There is SO MUCH going on.
Even the question of whether to impeach over one article (this call) or to add digging into other stuff, is a big topic. Going back, we still have things like Kusher's business not going bankrupt because he blackmailed a whole country and mis-used US foreign policy power. And the lists go on and on...
Sociopaths are not rattled odd people who look like clowns. They do deep connections into manipulation and corruptions. The clown effect is a cover.
Land: It is virtually certain that the House will pass Articles of Impeachment. I seriously doubt that one of the 53 senators r will vote to convict and 67 votes are needed.
DeleteRepublicans are enabling his bad behavior and rarely does one voice even the mildest criticism. They are too scared of him and the possibility that he will say something bad about them to the 90% of republicans who approve of Donald.
The most severe remark about the Ukraine matter made by a Republican senator came from Mitt Romney who called it "troubling". The ones who are talking are promulgating Trump's lies that are contradicted by the summary of the call released by him.
IMO, almost 1/2 of voters can not be convinced with accurate information and there is nothing that can be done to change them. They are already too far gone and only become angry when confronted with facts that call into question the reality creations that have been fed to them.
Things have gotten even stranger with the Syria, Kurd situation. Even Mcconnell has spoken ill of Trump's latest ill behavior. It's so important that this be reversed.
DeleteIf one met this person in a store, after a short exchange, one would think they'd met a mental health patient. And I do not mean to disparage mental health patients are generally much more healthy than this.
The GOP seems to be just scared of him and scared some more. There's cracking but I don't trust that it will continue.
Land: I discuss some of these issues in my recent post:
Deletehttps://tennesseeindependent.blogspot.com/2019/10/observations-and-sample-of-recent_8.html
Trump still enjoys 90% approval among republicans according to the latest polls.
Until the republican base desert him in substantial numbers, republican politicians will protect and nurture him as well as cover up his malfeasance, irrespective of the damage that he causes.
Those who favor impeachment are approaching a majority.
https://www.axios.com/trump-impeachment-richard-nixon-bill-clinton-858da3dd-3c1b-4918-a80d-f58fd9c5ce9e.html
https://thehill.com/homenews/administration/464777-majority-in-new-poll-supports-impeachment-inquiry-almost-half-back
The main difference is that Nixon lost significant republican support when more facts became known, but the GOP then does not resemble what that party has now become.
Does seem to be the state of things...
DeleteThe Stock Jocks are still in buy the dip mode as evidence by what happened earlier today.
ReplyDeleteThe negative ISM services report was met with selling that knocked the S & P 500 index down to 2855. The index then started a rally that has taken it back above 2900.
S&P 500 Index
2,901.44 +13.83 +0.48%
DAY RANGE 2,855.94 - 2,903.89
Last Updated: Oct 3, 2019 at 1:06 p.m. EDT
https://www.marketwatch.com/investing/index/spx
Until there is indisputable evidence that the economy is in a recession and corporate earnings are going to tank, it will be difficult to shake the Stock Jock's buy the dip, everything is just fine and will only get better consensus opinion.
Yesterday, Boris Johnson made what he characterized as England's final offer on Brexit. The EU has already responded to that final offer saying it was unworkable. While not rejecting England's offer outright, it was reportedly made clear to Boris that the offer would not win support from EU members and were "downbeat about it serving as the basis for serious negotiations". Several EU policymakers said accepting the offer would be worse for the EU than a hard Brexit.
ReplyDeleteA hard Brexit on 10/31 is more likely now than at anytime in the past and would be the probable result then or before year end.
I have been making some common stock scatter buys using commission free trades. Maybe I "poured" $2000 into about 7 or 8 buys, mostly stocks with dividend yields over 4%.
ReplyDeleteI am not pleased with the persistent drop in short term T Bill and CD rates. The 2 month treasury bill was auctioned today with a 1.74% investment rate. The 1 month bill has fallen almost 20 basis points in yield this week.
https://www.marketwatch.com/investing/bond/tmubmusd01m?countrycode=bx
The yield declines in short term T Bills has picked up as the odds of another FF rate cut later this month increase.
One week ago, the probability of a .25% federal funds cut this month was at 49.2%. Today the probability was at 88.2%.
https://www.cmegroup.com/trading/interest-rates/countdown-to-fomc.html
The economy is softening, which some Stock Jocks may accept but nonetheless remain unconcerned and confident that another Fed rate cut this month will solve whatever may be the problem. While another .25% later this month is now highly probable, that will not stop or delay what is already in motion. The magic elixir for the economy is not rates lower than the already abnormally low rates.
The ten year treasury yield closed today at 1.54%. When that yield falls back below the prior low for 2019, which was 1.47%, hit on 8/28, 9/3-4/2019, I will start to look for corporate bonds to sell.
There was a spurt up in the ten year treasury yield starting after 9/3 which caused me to put further sells on hold. That yield rise died, at least for now, at a 1.9% on 9/13/19.
https://www.treasury.gov/resource-center/data-chart-center/interest-rates/Pages/TextView.aspx?data=yieldYear&year=2019
Yield is still inverted too. It doesn't seem to be bothering anyone anymore.
DeleteAre there sectors your buys are favoring?
That was odd. I was going to post when google spontaneously refreshed the page, and signed me out. I'd already posted a couple times in the minutes before.
Larry Kudlow (television personality who is the Duck's chief economic advisor):
ReplyDelete“There could be positive surprises coming out of these talks. I’m not predicting. I’m just saying don’t rule that out. There could be some positive surprises.”
I "could" start running down my drive to pick up my mail. I am not going to predict that I will start today or tomorrow or next year or sometime in 2030. I am just not ruling out the possibility that I could do it.
Kudlow's statement is just garbage designed to manipulate.
Having said that, I have changed my opinion slightly on a possible trade deal happening. I am slightly more positive that one will be reached assuming China is willing to bend just a little now.
China needs to strike now by giving Donald something that will lift U.S. tariffs.
Donald has been materially weakened politically by the latest scandal and a slowing economy. While republicans would never admit it, the slowdown is due in part to the tariff wars.
I would note that strengthening intellectual property protections, while a worthy objective for U.S. technology firms operating in China, may end up costing U.S. jobs as companies move more production to China.
Since Donald wants to win, it is likely IMO that he is more willing to cave now and simply claim in his typical B.S. style that the deal is the best deal ever negotiated. He can say anything since the average voter is not going to delve into the weeds on this kind of issue. Just sell the line, repeated over and over again, that the Duck stood up to China and Made America Great Again.
He peddled Nafta 1.01 as the best ever trade deal when only minor changes were made to the existing agreement. How many voters could discuss the differences in Donald's revision and the existing agreement? Maybe 1 in 500,000.
I fully expect the "greatest deal don't ask about the details" approach. Not sure what to make now of what China will do since they've been called on to investigate a presidential candidate. And may assess the current vulnerability of Trump for his Syria decision, as a useful factor to them.
DeleteI discussed RIGL in this post. The company issued this press release earlier today.
ReplyDeletehttps://www.prnewswire.com/news-releases/rigel-secures-credit-facility-for-up-to-60-million-300929384.html
The initial reaction was slightly negative but has turned to ho-hum in afternoon trading:
Rigel Pharmaceuticals Inc. $1.715 +$ 0.005 +0.29%
Last Updated: Oct 4, 2019 at 2:26 p.m. EDT
https://www.marketwatch.com/investing/stock/rigl
RIGL is a high risk Lotto Ticket.
RIGL entered into a license agreement with "Medison Pharma to commercialize fostamatinib in all potential indications in Canada and Israel. Under the terms of the agreements, Rigel will receive an upfront payment of $5 million, which includes an advanced royalty payment, with the potential for approximately $35 million in regulatory and commercial milestones. In addition, the company will receive royalty payments beginning at 30% of net sales after credit for the advanced royalty payment is fulfilled."
Fostamatinib has been approved for marketing in the U.S. as noted in this post.
"On September 19, 2019, Rigel received a $4 million development milestone payment from Aclaris Therapeutics for the achievement of a certain event in accordance with the Rigel and Aclaris License and Collaboration Agreement dated August 27, 2015."
I do not recall seeing that disclosure earlier. Rigel has granted Aclaris a worldwide license to develop two Rigel compounds for the treatment of "alopecia areata and other dermatological conditions." Phase 2 trials have started for both compounds which is what probably triggered a milestone payment.
https://www.rigel.com/index.php/about-rigel/current-partners/aclaris-therapeutics/
The other part of the new release involves a loan agreement signed by Rigel to borrow up to $60M. Rigel drew down $10M at closing.
The loan agreement is described more fully in a 8-K filing:
https://www.sec.gov/Archives/edgar/data/1034842/000110465919052388/a19-19307_18k.htm
I have published a new post:
ReplyDeletehttps://tennesseeindependent.blogspot.com/2019/10/observations-and-sample-of-recent_5.html