ECON, IDV, NOBL, PFLT, PROSY, VEU, VTR

Economy: 

It is too early to fully assess the Phase 1 trade deal with China since most of the details are still not publicly available. 

The U.S. is keeping 25% tariffs on approximately $250B while reducing the 15% tariffs to 7.5% on about $125B of China's exports. 

China would commit to increase purchases of U.S. agricultural products by $32B over a two year period, using as a baseline the $24B in purchases made in 2017. Factbox: What's in the U.S.-China 'phase one' trade deal - Reuters So that works out to an $16B per year for 2 years over the the 2017 baseline. 

Regarding currency devaluations, China agreed to language that it has accepted for years as part of its commitment tot he G20 countries. There are allegedly stronger protections for U.S. intellectual property. The informality of the pressure applied by China makes this a long term problem that is not going to be solved by some general statement about pressure. (see generally, Forced or Not? Why U.S. Says China Steals Technology - The Washington Post)

Here's what the new trade deal means for the markets Trump halts new China tariffs and rolls back some prior duties

Donald says the Phase 2, which includes all of the issues that have proved to be intractable over the past several years, will begin immediately. China and Trump say they have trade deal, will cancel next tariffs I view the Phase 2 agreement to be a very low probability event. 

Based on my preliminary assessment, I see no significant economic benefit for the U.S. economy from this deal, though farmers will apparently be able to sell more products to China compared to 2017.  

The main benefits will be no new tariffs and some rollback of the 15% tariffs. 

It is far from clear whether U.S. farmers will be materially better off with this deal than without it. China was already accelerating farm product purchases because it needs the products.  

The announcement so far has had only a slight positive impact on soybean prices which remain significantly below the levels in existence prior to the trade war's onset early last year. Soybean Prices- 45 Year Historical Chart; Soybeans Spot Price Chart

Wheat Prices - 40 Year Historical Chart | MacroTrends
Corn Prices - 59 Year Historical Chart | MacroTrends

Goldman is disappointed in trade deal: Tariff rollback 'smaller than expected'

Sen. Chuck Schumer: Trump caved with phase one China trade deal

Fed keeps interest rates on hold amid 'favorable' economic outlook - Reuters

Federal Reserve issues FOMC statement (maintains FF target range between 1.5% to 1.75%); The Fed - December 11, 2019: FOMC Projections materials (includes dot plot) The Dot plot shows that 13 out of 17 members project no change in 2020 with 4 members predicting a .25% increase. A majority project one or more increases in 2021. I would not pay any attention to the 2021 forecasts until at least mid-2020.   

Fed not moving off sidelines unless inflation heats up, Powell says

China's Nov. consumer inflation near 8-year high - MarketWatch (+4.5% Y-O-Y through November 2019)

Gundlach: The 2020s will see 'real turmoil' as US debt woes come home to roost I recommend watching at least the first 20 minutes of this interview.

Gundlach sees 10-year yield above 2% with Fed 'cheerleading inflation' That is not a big jump from the current level. The last CPI report had the annual rate of inflation at 2.1% through November. In a free market, my guess is that the ten year treasury would now be close to 4% given the recent CPI numbers and the anticipated annual average rate of inflation over the next 10 years. Central banks have suppressed both short and longer term yields to produce negative real rates of return before taxes which is not a market driven result.  

US retail sales November 2019 (+.2%, less than expected vs. .5% consensus estimate, up 3.3% Y-O-Y)

The Tory victory in the U.K. election will insure that Brexit will occur soon. The attention will now focus on the economic impacts related to leaving the EU. 

SNP's Sturgeon calls for new Scottish independence vote Scotland wanted to remain in the EU. The odds of Scotland leaving the UK are better than 50/50 IMO. 

Even after Brexit, the EU and the UK will need to negotiate terms relating to trade.  Brexit: What happens now? - BBC News

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Markets and Market Commentary: 

There’s no better place to put your money than the U.S., says hedge-fund manager Kyle Bass - MarketWatch

‘Back up the truck and buy, buy buy,’ because there is no risk, says MUFG economist - MarketWatch Famous last words to be engraved on his gravestone?

AT&T Provides Update on Capital Allocation Strategy, Increases Quarterly Dividend by 2 Percent A 2% raise translates into a 1 cent per share quarterly increase to $.52. The annual rate will be $2.08 per share. My average cost per share currently stands at $29.39. The increase in the penny rate raises my dividend yield to 7.08%. I am not reinvesting the dividend when the likely reinvestment price is over $35.  

Here’s proof that 401(k) plans are not working for most Americans — can you guess who they ARE working for? - MarketWatch

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Trump: 

Chris Wallace: Trump 'Assault' on Freedom of the Press (“I believe President Trump is engaged in the most direct, sustained assault on freedom of the press in our history.”). 

I do not view Wallace's statement as an opinion but a statement of fact that is not subject to contradiction or debate. And, no one should be surprised that the attacks are coming from a republican President.  
  
Rudy Giuliani Associate Lev Parnas Wanted by Federal Prosecutors | National Review Republicans are promulgating Russian propaganda. 

Trump pays $2 million in damages ordered by judge over misuse of charity funds, according to NY attorney general

Trump mocks Greta Thunberg for being Time's 'Person of the Year'

Trump didn’t win Time’s ‘Person of the Year,’ so he mocks the teen who did - MarketWatch  

Paul Volcker ripped into Trump and 'nihilistic forces' undermining US

‘Avengers’ artist feels ‘violated’ by ‘sick’ video of President Trump ‘comparing himself to a mass murderer’ - MarketWatch

Trump, Russia and Ukraine: Five presidential conspiracy theories debunked

FBI wiretap of Trump campaign aide was riddled with errors, but Russia probe was legally justified, IG report finds

The AG William Barr, rightfully viewed as a Trump partisan, disagreed with the IG's conclusions as did his servant John Durham. AG Barr condemns IG report's finding that FBI probe of Trump campaign was justified; Bill Barr’s Justice Department swings into action to undercut the inspector general report - Vox 

John Durham, just another political partisan willing to follow Barr's playbook, tried to convince the IG, without success, to change his opinion to conform to the Trump narrative. Two reviews of Trump-Russia probe to have opposite conclusions: official testifies - Reuters   

The 11 most truth-stretching lines from Bill Barr's Russia interview 

Eric Holder unloads on William Barr’s “nakedly partisan” defense of Trump: “He is unfit to lead” This is not a question of political ideology but whether Barr is fit to be the lead attorney for the U.S. While Holder is a former AG who served under Obama, it is rare to hear any former AG unload on a sitting AG in this manner. The closest example to Barr in modern U.S. history would be Nixon's AG John N. Mitchell. 

Trump's sycophants at the DOJ, starting with the Trump Bot William Barr, will now create the reality that their master wants. 

The IG is apolitical, his office reviewed more than 1 million documents and interviewed 170 persons (see p.2), before issuing a 434 page report. READ: IG Report From Justice Department On Russia Investigation: NPR 

Highlights From the Horowitz Report on the Russia Investigation

Michael Horowitz just shot down a bunch of Trump conspiracy theories - The Washington Post

Some of the Republican lies about the IG report are documented here: A guide to the misleading spin on the IG report - The Washington Post

Ivanka Trump met Christopher Steele years before Russia dossier Steele told the IG that he was favorably disposed to Donald given his friendly relationship (not defined as to scope) with a Trump family member, identified in press reports as Ivanka before her marriage to Jared Kushner.  

FactChecking Trump's NATO Remarks-FactCheck.org (identifies the "slew" of false statements made by Trump)

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Déjà vu the Pentagon Papers and the Vietnam War. Confidential documents reveal U.S. officials failed to tell the truth about the war in Afghanistan; The 'Pentagon Papers' of the Afghanistan War - The Atlantic The same mistakes will be repeated over and over again. Only the names of those responsible and the places change. And Iraq was far worse.   

US has spent $6.4 trillion on wars in Middle East, Asia since 2001: Study

China's foreign minister says at symposium US has angered and suppressed China

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All trades are commission free unless otherwise noted. 

1. Bought 100 PROSY at $13.03: 

Quote: Prosus N.V. ADR Overview 

Closing Price Yesterday: PROSY $13.65 +$0.12  +0.92% 

Prosus - Home

Prosus N.V. ADR Analyst Estimates
2019: $2.15
2020: $2.76

This stock is traded as an ADR on the U.S. pink sheet exchange. Volume is generally close to 1 million shares, with a narrow bid/ask spread. 

The ordinary shares are listed on the Euronext Amsterdam exchange, with the shares priced in Euros: Prosus N.V (Netherlands: Euronext Amsterdam) 

Prosus was spun out of Naspers last September. As of 9/30/19, Naspers owned 73.8% of the stock. 

Naspers is a South African based company: Naspers Ltd.  (South Africa) An ADR trades on the pink sheet exchange and is priced in USDs. Naspers Ltd. ADR Overview  

This SA article is not yet behind the paywall. Prosus: Discounted Valuation Offers Investors Many Ways To Win-Seeking Alpha I did not see that article until after I bought the stock but my thoughts were basically the same.  

Since PROSY does not pay a dividend and is unlikely to do so, I will keep my exposure light years below immaterial which is where I am at now.   

In 2001, Nasper bought a 46.5% of Tencent for $32M. South African media group struck gold by taking a chance on Tencent | South China Morning Post That stake, now at about 31%, is now owned by Prosus. Tencent: Naspers is bringing its $134 billion stake to Europe - CNN 

Napster transferred other internet businesses into Prosus that are generally described in this article: Factbox: Prosus, tech heavyweight with Tencent stake, to list in Amsterdam - Reuters; see also Prosus - Companies Most of these companies are in emerging markets (e.g. China,  Brazil, India, Poland, Russia)

Last Earnings Report: 

Prosus N.V. Today Announced Its First Set of Results for the Six Months Ended 30 September 2019 | Business Wire

Prosus N.V. 2020 Q2 - Results - Earnings Call Presentation-Seeking Alpha 

Prosus N.V. (PROSY) CEO Bob van Dijk on Q2 2020 Results - Earnings Call Transcript | Seeking Alpha

Earnings will be erratic. For the semi-annual period ending 9/30/19, a US$599M gain was recognized when the company exchanged its 42.5% interest in MakeMyTrip Limited for a 5.6% interest in the public traded Ctrip. Makemytrip: Naspers exits makemytrip, leaves Ctrip largest stakeholder in portal

I would view the earnings as low quality since most of the net income comes from the 31% stake in Tencent rather than its own operations.  

2. Eliminations and Pares: 

A. Pared PFLT-Sold 81+ at $12.01:  

Quote: PennantPark Floating Rate Capital (PFLT)

Profit Snapshot: +$29.66

Item # 1.B. Added 30 PFLT at $11.3 (10/19/19 Post); Item # 4 Added 20 PFLT at $11.67-Used Commission Free Trade (6/23/19 Post); Item # 1.A. Bought 30 PFLT at $12.55-IB Account (2/26/18 Post)

Any profit is viewed as a victory when trading BDCs. The main goal is to harvest the dividends and eventually escape with a total return in excess of the dividend payments.  

This was an elimination of my PFLT position held in my Fidelity account. 

I still own shares in two other accounts. I am not reinvesting the dividend for a 100 share position held in my IB account. I am reinvesting the dividend in my Schwab account where I currently own 121+ shares. 

Dividend: Monthly at $.095 per share ($1.14 annually) 

Last Ex Dividend: 11/13

PennantPark Floating Rate Capital Ltd. Announces Monthly Distribution of $0.095 per Share Nasdaq:PFLT

Chart: The stock dived in response to the 2019 first quarter earnings report that included new non-accrual loans. 

1 Year Chart as of 11/27/19

Last Earnings Report: PennantPark Floating Rate Capital Ltd. Announces Financial Results for the Fourth Quarter and Fiscal Year Ended September 30, 2019

I discussed briefly the third quarter report in this comment. 

B. Eliminated IDV-Sold 21+ at $32.44:

Quote: iShares International Select Dividend ETF Overview

Profit Snapshot: $70.82 (11/25 sell only)

Sponsor's Website: iShares International Select Dividend ETF | IDV

Expense Ratio: .49%

Recent Dividends: Quarterly at variable rates

Last Discussed: Item # 4.A. Bought 5 IDV at $29.65; 5 at $29 and 5 at $28.3(12/29/18 Post)

Last Sell Discussion: Item # 5 Sold 51+ IDV at $33.58 (2/15/18 Post)

C. Eliminated VEU-Sold 17+ Shares at $52.52: 

Quote:  Vanguard FTSE All-World ex-US ETF Overview

Profit Snapshot: +$32.71

Sponsor's Website:  VEU - Vanguard FTSE All-World ex-US ETF

Expense Ratio: .09%

Last Discussed: Item # 5.A. (8/28/19 Post) 

Last Elimination: Eliminated VEU at 50.39 (4/15/19 Post)(profit snapshot = $52.73); 

Other Eliminations: +$1,614.39, snapshots in Item # 2 

Updated VEU Realized Gains = $1,699.83

D. Eliminated NOBL-Sold 5 at $74.28: 

Quote: ProShares S&P 500 Dividend Aristocrats ETF Overview

Profit Snapshot: +$39.44

Item # 5.A. Bought 5 NOBL at $66.39 (3/23/19 Post) 

Sponsor's Website: ProShares S&P 500 Dividend Aristocrats ETF (NOBL)

E. Eliminated ECON-Sold 15 at $23.03: 

Quote: Columbia Emerging Markets Consumer ETF Overview

Profit Snapshot (11/15 sell only): +$18.84  

Item # 3.A. Added 10 ECON at $21.68 (9/27/19; Item # 4.A. Bought 5 ECON at $21.96 (6/29/19 Post)

Sponsor's Website: ECON | Columbia Emerging Markets Consumer ETF

Expense Ratio: .59% 

3. Small Ball Adds: 

A. Added 3 VTR at $58.38; 5 at $55.58; 5 at $54.95 : 

Quote: Ventas Inc. (VTR)

Closing Price Yesterday: VTR $55.50  +$0.35 +0.63% 

Last Discussion: Item # 3.A. Started Small Ball "Buy Program" in VTR- Bought 10 at $58.32 and 2 at $57.61 (11/23/19 Post) I discussed the last earnings report in that post and have nothing to add here. 

Since my last discussion, Wells Fargo downgraded the stock to underperform from market perform and reduced its PT to $56 from $62. I do not have access to Wells Fargo stock reports. 

Dividend: Quarterly at $.7925 per share ($3.17 annually)

Dividend Information | Ventas

Next Ex Dividend: 12/31/19

Average Cost Per Share: $56.81

Dividend Yield at Total Average Cost  = 5.58%

Dividend Reinvestment: Yes as a means to average down

Current Position: 25 shares

Maximum Position: 100 shares 

Purchase Restriction: Small Ball Rule 

Last Earnings Report (Q/E 9/30/19): This report caused the most recent price decline and what I would call a valuation adjustment.  

I am obviously preceding with some trepidation. The main problem is VTR's significant ownership of senior housing properties. 

B. Added 10 GCI at $5.95: 

Closing Price Yesterday: GCI $6.00 -$0.07 -1.15%

Current Position this Account: 120 shares 

Average Cost Per Share = $6.87

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.