Economy:
Jobless claims climb another 2.981 million amid coronavirus shutdowns - MarketWatch This brings the tally to 36.5M.
Fed's Powell: More policy help may be needed to pull US out of downturn Powell expressed an opinion that more stimulus may be necessary to avoid "lasting" damage to the economy. He also stated that it is likely that the economy will face an "extended period" of weakness. And, in his words, "the recovery may take some time to gather momentum, and the passage of time can turn liquidity problems into solvency problems." Powell Speech on Current Economic Issues
Retail sales crater record 16% in April amid coronavirus lockdowns and spending slump - MarketWatch; Government Retail Sales Report.pdf
On a seasonally adjusted basis, CPI declined .8% in April, the largest monthly decline since December 2008. The negative number was due to the steep decline in energy prices. Consumer Price Index Summary
On a non-seasonally adjusted basis, CPI rose .3% Y-O-Y in April.
U.S. wholesale inflation sinks in February on lower oil prices as coronavirus hinders travel - MarketWatch
U.S. runs $737.9 billion April budget deficit: Treasury - MarketWatch
The N.Y. Fed Empire State Manufacturing index for May was reported at -48.5%:
Empire State Manufacturing Survey (overview) - FEDERAL RESERVE BANK of NEW YORK
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Markets and Market Commentary:
Why Stanley Druckenmiller says the risk-reward of investing in stocks has never been worse in his career- MarketWatch
This is ‘second-most overvalued’ stock market that billionaire investor David Tepper has ever seen - MarketWatch
Stock market investors are ‘too optimistic’ over 2020 earnings and the 2021 recovery, ING strategists say - MarketWatch ING believes that investors are pricing a 20% decline in SPX earnings this year, which the strategists view as too optimistic, followed by a 25% recovery in 2021. I would agree that investors are looking through an awful 2020 and projecting robust growth next year. I do not agree that the current SPX index level prices a 20% decline this year, more like pretending that the decline is irrelevant.
Investors should prepare for a U.S. ‘economic depression,’ warns Kyle Bass, but China’s fate could be even worse - MarketWatch
Surge in layoffs is unlikely to help profits, no matter what the market thinks With 86% of SPX companies reporting 1st quarter results, FactSet claims that earnings have declined 13.6% with forecasts for the second quarter at a 40.6% decline; -23% in the third and 11.4% in the 4th.
Nelson Peltz says he's bullish on a vaccine, putting new money to work and voting for Trump
Federal Reserve helps companies load up on more debt amid coronavirus fallout - The Washington Post
Neiman Marcus and J.Crew could survive bankruptcy filings, experts say - MarketWatch
Tanger Reports First Quarter Results & Provides COVID-19 Update; Tanger Factory suspends dividend (NYSE:SKT) | Seeking Alpha; Tanger collects 12% of April rent, sees liquidity sufficient for two years (NYSE:SKT) | Seeking Alpha
PennantPark Investment cuts quarterly dividend to $.12 from $.18
Preferred Apartment +5.5% after Q1 FFO beats; cuts quarterly dividend from $.265 per share to $.175 (NYSE:APTS) | Seeking Alpha
Investcorp Credit Management BDC, Inc. Reports Results for its Fiscal Third Quarter Ended March 31, 2020 (cuts regular dividend to $.15 per share from $.25)
Chatham Lodging April RevPAR slides 82.7% (NYSE:CLDT) | Seeking Alpha; Chatham Lodging Trust Announces First Quarter 2020 Results
Kimco Realty Announces First Quarter 2020 Results ("The company received rent deferral requests approximating 35% of Kimco’s pro-rata minimum base rent for the month of April, with the company selectively granting deferrals for 14% of the minimum base rent for this period. The company continues to negotiate for the payment of the remaining April rent not yet collected.") Kimco suspended its common share divided.
‘What we are confronting now is really unprecedented.’ Coronavirus-related lawsuits are about to flood the courts - MarketWatch
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Trump:
Trump (5/12/20): “We have met the moment and we have prevailed.” Trump says 'we've prevailed'
Doctor Don, M.D. and PhD in B.S., says that the medical opinion expressed by Dr. Fauci is "not acceptable". Trump says Fauci's warnings about reopening are not 'acceptable'
3 takeaways from coronavirus whistleblower Rick Bright’s testimony (1.) lives were lost because of inaction after warnings; (2) Trump and his administration pushed unproven drugs; and (3) some pessimism about a vaccine in 12 to 18 months).
A Trump Official Tried to Fast-Track Funding for His Friend’s Unproven COVID-19 “Treatment,” Whistleblower Says
Whistleblower Rick Bright testifies as Trump blasts him; Hear ousted chief Richard Bright's opening statement - CNN Video The government watchdog has found a "substantial likelihood of wrongdoing" in the removal of Dr. Bright. The scientific opinions expressed by Dr. Rick Bright, who questioned Doctor Don's medical recommendations, are not acceptable in TrumpWorld either.
Donald lacks actual factual foundations for his opinions. He does express his opinions as facts and in a firm, dominant tone that attempts to convey knowledge when there is none.
Since my last post was published, another study found Doctor Don's "miracle drug" does not help COVID-19 patients and increases the risk of heart attacks. Coronavirus: Tump-touted drug doesn't help patients, but raises heart attack risk, study says
Prestige Ameritech offered on 1/23/20 to make millions of N95 masks in Texas. The government turned him down.-The Washington Post Trump's Administration turned down this offer. This company was a U.S. manufacturer capable of producing 7 million N-95 masks per month. Prestige Ameritech's VP, Mike Bowen, warned the government that there was a mask shortage and the risk to human life was imminent. Dr. Rick Bright wrote in 1/26/20 email that the higher ups were ignoring the warning. Bright is apparently referring to the political appointee Robert Kadlac. HHS Refused to Secure N95 Masks for Coronavirus, Whistleblower Says
Trump vows complete end of Obamacare law despite pandemic
Trump Contradicts Nurse Who Reports Shortages of Protective Gear
After 27,000 nursing-home deaths, White House now recommends coronavirus tests in all facilities - MarketWatch
Trump says he'd consider ordering states to test nursing home residents
White House Orders Staff to Wear Masks as Trump Misrepresents Testing Record - The New York Times
Coronavirus (COVID-19) Testing - Statistics and Research - Our World in Data The U.S. is catching up three months into the pandemic.
Trump rips George W. Bush after he calls for unity amid coronavirus outbreak
Obama says White House response to coronavirus has been 'absolute chaotic disaster'--Trump charges Obama with 'biggest political crime in American history'
Trump says coronavirus will disappear without a vaccine. Fauci has said the opposite. COVID-19 may disappear in its current form within two years, but viruses do not disappear. They linger around and mutate.
The Trump Campaign War Against Truth is well under way. Trump's Misleading Ad on Coronavirus Testing - FactCheck.org
Seasonality of SARS-CoV-2: Will COVID-19 go away on its own in warmer weather?-Harvard's Center for Communicable Disease Dynamics;
Will Coronavirus Ever Go Away? What a Top WHO Expert Thinks-Time; Spanish flu: the killer that still stalks us, 100 years on-The Guardian (some of the Spanish flu genes are still circulating in human and pig populations, with some of them being direct descendants while others have combined with more contemporary pandemic virus including the Hong Kong flu in 1968 and the Swine Flu pandemic in 2009.
Melinda Gates says US coronavirus response is 'chaos,' gives Trump administration a D-minus grade
Trump ends press conference after female reporters challenge him on testing The video clip embedded in that article proves once again, when no further proof is necessary, that Donald is just a egomaniacal jerk.
Republican voters give Trump and GOP governors cover to reopen
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Trump and the Imperial Presidency:
Yesterday, Don the Authoritarian fired the State Department's Inspector General for doing his job. Trump fires State Department inspector general Steve Linick
The U.S. Supreme Court heard oral arguments last week in a case where Donald is asserting that his tax returns and related documents held by his accountants are "categorically immune" from being produced in response to a grand jury's criminal inquiry.
Donald is appealing a decision by the U.S. Court of Appeals for the Second Circuit that held unanimously that the accountants had to produce the documents in response to a grand jury subpoena. Lawfare During oral argument, Trump's attorney argued that a sitting President would be immune from an investigation even if he shot and killed someone.
The Chief Judge for the Second Circuit wrote the opinion which contains the following noteworthy footnote:
Donald will never voluntarily release his tax returns and will do everything conceivable to stall the production in response to valid subpoenas, particularly those issued by a criminal grand jury.
Supreme Court Brief Filed by Donal J. Trump: Brief for Petitioner.pdf
Barr's DOJ filed a brief supporting Trump's absolute immunity from investigation, even when the documents being sought are held by a third party: UnitedStates Amicus Brief.pdf The accountants are not contesting the subpoena: Letter
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Donald's Rogue DOJ and the Michael Flynn Case:
Michael Flynn, Donald's former National Security Advisor, pled guilty to lying to the FBI about his contacts with Russia's ambassador. He made that admission twice under oath.
A report prepared by the DOJ's inspector general found there was sufficient evidence to investigate Flynn.
The purported reason given by Barr is that the FBI discussed internally whether or not to tell Barr about the intercepted conversation or to simply ask him about the contents of his conversations with the Russian ambassador.
The decision was made that the FBI agents interviewing Flynn would not disclose to him that his conversations with the Russian ambassador were intercepted by U.S. intelligence and recorded.
Giving Flynn the choice to tell the truth or to lie is not entrapment, no matter how many times Trump TV and Trump make that claim.
The Justice Department has dropped Michael Flynn’s case - Vox
Michael Flynn: Filing error adds to twists of criminal case reversal Barr had his favorite toad, Timothy Shea, file the motion. DOJ’s About-Face on Stone Case Reeks of Improper Influence (Shea was doing Barr's bidding in that one too)
As noted by a former Assistant Attorney General for National Security, Barr's DOJ misrepresented in its court filing the evidence and relied on specious arguments.
Opinion | Bill Barr Twisted My Words in Dropping the Flynn Case. Here’s the Truth. - The New York Times;
Ex-DOJ official claims Barr "twisted" her words in motion to dismiss Flynn case - Axios;
Justice Dept. rattled as Flynn fallout reaches FBI - The Washington Post
Barr's decision was not a legal one but a political one made at Donald's insistence.
“Bill Barr’s America is not a place that anyone, including Trump voters, should want to go,” according to Donald Ayer, who served as deputy attorney general under the first President Bush. “It is a banana republic where all are subject to the whims of a dictatorial president and his henchmen.” Donald Ayer: Bill Barr Must Resign - The Atlantic
William Barr is a renegade Attorney General who sacrifices the rule of law and fundamental legal principles in pursuit of his far right ideology and slavish devotion to Don the Authoritarian. Under his leadership, the DOJ has become a political weapon used to reward friends and punish enemies and an instrument to further implement an authoritarian version of the imperial presidency doctrine.
Judge Emmett Sullivan, the federal judge overseeing the Flynn case, may have no choice but to dismiss the case under Rule 48 (a) of the Federal Rules of Criminal Procedure and applicable case law (Rinaldi v. United States, 434 U.S. 22 (Supreme Court 1977); The Justice Department Wants to Drop Flynn’s Case. Can the Judge Say No? - Lawfare
There is some leeway under Rinaldi to reject the DOJ's motion to set aside Flynn's guilty plea and to dismiss the criminal case against him. The Court can reject the DOJ's motion to dismiss by finding that it was "tainted with impropriety". I view that conclusion as supported by what is known now.
Sullivan's appointment of a former federal judge to make recommendations is an indication that he wants to keep this option and others open. Court asks retired judge to oppose Justice Dept. effort to drop Michael Flynn case, examine whether ex-Trump adviser committed perjury - The Washington Post
One of those options, which the retired judge will examine, is whether or not to hold Flynn in criminal contempt of the court. Judge questions if Michael Flynn is perjuring himself and appoints retired judge to examine case Sullivan has control over that option rather than the DOJ.
Judge Sullivan is going to allow third parties to submit briefs to discuss the government's decision to drop charges after Flynn plead guilty. Judge slows down effort to drop Flynn case - POLITICO; John Gleeson, David O’Neil and Marshall Miller: The Flynn case isn’t over until the judge says it’s over - The Washington Post
If Judge Sullivan dismisses the criminal case under this circumstance, the dismissal will not be a vindication of Flynn, even though Donald and Trump TV will make that claim, but simply a legally required decision after Barr made the politically motivated decision to drop the prosecution.
Over 1,900 Former DOJ Officials Call on AG William Barr to Resign for assaulting the rule of law - Rolling Stone
It is not surprising that Barr's DOJ misled Judge Sullivan in the manner described in this article: Ex-F.B.I. Official Is Said to Undercut Justice Dept. Effort to Drop Flynn Case
The question now is whether voters want another 4 years of William Barr and Donald Trump undermining the rule of law.
'A Pardon by Another Name': Lawyers Decry Barr's Move to Dump Flynn Case | National Law Journal
The Michael Flynn case is a sign of what’s to come with Barr’s Justice Department and Trump.
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Covid-19 Updates:
How a superspreader at choir practice sickened 52 people with COVID-19 | Live Science
Simply talking in confined environments could lead to coronavirus transmission, researchers say;
‘Speaking causes airborne virus transmission:’ Coroanvirus study gives more insight into the disease’s rapid contagion - MarketWatch
What lesson has Donald and his supporters learned from the infection rates in confined spaces, including cruise ships, meat packing plants, prisons and nursing homes and how the disease spreads out from those type of settings.
Coronavirus hot spot in Minnesota connected to surge of cases at meatpacking plant
Abbott Test Misses Many Coronavirus Cases - Study - TheStreet The Abbott device is used by the White House to screen people.
More than 1,800 prison inmates are infected with COVID-19 in Tennessee, TDOC says (about 54% of those tested have the infection) When there are a significant number of people in closed areas, COVID-19 has proven it will spread widely and rapidly. This was established early in the pandemic. The question is whether it is possible to protect those working or living in confined spaces, which would include offices, manufacturing plants, nursing homes and prisons.
Exclusive: Health official quits after being pushed to reopen Weld County, Colorado and hot-spot meat plant - MarketWatch Weld County is run by republicans.
About 100 N.Y. Children Show Symptoms of Illness Tied to Virus The illness is being called Pediatric Multisystem Inflammatory Syndrome (PMIS).
COVID-19-PMIS.pdf (NYC Health Department)
White House report shows coronavirus rates spiking in heartland
Doctors keep discovering new ways the coronavirus attacks the body
Testing uneven, or nonexistent, at meatpacking plants with COVID-19 outbreaks
New coronavirus cluster in California city due to party
Floridians aren't following virus safety measures, survey says. Thousands won't stay home
CDC finds New York City coronavirus death toll may be thousands worse than official tally
Fauci puts it bluntly: Coronavirus deaths are undercounted
Germany Sees New Coronavirus Cases Nearly Triple as Lockdown Is Eased
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Sample of Recent Tweets from Demagogue Don (Just 5/11 and 5/12):
In the first tweet reproduced below, Disgusting Don is accusing Joe Scarborough, a former republican congressman and critic, of murdering his intern Lauri Klausutis.
Never mind that the autopsy report found that she had "a floppy mitral valve disease" which caused her to go into cardiac arrhythmia that resulted in her losing consciousness, falling and hitting her head.
Trump promotes conspiracy theory accusing MSNBC’s Joe Scarborough of murder - POLITICO;
PolitiFact: Donald Trump’s Pants on Fire ‘unsolved mystery’ attack on Joe Scarborough
Never mind that Ms. Klausutis died in Fort Walton Beach, Florida when Scarborough was in Washington, DC.
Never mind there is zero proof connecting him with her death.
Never mind that Ms. Klausutis was happily married.
Facts are not relevant in Trump's America where non-stop lying, demagoguery, authoritarianism, and viciousness are rewarded as virtues.
Donald enjoys around 95% support from republicans.
The reference to OBAMAGATE involves one of Donald's Fake News reality creations, propagated by Trump TV, which is designed to manipulate the brain dead. What 'Obamagate' Is Really About - The Atlantic
The statement that Democrats were trying to steal a special election in California's 25th congressional district has no factual basis, but Donald never needs facts to support a declarative accusation, nor does the accusation even need to be consistent with what he has said on the same subject matter.
This is another tweet from Don the Authoritarian on this subject:
Demagogue Don is referring to a decision made by the republican mayor of Lancaster R. Rex Parris to open a precinct that leans toward Democrats for in person voting. Trump's jaw-dropping attack on California's voting plan Voting centers were also established in republican precincts. In Trump's America, those in person votes can be counted.
Donald of course does not see the inconsistency in claiming that mail-in ballots are rife with fraud and that allowing some people to vote in person has the same result when he so declares without evidence.
The rest of the comments are consistent with a demagogue that has strong authoritarian tendencies.
For Trump, All Democratic Election Wins are ‘Rigged’
Trump’s wild claims of voter fraud blow back on campaign aide
Trump will claim voter fraud even when he wins.
Discussed in Stocks, Bonds & Politics: Trump and Massive Voter Fraud Allegations-Cover For Voter Suppression
What is Donald doing other than manipulating the brain dead? He is insulting their intelligence and relying on their continued ignorance.
Howard Stern made the following observation about how Donald views his supporters last week:
“The oddity in all of this is the people Trump despises most, love him the most. The people who are voting for Trump, for the most part … He wouldn’t even let them in a f*cking hotel. He’d be disgusted by them. Go to Mar-a-Lago, see if there’s any people who look like you. I’m talking to you in the audience.”
Howard Stern Says Donald Trump “Despises” MAGA Voters – Deadline
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The Wisconsin Supreme Court recently heard arguments challenging the lawfulness of a stay-at-home order. That court is dominated by republican justices.
When the attorney for the Democrat administration pointed to the rapid spread from major cities to rural counties, particularly Brown County, to highlight the ongoing risk, the republican Chief Justice Patience Roggensack replied that the increase in Brown County was related to a meat packing plant and wasn't from "the regular folks". Chief justice: Coronavirus spread at meatpacking plant not affecting 'regular folks'; Wisconsin Supreme Court justice called 'elitist' for meatpacking remark
The Court then ruled 4 to 3 that the governor was powerless to protect the Wisconsin residents from a pandemic through extending a stay-at-home order. The challenge to the governor's authority to issue the order was made by republican legislators whose argument was accepted by a republican dominated Wisconsin Supreme Court.
It looks like Wisconsin businesses will soon open without legal restraints, though some businesses may voluntarily observe precautions to protect employees and customers. Wisconsin Supreme Court strikes down stay-at-home order
Wisconsin Gov. Tony Evers calls his state ‘the Wild West’ after bars reopen immediately following Supreme Court ruling - The Washington Post In the pictures that I have seen, social distancing is not being followed by most people.
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FBI serves warrant on Sen. Richard Burr (R-NC) in stock investigation
E.P.A. Opts Against Limits on Water Contaminant Tied to Fetal Damage
One man lost his life savings in a SIM hack. Here's how you can try to protect yourself - CNN
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1. Small Ball:
A. Restarted IRT-Bought 50 at $9.59; 10 at $9.02; 5 at $8.5; 5 at $7.5; 30 at $8.1; 5 at 7 and Eliminated IRT at $9.92 after Dividend Slash:
Recent History This Account:
Quote: Independence Realty Trust Inc. (IRT)
Closing Price 5/15/20: IRT $9.08 +$0.16 +1.79%
IRT announced its earnings last week and slashed its quarterly dividend from $.18 per share to $.12. (see discussion below)
I have almost no tolerance for dividend cuts and less tolerance now that such actions have become commonplace.
Profit Snapshot: +$114.31
SEC Filings
IRT Apartment Map
Investment Category: Equity REIT Common and Preferred Stock Basket Strategy
Current Position: None
Last Earnings Report (Q/E 3/31/20):
"IRT expects to reduce its quarterly common stock dividend, beginning with the dividend for the second quarter of 2020, from $0.18 per share (an annual rate of $0.72 per share) to $0.12 per share (an annual rate of $0.48 per share).
On 2/24/20, IRM sold 10.35M shares at a public offering price of $15.3.
Independence Realty Trust Announces First Quarter 2020 Financial Results
Prior Sell Discussions: Item # 1.A. Sold 150 IRT at $11.73 (6/26/19 Post)(profit snapshot= $799.79); Item # 1.A. Sold 121+ IRT at $10.91 (6/8/19 Post)(profit snapshot = $427.88); Item # 1.A. Sold 57+ IRT at $10.27 in a Roth IRA Account and Item #1 B. Sold 50 IRT at $10.38-Used Commission Free Trade (9/26/18 Post)(profit snapshots =$328.25); Item 1.C. Sold 50 IRT at $10.09 (6/21/18 Post)(profit snapshot =$27.12); Item # 3.A. Sold 127 IRT at $10.52-Used Commission Free Trade (5/29/18 Post)(profit snapshot = $362.17); Items 1, 2, 3 Update For Equity REIT Basket Strategy As Of 7/28/16 - South Gent | Seeking Alpha (profit snapshots = $197.94)
Prior Buy Discussions: Item # 1.A. Added 50 IRT at $9.35-Roth IRA Account (1/21/18 Post); Item # 1 Bought 50 IRT at $6.18 Update For The Equity REIT Basket Strategy As Of 2/22/16 - South Gent | Seeking Alpha; Item # 2 Added 100 IRT at $6.8 Update For EQUITY REIT Basket Strategy As Of 1/29/16 - South Gent | Seeking Alpha
IRT Realized Gain to Date: +$2,480.3 ($2,365.99 in prior trades)
Restart: Before considering a restart, I will want to see the share price fall below $8.
B. Restarted CFG-Bought 2 at $14.47:
Quote: Citizens Financial Group Inc. (CFG)
CFG Analyst Estimates
SEC Filings
Closing Price 5/15/20: CFG $19.92 -$0.23 -1.14%
Admittedly, I was far too timid in this buy. I would note the date of the purchase, and at least I was buying then.
Investment Category: Regional Bank Basket Strategy
Last Elimination: Item # 5.D. Eliminated CFG at $36.07 (9/28/19 Post)
Dividend: Quarterly at $.39 per share ($1.56 annually)
Last Ex Dividend: 4/28/20
Dividend Yield at $14.47: 10.78%
Last Earnings Report (Q/E 3/31/20): 10-Q; Citizens Financial Group, Inc. Reports First Quarter Net Income of $34 million and EPS of $0.03 with Underlying Net Income of $59 million and EPS of $0.09
As with other regional banks, CFG took an earnings hit by setting outside "$600 million pre-tax, or $1.10 per share after-tax, including a reserve build of $463 million pre-tax, or $0.85 per share after-tax, tied to COVID-19 pandemic impacts." That provision may prove to be too much, about right or too little to cover loan losses. The first quarter earnings hit distorts several financial metrics which I use to evaluate bank stocks including ROA and ROE.
"Net interest margin of 3.09% decreased 14 basis points compared to 3.23% in the first quarter of 2019, as the impact of lower interest rates was partially offset by lower funding costs and improved deposit mix, as well as continued mix shift towards better-returning assets. Net interest margin on an FTE basis of 3.10% decreased 15 basis points compared to 3.25% in the first quarter of 2019. Average interest-earning asset yields of 3.91% decreased 43 basis points from 4.34% in the first quarter of 2019, while average interest-bearing liability costs of 1.14% decreased 40 basis points from 1.54% in the first quarter of 2019." (page 14)
Tangible Book Value Per Share: Reported at $32, up 8% Y-O-Y
I currently own 4 CFG senior unsecured bonds that mature next year. Item # 2.B. Bought 2 CFG 2.375% SU Maturing on 7/28/21 at a TC of 98.838 (4/14/19 Post); Item # 3.B. Bought 2 CFG 2021 SU at a Total Cost of 98.92 (1/27/17 Post); Citizens Financial Group- Bond Facts by FINRA
C. Added 5 JRI at $8.95; 10 at $8.09; 10 at $10.16; 10 at $10.66:
Quote: JRI | Nuveen Real Asset Income & Growth Fund Overview
Closing Price 5/15/20: JRI $10.25 -$0.02 -0.19%
SEC Filings: SEC Filings
Sponsor's Website: JRI - Nuveen Real Asset Income and Growth Fund
Leveraged: Yes at 27.51% as of 3/31/20
Holdings: 411 as of 3/31/20
Last SEC Filed Shareholder Report: Nuveen Real Asset Income and Growth Fund (period ending 12/31/19)
Data Date of 3/18/20 Trade:
Closing Net Asset Value Per Share: $10.4
Closing Market Price: $7.42
Discount: -28.65%
Data Date of 3/24/20 Trade:
Closing Net Asset Value Per Share: $10.47
Closing Market Price: $7.86
Discount: -16.81%
Data Date of 3/27/20 Trade:
Closing Net Asset Value Per Share: $11.81
Closing Market Price: $10.18
Discount: -13.8%
Data Date of 4/16/20 Trade:
Closing Net Asset Value Per Share: $12.64
Closing Market Price: $10.63
Discount: -15.9%
Sourced: JRI-CEF Connect
Last Buy Discussion: Item # 2.F. Restarted JRI: Bought 10 $16.05; 10 at $15.62; 10 at $14.5; 10 at $14.2; 10 at $11.9; 10 at $11.37; 10 at $11 (3/14/20 Post)
Last Sell Discussions: Item # 2.A. Sold 102+ JRI at $17.98 (12/22/19 Post); Item # 4 Sold 100 JRI at $17.23 (10/2/19 Post)
Those eliminations were timed better than the restart of the "small ball buying program" which proved to be premature. I am gradually building the position back up to the 200 shares previously owned.
Current Position: 131+ shares
Purchase Restriction: Each subsequent purchase must reduce my average cost per share.
Average Cost Per Share: $12.05
Dividend: Currently at $.0965 ($1.158 annually)
Until recently the penny rate was at $.117 (partial ROC support)(annual rate at $1.404)
Dividend Yield at Average Cost: 9.61%
Last Ex Dividend Date: 5/14/20
Dividend Reinvestment: Yes, as long as the discount to net asset value exceeds 10%.
D. Added in Fidelity Account 10 ORKLY at $7.65; 10 at $7.3 and 20 at $9.03; 10 at $8.29:
Current Position Fidelity Account: 110 Shares
Closing Price 5/15/20: ORKLY $8.30 -$0.17 -2.01% (ADR traded on the U.S. pink sheet exchange and priced in USDs)
Average Cost Per Share = $8.31
I decided to buy the 20 share lot on 4/22, which rounded the position up to 100 shares in this account, after reviewing this report that I viewed favorably. Growth for Orkla's branded consumer goods - Orkla.com
This was the first quarter sales report. As with many consumer product companies, Orkla is experiencing increased sales related to the pandemic in both its food, snack and personal care lines.
The earnings report was released on 5/5/20 and the stock reacted negatively to the report, whereupon I bought another 10 shares at $8.29. IMO, the negative reaction was unjustified.
Quotes:
NOK Priced Ordinary Shares: ORK.OL
USD Priced ADR Pink Sheet Exchange: ORKLY
Investor Relations - Orkla.com
About Orkla - Orkla.com
Orkla Foods - Orkla.com
Orkla Confectionery & Snacks - Orkla.com
Orkla Care - Orkla.com
Orkla Food Ingredients - Orkla.com
Last Pare: Item # 4.B. Sold 100 ORKLY at $10.1 (1/5/20 Post)
Last Buy Discussions: Item # 1.C. Added 20 ORKLY at $7.76 (1/23/19 Post); Item # 1.B Added 20 ORKLY at $8.15 (7/22/18 Post); Item # 1.A. Bought 10 ORKLY at $9.22 and 10 at $9.09 (5/7/18 Post)
Last Earnings Report (Q/E 3/31/20): Higher in-home consumption of food and cleaning products spurred growth for Orkla - Orkla.com
Sourced: Q1-2020-Report.pdf
Orkla needs to dispose of its 46.2% interest in Jotun, a manufacture of paints and powder products and to use the proceeds to buyback stock and to expand its core consumer product businesses. Jotun - Orkla.com
ORKLA also owns a hydroelectric plant and an 85% interest in a power company. Hydro Power - Orkla.com
Other businesses outside of its core operations are Forside - Orkla Eiendom (real estate) and Orkla Ventures.
Dividend: Annually, usually goes ex dividend in April. There have been some special dividends. The last one that I received was paid in March 2017.
Those amounts are expressed in Norwegian Krone.
Norwegian Krone Plunges vs US Dollar, Euro on Covid-19 Outbreak (3/19/20) Since ORKLY is a USD priced ADR, the decline in the NOK/USD exchange rate will flow through into the USD share price. The result will be that the USD priced shares will underperform the ordinary shares priced in NOKs.
XE: Convert NOK/USD. Norway Krone to United States Dollar
Prior Round-Trips:
Sold 100 ORKLY-Update On Portfolio Positioning And Management - South Gent | Seeking Alpha August 2015 (+$51.08)- Bought Back 100 Orkla (ORKLY) At $7.285 - South Gent | Seeking Alpha December 2014
Item # 4 Sold 100 ORKLY at $9 (9/6/14 Post)(profit snapshot $122.48)-Item # 2. Bought 100 ORKLY at $7.61 (1/13/14 Post)
Total ORKLY Trading Profits: $243.98
E. Added 5 IGR at $3.75 and 50 at $5.69; 10 at $5.1:
Quote: IGR | CBRE Clarion Global Real Estate Income Fund Overview
This CEF owns global equity REIT common stocks and U.S. equity REIT preferred stocks. If the fund still owns the preferred stocks listed in the last filed shareholder report (see link below), it took a major hit in several of them. The fund was over exposed to hotel REIT preferred stocks and to EPRPRG. It is possible that those preferred shares were sold.
The preferred stocks listed in the filing as of 12/31/19 were as follows:
The Sunstone preferred stocks have held up better than most other hotel REIT preferreds.
SHO.PRE | Sunstone Hotel Investors Inc. 6.95% Cum. Redeem. Pfd. Series E Overview
SHO.PRF | Sunstone Hotel Investors Inc. 6.45% Cum. Pfd. Series F Overview
The Pebblebrook preferred shares are doing less well:
PEB.PRD | Pebblebrook Hotel Trust 6.375% Cum. Redeem. Pfd. Series D Overview
PEB.PRF | Pebblebrook Hotel Trust 6.3% Cum. Redeem. Pfd. Series F Overview
IGR SEC Filings
Last SEC Filed Shareholder Report (period ending 12/31/19). I do not know whether the fund owns those preferred stocks now.
Dividends: Monthly at $.05 per share (supported by ROC)
CBRE Clarion Global Real Estate Income Fund (NYSE: IGR) Declares Monthly Distribution for May
Next Ex Dividend Date: 5/19/20
Dividend Reinvestment: Yes, for as long as reinvestment price is letter to be at a greater than 10% discount to net asset value per share.
Leveraged: Yes, see page 19, borrowings "bear interest at the Federal funds rate plus 75 basis points. At December 31, 2019, there were borrowings in the amount of $121,019,500 on the Trust’s line of credit." So the cost of borrowings have come down due to the FED cutting the FF range down to 0%-.25%.
Last Sell Discussions: Item # 1.C. Sold 9 IGR at $8.33 (2/19/20 Post)(sold shares bought with dividends); Item # 2.A. Sold 100 IGR at $8.01 (12/28/19 Post)
Last Buy Discussion: Item # 2.D. (3/21/2020 Post)
Data Date of 3/23/20 Trade:
Closing Net Asset Value Per Share: $4.8
Closing Price: $4.27
Discount: -18.54%
Data Date of 4/29/20 Trade:
Closing Net Asset Value Per Share: $6.86
Closing Market Price: $5.67
Discount: -17.5%
Data Date of 5/15/20 Trade:
Closing Net Asset Value Per Share: $6.32
Closing Market Price: $5.11
Discount: -19.15%
Sourced: IGR-CEF Connect
F. Added 5 FSK at $1.99:
Quote: FS KKR Capital Corp. (FSK)
Closing Price 5/15/20: FSK $3.1700 -$0.02 -0.63%
Form 10-Q for the Q/E 3/31/20 (description of investments starts at page 4)
Management: External
Recent Historical Net Asset Values Per Share:
3/31/20: $6.09
12/31/19: $7.64
12/31/18: $7.84 FS KKR 10-K at page 71
12/31/17: $9.30 "
Historically, I viewed this BDC as borderline deservedly hated but I am now raising its risk and performance rating to deservedly hated. As with most other externally managed BDCs, FS KKR's managers deserve a massive pay cut to the base compensation fee and an elimination of the "incentive fee". The managers are ridiculously over compensated for what they in fact deliver in shareholder returns. In BDC land, however, failure is richly rewarded.
2019 Annual Report (risk factor summary starts at page 18 and ends at page 44)
Dividend: As expected, FSK cut its quarterly dividend. The new penny rate is $.15 per share, down from $.19 per share.
Next Ex Dividend Date: 6/16/20
Last Earnings Report (Q/E 3/31/20): FSK Announces First Quarter 2020 Results, $250 Million Unsecured Notes Issuance, Amendment of Senior Secured Revolving Credit Facility, and Declares Distribution for Second Quarter
Net investment income = $.19 per share
Net realized and unrealized loss per share =$1.59
"During the period from January 1 to March 31, 2020, FSK repurchased 8.9 million shares at an average price of $4.45 per share. During the period from April 1 to April 13, 2020, FSK repurchased 2.3 million shares at an average price of $3.16 per share."
FS KKR Capital Corp (FSK) CEO Michael Forman on Q1 2020 Results - Earnings Call Transcript | Seeking Alpha
I discuss buying a 2022 FSK SU bond in Item # 4.D. below. I view the bond as risky. The pricing indicates that the Bond Ghouls view it as junk even though it is still assigned the lowest investment grade ratings by Moody's and Fitch.
G. Added 1 MGC at $80:
Quote: MGC - Vanguard Mega Cap ETF | Vanguard
Closing Price 5/15/20: MGC $101.46 +$0.43 +0.43%
Sponsor's Website: MGC - Vanguard Mega Cap ETF | Vanguard
Current Position: 3 shares
Average Cost per share = $83
Expense Ratio: .07%
Last Sell Discussion: Item # 2.C Sold 8 MGC at $108.24 9-Elimination (12/11/2019)
Last Buy Discussion: Item # 2.I. Restarted MGC-Bought 1 at $85 and 1 at $83 (3/21/20 Post)
Top Holdings as of 4/30/20:
I would describe this holding as a placeholder that would be included in a wave buy program during the next meltdown. That kind of trading technique is where I buy a few shares of virtually every existing position.
I will not likely buy more until the price falls below $80. I will sell 1 share when and if the price goes above $105.
H. ADDED 1 DUK AT $65.7:
Quote: Duke Energy Corp. (DUK)
DUK Analyst Estimates | MarketWatch
SEC Filings
Closing Price 5/15/20 = DUK $81.19 -$1.11 -1.35%
Current Position: 19 Shares
Dividend: Quarterly at $.945 ($3.78 annually)
Last Ex Dividend: 5/14/20 (owned all shares as of)
Dividend Reinvestment: No
Last Sell Discussions: Item # 2.G. Sold 1 DUK at $100.73 (3/21/20 Post); Item # 1.C. Sold 2 DUK at $97.05 (2/16/20 Post)
Last Earnings Report (Q/E 3/31/20): SEC Filed Press Release
Adjusted E.P.S. was reported at $1.14, below the FactSet consensus estimate of $1.19.
Revenue fell to $5.949B from $6.163B and below the FactSet consensus of $6.329B.
Duke maintained its full year guidance of adjusted E.P.S. between $5.05 and $5.45.
The company blamed warmer than normal weather during the winter months and severed storms that impacted its service territories in North and South Carolina. Shutdowns may have adversely impacted electricity demand.
This report triggered three firms to lower their price targets while keeping their neutral/equal weight ratings. Barclays lowered its PT to $92 from $93; Morgan Stanley cut its PT to $87 from $96; and BofA Securities went from $93 to $$83. I do not have access to those reports. Collectively, they put pressure on the stock last Friday.
For the most part, I have bought and sold first mortgage bonds issued by DUK's operating electric utilities and have occasionally dabbled in DUK SU bonds. Those bonds have lower yields than the common shares.
Duke Energy has a good dividend growth history for an electric & gas utility IMO. Dividend Information - Our Company - Duke Energy
I. Added 10 PWCDF at $14.11: 10 at $13.85 :
Quote Power Corp. of Canada Stock Quote (PWCDF)- ordinary shares traded in USDs on the U.S. pink sheet exchange.
Closing Price 5/15: PWCDF $13.81 -$0.08 -0.58%
Current Position: 130 shares
Maximum Position: 200 Shares
Average Cost Per Share: US$15.24
I discussed this stock in my last post. Item # 1 (5/9/20 Post)
Since that last discussion, Power Corporation reported first quarter earnings.
Last Earnings Report (Q/E 3/31/20):Power Corporation Reports First Quarter 2020 Financial Results
"Power Corporation declared a quarterly dividend of $0.4475 per participating share payable July 31, 2020. The dividend payment schedule in 2020 was moved ahead by two months and represents a 10.5% increase in comparison with 2019." The dividend is paid in Canadian Dollars and converted into USDs for owners of PWCDF. The dividend is payable to shareholders of record on 6/30/20.
The general trading plan is buy and sell in 10 share lots. Since the price has been declining, I have bought in 10 share lots. I will consider selling 10 shares when and if the price exceeds $17. Using FIFO accounting, the 10 share sells will come out of my highest cost lot which was a 100 share purchase at $15.65. I have sold 10 shares out of that lot at $16.31.
K. Eliminated BRG in Fidelity Account-Sold 107+ at $6.37:
Quote Bluerock Residential Growth REIT Inc. (BRG)
Closing Price 5/15: BRG $5.59 +$0.01 +0.18%
Portfolio - Bluerock Residential Growth REIT
Home - Bluerock Residential Growth REIT
SEC Filings
2019 Annual Report
10-Q for the Q/E 3/31/20 (revolving credit facility information starts at page 19; mortgage list starts at page 21)
Management: Internal as of 10/31/17
Profit Snapshot: $38.12
Dividend: $.1625
Bluerock Residential Growth REIT (BRG) Announces Second Quarter Dividends on Common Stock, 8.250% Series A Cumulative Redeemable Preferred Stock, 7.625% Series C Cumulative Redeemable Preferred Stock, and 7.125% Series D Cumulative Preferred Stock, and May and June Dividends on Series B Preferred Stock and Series T Preferred Stock I still own the Series A preferred stock. I also still own 20+ common shares in another account with a $4.96 average cost per share.
Next Ex Dividend Date: 6/24/20
Last Earnings Report: Bluerock Residential Growth REIT Announces First Quarter 2020 Results ("Pre-COVID-19, entered into sales agreements for the sale of Ashton I & II, Enders Place at Baldwin Park and Marquis at TPC which closed in April 2020 for total sales prices of $160 million.")
I sold some shares at a loss. My intention is to wait 30 days and then evaluate whether I will restart a position in this account. Based on what I know now, I will likely restart before the ex dividend date if the price is below $5.
BRG Realized Gains to Date: $1,147.93
Some Prior Discussions:
Item # 1.C. Sold 60 BRG at $9.9-Used Commission Free Trade (9/26/18 Post)(profit snapshot =$142.16)-Item # 2.A. Bought 50 BRG at $7.6 (2/12/18 Post), Item # 3.D. Added 10 BRG at $7.19 (2/19/18 Post)
Item 3.A. Sold Remaining 50 BRG at $11.45 (10/31/17 Post)
South Gent's Comment Blog # 4: Sold Another 100 BRG
Item # 5. Eliminated BRG in One Taxable Account-Sold 220+ at $13.22: Update For Equity REIT Basket Strategy As Of 8/27/16 - South Gent | Seeking Alpha
Item # 5. Sold 100 BRG at $13.52 Update For Equity REIT Basket Strategy As Of 7/28/16 - South Gent | Seeking Alpha
The remaining 50 common shares were bought at $9.36 in my IB account on 2/16/16: Item # 2 Update For The Equity REIT Basket Strategy As Of 2/22/16 - South Gent | Seeking Alpha
Other Recent News:
Bluerock Residential Growth REIT (BRG) Provides Update on COVID-19 Impact and Response
Bluerock Residential Growth REIT (BRG) Announces 2019 Year End Tax Reporting Information (common stock dividend classified as 100% ROC)
2. Canadian Reset Equity Preferred Stocks:
A. Added 50 AXPRA at C$12.99:
Quote: AX-PA.TO
Issuer: Artis REIT (AX-UN.TO)
Last Discussed: Item # 2.A Added 50 AXPRA at C$23 (2/29/20 Post)
Security: Equity Preferred Stock (senior in the capital structure to common shares only)
Par Value: C$25
Coupon: Currently at 5.662% per annum, paid quarterly
Resets Every 5 Years at a 4.06% spread to the 5 year Canadian Bond
Last Reset: September 2017
Based on the coupon rate of 5.662%, the 5 year Canadian bond was at 1.602% on the reset calculation date.
Canada 5 Year Government Bond Overview | MarketWatch
Next Reset: September 2022
The recent price is partly attributable to concerns that the coupon will reset in September 2022 at a lower coupon than the 9/2017 reset.
Current Dividend Yield at C12.99 = 10.9%
Current Position: 150 shares
Last Ex Dividend Date: 3/30/20
3. Exchange Traded Bonds:
A. Bought 10 CSWCL at $22.25:
Quote: Capital Southwest Corp. 5.95% Notes Due 12/15/22 Overview
Closing Price 5/15: CSWCL $22.78 +$0.36 +1.61%
Trading is light with typically large bid/ask spreads. Fidelity customers are not allowed to buy online. That restriction applies to all BDC exchange traded bonds and a boatload of other securities as well.
CSWCL is a senior unsecured baby bond. It is incorrect to call it a preferred stock as indicated in the snapshot.
Issuer: Capital Southwest Corp. (CSWC) - An internally managed BDC
CSWC SEC Filings
Security: Final Prospectus Supplement
Par Value: $25
Maturity Date: 12/15/22
Issuer Optional Call Date: On or after 12/15/19
Capital Structure Placement: "The Notes will be our direct unsecured obligations and rank pari passu, which means equal in right of payment, with all outstanding and future unsecured unsubordinated indebtedness issued by us."
The notes are junior to senior secured debt which is always the case for senior unsecured debt. This is made clear by the following language which is standard:
"Because the Notes will not be secured by any of our assets, they will be effectively subordinated to all of our existing and future secured indebtedness (or any indebtedness that is initially unsecured as to which we subsequently grant security), to the extent of the value of the assets securing such indebtedness, including, without limitation, borrowings under our senior secured revolving credit facility, as amended, or the Credit Facility, of which we had $86.0 million outstanding as of December 12, 2017. The Notes will be structurally subordinated to all existing and future indebtedness and other obligations of any of our subsidiaries since the Notes are obligations exclusively of Capital Southwest Corporation and not of any of our subsidiaries. None of our subsidiaries is a guarantor of the Notes and the Notes will not be required to be guaranteed by any subsidiary we may acquire or create in the future. In any liquidation, dissolution, bankruptcy or other similar proceeding, the holders of any of our existing or future secured indebtedness may assert rights against the assets pledged to secure that indebtedness in order to receive full payment of their indebtedness before the assets may be used to pay other creditors, including the holders of the Notes, and any assets of our subsidiaries will not be directly available to satisfy the claims of our creditors, including holders of the Notes."
This BDC also has outstanding a 5.375% SU note with a $1K par value maturing in 2024. Prospectus ("The Notes will be our direct unsecured obligations and rank pari passu, which means equal in right of payment, with all outstanding and future unsecured unsubordinated indebtedness issued by us, including our 5.95% Notes due 2022 (the “2022 Notes”), of which $77.1 million in aggregate principal amount was outstanding as of September 23, 2019."); FINRA Bond Detail This bond trades infrequently.
BDC bonds carry a lot of risk.
The first level is that their loans are risky and become more so during a recession. The nation is currently in a recession of unknowable duration and depth.
The second level is that the BDC pays generous dividends to common shareholders. Cash is flying out the door rather than being invested to grow the business. Cash is then raised by incurring more debt and public offerings of common stock. Eliminating or cutting the common share dividend is generally a positive for bond owners.
B. Added 1 DDT at $14.17; 1 at $17.5; 1 at $16; 1 at $15.28:
Quote: Dillard's Capital Trust I 7.5%
Closing Price 5/15: DDT +$15.96 +$0.69 +4.52%
Trading is light with typically large bid/ask spreads.
Category: Exchange Traded Bond
Sub-Category: Trust Preferred Securities
The use of "preferred" in this context is technically correct but nonetheless conveys an incorrect impression of this securities placement in the capital structure. DDT is not an equity preferred stock senior only to common stock and junior to all bonds. This security is a junior bond, which is senior to all equity capital (common and equity preferred) and junior to senior debt.
Last Discussed: Item # 3.C. (3/21/20 Post)
DDT is a junk rated junior bond issued by the department store chain Dillard's Inc. (DDT)
DDS | Dillard's Inc. Analyst Estimates
DDS SEC Filings
2019 Annual Report (credit facility and debt discussed starting at page 31, "To increase our cash position during the COVID-19 pandemic and to provide additional financial flexibility, on March 25, 2020, we borrowed the unutilized availability of $779.0 million from our $800 million revolving credit agreement. The Company still has an option to expand the facility by $200 million.")
Dillard’s, Inc. Reports First Quarter Results (ugly but not as bad as expected and DDS announced that it would be reopening its stores)
The common stock reacted positively to this report last Friday. DDS $25.85 +$2.77 +12.00% I would note, however, that the 52 week is currently at $86.71 and the first quarter loss was huge.
Prospectus
Coupon: 7.5% paid on a $25 par value
Interest Payments: Quarterly
Maximum Position: 50 Shares
Maturity: 8/1/2038 unless redeem earlier at issuer's option which can be exercised at any time now.
Current Position: 18 Shares
Average Cost Per Share: $19.13
Yield at Average Cost: 9.8%
Last Ex Interest Date: 4/15/20
Interest was paid when due.
Trades Flat: Whoever owns the bond on the ex interest date receives the interest payment
Interest Payment Deferral: Interest on the junior bond can not legally be deferred for as long as Dillard's pays a cash dividend to its common shareholders. So far at least, Dillard's is still paying a quarterly cash dividend to those shareholders: Dillard’s, Inc. Announces $0.15 Cash Dividend
As with other junior bonds that permit the issuer to defer payments after cash dividends on common shares is eliminated, interest on the deferred amount accrues at the coupon payment.
4. Short Term Investment Grade Corporate Bonds as an Alternative to MM Funds:
A. Bought 2 Kroger 3.3% SU Bonds Maturing on 1/15/21:
I now own 4 bonds.
FINRA Page: Bond Detail (prospectus linked)
Issuer: Kroger Co. (KR)
KR | Kroger Co. Analyst Estimates | MarketWatch
SEC Filed Earnings Report for the F/Q ending on 2/1/20
KR SEC Filings
Last Bond Offering (1/20): $750M 3.95% SU notes maturing in 2050
Credit Ratings:
Bought at a Total Cost of 99.6 (includes $1 per bond commission)
YTM at Total Cost: 3.808%
Bought at 99.5
B. Bought 2 Toronto Dominion 2.5% SU Bonds Maturing on 12/14/20:
Finra Page: Bond Detail (prospectus linked)
Issuer: Toronto-Dominion Bank (TD)
TD | Toronto-Dominion Bank Analyst Estimates | MarketWatch
Credit Rating: Moody's at Aa1
Bought at a Total Cost of 99.237 (includes $1 per bond commission)
YTM at Total Cost = 3.588%
Bought at 99.127
C. Bought 2 Regions Financial 3.2% SU Bonds Maturing on 2/8/21:
FINRA Page: Bond Detail (prospectus linked)
Issuer: Regions Financial Corp. (RF)
RF | Regions Financial Corp. Analyst Estimates | MarketWatch
2019 Annual Report
RF SEC Filings
Credit Ratings:
Bought at a Total Cost of 98.957 (includes $1 per bond commission)
YTM at Total Cost = 4.44%
Bought at 98.857
D. Bought 2 FS KKR 4.75% SU Bonds Maturing on 5/15/22:
FINRA Page: Bond Detail (prospectus not linked)
Prospectus
Issuer: FS KKR Capital Corp. (FSK) - A BDC
2019 Annual Report SEC Form 10-K
FS KKR SEC Filings
Credit Rating:
Fitch Affirms FS KKR Capital Corp's Ratings at 'BBB-'; Outlook Revised to Negative
I expecting a one notch downgrade to junk.
Total Cost of 98.409 (with $2 Commission)
YTM at TC = 5.592%
Current Yield at TC = 4.8268%
The YTM and current yield indicate that the Bond Ghouls view FS KKR as a junk credit. I may end up regretting this purchase since I view the external managers as incompetent as noted above.
For this BDC, my maximum bond exposure is 2 $1K par value bonds. If I wanted to buy 2 of another maturity, I would have to sell this 2022 bond. And that is not subject to rational disagreement IMO.
E. Early Redemptions 5/14 to 5/18 Fidelity Taxable Account:
Fidelity will credit my account over the weekend with bond proceeds that will be paid on Monday.
I am receiving now an abundant number of early bond redemptions.
Two of the four referenced below had make whole payments attached to exercise of the issuer's early redemption right: Ipalco and Plum Creek Timber.
The other 2 were redeemed one month early without a make whole payment. Most $1K par value bonds allow the issuer to redeem within 1 to 3 months prior to maturity at par value plus accrued interest. And, most of those are limited to 1 month (e.g. Southern Company and Wisconsin Energy included in the snapshots below).
Almost of the cash received from early redemptions and regularly scheduled redemptions are landing in broker sweep accounts. I do not view the reinvestment options, either in stocks or bonds, as attractive.
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.
Jobless claims climb another 2.981 million amid coronavirus shutdowns - MarketWatch This brings the tally to 36.5M.
Fed's Powell: More policy help may be needed to pull US out of downturn Powell expressed an opinion that more stimulus may be necessary to avoid "lasting" damage to the economy. He also stated that it is likely that the economy will face an "extended period" of weakness. And, in his words, "the recovery may take some time to gather momentum, and the passage of time can turn liquidity problems into solvency problems." Powell Speech on Current Economic Issues
Retail sales crater record 16% in April amid coronavirus lockdowns and spending slump - MarketWatch; Government Retail Sales Report.pdf
U.S. wholesale inflation sinks in February on lower oil prices as coronavirus hinders travel - MarketWatch
U.S. runs $737.9 billion April budget deficit: Treasury - MarketWatch
The N.Y. Fed Empire State Manufacturing index for May was reported at -48.5%:
+++++
Markets and Market Commentary:
Why Stanley Druckenmiller says the risk-reward of investing in stocks has never been worse in his career- MarketWatch
This is ‘second-most overvalued’ stock market that billionaire investor David Tepper has ever seen - MarketWatch
Stock market investors are ‘too optimistic’ over 2020 earnings and the 2021 recovery, ING strategists say - MarketWatch ING believes that investors are pricing a 20% decline in SPX earnings this year, which the strategists view as too optimistic, followed by a 25% recovery in 2021. I would agree that investors are looking through an awful 2020 and projecting robust growth next year. I do not agree that the current SPX index level prices a 20% decline this year, more like pretending that the decline is irrelevant.
Investors should prepare for a U.S. ‘economic depression,’ warns Kyle Bass, but China’s fate could be even worse - MarketWatch
Surge in layoffs is unlikely to help profits, no matter what the market thinks With 86% of SPX companies reporting 1st quarter results, FactSet claims that earnings have declined 13.6% with forecasts for the second quarter at a 40.6% decline; -23% in the third and 11.4% in the 4th.
Nelson Peltz says he's bullish on a vaccine, putting new money to work and voting for Trump
Federal Reserve helps companies load up on more debt amid coronavirus fallout - The Washington Post
Neiman Marcus and J.Crew could survive bankruptcy filings, experts say - MarketWatch
Tanger Reports First Quarter Results & Provides COVID-19 Update; Tanger Factory suspends dividend (NYSE:SKT) | Seeking Alpha; Tanger collects 12% of April rent, sees liquidity sufficient for two years (NYSE:SKT) | Seeking Alpha
PennantPark Investment cuts quarterly dividend to $.12 from $.18
Preferred Apartment +5.5% after Q1 FFO beats; cuts quarterly dividend from $.265 per share to $.175 (NYSE:APTS) | Seeking Alpha
Investcorp Credit Management BDC, Inc. Reports Results for its Fiscal Third Quarter Ended March 31, 2020 (cuts regular dividend to $.15 per share from $.25)
Chatham Lodging April RevPAR slides 82.7% (NYSE:CLDT) | Seeking Alpha; Chatham Lodging Trust Announces First Quarter 2020 Results
Kimco Realty Announces First Quarter 2020 Results ("The company received rent deferral requests approximating 35% of Kimco’s pro-rata minimum base rent for the month of April, with the company selectively granting deferrals for 14% of the minimum base rent for this period. The company continues to negotiate for the payment of the remaining April rent not yet collected.") Kimco suspended its common share divided.
‘What we are confronting now is really unprecedented.’ Coronavirus-related lawsuits are about to flood the courts - MarketWatch
++++
Trump:
Trump (5/12/20): “We have met the moment and we have prevailed.” Trump says 'we've prevailed'
 |
| As of 5/15/20 |
3 takeaways from coronavirus whistleblower Rick Bright’s testimony (1.) lives were lost because of inaction after warnings; (2) Trump and his administration pushed unproven drugs; and (3) some pessimism about a vaccine in 12 to 18 months).
A Trump Official Tried to Fast-Track Funding for His Friend’s Unproven COVID-19 “Treatment,” Whistleblower Says
Whistleblower Rick Bright testifies as Trump blasts him; Hear ousted chief Richard Bright's opening statement - CNN Video The government watchdog has found a "substantial likelihood of wrongdoing" in the removal of Dr. Bright. The scientific opinions expressed by Dr. Rick Bright, who questioned Doctor Don's medical recommendations, are not acceptable in TrumpWorld either.
Donald lacks actual factual foundations for his opinions. He does express his opinions as facts and in a firm, dominant tone that attempts to convey knowledge when there is none.
Since my last post was published, another study found Doctor Don's "miracle drug" does not help COVID-19 patients and increases the risk of heart attacks. Coronavirus: Tump-touted drug doesn't help patients, but raises heart attack risk, study says
Prestige Ameritech offered on 1/23/20 to make millions of N95 masks in Texas. The government turned him down.-The Washington Post Trump's Administration turned down this offer. This company was a U.S. manufacturer capable of producing 7 million N-95 masks per month. Prestige Ameritech's VP, Mike Bowen, warned the government that there was a mask shortage and the risk to human life was imminent. Dr. Rick Bright wrote in 1/26/20 email that the higher ups were ignoring the warning. Bright is apparently referring to the political appointee Robert Kadlac. HHS Refused to Secure N95 Masks for Coronavirus, Whistleblower Says
Trump vows complete end of Obamacare law despite pandemic
Trump Contradicts Nurse Who Reports Shortages of Protective Gear
After 27,000 nursing-home deaths, White House now recommends coronavirus tests in all facilities - MarketWatch
Trump says he'd consider ordering states to test nursing home residents
White House Orders Staff to Wear Masks as Trump Misrepresents Testing Record - The New York Times
Coronavirus (COVID-19) Testing - Statistics and Research - Our World in Data The U.S. is catching up three months into the pandemic.
Obama says White House response to coronavirus has been 'absolute chaotic disaster'--Trump charges Obama with 'biggest political crime in American history'
Trump says coronavirus will disappear without a vaccine. Fauci has said the opposite. COVID-19 may disappear in its current form within two years, but viruses do not disappear. They linger around and mutate.
The Trump Campaign War Against Truth is well under way. Trump's Misleading Ad on Coronavirus Testing - FactCheck.org
Seasonality of SARS-CoV-2: Will COVID-19 go away on its own in warmer weather?-Harvard's Center for Communicable Disease Dynamics;
Will Coronavirus Ever Go Away? What a Top WHO Expert Thinks-Time; Spanish flu: the killer that still stalks us, 100 years on-The Guardian (some of the Spanish flu genes are still circulating in human and pig populations, with some of them being direct descendants while others have combined with more contemporary pandemic virus including the Hong Kong flu in 1968 and the Swine Flu pandemic in 2009.
Melinda Gates says US coronavirus response is 'chaos,' gives Trump administration a D-minus grade
Trump ends press conference after female reporters challenge him on testing The video clip embedded in that article proves once again, when no further proof is necessary, that Donald is just a egomaniacal jerk.
Republican voters give Trump and GOP governors cover to reopen
++
Trump and the Imperial Presidency:
Yesterday, Don the Authoritarian fired the State Department's Inspector General for doing his job. Trump fires State Department inspector general Steve Linick
The U.S. Supreme Court heard oral arguments last week in a case where Donald is asserting that his tax returns and related documents held by his accountants are "categorically immune" from being produced in response to a grand jury's criminal inquiry.
Donald is appealing a decision by the U.S. Court of Appeals for the Second Circuit that held unanimously that the accountants had to produce the documents in response to a grand jury subpoena. Lawfare During oral argument, Trump's attorney argued that a sitting President would be immune from an investigation even if he shot and killed someone.
The Chief Judge for the Second Circuit wrote the opinion which contains the following noteworthy footnote:
Supreme Court Brief Filed by Donal J. Trump: Brief for Petitioner.pdf
Barr's DOJ filed a brief supporting Trump's absolute immunity from investigation, even when the documents being sought are held by a third party: UnitedStates Amicus Brief.pdf The accountants are not contesting the subpoena: Letter
+++++
Donald's Rogue DOJ and the Michael Flynn Case:
Michael Flynn, Donald's former National Security Advisor, pled guilty to lying to the FBI about his contacts with Russia's ambassador. He made that admission twice under oath.
A report prepared by the DOJ's inspector general found there was sufficient evidence to investigate Flynn.
The purported reason given by Barr is that the FBI discussed internally whether or not to tell Barr about the intercepted conversation or to simply ask him about the contents of his conversations with the Russian ambassador.
The decision was made that the FBI agents interviewing Flynn would not disclose to him that his conversations with the Russian ambassador were intercepted by U.S. intelligence and recorded.
Giving Flynn the choice to tell the truth or to lie is not entrapment, no matter how many times Trump TV and Trump make that claim.
The Justice Department has dropped Michael Flynn’s case - Vox
Michael Flynn: Filing error adds to twists of criminal case reversal Barr had his favorite toad, Timothy Shea, file the motion. DOJ’s About-Face on Stone Case Reeks of Improper Influence (Shea was doing Barr's bidding in that one too)
As noted by a former Assistant Attorney General for National Security, Barr's DOJ misrepresented in its court filing the evidence and relied on specious arguments.
Opinion | Bill Barr Twisted My Words in Dropping the Flynn Case. Here’s the Truth. - The New York Times;
Ex-DOJ official claims Barr "twisted" her words in motion to dismiss Flynn case - Axios;
Justice Dept. rattled as Flynn fallout reaches FBI - The Washington Post
Barr's decision was not a legal one but a political one made at Donald's insistence.
“Bill Barr’s America is not a place that anyone, including Trump voters, should want to go,” according to Donald Ayer, who served as deputy attorney general under the first President Bush. “It is a banana republic where all are subject to the whims of a dictatorial president and his henchmen.” Donald Ayer: Bill Barr Must Resign - The Atlantic
William Barr is a renegade Attorney General who sacrifices the rule of law and fundamental legal principles in pursuit of his far right ideology and slavish devotion to Don the Authoritarian. Under his leadership, the DOJ has become a political weapon used to reward friends and punish enemies and an instrument to further implement an authoritarian version of the imperial presidency doctrine.
Judge Emmett Sullivan, the federal judge overseeing the Flynn case, may have no choice but to dismiss the case under Rule 48 (a) of the Federal Rules of Criminal Procedure and applicable case law (Rinaldi v. United States, 434 U.S. 22 (Supreme Court 1977); The Justice Department Wants to Drop Flynn’s Case. Can the Judge Say No? - Lawfare
There is some leeway under Rinaldi to reject the DOJ's motion to set aside Flynn's guilty plea and to dismiss the criminal case against him. The Court can reject the DOJ's motion to dismiss by finding that it was "tainted with impropriety". I view that conclusion as supported by what is known now.
Sullivan's appointment of a former federal judge to make recommendations is an indication that he wants to keep this option and others open. Court asks retired judge to oppose Justice Dept. effort to drop Michael Flynn case, examine whether ex-Trump adviser committed perjury - The Washington Post
One of those options, which the retired judge will examine, is whether or not to hold Flynn in criminal contempt of the court. Judge questions if Michael Flynn is perjuring himself and appoints retired judge to examine case Sullivan has control over that option rather than the DOJ.
Judge Sullivan is going to allow third parties to submit briefs to discuss the government's decision to drop charges after Flynn plead guilty. Judge slows down effort to drop Flynn case - POLITICO; John Gleeson, David O’Neil and Marshall Miller: The Flynn case isn’t over until the judge says it’s over - The Washington Post
If Judge Sullivan dismisses the criminal case under this circumstance, the dismissal will not be a vindication of Flynn, even though Donald and Trump TV will make that claim, but simply a legally required decision after Barr made the politically motivated decision to drop the prosecution.
Over 1,900 Former DOJ Officials Call on AG William Barr to Resign for assaulting the rule of law - Rolling Stone
It is not surprising that Barr's DOJ misled Judge Sullivan in the manner described in this article: Ex-F.B.I. Official Is Said to Undercut Justice Dept. Effort to Drop Flynn Case
The question now is whether voters want another 4 years of William Barr and Donald Trump undermining the rule of law.
'A Pardon by Another Name': Lawyers Decry Barr's Move to Dump Flynn Case | National Law Journal
The Michael Flynn case is a sign of what’s to come with Barr’s Justice Department and Trump.
++++
Covid-19 Updates:
How a superspreader at choir practice sickened 52 people with COVID-19 | Live Science
Simply talking in confined environments could lead to coronavirus transmission, researchers say;
‘Speaking causes airborne virus transmission:’ Coroanvirus study gives more insight into the disease’s rapid contagion - MarketWatch
What lesson has Donald and his supporters learned from the infection rates in confined spaces, including cruise ships, meat packing plants, prisons and nursing homes and how the disease spreads out from those type of settings.
Coronavirus hot spot in Minnesota connected to surge of cases at meatpacking plant
Abbott Test Misses Many Coronavirus Cases - Study - TheStreet The Abbott device is used by the White House to screen people.
More than 1,800 prison inmates are infected with COVID-19 in Tennessee, TDOC says (about 54% of those tested have the infection) When there are a significant number of people in closed areas, COVID-19 has proven it will spread widely and rapidly. This was established early in the pandemic. The question is whether it is possible to protect those working or living in confined spaces, which would include offices, manufacturing plants, nursing homes and prisons.
Exclusive: Health official quits after being pushed to reopen Weld County, Colorado and hot-spot meat plant - MarketWatch Weld County is run by republicans.
About 100 N.Y. Children Show Symptoms of Illness Tied to Virus The illness is being called Pediatric Multisystem Inflammatory Syndrome (PMIS).
 |
| Symptoms |
White House report shows coronavirus rates spiking in heartland
Doctors keep discovering new ways the coronavirus attacks the body
Testing uneven, or nonexistent, at meatpacking plants with COVID-19 outbreaks
New coronavirus cluster in California city due to party
Floridians aren't following virus safety measures, survey says. Thousands won't stay home
CDC finds New York City coronavirus death toll may be thousands worse than official tally
Fauci puts it bluntly: Coronavirus deaths are undercounted
Germany Sees New Coronavirus Cases Nearly Triple as Lockdown Is Eased
++++
Sample of Recent Tweets from Demagogue Don (Just 5/11 and 5/12):
In the first tweet reproduced below, Disgusting Don is accusing Joe Scarborough, a former republican congressman and critic, of murdering his intern Lauri Klausutis.
Never mind that the autopsy report found that she had "a floppy mitral valve disease" which caused her to go into cardiac arrhythmia that resulted in her losing consciousness, falling and hitting her head.
Trump promotes conspiracy theory accusing MSNBC’s Joe Scarborough of murder - POLITICO;
PolitiFact: Donald Trump’s Pants on Fire ‘unsolved mystery’ attack on Joe Scarborough
Never mind that Ms. Klausutis died in Fort Walton Beach, Florida when Scarborough was in Washington, DC.
Never mind there is zero proof connecting him with her death.
Never mind that Ms. Klausutis was happily married.
Facts are not relevant in Trump's America where non-stop lying, demagoguery, authoritarianism, and viciousness are rewarded as virtues.
The reference to OBAMAGATE involves one of Donald's Fake News reality creations, propagated by Trump TV, which is designed to manipulate the brain dead. What 'Obamagate' Is Really About - The Atlantic
The statement that Democrats were trying to steal a special election in California's 25th congressional district has no factual basis, but Donald never needs facts to support a declarative accusation, nor does the accusation even need to be consistent with what he has said on the same subject matter.
This is another tweet from Don the Authoritarian on this subject:
 |
| Trump: Do Not Count In-Person Votes made in a Precinct Likely to be Won by the Democrat Candidate |
Donald of course does not see the inconsistency in claiming that mail-in ballots are rife with fraud and that allowing some people to vote in person has the same result when he so declares without evidence.
The rest of the comments are consistent with a demagogue that has strong authoritarian tendencies.
For Trump, All Democratic Election Wins are ‘Rigged’
Trump’s wild claims of voter fraud blow back on campaign aide
Trump will claim voter fraud even when he wins.
Quotes From 2017 Trump Interview:
"DAVID MUIR: Do you think that that talking about millions of illegal votes is dangerous to this country without presenting the evidence?
PRESIDENT TRUMP: No, not at all.
(OVERTALK)
PRESIDENT TRUMP: Not at all because many people feel the same way that I do. And ...
DAVID MUIR: You don't think it undermines your credibility if there’s no evidence?
(OVERTALK)
PRESIDENT TRUMP: No, not at all because they didn't come to me. Believe me. Those were Hillary votes. And if you look at it they all voted for Hillary. They all voted for Hillary. They didn't vote for me. I don't believe I got one. Okay, these are people that voted for Hillary Clinton. And if they didn't vote, it would've been different in the popular." (emphasis added)
DAVID MUIR: What you have presented so far has been debunked. It's been called ...
(OVERTALK)
DAVID MUIR: ... false.
PRESIDENT TRUMP: No, it hasn't. Take a look at the Pew reports.
DAVID MUIR: I called the author of the Pew report last night. And he told me that they found no evidence of voter ...
(OVERTALK)
DAVID MUIR: ... fraud.
PRESIDENT TRUMP: Really? Then why did he write the report?
DAVID MUIR: He said no evidence of voter fraud.
PRESIDENT TRUMP: Excuse me, then why did he write the report?
(OVERTALK)
PRESIDENT TRUMP: According to Pew report, then he's -- then he's groveling again. You know, I always talk about the reporters that grovel when they wanna write something that you wanna hear but not necessarily millions of people wanna hear or have to hear."
End of Quotes:
TRANSCRIPT: ABC News Anchor David Muir Interviews President Trump - ABC NewsDiscussed in Stocks, Bonds & Politics: Trump and Massive Voter Fraud Allegations-Cover For Voter Suppression
What is Donald doing other than manipulating the brain dead? He is insulting their intelligence and relying on their continued ignorance.
Howard Stern made the following observation about how Donald views his supporters last week:
“The oddity in all of this is the people Trump despises most, love him the most. The people who are voting for Trump, for the most part … He wouldn’t even let them in a f*cking hotel. He’d be disgusted by them. Go to Mar-a-Lago, see if there’s any people who look like you. I’m talking to you in the audience.”
Howard Stern Says Donald Trump “Despises” MAGA Voters – Deadline
++++++++
The Wisconsin Supreme Court recently heard arguments challenging the lawfulness of a stay-at-home order. That court is dominated by republican justices.
When the attorney for the Democrat administration pointed to the rapid spread from major cities to rural counties, particularly Brown County, to highlight the ongoing risk, the republican Chief Justice Patience Roggensack replied that the increase in Brown County was related to a meat packing plant and wasn't from "the regular folks". Chief justice: Coronavirus spread at meatpacking plant not affecting 'regular folks'; Wisconsin Supreme Court justice called 'elitist' for meatpacking remark
The Court then ruled 4 to 3 that the governor was powerless to protect the Wisconsin residents from a pandemic through extending a stay-at-home order. The challenge to the governor's authority to issue the order was made by republican legislators whose argument was accepted by a republican dominated Wisconsin Supreme Court.
It looks like Wisconsin businesses will soon open without legal restraints, though some businesses may voluntarily observe precautions to protect employees and customers. Wisconsin Supreme Court strikes down stay-at-home order
Wisconsin Gov. Tony Evers calls his state ‘the Wild West’ after bars reopen immediately following Supreme Court ruling - The Washington Post In the pictures that I have seen, social distancing is not being followed by most people.
++++
FBI serves warrant on Sen. Richard Burr (R-NC) in stock investigation
E.P.A. Opts Against Limits on Water Contaminant Tied to Fetal Damage
One man lost his life savings in a SIM hack. Here's how you can try to protect yourself - CNN
+++++++
1. Small Ball:
A. Restarted IRT-Bought 50 at $9.59; 10 at $9.02; 5 at $8.5; 5 at $7.5; 30 at $8.1; 5 at 7 and Eliminated IRT at $9.92 after Dividend Slash:
Recent History This Account:
Quote: Independence Realty Trust Inc. (IRT)
Closing Price 5/15/20: IRT $9.08 +$0.16 +1.79%
IRT announced its earnings last week and slashed its quarterly dividend from $.18 per share to $.12. (see discussion below)
I have almost no tolerance for dividend cuts and less tolerance now that such actions have become commonplace.
Profit Snapshot: +$114.31
IRT Apartment Map
Investment Category: Equity REIT Common and Preferred Stock Basket Strategy
Current Position: None
Last Earnings Report (Q/E 3/31/20):
"IRT expects to reduce its quarterly common stock dividend, beginning with the dividend for the second quarter of 2020, from $0.18 per share (an annual rate of $0.72 per share) to $0.12 per share (an annual rate of $0.48 per share).
Same store net operating income (“NOI”) growth of 7.0% for the quarter ended March 31, 2020 compared to the quarter ended March 31, 2019.
Core Funds from Operations (“CFFO”) of $17.6 million for the quarter ended March 31, 2020 as compared to $16.0 million for the quarter ended March 31, 2019. CFFO per share was $0.19 for the first quarter of 2020 as compared to $0.18 for the first quarter of 2019.
For the three months ended March 31, 2020, recurring capital expenditures for the total portfolio were $1.3 million, or $84 per unit."
On 2/24/20, IRM sold 10.35M shares at a public offering price of $15.3.
Independence Realty Trust Announces First Quarter 2020 Financial Results
Prior Sell Discussions: Item # 1.A. Sold 150 IRT at $11.73 (6/26/19 Post)(profit snapshot= $799.79); Item # 1.A. Sold 121+ IRT at $10.91 (6/8/19 Post)(profit snapshot = $427.88); Item # 1.A. Sold 57+ IRT at $10.27 in a Roth IRA Account and Item #1 B. Sold 50 IRT at $10.38-Used Commission Free Trade (9/26/18 Post)(profit snapshots =$328.25); Item 1.C. Sold 50 IRT at $10.09 (6/21/18 Post)(profit snapshot =$27.12); Item # 3.A. Sold 127 IRT at $10.52-Used Commission Free Trade (5/29/18 Post)(profit snapshot = $362.17); Items 1, 2, 3 Update For Equity REIT Basket Strategy As Of 7/28/16 - South Gent | Seeking Alpha (profit snapshots = $197.94)
Prior Buy Discussions: Item # 1.A. Added 50 IRT at $9.35-Roth IRA Account (1/21/18 Post); Item # 1 Bought 50 IRT at $6.18 Update For The Equity REIT Basket Strategy As Of 2/22/16 - South Gent | Seeking Alpha; Item # 2 Added 100 IRT at $6.8 Update For EQUITY REIT Basket Strategy As Of 1/29/16 - South Gent | Seeking Alpha
Restart: Before considering a restart, I will want to see the share price fall below $8.
B. Restarted CFG-Bought 2 at $14.47:
CFG Analyst Estimates
SEC Filings
Closing Price 5/15/20: CFG $19.92 -$0.23 -1.14%
Admittedly, I was far too timid in this buy. I would note the date of the purchase, and at least I was buying then.
Investment Category: Regional Bank Basket Strategy
Last Elimination: Item # 5.D. Eliminated CFG at $36.07 (9/28/19 Post)
Dividend: Quarterly at $.39 per share ($1.56 annually)
Last Ex Dividend: 4/28/20
Dividend Yield at $14.47: 10.78%
Last Earnings Report (Q/E 3/31/20): 10-Q; Citizens Financial Group, Inc. Reports First Quarter Net Income of $34 million and EPS of $0.03 with Underlying Net Income of $59 million and EPS of $0.09
As with other regional banks, CFG took an earnings hit by setting outside "$600 million pre-tax, or $1.10 per share after-tax, including a reserve build of $463 million pre-tax, or $0.85 per share after-tax, tied to COVID-19 pandemic impacts." That provision may prove to be too much, about right or too little to cover loan losses. The first quarter earnings hit distorts several financial metrics which I use to evaluate bank stocks including ROA and ROE.
"Net interest margin of 3.09% decreased 14 basis points compared to 3.23% in the first quarter of 2019, as the impact of lower interest rates was partially offset by lower funding costs and improved deposit mix, as well as continued mix shift towards better-returning assets. Net interest margin on an FTE basis of 3.10% decreased 15 basis points compared to 3.25% in the first quarter of 2019. Average interest-earning asset yields of 3.91% decreased 43 basis points from 4.34% in the first quarter of 2019, while average interest-bearing liability costs of 1.14% decreased 40 basis points from 1.54% in the first quarter of 2019." (page 14)
Tangible Book Value Per Share: Reported at $32, up 8% Y-O-Y
I currently own 4 CFG senior unsecured bonds that mature next year. Item # 2.B. Bought 2 CFG 2.375% SU Maturing on 7/28/21 at a TC of 98.838 (4/14/19 Post); Item # 3.B. Bought 2 CFG 2021 SU at a Total Cost of 98.92 (1/27/17 Post); Citizens Financial Group- Bond Facts by FINRA
C. Added 5 JRI at $8.95; 10 at $8.09; 10 at $10.16; 10 at $10.66:
Quote: JRI | Nuveen Real Asset Income & Growth Fund Overview
Closing Price 5/15/20: JRI $10.25 -$0.02 -0.19%
SEC Filings: SEC Filings
Sponsor's Website: JRI - Nuveen Real Asset Income and Growth Fund
Leveraged: Yes at 27.51% as of 3/31/20
Holdings: 411 as of 3/31/20
Last SEC Filed Shareholder Report: Nuveen Real Asset Income and Growth Fund (period ending 12/31/19)
 |
| As of 12/31/19 |
Closing Net Asset Value Per Share: $10.4
Closing Market Price: $7.42
Discount: -28.65%
Data Date of 3/24/20 Trade:
Closing Net Asset Value Per Share: $10.47
Closing Market Price: $7.86
Discount: -16.81%
Data Date of 3/27/20 Trade:
Closing Net Asset Value Per Share: $11.81
Closing Market Price: $10.18
Discount: -13.8%
Data Date of 4/16/20 Trade:
Closing Net Asset Value Per Share: $12.64
Closing Market Price: $10.63
Discount: -15.9%
Sourced: JRI-CEF Connect
Last Buy Discussion: Item # 2.F. Restarted JRI: Bought 10 $16.05; 10 at $15.62; 10 at $14.5; 10 at $14.2; 10 at $11.9; 10 at $11.37; 10 at $11 (3/14/20 Post)
Last Sell Discussions: Item # 2.A. Sold 102+ JRI at $17.98 (12/22/19 Post); Item # 4 Sold 100 JRI at $17.23 (10/2/19 Post)
Those eliminations were timed better than the restart of the "small ball buying program" which proved to be premature. I am gradually building the position back up to the 200 shares previously owned.
Current Position: 131+ shares
Purchase Restriction: Each subsequent purchase must reduce my average cost per share.
Average Cost Per Share: $12.05
Dividend: Currently at $.0965 ($1.158 annually)
Until recently the penny rate was at $.117 (partial ROC support)(annual rate at $1.404)
Dividend Yield at Average Cost: 9.61%
Last Ex Dividend Date: 5/14/20
Dividend Reinvestment: Yes, as long as the discount to net asset value exceeds 10%.
D. Added in Fidelity Account 10 ORKLY at $7.65; 10 at $7.3 and 20 at $9.03; 10 at $8.29:
Current Position Fidelity Account: 110 Shares
Closing Price 5/15/20: ORKLY $8.30 -$0.17 -2.01% (ADR traded on the U.S. pink sheet exchange and priced in USDs)
Average Cost Per Share = $8.31
I decided to buy the 20 share lot on 4/22, which rounded the position up to 100 shares in this account, after reviewing this report that I viewed favorably. Growth for Orkla's branded consumer goods - Orkla.com
The earnings report was released on 5/5/20 and the stock reacted negatively to the report, whereupon I bought another 10 shares at $8.29. IMO, the negative reaction was unjustified.
Quotes:
NOK Priced Ordinary Shares: ORK.OL
USD Priced ADR Pink Sheet Exchange: ORKLY
Investor Relations - Orkla.com
About Orkla - Orkla.com
Orkla Foods - Orkla.com
Orkla Confectionery & Snacks - Orkla.com
Orkla Care - Orkla.com
Orkla Food Ingredients - Orkla.com
Last Pare: Item # 4.B. Sold 100 ORKLY at $10.1 (1/5/20 Post)
Last Buy Discussions: Item # 1.C. Added 20 ORKLY at $7.76 (1/23/19 Post); Item # 1.B Added 20 ORKLY at $8.15 (7/22/18 Post); Item # 1.A. Bought 10 ORKLY at $9.22 and 10 at $9.09 (5/7/18 Post)
Last Earnings Report (Q/E 3/31/20): Higher in-home consumption of food and cleaning products spurred growth for Orkla - Orkla.com
Orkla needs to dispose of its 46.2% interest in Jotun, a manufacture of paints and powder products and to use the proceeds to buyback stock and to expand its core consumer product businesses. Jotun - Orkla.com
ORKLA also owns a hydroelectric plant and an 85% interest in a power company. Hydro Power - Orkla.com
Other businesses outside of its core operations are Forside - Orkla Eiendom (real estate) and Orkla Ventures.
Dividend: Annually, usually goes ex dividend in April. There have been some special dividends. The last one that I received was paid in March 2017.
Norwegian Krone Plunges vs US Dollar, Euro on Covid-19 Outbreak (3/19/20) Since ORKLY is a USD priced ADR, the decline in the NOK/USD exchange rate will flow through into the USD share price. The result will be that the USD priced shares will underperform the ordinary shares priced in NOKs.
XE: Convert NOK/USD. Norway Krone to United States Dollar
Prior Round-Trips:
Sold 100 ORKLY-Update On Portfolio Positioning And Management - South Gent | Seeking Alpha August 2015 (+$51.08)- Bought Back 100 Orkla (ORKLY) At $7.285 - South Gent | Seeking Alpha December 2014
Item # 4 Sold 100 ORKLY at $9 (9/6/14 Post)(profit snapshot $122.48)-Item # 2. Bought 100 ORKLY at $7.61 (1/13/14 Post)
Total ORKLY Trading Profits: $243.98
E. Added 5 IGR at $3.75 and 50 at $5.69; 10 at $5.1:
Quote: IGR | CBRE Clarion Global Real Estate Income Fund Overview
This CEF owns global equity REIT common stocks and U.S. equity REIT preferred stocks. If the fund still owns the preferred stocks listed in the last filed shareholder report (see link below), it took a major hit in several of them. The fund was over exposed to hotel REIT preferred stocks and to EPRPRG. It is possible that those preferred shares were sold.
The preferred stocks listed in the filing as of 12/31/19 were as follows:
The Sunstone preferred stocks have held up better than most other hotel REIT preferreds.
SHO.PRE | Sunstone Hotel Investors Inc. 6.95% Cum. Redeem. Pfd. Series E Overview
SHO.PRF | Sunstone Hotel Investors Inc. 6.45% Cum. Pfd. Series F Overview
The Pebblebrook preferred shares are doing less well:
PEB.PRD | Pebblebrook Hotel Trust 6.375% Cum. Redeem. Pfd. Series D Overview
PEB.PRF | Pebblebrook Hotel Trust 6.3% Cum. Redeem. Pfd. Series F Overview
IGR SEC Filings
Last SEC Filed Shareholder Report (period ending 12/31/19). I do not know whether the fund owns those preferred stocks now.
Dividends: Monthly at $.05 per share (supported by ROC)
CBRE Clarion Global Real Estate Income Fund (NYSE: IGR) Declares Monthly Distribution for May
Next Ex Dividend Date: 5/19/20
Dividend Reinvestment: Yes, for as long as reinvestment price is letter to be at a greater than 10% discount to net asset value per share.
Leveraged: Yes, see page 19, borrowings "bear interest at the Federal funds rate plus 75 basis points. At December 31, 2019, there were borrowings in the amount of $121,019,500 on the Trust’s line of credit." So the cost of borrowings have come down due to the FED cutting the FF range down to 0%-.25%.
Last Sell Discussions: Item # 1.C. Sold 9 IGR at $8.33 (2/19/20 Post)(sold shares bought with dividends); Item # 2.A. Sold 100 IGR at $8.01 (12/28/19 Post)
Last Buy Discussion: Item # 2.D. (3/21/2020 Post)
Data Date of 3/23/20 Trade:
Closing Net Asset Value Per Share: $4.8
Closing Price: $4.27
Discount: -18.54%
Data Date of 4/29/20 Trade:
Closing Net Asset Value Per Share: $6.86
Closing Market Price: $5.67
Discount: -17.5%
Data Date of 5/15/20 Trade:
Closing Net Asset Value Per Share: $6.32
Closing Market Price: $5.11
Discount: -19.15%
Sourced: IGR-CEF Connect
F. Added 5 FSK at $1.99:
Closing Price 5/15/20: FSK $3.1700 -$0.02 -0.63%
Form 10-Q for the Q/E 3/31/20 (description of investments starts at page 4)
Management: External
Recent Historical Net Asset Values Per Share:
3/31/20: $6.09
12/31/19: $7.64
12/31/18: $7.84 FS KKR 10-K at page 71
12/31/17: $9.30 "
Historically, I viewed this BDC as borderline deservedly hated but I am now raising its risk and performance rating to deservedly hated. As with most other externally managed BDCs, FS KKR's managers deserve a massive pay cut to the base compensation fee and an elimination of the "incentive fee". The managers are ridiculously over compensated for what they in fact deliver in shareholder returns. In BDC land, however, failure is richly rewarded.
Dividend: As expected, FSK cut its quarterly dividend. The new penny rate is $.15 per share, down from $.19 per share.
Next Ex Dividend Date: 6/16/20
Last Earnings Report (Q/E 3/31/20): FSK Announces First Quarter 2020 Results, $250 Million Unsecured Notes Issuance, Amendment of Senior Secured Revolving Credit Facility, and Declares Distribution for Second Quarter
Net investment income = $.19 per share
Net realized and unrealized loss per share =$1.59
"During the period from January 1 to March 31, 2020, FSK repurchased 8.9 million shares at an average price of $4.45 per share. During the period from April 1 to April 13, 2020, FSK repurchased 2.3 million shares at an average price of $3.16 per share."
I discuss buying a 2022 FSK SU bond in Item # 4.D. below. I view the bond as risky. The pricing indicates that the Bond Ghouls view it as junk even though it is still assigned the lowest investment grade ratings by Moody's and Fitch.
G. Added 1 MGC at $80:
Quote: MGC - Vanguard Mega Cap ETF | Vanguard
Closing Price 5/15/20: MGC $101.46 +$0.43 +0.43%
Sponsor's Website: MGC - Vanguard Mega Cap ETF | Vanguard
Current Position: 3 shares
Average Cost per share = $83
Expense Ratio: .07%
Last Sell Discussion: Item # 2.C Sold 8 MGC at $108.24 9-Elimination (12/11/2019)
Last Buy Discussion: Item # 2.I. Restarted MGC-Bought 1 at $85 and 1 at $83 (3/21/20 Post)
Top Holdings as of 4/30/20:
I will not likely buy more until the price falls below $80. I will sell 1 share when and if the price goes above $105.
H. ADDED 1 DUK AT $65.7:
Quote: Duke Energy Corp. (DUK)
DUK Analyst Estimates | MarketWatch
SEC Filings
Closing Price 5/15/20 = DUK $81.19 -$1.11 -1.35%
Current Position: 19 Shares
Dividend: Quarterly at $.945 ($3.78 annually)
Last Ex Dividend: 5/14/20 (owned all shares as of)
Dividend Reinvestment: No
Last Sell Discussions: Item # 2.G. Sold 1 DUK at $100.73 (3/21/20 Post); Item # 1.C. Sold 2 DUK at $97.05 (2/16/20 Post)
Last Earnings Report (Q/E 3/31/20): SEC Filed Press Release
Adjusted E.P.S. was reported at $1.14, below the FactSet consensus estimate of $1.19.
Revenue fell to $5.949B from $6.163B and below the FactSet consensus of $6.329B.
Duke maintained its full year guidance of adjusted E.P.S. between $5.05 and $5.45.
The company blamed warmer than normal weather during the winter months and severed storms that impacted its service territories in North and South Carolina. Shutdowns may have adversely impacted electricity demand.
This report triggered three firms to lower their price targets while keeping their neutral/equal weight ratings. Barclays lowered its PT to $92 from $93; Morgan Stanley cut its PT to $87 from $96; and BofA Securities went from $93 to $$83. I do not have access to those reports. Collectively, they put pressure on the stock last Friday.
Duke Energy has a good dividend growth history for an electric & gas utility IMO. Dividend Information - Our Company - Duke Energy
I. Added 10 PWCDF at $14.11: 10 at $13.85 :
Closing Price 5/15: PWCDF $13.81 -$0.08 -0.58%
Current Position: 130 shares
Maximum Position: 200 Shares
Average Cost Per Share: US$15.24
I discussed this stock in my last post. Item # 1 (5/9/20 Post)
Since that last discussion, Power Corporation reported first quarter earnings.
Last Earnings Report (Q/E 3/31/20):Power Corporation Reports First Quarter 2020 Financial Results
"Power Corporation declared a quarterly dividend of $0.4475 per participating share payable July 31, 2020. The dividend payment schedule in 2020 was moved ahead by two months and represents a 10.5% increase in comparison with 2019." The dividend is paid in Canadian Dollars and converted into USDs for owners of PWCDF. The dividend is payable to shareholders of record on 6/30/20.
K. Eliminated BRG in Fidelity Account-Sold 107+ at $6.37:
Closing Price 5/15: BRG $5.59 +$0.01 +0.18%
Portfolio - Bluerock Residential Growth REIT
Home - Bluerock Residential Growth REIT
SEC Filings
2019 Annual Report
10-Q for the Q/E 3/31/20 (revolving credit facility information starts at page 19; mortgage list starts at page 21)
Management: Internal as of 10/31/17
Profit Snapshot: $38.12
Bluerock Residential Growth REIT (BRG) Announces Second Quarter Dividends on Common Stock, 8.250% Series A Cumulative Redeemable Preferred Stock, 7.625% Series C Cumulative Redeemable Preferred Stock, and 7.125% Series D Cumulative Preferred Stock, and May and June Dividends on Series B Preferred Stock and Series T Preferred Stock I still own the Series A preferred stock. I also still own 20+ common shares in another account with a $4.96 average cost per share.
Next Ex Dividend Date: 6/24/20
Last Earnings Report: Bluerock Residential Growth REIT Announces First Quarter 2020 Results ("Pre-COVID-19, entered into sales agreements for the sale of Ashton I & II, Enders Place at Baldwin Park and Marquis at TPC which closed in April 2020 for total sales prices of $160 million.")
BRG Realized Gains to Date: $1,147.93
Some Prior Discussions:
Item # 1.C. Sold 60 BRG at $9.9-Used Commission Free Trade (9/26/18 Post)(profit snapshot =$142.16)-Item # 2.A. Bought 50 BRG at $7.6 (2/12/18 Post), Item # 3.D. Added 10 BRG at $7.19 (2/19/18 Post)
Item 3.A. Sold Remaining 50 BRG at $11.45 (10/31/17 Post)
South Gent's Comment Blog # 4: Sold Another 100 BRG
Item # 5. Eliminated BRG in One Taxable Account-Sold 220+ at $13.22: Update For Equity REIT Basket Strategy As Of 8/27/16 - South Gent | Seeking Alpha
Item # 5. Sold 100 BRG at $13.52 Update For Equity REIT Basket Strategy As Of 7/28/16 - South Gent | Seeking Alpha
The remaining 50 common shares were bought at $9.36 in my IB account on 2/16/16: Item # 2 Update For The Equity REIT Basket Strategy As Of 2/22/16 - South Gent | Seeking Alpha
Bluerock Residential Growth REIT (BRG) Provides Update on COVID-19 Impact and Response
Bluerock Residential Growth REIT (BRG) Announces 2019 Year End Tax Reporting Information (common stock dividend classified as 100% ROC)
2. Canadian Reset Equity Preferred Stocks:
A. Added 50 AXPRA at C$12.99:
Quote: AX-PA.TO
Issuer: Artis REIT (AX-UN.TO)
Last Discussed: Item # 2.A Added 50 AXPRA at C$23 (2/29/20 Post)
Security: Equity Preferred Stock (senior in the capital structure to common shares only)
Par Value: C$25
Coupon: Currently at 5.662% per annum, paid quarterly
Resets Every 5 Years at a 4.06% spread to the 5 year Canadian Bond
Last Reset: September 2017
Based on the coupon rate of 5.662%, the 5 year Canadian bond was at 1.602% on the reset calculation date.
Canada 5 Year Government Bond Overview | MarketWatch
Next Reset: September 2022
The recent price is partly attributable to concerns that the coupon will reset in September 2022 at a lower coupon than the 9/2017 reset.
Current Dividend Yield at C12.99 = 10.9%
Current Position: 150 shares
Last Ex Dividend Date: 3/30/20
3. Exchange Traded Bonds:
A. Bought 10 CSWCL at $22.25:
Closing Price 5/15: CSWCL $22.78 +$0.36 +1.61%
Trading is light with typically large bid/ask spreads. Fidelity customers are not allowed to buy online. That restriction applies to all BDC exchange traded bonds and a boatload of other securities as well.
CSWCL is a senior unsecured baby bond. It is incorrect to call it a preferred stock as indicated in the snapshot.
Issuer: Capital Southwest Corp. (CSWC) - An internally managed BDC
CSWC SEC Filings
Security: Final Prospectus Supplement
Par Value: $25
Maturity Date: 12/15/22
Issuer Optional Call Date: On or after 12/15/19
Capital Structure Placement: "The Notes will be our direct unsecured obligations and rank pari passu, which means equal in right of payment, with all outstanding and future unsecured unsubordinated indebtedness issued by us."
The notes are junior to senior secured debt which is always the case for senior unsecured debt. This is made clear by the following language which is standard:
"Because the Notes will not be secured by any of our assets, they will be effectively subordinated to all of our existing and future secured indebtedness (or any indebtedness that is initially unsecured as to which we subsequently grant security), to the extent of the value of the assets securing such indebtedness, including, without limitation, borrowings under our senior secured revolving credit facility, as amended, or the Credit Facility, of which we had $86.0 million outstanding as of December 12, 2017. The Notes will be structurally subordinated to all existing and future indebtedness and other obligations of any of our subsidiaries since the Notes are obligations exclusively of Capital Southwest Corporation and not of any of our subsidiaries. None of our subsidiaries is a guarantor of the Notes and the Notes will not be required to be guaranteed by any subsidiary we may acquire or create in the future. In any liquidation, dissolution, bankruptcy or other similar proceeding, the holders of any of our existing or future secured indebtedness may assert rights against the assets pledged to secure that indebtedness in order to receive full payment of their indebtedness before the assets may be used to pay other creditors, including the holders of the Notes, and any assets of our subsidiaries will not be directly available to satisfy the claims of our creditors, including holders of the Notes."
This BDC also has outstanding a 5.375% SU note with a $1K par value maturing in 2024. Prospectus ("The Notes will be our direct unsecured obligations and rank pari passu, which means equal in right of payment, with all outstanding and future unsecured unsubordinated indebtedness issued by us, including our 5.95% Notes due 2022 (the “2022 Notes”), of which $77.1 million in aggregate principal amount was outstanding as of September 23, 2019."); FINRA Bond Detail This bond trades infrequently.
BDC bonds carry a lot of risk.
The first level is that their loans are risky and become more so during a recession. The nation is currently in a recession of unknowable duration and depth.
The second level is that the BDC pays generous dividends to common shareholders. Cash is flying out the door rather than being invested to grow the business. Cash is then raised by incurring more debt and public offerings of common stock. Eliminating or cutting the common share dividend is generally a positive for bond owners.
B. Added 1 DDT at $14.17; 1 at $17.5; 1 at $16; 1 at $15.28:
Closing Price 5/15: DDT +$15.96 +$0.69 +4.52%
Trading is light with typically large bid/ask spreads.
Category: Exchange Traded Bond
Sub-Category: Trust Preferred Securities
The use of "preferred" in this context is technically correct but nonetheless conveys an incorrect impression of this securities placement in the capital structure. DDT is not an equity preferred stock senior only to common stock and junior to all bonds. This security is a junior bond, which is senior to all equity capital (common and equity preferred) and junior to senior debt.
Last Discussed: Item # 3.C. (3/21/20 Post)
DDT is a junk rated junior bond issued by the department store chain Dillard's Inc. (DDT)
DDS | Dillard's Inc. Analyst Estimates
DDS SEC Filings
2019 Annual Report (credit facility and debt discussed starting at page 31, "To increase our cash position during the COVID-19 pandemic and to provide additional financial flexibility, on March 25, 2020, we borrowed the unutilized availability of $779.0 million from our $800 million revolving credit agreement. The Company still has an option to expand the facility by $200 million.")
Dillard’s, Inc. Reports First Quarter Results (ugly but not as bad as expected and DDS announced that it would be reopening its stores)
 |
| Store Reopenings |
Prospectus
Coupon: 7.5% paid on a $25 par value
Interest Payments: Quarterly
Maximum Position: 50 Shares
Maturity: 8/1/2038 unless redeem earlier at issuer's option which can be exercised at any time now.
Average Cost Per Share: $19.13
Yield at Average Cost: 9.8%
Last Ex Interest Date: 4/15/20
Interest was paid when due.
Trades Flat: Whoever owns the bond on the ex interest date receives the interest payment
Interest Payment Deferral: Interest on the junior bond can not legally be deferred for as long as Dillard's pays a cash dividend to its common shareholders. So far at least, Dillard's is still paying a quarterly cash dividend to those shareholders: Dillard’s, Inc. Announces $0.15 Cash Dividend
As with other junior bonds that permit the issuer to defer payments after cash dividends on common shares is eliminated, interest on the deferred amount accrues at the coupon payment.
4. Short Term Investment Grade Corporate Bonds as an Alternative to MM Funds:
A. Bought 2 Kroger 3.3% SU Bonds Maturing on 1/15/21:
FINRA Page: Bond Detail (prospectus linked)
Issuer: Kroger Co. (KR)
KR | Kroger Co. Analyst Estimates | MarketWatch
SEC Filed Earnings Report for the F/Q ending on 2/1/20
KR SEC Filings
Last Bond Offering (1/20): $750M 3.95% SU notes maturing in 2050
Credit Ratings:
YTM at Total Cost: 3.808%
Bought at 99.5
B. Bought 2 Toronto Dominion 2.5% SU Bonds Maturing on 12/14/20:
Issuer: Toronto-Dominion Bank (TD)
TD | Toronto-Dominion Bank Analyst Estimates | MarketWatch
Credit Rating: Moody's at Aa1
Bought at a Total Cost of 99.237 (includes $1 per bond commission)
YTM at Total Cost = 3.588%
Bought at 99.127
C. Bought 2 Regions Financial 3.2% SU Bonds Maturing on 2/8/21:
Issuer: Regions Financial Corp. (RF)
RF | Regions Financial Corp. Analyst Estimates | MarketWatch
2019 Annual Report
RF SEC Filings
Credit Ratings:
YTM at Total Cost = 4.44%
Bought at 98.857
D. Bought 2 FS KKR 4.75% SU Bonds Maturing on 5/15/22:
Prospectus
Issuer: FS KKR Capital Corp. (FSK) - A BDC
2019 Annual Report SEC Form 10-K
FS KKR SEC Filings
Credit Rating:
I expecting a one notch downgrade to junk.
Total Cost of 98.409 (with $2 Commission)
YTM at TC = 5.592%
Current Yield at TC = 4.8268%
The YTM and current yield indicate that the Bond Ghouls view FS KKR as a junk credit. I may end up regretting this purchase since I view the external managers as incompetent as noted above.
"On April 30, 2020, FSK closed an issuance of $250 million aggregate principal amount of unsecured notes. The notes will mature on May 15, 2025 and bear interest at a rate of 8.625% per year, subject to certain adjustments, payable semi-annually. Subject to a two-year non-call period, the notes may be redeemed in whole or in part at FSK’s option at any time or from time to time at redemption prices set forth in the indenture governing the notes. FSK intends to use the net proceeds from the offering to refinance existing debt and for general corporate purposes." SEC Filed Press Release A 8.625% coupon for a 5 year bond would not be consistent with an investment grade rating. FS KKR bonds are trading at junk bond yields.
For this BDC, my maximum bond exposure is 2 $1K par value bonds. If I wanted to buy 2 of another maturity, I would have to sell this 2022 bond. And that is not subject to rational disagreement IMO.
E. Early Redemptions 5/14 to 5/18 Fidelity Taxable Account:
Fidelity will credit my account over the weekend with bond proceeds that will be paid on Monday.
I am receiving now an abundant number of early bond redemptions.
Two of the four referenced below had make whole payments attached to exercise of the issuer's early redemption right: Ipalco and Plum Creek Timber.
The other 2 were redeemed one month early without a make whole payment. Most $1K par value bonds allow the issuer to redeem within 1 to 3 months prior to maturity at par value plus accrued interest. And, most of those are limited to 1 month (e.g. Southern Company and Wisconsin Energy included in the snapshots below).
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.
The exchange traded BDC bond CSWCL, discussed in this post, has about a 10.69% yield to maturity at a total cost of $22.25.
ReplyDeleteI used the YTM calculator at this website and entered 2.7 years to maturity.
https://dqydj.com/bond-yield-to-maturity-calculator/
I am taking on slightly more risk than I want since money market yields at Fidelity and Schwab are at .01%.
The Vanguard Prime MM fund is at .43%. The 3 month treasury bill closed at .12%.
The ten year treasury note closed last Friday at a .64% yield.
https://www.treasury.gov/resource-center/data-chart-center/interest-rates/Pages/TextView.aspx?data=yieldYear&year=2020
Gallup released Donalds latest approval numbers as of 5/13/20.
Approve at 49%
Disapprove at 48%
https://news.gallup.com/poll/203207/trump-job-approval-weekly.aspx?g_source=link_newsv9&g_campaign=item_201617&g_medium=copy
Gallup is the one that usually skewed in his favor, if I remember correctly?
DeleteLand: You are thinking of Rasmussen.
Delete""
ReplyDeleteIn the first tweet reproduced below, Disgusting Don is accusing Joe Scarborough, a former republican congressman and critic, of murdering his intern Lauri Klausutis. ""
Uh oh, who did Trump murder?
Land: In TrumpWorld, you do not need facts to support an accusation. So just pick any name, like Tim Russert or maybe Jeffrey Epstein.
DeleteRasmussen - ah, yep.
Delete"" In TrumpWorld, you do not need facts to support an accusation.""
So true.
I'm thinking of projection. He's accusing an ex-politician of murder. So he's either just murdered someone we don't know about... or there's info he's just learned of that shows him involved in a prior murder. Such as Epstein's... When he gets committed to an accusation, after 3 years of training by him, projection comes to mind.
https://www.cnbc.com/2020/05/14/nelson-peltz-says-hes-bullish-on-a-vaccine-putting-new-money-to-work-and-voting-for-trump.html
ReplyDeleteYou linked to this Peltz article.
He's "not buying the stock market right now."
But there are two stocks "he’s deployed the fund’s capital in new investments".
I struggle when articles contradict themselves, but that aside... I think he's also not buying into the market overall. Only into a few values he found.
The article says...in contrast to Temper and Buffet. But sounds like it's similar to them in the overall.
Peltz: "I’m not buying the market: I’m buying specific companies. "
"there is no recovery to pre-collapse highs "
ReplyDeleteI've been keeping that in mind. Is why it's bothering me that I have so much in at the higher levels. A crash that recovers means only that I can't use them for buying into blood. That's a problem. But there's risk of a "stuff hit's the fan" point in time.
I'm not a big bond buyer. I will buy bonds I want to hold to maturity (used to exist.) But don't use the bond market as counter balance to my stocks. Maybe against conventional wisdom, but so be it.
BDC stocks are disfavored by me even during economic expansions. Many of them, particularly the externally managed ones, find ways to incinerate capital during the best of times.
ReplyDeleteIn this post, I referred to FS KKR as a deservedly hated BDC. I was being kind in limiting my criticism to that statement.
Actually, the only honorable course for the external FSK managers IMO is to return all their compensation and then commit seppuku.
Before buying a BDC, it is important to check on its recent five year performance on a total return basis.
Total return includes dividend reinvestment.
For FSK, the annual average total return over the past 5 years is -11.52%. The total return was -45.81%.
https://www.dividendchannel.com/drip-returns-calculator/
When you see that kind of performance, you may wonder why the managers are still being paid exorbitant fees. The answer is that they have a lock on management. The BDC is set up to handsomely reward the external manager, even to pay "incentive fees" for what amounts to pathetic returns, and to entice individual mom and pops to buy based on the shiny object, which is the high dividend yield in this example, at least for awhile until it is cut.
Masters of Disaster are richly rewarded for failure. That was made clear to everyone in the period leading up to the Near Depression, when they collectively incinerated trillions while rewarding themselves billions. Then, the Savings Class, who had no role in creating the financial disaster, get tapped to clean up the mess.
My goal whenever I buy a few BDC shares is to exit the position at a total return, no matter how small, in excess of the dividend. payments.
South Gent,
ReplyDeleteTPVG is the only BDC I have bought during the last 2 months. Now I am looking into regional banks for yield and stability. Do you still own NRIM?
Y: I sold NRIM in 2011 and have not been back since then.
DeleteItem # 1 Sold 50 NRIM at $20.05
https://tennesseeindependent.blogspot.com/2011/05/sold-300-of-bond-cef-acg-at-782sold-50.html
I will take another look.
I have been an extremely cautious buyer of regional banks recently since they are now facing two major headwinds to earnings and earnings growth: (1) NIM compression which was been around a long time and more recently (2) increases in nonperforming loans, much higher reserves against potential loans losses and higher charge-offs down the road.
During the first quarter, regional bank earnings were hit by substantial increases in their loan loss reserve amounts, related to the ongoing recession, under new accounting rules.
https://www.federalreserve.gov/supervisionreg/topics/faq-new-accounting-standards-on-financial-instruments-credit-losses.htm
Those charges may end up being too much or too little depending on what happens in the ensuing months.
The NPL and charge-off ratios were about as good as they can get before the pandemic. So the wind was at that back on those important categories impacting earnings and now they are headwinds.
I would not view the dividends as reliable generally. If there is a recession lingering into the second half, or a second wave infection worse than the first, then I would not count on dividends remaining as they are now.
Some of the smaller banks did not cut during the Near Depression period. A few even continued to increase the dividends. If my memory is correct, WASH may have been one of those. I sold out at a good profit.
So generally, I would look for banks that at least kept the dividend stable during that earlier period and never had a down year during the prior Dark Period. You can find that information by going to the SEC, entering the bank name, and then pulling up a 10-K for 2012 which would have in it somewhere five years of financial data. Look for no dividend cuts, earnings, and non-performing loan losses peaking at below 2%.
I am starting to nibble on several that I sold several years ago at prices that were prevailing in 2009. I would characterize the buying as extremely timid, though a slither more bold than the 2 share purchase of CFG discussed in this post.
South Gent,
DeleteYup, I remember you mentioned WASH in your old posts. You used to have a lot more regional banks, and REIT's.
Y: I looked at NRIM and WASH this afternoon. I own neither at the current time. I view WASH as a more likely small add than NRIM.
DeleteThe Alaska economy is not so hot, and NRIM has loan exposure to industry sectors which are suffering. The efficiency ratio is also too high.
Futures are up. Over 1%.
ReplyDeleteI wonder how many rounds of this trading range will happen until the market decides it has enough info on re-opening?
Well, I'm going to Home Depot tomorrow to buy plants. I've been waiting out the weekend, so it will be less busy. My one drive by, the line to enter was long & not very good at counting off 6 feet. At all.
Land: I thought the upbeat move in the futures last night was due to comments made by Powell. He basically affirmed what I call the Blue Sky scenario, but did not go all in.
DeletePowell Selected Quotes: "Assuming there's not a second wave of the coronavirus, I think you'll see the economy recover steadily through the second half of this year. . . It's a reasonable expectation that there'll be growth in the second half of the year. I would say though we're not going to get back to where we were quickly. We won't get back to where we were by the end of the year. That's unlikely to happen. . . .So, in the long run, I would say the U.S. economy will recover. We'll get back to the place we were in February; we'll get to an even better place than that. I'm highly confident of that.
https://www.cbsnews.com/news/coronavirus-economy-jerome-powell-federal-reserve-crisis-60-minutes/
The additional surge this morning is probably due to Moderna's report on its Phase 1 vaccine trial.
https://www.cnbc.com/2020/05/18/moderna-reports-positive-data-on-early-stage-coronavirus-vaccine-trial.html
The results were positive without question in that a relatively small dose produced antibodies "generally seen in blood samples from people who recovered from the disease"; and antibodies in the 100 mcg dose “significantly exceeded levels” in recovered patients.
I am not sure how easily it would be to mass produce that vaccine.
The mere presence of antibodies does not establish for how long the antibodies will provide protection, nor is it known now what level of antibodies will be sufficient to prevent an infection from occurring the first time. The Stock Jocks will not be concerned about those unresolved issues.
E-Mini S&P 500 Future Continuous Contract
2,911.75 +65.35 +2.30%
Last Updated: May 18, 2020 at 6:56 a.m. CDT
https://www.marketwatch.com/investing/future/sp%20500%20futures?mod=home-page
The results are enough for me to do some light buying this morning in beaten down sectors like regional bank stocks.
South Gent,
DeleteIn stead of "light buying" this morning I entered a small position of SDS, which will make me feel a little better when I give back some of the gain this morning.
Y: Before the market opened today, I entered several limit order to buy small cap regional bank stocks at 10 cents or so higher than the close last Friday. I was hoping for 1 fill and got none.
DeleteSPDR S&P Regional Banking ETF
$34.67 +$ 2.63 +8.21%
Last Updated: May 18, 2020 at 11:40 a.m. EDT
WASH closed at $27.99 last Friday. I did go ahead and buy 5 shares at $29. I decided to refrain from chasing after the others. I also added to PBCT.
Washington Trust Bancorp, Inc. (WASH)
$29.28 +$1.29 (+4.61%)
As of 11:45AM EDT.
52 Week Range 25.86 - 54.96
Forward Dividend & Yield $2.04 (7.20%)
https://finance.yahoo.com/quote/WASH?p=WASH&.tsrc=fin-srch
I eliminated my position back in 2018:
Item 2.A. Sold 50 WASH at $61.53-Used Commission Free Trade:
Profit Snapshot: +$2,309.26
https://tennesseeindependent.blogspot.com/2018/06/observations-and-sample-of-recent_25.html
I was asleep and missed the flying high. So I missed chance to buy in today on the vaccine news.
DeleteI may sell some of my 401k SPX bought in March (only has mutual fund options.)
---
Vaccine news is good, but was supposedly already baked in. I guess investors were picturing a nice sized recovery without a vaccine? Just were expecting re-opening slowly to be enough.
To me it looks like blue skies were expected and baked in. So now something supports that scenario, so it's time to buy into that scenario market was already pricing for. Does the legalization and greater availability of cannabis have something to do with this?
SPX and IWM are at the top of that near term trading range.
Still under 200 dma, and a few % more to butt into that. But with this mood, that may not be a resistance?
I suppose the excitement is on the idea that the newer approaches to vaccines, can produce one more quickly than in the past. I had already assumed that. Also, thought that was baked in.
---
I will be buying a little JPmorgan. But waiting a day or two or until next dip. They will be very long term buys. Banks could be in big trouble here. But it is a beaten down sector that reflects that. And I own no banks.
Considering KRE but I don't have skills to assess regionals at all, and they are more likely to run into trouble in non-blue sky scenarios (though it is an index). It's down & pays a div. And I can hold for 10 years, so unless the banking industry goes under for 10 years, it should be fine.
I want to add an electronic banking, modern tech tool as well. I don't know of a good name. Square without div is too much of a risk at this price.
It has not escaped me that I went from posting actual buys I made, to posting only plans to buy and self pep talks.
---
Powell comments read like "Trump's buddies gave me a call so I'm now backing out of what I said last week."
He talks about having tons of ammunition left from the Fed. I haven't read yet, what those might be?? They're already buying junk bonds. Neg rates are not a working option.
Someone should start indices of best of breed in each sector. That's the one disadvantage of indices - you get the junk with the good. Those would sell well. They'd also totally change how the market works, as bubbles form.
DeleteLand: There are ETFs that attempt to do that but most of them select the "quality" stocks out of an index like the S & P 500. The stocks are chosen using a variety of "factors" including earnings growth. Many of them end up underperforming or performing roughly in line with SPY.
DeleteOne example of factor ETFs is the iShares Edge MSCI USA Quality Factor ETF (QUAL):
From the sponsor's website: "Exposure to large- and mid-cap U.S. stocks exhibiting positive fundamentals (high return on equity, stable year-over-year earnings growth and low financial leverage)"
https://www.ishares.com/us/products/256101/ishares-msci-usa-quality-factor-etf
Another one is the FlexShares Quality Dividend Index Fund (QDF):
https://www.flexshares.com/funds/QDF
SPY had a 3 year annual average total return of 8.1% through last Friday.
https://www.morningstar.com/etfs/arcx/spy/performance
QDF was at +2.16%
https://www.morningstar.com/etfs/arcx/qdf/performance
QUAL did slightly outperform SPY at +9.1% annual average total return over the past 3 years.
https://www.morningstar.com/etfs/bats/qual/performance
The Invesco S&P 500® Quality ETF (SPHQ) had a 8.62% annual average total return.
https://www.morningstar.com/etfs/arcx/sphq/performance
There may be sector "quality" factor ETFs but I am not familiar with them.
Hum, maybe they don't pick out what I think of as quality. It should be 1-3 stocks per sector or type. And not off the spx that is too broad so you'd really be buying a package of sectors.
DeleteMaybe I'll make my own basket.
Land: Those funds screen for what is generally recognized as "quality" including earnings growth, low leverage and high returns on equity. What happens is that leave out stocks that are working that do not fit the criteria. An example is leaving out Amazon which is not part of the QUAL portfolio. AMZN is a major weighted component of SPY. When AMZN is doing a lot of heavy lifting as it has been for the SPX, and the quality fund does not own it, then it has to do really well with a lot of other picks to just catch up with SPY.
DeleteThere are some mutual funds that run very concentrated portfolios.
Bill Nygren has been managing the Oakmark Select Fund since 1996 which generally owns 20 stocks.
The last total is 23.
https://oakmark.com/our-funds/oakmark-select/
But that professionally managed fund which is concentrated with the manager's best ideas has substantially underperformed SPY and has a 1 star rating from Morningstar.
https://www.morningstar.com/funds/xnas/oaklx/performance
So even long time managers who spend every day, all day long, trying to beat the market, and who have access to good research teams, have trouble beating a low cost index ETF like SPY or VTI.
I beat the market from mid-2000s to 2013 :).
DeleteWell, I beat Spx that I didn't even know went nowhere. (Oblivion and keeping it simple, can really help you sleep at night.) I liked this one Russell mid-small cap fund and was weighted toward it. Plus my 6% bonds. My average annual return was 11%. I think with divs and interest on my rainyday $ counted in too. So not a stellar beat.
Since then I've completely underperformed.
I'm thinking of quality as a more ephemeral measure. The agreed upon hot stock of each area. So Kogers and Costco in grocery. JPMorgan in large banks. LMT in defense (even though BA gets all the noise.) Amazon in everything consumer online. With consistent sense of quality management and rewarding investors with doing the right moves... that's what I hear on some stocks. Well managed debt so that it's a lower risk portfolio.
Past growth is only a so-so measure going forward. (Sometimes growth is based on a little economic games that can't be continued ongoingly.)
I can see how this might not work out well though.
I had liked the idea when low volatility came out. They showed as having better returns. But, it was by about the same amount as the higher fees... so well, that never worked out.
Land: My goal now is not to beat SPX but to preserve capital and to generate current income. I will be satisfied with 5% annual average returns going forward.
DeleteAnd, if I managed to beat that bogey significantly in a particular year, then that will only make me more conservative. Examples include selling T.Rowe Price mutual funds last January and last year after substantial multi-year gains.
Last January eliminations:
1. Eliminated OTCFX:
https://tennesseeindependent.blogspot.com/2020/01/aple-nmfc-otcfx-peo-rlj.html
1. Eliminated PRDGX:
https://tennesseeindependent.blogspot.com/2020/01/cjref-fieca-hban-prdgx-tcpc.html
Previously I tried to beat SPX on a rolling five year basis with a far less risky portfolio.
see discussion under the heading
Portfolio Management and Performance Numbers
https://tennesseeindependent.blogspot.com/2014/04/portfolio-management-goalscricket-bond.html
I will read on your experiences with that method (it's taking a while)!
DeleteI'd be thrilled with 5% going forward. It's a tough environment.
Land: I view the Day of Reckoning as inevitable since no one will have the balls politically to apply the brakes. The U.S. will hit a brick wall with the pedal to the metal.
DeleteThis blog post makes the same argument. It is an interesting read.
https://www.oftwominds.com/blogmay20/cycles5-20.html?mod=article_inline
I would not agree with all of his points. I would disagree that the end game is near; and it will have to be near before having serious negative repercussions in the U.S. stock, bond and currency markets. The USD will collapse in value.
when this starts to unfold.
Investment decisions are not made now on this scenario, nor will they be made anytime soon IMO, until it becomes clearer that the result is unavoidable.
I'd read another article you linked to with a similar observation about debt.
DeleteEven knowing that dollar is likely to collapse is a good tell then know to think about all of this while media's focused only on it's collapse.
I've had it stored as a down the road potential. I'm still hopeful some brakes will be put onto the debt before it spirals. Breaks won't be soon though if they come.
In a comment you said... "Monetary policy is already super aggressive and easy. And there are serious short term consequences..."
ReplyDeleteI'm not aware of short term outside of ridiculously low interest rates.
Land: If you applied a 3% rate to 10 trillion held in savings accounts, CDs, MM funds, and similar short term instruments, you get $300B in disposable income that can be spent, saved or used to reduce high cost debt. 3% is not a high average rate and is below normal historically. With the current interest rates on those type of securities, you are in effect reducing household income by hundreds of billions compared to a normal rate.
DeleteThe exceedingly low interest rates also creates misallocation of cash resources that is both short and long term. Cash is allocated more toward non-economically productive assets rather than research & development, business expansions, and new plant. The non-economically productive assets would include share buybacks and use of excess liquidity to buy paper assets (stocks/bonds) rather than to invest in the real economy.
There is also a tendency to borrow money for non-productive uses. Excessive debt levels will be the cause of the next major financial crisis and the next depression. Debt is increasingly parabolically everywhere including corporate balance sheets.
I think I'm going to post that somewhere so I can go back to it. It's a clear explanation of a lot of influential concepts that I hadn't strung together yet.
DeleteI haven't understood why low interest encourages buybacks - specifically instead of development. But I don't need to understand, to watch it happen.
The lack of savings income is huge, but the rest of this are too.
---
Okay so the question I need to start developing is when rates rise and debt is in deep trouble, where to hide? Stocks will stagnate or tumble. Business with be in trouble. So will the gov't. Bonds will go down as rates increase. This gives a starting point to start looking at that longer term worry so maybe I'll be more able to react when that time comes. The one bright spot will be any very needed busineses.
Land: The path to the next depression, triggered by a massive debt bomb implosion, is being laid now. I would consider the end game to be inevitable.
DeleteI am not basing any current investment decisions on this forecast since the fuse, while lit, is long and will burn slowly.
In the event that I am prescient on this future occurrence, it would be important to be debt free when it happens. Debt and depressions do not mix well. I am free of debt and have been for a very long time, which has nothing to do with this future forecast. I am just financially conservative and have a natural aversion to buying anything with borrowed money.
Some gold would likely be helpful since the scenario is predicated in part on fiat currencies losing their value, particularly the USD.
But, to know what to do, I would have to be alive and compos mentis, at least sufficiently to digest relevant facts and to form an opinion on how best to navigate the disaster as it unfolds.
Thanks. It gives a start to being aware and not taken completely by surprise down the road. I'm debt free or close. I have the cash to pay off the tiny amount of mortgage left but put it into a good stock and it'd earn as much as the interest.
DeleteGardening will have to wait. Home Depot doesn't have any of the plants I usually get. I hope it's just early in the season.
ReplyDeleteOutside is a no-mask, no-entrance sign.
Grocery stores so far had what I normally get.
Futures were down until an hour ago. Then neutral to a little green. Now the happy dance is back. A 1/2% green.
ReplyDeleteThere's a lot of belief that the bottom is in. And that it's now forming it's base to go higher.
Since SPX is above 20 month ma that might be true. (I think I saw that comment, but can't confirm it.) It's be unusual, but it could go into a bear again based on events, and drop below 20 month again.
Physicians Realty Trust (DOC)
ReplyDelete$17.40 +$1.22 (+7.51%)
As of 9:39AM EDT.
DOC will be added to the S & P 400 index effective prior to the opening on 5/22.
https://www.prnewswire.com/news-releases/west-pharmaceutical-services-set-to-join-sp-500-physicians-realty-trust-to-join-sp-midcap-400-helmerich--payne-to-join-sp-smallcap-600-301061253.html
The price rise has nothing to do with fundamentals.
I put in a limit order, above the current market price, to sell 10 shares, part of a 45 share lot bought at $12.96 (3/20/20)
South Gent,
ReplyDeleteI used to think REIT's are safer options for income and stability in a business cycle. However, the Covid-19 pandemic seems to fundamentally transform the real estate landscape with the following factors:
1. Travel restrictions are hurting the hotel sector.
2. Retail outlets are closing.
3. Big closed shopping malls are suffering.
4. Office workers are working remotely from home.
5. Medical Offices are seeing less traffic.
6. Apartment REIT's are collecting less rent due to high unemployment.
7. Student housing is a question mark with remote learning.
Are you still watching any REIT's for potential purchase?
Y: All of those observations describe current reality.
DeleteRetail properties, particularly Malls, are in a long term secular decline.
I have a question mark whether or not working at home, rather than in an office, will be a longer term drag on office REITs like SLG or BDN. Occupancy will suffer during a recession and a pandemic adds another layer of uncertainty.
I am up to 14 shares of SLG with the last purchase at $35.5. That one does own premium properties in NYC. I will continue to average down in 1 or 2 share lots.
I mentioned in a recent post that I would re-enter a BRG position at a lower price.
The blue chip apartment REITs have low dividend yields and high P/FFO ratios.
I am more likely to sell medical office REITs at current prices than to buy. I currently own HTA and DOC.
In storage REITs, I will probably add a few shares to CUBE when and if the price falls below my last purchase price. I have an unrealized loss in JCAP and will probably not buy more other than through dividend reinvestment.
Item 2. E. Started Small Ball "Buying Program in CUBE-Bought 10 at $22; 2 at $21.55; 1 at $19.73:
In the industrial space, I recently discussed a 5 share buy of WPC and adding more STAG. I will need lower prices to buy more.
Item # 2.F. Added 5 WPC at $43
https://tennesseeindependent.blogspot.com/2020/04/adx-argd-bmoprsca-bud-cube-emp-pbct-pfe.html
2. Bought 50 STAG at $20.9
https://tennesseeindependent.blogspot.com/2020/03/bpoprp-cio-ciopra-enba-fdus-gis-hban.html
I have the most exposure to equity REITs in their SU bonds, followed by preferred shares. The overall exposure to the common shares is probably at the lowest level in 10 years or so and the buys are all small ball. Without checking, I would guess that my exposure to equity REIT SU bonds is at least 5 times larger than to the common shares.
I spent the morning selecting a few chicken buys in the regional bank space. Chicken buys use to be 100 shares of a $20 dollar stock. Now it is 5 or 10 shares.
Global Medical REIT Inc.
ReplyDelete$11.36 +$ 0.28 +2.53%
Last Updated: May 19, 2020 at 1:23 p.m. EDT
https://www.marketwatch.com/investing/stock/gmre
I sold my remaining 40 GMRE shares into today's rally.
I discussed the purchases in this post:
Item 1.B. Bought 20 GMRE at $10; 10 at $9.2; 10 at $8.81; 10 at $8.2 and Sold 10 at $11.22 :
https://tennesseeindependent.blogspot.com/2020/04/aeb-cpxpre-cs-d-enb-doc-gmta-gmre.html
While the quarterly dividend is good, it is either barely covered by FFO or not covered at all, depending on the quarter.
In the Q/E 3/30/20, GMRE reported $.19 FFO per share:
https://www.businesswire.com/news/home/20200506006062/en/Global-Medical-REIT-Announces-Quarter-2020-Financial
For 2019, both FFO and AFFO were reported at $.75 per share (dividend at $.8 per share):
https://www.businesswire.com/news/home/20200304005816/en/Global-Medical-REIT-Announces-Fourth-Quarter-Year-End
When discussing this REIT in the past, my opinion was that it needed to cut the dividend.
I view that as extremely likely if there is an agreement on internalizing management. The company is now negotiating the terms of the internalization, as noted in the earnings press release, and that costs money and/or shares. Dividend cuts normally follow internalizations. Maintaining a dividend that is at best barely covered with FFO now after internalization is not an option IMO.
GMRE is classified as a net lease REIT, but I do not recall how many of the properties are triple net lease. That makes a difference since GMRE does not adjust FFO by any routine maintenance expenditures to arrive at AFFO.
Today's sudden large decline is being credited to:
ReplyDelete""Stat News in a Tuesday afternoon report attempted to throw some cold water on an upbeat study released by Moderna MRNA, -10.41% about its coronavirus vaccine candidate. The Stat News article said that the Moderna report on its experimental remedy for COVID-19 lacked sufficient data. ""
https://www.marketwatch.com/story/dow-stumbles-250-points-lower-in-final-half-hour-of-trade-as-report-throws-cold-water-on-moderna-vaccine-candidate-2020-05-19
Looks like someone is timing the market. Publishing while it's in an uptrend so it finished that move. Then as it's at the top ready to reverse. I'd like this news in advance of the market too.
The other observation is that it's hard to believe this moved the market. Are people that anxious that they'd emotionally grab onto to news this tightly, in both directions?
I don't know what this means "eight people who took part in a 45-subject safety trial"
8 people got it, and 37 didn't? That'd be a waste of research resources to not give it to most.
---
Just for fun:
""The S&P 500 surged 3.2% to 2,953.91 on Monday to the highest close since March 6, which was before COVID-19 was declared a pandemic by the World Health Organization. More importantly for many chart watchers, the index has now retraced 62.4% of the coronavirus-related selloff from the Feb. 19 record close of 2,386.15 and the 3 1/2-year low of 2,237.40 on March 23; the 61.8% retracement was at 2,947.33. Followers of the Fibonacci ratio of 1.618, also known as the "golden ratio," suggest that retracements that surpass 61.8% are no longer governed by the previous trend, and that a full retracement is the next target. The S&P 500 is the second of the Big 3 stock market indexes to surpass the 61.8% Fibonacci retracement level. The Nasdaq Composite COMP, -0.53% has retraced 80.3% of its coronavirus selloff (it passed 61.8% target on April 27), the Dow Jones Industrial Average has retraced 54.8% of its selloff (61.8% of the selloff would be at 25,364.89). To put the S&P 500's rally in context, there were under 500 COVID-19 cases diagnosed and 19 deaths in the U.S. on March 6, compared with the current count of about 1.5 million cases and just under 90,000 deaths.""
https://www.marketwatch.com/story/the-sp-500-set-to-close-above-key-fibonacci-retracement-level-2020-05-18?mod=mw_more_headlines
Seems too razor thin a retracement over to matter, and not based on closing values. But also the idea that if it pops up enough then it's indicating that the market is more ripe for bigger pops, doesn't take Fibonacci ratio. That's just common sense.
This market is more uncertain about itself than that.
I've rarely seen a clear explanation of something in this type of tech, so seems just fun to post.
I would attribute the late day selloff to that STAT article which raised legitimate questions about the Moderna press release.
ReplyDeletehttps://www.statnews.com/2020/05/19/vaccine-experts-say-moderna-didnt-produce-data-critical-to-assessing-covid-19-vaccine/?mod=article_inline
SPX has not yet managed to pierce its 200 day SMA line using a 1 year chart. Yahoo Finance's chart has that SMA line at 2,999.02.
SPX Close 5/18/20: 2,922.94 -30.97 (-1.05%)
The stat article is good.
DeleteI still find the initial push by Moderna to release questionable and then this quick rebut. And the intensive rather than mild reactions of the market to buy in and reverse.
Good point on 200 dma. I don't find the wave theory articles useful. That's why I was saying posting for fun. Not to take seriously.
Land: I have a number of issues with this powerful stock starting last month.
DeleteThe most concerning is that the powerful retracement rally is occurring during depression like economic conditions. The CBO predicted today that GDP would fall an annualized 38% this quarter, the largest drop in U.S. history.
The second issue is that the VIX has remained at elevated levels, closing today at 30.53.
Another concern is the optimism about the near future is based more on hope than discernible facts. The Moderna inspired rally yesterday is just one example.
The more important manifestation, which is almost a daily occurrence, is to dismiss all bad news based on a belief that everything will be just fine soon, a belief that appears to me to be more delusionary than factual based on what is known now.
Then you have the technical issue, which may be fatal to the rally, involving an approach to the 200 day SMA line followed by a failure to pierce it to the upside or a failure to hold for any duration if pierced.
I do not pay any attention to the Fibonacci numbers.
That's reassuring in an odd way. I guess it's nice to have someone reflect what seem like the reasons concerns in this market.
DeleteWhat you express seems to me, similar to what a core # of CNBC guesses are expressing. Though they do it more scattered.
I keep wondering if it's like 1999. Difference is then the disconnect between prices and earnings and therefore value was obvious.
It's harder now to tell if the disconnect is real and worth selling into. Or it's that this problem has an end point either sooner or later, and so prices are fine no matter, and the bifurcation into succeeding vs impacted stocks is the answer.
""The more important manifestation, which is almost a daily occurrence, is to dismiss all bad news based on a belief that everything will be just fine soon""
I agree that's the part that's worrisome. A little optimism is good. The total dismissal of anything bad, is where it feels off-kilter.
The answer is always, the Fed. That was the play to make (on the Fed) for the last 10 years. Again, don't know whether it's enough or some negatives should be considered.
Just think without the virus, market would be at 4000 now?
I meant this as a positive. It's not well written.
DeleteI meant that it's reassuring to read a good reflection of the situation.
The "in an odd way" was because it's kind of odd to find a description of negative stuff, reasssuring. Also it was that I guess it's reassuring because it's nice to have a reflection.
I wanted to clarify, since it read so unclearly when I just re-read it.
Apple Hospitality REIT Inc.
ReplyDelete$9.64 -$0.08 -0.82%
https://www.marketwatch.com/investing/stock/aple
This hotel REIT, like others in this sector, suspended its common share dividend payments.
I decided to pare my small position and have sold 70 shares at a $560.82 loss. Those were my highest cost shares, including several bought with dividends. A snapshot of the loss is in this post where I track my REIT common and preferred realized gains and losses:
https://tennesseeindependent.blogspot.com/2014/10/gateway-post-equity-reit-common-and.html
I still own a few shares.
Many of the hotel REITs may recover provided there is no Covid-19 second wave this fall that forces another shutdown. I do not know whether that will happen so I sold some shares and kept some.
APLE did announce that it expected to receive waivers on its loan covenants. The waivers will last for 4 quarters starting with the current one. If that waiver is secured, that will buy some breathing room.
https://seekingalpha.com/news/3575658-apple-hospitality-expects-waivers-on-credit-covenants-shares-jump-6_1?mod=mw_quote_news
The loss has some value since I am only partially offsetting a small portion of realized gains harvested this year, thereby reducing my 2020 tax obligation.
South Gent,
ReplyDeleteUnlike the 2008-2009 crash the market is now moving up too much and too fast to make any meaningful bottom fishing. It seems everything is moving at a faster pace: the spread of the Covid-19 virus, the warp speed vaccine development, the Fed's monetary easing policy, and the Government's stimulus programs. Could this be considered the shortest bear market?
Y: It deepens on how you define a recovery from a bear market. Do you require only a return to less than a 20% decline from the high or a return to the previous high.
DeleteOn a daily trading basis, I do not recall a faster % decline followed by a faster % increase measured in days.
Yardeni has the bear market starting on 2/19/20 and ending on 3/23/20 with a 33.9% SPX decline.
Page 4, PDF.
https://www.yardeni.com/pub/sp500corrbeartables.pdf
Using his definition, that bear market was the shortest since 1928 which is as far as he goes back.
This article claims it takes on average 2 years to come back from bear markets since 1946, with declines in the 20% to 40% range taking on average 14 months.
https://www.investors.com/etfs-and-funds/sectors/sp500-coronavirus-stock-crash-how-long-take-recover/
If I take the high of 3386.15, then a number within 20% of that high would be 2708.92 or higher.
None of the foregoing provides illumination IMO about whether the underlying foundation of the counter rally, which I simply call the Blue Sky scenario, will pan out.
If the Dark Sky scenario occurs, which has the recession continuing through the year most of the year (the virus does not cooperate with the reopening push), then the rally will fail and a retest of the March lows will likely happen. I would then simply call the rally a head fake in a bear market that did not end as Yardeni claims in March.
I am not doing much now.
I did buy 100 shares of NWHUF at $6.83, bringing my total of the USD priced Grey Market traded shares up to 400. I also own the CAD prices shares traded in Toronto. I only use Schwab to buy Grey Market listed securities. I do not pay Schwab a commission and the bid/ask quote already converts the CAD price into USDs. Some brokers charge extra for transactions in that U.S. dark market, some may charge $50. That buy replaces GMRE in that account which was sold yesterday.
I'd forgotten about this (from a reader's comment to the Stat article) that was in the media:
ReplyDelete"Moderna was one of several drug companies that met with Trump. Each company that auditioned in front of the President so that he could give out $$$$$ to develop a vaccine. Each company’s gave their ideas on how long a vaccine would take, Trump didn’t like that. When Moderna CEO said what Trump wanted to hear (the end of this year or before) he gave them money. "
It goes with my sense that market was coming down, 7% in 2-3 days. And a magic rabbit appeared out of a hat.
Another Stat article behind a paywall starts out saying Moderna should stop acting like the penny stock it used to be, and be more responsible with it's releases.
----
I had an order I forgot to remove for Intc at 61.85. It sure filled. With 40 shares for sale, it was noticeable to not have waited for a 63.20 price.
It gave me the push. I sold 10 SPY in my regular account 297.15. And 5 SPY in my IRA at 297.08.
I've noticed that I've sold a few items, but not bought them back. It is my intent to.
---
More groceries bought. And hopefully the right and working part to fix my leaky sink (defective parts are making this into a long project.)
I so appreciate that masks are not just asked for but required. I've also discovered that going shortly before closing (not earlier than usual), there's much less of those (can I use the word, insipid) 6' appear lines to wait to get in.
I'm definitely not spending as much as usual. And not planning to leave home going forward.
---
Futures are red. About .4%. I haven't noticed the same split personally up and down, that was present the other day.
Land: After telling Donald what he wanted to hear, Moderna received up to a $485M grant from the U.S. Biomedical Advanced Research and Development Authority.
ReplyDeletehttps://www.fool.com/investing/2020/04/17/moderna-lands-a-483-million-grant-to-accelerate-de.aspx
Donald repeated his claim yesterday that Joe Scarborough murdered his intern. He also threatened to cut off federal funds from Nevada and Michigan if they proceeded with mail in voting this November.
My current read is the Stock Jocks are waiting for to see whether the virus derails the reopening push which explains the current stall and up and down chop going nowhere.
I don't understand the Scarborough attack. There's always a reason beyond knee jerk. Some deeper manipulative goal. This one escapes me. Has Joe managed to shame Trump lately? Joe's constant invites to Trump onto the show were a contributor to his election.
DeleteThat waiting to see ... seems to be it. A collective holding of breath with a touch of super sure it's all going to be worth buying into soon.
Land: Trump has a strong authoritarian personality and he will do whatever he can to undermine constitutional values and the institutions necessary for a properly functioning democracy, including faith in the results of elections, voting and a free press.
DeleteHe will attack viciously, as is his nature, anyone who contradicts his reality creations with facts and disseminates that information to a national audience.
He denigrates those sources in a variety of ways, which includes personal attacks and accusations that have no factual foundation.
His liberal use of labels like "enemy of the people" and "Fake News", when referring to responsible journalists, are just part of his strategy to prevent as much as possible voter reliance on accurate information. That is consistent with his demagoguery and strong authoritarian tendencies that will not brook checks and balances on his exercise of virtually unlimited presidential power. The firing of 4 IGs since 4/3/20 is just an example of removing those checks.
He knows that the republican base is willing to accept fact free accusations and conspiracy theories. Remember that Donald gained prominence among republicans by becoming the foremost proponent of the birther conspiracy. Even now, most republicans still believe Obama was born in Kenya, and there is no amount of proof that could conceivably convince them otherwise.
Donald's overreaching purpose is to undermine with as many people as possible any news source that interferes with his false narratives and statements and to intimidate anyone who dares to challenge his statements, even those that are egregious like the accusation made against Scarborough. He has cowed all republican politicians on a national level, except for Senator Romney, to such an extent that none will dare criticize him in any meaningful way. After all, he is supported by about 95% of republicans and those republican politicians want to keep their jobs.
Yes there is all of that.
DeleteHe's usually strategic with his nutty accusations. Maybe I'll search twitter with that hashtag and see what inventive ideas folks have.
It's hard to believe the joke from NY has managed to maneuver to have this much power. It would have been so easy to shut him down if there was even a modicum of courage early on. Heck forget that, offer him a TV show & money and he'd have gone away.(Maybe not gone away. I get the impression Putin's been polishing up Trump's luster to hold office for a long time now.)
In an interview with Leslie Stahl after the 2016, she asked him whether he was going to continue attacking the press.
DeleteTrump made this exceedingly rare truthful statement that he would continue those attacks in an effort to discredit the press and demean them, so that no one will believe any negative story, as defined by Donald, about him.
https://www.cbsnews.com/news/lesley-stahl-donald-trump-said-attacking-press-to-discredit-negative-stories/
Donald knows that republicans will continue to support him no matter how many egregious, unethical and immoral comments that he makes. Accusing Joe Scarborough of murder is just one of many really disgusting comments that provide a window into his soul. He is evil.
https://www.businessinsider.com/mika-brzezinski-slams-trump-joe-scarborough-murder-conspiracy-tweet-2020-5
I remember that interview and comment.
DeletePeople are still underestimating the evil part. They still look through the window of normal so they don't anticipate how bad it is in there. Still explain him away rather than say "if he does THIS horror, let's preemptively dig up the next bigger deeper one."
THIS is what sociopaths are. The buffoonery are a combination of staged coverup. And actual inability in anything normal.
I had an online discussion the other day with a man who really likes Trump from the TV show and thinks that's his persona. He believes trump has helped many charities, because the show had him talking about charities. I pointed out his fines for charity violations, and $25 million for his fake university. His reply was fake news.
I haven't had time (nor bother) to go back yet and post a few links I've pulled up of his $2m fine etc.. This is an educated person who prides himself on reading news from lots of sources. I think a very high score in supporters would be gullibility. I don't know what it takes to create this much willful blindness. When I started to breach his armor, he started to crack and blow up. Sociopaths are very skilled manipulators including Trump.
Land: Facts will never change a Trumpsters' opinion. It is not worth the effort to even make the attempt. I would just ignore that person. He is not worth a moment of your time.
DeleteHe used to vote dem. Did not vote Trump last time. It's a social experiment. Aiming to find out why he can fool himself so much. He's not one of the obvious (racist, sociopath themselves, painfully unable to think.) I am curious to see what he does with the info on lawsuits and charities when he sees it. No, I am not prioritizing this in my life. I don't aim to change votes. Which reminds me I have to respond to a friend who's arranging GOTV callphone canvassing (all from home of course.) Some people have so much energy...
DeleteI meant to say .... I don't aim to change Trump votes. Not worthwhile.
DeleteLand: There were a large number of marginal Trump voters in 2016. Many of them will vote for Biden in 2020. The people that I call Trumpsters believe that Donald is honest and a role model for their children. They are not reachable with accurate information. Their receptiveness to facts inconsistent with their beliefs would be the same as if you tried to insert a worm into their ear.
DeleteI mentioned earlier that Donald has fired 4 Inspector Generals since 4/3/20. The number is now up to 5 with the firing of the Department of Transportation IG who was investigating Elaine Chao, the Secretary of the DOT and Mitch McConnell's wife.
https://www.scmp.com/news/world/united-states-canada/article/3085328/us-lawmakers-slam-trumps-firing-watchdog
Land: Trump University was clearly a fraudulent enterprise.
DeleteAnother fraud suit against Trump that is working its way through the court system.
https://www.newsweek.com/federal-judge-rules-lawsuit-against-trump-corporation-will-go-forward-1504963
And, there is no doubt that Trump used his Foundation
"to promote his presidential bid, pay off business debts and purchase a portrait of himself for one of his hotels." Those actions resulted in a $2M fine.
https://www.nytimes.com/2019/11/07/nyregion/trump-charities-new-york.html
Don't you think getting a worm into their ear would be easier? If Trump declared a worm in the ear protection from corona virus, bait shops would be emptied.
DeleteMcConnell is the one I don't understand. I'm not sure you can be that corrupt and a straight up robber... without being a sociopath (ASPD) too. He doesn't display it as overtly.
Hadn't heard about this lawsuit. Fits in nicely with the others.
The current yield on Fidelity Government money market fund is .01%.
ReplyDeleteThat is a common yield for broker MM fund sweep yields.
What effect is low rates going to have on investor behavior?
Just to illustrate, assume an investor has $1M to invest and the investment options could broadly be described as $1M in a MM fund yielding .01% or in stocks.
The $1M invested in a MM fund would produce $100 in annual income before taxes and an adjustment for inflation which would take the nominal amount deep into negative territory.
If the investor bought just 100 shares of Ares Capital (ARES) at $14.35, the last price before I published this comment, that stock would generate $160 in income.
The central banks are forcing people to invest in risk assets, at least for those who want or need meaningfully positive real returns after taxes on their capital. The flip side is that those who remain in short term, relatively credit risk free instruments, are being punished for doing so.
My new and still not properly set up First Foundation account, has just lowered from 1.75% to 1.6% for up to 3M.
DeleteSo it's possible to get more than .01 with some chasing.
Both schwab and FF seem to not be linking to my discoverbank correctly. It's been a week and I can't get this accomplished.
That said, 1.6% is still low.
Stocks like ARES aren't the usual -- they take more skills to understand. Are junk bond risk level. But 1.6% is low compared to divs on plenty of stocks that aren't at as much risk.
It's particularly a problem for retirees who want to switch to secure investments to live off of interest. Which is what was the recommended plan for years. That plan didn't include zirp!
Land: I have not linked a bank account with a brokerage account in some time. As I recall, it took several days and required me to do something. One example that I recall is that a small amount was deposited by the broker. I then had to go into that account and identify for the broker a small penny amount deposited. So you could have some security hoop to jump through. If you continue to have problems, I would just contact customer service. Schwab and Fidelity customer representatives are pretty good generally.
DeleteI would anticipate that the rates that are being quoted now are mainly teaser rates which will decline once the company convinces someone to deposit money. A lot of people will open the account up and then mostly forget about it or be loathed to close it. I am one of those people. I opened a ING Direct account many years ago that I linked to a Sharebuilder brokerage account. ING Direct was acquired by Capital One. Customers of Sharebuilder were sold to ETrade; and I did not want to fool with that broker so I transferred the assets to Fidelity. I still own the Capital One savings account and should liquidate it but have not bothered to take the time to do it.
The top rate on 3 month CDs, looking at the ones offered to Fidelity customers, is currently at .15%. Why bother?
I can say, as a psychological matter, that looking at that .01% in the MM does cause me to take risks and buy something from time to time.
Today I bought 100 of BXMX, a CEF.
Nuveen S&P 500 Buy-Write Income:BXMX
CEF Connect Page:
https://www.cefconnect.com/fund/BXMX
I had already made 2 phone calls, and two messages when I hit frustration. The microdeposits are already sent. But there's nothing on the screen to put them into for this bank connection. I now have someone working on the problem. There's some known glitch in ACH linking I am told. That's schwab. Still need to reach the other bank's dept.. It will happen, eventually. Everyone's working from home, so it's making it harder to manage things.
DeleteMy discover bank is at 1.4% and still there for a while now.
I don't think this will be a teaser rate, because they need the money for loans.
Hopefully it will last a few months or 6. And the market goes down & I can get more into it. I've chased a few rates and had them last long enough to make it worthwhile (usually over a year.) In this environment, who knows.
Garmin was popping. I missed the morning highs of 84.90. But sold 5 shares into 84.02. Previously I'd sold 10 shares at 83. That leaves 35 shares.
ReplyDeleteI should be selling more into higher pops, same as buying more as a market declines. That's not human nature. (10's gone to now 5 shares)
Smallcaps are up while the rest of down? Is it because gas is coming to life, or a relief package I haven't heard about, is getting more real?
ReplyDeleteLand: The moves are so small percentage wise today that I would not attempt to ascribe any causes other than market dynamics.
DeleteThe Blue Sky scenario still appears to be the dominant consensus among the Stock Jocks, but we saw in February and March how quickly that herd can stampede in the opposite change direction.
IWM has underperformed SPY and QQQ this year.
Through yesterday, IWM had a total return of -18.81%.
QQQ was up +9.06% YTD:
https://www.morningstar.com/etfs/xnas/qqq/performance
SPY was down -7.18% YTD.
The small caps may narrow their performance differences with QQQ and SPY when and if the Blue Sky scenario appears to be more fact than fiction. IWM is weighted more in companies whose businesses are entirely U.S. centric or close to it.
Hum that's true.
DeleteIt's been unusual for IWM to lead, but was in the recent rally. Could easily be that as a rally trails off, it's taking a little longer to fade.
I happily sold into this rally today. Just a hair's worth.
ReplyDelete5 IWM at 134.60. Another $3000 IWM in 401k at close. SPY hasn't made it back to it's recent 297 so held off on that.
I have a profit in the QQQ bought in the crisis, but that goes up whether in covid mode or v-shaped expectation mode, so seems best to hold.
Maybe worth taking a loss in MMM and F before another leg down but that's a lot of betting on timing, instead of just waiting a few years for a recovery.
I don't really have anything else to sell, until the market climbs to SPY over $300. Just a little more INTC & SOXX if it moves back up.
With the market maintaining and even increasing into the close, I'm starting to worry that the market won't come down enough to make it obvious to get back in.
Could this be based on recovery package expectations? That's nowhere near happening yet.
Meanwhile the frustration of all that Trump's contributed to hardships and pain for people is so present.
Schwab uses a 3rd party to do electronic account connections. The problem is already known to them. I'll have to fill a paper form & they'll fast track it. I have a single point of contact who calls back, which always good. He's excited about a 3 day weekend coming.
I have published a new post:
ReplyDeletehttps://tennesseeindependent.blogspot.com/2020/05/argd-chn-chiq-clou-ebgef-ftsprm-gnl-mnr.html