Economy:
Calculated Risk: Q2 GDP Forecasts: Probably Around 40% Annual Rate Decline (emphasis added)
ADP reported that private sector jobs declined by an estimated 2,760,000 in May. ADP National Employment Report The April decline was previously reported at 20,360,000.
The U.S. Bureau of Labor Statistics claimed that 2.5 million jobs were added in May with the unemployment rate falling to 13.3% from April's 14.7%. Employment Situation Summary {"In May, employment continued to decline in government (-585,000)"} Donald said last Friday that May was "probably, if you think of it, the greatest comeback in American history".
The consensus estimate was for a 19 to 19.5% unemployment rate, depending on the service compiling the estimates. The consensus forecast was for a job loss of 7.25M to 8.333M, depending on the service compiling the estimates.
Note that the ADP report only includes private payrolls.
The BLS, which includes both private and government jobs, claimed that government jobs declined by 585,000 in May. So without that decline, BLS would have the private payrolls at +3.085 M compared to ADP 's number of -2.76M.
IMO, that kind of discrepancy makes both estimates unreliable. That observation, however, is irrelevant in predicting how the Stock Jocks and Bond Ghouls will react to the BLS report.
The U-6 number remained extremely high at a seasonally adjusted 21.2%. Table A-15. Alternative measures of labor underutilization
Total Unemployed, Plus All Persons Marginally Attached to the Labor Force, Plus Total Employed Part Time for Economic Reasons, as a Percent of the Civilian Labor Force Plus All Persons Marginally Attached to the Labor Force (U-6) (U6RATE) | FRED | St. Louis Fed
Average hourly earnings declined by 29 cents in May.
Most of the job additions were in low paying restaurant and retail sectors: "Over the month, employment in food services and drinking places rose by 1.4 million, accounting for about half of the gain in total nonfarm employment. . . In May, employment in retail trade rose by 368,000."
Brian Wesbury expresses the bullish interpretation of this BLS report in his blog: Nonfarm payrolls rose 2,509,000 in May.pdf. I would label that interpretation as the dominant narrative being expressed in stock prices.
Factory orders fall sharply for second straight month in April - MarketWatch
US weekly jobless claims total 1.877 million, vs 1.775 million expected
The ISM May 2020 Non-Manufacturing PMI increased to 45.4 from 41.8 in April. The new orders component rose to 41.9 from 32.9. Service side of U.S. economy breaths signs of life in May as states reopen, ISM finds - MarketWatch
ADP reported that private sector jobs declined by an estimated 2,760,000 in May. ADP National Employment Report The April decline was previously reported at 20,360,000.
The U.S. Bureau of Labor Statistics claimed that 2.5 million jobs were added in May with the unemployment rate falling to 13.3% from April's 14.7%. Employment Situation Summary {"In May, employment continued to decline in government (-585,000)"} Donald said last Friday that May was "probably, if you think of it, the greatest comeback in American history".
The consensus estimate was for a 19 to 19.5% unemployment rate, depending on the service compiling the estimates. The consensus forecast was for a job loss of 7.25M to 8.333M, depending on the service compiling the estimates.
Note that the ADP report only includes private payrolls.
The BLS, which includes both private and government jobs, claimed that government jobs declined by 585,000 in May. So without that decline, BLS would have the private payrolls at +3.085 M compared to ADP 's number of -2.76M.
IMO, that kind of discrepancy makes both estimates unreliable. That observation, however, is irrelevant in predicting how the Stock Jocks and Bond Ghouls will react to the BLS report.
The U-6 number remained extremely high at a seasonally adjusted 21.2%. Table A-15. Alternative measures of labor underutilization
Average hourly earnings declined by 29 cents in May.
Most of the job additions were in low paying restaurant and retail sectors: "Over the month, employment in food services and drinking places rose by 1.4 million, accounting for about half of the gain in total nonfarm employment. . . In May, employment in retail trade rose by 368,000."
Brian Wesbury expresses the bullish interpretation of this BLS report in his blog: Nonfarm payrolls rose 2,509,000 in May.pdf. I would label that interpretation as the dominant narrative being expressed in stock prices.
Factory orders fall sharply for second straight month in April - MarketWatch
US weekly jobless claims total 1.877 million, vs 1.775 million expected
The ISM May 2020 Non-Manufacturing PMI increased to 45.4 from 41.8 in April. The new orders component rose to 41.9 from 32.9. Service side of U.S. economy breaths signs of life in May as states reopen, ISM finds - MarketWatch
China asks state firms to halt purchases of U.S. soybeans, pork, sources say If this has occurred, I view it as a message sent to Donald that China will respond to what it views as U.S. interference in China's relationship with Hong Kong.
The pandemic isn’t over. But America sure seems over it.
The pandemic isn’t over. But America sure seems over it.
Restaurant bookings have fully recovered in Germany in a sign that activity rebounds quickly as lockdowns ease - MarketWatch
Mortgage demand from homebuyers spikes 18%
European Central Bank ramps up its pandemic bond buying to 1.35 trillion euros When the ECB and the FED finish buying all of the sovereign and corporate debt with newly created money, my thought is to cancel the debt and then push the relevant computer button wiping out the funny money used to buy all of those securities.
'Best day ever': Gamblers flock to downtown Las Vegas on first night of casino reopenings
OPEC and allies reportedly agree to extend record production cut
Mortgage demand from homebuyers spikes 18%
European Central Bank ramps up its pandemic bond buying to 1.35 trillion euros When the ECB and the FED finish buying all of the sovereign and corporate debt with newly created money, my thought is to cancel the debt and then push the relevant computer button wiping out the funny money used to buy all of those securities.
'Best day ever': Gamblers flock to downtown Las Vegas on first night of casino reopenings
OPEC and allies reportedly agree to extend record production cut
'The Covid-19 recession is over,' says economist Zandi as May job losses not as bad as feared (“The good news is I think the recession is over, the Covid-19 recession is over, barring another second wave, a major second wave, or real serious policy errors,” according to Mark Zandi, chief economist at Moody’s Analytics. He is predicting a sluggish recovery until there is an effective vaccine)
Canada's mortgage insurer tightens rules as it forecasts home-price drop of up to 18% - Reuters
50 Popular Restaurants That Won’t Reopen After the Pandemic
Canada's mortgage insurer tightens rules as it forecasts home-price drop of up to 18% - Reuters
50 Popular Restaurants That Won’t Reopen After the Pandemic
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Markets and Market Commentary:
As the Nasdaq and S & P 500 indexes moved closer to their all time highs yesterday, it occurred to me that I have been living in an Alternate Reality, actually believing that some kind of virus had shut down major portions of the world economy which was in the midst of a deep recession. Maybe I need to google "coronavirus" just to confirm that it never existed.
The underlying narrative, now at 100% certainty as expressed in stock market index levels, is that COVID-19 really did not happen as a practical matter and everything will be back to normal in a few weeks with no hangover or residual effects. Not just back to normal, but better than it has ever been before year end.
The latest catalyst for optimism is the jobs report released last Friday that showed only a 13.3% unemployment rate, significantly higher than the worse level hit during the Near Depression back in 2008-2009 which was 10% in October 2009.
The paycheck protection program may have resulted in some people being brought back that had just recently been laid off, primarily in the restaurant and retail sectors.
The BLS data did not square with other reports, including the ADP private payroll report for May or the new claims for unemployment insurance during May. News Release for the week ending 5/30/20; Jobless claims climb 1.88 million at end of May-MarketWatch
‘You should be nervous!’—legendary money manager slashes stock market exposure from 55% to 25% - MarketWatch; Grantham Sounds Bearish Warning With GMO Cutting Exposure - Bloomberg
How the U.S. dollar’s ‘almost silent slide’ is juicing the stock-market rally - MarketWatch The U.S. Dollar Index was near 103 in late March and has now slid to around 97. DXY | U.S. Dollar Index (DXY)
Negative interest rates could be needed for a 'V' recovery, Fed economist says
Goldman Sachs bets against the dollar as economies reopen (GS believes the Norwegian Krone will gain against the USD for the reasons discussed in this article. I own a USD priced ETF that owns attempts to track the MSCI Norway IMI 25/50 Index. MSCI Norway ETF (NORW). I also own Orkla ASA ADR (ORKLY), whose ordinary shares are price in NOKs. A rise in the NOK/USD exchange rate will cause Norwegian stocks priced in USDs to outperform the shares price in NOKs and traded in Oslo.)
As the Nasdaq and S & P 500 indexes moved closer to their all time highs yesterday, it occurred to me that I have been living in an Alternate Reality, actually believing that some kind of virus had shut down major portions of the world economy which was in the midst of a deep recession. Maybe I need to google "coronavirus" just to confirm that it never existed.
The underlying narrative, now at 100% certainty as expressed in stock market index levels, is that COVID-19 really did not happen as a practical matter and everything will be back to normal in a few weeks with no hangover or residual effects. Not just back to normal, but better than it has ever been before year end.
The latest catalyst for optimism is the jobs report released last Friday that showed only a 13.3% unemployment rate, significantly higher than the worse level hit during the Near Depression back in 2008-2009 which was 10% in October 2009.
The paycheck protection program may have resulted in some people being brought back that had just recently been laid off, primarily in the restaurant and retail sectors.
The BLS data did not square with other reports, including the ADP private payroll report for May or the new claims for unemployment insurance during May. News Release for the week ending 5/30/20; Jobless claims climb 1.88 million at end of May-MarketWatch
‘You should be nervous!’—legendary money manager slashes stock market exposure from 55% to 25% - MarketWatch; Grantham Sounds Bearish Warning With GMO Cutting Exposure - Bloomberg
How the U.S. dollar’s ‘almost silent slide’ is juicing the stock-market rally - MarketWatch The U.S. Dollar Index was near 103 in late March and has now slid to around 97. DXY | U.S. Dollar Index (DXY)
Goldman Sachs bets against the dollar as economies reopen (GS believes the Norwegian Krone will gain against the USD for the reasons discussed in this article. I own a USD priced ETF that owns attempts to track the MSCI Norway IMI 25/50 Index. MSCI Norway ETF (NORW). I also own Orkla ASA ADR (ORKLY), whose ordinary shares are price in NOKs. A rise in the NOK/USD exchange rate will cause Norwegian stocks priced in USDs to outperform the shares price in NOKs and traded in Oslo.)
Here’s why the ‘unloved but welcome’ U.S. stock market rally from March lows won’t last, Goldman says - MarketWatch
Small-caps have led since April, but could be set for a ‘summer setback,’ analysts warn - MarketWatch
A 50-year technological revolution is about to begin. These are the stocks to own, says strategist-MarketWatch ("the age of connected intelligence", and maybe, the users of the "connected intelligence" will become more intelligent and knowledgeable)
Marriott: Trump administration ordered end of Cuba hotel business
Blowout jobs report shows 'big hedge fund guys' got it wrong: Cramer
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Portfolio Management:
The small ball strategy required me to buy during March and into April. I am now reversing that process as required by this strategy.
While I will be discussing stock and stock fund purchases in the next five posts, those have already occurred prior to yesterday.
I am not likely to continue common stock purchases at current market levels given the uncertainties relating to the duration of recessionary conditions and the timing and strength of a recovery.
New purchases of treasuries and CDs are not going to happen for a long time:
I do not view those rates as being worth the effort of entering an order.
I may add at lower prices to my placeholder ETFs.
A placeholder is a security that I will likely buy during a substantial stock market decline, similar to or worse than what happened in March.
Part of the small ball strategy is the "small ball wave buying program" where I start at the top and buy a few shares of virtually everything in an account that is experiencing really serious downside momentum.
The purchase will generally start with a 1 to 5 share lot and may build up gradually before topping out a 10 shares.
Some of the placeholder adds are bungee jumping ETFs, generally described as stock ETFs that have already recovered to new highs after the March decline.
An example is the Invesco QQQ Trust (QQQ) which hit a new 52 week high yesterday.
Another example is the bungee jumper First Trust Cloud Computing ETF (SKYY):
Another example is the First Trust Dow Jones Internet Index Fund (FDN):
I will discuss purchases of bungee jumpers in future posts.
The opportunities in investment grade corporate debt have passed IMO. I will occasionally take a look and bought 2 senior unsecured bonds yesterday issued by S.L. Green Realty L.P., the operating entity for SL Green Realty Corp. (SLG). This particular bond matures on 10/15/22. I mentioned in a recent comment paring my higher yielding common stock position.
This bond is generally lightly traded. Rarely is a seller willing to accept a 2 bond purchase order at a price that I am willing to pay. I had to pay up to hit the ask price for a 2 bond order but I was willing to accept that given the income alternatives for cash. My total cost was 99.579, with the YTM at 3.427%. Bonds Detail (click "Trade History"). I will discuss this trade in a subsequent post where I also discuss the common stock pare. I also the equity preferred SLGPRI.
On big up days like yesterday, I am buying 1 or 2 shares of double short ETFs.
Small-caps have led since April, but could be set for a ‘summer setback,’ analysts warn - MarketWatch
A 50-year technological revolution is about to begin. These are the stocks to own, says strategist-MarketWatch ("the age of connected intelligence", and maybe, the users of the "connected intelligence" will become more intelligent and knowledgeable)
Marriott: Trump administration ordered end of Cuba hotel business
Blowout jobs report shows 'big hedge fund guys' got it wrong: Cramer
++++
Portfolio Management:
The small ball strategy required me to buy during March and into April. I am now reversing that process as required by this strategy.
While I will be discussing stock and stock fund purchases in the next five posts, those have already occurred prior to yesterday.
I am not likely to continue common stock purchases at current market levels given the uncertainties relating to the duration of recessionary conditions and the timing and strength of a recovery.
New purchases of treasuries and CDs are not going to happen for a long time:
 |
| U.S. Treasury Yields as of 6/5/20 |
I may add at lower prices to my placeholder ETFs.
A placeholder is a security that I will likely buy during a substantial stock market decline, similar to or worse than what happened in March.
Part of the small ball strategy is the "small ball wave buying program" where I start at the top and buy a few shares of virtually everything in an account that is experiencing really serious downside momentum.
The purchase will generally start with a 1 to 5 share lot and may build up gradually before topping out a 10 shares.
Some of the placeholder adds are bungee jumping ETFs, generally described as stock ETFs that have already recovered to new highs after the March decline.
An example is the Invesco QQQ Trust (QQQ) which hit a new 52 week high yesterday.
Another example is the bungee jumper First Trust Cloud Computing ETF (SKYY):
 |
| Bungee Jumper |
The opportunities in investment grade corporate debt have passed IMO. I will occasionally take a look and bought 2 senior unsecured bonds yesterday issued by S.L. Green Realty L.P., the operating entity for SL Green Realty Corp. (SLG). This particular bond matures on 10/15/22. I mentioned in a recent comment paring my higher yielding common stock position.
This bond is generally lightly traded. Rarely is a seller willing to accept a 2 bond purchase order at a price that I am willing to pay. I had to pay up to hit the ask price for a 2 bond order but I was willing to accept that given the income alternatives for cash. My total cost was 99.579, with the YTM at 3.427%. Bonds Detail (click "Trade History"). I will discuss this trade in a subsequent post where I also discuss the common stock pare. I also the equity preferred SLGPRI.
On big up days like yesterday, I am buying 1 or 2 shares of double short ETFs.
+++++
Trump:
When Donald was asked about his favorite bible verse, he replied an "eye for an eye" because you have to be strong. Trump's favorite Bible verse: 'Eye for an eye' - POLITICO I really did not need him to confirm that.
Jesus had this to say in the "Sermon on the Mount about Donald's favorite passage: Matthew 5:38-42 NIV - Eye for Eye - “You have heard that it - Bible Gateway; What Does “an Eye for an Eye” Mean in the Bible?
Survey: White Evangelicals See Trump As 'Honest' And 'Morally Upstanding' : NPR; Americans' Views on Trump, Religion and Politics | Pew Research Center
In Days of Discord, President Trump Fans the Flames-The New York Times
How to hydroxychloroquine - YouTube (Sarah Cooper, comedian) and How to medical - YouTube
Trump's Evidence-Free Attempt to Link Scarborough to Aide's Death - FactCheck.org
Trump's False Statements About How Democratic Leaders Handled Protests - FactCheck.org
Recent column by conservative George Will: George Will: There is no such thing as rock bottom for Trump. Assume the worst is yet to come. - The Washington Post ("Voters must dispatch his congressional enablers, especially the senators who still gambol around his ankles with a canine hunger for petting.") I agree.
Why Do Republican Leaders Continue to Enable Trump? - The Atlantic
If Donald was not the President, he would have already been kicked off Twitter for his abusive statements that routinely violate Twitter's policies and justifiably so. Twitter lets President Trump’s tweets stand but suspends another account for tweeting the exact same thing - MarketWatch
Esper, Milley won't testify before House panel on military response to protests
Mattis breaks silence and tears into Trump: 'He tries to divide us'
Jim Mattis blasts Trump in message that defends protesters, says president ‘tries to divide us’
I would make a distinction between stating a policy position that does not cause divisions which are already present and Donald's divisive conduct and language unrelated to policy objectives.
When a politician comes out for or against abortion, that alone will create policy disagreements and divisions among voters, but that is unavoidable and the division is already present.
Donald goes out of his way to belittle, inflame emotions, smear, mislead and antagonize through a constant stream of false and angry statements that are pure demagoguery and frequently juvenile. He appeals to people's worst instincts and fears in a transparent effort to manipulate them for his personal gain. His conduct and statements are intended to create, reinforce and harden divisions unrelated to specific policy goals.
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Trump Authorizes Use of Force Against Peaceful Protestors-Lafayette Park:
Donald wanted to have a photo op with him holding someone's bible in front of the St. John's Episcopal Church, near the White House.
George Floyd protests live updates: Peaceful protesters gassed so Trump can pose for photos - The Washington Post
There were peaceful protestors that were in his way.
To force them to move, those congregating peacefully and in a law abiding manner in Lafayette Park were shot with rubber bullets, attacked with mounted police, and assaulted with pepper balls. Fact check: five false or misleading claims Trump and his allies make about the response to the protests
Don the Authoritarian later retweeted a claim that the protestors were "terrorists". Trump tweets a letter calling protesters ‘terrorists’ Trump's retweets must be considered his own statements.
The Bishop for D.C., Mariann Edgar Budde, told Anderson Cooper that she was outraged by Trump's conduct. 'I am outraged': Bishop overseeing church responds to Trump photo-op Her interview is worth listening to.
Just before Trump sanctioned military action against the peaceful protest in Lafayette Park, Donald claimed that he was an “an ally of all peaceful protesters.” Trump says he's an 'ally' to protesters as police fire tear gas in DC - Business Insider; Perhaps Trump’s most ludicrous claim: That he is an ‘ally of all peaceful protesters’ - The Washington Post
Video of the attack showed police beating members of the press which is to be expected in Trump's America. Australian 7NEWS crew attacked by police live on air | 7NEWS - YouTube
Barr denies that those actions had anything to do with clearing a path for Trump's walk to the church. Barr defends use of force at Monday's White House protest (Barr: "There was no correlation between our tactical plan of moving the perimeter out by one block and the President's going over to the church." It was just a coincidence that the "tactical plan of moving the perimeter" occurred immediately before Barr and Donald walked to the photo op.)
Once the crowd was dispersed, Donald walked to the Church, followed closely by the Defense Secretary Esper, Attorney General Barr and General Mark Milley (Chairmen of the Joint Chiefs) wearing battle fatigues.
Maybe General Milley thought he was in Afghanistan.
Mark Esper and Mark Milley have been promoted to the level of their incompetence - The Washington Post (opinion column written by George Will)
Why Mark Milley striding behind Trump through Lafayette Square was so troubling - The Washington Post (opinion column written by "neo-conservative" Robert Kagan)
Admiral Mullen, who served in Milley's role as Chairman of the Joint Chiefs of Staff under Bush and Obama, was highly critical. Mike Mullen: I Cannot Remain Silent - The Atlantic
Donald wanted Milley to "dominate the streets" of America and the General was willing to comply.
Ivanka with her designer handbag and Kushner were in the group as was the newly installed press secretary who promised on her first that she would never lie and then proceeded to do so. (see photo embedded in this article: Top General Defends His Actions After Appearing in Trump Photo Op)
U.S. police have attacked journalists more than 120 times since May 28 » Nieman Journalism Lab (as of 6/1/20 at 9:53 A.M., more since then)
Protesters Dispersed With Tear Gas So Trump Could Pose at Church - The New York Times
Inside the push to tear-gas protesters ahead of a Trump photo op - The Washington Post
Top Republican senators defend Trump's church photo-op after peaceful protesters cleared out
Trump held up a Bible in his photo op. He looked uncomfortable with the Bible in his hand.
A reporter asked him whether it was his bible. Trump replied that "It's a Bible". The Bible remained closed throughout the photo op. Trump's Biblical Spectacle Outside St. John's Church - The Atlantic ("To Trump, the Bible and the church are not symbols of faith; they are weapons of culture war.")
I doubt that Donald has opened a Bible in decades, if at all in his lifetime. At most, he may have read up to 200 words in his life, though he frequently claimed in rallies that no one read the Bible more than he. Trump offers revealingly bad answers about the Good Book - Chicago Tribune; Donald Trump unable to name one verse from "favourite book" The Bible - YouTube
Donald claims that he knew nothing about the protestors being moved so he could have his photo op. That claim is simply not believable.
All of the foregoing is to be expected in Trump's America with far worse to come when and if he is reelected.
+++
"When the looting starts, the shooting starts":
Donald later tried to explain that the was not condoning violence, which he was obviously doing IMO. Trump seeks to explain 'looting leads to shooting' tweet that sparked outrage
President Donald Trump's response to police killing threatens to further deepen unrest in America, Democrats and Republicans say
The phrase "when the looting starts, the shooting starts" has historically meant that law enforcement will shoot looters. The phrase became prominent when uttered by Miami's police chief Walter Headley in 1967:
Headley: Law enforcement would go after young hoodlums, from 15 to 21, who have taken advantage of the civil rights campaign. ... We don't mind being accused of police brutality. There is only one way to handle looters and arsonists during a riot and that is to shoot them on sight. I've let the word filter down: When the looting starts the shooting starts. " (emphasis added) There is no doubt what this phrase means.
The racist George Wallace repeated the phrase during a 1968 campaign rally in Pittsburgh. Where does the phrase 'When the looting starts, the shooting starts' come from?; The History Behind 'When The Looting Starts, The Shooting Starts' : NPR The phrase is viewed as racist and has not been heard to my knowledge from any nationally known politician, except for George Wallace, until Trump gave it new life.
As cities burned, Trump stayed silent — other than tweeting fuel on the fire - The Washington Post (5/31/20 article)
Some samples, just from 5/31 published tweets, of Demagogue Don throwing fuel on the fire and making divisive and otherwise incendiary statements
After this tweet from Donald, the police started to attack journalists covering the protest, targeting one journalist with a rubber bullet that put out her eye, while others were beaten and arrested. Police Target Journalists as Trump Blames ‘Lamestream Media’ for Protests - The New York Times It is common for that to happen in autocratic countries.
In TrumpWorld, the protests, rioting and looting is due to the "Lamestream Media" fomenting hatred and anarchy, ANARCHISTS, Radical Left Democrats, and the "ANTIFA organization" which he will designate as a "Terrorist Organization". The FBI Finds ‘No Intel Indicating Antifa Involvement’ in Sunday’s Violence | The Nation
What is missing from those tweets besides leadership?
Trump is just feeding red meat to the Trumpsters.
He is proving in his statements that he has no comprehension whatsoever about the history of race relations in the U.S. or how the images of a police officer with a boot on an African American's neck for 8 minutes and 46 seconds plays into that history.
As to ANTIFA, short for anti-fascism, it is not an organization, lacks membership rolls, does not have a leader or any centralized structure. Trump has no power to designate ANTIFA a terrorist organization, even it was one, since it is not a foreign group and there are no domestic terrorism laws.
Trump Can't Designate Antifa - or Any Movement - Domestic Terrorist Organization - FactCheck.org
Many Claim Extremists Are Sparking Protest Violence. But Which Extremists? - The New York Times
There has been opportunistic looting long before ANTIFA. In my lifetime, the first major occurrences were in 1964-1965.
The 100% pure Trumpster Matt Gaetz (R-FL) has a republican solution for alleged ANTIFA members:
Twitter restricts tweet from Gaetz for glorifying violence It is not clear whether Gaetz is advocating drone strikes against suspected members on U.S. soil.
++
Trump Uses the Army as a Domestic Police Force:
Trump says he is mobilizing 'heavily armed' military to stop protests
Pentagon defends defense secretary's call to 'dominate the battle space' in response to civil unrest - ABC News
What You Need to Know Legally about the Military Heading to Minneapolis | Law & Crime
The 100% Pure Trumpster Senator from Arkansas, Tom Cotton, urged Trump to use the Army to put an end to the protests.
Opinion | Tom Cotton: Send In the Military - The New York Times
Senator Cotton (R-AK): Trump should use Insurrection Act to deploy active-duty military to cities | TheHill; Tom Cotton calls for the jackboots; so does Trump. And what did Asa say? - Arkansas Times
Trump considering a move to invoke Insurrection Act
And where is the hard evidence that "Antifa terrorists" are responsible for looting and violence?
Dredging up internal enemies is a common trope that authoritarians like Cotton, Trump and Barr will use in pursuit of power. What is fascism? A Yale philosopher explains how it works - Vox
The claimed legal basis for using the Army as a police force on U.S. soil is the 1807 Insurrection Act, as modified in 2007 to give the President more authority to use the military on U.S. soil. Insurrection Act - Wikipedia
Last Monday, Donald caused the military to deploy into the nation's capital. Active duty troops deploying to Washington DC He also announced that he was putting General Mark Milley, Chairman of the Joint Chiefs of Staff, "in charge" of the response to the protests. George Floyd protests: Trump puts top U.S. military officer 'in charge'
The National Guard, which traditionally has been used to quell riots, had already been deployed to 23 states and D.C. as of 5/31/20. National Guard civil unrest update: More than 17,000 troops in 23 states and DC activated
The President, the Military and Minneapolis: What You Need to Know - Just Security
When the Trumpsters are no longer in power, Congress may want to revisit the Insurrection Act, as amended, since it could be abused by an authoritarian minded President like Trump who routinely engages in the most base demagoguery and who enjoys sowing divisiveness solely for his own political gain and enjoyment. And, it must always be remembered that he is supported by 95% of republicans, most of whom view him as honest and a role model for their children. What republicans really want is more unchecked Donald Trumps. That fact needs to be remembered.
Donald also threatened protestors with "vicious dogs". Trump Threatens White House Protesters With ‘Vicious Dogs’ and ‘Ominous Weapons’ - The New York Time; Trump’s warning that ‘vicious dogs’ would attack George Floyd protesters conjured racial terror history - The Washington Post
As soon as I read that comment, the image of Bull Connor unleashing police dogs against protesters back in 1963. Pictures Bull Connor's Dogs - Google Search
Donald reminds me of Bull Connor, Lester Maddox and George Wallace. William Barr is a slightly more slick version of John N. Mitchell.
Trump calls governors ‘weak,’ urges them to use force against unruly protests; Trump calls governors facing unrest 'weak' and 'fools,' urges stronger police tactics
Donald also recommended that the police arrest anyone burning an American flag since the republican judges would overrule the precedent that treated that act as protected First Amendment speech. Trump Tells Governors To Harshly Punish Flag-Burners Amid Police Violence Protests; Texas v. Gregory Lee Johnson (Sup.Ct. 1989)(5 to 4)
It is interesting that Justice Scalia joined the majority opinion holding that burning the American flag was protected First Amendment speech, while the "liberal" John Paul Stevens dissented.
The same split occurred in a subsequent decision that reached the same result: UNITED STATES v. Shawn D. Eichman, et al. (Sup.CT. 1990).
Donald lied in a tweet when he claimed that the D.C. Mayor refused to provide police protection at the White House. The D.C. police joined with the uniformed Secret Service to cordon off the WH during last weekends disturbances. PolitiFact | Trump falsely claims DC mayor kept police from White House protests Donald is incapable of telling the truth.
+++
When Donald was asked about his favorite bible verse, he replied an "eye for an eye" because you have to be strong. Trump's favorite Bible verse: 'Eye for an eye' - POLITICO I really did not need him to confirm that.
Jesus had this to say in the "Sermon on the Mount about Donald's favorite passage: Matthew 5:38-42 NIV - Eye for Eye - “You have heard that it - Bible Gateway; What Does “an Eye for an Eye” Mean in the Bible?
Survey: White Evangelicals See Trump As 'Honest' And 'Morally Upstanding' : NPR; Americans' Views on Trump, Religion and Politics | Pew Research Center
In Days of Discord, President Trump Fans the Flames-The New York Times
How to hydroxychloroquine - YouTube (Sarah Cooper, comedian) and How to medical - YouTube
Trump's Evidence-Free Attempt to Link Scarborough to Aide's Death - FactCheck.org
Trump's False Statements About How Democratic Leaders Handled Protests - FactCheck.org
Recent column by conservative George Will: George Will: There is no such thing as rock bottom for Trump. Assume the worst is yet to come. - The Washington Post ("Voters must dispatch his congressional enablers, especially the senators who still gambol around his ankles with a canine hunger for petting.") I agree.
Why Do Republican Leaders Continue to Enable Trump? - The Atlantic
If Donald was not the President, he would have already been kicked off Twitter for his abusive statements that routinely violate Twitter's policies and justifiably so. Twitter lets President Trump’s tweets stand but suspends another account for tweeting the exact same thing - MarketWatch
Esper, Milley won't testify before House panel on military response to protests
Mattis breaks silence and tears into Trump: 'He tries to divide us'
Jim Mattis blasts Trump in message that defends protesters, says president ‘tries to divide us’
I would make a distinction between stating a policy position that does not cause divisions which are already present and Donald's divisive conduct and language unrelated to policy objectives.
When a politician comes out for or against abortion, that alone will create policy disagreements and divisions among voters, but that is unavoidable and the division is already present.
Donald goes out of his way to belittle, inflame emotions, smear, mislead and antagonize through a constant stream of false and angry statements that are pure demagoguery and frequently juvenile. He appeals to people's worst instincts and fears in a transparent effort to manipulate them for his personal gain. His conduct and statements are intended to create, reinforce and harden divisions unrelated to specific policy goals.
++
Trump Authorizes Use of Force Against Peaceful Protestors-Lafayette Park:
Donald wanted to have a photo op with him holding someone's bible in front of the St. John's Episcopal Church, near the White House.
George Floyd protests live updates: Peaceful protesters gassed so Trump can pose for photos - The Washington Post
There were peaceful protestors that were in his way.
To force them to move, those congregating peacefully and in a law abiding manner in Lafayette Park were shot with rubber bullets, attacked with mounted police, and assaulted with pepper balls. Fact check: five false or misleading claims Trump and his allies make about the response to the protests
Don the Authoritarian later retweeted a claim that the protestors were "terrorists". Trump tweets a letter calling protesters ‘terrorists’ Trump's retweets must be considered his own statements.
The Bishop for D.C., Mariann Edgar Budde, told Anderson Cooper that she was outraged by Trump's conduct. 'I am outraged': Bishop overseeing church responds to Trump photo-op Her interview is worth listening to.
Just before Trump sanctioned military action against the peaceful protest in Lafayette Park, Donald claimed that he was an “an ally of all peaceful protesters.” Trump says he's an 'ally' to protesters as police fire tear gas in DC - Business Insider; Perhaps Trump’s most ludicrous claim: That he is an ‘ally of all peaceful protesters’ - The Washington Post
Video of the attack showed police beating members of the press which is to be expected in Trump's America. Australian 7NEWS crew attacked by police live on air | 7NEWS - YouTube
Barr denies that those actions had anything to do with clearing a path for Trump's walk to the church. Barr defends use of force at Monday's White House protest (Barr: "There was no correlation between our tactical plan of moving the perimeter out by one block and the President's going over to the church." It was just a coincidence that the "tactical plan of moving the perimeter" occurred immediately before Barr and Donald walked to the photo op.)
Once the crowd was dispersed, Donald walked to the Church, followed closely by the Defense Secretary Esper, Attorney General Barr and General Mark Milley (Chairmen of the Joint Chiefs) wearing battle fatigues.
Maybe General Milley thought he was in Afghanistan.
Mark Esper and Mark Milley have been promoted to the level of their incompetence - The Washington Post (opinion column written by George Will)
Why Mark Milley striding behind Trump through Lafayette Square was so troubling - The Washington Post (opinion column written by "neo-conservative" Robert Kagan)
Admiral Mullen, who served in Milley's role as Chairman of the Joint Chiefs of Staff under Bush and Obama, was highly critical. Mike Mullen: I Cannot Remain Silent - The Atlantic
Donald wanted Milley to "dominate the streets" of America and the General was willing to comply.
Ivanka with her designer handbag and Kushner were in the group as was the newly installed press secretary who promised on her first that she would never lie and then proceeded to do so. (see photo embedded in this article: Top General Defends His Actions After Appearing in Trump Photo Op)
U.S. police have attacked journalists more than 120 times since May 28 » Nieman Journalism Lab (as of 6/1/20 at 9:53 A.M., more since then)
Protesters Dispersed With Tear Gas So Trump Could Pose at Church - The New York Times
Inside the push to tear-gas protesters ahead of a Trump photo op - The Washington Post
Top Republican senators defend Trump's church photo-op after peaceful protesters cleared out
Trump held up a Bible in his photo op. He looked uncomfortable with the Bible in his hand.
A reporter asked him whether it was his bible. Trump replied that "It's a Bible". The Bible remained closed throughout the photo op. Trump's Biblical Spectacle Outside St. John's Church - The Atlantic ("To Trump, the Bible and the church are not symbols of faith; they are weapons of culture war.")
I doubt that Donald has opened a Bible in decades, if at all in his lifetime. At most, he may have read up to 200 words in his life, though he frequently claimed in rallies that no one read the Bible more than he. Trump offers revealingly bad answers about the Good Book - Chicago Tribune; Donald Trump unable to name one verse from "favourite book" The Bible - YouTube
Donald claims that he knew nothing about the protestors being moved so he could have his photo op. That claim is simply not believable.
All of the foregoing is to be expected in Trump's America with far worse to come when and if he is reelected.
+++
"When the looting starts, the shooting starts":
President Donald Trump's response to police killing threatens to further deepen unrest in America, Democrats and Republicans say
The phrase "when the looting starts, the shooting starts" has historically meant that law enforcement will shoot looters. The phrase became prominent when uttered by Miami's police chief Walter Headley in 1967:
Headley: Law enforcement would go after young hoodlums, from 15 to 21, who have taken advantage of the civil rights campaign. ... We don't mind being accused of police brutality. There is only one way to handle looters and arsonists during a riot and that is to shoot them on sight. I've let the word filter down: When the looting starts the shooting starts. " (emphasis added) There is no doubt what this phrase means.
The racist George Wallace repeated the phrase during a 1968 campaign rally in Pittsburgh. Where does the phrase 'When the looting starts, the shooting starts' come from?; The History Behind 'When The Looting Starts, The Shooting Starts' : NPR The phrase is viewed as racist and has not been heard to my knowledge from any nationally known politician, except for George Wallace, until Trump gave it new life.
As cities burned, Trump stayed silent — other than tweeting fuel on the fire - The Washington Post (5/31/20 article)
Some samples, just from 5/31 published tweets, of Demagogue Don throwing fuel on the fire and making divisive and otherwise incendiary statements
 |
| Trump Accuses the News Media of Fomenting Hatred and Anarchy |
In TrumpWorld, the protests, rioting and looting is due to the "Lamestream Media" fomenting hatred and anarchy, ANARCHISTS, Radical Left Democrats, and the "ANTIFA organization" which he will designate as a "Terrorist Organization". The FBI Finds ‘No Intel Indicating Antifa Involvement’ in Sunday’s Violence | The Nation
What is missing from those tweets besides leadership?
Trump is just feeding red meat to the Trumpsters.
He is proving in his statements that he has no comprehension whatsoever about the history of race relations in the U.S. or how the images of a police officer with a boot on an African American's neck for 8 minutes and 46 seconds plays into that history.
As to ANTIFA, short for anti-fascism, it is not an organization, lacks membership rolls, does not have a leader or any centralized structure. Trump has no power to designate ANTIFA a terrorist organization, even it was one, since it is not a foreign group and there are no domestic terrorism laws.
Trump Can't Designate Antifa - or Any Movement - Domestic Terrorist Organization - FactCheck.org
Many Claim Extremists Are Sparking Protest Violence. But Which Extremists? - The New York Times
There has been opportunistic looting long before ANTIFA. In my lifetime, the first major occurrences were in 1964-1965.
The 100% pure Trumpster Matt Gaetz (R-FL) has a republican solution for alleged ANTIFA members:
++
Trump Uses the Army as a Domestic Police Force:
Trump says he is mobilizing 'heavily armed' military to stop protests
Pentagon defends defense secretary's call to 'dominate the battle space' in response to civil unrest - ABC News
What You Need to Know Legally about the Military Heading to Minneapolis | Law & Crime
Opinion | Tom Cotton: Send In the Military - The New York Times
Senator Cotton (R-AK): Trump should use Insurrection Act to deploy active-duty military to cities | TheHill; Tom Cotton calls for the jackboots; so does Trump. And what did Asa say? - Arkansas Times
And where is the hard evidence that "Antifa terrorists" are responsible for looting and violence?
Dredging up internal enemies is a common trope that authoritarians like Cotton, Trump and Barr will use in pursuit of power. What is fascism? A Yale philosopher explains how it works - Vox
The claimed legal basis for using the Army as a police force on U.S. soil is the 1807 Insurrection Act, as modified in 2007 to give the President more authority to use the military on U.S. soil. Insurrection Act - Wikipedia
Last Monday, Donald caused the military to deploy into the nation's capital. Active duty troops deploying to Washington DC He also announced that he was putting General Mark Milley, Chairman of the Joint Chiefs of Staff, "in charge" of the response to the protests. George Floyd protests: Trump puts top U.S. military officer 'in charge'
The National Guard, which traditionally has been used to quell riots, had already been deployed to 23 states and D.C. as of 5/31/20. National Guard civil unrest update: More than 17,000 troops in 23 states and DC activated
The President, the Military and Minneapolis: What You Need to Know - Just Security
When the Trumpsters are no longer in power, Congress may want to revisit the Insurrection Act, as amended, since it could be abused by an authoritarian minded President like Trump who routinely engages in the most base demagoguery and who enjoys sowing divisiveness solely for his own political gain and enjoyment. And, it must always be remembered that he is supported by 95% of republicans, most of whom view him as honest and a role model for their children. What republicans really want is more unchecked Donald Trumps. That fact needs to be remembered.
Donald also threatened protestors with "vicious dogs". Trump Threatens White House Protesters With ‘Vicious Dogs’ and ‘Ominous Weapons’ - The New York Time; Trump’s warning that ‘vicious dogs’ would attack George Floyd protesters conjured racial terror history - The Washington Post
As soon as I read that comment, the image of Bull Connor unleashing police dogs against protesters back in 1963. Pictures Bull Connor's Dogs - Google Search
Donald reminds me of Bull Connor, Lester Maddox and George Wallace. William Barr is a slightly more slick version of John N. Mitchell.
Trump calls governors ‘weak,’ urges them to use force against unruly protests; Trump calls governors facing unrest 'weak' and 'fools,' urges stronger police tactics
Donald also recommended that the police arrest anyone burning an American flag since the republican judges would overrule the precedent that treated that act as protected First Amendment speech. Trump Tells Governors To Harshly Punish Flag-Burners Amid Police Violence Protests; Texas v. Gregory Lee Johnson (Sup.Ct. 1989)(5 to 4)
It is interesting that Justice Scalia joined the majority opinion holding that burning the American flag was protected First Amendment speech, while the "liberal" John Paul Stevens dissented.
The same split occurred in a subsequent decision that reached the same result: UNITED STATES v. Shawn D. Eichman, et al. (Sup.CT. 1990).
Donald lied in a tweet when he claimed that the D.C. Mayor refused to provide police protection at the White House. The D.C. police joined with the uniformed Secret Service to cordon off the WH during last weekends disturbances. PolitiFact | Trump falsely claims DC mayor kept police from White House protests Donald is incapable of telling the truth.
+++
The Malignant Cruelty of Donald Trump-The Atlantic
Donald Trump's ex-wife: Trump kept book of Hitler's speeches by bed - Business Insider
Trump Hails "Good Bloodlines" of Nazi Favorite Henry Ford
Trump violating law by not updating budget, outside experts say - MarketWatch
Tensions escalate over Pompeo’s decision to oust inspector general - The Washington Post Pompeo may be the worst Secretary of State in U.S. history, as claimed by Thomas Friedman. He does know how to butter up to Donald which is critical for anyone wanting a cabinet post. Pompous Pompeo came to Trump's attention and made a name for himself among republicans by leading the effort to blame Hillary for Benghazi.
Pompeo Has Been Undermining the State Department Since the Benghazi Investigation – Foreign Policy
Trump’s executive order on Twitter ignores that he’s the real danger to speech - The Washington Post
++++++
COVID-19 Updates:
Tennessee Health Dept. reports 400 new COVID-19 cases in one day, bringing total to 25,520 (6/5/2020)
Coronavirus update: U.S. case tally tops 1.8 million; study finds face masks, social distancing effective at reducing infections - MarketWatch (6/2/20)
America’s response to coronavirus pandemic is ‘incomprehensibly incoherent,’ says historian who studied the 1918 flu - The Washington Post
One in 10 Covid-19 patients with diabetes die within a week, study finds
How safe are these common summer activities, health experts weigh in
Lake of the Ozarks: Partier tests positive - CNN
+++
Doctor Don's Miracle Cure:
UK halts trial of hydroxychloroquine as 'useless' for COVID-19 patients - Reuters
Hydroxychloroquine doesn't prevent coronavirus infection, study with more than 800 people finds
The evidence so far is that Doctor Don's miracle cure does not work and can cause serious injury to some patients including death.
The WHO lifted its temporary hold on a trial based on safety concerns, but emphasized that the persons receiving hydroxychloroquine will be closely monitored for side effects. WHO resumes coronavirus trial on hydroxychloroquine after examining safety issues
++++
Tara Reade and Joe Biden:
Tara Reade’s Tumultuous Journey to the 2020 Campaign - The New York Times ("Acquaintances who tried to help would accuse her of failing to repay the money they had lent her, of skipping out on bills and misleading them, just as others had done in the places she had left behind. . . In May, Antioch University Seattle said Ms. Reade had not obtained a bachelor's degree there, as claimed on her résumé. That in turn raised questions about how she had gained admission to law school ") Her history does not provide much confidence in her veracity. I am curious how she managed to get into a law school without graduating from college.
My approach to these kind of sexual misconduct allegations is to form an opinion on credibility based on available facts and the likelihood that the guy is a cad. Bill Clinton and Trump are at one end of the cad line (highly likely cad behavior), and Presidents G.H.W. Bush and Obama at the other (highly unlikely).
I would put Biden as a likely too touchy-feely with women in the past, but not likely to cross the line into sexual battery.
The credibility of both the man and the woman are relevant in making the assessment.
I found most of the women making allegations against Trump and Clinton to be credible.
I found the women making claims against Brett Kavanaugh as credible, when the allegations were committed during his heavy drinking college days.
I do not find Tara Reade credible on her sexual assault allegation. I would not be surprised that Biden touched her in a too familiar way, or said something inappropriate about her appearance.
All the President's Women review: Donald Trump, sexual predator | US news | The Guardian
++++
Masha Gessen Maps a Path Beyond Trump in ‘Surviving Autocracy’ | Observer; 'Surviving Autocracy': Masha Gessen's New Book Tells A Story Of Trump's Presidency : NPR
Another Black Man, Manuel Ellis, Who Said ‘I Can’t Breathe’ Died in Custody after Arrest by Tacoma, Washington Police, An Autopsy Calls It Homicide. - The New York Times This event did not make national news until last week. Manuel Ellis: Death of black man in Tacoma police custody ruled a homicide - CBS News
Louisville Cops Shoot TV Reporter with Pepper Ball - YouTube; Louisville police shoot reporter with pepper bullets during protest on live TV - CBS News
Denver police fire pepper balls at man yelling that his pregnant fiancée is in car
A Reporter’s Cry on Live TV: ‘I’m Getting Shot! I’m Getting Shot!’ - The New York Times
Philadelphia police inspector charged with beating protester
President Trump to Police: Don't be too nice - YouTube (in this video Donald encourages police to rough up suspects already in custody) That is to be expected in Trump's America.
Buffalo Police Officers Suspended After Shoving 75-Year-Old Protester - The New York Times; Buffalo Officers Suspended for Pushing 75-Year-Old Protester | NBC New York - YouTube The Buffalo police initially claimed that the man tripped and fell. When a video proved that he was shoved by police and then fell, hit his head on the sidewalk, started bleeding from the ear, with the police walking past him like he was a piece of dog mess, then the police started to rethink their prior claim about what had happened. When the two officers who put the guy in hospital were then suspended pending an investigation, their entire unit resigned in protest, not for the police lie or the injury to the civilian, but because the responsible persons were going to be investigated. Buffalo police officers resign from unit in protest of suspended colleagues who shoved man, 75, to ground; Buffalo police suspended after shoving 75-year-old man, leaving him with 'serious head injury,' authorities say - The Washington Post That is Trump's America. And, it just proves that it will be impossible to change police behavior in any meaningful way. The 75 year old injured civilian, Martin Gugino, is currently in serious condition. Martin Gugino, pushed to ground by Buffalo cops, known as peaceful man
Police officers who engage in excessive use of force are routinely allowed to remain on the force and frequently receive no meaningfully discipline. Special Report: How union, Supreme Court shield Minneapolis cops - Reuters (6/4/20); Special Report: Police union contracts offer shield of protection (1/14/2017). The end result is more cases of police misconduct since bad cops are allowed to keep their jobs notwithstanding multiple examples of misconduct including use of excessive force.
Will this change after Floyd's death?
The answer IMO is no and that has already been well established by police use of excessive force on those protesting Floyd's death.
A Crisis That Began With an Image of Police Violence Keeps Providing More - The New York Times; Opinion | What Happens When It Is the Police Who Riot in the Streets? - The New York Times
Donald Trump’s Fascist Performance I would not describe Donald as a fascist in the historical sense. He is clearly an authoritarian demagogue who is the unquestionable leader of a political party that is tilting more in that direction.
Lawyer says ex-Minneapolis cop Derek Chauvin illegally voted in Florida Chauvin could not possibly have voted for Donald illegally since Donald has asserted that between 3 to 5 million illegal votes were cast in 2016 and all of them went for Hillary. TRANSCRIPT: ABC News Anchor David Muir Interviews President Trump - ABC News
Donald Trump's ex-wife: Trump kept book of Hitler's speeches by bed - Business Insider
Trump Hails "Good Bloodlines" of Nazi Favorite Henry Ford
Trump violating law by not updating budget, outside experts say - MarketWatch
Tensions escalate over Pompeo’s decision to oust inspector general - The Washington Post Pompeo may be the worst Secretary of State in U.S. history, as claimed by Thomas Friedman. He does know how to butter up to Donald which is critical for anyone wanting a cabinet post. Pompous Pompeo came to Trump's attention and made a name for himself among republicans by leading the effort to blame Hillary for Benghazi.
Pompeo Has Been Undermining the State Department Since the Benghazi Investigation – Foreign Policy
Trump’s executive order on Twitter ignores that he’s the real danger to speech - The Washington Post
 |
| More from Don the Authoritarian |
COVID-19 Updates:
 |
| As of 6/5/20 |
Coronavirus update: U.S. case tally tops 1.8 million; study finds face masks, social distancing effective at reducing infections - MarketWatch (6/2/20)
America’s response to coronavirus pandemic is ‘incomprehensibly incoherent,’ says historian who studied the 1918 flu - The Washington Post
One in 10 Covid-19 patients with diabetes die within a week, study finds
How safe are these common summer activities, health experts weigh in
Lake of the Ozarks: Partier tests positive - CNN
+++
Doctor Don's Miracle Cure:
UK halts trial of hydroxychloroquine as 'useless' for COVID-19 patients - Reuters
Hydroxychloroquine doesn't prevent coronavirus infection, study with more than 800 people finds
The evidence so far is that Doctor Don's miracle cure does not work and can cause serious injury to some patients including death.
The WHO lifted its temporary hold on a trial based on safety concerns, but emphasized that the persons receiving hydroxychloroquine will be closely monitored for side effects. WHO resumes coronavirus trial on hydroxychloroquine after examining safety issues
++++
Tara Reade and Joe Biden:
Tara Reade’s Tumultuous Journey to the 2020 Campaign - The New York Times ("Acquaintances who tried to help would accuse her of failing to repay the money they had lent her, of skipping out on bills and misleading them, just as others had done in the places she had left behind. . . In May, Antioch University Seattle said Ms. Reade had not obtained a bachelor's degree there, as claimed on her résumé. That in turn raised questions about how she had gained admission to law school ") Her history does not provide much confidence in her veracity. I am curious how she managed to get into a law school without graduating from college.
My approach to these kind of sexual misconduct allegations is to form an opinion on credibility based on available facts and the likelihood that the guy is a cad. Bill Clinton and Trump are at one end of the cad line (highly likely cad behavior), and Presidents G.H.W. Bush and Obama at the other (highly unlikely).
I would put Biden as a likely too touchy-feely with women in the past, but not likely to cross the line into sexual battery.
The credibility of both the man and the woman are relevant in making the assessment.
I found most of the women making allegations against Trump and Clinton to be credible.
I found the women making claims against Brett Kavanaugh as credible, when the allegations were committed during his heavy drinking college days.
I do not find Tara Reade credible on her sexual assault allegation. I would not be surprised that Biden touched her in a too familiar way, or said something inappropriate about her appearance.
All the President's Women review: Donald Trump, sexual predator | US news | The Guardian
++++
Masha Gessen Maps a Path Beyond Trump in ‘Surviving Autocracy’ | Observer; 'Surviving Autocracy': Masha Gessen's New Book Tells A Story Of Trump's Presidency : NPR
Another Black Man, Manuel Ellis, Who Said ‘I Can’t Breathe’ Died in Custody after Arrest by Tacoma, Washington Police, An Autopsy Calls It Homicide. - The New York Times This event did not make national news until last week. Manuel Ellis: Death of black man in Tacoma police custody ruled a homicide - CBS News
Louisville Cops Shoot TV Reporter with Pepper Ball - YouTube; Louisville police shoot reporter with pepper bullets during protest on live TV - CBS News
Denver police fire pepper balls at man yelling that his pregnant fiancée is in car
A Reporter’s Cry on Live TV: ‘I’m Getting Shot! I’m Getting Shot!’ - The New York Times
Philadelphia police inspector charged with beating protester
President Trump to Police: Don't be too nice - YouTube (in this video Donald encourages police to rough up suspects already in custody) That is to be expected in Trump's America.
Buffalo Police Officers Suspended After Shoving 75-Year-Old Protester - The New York Times; Buffalo Officers Suspended for Pushing 75-Year-Old Protester | NBC New York - YouTube The Buffalo police initially claimed that the man tripped and fell. When a video proved that he was shoved by police and then fell, hit his head on the sidewalk, started bleeding from the ear, with the police walking past him like he was a piece of dog mess, then the police started to rethink their prior claim about what had happened. When the two officers who put the guy in hospital were then suspended pending an investigation, their entire unit resigned in protest, not for the police lie or the injury to the civilian, but because the responsible persons were going to be investigated. Buffalo police officers resign from unit in protest of suspended colleagues who shoved man, 75, to ground; Buffalo police suspended after shoving 75-year-old man, leaving him with 'serious head injury,' authorities say - The Washington Post That is Trump's America. And, it just proves that it will be impossible to change police behavior in any meaningful way. The 75 year old injured civilian, Martin Gugino, is currently in serious condition. Martin Gugino, pushed to ground by Buffalo cops, known as peaceful man
Police officers who engage in excessive use of force are routinely allowed to remain on the force and frequently receive no meaningfully discipline. Special Report: How union, Supreme Court shield Minneapolis cops - Reuters (6/4/20); Special Report: Police union contracts offer shield of protection (1/14/2017). The end result is more cases of police misconduct since bad cops are allowed to keep their jobs notwithstanding multiple examples of misconduct including use of excessive force.
Will this change after Floyd's death?
The answer IMO is no and that has already been well established by police use of excessive force on those protesting Floyd's death.
A Crisis That Began With an Image of Police Violence Keeps Providing More - The New York Times; Opinion | What Happens When It Is the Police Who Riot in the Streets? - The New York Times
Donald Trump’s Fascist Performance I would not describe Donald as a fascist in the historical sense. He is clearly an authoritarian demagogue who is the unquestionable leader of a political party that is tilting more in that direction.
Lawyer says ex-Minneapolis cop Derek Chauvin illegally voted in Florida Chauvin could not possibly have voted for Donald illegally since Donald has asserted that between 3 to 5 million illegal votes were cast in 2016 and all of them went for Hillary. TRANSCRIPT: ABC News Anchor David Muir Interviews President Trump - ABC News
++++
All trades are commission free except as other noted.
1. Small Ball:
All trades are commission free except as other noted.
1. Small Ball:
Small Ball Rules:
1. Each subsequent purchase has to be at the lowest price in the chain (a variation allows for purchases that reduce the average cost per share);
2. Purchases are made in small lots, using commission free trades;
3. On price pops, I will consider selling the highest cost lots for a profit, and some positions will be eliminated when the price objective is met.
The overall goal is to reduce risk through a controlled and largely mechanical trading strategy.
The strategy required me to make several hundred small purchases during March 2020 and to sell the higher cost lots into the April-June 2020 rally.
The reasons for selling the highest cost lots first are (1) to reduce my income tax obligation resulting from a sell; (2) to generate a total return in excess of the dividend payments; (3) to increase my dividend yield on the remaining shares; (4) to take advantage of normal up and down volatility by selling the highest cost lots profitably and then by buying when the price falls below the lowest price paid in the chain; (5) to make it more likely that I will buy during a meltdown after selling higher cost shares (psychological); and (6) to mitigate risk through less at risk monetary exposure. Risk is also controlled through small odd lot trades.
I am not concerned about the dollar value of the profit provided I am in achieving the objectives set out above.
A. Eliminated DEA-Sold Remaining 21+ Shares at $28.81:
Quote: Easterly Government Properties Inc.
Closing Price 6/5/20: DEA $24.77 -$0.38 -1.51%
SEC Filings
I discuss this sell in a 4/8/2020 comment.
Profit Snapshot: +$272.6
Investment Category: Equity REIT Common and Preferred Stock Basket Strategy
Last Substantive Buy Discussion: Item # 4.A. Bought 10 DEA at $17.4 and 10 at $15.74-Used Commission Free Trades (1/9/19 Post)
Last Sell Discussions: Item # 3.A. Sold 10 DEA at $22.39 (11/20/19 Post)(profit snapshot = $47.24); Items 1.A. and 1.B. Sold 10 DEA at $19.81 and Eliminated DEA in Schwab Account at $19.81 (8/24/19 Post)(profit snapshots $74.38); Sold 10 DEA at $21.44-Used Commission Free Trade (5/17/18 Post)(profit snapshot = $22.59); Item 5. A. Sold 50 DEA at $21.59-Used Commission Free Trade (12/11/17 Post)(profit snapshot = $97.85)
Dividends: Quarterly at $.26 per share ($1.04 annually)
I am not anticipating much, if any, dividend growth which creates a negative vibe for me.
Last Ex Dividend Date: 5/13/20
Last Earnings Report (Q/E 3/31/20): Easterly Government Properties Reports First Quarter 2020 Results
Note that FFO and CAD are moving higher in dollars but not in dollars per share which is more important IMO.
DEA Trading Profits to Date: $543.52 ($270.92 prior trades) The last shares sold, consisting of just 21 shares, were my lowest cost and generated about 1/2 of the total trading profit to date.
Current Position: None
B. Eliminated GMRE-Sold 40 at $11.25:
Quote: Global Medical REIT Inc. (GMRE)
Closing Price 6/5/20: GMRE $12.08 +$0.28 +2.37%
Profit Snapshot: +$87.86
Investment Category: Equity REIT Common and Preferred Stock Basket Strategy
I discussed the reasons for this sell in a 5/19/20 comment.
Last Substantive Buy Discussion: 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-FIFO Accounting (4/18/20 Post)
Prior Sell Discussions: Item # 4.A. Eliminated GMRE-Sold 98+ at $9.41 (11/28/18 Post)(profit snapshot = $159.01); Item # 3.C. Sold 50 GMRE at $10.01 (5/23/2017 Post); South Gent's Comment Blog # 7: Eliminated GMRE
GMRE Trading Profits To Date: $485.01 ($376.15 in prior trades)
Dividend: Quarterly at $.2 per share
Last Ex Dividend: 3/24/20
I am expecting a dividend cut.
This REIT is likely to go through a management internalization process soon.
This will cost money and/or shares issued to the current external manager, and the dividend ($.80 annually per share) is not covered now with free cash flow.
Sourced 2019 Annual Report at pp. 46-47
After the terms of the internalization are released, and the dividend is cut, I will take another look.
Last Earnings Report (Q/E 3/31/20): SEC Filed Press Release
I still own GMREPRA.
The preferred stock dividend can not be cut but only deferred after GMRE ceases to pay cash dividends to the common shareholders.
C. Restarted FISI-Bought 10 at $16.17:
Quote: Financial Institutions Inc. (FISI)
Closing Price 6/5/20: FISI $21.17 +$1.68 +8.62%
Investor Relations > Financial Institutions, Inc.
"Financial Institutions, Inc. provides diversified financial services through its subsidiaries Five Star Bank, SDN, Courier Capital and HNP Capital. Five Star Bank provides a wide range of consumer and commercial banking and lending services to individuals, municipalities and businesses through a network of more than 50 offices throughout Western and Central New York State. SDN provides a broad range of insurance services to personal and business clients. Courier Capital and HNP Capital provide customized investment management, investment consulting and retirement plan services to individuals, businesses, institutions, foundations and retirement plans."
FISI | Financial Institutions Inc. Analyst Estimates
Investment Category: Regional Bank Basket Strategy
Dividend: $.26 per share ($1.04 annually)
Financial Institutions, Inc. Announces Quarterly Cash
Next Ex Dividend: 6/11/20
Dividend Yield at $16.17: 6.43%
Last Earnings Report (Q/E 3/31/20):
"First quarter results were negatively impacted by a significantly higher provision for credit losses of $13.9 million, as compared to $1.2 million in the first quarter of 2019. The after-tax impact of the higher provision as compared to first quarter of 2019 was $0.59 per diluted share. The higher provision was driven by the adoption of the current expected credit loss (“CECL”) standard and the impact of COVID-19 on the economic environment."
Financial Institutions, Inc. Announces First Quarter Results
Last Elimination (consisting of 150 shares sold in three 50 share lots): Item # 3 Sold 50 FISI at $24.71 Update For Regional Bank Basket Strategy As Of 8/21/15 - South Gent | Seeking Alpha(profit snapshot = $442.07); Item # 2 Sold 51+ FISI at $24.1 (5/3/2015 Post)(profit snapshot = $254.18); Item # 5 Sold 50 of 150 FISI at $21.16 (10/11/13 Post)(profits snapshot = $59.15)
FISI Realized Gains To Date: $755.4.
D. Restarted GLW-Bought 50 at $19.74 and then Sold at $22.28 :
Quote: Corning Inc. (GLW)
GLW | Corning Inc. Analyst Estimates
GLW SEC Filings
GLW 2019 Annual Report
Website: Corning | Materials Science Technology and Innovation
Profit Snapshot: +$127.47
I mentioned the purchase in a 4/16 comment. I discussed the reasons for selling the position in a 4/28 comment.
Previous Round-Trip: Item # 3.B. Sold 103 GLW at $26.45 (2/7/17 Post)(profit snapshot: $568.02; also contains snapshots of prior profits)
Last Earnings Report: SEC Filed Press Release
As previously discussed, the Stock Jocks reacted positively to this report when I only had a negative one. So I sold into the share price pop on the day of the earnings release.
Dividends: Quarterly at $.22 per share
Corning - Investor Relations - Stock Information - Dividends
Last Ex Dividend Date: 5/28
Corning is an interesting company for a longer term investment. For a trade, I will wait for more positive earnings news.
One of its glass products may see increased demand in the coming months. Pharmaceutical Glass Tubing and Technologies | Pharmaceutical Borosilicate Glass Tubing for Vials, Cartridges, Syringes, and Pharma Glassware | Corning
E. Restarted RMT-Bought 10 at $5.9:
Quote: RMT | Royce Micro-Cap Trust Inc. Overview
Closing Price 6/5/20: RMT $7.67 +$0.30 +4.07%
Sponsor's Website: Royce Micro-Cap Trust (RMT)-A CEF
RMT SEC Filings
Holdings as of 3/31/20 (SEC Filing)
Last SEC Filed Shareholder Report period ending 12/31/19
RMT Page at Morningstar
Last Elimination: Item # 1.A. Eliminated RMT-Sold 113+ at $8.7 (2/22/20 Post)(profit snapshot = $79.75)
The largest prior liquidation resulted in a $2,269.61 profit: Item # 1.A.
Data Date of 4/13/20 Trade:
Closing Net Asset Value Per Share: $7.03
Closing Market Price: $5.92
Discount: -15.79%
Sourced: RMT Royce Micro-Cap Trust-CEF Connect
Recent Distributions:
This CEF has a managed distribution policy.
Based on the fund's history during the Near Depression period, there will be a suspension of that policy when dividends can no longer be supported by capital gains realized by the fund. The total dividend paid in 2010, for example, was only 8 cents per share, paid in December 2010, and was sourced from ordinary income and short term capital gains. Quarterly dividend did not resume until March 2011
Last Dividend Declaration: $.15 per share
Royce Micro-Cap Trust, Inc. (NYSE-RMT) declares Second Quarter Common Stock Distribution of $0.15 Per Share ("The Fund has adopted a Distribution Policy of paying quarterly distributions on its Common Stock. Distributions are being made at the annual rate of 7% of the rolling average of the prior four calendar quarter-end net asset values (NAVs), with the fourth quarter distribution being the greater of 1.75% of the rolling average or the minimum distribution required by IRS regulations.") Under this managed distribution plan, the quarterly dividend is variable.
Next Ex Dividend Date:
Some Prior Sell Discussions: Item # 1.B. Sold 100 RMT at $8.73 (1/25/20 Post); Item # 3.A. Sold 274+ RMT at $8.9 (8/3/17 Post); Item 3.A. Sold 276+ RMT at $8.4 (5/17/17 Post)
Some Prior Buy Discussions: Item # 2.B. Added 50 RMT at $7.91 (8/21/19 Post); Item # 1 Bought 50 RMT at $8.03-Used Commission Free Trade. (6/15/19 Post)
F. Added 10 PPT at $4.39:
Quote: PPT | Putnam Premier Income Trust Overview-A CEF
Closing Price 6/5/20: PPT $5.03 +$0.03 +0.60%
Sponsor's Website: Putnam Premier Income Trust
SEC Filings
Last SEC Filed Shareholder Report (period ending
Last Discussed: Item # 2.A. (4/4/20 Post)
I will sell my highest cost lot when I can do so profitably based on my original cost.
Dividend: Monthly at $.035 per share ($.42 annually)
The dividend is supported by ROC.
Next Ex Dividend Date: 6/23/20
Average Cost Per Share: $4.85
Dividend Yield at $4.85: 8.66%
Dividend Reinvestment: No. I turned off dividend reinvestment when the market approached net asset value per share.
Current Position: 419+ shares
Data Date of 4/17/20 Trade:
Closing Net Asset Value Per Share: $4.62
Closing Market Price: $4.38
Discount: -5.19%
Sourced: PPT Putnam Premier Income CEF Connect
G. Bought 10 PFLT at $6.06; 5 at $5.75:
Quote: PennantPark Floating Rate Capital (PFLT)-A BDC
Closing Price 6/5/20: PFLT $8.90 +$0.18 +2.06%
This is a restart in my Fidelity taxable account Item # 2.A. Eliminated PFLT in Fidelity Account-Sold 81+ at $12.01 (12/14/19 Post)(profit snapshot $29.66; any profit is viewed as a victory)
10-Q for the Q/E 3/31/20 (investments listed starting at page 8)
5 Year Financial History:
Annual Report at page for F/Y Ending 9/30/19
I eliminated my position in this account last year.
Dividend: Monthly at $.095 per share ($1.14 annually)
PennantPark Floating Rate Capital Ltd. Announces Monthly Distribution of $0.095 per Share
Dividend Yield at $5.96 Average Cost: 19.13%
Viewed as high risk. Possible dividend cut.
Net Asset Value Per Share History:
3/31/20 $12.2 10-Q at page 5
12/31/19: $12.95
9/30/19: $12.97
6/30/19: $13.07
3/21/19: $13.24
12/31/18 $13.66
9/30/18 $13.82
6/30/18: $13.82
9/30/17: $14.10
9/30/16: $14.06
9/30/15: $13.95
9/30/14: $14.40
9/30/13: $14.10
9/30/12: $13.98
IPO April 2011 at $15 (net to company at $13.9 after underwriters' discount and before PFLT expenses related to the offering)
Last Earnings Report (Q/E 3/31/20): This report was released after my purchases.
NII per share = $.3 (above $.285 dividend)
"As of March 31, 2020, our portfolio totaled $1,179.0 million and consisted of $1,072.0 million of first lien secured debt (including $119.7 million in PSSL), $32.0 million of second lien secured debt and $74.9 million of preferred and common equity (including $35.1 million in PSSL). Our debt portfolio consisted of 99% variable-rate investments. As of March 31, 2020, we had two portfolio companies on non-accrual, representing 0.6% and zero of our overall portfolio on a cost and fair value basis, respectively. Overall, the portfolio had net unrealized depreciation of $71.7 million. Our overall portfolio consisted of 108 companies with an average investment size of $10.9 million, had a weighted average yield on debt investments of 7.8%, and was invested 91% in first lien secured debt (including 10% in PSSL), 3% in second lien secured debt and 6% in preferred and common equity (including 3% in PSSL). As of March 31, 2020, 98% of the investments held by PSSL were first lien secured debt."
PennantPark Floating Rate Capital Ltd. Announces Financial Results for the Quarter Ended March 31, 2020 Nasdaq:PFLT
H. Eliminated CIO-Sold 20 at $8.32 and 10 at $8.52:
Quote: City Office REIT Inc. (CIO)
Closing Price 6/5/20: CIO $10.48 +$0.21 +2.04%
Website: City Office REIT
Our Properties-City Office REIT
2019 Annual Report SEC Form 10-K
CIO SEC Filings
Profit Snapshot: $34.64
Investment Category: Equity REIT Common and Preferred Stock Basket Strategy
Last Discussed: Item #4.D. (4/4/20 Post); Item # 3.A. Restarted CIO-Bought 10 at $7.3; 5 at $7 (3/28/20 Post)
The dividend was recently slashed from $.23 per share to $.15 per share. City Office REIT Announces Dividends for First Quarter 2020
Last Earnings Report (Q/E 3/31/20): Note that the reduced dividend of $.15 per share still exceeds AFFO per share.
Prior Round-Trips:
Item # 1. C. Sold 10 CIO at $11.58 (5/17/2018 Post)(profit snapshot = $13.94)-Item # 1.B. Bought 10 CIO at $10.19 (3/12/18 Post)
Item # 8 Sold 100 CIO at $13.5: Update For Equity REIT Basket Strategy As Of 7/28/16 - South Gent | Seeking Alpha (profit snapshot= $207.97)-Item # 5 Bought 100 CIO at $11.4 at Update For Equity REIT Basket Strategy As Of 4/6/16 - South Gent | Seeking Alpha
Item # 1. Sold 50 CIO at $12.38: Update For Equity REIT Basket Strategy As Of 3/7/16 - South Gent | Seeking Alpha (profit snapshot $61.04 plus one dividend)-Scroll to 2. BOUGHT CIO at $11.12) Update For REIT Basket Strategy As Of 11/24/15 - South Gent | Seeking Alpha
CIO Trading Profits to Date: $303.65 ($269.01 in prior trades)
CIO will have to fall below $7 for me to reconsider a purchase.
I still own CIOPRA.
I. Restarted VLY-Bought 10 at $7.66:
Quote: Valley National Bancorp (VLY)
Closing Price 6/5/20: VLY $9.20 +$0.48 +5.50%
VLY | Valley National Bancorp Analyst Estimates
Investment Category:Regional Bank Basket Strategy
VLY SEC Filings
10-Q for the Q/E 3/31/20
2019 Annual Report
Dividend: Quarterly at $.11 per share
Valley National Bancorp Declares Its Regular Quarterly Preferred and Common Stock Dividends
Dividend Yield at $7.66 = 5.74%
Next Ex Dividend: 6/12/20
Last Sell Discussions: Item # 1.A. Eliminated VLY-Sold 102+ at $10.51 (9/11/2019 Post); Item # 2.A. Eliminated VLY Sold 51+ VLY at $12.76 (7/25/18 Post); Item # 2.B. Sold 60 VLY at $12.52 (1/28/18 Post)
Recent Acquisition: "Effective December 1, 2019, Valley completed its acquisition of Oritani Financial Corp. ("Oritani") and its wholly-owned subsidiary, Oritani Bank. Oritani had approximately $4.3 billion in assets, $3.4 billion in net loans, $2.9 billion in deposits, after purchase accounting adjustments, and a branch network of 26 locations." I had bought and sold Oritani several times.
Last Earnings Report (Q/E 3/31/20): SEC Filed Press Release
"net income for the fourth quarter 2019 of $38.1 million, or $0.10 per diluted common share, as compared to the fourth quarter 2018 earnings of $77.1 million, or $0.22 per diluted common share, and net income of $81.9 million, or $0.24 per diluted common share, for the third quarter 2019. During the fourth quarter 2019, Valley incurred non-core after tax charges of $52.5 million mostly due to prepayment penalties on FHLB borrowings, merger expenses and additional income tax expense related to reserves for uncertain tax positions. Excluding all non-core charges, our adjusted net income was $90.7 million, or $0.24 per diluted common share, for the fourth quarter 2019, $72.7 million, or $0.21 per diluted common share, for the fourth quarter 2018, and $83.1 million, or $0.24 per diluted common share, for the third quarter 2019."
Other News: Valley National Bancorp Announces Pricing of Subordinated Notes ("5.25% Fixed-to-Floating Rate Notes due 2030 (the “Notes”). Interest on the Notes will accrue at a rate equal to (i) 5.25% per annum from the original issue date to, but excluding, June 15, 2025, payable semiannually in arrears, and (ii) a floating rate per annum equal to a benchmark rate, which is expected to be Three-Month Term SOFR (as defined in the Notes), plus a spread of 514 basis points from, and including, June 15, 2025, payable quarterly in arrears. The Notes are intended to qualify as Tier 2 capital for regulatory purposes."This is a $1K par value junior bond-Prospectus; FINRA Bond Detail)
Preferred stock and junior bonds issued by a bank holding company would likely become worthless when and if the FDIC seizes the subsidiary that conducts banking operations.
J. Restarted NWBI- Bought 10 at $10.32; 5 at $10.1; 5 AT $9.9; 2 AT $8.86; 3 AT $9.47 and Sold Highest Cost Lot at $10.71:
Quote: Northwest Bancshares Inc. (NWBI)
Closing Price 6/5/20: NWBI $10.94 +$0.41 +3.89%
"Headquartered in Warren, Pennsylvania, Northwest Bancshares, Inc. is the holding company of Northwest Bank. Founded in 1896, Northwest Bank is a full-service financial institution. . . As of March 31, 2020, Northwest operated 170 full-service community banking offices and eight free standing drive-through facilities in Pennsylvania, New York and Ohio." Subsequent to the quarter's end, NWBI completed an acquisition of a bank holding company that owned 31 branches in Indiana.
NWBI | Northwest Bancshares Inc. Analyst Estimates
Remaining Shares (15):
Average Cost per share = $9.74
Sold 10 at $10.71 (Bought at $10.32)
Profit Snapshot: +$3.89
Prior Round-Trip: Sold 156 + NWBI at $12.52 (6/30/2011 Post)(profit $170.19). I reinvested the dividends and bought the following lots: Item # 3 Bought: 50 NWBI at 10.45 (11/26/2010 Post); Item # 3 Added 50 NWBI at $11.10 (9/29/2010 Post); Item # 1 Bought 50 NWBI at $11.47 (1/20/2010 Post) All of my trading profits were taken in 2011, totalling $201.79. There was another 50 share lot that was sold profitably that year:
I have not been back in the stock since I sold my remaining shares in 2011.
Dividend: Quarterly at $.19 per share ($.76)
Dividend Yield at $9.74: 7.8%
The dividend yield is the primary attraction. As with other high yield stocks, the trick is to harvest the dividend without giving some or all of it back in a share loss.
Last Ex Dividend: 5/6/20
"102nd consecutive quarter in which the Company has paid a cash dividend"
5 Year Operating History:
Sourced: 2019 Annual Report at page 26-27
Last Earnings Report (Q/E 3/31/20): SEC Filed Press Release
E.P.S. was impacted by the usual problems impacting regional banks during the first quarter.
"The provision for loan losses increased by $21.2 million, or 327.4%, to $27.6 million for the quarter ended March 31, 2020, from $6.5 million for the quarter ended March 31, 2019. During the current quarter, the Company adopted ASU 2016-13, referred to as Current Expected Credit Losses ("CECL"), which requires that all financial assets measured at amortized cost be presented at the net amount expected to be collected inclusive of the entity's current estimate of all lifetime expected credit losses. Due to the adoption of CECL, our allowance for loan losses, reserve for unfunded commitments and equity were negatively impacted by $10.8 million, $2.3 million and $9.6 million, respectively. In addition, the estimated economic impact of COVID-19 caused us to increase our provision expense for the quarter by approximately $23 million."
E.P.S Diluted: $.07
NIM: 3.66%
Efficiency Ratio: 64.67%
NPL Ratio: .97%
NPA Ratio: 1.05%
Coverage Ratio: 108.7%
Charge off Ratio: .16%
Capital Ratios: Solid for now
10-Q for the Q/E 3/31/20
NWBI SEC Filings
Other Recent News: Northwest Bancshares, Inc. Completes Merger with MutualFirst Financial, Inc. (4/24/20) ("Northwest issued 20,659,087 shares of common stock in the merger (subject to adjustment for cash issued in lieu of fractional shares), and based upon the $10.33 per share closing price of Northwest's common stock on April 24, 2020, the transaction value was approximately $213.4 million. The completion of the merger has resulted in a bank with approximately $12.8 billion in total assets, providing banking services through 214 branch locations and 273 ATMs in four states. The transaction has expanded Northwest's franchise by 36 full service offices located in Indiana.")
Purchase Restriction: Each subsequent purchase must reduce my average cost per share.
Maximum Position: 100 shares
K. Eliminated JRI in Schwab Account-Sold 100 at $11.48:
Quote: JRI | Nuveen Real Asset Income & Growth Fund Overview
I still own JRI in other accounts.
Closing Price 6/5/20: JRI $12.33 +$0.24 +1.99%
SEC Filings
Sponsor's Website: JRI - Nuveen Real Asset Income and Growth Fund
This was a dividend harvest trade. With this kind of income harvesting strategy, I buy at a price that I am willing to hold for a long period, but the intention is to own the security for at most a few weeks. This CEF pays monthly dividends. I owned it long enough to receive 1 monthly dividend payment.
Profit Snapshot: +$69.35
1. Each subsequent purchase has to be at the lowest price in the chain (a variation allows for purchases that reduce the average cost per share);
2. Purchases are made in small lots, using commission free trades;
3. On price pops, I will consider selling the highest cost lots for a profit, and some positions will be eliminated when the price objective is met.
The overall goal is to reduce risk through a controlled and largely mechanical trading strategy.
The strategy required me to make several hundred small purchases during March 2020 and to sell the higher cost lots into the April-June 2020 rally.
The reasons for selling the highest cost lots first are (1) to reduce my income tax obligation resulting from a sell; (2) to generate a total return in excess of the dividend payments; (3) to increase my dividend yield on the remaining shares; (4) to take advantage of normal up and down volatility by selling the highest cost lots profitably and then by buying when the price falls below the lowest price paid in the chain; (5) to make it more likely that I will buy during a meltdown after selling higher cost shares (psychological); and (6) to mitigate risk through less at risk monetary exposure. Risk is also controlled through small odd lot trades.
I am not concerned about the dollar value of the profit provided I am in achieving the objectives set out above.
A. Eliminated DEA-Sold Remaining 21+ Shares at $28.81:
Quote: Easterly Government Properties Inc.
Closing Price 6/5/20: DEA $24.77 -$0.38 -1.51%
SEC Filings
I discuss this sell in a 4/8/2020 comment.
Profit Snapshot: +$272.6
Last Substantive Buy Discussion: Item # 4.A. Bought 10 DEA at $17.4 and 10 at $15.74-Used Commission Free Trades (1/9/19 Post)
Last Sell Discussions: Item # 3.A. Sold 10 DEA at $22.39 (11/20/19 Post)(profit snapshot = $47.24); Items 1.A. and 1.B. Sold 10 DEA at $19.81 and Eliminated DEA in Schwab Account at $19.81 (8/24/19 Post)(profit snapshots $74.38); Sold 10 DEA at $21.44-Used Commission Free Trade (5/17/18 Post)(profit snapshot = $22.59); Item 5. A. Sold 50 DEA at $21.59-Used Commission Free Trade (12/11/17 Post)(profit snapshot = $97.85)
Dividends: Quarterly at $.26 per share ($1.04 annually)
I am not anticipating much, if any, dividend growth which creates a negative vibe for me.
Last Ex Dividend Date: 5/13/20
Last Earnings Report (Q/E 3/31/20): Easterly Government Properties Reports First Quarter 2020 Results
DEA Trading Profits to Date: $543.52 ($270.92 prior trades) The last shares sold, consisting of just 21 shares, were my lowest cost and generated about 1/2 of the total trading profit to date.
Current Position: None
B. Eliminated GMRE-Sold 40 at $11.25:
Quote: Global Medical REIT Inc. (GMRE)
Closing Price 6/5/20: GMRE $12.08 +$0.28 +2.37%
Profit Snapshot: +$87.86
I discussed the reasons for this sell in a 5/19/20 comment.
Last Substantive Buy Discussion: 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-FIFO Accounting (4/18/20 Post)
Prior Sell Discussions: Item # 4.A. Eliminated GMRE-Sold 98+ at $9.41 (11/28/18 Post)(profit snapshot = $159.01); Item # 3.C. Sold 50 GMRE at $10.01 (5/23/2017 Post); South Gent's Comment Blog # 7: Eliminated GMRE
GMRE Trading Profits To Date: $485.01 ($376.15 in prior trades)
Dividend: Quarterly at $.2 per share
Last Ex Dividend: 3/24/20
I am expecting a dividend cut.
This REIT is likely to go through a management internalization process soon.
This will cost money and/or shares issued to the current external manager, and the dividend ($.80 annually per share) is not covered now with free cash flow.
After the terms of the internalization are released, and the dividend is cut, I will take another look.
Last Earnings Report (Q/E 3/31/20): SEC Filed Press Release
The preferred stock dividend can not be cut but only deferred after GMRE ceases to pay cash dividends to the common shareholders.
C. Restarted FISI-Bought 10 at $16.17:
Closing Price 6/5/20: FISI $21.17 +$1.68 +8.62%
Investor Relations > Financial Institutions, Inc.
"Financial Institutions, Inc. provides diversified financial services through its subsidiaries Five Star Bank, SDN, Courier Capital and HNP Capital. Five Star Bank provides a wide range of consumer and commercial banking and lending services to individuals, municipalities and businesses through a network of more than 50 offices throughout Western and Central New York State. SDN provides a broad range of insurance services to personal and business clients. Courier Capital and HNP Capital provide customized investment management, investment consulting and retirement plan services to individuals, businesses, institutions, foundations and retirement plans."
FISI | Financial Institutions Inc. Analyst Estimates
Investment Category: Regional Bank Basket Strategy
Dividend: $.26 per share ($1.04 annually)
Financial Institutions, Inc. Announces Quarterly Cash
Next Ex Dividend: 6/11/20
Dividend Yield at $16.17: 6.43%
Last Earnings Report (Q/E 3/31/20):
"First quarter results were negatively impacted by a significantly higher provision for credit losses of $13.9 million, as compared to $1.2 million in the first quarter of 2019. The after-tax impact of the higher provision as compared to first quarter of 2019 was $0.59 per diluted share. The higher provision was driven by the adoption of the current expected credit loss (“CECL”) standard and the impact of COVID-19 on the economic environment."
Last Elimination (consisting of 150 shares sold in three 50 share lots): Item # 3 Sold 50 FISI at $24.71 Update For Regional Bank Basket Strategy As Of 8/21/15 - South Gent | Seeking Alpha(profit snapshot = $442.07); Item # 2 Sold 51+ FISI at $24.1 (5/3/2015 Post)(profit snapshot = $254.18); Item # 5 Sold 50 of 150 FISI at $21.16 (10/11/13 Post)(profits snapshot = $59.15)
FISI Realized Gains To Date: $755.4.
D. Restarted GLW-Bought 50 at $19.74 and then Sold at $22.28 :
GLW | Corning Inc. Analyst Estimates
GLW SEC Filings
GLW 2019 Annual Report
Website: Corning | Materials Science Technology and Innovation
Profit Snapshot: +$127.47
Previous Round-Trip: Item # 3.B. Sold 103 GLW at $26.45 (2/7/17 Post)(profit snapshot: $568.02; also contains snapshots of prior profits)
Last Earnings Report: SEC Filed Press Release
Dividends: Quarterly at $.22 per share
Corning - Investor Relations - Stock Information - Dividends
Last Ex Dividend Date: 5/28
Corning is an interesting company for a longer term investment. For a trade, I will wait for more positive earnings news.
One of its glass products may see increased demand in the coming months. Pharmaceutical Glass Tubing and Technologies | Pharmaceutical Borosilicate Glass Tubing for Vials, Cartridges, Syringes, and Pharma Glassware | Corning
E. Restarted RMT-Bought 10 at $5.9:
Quote: RMT | Royce Micro-Cap Trust Inc. Overview
Closing Price 6/5/20: RMT $7.67 +$0.30 +4.07%
Sponsor's Website: Royce Micro-Cap Trust (RMT)-A CEF
RMT SEC Filings
Holdings as of 3/31/20 (SEC Filing)
Last SEC Filed Shareholder Report period ending 12/31/19
RMT Page at Morningstar
Last Elimination: Item # 1.A. Eliminated RMT-Sold 113+ at $8.7 (2/22/20 Post)(profit snapshot = $79.75)
The largest prior liquidation resulted in a $2,269.61 profit: Item # 1.A.
Data Date of 4/13/20 Trade:
Closing Net Asset Value Per Share: $7.03
Closing Market Price: $5.92
Discount: -15.79%
Sourced: RMT Royce Micro-Cap Trust-CEF Connect
Recent Distributions:
Based on the fund's history during the Near Depression period, there will be a suspension of that policy when dividends can no longer be supported by capital gains realized by the fund. The total dividend paid in 2010, for example, was only 8 cents per share, paid in December 2010, and was sourced from ordinary income and short term capital gains. Quarterly dividend did not resume until March 2011
Last Dividend Declaration: $.15 per share
Royce Micro-Cap Trust, Inc. (NYSE-RMT) declares Second Quarter Common Stock Distribution of $0.15 Per Share ("The Fund has adopted a Distribution Policy of paying quarterly distributions on its Common Stock. Distributions are being made at the annual rate of 7% of the rolling average of the prior four calendar quarter-end net asset values (NAVs), with the fourth quarter distribution being the greater of 1.75% of the rolling average or the minimum distribution required by IRS regulations.") Under this managed distribution plan, the quarterly dividend is variable.
Next Ex Dividend Date:
Some Prior Sell Discussions: Item # 1.B. Sold 100 RMT at $8.73 (1/25/20 Post); Item # 3.A. Sold 274+ RMT at $8.9 (8/3/17 Post); Item 3.A. Sold 276+ RMT at $8.4 (5/17/17 Post)
Some Prior Buy Discussions: Item # 2.B. Added 50 RMT at $7.91 (8/21/19 Post); Item # 1 Bought 50 RMT at $8.03-Used Commission Free Trade. (6/15/19 Post)
F. Added 10 PPT at $4.39:
Quote: PPT | Putnam Premier Income Trust Overview-A CEF
Closing Price 6/5/20: PPT $5.03 +$0.03 +0.60%
Sponsor's Website: Putnam Premier Income Trust
SEC Filings
Last SEC Filed Shareholder Report (period ending
Last Discussed: Item # 2.A. (4/4/20 Post)
I will sell my highest cost lot when I can do so profitably based on my original cost.
Dividend: Monthly at $.035 per share ($.42 annually)
The dividend is supported by ROC.
Next Ex Dividend Date: 6/23/20
Average Cost Per Share: $4.85
Dividend Yield at $4.85: 8.66%
Dividend Reinvestment: No. I turned off dividend reinvestment when the market approached net asset value per share.
Current Position: 419+ shares
Data Date of 4/17/20 Trade:
Closing Net Asset Value Per Share: $4.62
Closing Market Price: $4.38
Discount: -5.19%
Sourced: PPT Putnam Premier Income CEF Connect
G. Bought 10 PFLT at $6.06; 5 at $5.75:
Quote: PennantPark Floating Rate Capital (PFLT)-A BDC
Closing Price 6/5/20: PFLT $8.90 +$0.18 +2.06%
This is a restart in my Fidelity taxable account Item # 2.A. Eliminated PFLT in Fidelity Account-Sold 81+ at $12.01 (12/14/19 Post)(profit snapshot $29.66; any profit is viewed as a victory)
10-Q for the Q/E 3/31/20 (investments listed starting at page 8)
5 Year Financial History:
I eliminated my position in this account last year.
Dividend: Monthly at $.095 per share ($1.14 annually)
PennantPark Floating Rate Capital Ltd. Announces Monthly Distribution of $0.095 per Share
Dividend Yield at $5.96 Average Cost: 19.13%
Viewed as high risk. Possible dividend cut.
Net Asset Value Per Share History:
3/31/20 $12.2 10-Q at page 5
12/31/19: $12.95
9/30/19: $12.97
6/30/19: $13.07
3/21/19: $13.24
12/31/18 $13.66
9/30/18 $13.82
6/30/18: $13.82
9/30/17: $14.10
9/30/16: $14.06
9/30/15: $13.95
9/30/14: $14.40
9/30/13: $14.10
9/30/12: $13.98
IPO April 2011 at $15 (net to company at $13.9 after underwriters' discount and before PFLT expenses related to the offering)
NII per share = $.3 (above $.285 dividend)
"As of March 31, 2020, our portfolio totaled $1,179.0 million and consisted of $1,072.0 million of first lien secured debt (including $119.7 million in PSSL), $32.0 million of second lien secured debt and $74.9 million of preferred and common equity (including $35.1 million in PSSL). Our debt portfolio consisted of 99% variable-rate investments. As of March 31, 2020, we had two portfolio companies on non-accrual, representing 0.6% and zero of our overall portfolio on a cost and fair value basis, respectively. Overall, the portfolio had net unrealized depreciation of $71.7 million. Our overall portfolio consisted of 108 companies with an average investment size of $10.9 million, had a weighted average yield on debt investments of 7.8%, and was invested 91% in first lien secured debt (including 10% in PSSL), 3% in second lien secured debt and 6% in preferred and common equity (including 3% in PSSL). As of March 31, 2020, 98% of the investments held by PSSL were first lien secured debt."
PennantPark Floating Rate Capital Ltd. Announces Financial Results for the Quarter Ended March 31, 2020 Nasdaq:PFLT
H. Eliminated CIO-Sold 20 at $8.32 and 10 at $8.52:
Quote: City Office REIT Inc. (CIO)
Closing Price 6/5/20: CIO $10.48 +$0.21 +2.04%
Website: City Office REIT
Our Properties-City Office REIT
2019 Annual Report SEC Form 10-K
CIO SEC Filings
Profit Snapshot: $34.64
Last Discussed: Item #4.D. (4/4/20 Post); Item # 3.A. Restarted CIO-Bought 10 at $7.3; 5 at $7 (3/28/20 Post)
The dividend was recently slashed from $.23 per share to $.15 per share. City Office REIT Announces Dividends for First Quarter 2020
Last Earnings Report (Q/E 3/31/20): Note that the reduced dividend of $.15 per share still exceeds AFFO per share.
Item # 1. C. Sold 10 CIO at $11.58 (5/17/2018 Post)(profit snapshot = $13.94)-Item # 1.B. Bought 10 CIO at $10.19 (3/12/18 Post)
Item # 8 Sold 100 CIO at $13.5: Update For Equity REIT Basket Strategy As Of 7/28/16 - South Gent | Seeking Alpha (profit snapshot= $207.97)-Item # 5 Bought 100 CIO at $11.4 at Update For Equity REIT Basket Strategy As Of 4/6/16 - South Gent | Seeking Alpha
Item # 1. Sold 50 CIO at $12.38: Update For Equity REIT Basket Strategy As Of 3/7/16 - South Gent | Seeking Alpha (profit snapshot $61.04 plus one dividend)-Scroll to 2. BOUGHT CIO at $11.12) Update For REIT Basket Strategy As Of 11/24/15 - South Gent | Seeking Alpha
CIO Trading Profits to Date: $303.65 ($269.01 in prior trades)
CIO will have to fall below $7 for me to reconsider a purchase.
I still own CIOPRA.
Quote: Valley National Bancorp (VLY)
Closing Price 6/5/20: VLY $9.20 +$0.48 +5.50%
VLY | Valley National Bancorp Analyst Estimates
Investment Category:Regional Bank Basket Strategy
VLY SEC Filings
10-Q for the Q/E 3/31/20
2019 Annual Report
Dividend: Quarterly at $.11 per share
Valley National Bancorp Declares Its Regular Quarterly Preferred and Common Stock Dividends
Dividend Yield at $7.66 = 5.74%
Next Ex Dividend: 6/12/20
Last Sell Discussions: Item # 1.A. Eliminated VLY-Sold 102+ at $10.51 (9/11/2019 Post); Item # 2.A. Eliminated VLY Sold 51+ VLY at $12.76 (7/25/18 Post); Item # 2.B. Sold 60 VLY at $12.52 (1/28/18 Post)
Recent Acquisition: "Effective December 1, 2019, Valley completed its acquisition of Oritani Financial Corp. ("Oritani") and its wholly-owned subsidiary, Oritani Bank. Oritani had approximately $4.3 billion in assets, $3.4 billion in net loans, $2.9 billion in deposits, after purchase accounting adjustments, and a branch network of 26 locations." I had bought and sold Oritani several times.
Last Earnings Report (Q/E 3/31/20): SEC Filed Press Release
"net income for the fourth quarter 2019 of $38.1 million, or $0.10 per diluted common share, as compared to the fourth quarter 2018 earnings of $77.1 million, or $0.22 per diluted common share, and net income of $81.9 million, or $0.24 per diluted common share, for the third quarter 2019. During the fourth quarter 2019, Valley incurred non-core after tax charges of $52.5 million mostly due to prepayment penalties on FHLB borrowings, merger expenses and additional income tax expense related to reserves for uncertain tax positions. Excluding all non-core charges, our adjusted net income was $90.7 million, or $0.24 per diluted common share, for the fourth quarter 2019, $72.7 million, or $0.21 per diluted common share, for the fourth quarter 2018, and $83.1 million, or $0.24 per diluted common share, for the third quarter 2019."
Preferred stock and junior bonds issued by a bank holding company would likely become worthless when and if the FDIC seizes the subsidiary that conducts banking operations.
J. Restarted NWBI- Bought 10 at $10.32; 5 at $10.1; 5 AT $9.9; 2 AT $8.86; 3 AT $9.47 and Sold Highest Cost Lot at $10.71:
Quote: Northwest Bancshares Inc. (NWBI)
Closing Price 6/5/20: NWBI $10.94 +$0.41 +3.89%
"Headquartered in Warren, Pennsylvania, Northwest Bancshares, Inc. is the holding company of Northwest Bank. Founded in 1896, Northwest Bank is a full-service financial institution. . . As of March 31, 2020, Northwest operated 170 full-service community banking offices and eight free standing drive-through facilities in Pennsylvania, New York and Ohio." Subsequent to the quarter's end, NWBI completed an acquisition of a bank holding company that owned 31 branches in Indiana.
NWBI | Northwest Bancshares Inc. Analyst Estimates
Remaining Shares (15):
Sold 10 at $10.71 (Bought at $10.32)
Profit Snapshot: +$3.89
Dividend: Quarterly at $.19 per share ($.76)
Dividend Yield at $9.74: 7.8%
The dividend yield is the primary attraction. As with other high yield stocks, the trick is to harvest the dividend without giving some or all of it back in a share loss.
Last Ex Dividend: 5/6/20
"102nd consecutive quarter in which the Company has paid a cash dividend"
5 Year Operating History:
Last Earnings Report (Q/E 3/31/20): SEC Filed Press Release
E.P.S. was impacted by the usual problems impacting regional banks during the first quarter.
"The provision for loan losses increased by $21.2 million, or 327.4%, to $27.6 million for the quarter ended March 31, 2020, from $6.5 million for the quarter ended March 31, 2019. During the current quarter, the Company adopted ASU 2016-13, referred to as Current Expected Credit Losses ("CECL"), which requires that all financial assets measured at amortized cost be presented at the net amount expected to be collected inclusive of the entity's current estimate of all lifetime expected credit losses. Due to the adoption of CECL, our allowance for loan losses, reserve for unfunded commitments and equity were negatively impacted by $10.8 million, $2.3 million and $9.6 million, respectively. In addition, the estimated economic impact of COVID-19 caused us to increase our provision expense for the quarter by approximately $23 million."
E.P.S Diluted: $.07
NIM: 3.66%
Efficiency Ratio: 64.67%
NPL Ratio: .97%
NPA Ratio: 1.05%
Coverage Ratio: 108.7%
Charge off Ratio: .16%
Capital Ratios: Solid for now
NWBI SEC Filings
Other Recent News: Northwest Bancshares, Inc. Completes Merger with MutualFirst Financial, Inc. (4/24/20) ("Northwest issued 20,659,087 shares of common stock in the merger (subject to adjustment for cash issued in lieu of fractional shares), and based upon the $10.33 per share closing price of Northwest's common stock on April 24, 2020, the transaction value was approximately $213.4 million. The completion of the merger has resulted in a bank with approximately $12.8 billion in total assets, providing banking services through 214 branch locations and 273 ATMs in four states. The transaction has expanded Northwest's franchise by 36 full service offices located in Indiana.")
Purchase Restriction: Each subsequent purchase must reduce my average cost per share.
Maximum Position: 100 shares
K. Eliminated JRI in Schwab Account-Sold 100 at $11.48:
I still own JRI in other accounts.
Closing Price 6/5/20: JRI $12.33 +$0.24 +1.99%
SEC Filings
Sponsor's Website: JRI - Nuveen Real Asset Income and Growth Fund
This was a dividend harvest trade. With this kind of income harvesting strategy, I buy at a price that I am willing to hold for a long period, but the intention is to own the security for at most a few weeks. This CEF pays monthly dividends. I owned it long enough to receive 1 monthly dividend payment.
Profit Snapshot: +$69.35
 |
| Purchase Made 5/8/20; ex Dividend for $.0965 per share on 5/14/20 |
Total Return = $73
Annualized Total Return = 6.77% on $1,078 outlay
Holding Period: 21 days
Data Date of 5/29/20 Trade:
Closing Net Asset Value Per Share: $13.58
Closing Market Price: $11.49
Discount: -15.39%
Sourced: JRI- CEF Connect
Last Buy Discussion: Item # 1.C. Added 5 JRI at $8.95; 10 at $8.09; 10 at $10.16; 10 at $10.66 (5/16/20 Post) Those shares are still owned and held in another account where I am reinvesting the dividend.
Last Sell Discussions: Item # 2.A. Sold 102+ JRI at $17.98 (12/22/19 Post)(profit snapshot = $140.67); Item # 1.A. Sold 100 JRI at $17.51(10/30/19 Post )(profit snapshot = $100.41); Item # 4 Sold 100 JRI at $17.23 (10/2/19 Post)(profit snapshot = $40.45);
JRI Realized Gains to Date: $350.88
Annualized Total Return = 6.77% on $1,078 outlay
Holding Period: 21 days
Data Date of 5/29/20 Trade:
Closing Net Asset Value Per Share: $13.58
Closing Market Price: $11.49
Discount: -15.39%
Sourced: JRI- CEF Connect
Last Buy Discussion: Item # 1.C. Added 5 JRI at $8.95; 10 at $8.09; 10 at $10.16; 10 at $10.66 (5/16/20 Post) Those shares are still owned and held in another account where I am reinvesting the dividend.
Last Sell Discussions: Item # 2.A. Sold 102+ JRI at $17.98 (12/22/19 Post)(profit snapshot = $140.67); Item # 1.A. Sold 100 JRI at $17.51(10/30/19 Post )(profit snapshot = $100.41); Item # 4 Sold 100 JRI at $17.23 (10/2/19 Post)(profit snapshot = $40.45);
JRI Realized Gains to Date: $350.88
3. Short Term Bond Ladder Basket Strategy:
A. Bought 10 Essex Portfolio 3.375% SU Bonds Maturing on 1/15/23:
FINRA Page: Bond Detail (prospectus linked)
Bought at a Total Cost of 97.114 (includes $1 per bond commission)
YTM at Total Cost = 4.494%
Current Yield at Total Cost = 3.4753%
Third Party Price as of 6/5/20 = 102.7428
Issuer: Essex Portfolio, the operating entity for Essex Property Trust Inc. (ESS) who guarantees the notes:
Third Party Price as of 6/5/20 = 102.7428
Earlier this year, Essex Portfolio priced a $500M offering of 2.65% SU notes maturing in 2032: SEC Filed Press Release (2/4/20)
2020 First Quarter Earnings Report (SEC Filing)
I now own 14 Essex bonds. The other 4 are held in different accounts. Two of those bonds are 3.25% SU maturing on 5/1/23. Item # 1.B. Bought 2 Essex Property L.P. 3.25% SU Maturing on 5/1/23 at a TC of 99.628 (4/20/17 Post); Bonds Detail (closed at 103.77):
The other two are the Essex 3.625% SU bonds maturing on 8/15/22.
All of the bonds issued by the operating L.P. are guaranteed by Essex. While that is normally the case for operating REIT L.P.s, there are exceptions so the prospectus needs to be checked.
B. Added 2 Highwoods Property L.P. 3.625% SU Bond Maturing on 1/15/23:
The other two are the Essex 3.625% SU bonds maturing on 8/15/22.
All of the bonds issued by the operating L.P. are guaranteed by Essex. While that is normally the case for operating REIT L.P.s, there are exceptions so the prospectus needs to be checked.
B. Added 2 Highwoods Property L.P. 3.625% SU Bond Maturing on 1/15/23:
FINRA Page: Bond Detail (prospectus linked)
Bought at a Total Cost of 98.633 (includes $1 per bond commission)
Last Close: 103.47
YTM at Total Cost = 4.142%
Current Yield at TC = 3.6752%
Issuer: Operating Entity for Highwoods Properties Inc. (HIW)-An Office REIT
Investor Relations: Real Estate Company | Highwoods Properties
One of HIW's main markets is Nashville. Nashville | Highwoods
10-Q for the Q/E 3/31/20
HIW 2019 Annual Report (debt listed starting at page 78)
6/1/20 Update on Covid-19.PDF (99% of May rents collected)
Credit Ratings:
4. Canadian Reset Equity Preferred Stocks:
A. Added 50 EMAPRC:CA at C$14.5 (C$1 Commission):
Quote: EMA-PC.TO
Closing Price 6/5/20: EMA-PC.TO C$16.30 +C$0.30 +1.87%
Last Discussed: Item # 1.A. Bought 50 EMAPRC at C$18.7 (7/7/19 Post)
Issuer: Home | Emera (electric utility holding company)
Capital Structure Placement: Equity Preferred stock, senior only to common stock in the capital structure
Par Value: C$25
Dividends: Cumulative and Quarterly
Last Ex-Dividend: 4/30/20
Current Coupon: 4.721%
Current Yield at C$14.5 = 8.12%
Current Coupon Period: 8/15/18 and ending on 8/14/23
Next Reset: August 2023 at a 2.65% spread to the then existing 5 year Canadian bond.
Dividend Stopper Clause: Yes
Prior EMAPRC Round Trip Trades: +C$409 (snapshots in prior link)
South Gent's Comment Blog # 8: Sold 100 EMAPRC at C$21.96---Item # 2 Bought 50 EMAPRC at C$17.44 and 50 at C$17.84 Update For Exchange Traded Bond And Preferred Stock Basket Strategy As Of 7/13/16 - South Gent | Seeking Alpha
Other Round Trips Other Emera Preferred Stocks: +$C229
The weakness in the share price is probably due to concerns that the coupon will reset in 2023 at a much lower rate than the current one.
5. Intermediate Term Bond Ladder Basket Strategy:
A. Bought 2 Ares Capital 4.2% SU Bonds at 91 Maturing on 6/10/24-Then Sold at 95.2:
Purchase:
Sell:
Profit Snapshot: $80
FINRA Page: Bond Detail (prospectus not linked)
Prospectus "The Notes are our direct senior unsecured obligations and rank pari passu, or equally, with all outstanding and future unsecured unsubordinated indebtedness issued by Ares Capital Corporation.") The issuer may redeem without making a make whole payment on or after May 10, 2024.
Bought at Total cost of 91.1 (with $1 per bond commission)
YTM at Total Cost: 6.685%
Sold at 95.2
Proceeds at 95.1 (with $1 Per bond commission)
Issuer: Ares Capital Corp. (ARCC)
ARCC SEC Filings
2019 ARCC Annual Report
I will be discussing in my next post the purchase of 4 Ares Capital 3.625% SU bonds maturing on 1/19/22. Bond Detail
I have already repurchased this 2024 ARES bond which I will mention in a subsequent post.
B. Bought 2 FS KKR 4.625% SU Bond Maturing on 7/15/24 and Sold at 88.5:
Purchase:
Sell:
This is another short term trade of a BDC senior unsecured bond.
Profit Snapshot: +$80.54
FINRA PAGE: Bond Detail (prospectus not linked)
Prospectus
Bought at a Total Cost of 84.373 (with $2 commission)
YTM at TC = 9.144%
Curent Yield at TC = 5.48%
Rated at Baa3 by Moody's (but trading like junk rated)
Sold at 88.5
Proceeds at 88.4
FSK 2019 Annual Report (debt discussed starting at page 139; note that there is a significant amount of senior secured debt)
SEC Filed Earnings Press Release for the 2019 4th Quarter
Last Bond Offering (12/19): $45M 4.125% SU notes maturing in 2025
6. REIT Equity Preferred Stocks:
A. Pared CIOPRA-Sold 10 at $21.17 and 10 at $22.25 (highest cost lots):
Quote: City Office REIT Inc. 6.625% Cumulative Preferred Series A Stock
Profit Snapshot: $22.17
New Average Cost Per Share: $16.91 with no ROC adjustment
Yield at $16.91 = 9.79%
Investment Category: Advantages and Disadvantages of Equity REIT Cumulative Equity Preferred Stocks, a subcategory of Equity REIT Common and Preferred Stock Basket Strategy
Last Discussed: Item # 1.A. Bought 20 CIOPRA at $20.6; 5 at $19.14; 5 at $18.6; 5 at $18.35; 5 at $17.5; 5 at $15.15; 5 at $13.56; 10 at $16.5 (3/28/20 Post)
Security: Prospectus Supplement
Prior Trade Discussions: Item # 1.A. Eliminated CIOPRA-Sold 50 at $24.77-Used Commission Free Trade (4/24/19 Post)-Item # 4.A. Bought 50 CIOPRA at $21.67-Used Commission Free Trade (1/13/19 Post)
Item # 4.A. Sold 50 CIOPRA at $24.14-Used Commission Free Trade (3/17/19 Post)-Item 3.A. Sold 50 CIOPRA at $25.21 (1/27/17 Post)
CIOPRA Trading Profits to Date: $324.36
Purchase Restriction: Each subsequent purchase has to reduce my average cost per share.
I own a few shares of CIOPRA in other accounts. The largest position in those accounts is 10 shares held in my Schwab taxable account.
Closing Price 6/5/20: EMA-PC.TO C$16.30 +C$0.30 +1.87%
Last Discussed: Item # 1.A. Bought 50 EMAPRC at C$18.7 (7/7/19 Post)
Issuer: Home | Emera (electric utility holding company)
Capital Structure Placement: Equity Preferred stock, senior only to common stock in the capital structure
Par Value: C$25
Dividends: Cumulative and Quarterly
Last Ex-Dividend: 4/30/20
Current Coupon: 4.721%
Current Yield at C$14.5 = 8.12%
Current Coupon Period: 8/15/18 and ending on 8/14/23
Next Reset: August 2023 at a 2.65% spread to the then existing 5 year Canadian bond.
Dividend Stopper Clause: Yes
Prior EMAPRC Round Trip Trades: +C$409 (snapshots in prior link)
South Gent's Comment Blog # 8: Sold 100 EMAPRC at C$21.96---Item # 2 Bought 50 EMAPRC at C$17.44 and 50 at C$17.84 Update For Exchange Traded Bond And Preferred Stock Basket Strategy As Of 7/13/16 - South Gent | Seeking Alpha
The weakness in the share price is probably due to concerns that the coupon will reset in 2023 at a much lower rate than the current one.
5. Intermediate Term Bond Ladder Basket Strategy:
A. Bought 2 Ares Capital 4.2% SU Bonds at 91 Maturing on 6/10/24-Then Sold at 95.2:
Purchase:
Prospectus "The Notes are our direct senior unsecured obligations and rank pari passu, or equally, with all outstanding and future unsecured unsubordinated indebtedness issued by Ares Capital Corporation.") The issuer may redeem without making a make whole payment on or after May 10, 2024.
Bought at Total cost of 91.1 (with $1 per bond commission)
YTM at Total Cost: 6.685%
Sold at 95.2
Proceeds at 95.1 (with $1 Per bond commission)
Issuer: Ares Capital Corp. (ARCC)
ARCC SEC Filings
2019 ARCC Annual Report
I will be discussing in my next post the purchase of 4 Ares Capital 3.625% SU bonds maturing on 1/19/22. Bond Detail
I have already repurchased this 2024 ARES bond which I will mention in a subsequent post.
B. Bought 2 FS KKR 4.625% SU Bond Maturing on 7/15/24 and Sold at 88.5:
Purchase:
Profit Snapshot: +$80.54
Prospectus
Bought at a Total Cost of 84.373 (with $2 commission)
YTM at TC = 9.144%
Curent Yield at TC = 5.48%
Rated at Baa3 by Moody's (but trading like junk rated)
Sold at 88.5
Proceeds at 88.4
FSK 2019 Annual Report (debt discussed starting at page 139; note that there is a significant amount of senior secured debt)
SEC Filed Earnings Press Release for the 2019 4th Quarter
Last Bond Offering (12/19): $45M 4.125% SU notes maturing in 2025
6. REIT Equity Preferred Stocks:
A. Pared CIOPRA-Sold 10 at $21.17 and 10 at $22.25 (highest cost lots):
Profit Snapshot: $22.17
Yield at $16.91 = 9.79%
Investment Category: Advantages and Disadvantages of Equity REIT Cumulative Equity Preferred Stocks, a subcategory of Equity REIT Common and Preferred Stock Basket Strategy
Last Discussed: Item # 1.A. Bought 20 CIOPRA at $20.6; 5 at $19.14; 5 at $18.6; 5 at $18.35; 5 at $17.5; 5 at $15.15; 5 at $13.56; 10 at $16.5 (3/28/20 Post)
Security: Prospectus Supplement
Par Value: $25
Last Ex Dividend: 4/8/20
Issuer: City Office REIT Inc. (CIO)
Optional Redemption: On or after 10/4/21 at par value plus accrued and unpaid dividends
Dividend Stopper Clause = Yes (page S-22 of the prospectus)
Change of Control Provision: Yes
Prior Trade Discussions: Item # 1.A. Eliminated CIOPRA-Sold 50 at $24.77-Used Commission Free Trade (4/24/19 Post)-Item # 4.A. Bought 50 CIOPRA at $21.67-Used Commission Free Trade (1/13/19 Post)
Item # 4.A. Sold 50 CIOPRA at $24.14-Used Commission Free Trade (3/17/19 Post)-Item 3.A. Sold 50 CIOPRA at $25.21 (1/27/17 Post)
CIOPRA Trading Profits to Date: $324.36
Purchase Restriction: Each subsequent purchase has to reduce my average cost per share.
I own a few shares of CIOPRA in other accounts. The largest position in those accounts is 10 shares held in my Schwab taxable account.
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.
""Restaurant bookings have fully recovered in Germany in a sign that activity rebounds quickly as lockdowns ease - MarketWatch""
ReplyDeleteThis seems HUGE.
"""Canada's mortgage insurer tightens rules as it forecasts home-price drop of up to 18% - Reuters""
If property prices go down noticably I will be buying real estate (not with all funds of course.)
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On GMO, I like this line
“We are in the top 10% of historical price earnings ratio[s] for the S&P on prior earnings and simultaneously are in the worst 10% of economic situations, arguably even the worst 1%!”
Add to that estimates are things are back to Feb normals for some stocks (still tanked for some sectors) but what's not tanked is running to high it's get market closing in on Feb highs all by themselves.
That's one problem. Another is that Feb highs were a bit bubbly with valuation expansions but not earnings from year before (if I understand that correctly.)
There's a lot of pigs flying lately, not just in the stock market.
GMO it says are perpetually somewhat bearish though. But their record in 2000, 2007, and bullish in 2008 is listed as impressive.
Interesting on where to look for opportunities:
"“value” stocks are comparatively cheap everywhere, and that emerging market stocks as a group are cheap by any reasonable measure. (And best of all, naturally: Emerging market value stocks)"
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Graham rumors. If true, indicate what we have suspected. There is blackmail happening that's shaping the GOP response.
That'd hardly be hard to believe. It's blamed on the email hacking. However, Putin's been collecting for years.
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I haven't heard in media that I've had on (various stations) about the journalist who's lost sight in one eye from a rubber bullet. Nor the policeman shot in the head. I do wish strongly that media would cover more broadly. It's sometimes that they don't have their own exclusive reports on location. But they still should bring it up.
I have not yet been able to figure out if increased activity has resulted in increased serious covid cases, particularly (and sadly) death.
"1. Each subsequent purchase has to be at the lowest price in the chain"
ReplyDeleteSo if you buy a stock a few weeks before... then near the March lows... will all future purchases need to be lower than that March lows price?
Or does it need to be lower than the last price you sold at on a pop?
That's for regular process. For (a variation allows for purchases that reduce the average cost per share)
If one hasn't already own the stock, or sold all shares on a pop... then would the buy in be at some price lower than the pop price?
As stocks rally so strongly, it's hard to buy back in. Even down days don't go down the prior purchase prices. Sometimes they don't go below prior sales prices even in a pullback!
Land: During the meltdown phase last March, I would generally use lowest price in the chain.
DeleteWhen I became more confident that the worst was over, I did switch in many cases to the less restrictive option that would allow for purchases higher than my lowest cost lot provided the purchase lowered my average cost.
With the securities having moved up in price, I am selling the higher cost lots which lowers my average cost per share. Even when using the less restrictive option, the market would have to fall in most cases significantly for the price to fall below my average cost per share, let alone the lowest price in the chain.
With prices having recovered, I will probably use the most restrictive purchase restriction since I do not want to chase anything now.
I may have close to 300 different securities in my portfolio now, and I am probably not completely consistent in implementing these rules.
If I eliminate a position, that wipes the slate clean with no purchase restriction. The best case scenario from my viewpoint is to buy back at the lowest price paid in the sold lots. More often, I may set a consider to repurchase at some percentage below where the stock was sold, somewhere in the 5% to 10% range but higher in some sectors. Some regional bank stocks, like WASH, I bought back at more than 50% below where I last sold.
Thanks! That's helpful.
DeleteNow that I'm practiced I want to do all this again. I know I can do it better :).
I doubt I'll even get up to 300 issues. It takes near daily watching to know what's going on with their prices.
LAND: There are variations based on my opinion about a particular stock. For example, I am not enthusiastic about IBM which I view as a bond substitute when interest rates are abnormally low. I own 17+ shares at average cost per share of $122.08. The applicable restriction is that each new buy must lower my average cost per share. IBM closed last Friday at $132.06, so the stock is off my radar screen for new buys using that restriction.
DeleteGiven my lack of enthusiasm, which is based on past financial results, I am not likely to buy when the price falls below $122.08 until the price sinks below $105. I am more focused on selling my highest cost lot.
The last purchases were discussed in this post:
Item # 2.G. Added 1 IBM at $95; 1 at $100; 1 at $102.75; 1 at 105.5; 1 at $92:
https://tennesseeindependent.blogspot.com/2020/05/bhb-btz-dgro-ebayl-eprprc-good-hta-ibm.html
Another income stock viewed with disfavor is GMRE discussed in this post. I eliminated the position at $11.25. The lowest cost lot was bought at $8.2 during the March meltdown (3/18). The highest cost lot was bought at $10 (3/13). The progression as shown in the snapshot was each purchase had to be at a lower price. Eliminating the position wipes the slate clean. Since I view the dividend as likely to be slashed, I would wait on that to happen before reconsidering a restart of a small ball "purchase program”. I would then set the first purchase price somewhere close to $9. I would not use 10% below $11.25 which would be less than $10.12
The optimum result in my trading systems is to buy back shares previously sold at a lower price than those shares were bought without missing a dividend payment.
I view stocks as inventory that generates income. Inventory will be sold when the price objective or goal is achieved. I do not need to own any stocks.
The trading systems that I use are tailored to my capital preservation goal, while assuming some risk and to my current willingness to take risks. If for example I had to buy $10K with each stock purchase, I would not have been buying during March. I was comfortable buying using the small ball trading system even as stocks that I purchased in the early morning had fallen even more before the end of trading, triggering yet another round of buying. On two days, as I recall, I did three rounds of wave buying going over 120 buy trades in a signal day. One of those days was 3/23 when the SPX closed at 2,237.4.
This adds to the picture of how the trading works.
DeleteCertainly factors on the stock, such as IBM is no longer a front runner strong stock, and GMRE's potential div cut should matter.
The nervousness I described is at selling once it's up, on fear that there will be more rally and I'll have sold too soon. Buying when down was much easier.
I think I need to adjust the pattern, to hold longer into rallies to setup for a longer horizon. That is to say, put more aside mentally to hold all through the downs until post-crash, which can be several years. Maybe need to ear mark a core very consciously, so that I know have something I'm holding without worry that I should be selling into the rally.
I suspect under more usual Unstable VIX, it is financially better to sell into the rally. This round is simply "weird." I can't get a down day after a sell, to buy back even a little below.
It is useful to see how you're doing this process.
I'm no longer looking much to do selling. I'm waiting for VIX under 20. Then I'll decide whether to sell, or if it's a true return to bull market, and best to keep holding.
DeleteEven LMT that was struggling so much to break 400, is back higher than when I sold 2shares on FRI at 413.
Today WMT is down. I'd sold into it's rallies during May when it was the safe place in a pandemic. At 131 and 127.
So put in order to rebuy today. Have been eyeing 120.20, and not able to get it several times. However, today it went down to 119.50. (Which I wasn't looking at the computer during.) So put in a 119.80 order, but will probably not get it. So likely not get back in again yet.
In case you're interested. Or someone else coming by.
ReplyDeleteAn eye for an eye - Jewish understanding of it is commonly misunderstood, and then wrapped into a bigger false claim about Judaism being legalistic, and Christianity saving Judaism by adding grace and compassion. So it's a hot button for Jews, because surprise, surprise, yet another inaccurate negative view.
Several of the links come close to explaining that, and using a reasonable interpretation of what Judaism holds.
Most of Judaism in the world today is Rabbinic, called Talmudic Judaism.
After the Roman dispersion, there was a massive effort to write down the oral traditions and history that had been gathering. It was less of a problem when priests were taught in the Jerusalem Temple. But with moves all over the place, it was needed. This information of both oral Torah (bible) stories and interpretations is considered integral to Judaism.
My first day of learning about Talmud, we were given this verse. Then told to read it and see what we think. It says an eye for an eye, a tooth for a tooth, a burn for a burn, a bruise for a bruise. If one pauses and thinks about it...
Looking at the passage, a thought popped out. One can't duplicate burns and bruises exactingly. That is a key to Talmudic interpretation. The Talmud makes it clear that it is only allowing financial or other compensation. It goes into details about how to do that. It is very clear that only a court judgement not vigilantism can mead out a punishment.
There is no evidence it was ever taken literally. There's no archeology frequency of poked out eyes or removed hands, etc.. Instead, it's more likely that it was the usual step forward from the Hammurabi law. In that and other popular law, punishment was based in part of status of perp and victims. This passage is moving away from a rich person paying off victims, to stating that the actual injury matters.
(Judaism is one religion and the branches are more about observation level than theological differences. So these links will all be similar.)
Reconstructionist - best worded explanation (I wasn't purposely looking, but I happen to know this Rabbi.)
https://www.reconstructingjudaism.org/dvar-torah/eye-for-an-eye
This is an Orthodox group who's mission is outreach and teaching more about Judaism to ... less religious Jews.
https://www.aish.com/atr/Eye-for-an-Eye.html
I'm not crazy about this site. It's Reform style but far enough left to be apologetic and inaccurate on a few points. However, they've got the most direct quotes.
https://www.myjewishlearning.com/article/an-eye-for-100-a-tooth-for-about-ten-bucks/
This is my favorite quite summary site on Judaism. Nothing specifically on eye for eye but a good summary of Talmud and law over all.
http://www.jewfaq.org/torah.htm
http://www.jewfaq.org/brother.htm
Capital punishment is similar. There were so many restrictions that it almost never applied. You need for starters, four witnesses, and the perp warned within mins before acting, of the consequences of his actions. The list goes on. Strikingly (to me), this murdering police person might just fit the requirements.
Like most things in Judaism there is very little firm dogma, and a whole lot of discussion. There are two Talmuds. The English translation is printed with four most famous scholar's commentary on each page. The usual version is 74 volumes. There is one reasonable version online. Not great, but the translation copywrite is expired. There are many fakes online. Right Pre-WWII, a fake was commissioned which inserts a bunch of false passages as a way to foment hate. So good to verify it's the real one.
Regarding the jobs report released by the U.S. Bureau of Labor Statistics last Friday, I am categorizing it as non-reliable.
ReplyDeleteActually, the BLS admits in the release that the unemployment rate is wrong due to a "misclassification error", which, when corrected, could result in as much as a 16.3% unemployment rate vs. the reported 13.3%.
https://www.cnbc.com/2020/06/05/heres-why-the-real-unemployment-rate-may-be-higher-than-reported.html
See the information at the bottom of the news release, placed in a box.
https://www.bls.gov/news.release/empsit.nr0.htm
And the "misclassification error" started with the March data. The error, or whatever it is, also resulted in understating unemployment in March and April.
"In March, the BLS said the unemployment rate likely should have been 5.4 percent, instead of the official 4.4 percent rate. In April, the BLS said the real unemployment rate was likely about 19.7 percent, not 14.7 percent."
I am expecting a decline in the unemployment rate as the economy reopens. I can not rely on the BLS current estimates however. The May unemployment rate was probably somewhere between the reported 13.3% and 17% which is not very helpful.
That miscalculation is interesting. The market rallied on what it thought it had that was better than expected. So a correction could be issued immediately with no reaction, especially since it's an unclear correction (LIKELY 19.7 not 14.7).
DeleteThe question I see is how to play exuberant phase of a market.
Markets can go up a lot. A whole lot during exuberance. When they crash, it takes air out. But if you missed that climb, my observation is the drop is not much below the starting point of the air climb. So it's hard to make up if you don't take that crazy ride (usually has some ups and downs.) I haven't' actually tried to go through one of these phases, so I may be way off on that observation?
Land: The Stock Jocks have "twitter" brains. Reading a headline is sufficient information gathering, and is not too taxing on the brain. Looking underneath the hood can only cause confusion and trepidation when the desire is to put the pedal to the metal.
DeleteEven for the really deep thinkers, the "miscalculation error" is placed in the same dustbin as any other negative news and thrown out with that day's garbage. The thinking is that the next jobs report and the ones thereafter will show that the economy is coming back fast.
In other words, it frequently pays just to go with the flow and not to overthink it. The tricky part is to know when to hit the brakes and reverse gear.
It is not possible to prove that the future expectations embedded in stock prices now are wrong. That will have to be done, if at all, by the future becoming the present.
I am selling into the rally which is what I do. Buy the dips, sell the rips.
Most of the time, I slowly move my stock allocation up and down, so I still have a lot of stock to sell into the ongoing rally. I am buying volatility spikes and I did far more buying in March than what I normally would do given the depth of that selloff.
The movement in the VIX today is not confirming the up move in SPX:
CBOE Volatility Index (^VIX)
25.23 +0.71 (+2.90%)
As of 11:58AM EDT
https://finance.yahoo.com/quote/%5EVIX?p=^VIX&.tsrc=fin-srch
Definitely some more options bets are being made on a pullback with that VIX move.
DeleteInteresting. I hadn't noticed today. Currently up 3%.
There will be short covering after the next pullback.
ReplyDeleteSouth Gent,
"As the Nasdaq and S & P 500 indexes moved closer to their all time highs yesterday, ......in an Alternate Reality..."
Mohaed El-Erian, who is more conservative himself, attributed it to the win-win mindset in the market at the moment. If it's a V-shape recovery, the market will go higher (and/or we will see a sector rotation). If the economy collapses again, the Fed and the government will come to its rescue with more monetary/fiscal stimulus programs, effectively a put.
Y: The stock market has had a "value" tilt for several recent trading days including today. Both the DJIA and the S & P 500 are outperforming the Nasdaq 100.
DeleteInvesco QQQ Trust (QQQ)
$238.33 -1.36 (-0.57%)
As of 10:23AM EDT.
KRE, the regional bank ETF is up 2.63% while the First Trust Dow Jones Internet Index Fund (FDN)is up .16. The Energy Select Sector SPDR Fund (XLE) is up 2.2%.
Value depends on an ability to predict the future. After the regional bank stocks lost over 50%, they were "value" stocks provided the future predictions embedded the March prices did not happen or was far less bad than anticipated.
One of the ETFs that I bought as a placeholder when I started to see this rotation was VLUE. I may not discuss that one. I am up about 10%.
https://www.ishares.com/us/products/251616/ishares-msci-usa-value-factor-etf
El-Erian is summarizing the logic being used by whoever is buying this market very well.
DeleteThe CNBC guests are buying only in cautious amounts until at least last week, according to their words. So it's unclear who's using this logic and so gungho. Retail is supposedly not a high enough $. So it's big investors and pension funds?
It is value stocks that are rallying up these value indices, or money going back into travel airlines and hotels?
DeleteVYM is up with everything else, but not more than.
There has been that rotation out of Nasdaq as the lead.
Usually it's said that when everyone's in the same side of the boat it tips. But in this case it seems to have moved to rotation into a bull, rather than a pullback on the bull.
Land: VYM has a "value" tilt and is currently up .99% vs. QQQ at -.05%.
DeleteValue is relative and defined in significant part by future expectations.
The future expectation now is the Blue Sky scenario which, once that belief gels in enough investors who buy the non-QQQ names, has caused a positive reassessment of earnings in several beaten down sectors, including regional banks, travel and leisure stocks.
I don't think that QQQ has relinquished its leadership role to DJIA or SPX yet but it is underperforming, probably due to some selling in stocks that have led the charge off the March bottom into stocks that were beaten to a pulp in March and are still well off their February highs.
I wonder how much the less enthusiasm for FAANGS is a sense of a polish coming off, as social media are being challenged, and monopoly tech stocks may be depending on politics.
DeleteThe dominate reason is the rotation. But wonder if a little loss of shine is being built in.
Land: After looking in my account, I bought VLUE on 6/1/20 at $72.82, which would be when I decided to play for awhile the rotation to "value" that I was seeing with an ETF.
DeleteI doubt there is any concern reflected in social media stock prices relating to the possibility of increased regulation. Trump does not have enough votes to change section 230 of the Communications Decency Act.
https://www.law.cornell.edu/uscode/text/47/230
Even if he did, it would probably cause the social media sites to control content even more due to increased liability for user comments and for twitter to kick Donald off their website. That would require Donald to actually think beyond the current nano second, which he is of course incapable of doing.
Facebook, Inc. (FB)
$229.78-0.99 (-0.43%)
As of 12:32PM EDT
https://finance.yahoo.com/quote/FB?p=FB&.tsrc=fin-srch
FB closed at $146.01 on 5/15/20:
https://finance.yahoo.com/quote/FB/history?p=FB
In context of recent price history, the slippage today does not detract from the huge price spike.
I was thinking more long term on social media getting impacted after the election. I suppose that is too far out for the market to think... even while it prices now for a 2021 blue sky.
DeleteIs VLUE a good represention of value, or does it have draw backs to be cautious about?
Land: I could have an argument with myself lasting days about the meaning of value stocks since future growth expectations is a factor, but so are current numbers in relation to price.
DeleteVLUE is okay. It is a factor ETF. Another option is Vanguard's Value ETF (VTV) which has an expense ratio of .04%.
https://investor.vanguard.com/etf/profile/VTV
1 Year Total Return:
VLUE: +5.15%
VTV: +3.12%
QQQ: +37.19%
(returns through last Friday's close)
So value does have a substantial performance deficit vs. growth.
There will be a significant overlap with VYM.
I am just buying some stuff to trade based on my opinions about current market dynamics.
Druckenmiller was just on CNBC and he has turned relatively bullish in the short-intermediate term and thinks that it's the turn for the value stocks now.
ReplyDeleteY: I rarely watch CNBC but I do review the articles at its website. I see that Druckenmiller was "humbled" by the market's comeback:
Deletehttps://www.cnbc.com/2020/06/08/stanley-druckenmiller-said-hes-been-humbled-by-market-comeback-underestimated-the-fed.html
I am simply following my trading strategies, so I bought the dip and am now selling the rip.
I mentioned earlier that I went over my 200 share limit in Power Corporation of Canada. Whenever I do that, which is rare, I will try to pare the position back down to the maximum limit which I have now done.
I sold 10 PWCDF this morning at US$19.31, the third ten share lot sell, each at a higher price than the prior one. I mentioned in a comment that I had changed my plan in that manner.
That brings me down to 100 PWCDF and 100 POW:CA which I recently discussed. I will now wait for the stock to go ex dividend later this month and then decide what to do. This is all very disciplined and structured.
I see the Hotel REITs are continuing their rally today which is consistent with the herd opinion that conditions are returning to normal.
In my Fidelity account, I averaged down in HTPRD, all the way to a $4 buy. The average downs reduced my cost basis to $13.51. For securities that dived too far for me, I may elect to just get rid of them at a profit now, or see if I can sell the highest cost lots profitably and then hold onto the rest. The highest cost lot in that account is $18.88. HT has deferred its preferred stock dividend payments, and one quarter so far is in deferral. I have not made a decision on what to do yet, but I could get out now for close to a $200 profit.
Hersha Hospitality Trust 6.5% Cum. Redeem. Pfd. Series D
https://www.marketwatch.com/investing/stock/ht.prd
South Gent,
DeleteI bought HT at $14.1 last year and averaged down at $13.31 and $12.18 to watch it tanked at $2.29 on March 18, 2020. I managed to gather some courage to pick up 100 shares at $4.54 during the crash, which helps a little to offset the loss in my larger position of much higher cost basis.
South Gent,
DeleteRe. "Druckenmiller said he has returned just 3% during the market’s 40% rally since the S&P 500′s springtime bottom."
Druckenmiller miscalculated. The market low was already in when the Fed put and the government stimulus programs were announced, which is similar to what happened in the 2008-2009 financial crisis.
Market timing didn't work this time. Ken Fisher says that "The market is the great humiliator.".
Fear and Greed index is in greed range at 67, but not yet in extreme greed
Deletehttps://money.cnn.com/data/fear-and-greed/
The bank rate of 1.6% was lowered the other day to 1.45%.
ReplyDeleteIt's higher than the 1.15% is several banks, which is not a lot of consolidation. One plus with First Foundation is fund moved in with ACH supposedly are credited immediately, so there's never a wait time to grab them back into a brokerage if the market has what has now become a rare, bad day, good for buying. It's listing as credited nearly immediately, so, so far this seems to be true.
Given the blue sky views that includes a Fed backup if anything goes wrong...
ReplyDeletehow high can this market go?
What can be used to guesstimate where it can go to? I suppose there's no real reason to need to know. Just an human urge to figure out at what point valuations will seem unreasonable even within that blue sky view.
Land,
DeleteThe market could go sideways with sector rotation, it could go higher to set up a bigger crash down the road, or it could retest its March low.
South Gent,
Care to assign probabilities to the various scenarios?
South Gent,
NBER declared that the U.S. entered a recession in February. I hope that was not a catalyst for the stock market's pop today but maybe it was since that is now 3 months in the rear view mirror.
DeleteMaybe investors were encouraged by WHO stating that asymptomatic spread of COVID-19 was rare.
I spent the day selling, mostly getting rid of positions that caused too much pain during the March slide which had managed to transition into unrealized gains.
The dominant stock market trend remains up, but let's just say that is becoming more goofy by the day as far as I am concerned.
There are sectors and indexes that have lagged but it remains to be seen whether they will join the party or leave when they see the first puff of smoke.
VEA is one of the index ETFs that has spent years bobbing up and down and going nowhere.
Vanguard FTSE Developed Markets ETF (VEA)
$40.85 $0.48 +1.19%
Sponsor's Website: .05% expense ratio
Number of stocks 3924
https://investor.vanguard.com/etf/profile/VEA
Performance: Awful
5 Year annual average total return = +2.88%
https://www.morningstar.com/etfs/arcx/vea/performance
As to industrial stocks with good balance sheets, Cognex (CGNX) came to mind, but I do not own it. The company makes machine vision systems/sensors and bar code readers.
Cognex Corporation (CGNX)
$60.47 +$2.51 (+4.33%)
I will not buy since the P/E is too high and there is a negligible dividend.
The company has no debt and over $800M in cash.
https://www.sec.gov/Archives/edgar/data/851205/000115752320000577/a52210223ex99_1.htm
If you look at Industrial ETFs, the one doing the best this year is Invesco DWA Industrials Momentum ETF (PRN):
https://etfdb.com/etfdb-category/industrials-equities/
You've got some good motivations there. The recession announcement that it already started, i.e. past. It's like getting socks for your birthday, and excited that you won't be getting those again next time.
DeleteI'd missed the WHO announcement. That could be it.
That is great news. Means we can all relax a little around people we trust who are asymptomatic. Can change our options. That of course depends on whether the WHO is accurate. I'll wait for confirmation. Hopefully it's more accurate than those original test kits.
"becoming more goofy by the day"
Yes. I have concluded that markets do their exuberant phase based on timing or some other indicators... that don't include the economy.
Thanks for the names to look at! Cognex's business is more impacted than not by covid. High PEs 55 at this time? In this industry? That's back to a market that isn't cheap at all, even after a dive. I'll have to look though at past and see if the PE is high because of temporary earning decline.
4% up today. Someone thinks it's a fabulous deal.
https://finviz.com/quote.ashx?t=CGNX
62% increase in earnings expected next year. I'll have to dig to find out why that's expected.
"It's emerging from a large base formation"
https://realmoney.thestreet.com/investing/barcode-maker-cognex-is-emerging-from-a-large-base-formation-15337252?puc=yahoo&cm_ven=YAHOO
It is a nice looking chart for about 10% more.
Average target price by analysts is 49.53. Current price is in 60.47.
https://www.marketwatch.com/investing/stock/cgnx/analystestimates
Since I've learned of that datapoint (from when you posted it), I've been avoiding stocks who's estimated price is less than their market price.
Maybe the ETFs. Or a lithium stock. (The Lithium ETF has little to do with lithium.)
(The WHO news is good, but doesn't add up to Feb highs. Just want to be clear about that.)
DeleteLand: The WHO is still claiming that those with mild symptoms can transmit infections. The list of symptoms are lengthly and include new loss of taste or smell, cough, sore throat, muscle aches, and shortness of breath or breathing. Symptoms normally appear 2 to 14 days after infection.
DeleteIt possible to have one or more of the symptoms and be unaware that its related to a COVID-19 infection. Based on what WHO said yesterday, there is a brief time after infection that the person is unlikely to be contagious.
One of the main problems is the super spreaders:
https://www.bbc.com/news/health-52903787
Land: I would not say that refraining from buying at a price higher than the consensus price target is an absolute for me.
DeleteWhat I am doing now is not likely to result in buying stocks that have risen so much that the price exceeds the consensus target price.
I view some price targets as too conservative.
For example, Yahoo Finance has a consensus PT for Oneok (OKE) at $35.95. The close yesterday was at $48.04. YF shows the dividend yield at $48.04 to be 7.79%.
https://finance.yahoo.com/quote/OKE?p=OKE
While I would not buy OKE at $48 or higher, I might consider buying a few shares in the $36 to $38 range which is higher than the PT.
My primary connection with OKE has been an owners of senior unsecured debt.
I will be discussing in my next post purchasing one of those bonds. After looking at the company again, I bought 5 shares of the common at $27.77 which I will discuss as well. The yield at that price is 13.47%. Needless to say, I needed to be a bit more adventuresome with the stock, but at least I bought some. The SU bond that I bought was the 3.375% note maturing on 10/1/22, bought at a total cost of 97.01, creating a YTM of 4.696%. The purchase was made on 4/28 so I am gradually catching up discussing my March and April bond purchases.
+++
There was more "news" today that Intel will abandon Intel chips next year and will announce that transition to its own ARM chips later this month.
https://techcrunch.com/2020/06/09/apple-could-reportedly-announce-mac-shift-to-its-own-arm-based-chips-this-month/
The Intel info isn't hitting the stock today. It's been slower to rise than Garmin and SOXX but eventually joined in.
DeleteI can't figure out good prices for a stock based on fundamentals. I simply haven't figured out how that's done. I tend to use price action as my guide - which isn't much of a guide.
The one factor I can add in from estimates even if they are off (and analysts being off, is not "unheard of"), is that it should be a drag on the stock. But I can't tell how much.
So good to know that even collectively, it's not a number to etch in stone.
Happened on this article just now in finviz's list. Guess others have noticed this trend.
Deletehttps://www.marketwatch.com/story/these-22-buy-rated-stocks-have-gotten-as-much-as-36-ahead-of-wall-streets-price-targets-something-has-got-to-give-2020-06-09
That article led me to this one. Jeffrey Saut is calling this a bull, with years to go. Maybe some pullbacks but a bull overall.
DeleteHis reasons include: "market has a lot going for it — tons of pent-up demand for the economy from lockdowns, a V-shaped recovery, and a likely win for President Donald Trump in the November elections."
CNBC is debating why the run up. Whether it's big money or retail. They're baffled so they started a topic about maybe this time it's retail. (Not based on anything. Just doing it cause they're baffled. Also cause Cramer said there's twitter comments about getting to this or that stock, then it runs up.)
On that same topic of run up, I've seen this confidence that Trump will win among supporters. This may be one of the factors currently at play getting money into the market, from that 1-2%.
Polls aren't looking strong for Trump. But his Russia assist may still be strong.
https://www.marketwatch.com/story/heres-the-only-thing-investors-need-to-know-about-the-stock-market-right-now-says-50-year-veteran-2020-06-09?mod=mw_more_headlines
Land: As to the rocket fuel behind a parabolic spike, I would not overlook foreign buying. The USD has been declining against major foreign currencies.
DeleteFor a U.S. investor, an opportunistic time to buy is when the USD is strong against a foreign currency and a stock priced in that foreign currency is undervalued after falling significantly in price. The same dynamic is involved for European investors looking a U.S. when the Euro gains against the USD.
European stock indexes have substantially underperformed SPX over the past several years. That creates a mindset that the U.S. is the place to be for foreign investors.
Compare the total returns of VGK with SPY.
https://www.morningstar.com/etfs/arcx/vgk/performance
The 5 year annual average VGK total was +2.46% through yesterday's close.
For SPY, the number was at 11.38%.
https://www.morningstar.com/etfs/arcx/spy/performance
That is a huge performance deficit for European stocks.
You can see the same kind of performance deficit in other country index funds.
China
https://www.morningstar.com/etfs/xnas/mchi/performance
Canada:
https://www.morningstar.com/etfs/arcx/ewc/performance
Other factors include psychological ones and market dynamics.
I seriously doubt that individual investors moved the market higher but may have been net contributors to the buying.
There are several indexes that measure U.S. Dollar strength against foreign currencies.
DeletePerhaps the best well known is the U.S. Dollar Index (DXY):
96.33 -0.29 -0.30%
Last Updated: Jun 9, 2020 at 2:37 p.m. EDT
https://www.marketwatch.com/investing/index/dxy
That index topped out near 103 on 3/20/20.
A DXY decline indicates USD weakness against a basket of 6 currencies weighted in the Euro.
A broader index that includes 16 foreign currencies shows the same decline:
WSJ Dollar Index
https://www.marketwatch.com/investing/index/buxx?countrycode=xx
That's all interesting stuff. I knew the dollar had come off it's highs. I never quite know what that impacts.
DeleteForeign money coming in - with how poorly Europe's done, makes sense. Add weaker dollar so it's better priced for them.
That might explain why my Shell & Total are both down 3% today and CVX is only down 1%.
Related, I heard on bloomberg radio that 40% of Americans polled say they won't buy goods made in China. That is about % of Trump supporters?
I'm not sure how that's going to work, since much of the supply chain is through China.
My new HD is assembled in China, made in Thailand. I seriously doubt I could find a USA made one.
Will the market have a turnaround Tuesday? That closing rally says not and there's no catalyst.
ReplyDeleteAll of this is without full year guidance from most companies. So the market's putting in their own guesses.
Is there anything depressed in industrials that has a good balance sheet and some divs? That's where I'd like to head for LONG term buys at good prices.
You keep saying solid evidence of a troubled reality in the future will need to meet the market if there will be a change in that prediction. That is very true. Nothing glitchy matters, unless it brings into question a Fed put and a successfully (only) partially reopened world. (Since partially leads eventually to fully, in the market's opinion.)
ReplyDeleteI bet some of this is simple psychology. Seeing 30% pops, so wanting to get in and not miss out on more.
Maybe not a bad idea. Even if illogical to the fundamentals, if that's the herd movement.
Speed of movement needs to be a factor in models, due to that psychology. (VIX model does it by requiring raises in a row.) Is there a way that's valid, to include that in the reverse?
The Washington Post has compiled a timeline of what actually happened in Lafayette Park. The 12+ minute video proves that both Donald and William Barr are lying which of course will not stop either of them from repeating the same lies.
ReplyDeletehttps://www.washingtonpost.com/investigations/2020/06/08/timeline-trump-church-photo-op/?arc404=true
After watching the video, which includes video footage taken by the protestors and news organizations and communications among the authorities, it is crystal clear that the protestors were moved for Trump's photo op. It is also clear that tear gas was used, and protestors were beaten, hit with pepper balls and rubber balls that exploded out of canisters (called sting balls).
Trump wanted a photo op. Ordered people removed. Barr issued the order.
DeleteIt's backfired so far on him.
May it keep backfiring. And he keep making unforced errors.
He's so unable to work from compassion, that he rushed into this using his own judgement, and so his actions lacked compassion.
Land: Lying all of the time about almost everything works really well for Donald. Republicans will not hold him accountable for deliberately providing false information in an effort to mislead the public. He is rewarded for being untruthful.
DeleteBarr is a somewhat more subtle liar, and a practitioner of what I would call "lawyer lies", broadly defined as a statement that is technically correct but causes the listener to form a false conclusion.
For example, Barr denies that the Park Police used tear gas on the Lafayette Park protestors. That may be true. However, the videos show that riot police from the Federal Bureau of Prisons had tear gas launchers, video shows tear gas canisters exploding and canisters were found by reporters.
Barr denied that rubber bullets were used. That may be true. However, the WP's video collection shows the use of "sting ball grenades" that explode and indiscriminately fires rubber pellets or balls over about a 50 foot radius. So, if Barr was honest, and he is not, he would say that rubber bullets were not used but sting ball grenades using rubber pellets or balls were used. But then telling the truth would defeat the reason why he told the "lawyer's lie" which was to mislead the public.
The video timeline shows that the protestors were cleared immediately prior to Trump's walk from the WH to the Church. Yet Donald and Barr claim that the photo op was unrelated to military type assault on the protestors.
I contributed $100 to the economy today. Bought a 5T Seagate harddrive.
ReplyDeleteGot it home and may need to find a different model. So will be adding more gas to my $100 contribution.
I'm excited about the possibility of not running out of room, since everything is near it.
The parking lot was empty. But store was more busy than I expected. The dollar tree said it's closed. Home depot (mulch) was hopping. I had to come back to avoid the line.
Why is PPL down 7%?
ReplyDeleteIt's ex-div today. But that's not this much of a reason.
I sold all my PPL at 30.02. Missed the top had a waited 1-2 days.
Debating buying back. The articles only talk about a large run up.
Land: The is broad weakness today in the utility sector:
DeleteUtilities Select Sector SPDR ETF
$61.33 -$1.50 -2.39%
https://www.marketwatch.com/investing/fund/xlu
When you see that a particular stock is down, one reason may be its sector is in retreat.
PPL held a teleconference with employees and analysts today. The company reaffirmed "its previous guidance that it is too soon to predict the COVID-19 pandemic's full scope, duration and economic impact and, as a result, the Company has not changed its 2020 earnings forecast range and maintained its 2021 guidance range of $2.40 to $2.60 per share."
https://www.sec.gov/Archives/edgar/data/922224/000092222420000035/ppl0609208k.htm
A brokerage firm, Seaport Global Securities" downgraded to sell today. I doubt that downgrade is causing much consternation.
The recent price rise did take the price over the consensus PT of $29.95.
Investors may have been thinking Blue Sky and the company said wait, it is too early to make that prediction.
I am in a holding pattern, primarily for the dividend in a low interest rate scenario likely to last for an extended period. The ten year treasury yield is around .83% currently.
I bought back 10 of my 83 shares for $28.39.
DeleteI couldn't bring myself to risk $500 getting 1/2ed if there's another pullback. And there's plenty of time before the next div.
The sector down seems like it could be a factor. Plus them giving a teleconference that involved reality. Wonder why nothing listed the teleconference in their news.
It doesn't seem like a fundamental reason. And it can be a long term div holding.
I haven't bought back PFE. That went down for a fundamental reason.
I had an awful thought. After Trump made his white supremacist remark at the Ford plant, that policeman did an overtly white supremacist killing. That remark might have opened up space some for that next move.
ReplyDeleteIt's backfired so far.
Trump tried to handle it with more White Supremacist type moves. Calls to militancy. And a look of him symbolically as savior in front of a Church.
It's a really bad movie we're in.
Land: Today, Donald claimed that the 75 year guy knocked down in Buffalo might be an ANTIFA terrorist who was "scanning" police frequencies in an effort to block communications. Donald also claimed that Martin Gugino, who remains in serious condition at a hospital, "fell harder than was pushed". In other words, the guy was faking a fall in order to "set up" the police
DeleteOne of the websites that Trump visits daily is OANN, known as a far right conspiracy website that Donald now prefers to Fox "News". Donald is the foremost spreader of fact free conspiracy theories.
This particular conspiracy theory was originally found in anonymous blog which was then broadcast by OANN. Donald, given his vile and evil nature, decided to broadcast the fact free conspiracy theory worldwide.
https://www.nbcnews.com/tech/social-media/president-trump-tweets-antifa-conspiracy-theory-originated-anonymous-blog-n1228356
Alex Jones is our president.
DeleteI was wondering what Trump would do when FOX started not supporting his every whim. So he finds something to the right, or more accurately, to the crazy.
Our president is inventing tin foil accusations. (scanner) Is he wearing a tin foil hat?
Land: After receiving extremely mild pushback on his Covid-19 miracle cure from one Fox news personality, and the booting of two news personalities for making repeated false claims about Covid-19, Donald made it clear that he was going to start watching other "news" outlets. OANN is one of his favorites now along with the Daily Caller.
Deletehttps://www.theguardian.com/us-news/2020/apr/29/fox-news-trump-democratic-talking-points
Both are over the top Trump propaganda outlets that push conspiracy theories. It is just something to consider that the President of the U.S. is receiving his daily briefings from those sources and then uses his twitter feed to give them a worldwide audience.
There is no material difference between Alex Jones and Trump other than Donald probably lies more. I do not believe any well known person lies anywhere near as much as Donald, at least since the age of modern mass communication. I go through his twitter feed everyday and find countless examples. It is a major undertaking to document every one.
The WP now has him up to 19,127 publicly made false and misleading statements since his inauguration to 6/1/20.
https://www.washingtonpost.com/politics/2020/06/01/president-trump-made-19127-false-or-misleading-claims-1226-days/
Question is - will fox try to court him back? Or have more freedom to be more accurate (for those few hosts inclined to be).
DeleteYes, it is something else that the president of the USA, most powerful country in the world, gets his info from conspiracy theorists.
Makes Regan's use of psychics seem very mild.
I ignore his twitter feed. Helps with my digestion.
Land: The OAN segment that Trump was watching featured the reporter Kristian Rouz, a Russian journalist who also works for the Russian state propaganda channel Sputnik. The ultimate source was a blog post on the conspiracy website called the "Conservative Treehouse". The site's owner is believed to be Mark Bradman, a former grocery store clerk, who started to gain notoriety among republicans by claiming that the Florida teenager George Zimmerman shot, was an “undisciplined punk thug, drug dealing, thief and wannabe gangsta.”
DeleteToday market a rotation out of beaten down sectors back into the QQQ names.
ReplyDeleteThe S & P 500 declined by 25.21 points or .78%, while QQQ rose $1.75 or +.72%.
Many travel, hotel and leisure stocks declined by more than 5%. KRE fell 2.43%. XLE declined 3.76%.
I have reached the point where I am almost doing nothing other than selling some of my highest cost lots into the parabolic spike up.
The ten year treasury which had been rising in yield rose in price and declined in yield today.
U.S. 10 Year Treasury Note
.827% -0.055%
Last Updated: Jun 9, 2020 4:55 p.m. EDT
https://www.marketwatch.com/investing/bond/tmubmusd10y?countrycode=bx
The WHO is managing to create confusion on whether people without COVID-19 symptoms can spread the disease.
https://www.cnbc.com/2020/06/09/who-scrambles-to-clarify-comments-on-asymptomatic-coronavirus-spread-much-is-still-unknown.html
It would make sense that those who have symptoms are more likely to transmit the infection than those who are truly asymptomatic. It is not clear when someone, who develops symptoms, can transmit the disease. It may be a question about how much of an viral load an infected person received.
Texas is now experiencing record COVID 19 hospitalizations.
https://www.cnbc.com/2020/06/09/texas-reports-two-consecutive-days-of-record-coronavirus-hospitalizations-weeks-after-reopening.html
So it remains unclear whether the reopening push coupled with fewer individuals taking basic precautions will lead to a spike in infections, hospitalization and deaths and whether any such spike will be sufficient to cause widespread shutdowns.
I saw a video of a Las Vegas casino last night where only a handful of people were wearing masks; and social distancing was not being followed at all by those without masks. Failures to take any precautions are likely to become more commonplace in the coming weeks.
So that's more evidence this pattern of what's hot and not in blue sky and worry, is the pattern.
DeleteTomorrow could be an up day.
Was turnaround Tuesday again.
An explosion of cases will matter to the market and people. Short of that...
Another mourning notice from the NY synagogue I'm on a mailing list for. It's at least a slower rate. The notices don't say how anyone passed.
That WHO clarification (sounds like it's lack of clarity) then points to that announcement being the catalyst yesterday.
ReplyDeleteThis article had confused me when I was reading the WHO article at the same time. It makes it clear that non-symptomatic spread was an early important observation.
https://www.bbc.com/news/uk-52840763
Lovely. Not. Awy.
ReplyDeleteOops, that was a frightful pullback. Need to correct it, and buy into it! Futures green.
ReplyDeleteSo far today, I am seeing a continuation of the sector rotation spin that started yesterday.
ReplyDeleteTravel, hotel and leisure stocks have accelerated their declines.
E.G.
Carnival Corp.
$19.76 -3.28 -14.24%
Last Updated: Jun 10, 2020 at 10:26 a.m. EDT
https://www.marketwatch.com/investing/stock/ccl
Hersha Hospitality Trust Cl A
$7.74 -1.09 -12.34%
https://www.marketwatch.com/investing/stock/ht
American Airlines Group Inc
$16.11 -$2.4419 -13.16%
Last Updated: Jun 10, 2020 10:28 a.m. EDT
https://www.marketwatch.com/investing/stock/aal
Regional banks are declining:
SPDR S&P Regional Banking ETF (KRE)
$42.89 -$2.01 -4.48%
https://www.marketwatch.com/investing/fund/kre
MSFT hit a new all time high and QQQ is up:
Invesco QQQ
$244.88 +$1.61 +0.66%
https://www.marketwatch.com/investing/fund/qqq
My only trade so far today was to buy 1 QID share.
Since I have booked a lot of short term gains so far this year, I decided to eliminate a small position in the Hotel REIT Chatham Lodging and to reduce a small position in the Hotel REIT RLJ. The loss snapshots are now in my gateway post for the Equity REIT basket strategy, reducing my net realized gain to $25,484.85.
https://tennesseeindependent.blogspot.com/2014/10/gateway-post-equity-reit-common-and.html
Chatham Lodging Trust
$7.79 -$0.96 -10.97%
https://www.marketwatch.com/investing/stock/cldt
The Hotel REITs have eliminated their common share dividends for now and most have deferred their preferred stock dividends. Since I am an income oriented investor, that is one reason for taking my lumps now. The other reason is to reduce my 2020 tax obligation by having those losses offset already realized short term gains. The last reason is that no one really knows when conditions will return to a normal hotel occupancy levels.
Microsoft Corp
$193.72 +$3.92 +2.07%
Last Updated: Jun 10, 2020 at 10:39 a.m. EDT
https://www.marketwatch.com/investing/stock/msft
MSFT and AAPL have a combined 22.8% weighting in QQQ as of 6/9 with AMZN at 10.05%.
https://www.invesco.com/us/financial-products/etfs/product-detail?productId=QQQ&ticker=QQQ&title=invesco-qqq=portfolio&audienceType=investors#portfolio
This is all good to know.
DeleteI've got a small debate on whether I want to buy back a little of the IWM I'd sold at over 150.
Is this as far as the dip goes and it's time to buy in. Or will this be a real dip of near 5%?
Most of my stuff isn't very dipped. Just IWM small caps. LAZ is taking a beating, over 5% down. It often acts like a European stock, so maybe it's something there.
I'm mostly still not doing much.
The reversal in travel, leisure and hotel stocks is probably tied to WHO walking back yesterday their claim that COVID-19 transmission from asymptomatic persons was rare.
ReplyDeleteDr. Fauci added fuel to the retreat by flatly saying WHO's claim "was not correct".
https://www.cnbc.com/2020/06/10/dr-anthony-fauci-says-whos-remark-on-asymptomatic-coronavirus-spread-was-not-correct.html
Infection rates are spiking back up in several states that reopened early.
The total number of U.S. infections is over 2M with daily death numbers near 1K.
That all makes sense. Their statement, not as much.
DeleteMeanwhile someone is paying for the grass around me to be cut. It's different days and different associations, but there seems to always been beeping and whirling noise. It's an outdoor task so I guess that's why.
These rallies couldn't have helped. But they were an important message, and may have helped a tipping point in a long term problem.
People did wear masks and in some instances, kept a distance. I didn't join any protests since I fit risk categories.
According to Powell, the FED is likely to continue its Jihad Against the Savings Class through 2022.
ReplyDeletehttps://www.cnbc.com/2020/06/10/fed-meeting-decision-interest-rates.html
The Fed also sees GDP growth of 5% next year after declining 6.5% this year.
So is that good?
It must be really good based on where the stock market sits now.
If that GDP forecast pans out, real SPX earnings growth starting in 2019 through 2021 may end up being negative with a few companies keeping the number near positive.
One reason why the QQQ is doing better than other major indexes is that the Stock Jocks are willing to pay up for earnings growth where interest rates and inflation are hugging zero and meaningful earnings growth is becoming an increasingly rare phenomenon.
The Fed's economic forecasts can be found here:
ReplyDeletehttps://www.federalreserve.gov/monetarypolicy/fomcprojtabl20200610.htm
Overall, I would say the forecasts for GDP, unemployment and interest rates are inconsistent with the Blue Sky scenario and V shaped robust recovery. That probably explains the downdraft in major indexes today except for the Nasdaq.
The futures are currently down across the board.
So 6.5-5% is a total 2 year loss of 1.5%.
ReplyDeleteHow much contraction in the stock market would that equal in earnings and prices?
The market was at top end of a channel and due for a pullback (but hadn't on the other resistances.) Maybe a little reality peeked for a short while. It the market takes this seriously, Trump will pressure, yell at, and blackmail someone to make an announcement that reassures the market of that blue sky scenario.
Land: It will be difficult for most publicly traded companies to generate earnings growth when and if GDP declines by 6.5% this year and then only gains 5% in 2021. Under that economic scenario, a large number of S & P 500 companies will have negative year-over-year E.P.S. growth.
DeleteAs of last Friday's close, the 12 month forward P/E using estimated NON-GAAP numbers was 24.7. The trailing 12 month P/E using GAAP numbers was at 27.17.
https://www.wsj.com/market-data/stocks/peyields
The Non-GAAP forward P/E is extremely high and made more concerning by the fact that the analysts making those future forecasts have a long history of being far too optimistic.
The average forward P/E starting in 1982 is about 16.
I was trying to calculate fair price estimate for SPX based on earnings. To do that I need to estimate earnings.
DeleteIf GDP goes down in 2 years a total of 1.5% as estimated, rather than an increase in that 2 years...
How much earnings *reduction* does 1.5% GDP down, equal to on the SPX?
That's the word problem, as I set it up.
I have no idea how much % reduction in GDP translates to reduction in real earnings.
I'd then need to use that estimate and historic or other PEs such as 16 or 20 to get "fair" SPX prices.
I need to save that PE source page.
Those #s are insane. And that's without including a 1.5% estimated total reduction in GDP across the next two years.
--
In part I have no idea how to calculate GDPs impact on earnings, because this is such an unusual situation. Usually by now no one's asking that, because stock prices are already down and reflecting a lower earnings.
I find it hard to believe investors are buying for earnings and GDP potentially bouncing back to normal, in 2023. Market is forward looking. But usually not *that* patient about looking forward.
Is there anywhere a source that estimates how much GDP changes impact earnings? (In either direction. I'll just subtract rather than add.)
Land: Over time, aggregate U.S. corporate earnings growth will increase at about the same pace as GDP.
DeleteThis is a 2010 publication:
https://www.msci.com/documents/10199/a134c5d5-dca0-420d-875d-06adb948f578
I use the phrase "aggregate corporate earnings" rather than earnings per share since the later number can be impacted by significant share repurchases.
Then you have to compare GDP growth to aggregate market capitalization. Stocks may have run up too much based on reasonable GDP forecasts.
There may be some good reasons for that to happen, and many bad ones. One good reason is a long term forecast that inflation and interest rates will remain abnormally low for an extended period.
A bad one can be generally described as emotions, including greed, overtaking and replacing rational valuations.
There is a valuation measure that specifically addresses the relationship between GDP and total stock market capitalization. That ratio is now almost as high as it was in 1999.
https://www.advisorperspectives.com/dshort/updates/2020/06/01/market-cap-to-gdp-an-updated-look-at-the-buffett-valuation-indicator
An alternative measure of this ratio, using the Wilshire 5000 index, is currently higher than it was in 1999. (see previous link)
This indicator is not a market timing signal which is true for the Shiller P/E too IMO.
It does provide some broad measure of whether stocks are too expensive or too cheap for the long term. Currently, it does not matter what traditional valuation measure is used. The same result is reached. The market is overvalued. That is why I characterize the recent rise as goofy and becoming goofier by the day.
see also:
https://www.gurufocus.com/stock-market-valuations.php
Futures look serious about going down again tomorrow.
ReplyDeleteThe question I see is, is this a place to buy back some shares? If for some able to get in lower then where sold into gains.
It's certainly not very low compared to the bottom. Nor in indices, to fair valuations (PEs).
But this is a buy the dips crowd. Hum?
Be nice if I was sleeping so I could make better decisions during the day.
--
I hadn't sold my crummy stocks because didn't know if it was a temporary top. I sold some gainers. Yesterday the down in MMM and LAZ and others was so much more than in better stocks.
I'm not sure the right rule and timing to implement because it requires selling at a loss. But probably selling those poorer stocks off was important to do. (Too late know, but I can think about what rule to use, for the next rounds.)
Land: I will generate short term capital gains through trading every year. The primary reason is increase current income.
DeleteThe existence of this profit pile makes it easier to sell some losers since I am reducing my tax obligation through the netting of profits and losses. I explained in recent comments, including the one above, why I reduced my position in Hotel REITs.
I have also been selling positions that were losers but have managed to return to profit territory. That is one way to take advantage of a parabolic rise in stocks.
An example, which I will not be discussing in a post, is my recent elimination of Centerpoint (CNP) in my Vanguard taxable account. I sold 33 shares at a $16.82 profit. To generate that profit, I had to average down during the March meltdown, buying shares down to $12.43. I also eliminated CNP in two other accounts generating a $78.99 (111+ shares). I still own shares in my Fidelity account since the company is not hopeless.
The reason for the sells was to reduce my position in response to a recent dividend cut. CNP has run into problems securing adequate rate relief for its subsidiary Houston Electric.
The fact that I have reasons for each sell does not mean that I can predict the future. I may be selling too early. I can say that the selling makes sense to me now as part of a comprehensive risk management for stocks.
My cash allocation is probably near 40% now. The buildup is coming from proceeds received from bond, CD and treasury redemptions which have not been reinvested and landed in my sweep accounts. A growing amount starting in May comes from net liquidations in stocks.
That was quite a day.
DeleteI was on a call, so put in two orders. 5 SPY at 302.20 while SPY was at 304. Seemed like a safe bet to not miss out on. Now it seems to high.
WMT 119.80 buy back of 10 sold 127 & 131 in that spike it had.
Would have been a good day to buy double shorts. I was taken by surprise by this.
This morning the charts looked like the usual amount of drawdown that this climb has had. This felt different, but still.
Now the chart todays move down is big. Different than the priors.
Market's still largely above where I sold on the way up. So not buying back yet.
So interesting that this wasn't triggered by anything. So many triggers available in the last two months, and a Fed vague talk, and some not particularly large increases in cases... seemed to put a pin the balloon. Pollings been out a couple days so that doesn't seem like it.
No idea where way it's going from here. I had raised a lot of cash. So if there is more down, I need to make sure to buy in.
Land: I did buy 1 share of several stock ETFs, which is all of the courage that I could muster today. And throwing caution to the wind, I bought another share after further declines in two of them.
DeleteI also bought today 100 shares of MIN at $3.85, just to produce some income. MIN is an investment grade bond CEF.
https://www.cefconnect.com/fund/MIN
Dividends are paid monthly.
MFS Intermediate Income Trust
$3.87 -$.01
https://www.marketwatch.com/investing/fund/min
I had sold my highest cost shares in BTZ which has a significant exposure to junk rated bonds. I will discuss those pares in my next post.
This kind of swap is motivated by an opinion that junk bonds had rallied too much based on a too optimistic economic scenario.
SPDR Bloomberg Barclays High Yield Bond
ETF
$101.26 -$2.65 -2.55%
https://www.marketwatch.com/investing/fund/jnk
I suspect that the Stock Jocks will hook themselves up to an IV of chill juice tonight, breathe into a paper bag for a couple of hours, take some xanax, beat their chests while howling to the moon, in preparation for a rally attempt tomorrow morning.
"IV of chill juice tonight, breathe into a paper bag for a couple of hours, take some xanax, beat their chests while howling to the moon, in preparation for a rally attempt tomorrow morning."
DeleteLOL, yep.
I'd say more. But I haven't anything important to say. I'm watching the drama. I think you've covered all the points in what's going on.
This does say that bad news can get into Stock Jocks' heads. It is possible. It has been improbable. So what happens now will tell how much of that howling is giving them continued strength.
As I mentioned in a previous comment, the FED's economic forecasts for 2020-2022, released yesterday, are not consistent with the V shaped recovery scenario.
ReplyDeleteSo there was some reassessment today of stock multiples given a more sluggish recovery scenario.
I will need to take back my prior guess that the VIX will nudge below 20 this month. That looks a somewhat farfetched now. The movement today is consistent with an ongoing Unstable Vix Pattern which is not close to resolving into a Stable VIX Pattern. In other words, the market carries a lot of risk and is appropriate more for traders than long term investors except when there is either a Catastrophic Event or something close to it (e.g. last March) when long term positions can be acquired at more reasonable prices than now.
CBOE Volatility Index
40.79 +13.22 +47.95%
https://www.marketwatch.com/investing/index/vix
S&P 500 Index
3,002.10 -188.04 -5.89%
https://www.marketwatch.com/investing/index/spx
I mentioned earlier that the market was overvalued using all traditional valuation measures including the forward estimated non-GAAP SPX E.P.S. which is frequently delusionary anyway.
There is one valuation measure used by Trumpsters which is based on the delusionary forecasts made by Donald and Mnuchin. Based on the GOP's corporate tax cuts which will "pay for themselves", real GDP will grow at an annual and compounded 4%+ until the end of days. I am not a believer, having avoided drinking the crazy juice.
Treasuries and gold worked today and not much else.
The corporate investment grade bond ETFs had a bad day even though U.S. treasury ETFs sported good percentage gains. That is consistent with a rougher economic outlook, since corporate bonds, even the ones rated investment grade, have some credit risk component to their yields.
iShares 20+ Year Treasury Bond ETF
$163.88 $3.04 +1.89%
https://www.marketwatch.com/investing/fund/tlt
iShares Investment Grade Corporate Bond ETF
$131.70 -$1.59 -1.19%
https://www.marketwatch.com/investing/fund/lqd
Another potential problem is the massive growth in debt last quarter, as shown in the FED's Z.1 release today.
https://www.federalreserve.gov/releases/z1/20200611/html/recent_developments.htm
I had been adding to my double short ETFs. TWM was the best performer today among the ones that I currently own:
ProShares UltraShort Russell 2000
$11.90 +$1.55 +14.98%
https://www.marketwatch.com/investing/fund/twm
The $ amount devoted to those hedges is light years below insignificant for me. TWM is almost in profit territory after repeated averaging down in small lots.
The volatility measure for the Russell 2000 is currently at a higher level than the VIX for the S & P 500.
CBOE RUSSELL 2000 VOLATILITY INDEX (^RVX)
51.11 +11.49 (+29.00%)
https://finance.yahoo.com/quote/%5ERVX?p=^RVX&.tsrc=fin-srch
The recent slide in interest rates is causing more early redemptions of my corporate bonds, including ones maturing in 2021 that are subject to make whole provisions.
The S & P 500 index did close below its 200 day SMA line today.
ReplyDeleteUsing a 1 year Yahoo Finance chart, the line was at 3,013.01. The close was at 3,002.10. I do not regard that as a major break yet. I have the crossover above the line occurring on 5/26. Including that day, the index spent 11 trading days above the 200 day SMA line before breaking below it.
I am not going to be awarded the Nobel Prize in Economics for the following observation. Buying interest after a 44+% rally since the 3/23 close is going to fade and profit taking will gain the upper hand at least for awhile. It is one thing to buy when SPX was at 2,237, the close on 3/23, and another to keep on buying after it closes at 3,232.39 on 6/8. I think that I just described some kind of psychological disorder involving mood swings.
Only 11 days above 200 day SMA. That's not much. It felt like forever. It's moved a big distance in that time.
ReplyDeleteFutures are up.
I'm not sure profit taking will rein. That psychological disorder involving mood swings may be in a more advanced stage, where climbing will continue.
If there is more breakdown, at some point there will be heavy short covering. The VIX up on those two up days was pointing to lots of setup.
I wonder if someone will write a book about the judgements used in the algo programming. It would be valuable to know how much above MA it takes to trigger an algo buying. Or below to trigger a selling.
I got chicken and put in an order to sell my 202.20 bought SPY. It got sold. So now I don't have my $1500 to trade :(. Oh well.
If the market goes right back up, I'm selling over IWM 154 this time. I'm also using VIX under 30 as the new VIX under 20 for selling at the top.
When life returns to normal, I'll use VIX under 20 persistently as signs of a new stable time.
I thought if VIX went under 20 this month, it would likely be temporarily. Completely depending on the news.
I'm curious what tomorrow will bring. I wish it was easy to bet that the end of the day, last 10 mins will be a big move in one or the other direction before the weekend.
The howling apparently worked. Regeneron starting trials and that's the excuse.
ReplyDeleteEnergy is up. EU energy even more so, Shell, Total.
Troubled stocks that sold off big also are up big, LAZ, MMM, F.
Bought back 15 of the INTC I'd sold off at 64ish, over 6% move. Bought too soon this morning at 60.70. Still have 30 INTC to get back into.
Other stocks are generally still above where I'd sold out on the way up.
I'd like to take advantage of all of this. But don't see anything pretty reasonable to do.
Land: The Stock Jocks need to go into therapy.
DeleteIt would not surprise me to see SPX go negative before the close.
I did not regard yesterday as a buying opportunity, though I may have bought close to $1K in stock and stock ETF shares which is close to doing nothing for me.
One stock that has been pummeled over the past several days is Oneok (OKE). Brokerage firms do not have a positive opinion, and a number of them have been downgrading the stock. A dividend cut is anticipated IMO in the current price.
ONEOK Inc.
$32.73 -$2.6011 -7.36%
VOLUME: 20M
YIELD 11.32%
Last Updated: Jun 12, 2020 11:02 a.m. EDT
https://www.marketwatch.com/investing/stock/oke
I will be discussing in my next post a 5 share purchase at $27.77 along with 2 of its 3.375% SU bonds maturing in 2022 bought at a total cost of 97.01.
Part of the reason for the slide is a massive stock offering priced today at $32.
https://www.prnewswire.com/news-releases/oneok-announces-public-offering-of-common-stock-301074345.html
Ah, why go into therapy when you can simply buy up therapy stocks into 1999 evaluations?
DeleteThis is the morning dip. At around 11am the market tanks. Almost all days it reverses here. But not as consistently after big sell offs. Where continued sells into the close have happened.
I'm just watching.
Oneok (OKE) - I'm not buying into stock aiming to cut it's div. I'm not skilled enough to manage for it. But even at 1/2, that's a nice div.
The downdraft after the opening is probably due to reports relating to John Bolton's upcoming book scheduled to be released on 6/23.
ReplyDeleteTrump has tried to squash the book's release on national security grounds.
S&P 500 Index
2,991.95 -10.15 -0.34%
Day's Range: 2,191.86 - 3,393.52
As of 1:50PM EDT.
https://finance.yahoo.com/quote/%5EGSPC?p=^GSPC
This is quote from the book according to CNBC:
“Ukraine-like transgressions existed across the full range” of Trump’s foreign policy. Bolton claims that the impeachment inquiry focused too narrowly on Ukraine.
The downdraft after a down day is a pattern that shows up sometimes.
DeleteWhy would the book influence the stock market?
(But riots, protests, virus, and polling data doesn't.) I can't follow the logic of this market.
Land: There is no meat yet on what Bolton claims are multiple impeachment offenses similar to Ukraine.
DeleteThe takeaway is that Trump already has a negative approval rating, which has been falling, and would struggle to win in November without anything further adding to his problems. It is possible that Trump will take down several republican senators, with the Democrats security the trifecta of winning the Presidency and control over the Senate and the House. That is view negatively by the Stock Jocks
Seems odd to suddenly worry about Bolton's book when they don't believe any of it's true. Though he is a respected Republican.
DeleteMaybe the polling is finally catching up. Wasn't not enough to convince them, but it's getting hard to ignore and the book is a reminder.
Land: The playing field for the 2020 election involves independents, marginal Trump voters and turnout, particularly among those Bernie Sanders voters who sat out the 2016 election and whose votes for Hillary would have easily defeated Trump in the three key states that he narrowly carried.
DeleteAs to the Trumpsters, they believe Donald is honest and a role model for their children. They will classify anything that Bolton says as Fake News and sour grapes.
The last Gallup poll has Donald at a 38% approval rating, which is just terrible for a President seeking reelection.
New trading range coming...
ReplyDeleteLand: It is too early to form an opinion. The current trading range is holding. I would broadly define that range as SPX 2950 to 3250.
DeleteAt least SPX managed to break back above its 200 day SMA line. Overall, however, I would give today's action a negative vibe rating.
While COVID-19 infections and hospitalizations are moving up in several states, the increase is probably far below a level that would provoke a shutdown in the impacted areas. The inclination to avoid further business closures appears to be set in concrete.
There is a sizable contingent of Stock Jocks who believe that the FED's forecasts, which caused the downdraft yesterday, are far too pessimistic. The forecasts seem reasonable to me, but I am just an Old Geezer sitting at a desk in Tennessee.
There was probably a lot of program trading today that was contributing to the wild swings.
The upward movement in stocks did roughly coincide with a decline in the USD that started around 1:5 P.M. E.S.T. when the DXY was around 97.43, then drifting down to 97.13 as of 4:00 P.M. E.S.T.
It seems that an excerpt of Bolton's book was not quoted but a press release from the publisher announcing the publication date. It is not surprising to me at least that Bolton is claiming that Trump's decision making is inconsistent and scatter-shot, driven by “reelection calculations” rather than national security.
"I am hard-pressed to identify any significant Trump decision during my tenure that wasn’t driven by reelection calculations," Bolton writes, according the description Simon & Schuster distributed Friday morning.
“What Bolton saw astonished him: a president for whom getting reelected was the only thing that mattered, even if it meant endangering or weakening the nation,” the news release said.
"""I am hard-pressed to identify any significant Trump decision during my tenure that wasn’t driven by reelection calculations,"""
ReplyDeleteSo the big question if he's reelected. What will it be based on then? Turning us into his dictatorship?
I have published a new post:
ReplyDeletehttps://tennesseeindependent.blogspot.com/2020/06/bdge-brkb-btz-cznc-enbprpca-igr-main.html