Economy:
U.S. weekly jobless claims fall to 963,000, first time below 1 million since mid-March
"Total industrial production rose 3.0 percent in July after increasing 5.7 percent in June; even so, the index in July was 8.4 percent below its pre-pandemic February level." The Fed - Industrial Production and Capacity Utilization - G.17
Retail Sales-July 2020-Retail Sales.pdf:
The increase was lower than expected due to auto sales. Retail sales July 2020
U.S. weekly jobless claims fall to 963,000, first time below 1 million since mid-March
"Total industrial production rose 3.0 percent in July after increasing 5.7 percent in June; even so, the index in July was 8.4 percent below its pre-pandemic February level." The Fed - Industrial Production and Capacity Utilization - G.17
Retail Sales-July 2020-Retail Sales.pdf:
Employers start to suspend their 401(k) match - MarketWatch
Fed's Kashkari advocates six-week economic lockdown to defeat the coronavirus
Nearly 80% of credit card holders are worried about making payments
Why you might not see a payroll tax cut, even as Trump demands it; How a payroll tax holiday might ultimately cost workers more next year
Fed's Kashkari advocates six-week economic lockdown to defeat the coronavirus
Nearly 80% of credit card holders are worried about making payments
Why you might not see a payroll tax cut, even as Trump demands it; How a payroll tax holiday might ultimately cost workers more next year
Trump's order to stop evictions is "toothless, at best," expert says
The Fed bought more blue-chip and junk bonds, and has started making Main Street loans (8/10/20)
Singapore releases second-quarter 2020 GDP, economic data GDP contracted by 42.9% compared to the previous quarter and -13.2% Y-O-Y.
Banks are tightening loan standards for consumers:
Net Percentage of Domestic Banks Tightening Standards on Consumer Loans, Credit Cards-St. Louis Fed
UK recession is worst of any major economy - CNN
The recovery is faltering, top forecasters say - MarketWatch
Total combined North America rail traffic fell 7.2% for the week ending 8/8. Rail traffic fell 10.2% for the W/E 8/1 and is down 11.5% Y-T-D. Weekly Rail Traffic for the Week Ending August 8, 2020 - Association of American Railroads
The Fed bought more blue-chip and junk bonds, and has started making Main Street loans (8/10/20)
Singapore releases second-quarter 2020 GDP, economic data GDP contracted by 42.9% compared to the previous quarter and -13.2% Y-O-Y.
Banks are tightening loan standards for consumers:
UK recession is worst of any major economy - CNN
The recovery is faltering, top forecasters say - MarketWatch
Total combined North America rail traffic fell 7.2% for the week ending 8/8. Rail traffic fell 10.2% for the W/E 8/1 and is down 11.5% Y-T-D. Weekly Rail Traffic for the Week Ending August 8, 2020 - Association of American Railroads
+++++
Markets and Market Commentary:
S & P 500 P/Es as of 8/14/20:
GAAP Trailing 12 Months: 35.29
Non-GAAP Estimated Forward 12 Months: 26.15
P/E & Yields
Stocks are ignoring the lack of a stimulus package from Congress, but that could change
Trump claims Biden win would crash market, cause depression - MarketWatch Trump routinely engages in demagoguery.
George Soros explains why he no longer participates in this market bubble - MarketWatch
Stocks could be melting up like they did in the Roaring ’20s, strategist says — we all know what happened next - MarketWatch
S & P 500 P/Es as of 8/14/20:
GAAP Trailing 12 Months: 35.29
Non-GAAP Estimated Forward 12 Months: 26.15
P/E & Yields
Stocks are ignoring the lack of a stimulus package from Congress, but that could change
Trump claims Biden win would crash market, cause depression - MarketWatch Trump routinely engages in demagoguery.
George Soros explains why he no longer participates in this market bubble - MarketWatch
Stocks could be melting up like they did in the Roaring ’20s, strategist says — we all know what happened next - MarketWatch
This stock market indicator threw up a ‘timely’ buy signal in March. Now it’s saying sell - MarketWatch The signal is the Morgan Stanley market timing indicator that gave a buy signal in March.
Trump says he signed order reimposing 10% aluminum tariffs on Canada
Canada to impose $3.6B in tariffs in response to Trump's move against Canadian aluminum | CBC News
10-year Treasury yield pops above 0.7% to hit six-week high as investors struggle to take down debt auction-MarketWatch The federal government is selling so much debt that investors are demanding somewhat higher interest rates. Having to sell too much debt is and will be the new normal for the U.S. government.
JPMorgan: It has 'never been easier to make money' on small and midcaps That is an absurd statement.
Fed slows corporate debt purchases to trickle - MarketWatch
Cisco (CSCO) earnings Q4 2020 (revenue declined 9% Y-O-Y, the third straight quarterly decline; non-GAAP E.P.S reported at $.80 with GAAP at $.62, beating the non-GAAP consensus estimate by 6 cents; non-GAAP E.P.S. decreased 4% Y-O-Y; poor guidance for the current quarter, with -9% to -11% decline in revenues Y-O-Y and non-GAAP E.P.S. in a $.69 to $.71 per share range vs. consensus at $.76); Cisco Reports Fourth Quarter And Fiscal Year 2020 Earnings
Bluerock Residential Growth REIT Announces Second Quarter 2020 Results I currently own only 20+ shares and have traded this REIT frequently. I also own BRG's Series A equity preferred stock in several accounts, which is my preferred way of playing this one. Bluerock Residential Growth REIT Inc. 8.25% Cumulative Preferred Series A Overview | MarketWatch
Stein Mart files for bankruptcy and will close most of its 300 stores - CNN
Mortgage rates keep falling — will they finally drop to 0%? - MarketWatch
Canada to impose $3.6B in tariffs in response to Trump's move against Canadian aluminum | CBC News
10-year Treasury yield pops above 0.7% to hit six-week high as investors struggle to take down debt auction-MarketWatch The federal government is selling so much debt that investors are demanding somewhat higher interest rates. Having to sell too much debt is and will be the new normal for the U.S. government.
JPMorgan: It has 'never been easier to make money' on small and midcaps That is an absurd statement.
Fed slows corporate debt purchases to trickle - MarketWatch
Cisco (CSCO) earnings Q4 2020 (revenue declined 9% Y-O-Y, the third straight quarterly decline; non-GAAP E.P.S reported at $.80 with GAAP at $.62, beating the non-GAAP consensus estimate by 6 cents; non-GAAP E.P.S. decreased 4% Y-O-Y; poor guidance for the current quarter, with -9% to -11% decline in revenues Y-O-Y and non-GAAP E.P.S. in a $.69 to $.71 per share range vs. consensus at $.76); Cisco Reports Fourth Quarter And Fiscal Year 2020 Earnings
Bluerock Residential Growth REIT Announces Second Quarter 2020 Results I currently own only 20+ shares and have traded this REIT frequently. I also own BRG's Series A equity preferred stock in several accounts, which is my preferred way of playing this one. Bluerock Residential Growth REIT Inc. 8.25% Cumulative Preferred Series A Overview | MarketWatch
Stein Mart files for bankruptcy and will close most of its 300 stores - CNN
Mortgage rates keep falling — will they finally drop to 0%? - MarketWatch
+++++++
Trump:
Unprecedented - YouTube
Disgusting Don renewed his scurrilous attacks on Joe Scarborough and his wife last Thursday:
Donald stated that Biden's VP choice, Senator Kamala Harris, was "nasty". Trump says Kamala Harris 'nasty'; Trump Repeatedly Calls Kamala Harris ‘Nasty’ And ‘Horrible’ In White House Briefing
Donald called Senator Harris a "madwoman" last week. Trump slams 'mad woman' Kamala Harris
Donald views any woman who criticizes him, or does not pay him slavish devotion, as nasty. Here’s A Non-Exhaustive List Of The Women Trump Has Demeaned Using The Word ‘Nasty’ (8/22/19);
Trump refers to Danish Prime Minister Mette Frederiksen as 'nasty';
‘Nasty’ is Trump’s insult of choice for women-The Washington Post (8/21/19);
Why does President Trump react so strongly when challenged by female reporters?-Poynter (in Trump's words, women reporters are not "Donna Reid")
Trump critics see tweet about 'the suburban housewife' as sexist, racist Trump walks out of news conference after reporter asks him about Veterans Choice lie he's told more than 150 times Trump lies all of the time about almost everything. Reporters need to do their job and challenge him more.
Trump says he can win New York — as he did in 2016, when he lost his home state by 22 points Delusional Don may have been inhaling household cleaning products.
Trump and his aides struggle for a message as political blows keep coming - POLITICO
The lost days of summer: How Trump struggled to contain the virus - The Washington Post (Science is not guiding the Trump response to the pandemic)
Trump promises permanent payroll tax cut that funds Medicare and Social Security if re-elected - The Washington Post (Trump: “If I’m victorious on November 3rd, I plan to forgive these taxes and make permanent cuts to the payroll tax. I’m going to make them all permanent.” emphasis added) I suspect that the Democrats will have a few campaign ads addressing that approach. Making the cuts permanent would result in Social Security running out of funds in about 2 years. CNBC
Unprecedented - YouTube
Disgusting Don renewed his scurrilous attacks on Joe Scarborough and his wife last Thursday:
Donald stated that Biden's VP choice, Senator Kamala Harris, was "nasty". Trump says Kamala Harris 'nasty'; Trump Repeatedly Calls Kamala Harris ‘Nasty’ And ‘Horrible’ In White House Briefing
Donald called Senator Harris a "madwoman" last week. Trump slams 'mad woman' Kamala Harris
Donald views any woman who criticizes him, or does not pay him slavish devotion, as nasty. Here’s A Non-Exhaustive List Of The Women Trump Has Demeaned Using The Word ‘Nasty’ (8/22/19);
Trump refers to Danish Prime Minister Mette Frederiksen as 'nasty';
‘Nasty’ is Trump’s insult of choice for women-The Washington Post (8/21/19);
Why does President Trump react so strongly when challenged by female reporters?-Poynter (in Trump's words, women reporters are not "Donna Reid")
Trump critics see tweet about 'the suburban housewife' as sexist, racist Trump walks out of news conference after reporter asks him about Veterans Choice lie he's told more than 150 times Trump lies all of the time about almost everything. Reporters need to do their job and challenge him more.
Trump says he can win New York — as he did in 2016, when he lost his home state by 22 points Delusional Don may have been inhaling household cleaning products.
Trump and his aides struggle for a message as political blows keep coming - POLITICO
The lost days of summer: How Trump struggled to contain the virus - The Washington Post (Science is not guiding the Trump response to the pandemic)
Trump promises permanent payroll tax cut that funds Medicare and Social Security if re-elected - The Washington Post (Trump: “If I’m victorious on November 3rd, I plan to forgive these taxes and make permanent cuts to the payroll tax. I’m going to make them all permanent.” emphasis added) I suspect that the Democrats will have a few campaign ads addressing that approach. Making the cuts permanent would result in Social Security running out of funds in about 2 years. CNBC
Donald Trump's Guide to American History | NowThis - YouTube Donald is the foremost expert on every topic, a status achieved by making no effort to actually learn anything.
Government watchdog finds top Trump DHS officials are ineligible for their positions | TheHill That includes the 100% pure Trumpsters, Acting Secretary Chad Wolf and Deputy Secretary Ken Cuccinelli.
Government watchdog finds top Trump DHS officials are ineligible for their positions | TheHill That includes the 100% pure Trumpsters, Acting Secretary Chad Wolf and Deputy Secretary Ken Cuccinelli.
Trump continues to repeat his claim, over and over again, that Democrats want to keep schools closed just to hurt him politically. Trump advocates for school reopenings: 'This thing is going away' | TheHill It is all about Donald, nothing else matters.
'Friday Night Massacre' at US Postal Service as Postmaster General — a Major Trump Donor — Ousts Top Officials – BillMoyers.com Donald is trying to undermine the Post Office's ability to deliver mail-in ballots on time. Why is Donald firing Post Office employees who head up operations and cutting funding just a few months before an election where mail-in ballots will be at a record level? The reasons are obvious.
Trump holds up coronavirus aid to block Democrats' bid for election funding - Reuters Trump refuses to provide more $3.5B in funding for the Post Office. Trump: “The items are the post office and the $3.5 billion for mail-in voting. If we don’t make the deal, that means they can’t have the money, that means they can’t have universal mail-in voting. It just can’t happen.” This is just part of a long standing republican effort to suppress voting as much as possible in places where their candidates may lose.
Kudlow: Money for voting rights is a ‘really liberal left’ wish list item - POLITICO
Amid political controversy, postmaster general's stock holdings come under renewed scrutiny - ABC News; How US Postal Service changes could complicate mail-in voting - ABC News The postmaster general, Louis DeJoy, was recently appointed by Donald. His qualification for the job was his large donations to Donald's campaign.
Trump explicitly links mail-in voting and his opposition to post-office financial relief - MarketWatch
U.S. Postal Service warns numerous states that mail-in ballots may be delivered too late
Obama: Trump trying to 'actively kneecap' Postal Service to affect 2020 election
Trump Proves Biden Right on USPS Funding, Mail-In Ballots - FactCheck.org
'Friday Night Massacre' at US Postal Service as Postmaster General — a Major Trump Donor — Ousts Top Officials – BillMoyers.com Donald is trying to undermine the Post Office's ability to deliver mail-in ballots on time. Why is Donald firing Post Office employees who head up operations and cutting funding just a few months before an election where mail-in ballots will be at a record level? The reasons are obvious.
Trump holds up coronavirus aid to block Democrats' bid for election funding - Reuters Trump refuses to provide more $3.5B in funding for the Post Office. Trump: “The items are the post office and the $3.5 billion for mail-in voting. If we don’t make the deal, that means they can’t have the money, that means they can’t have universal mail-in voting. It just can’t happen.” This is just part of a long standing republican effort to suppress voting as much as possible in places where their candidates may lose.
Kudlow: Money for voting rights is a ‘really liberal left’ wish list item - POLITICO
Amid political controversy, postmaster general's stock holdings come under renewed scrutiny - ABC News; How US Postal Service changes could complicate mail-in voting - ABC News The postmaster general, Louis DeJoy, was recently appointed by Donald. His qualification for the job was his large donations to Donald's campaign.
Trump explicitly links mail-in voting and his opposition to post-office financial relief - MarketWatch
U.S. Postal Service warns numerous states that mail-in ballots may be delivered too late
Obama: Trump trying to 'actively kneecap' Postal Service to affect 2020 election
Trump Proves Biden Right on USPS Funding, Mail-In Ballots - FactCheck.org
Opinion | Trump’s flagrant assault on the First Amendment is disguised as a defense of it - The Washington Post
Trump goes after FBI director Wray, whom he appointed, and issues warning to Barr
The GOP's trend toward authoritarianism continues.
German ambassador pick disparaged immigrants and refugees, called for martial law at US-Mexico border
How to Beat Populists When the Facts Don't Matter-The Atlantic ("Some voters live in a so-called populist bubble, where they hear nationalist and xenophobic messages, learn to distrust fact-based media and evidence-based science, and become receptive to conspiracy theories and suspicious of democratic institutions." Republicans who live inside that bubble can not be persuaded with accurate information)
Trump goes after FBI director Wray, whom he appointed, and issues warning to Barr
The GOP's trend toward authoritarianism continues.
German ambassador pick disparaged immigrants and refugees, called for martial law at US-Mexico border
How to Beat Populists When the Facts Don't Matter-The Atlantic ("Some voters live in a so-called populist bubble, where they hear nationalist and xenophobic messages, learn to distrust fact-based media and evidence-based science, and become receptive to conspiracy theories and suspicious of democratic institutions." Republicans who live inside that bubble can not be persuaded with accurate information)
Trump Misrepresents Obama-Era Fair Housing Rule - FactCheck.org
False Ad About Biden's VP Pick - FactCheck.org
Trump Ad Features Edited, Out-of-Context Biden Photos - FactCheck.org
False Ad About Biden's VP Pick - FactCheck.org
Trump Ad Features Edited, Out-of-Context Biden Photos - FactCheck.org
Republican Group Selectively Edits Biden Tax Remark - FactCheck.org
NYT: White House reached out to South Dakota governor about adding Trump to Mount Rushmore
President Trump: Some say men insulted by Joe Biden choosing woman VP
QAnon supporter who made racist videos wins Republican primary in Georgia - MarketWatch
'Antifa' website cited in conservative media attack on Biden is linked to — wait for it — Russia
Trump reverts to stereotypes as campaign fumbles to respond to Harris pick Trump stated last week that suburban white women will vote for him since he will keep brown and black people out of their neighborhoods. Trump makes fear-based appeal to women as Biden picks Harris - POLITICO
One reply:
It needs to be imprinted on one's brain, and never forgotten, that over 90% of republicans approve of Donald, 81% of them currently believe that he is honest, and almost as many view him as a role model for their children.
The GOP is not a conservative party.
++++
Covid-19 Updates:
Why Bill Gates thinks US testing system is not improving
Virus not showing signs of seasonal pattern, WHO says
COVID-infected people protected for up to 3 months, CDC says - ABC News
NYT: White House reached out to South Dakota governor about adding Trump to Mount Rushmore
President Trump: Some say men insulted by Joe Biden choosing woman VP
QAnon supporter who made racist videos wins Republican primary in Georgia - MarketWatch
'Antifa' website cited in conservative media attack on Biden is linked to — wait for it — Russia
Trump reverts to stereotypes as campaign fumbles to respond to Harris pick Trump stated last week that suburban white women will vote for him since he will keep brown and black people out of their neighborhoods. Trump makes fear-based appeal to women as Biden picks Harris - POLITICO
It needs to be imprinted on one's brain, and never forgotten, that over 90% of republicans approve of Donald, 81% of them currently believe that he is honest, and almost as many view him as a role model for their children.
The GOP is not a conservative party.
++++
Covid-19 Updates:
 |
| As of 8/14/20 |
Virus not showing signs of seasonal pattern, WHO says
COVID-infected people protected for up to 3 months, CDC says - ABC News
How Accurate Are Coronavirus Tests? Governor Mike DeWine of Ohio was in the news recently when he tested positive for Covid-19 using an antigen test that provides a quick response. He was then tested using a procedure known as polymerase chain reaction and tested negative. The first test is believed to have a 20% false negative rate. A false positive would be far less likely.
Trump says, without evidence, vaccine could be ready by Election Day In Trump's America, the preference is to make claims without any evidentiary support or that is contradicted by the evidence.
1 in 3 Americans would refuse COVID-19 vaccine, new Gallup poll finds
Thousands of students, staff sent home nationwide as COVID gnarls school reopenings - ABC News
Over 900 students and staff in Georgia school district quarantining after positive COVID-19 tests - CBS News This is in Cherokee County, Georgia where wearing a face mask is optional.
COVID-19 in Georgia: State reports its highest daily death toll (8/14/20)
Florida reports record number of COVID-19 hospitalizations (8/10/20)
Reporter booed at Trump press conference after asking about masks This press conference was at Donald's golf club.
9 people test positive for coronavirus at Georgia school that went viral for crowded photo - ABC News The school suspended the student for taking the photo, reversing the decision only after a national outrage. The school district does not require students to wear masks. The school is located in Paulding County, GA, controlled by republicans. North Paulding Teens Suspended For Viral Images of Packed Hall | Dallas, GA Patch; This student took viral photo of packed high school hallway. Now, she says she's received threats - CBS News
The 7-year-old Georgia boy with Covid-19 who died drowned in a bathtub after a seizure, coroner says
Dr. Sanjay Gupta: Why I am not sending my kids back to school - CNN
Trump denies saying things he previously said about the coronavirus - YouTube (up to April 2020) Donald will constantly deny saying something that was caught on video.
Wearing a neck gaiter may be worse than no mask at all, researchers find (the reason is that the neck gaiter mask breaks the particles down into smaller parts that penetrate the mask and linger in the air longer).
This 21-year-old thought he had overcome a mild case of Covid-19. Then he went into organ failure - CNN
Alyssa Milano shows hair loss following Covid-19 battle in video - CNN
‘This is no longer a debate’: Sheriff Billy Woods of Marion County Florida bans deputies, visitors from wearing masks
+++++++
Thousands of students, staff sent home nationwide as COVID gnarls school reopenings - ABC News
Over 900 students and staff in Georgia school district quarantining after positive COVID-19 tests - CBS News This is in Cherokee County, Georgia where wearing a face mask is optional.
 |
| Cherokee County, GA 2016 Election Results |
Florida reports record number of COVID-19 hospitalizations (8/10/20)
Reporter booed at Trump press conference after asking about masks This press conference was at Donald's golf club.
9 people test positive for coronavirus at Georgia school that went viral for crowded photo - ABC News The school suspended the student for taking the photo, reversing the decision only after a national outrage. The school district does not require students to wear masks. The school is located in Paulding County, GA, controlled by republicans. North Paulding Teens Suspended For Viral Images of Packed Hall | Dallas, GA Patch; This student took viral photo of packed high school hallway. Now, she says she's received threats - CBS News
 |
| Paulding Country, GA. 2016 Election Results |
Dr. Sanjay Gupta: Why I am not sending my kids back to school - CNN
Trump denies saying things he previously said about the coronavirus - YouTube (up to April 2020) Donald will constantly deny saying something that was caught on video.
Wearing a neck gaiter may be worse than no mask at all, researchers find (the reason is that the neck gaiter mask breaks the particles down into smaller parts that penetrate the mask and linger in the air longer).
This 21-year-old thought he had overcome a mild case of Covid-19. Then he went into organ failure - CNN
Alyssa Milano shows hair loss following Covid-19 battle in video - CNN
‘This is no longer a debate’: Sheriff Billy Woods of Marion County Florida bans deputies, visitors from wearing masks
All trades are commission free except as otherwise noted.
1. Pared ORKLY:
A. Eliminated ORKLY in Schwab Account-Sold 120 at $9.47:
Quote: ORKLY | Orkla ASA ADR Overview
Orkla is a Norwegian based consumer products company. The first half results have benefited from the Covid-19 pandemic.
I still own 100 shares in another taxable account at an average cost per share of $8.22.
Orkla is a Norwegian based consumer products company. The first half results have benefited from the Covid-19 pandemic.
I still own 100 shares in another taxable account at an average cost per share of $8.22.
About Orkla
Orkla Foods - Orkla.com
Orkla Confectionery & Snacks - Orkla.com
Orkla Care - Orkla.com
Orkla Food Ingredients - Orkla.com
The company has other businesses that are unrelated to those categories.
Orkla Foods - Orkla.com
Orkla Confectionery & Snacks - Orkla.com
Orkla Care - Orkla.com
Orkla Food Ingredients - Orkla.com
The company has other businesses that are unrelated to those categories.
Profit Snapshot: $63.12
Last Substantive Buy Discussion: Item # 1.D. Added 10 ORKLY at $7.65; 10 at $7.3; 20 at $9.03; 10 at $8.29 (5/16/20 Post) I discussed the first quarter earnings report in that post.
Last Sell Discussions: Item # 4.B. Sold 100 ORKLY at $10.1 (1/5/20 Post)(profit snapshot = $4.97); Sold 100 ORKLY-Update On Portfolio Positioning And Management -South Gent | Seeking Alpha August 2015 (profit snapshot =$51.08); Item # 4 Sold 100 ORKLY at $9 (9/6/14 Post)(profit snapshot = $122.48)
2017 Transactions: $65.45
Dividends: Paid annually. I have received already the 2020 annual payment before selling these shares.
B. Sold 10 of 110 ORKLY Fidelity Taxable Account at $9.47:
This was my highest cost lot. The average cost per share was reduced from $8.31 to $8.22:
New Average Cost Snapshot Intraday on 7/15/20 (100 Shares):
Profit Snapshot: $2.49
OKRLY Trading Profits to Date: $309.59
OKRLY Trading Profits to Date: $309.59
2. Small Ball:
A. Started FIVG-Bought 5 at $27.6:
Closing Price 8/14/20: FIVG $29.55 -$0.17 -0.56%
Sponsor's Website: The First 5G ETF - FIVG
Expense Ratio: .3%
Total Holdings: 78
Top Holdings as of 8/7/2020:
B. Eliminated CNA-Sold Remaining 15 shares at $33.07:
Quote: CNA Financial Corp
CNA | CNA Financial Corp. Analyst Estimates
CNA SEC Filings
2019 Annual Report
Profit Snapshot: +$96.04
Item # 1.G. Bought 5 CNA at $28.15; 10 at $27.5; 5 at $26, and Sold 10 at $29.44 (6/20/20 Post)
Dividend: Quarterly, regular at $.37 per share ($1.48 annually)
Last Ex Dividend: 5/14/20 (owned as of)
Quote: CNA Financial Corp
CNA | CNA Financial Corp. Analyst Estimates
CNA SEC Filings
2019 Annual Report
Profit Snapshot: +$96.04
Dividend: Quarterly, regular at $.37 per share ($1.48 annually)
Last Ex Dividend: 5/14/20 (owned as of)
Last Earnings Report (Q/E 6/30/20): CNA Financial Announces Second Quarter 2020 Results
Loews Corporation (L) owns 89.1 of CNA's common shares.
Loews CEO Rails Against ‘Absurd’ Valuation of Conglomerate-Barron's (8/3/20 article) There are several reasons why investors hate Lowes' stock including its ownership interest in Diamond Offshore Drilling which is in bankruptcy (investment written down $957M in the second quarter), its ownership of hotels and Boardwalk Pipeline. Loews Corporation Reports Net Loss Of $835 Million For The Second Quarter Of 2020
C. Added 5 ENB at $30.65:
This add reduced my average cost from $31.5 to $31.37.
Quote: Enbridge Inc. (U.S.: NYSE)
Closing Price 8/14/20: ENB $32.87 0.00 0.00%
I mentioned this purchase in a 7/21/20 comment.
ENB Info as of 8/14/20:
SEC Filings
Enbridge sees more gradual pace of recovery in crude volumes (NYSE:ENB) | Seeking Alpha (7/29/20)
Investment Center Dashboard - Enbridge Inc.
Last Buy Discussion: Item # 1.C. Added 1 ENB at $27.23; 1 at $26.21; 1 at $25.49; 1 at $24.29; 1 at $23.68 (4/18/20 Post)
Last Sell Discussions: Item # 1.B. Sold 8 ENB at $42.36 (2/19/20 Post)(profitably selling all shares bought with dividends);
Item # 3.B. Sold 17 ENB at $40.21 (1/18/20 Post);
Item # 1.B. Sold 15 ENB at $37.61-Used Commission Free Trade (2/20/19 Post);
Item # 3 Sold 50 ENB at $39.03 (12/21/17 Post);
Sold 10 ENB at $40.14 (1/5/18 Post);
Dividends: Quarterly at C$.81 per share (C$3.24 annually)
Dividends and Common Shares - Enbridge Inc.
Enbridge Declares Quarterly Dividends
For U.S. citizens, the Canadian government will withhold a 15% tax from the payment when the stock is owned in a taxable account but not when the stock is owned in a retirement account. That is pursuant to the existing U.S-Canada tax treaty. The CAD amount will be converted into USDs for owners of ENB.
XE: CAD / USD Currency Chart. Canadian Dollar to US Dollar Rates
Dividend Reinvestment: Yes. I currently view the common stock as undervalued long term.
Last Ex Dividend Date: Last Thursday, 8/13/2020 (all shares owned as of)
Position This Account: 34+ shares
Average Cost Per Share This Account: US$31.37
Dividend Yield: Will depend on the CAD/USD conversion rate. Assuming a constant rate of .75, the annual USD payment per share at C$3.24 per share would be about US$2.43. Using that conversion rate assumption, the yield at a US$31.37 per share total cost would be about 7.75%. The actual yield will fluctuate with the exchange rate and whether the U.S. investor can recoup as a foreign tax credit the 15% withheld from each payment by Canada.
5 Year Chart:
The strategy, in part dictated by this chart, is to lighten up when the price approaches $40 by selling my highest cost shares.
Last Earnings Report (Q/E 6/30/20):
Numbers are in CADs:
"GAAP earnings of $1,647 million or $0.82 earnings per common share, compared with GAAP earnings of $1,736 million or $0.86 per common share in 2019.
Adjusted earnings were $1,133 million or $0.56 per common share, compared with $1,349 million or $0.67 per common share in 2019
Cash Provided by Operating Activities was $2,416 million, compared with $2,494 million in 2019
Distributable Cash Flow (DCF) was $2,437 million, compared with $2,310 million in 2019
Re-affirmed financial guidance for 2020 of $4.50 to $4.80 DCF/share"
Enbridge Reports Strong Second Quarter
Broker Reports:
In response to the earnings report, RBC maintained its outperform rating but cut ENB's price target to C$58 from C$61; while Citigroup raised its recommendation to buy with a C$50 PT. I do not have access to those reports.
The following reports are available to Schwab customers.
Morningstar (8/8/20): 4 stars, wide moat, US$43 FV
Argus (8/3/20): Buy with a US$38 PT
S & P (7/31/20): 4 stars with a US$40 12 month PT
Purchase Restriction: Any subsequent purchase, other than through dividend reinvestment, must reduce my average cost per share. This 5 lot purchase met that requirement. Moving slowing in and out are standard small ball trading techniques.
One of the long term problems involves long regulatory delays that increase costs for new pipelines and even legal issues for those already carrying product. Pipeline Court Ruling Helps Some Oil Companies, but Big Risks Remain - Barron's
I also own ENB equity preferred stocks and bonds.
D. Started ENB "Small Ball Buying Program" in Vanguard Taxable Account-Bought 5 at $30.66:
E. Added 5 SCM at $7.41:
Quote: Stellus Capital Investment Corp. (SCM)
Closing Price 8/14/20: SCM $8.56 +$0.04 +0.47%
Stock Info 8/14/20:
SEC Filings
Management: External (viewed as high risk)
Dividend: Quarterly at $.25
Earlier this year, SCM changed its distribution schedule from monthly to quarterly and reduced its quarterly payout from $.34 per share paid in monthly installments to the current $.25 quarterly rate.
Next Ex Dividend Date: 9/14/2020
Position this Account: 98+ Shares
Average Cost Per Share this Account: $8.63
Dividend Reinvestment: Yes, for as long as the likely dividend reinvestment price is likely to be at a greater than 10% discount to the last reported net asset value per share.
Yield at Average Cost of $8.63 = 11.59% (assumes no change in the $.25 per share quarterly rate)
6/30/20: $13.34
3/31/20: $11.55
12/31/19: $14.14
12/31/18: $14.09
12/31/17: $13.81
12/31/16 $13.69
12/31/15: $13.19
12/31/14: $13.94
12/31/13: $14.54
November 2012: IPO at $15 ($14.46 after underwriters discount)
5 Year Chart:
Last Earnings Report (Q/E 6/30/20): This report was released after this purchase. Investors responded positively to the release with the stock gaining $.43 or 5.88% on 7/31/20.
NII = $.28 per share, down from $.29 per share for the 2019 second quarter
Net Asset Value Per Share: $13.34, up $1.79 per share from 3/31/20 but still down from $14.14 as of 12/31/2019
Stellus Capital Investment Corporation Reports Results for its Second Fiscal Quarter Ended June 30, 2020
Stellus Capital Investment's (SCM) CEO Robert Ladd on Q2 2020 Results - Earnings Call Transcript | Seeking Alpha
In response to this report, Janney raised its PT to $10.5 from $9.5 but maintained its neutral rating.
Prior Sell Discussions: Item # 3 Eliminated SCM - Sold 50 at $13.72 (9/21/19 Post)(profit snapshot = $3.75); Item # 1.B. Sold 32+ SCM at $14.22-Used Commission Free Trade (2/2/19 Post)(profit snapshot = $78.09); Item # 1.A. Sold Highest Cost Lot-50 Shares at $12.63 (5/3/18 Post)(profit snapshot = $34.24); Item 2.B. Sold 100 SCM at $14.23 (2/27/17 Post)(profit snapshot=$285.96); Item # 2 Sold 100 SCM at $13.02 (1/12/17 Post)(profit snapshot= $141.96)
Goal: Total Return in excess of the dividend payments which has been accomplished so far for this BDC stock
SCM Trading Profits to Date = $543.99
Purchase Restriction: Each purchase must reduce my average cost per share. The highest cost lot will be sold when and if it becomes profitable to do as a risk mitigation measure.
F. Started BBCA-Bought 5 at $23.6:
Quote: BBCA | JPMorgan BetaBuilders Canada ETF Overview
Closing Price 8/14: BBCA $24.68 -$0.06 -0.24%
Sponsor's Website: JPMorgan BetaBuilders Canada ETF
Expense Ratio: .19%
This expense ratio is better than the .49% charged by the iShares MSCI Canada ETF (EWC) which has considerably more assets.
I discussed this purchase in a 7/21/20 comment.
Dividends: Quarterly at a variable rate
Closing Price 8/14: IQLT $31.43 -$0.18 -0.57%
Sponsor's Website: iShares Edge MSCI International Quality Factor ETF
Expense Ratio: .30%
Number of Holdings: 298 as of 8/7/20
Some Top Holdings:
Closing Price 8/14/20: VNQI $48.88 -$0.08 -0.16%
Sponsor's Website: Vanguard Global ex-U.S. Real Estate ETF
Expense Ratio: .12%
Some Top Holdings as of 6/30/20:
I. Started FLGB-Bought 10 at $20.12; 1 at $19.49:
Quote: FLGB | Franklin FTSE United Kingdom ETF Overview
Sponsor's Website: Franklin FTSE United Kingdom ETF - Overview
Expense Ratio: .09%
This ETF has a lower expense ratio than EWU, which is currently at .50%. iShares MSCI United Kingdom ETF | EWU
Some Top Holdings as of 8/6/20:
Dividends: Semi-Annually
J: Restarted VGK-Bought 5 at $53.73; 1 at $51.97:
Closing Price 8/14: VGK $54.16 -$0.56 -1.02%
Sponsor's Website: VGK - Vanguard FTSE Europe ETF
Expense Ratio: .08%
Holdings as of 6/30/20: 1321 stocks
Some Top Holdings as of 6/30/20:
Other Sell Discussion: Item # 3.E. Sold 25 VGK at $50.21 (3/8/17 Post)(profit snapshot = $43.87)
K. Bought 20 LGI at $15.18:
Quote: Lazard Global Total Return & Income Fund Overview- A Leveraged CEF
Closing Price 8/14: LGI $15.33 -$0.06 -0.39%
Data Date of 8/10/20 Purchase:
Closing Net Asset Value Per Share: $17.44
Closing Market Price: $15.25
Discount: -12.56%
Sourced: LGI-CEF Connect
LGI Fact Sheet (June 2020):
Top 10 Holdings per June Fact Sheet:
Dividends: Monthly at $.10646 (supported by ROC)
Last Ex Dividend: 8/11/20 (day after purchase)
LGI SEC Filings
2019 Annual Report
Holdings as of 3/31/20
Purchase Restriction: Each subsequent purchase must be at the lowest price in the chain.
Maximum Position: 100 shares
L. Pared TPVG Fidelity Account-Sold 10 at $12.6:
Quote: TPVG | TriplePoint Venture Growth BDC Corp. Overview
Closing Price 8/14: TPVG $12.42 -$0.06 -0.48%
TPVG SEC Filings
In my last post, I discussed eliminating my position in my Schwab taxable account. That left me with positions in 4 accounts including 2 Roth IRA accounts. Item # 1.J. (8/8/20 Post)
I am mindful of what happened to this stock last March.
1 Year Chart:
Profit Snapshot: +$9.99
This pare reduced by average cost per share from $8.46 to $7.97:
 |
| Snapshot Intraday 8/11/20 |
Next Ex Dividend: 8/28/20
Yield at $7.97 = 18.07%
TPVG Trading Profits to Date: $807.09
Goal: Total Return in Excess of the dividends received.
3. Exchange Traded Baby Bonds:
A. Pared TPVY-Sold 10 at $25.25 (highest cost lot):
Closing Price 8/14: $25.32
Investment Category: Exchange Traded Baby Bonds, part of Exchange Traded Bonds category.
Profit Snapshot: +$6.62
Last Discussed: Item # 4.A. Added 10 TPVY at $23.67 (8/1/2020 Post)
First Purchase: Item # 4.C. Bought 5 TPVY at $21.95 (4/11/20 Post)
Security: Prospectus
Issuer: TriplePoint Venture Growth BDC Corp. Overview
Interest: Quarterly / trades flat
Capital Structure: Senior Unsecured debt
Par Value: $25
Maturity Date: 7/15/22
Callable at Par Value at issuer's option now
Payment Dates: January 15, April 15, July 15 and October 15
Last Ex Interest Date: 6/30/20
4. Fixed Coupon Holdings in Schwab Taxable Account-Snapshot as of 8/11/20:
In a recent post, I included snapshots of bonds held in my Fidelity taxable account. I own bonds in 5 of my accounts which includes 1 Roth IRA account.
As with other brokers, the prices are provided by a third party service rather than the actual closing market prices.
The three $10K par value corporate bond lots were bought when prices sank in March-April 2020:
FINRA Page-American Electric Power 2.95% SU Maturing on 12/15/22
FINRA Page-Essex 3.375% SU Maturing on 1/15/23
FINRA Page-Virginia Electric Power 3.45% SU Maturing on 9/1/22
A 10 corporate bond lot is as high as I will go with a single trade. That is entirely due to risk management.
Some municipal bond purchases have been at 15 bonds, though none of those positions are owned in this taxable account.
There are three 10 municipal bond lots included in the following snapshots:
MEMMA Page-Rutherford County, TN. 3.125% Water Revenue Maturing on 2/1/31 (rated at AAA)
EMMA Page- Rutherford County, TN. 2% Waterworks Revenue Maturing on 2/1/2030 (rated at AAA)
EMMA Page-Wilson County, TN. 4% GO Maturing on 4/1/39 (rated at AA+)
The quality of the bond, current yield, and yield-to-maturity are the main factor determining how much I will allocate to the purchase. With some municipal bonds, I will go over par value when other criteria are viewed as favorable.
Even with high quality bonds, I am extremely diversified.
So far, I have not lost a Tennessee municipal bond to an issuer optional redemption, but that will start to change in 2022. In this account, I will lose the Harpeth Valley Utility District 4% revenue bond in 2022. While the maturity date is in 2040, the issuer may redeem at par on or after 9/1/2022. Emma Page (rated at AA+)
Municipal bonds can only be bought in 5 bond lots.
Disclaimer: I am not a financial advisor but simply an individual investor who has been managing my own money since I was a teenager. In this post, I am acting solely as a financial journalist focusing on my own investments. The information contained in this post is not intended to be a complete description or summary of all available data relevant to making an investment decision. Instead, I am merely expressing some of the reasons underlying the purchase or sell of securities. Nothing in this post is intended to constitute investment or legal advice or a recommendation to buy or to sell. All investors need to perform their own due diligence before making any financial decision which requires at a minimum reading original source material available at the SEC and elsewhere. A failure to perform due diligence only increases what I call "error creep". Stocks, Bonds & Politics: ERROR CREEP and the INVESTING PROCESS Each investor needs to assess a potential investment taking into account their personal risk tolerances, goals and situational risks. I can only make that kind of assessment for myself and family members.
I haven't read all the links I want to yet, but that Atlantic one about how to deal with the data deficit and tribalism is really interesting. The 1st half is. The 2nd half gets less organized around any points, but still useful examples to consider.
ReplyDeleteThat's the first attempt I've seen at figuring out how to reach those who've dug in, and who ignore data in front of them, and why they do.
I'm going to send it to those I know trying to tackle antisemitism. It's the same phenomenon.
FG's talking about pauses at the highs, possible small pullback but not a W. And also broadening of the market as a good sign. He's buying per stock, not into the market as a whole. Maybe his optimism is right. It's served him well. I find the lack of stimulus, reduced bond buying (that you have links too), lack of money flowing in, has to have an effect including on market mindset. So that really is puzzling why that hasn't happened yet. Only if there's a vaccine, is that getting a reaction.
Land: Optimism about the future has served the Stock Jocks well, as long as they can deal with the inevitable bear markets including the ones that turn them into road kill.
ReplyDeleteThe long term secular bear markets are nasty, as are the catastrophic declines that will occur, worse than what was experienced last March.
I would be more inclined to go with James Montier's opinion:
https://www.gmo.com/americas/research-library/reasons-not-to-be-cheerful/
Investors will always find a way to justify absurd valuations which will include ignoring all negative evidence (as now), projecting a too rosy future (as now), and creating certainty when there is none to be found and major uncertainties that could easily derail the rosy projections are prevalent (as now).
For the moment, I am riding the wave up in a limited stock allocation. I am also currently very cash heavy that is larger than my fixed income allocation.
When I last eliminated my stock allocation (1999-2000), there were alternatives for the cash. There are none now.
I'm reading the article. Have many thoughts, but one that's been bothering me a while. The author doesn't mention (unless it's in the last paragraph I'm now reading), but his comments remind me of.
ReplyDeleteIf it was about interest rates, more than tech would have been getting bought. There are solid balance sheet companies with good divs. They have not been the focus. They still aren't. It's all betting on what businesses will recovery nicely by the market's estimate.
I have published a new post that contains snapshots of regional bank stock trades starting in 2009.
ReplyDeletehttps://tennesseeindependent.blogspot.com/2020/08/regional-bank-basket-strategy.html
I use a basket strategy for that stock sector. A stock sector basket is similar to a stock fund in that a number of stocks are owned.
The new regional bank basket post is primarily for my benefit. In collecting information to include in it, I revisited some stocks that I had forgotten about and whose current prices are appealing to me for small ball type purchases.
While Mnuchin claimed that the additional $300 per week in unemployment benefits would start immediately, FEMA (Yes FEMA) says the first payment will start to roll out no earlier than 3 weeks from 8/8/20.
ReplyDeleteDonald has taken the money out of FEMA disaster relief funding which will last about 4 weeks or so, and then he will have to find another source. So there goes the hurricane disaster relief money.
https://www.cnbc.com/2020/08/17/how-long-will-it-take-new-300-unemployment-aid-to-be-paid-by-states.html
++
I have been searching for income producing securities and do not care for my options.
So I just nibble when I find something.
I bought today 10 shares of the newly issued equity preferred stock ARGOPRA. The price closed today at $25.34. I paid a few cents less.
https://www.marketwatch.com/investing/stock/argo.pra
The issuer is Argo International. S & P assigns a junk rating of BB.
Par value is $25.
This is fixed-to-floating rate security.
The fixed rate coupon is 7% and transitions to a floater in about 5 years unless redeemed by the issuer.
That is typical for these securities.
The option to redeem is triggered when the transition from a fixed coupon to the floating rate happens.
The floating rate is unusual in that the spread is to the 5 year Treasury.
The spread is at 6.712%, which is nice, even though it may never be paid. If allowed by the issuer to reset in September 2025, the reset coupon will last for 5 years as I read the prospectus (page S-33). That is the way the Canadian resets work when the rate is a spread to the Canadian 5 year government bond (or, in a few cases like EBGEF, to the five year Treasury).
https://www.sec.gov/Archives/edgar/data/1091748/000119312520190244/d112454d424b2.htm
Dividends are non-cumulative which is a negative. The issuer is paying a common stock cash dividend, which would have to be eliminated prior to eliminating the non-cumulative preferred dividend.
I have frequently traded the exchange traded senior bond ARGD and currently own somewhere over 100 shares:
https://www.marketwatch.com/investing/stock/argd
This bond can be called now at anytime. The price collapsed during the March meltdown which is typical for exchange traded bonds and preferred stocks during stock meltdowns with extreme volatility. On 3/18/20, for example, I bought 5 ARGD at $11.6. The price closed today at $25.81.
When I last looked the bond is rated BBB- by S & P. Sometimes the equity preferred stock is rated 1 notch below. This equity preferred is two notches below
I can't believe he's using FEMA for this. And it's so meaningless when it will run out - while bankrupting the next state hit by what Trump would call "big winds, big waters, wet water, windy winds..."
ReplyDeleteWatching the convention.
This time Bernie's being supportive.
I wish they'd do less about how bad it is, and more connection and reminder of what this country used to be pre-trump. The ideals, possibilities, caring outreach by americans together during troubles. But otherwise, it's going well. Quick clips so nothing gets too boring or easy to focus on to attack.
Best line yet from Michelle. Joe is a testament to getting back up.
----
I got an email from Ameritrade. I've gotten other offers. I ignored this one because there has to be a catch.
Still I got another one for 1.5%, so I should figure out if this 3% has any merit even if it's only for a few months. It is only BBBs.
-----
TD Ameritrade is participating in the following Callable Jefferies Group LLC Fixed‑rate Note offering.
Offering details:
Issuer:
Jefferies Group LLC
CUSIP:
47233JDR6
Rating:
BAA3/BBB
Order Period:
Until 08/26/2020
Coupon:
3.00%
Maturity:
2/28/2033
Payment Frequency:
Semi-Annual
Call Status:
8/28/2023 @ 100, Once
Survivor's Option:
No
Price:
100
Important information
Subject to availability and change in price. The ultimate amounts and sale dates can be affected by legal, market, and other factors. For more detailed information, please refer to the Disclosure Statement for this offering.
These notes are not Federal Deposit Insurance Corporation (FDIC) insured. Holders are subject to the credit risk of the issuer and the likelihood they will honor their obligation to pay the principal amount at maturity and interest, if any, payable under the terms of the note.
Early redemption risk: If the notes are redeemed prior to their stated maturity date, you may have to reinvest the proceeds in a lower rate environment.
Secondary trading may be limited. The notes will not be listed on a securities exchange. Therefore, there may be little or no secondary market for the notes.
Bonds and certificates of deposit (CDs) are sold in denominations of $1,000.00. For example, a purchase of 10 bonds would cost $10,000.00.
Support icon
Call us for help
To learn more about this offering and other new issues, call a TD Ameritrade Fixed Income Specialist at 800‑934‑4445, or call your regional Fixed Income Specialist, Monday through Friday, 8 a.m. to 6:30 p.m. ET. You will receive one-to-one assistance for your fixed-income needs.
----
Land: It looks like the FEMA money will now run out in 3 weeks, starting with the first weekly payment.
DeleteThe storms in the midwest will require significant FEMA expenditures so its funding for disaster relief will probably run out in late September 2020.
++
I would not buy the Jeffries note for several reasons.
These notes sold in initial offerings through brokers to their individual retail clients are generally hard to sell and lack liquidity due to their relatively small size.
I also do not view 3% as adequate compensation for a Baa3 rated credit. That is just one notch above junk.
This note apparently allows the issuer to call at par value in 2023 which creates asymmetric interest rate risk in favor of the issuer. If interest rates rise, the issuer will allow the owners to keep the 3% bonds which would be losing value and would be difficult to sell.
The owners therefore face the interest rate risk that I call the risk of lost opportunity, where the owner has two bad choices, forgo the ability to earn a higher interest rate using the funds stuck in a bond going down in value or to sell the bond at a loss if possible.
And, if for some reason rates go negative, and Jefferies can refinance in 2023 at a lower coupon, the owners receive the proceeds with even more undesirable options for reinvestment in similar rated securities.
I started to trade $1K par value corporate bonds in 2007 when I was looking for an alternative for the proceeds being raised by stock sales.
I started with the "corporate notes program" at Fidelity which is its version of this TD Ameritrade offering. When I wanted to sell those high quality bonds in February 2009, I found them hard to sell but managed to do so with the proceeds redirected back into stocks starting in late 2/2009.
I did not start buying $1K par value bonds in the bond market (secondaries, not original offerings) until 2010.
That's interesting experience that it can't be sold easily, when small batches to individual clients. One has to assume keeping for life or until called. I wasn't aware at all. I figured sell-ablity was a factor of where rates were relative to the issue, rather than having an independent problem of not getting enough traffic & appeal for smaller batches.
Delete13 years is a long time. If I was retired and living off the divs, I might commit to a 4%, and risk inflation running away since I think that's not to likely to be a significant factor for at least most of the 13 years. But this isn't 4% or a safe rating.
I've ignored all the other offerings because 1 to 1.5% is not something I'm going to commit to.
FEMA needs to deal with natural disasters that it's intended for. Trump keeps showing off how he bankrupted his company.
Can't believe the move today. So that's what it took for a small pullback? The Fed saying it's worried? Investors couldn't guess what the FED was going to say by looking around? Looking around anywhere, everywhere?
I'm also having trouble understanding the big positives to beats. The estimates were reduced. Prices should be based off earnings, not how much earnings beat an under estimated reduced earnings estimate.
I'll take it through.
But this could be as far as this pullback goes. <1%. Maybe more since it's a technical move to pullback here to 2-3%.
The budget is coming up too... while Congress's two houses can't agree on a relief package. So I'm no longer betting that they'll come to a last min agreement. They don't seem afraid of a standoff any more.
Watching more convention. I like some. It's like watching Hallmark commercials. I liked Michelle Obama's speech the best so far.
I still think they should be presenting a more upbeat image of where USA could be. Hopefully this will be energizing.
I've started the process of learning to text-canvas. I did a round of phone call-canvasing. I wasn't totally "keen" on it. It's not hard though. I shortened the script that give. That worked better. More genuine sounding and less like a recording. More important, I have to figure out if I have to request a mail in ballot.
Land: The decline in stocks yesterday started almost immediately after the FED released the minutes of its last meeting.
DeleteThe FED's prior forecast of GDP growth was tied in part to another stimulus package being passed by Congress. The FED believes that more fiscal stimulus is necessary now.
This passage from the minutes probably spooked the Stock Jocks a bit:
"Members stated that the path of the economy would depend significantly on the course of the virus. In addition, members agreed that the ongoing public health crisis would weigh heavily on economic activity, employment, and inflation in the near term and was posing considerable risks to the economic outlook over the medium term. In light of these developments, members decided to maintain the target range for the federal funds rate at 0 to 1/4 percent."
https://www.federalreserve.gov/monetarypolicy/fomcminutes20200729.htm
A significant portion of better economic data released over the past month or so is due to fiscal stimulus programs that have expired.
+++
I am not even looking for $1K par value bonds to buy. When stocks collapse again, and the VIX spikes, investors who are not bond investors will be able to find buying opportunities in exchange traded baby bonds that have $25 par values and trade like stocks. Their purchase does not require the acquisition of a skill set applicable to buying $1K par values in the bond market. I mentioned above, for example, buying ARGD during March for $11+. That one is a baby bond with a $25 par value and a 6.5% coupon, with a BBB- credit rating.
Item # 2.A. Added 5 AGRD at $22.27; 5 at $16.74; 5 at $14.21; 5 at $10.25; 5 at $16.5; 5 at $11.6:
https://tennesseeindependent.blogspot.com/2020/04/adx-argd-bmoprsca-bud-cube-emp-pbct-pfe.html
The brokers that I use apply their zero commission rates to purchases of exchange traded bonds so it is cost effective to buy in small lots. At $11.6, the yield for that BBB- rated bond is about 14%. (.065% x $25 = $1.625 annual interest payment per share ÷ total cost of $11.6 per share = 14% per annum)
Is that what did it in the Fed report. Still, that was knowable without their report.
DeleteIt didn't bother the market for long though. Still bought in today, just more into the Tech leaders.
This article lays out how the lack of stimulus is effecting Walmart. It's Motley Fool, so maybe it's too bearish? And I did not give my email to get their list of preferred stocks. Do that only once, and one learns!
https://www.fool.com/investing/2020/08/19/walmart-sounds-a-warning-on-the-economy/
They're calculating 10% reduction in consumer funds available for spending, without including other issues like paycheck support is ending. Walmart reporting headwinds showing up.
"When stocks collapse again, and the VIX spikes"
DeleteSo you're expecting a pullback sometime in this muck with more confidence?
There are still many people who believe Donald Trump. With that, and those people invest, I'm back to leaning on the idea that's why the realities are getting ignored in favor of excitement. Then others that are technical-based see how it's moving and go with it.
---
I've assessed that by 6 months after Biden's in office, it will be obvious if the economy is headed to a place where stable VIX market can exist, and it's appropriate to buy in even if there may be a pullback.
Between now and then there will be a pullback or not. I will buy if there is one. If I don't buy by the time stable VIX returns, I'll buy then.
What helped is realizing that realistically, it should be more obvious in the next 6-9 months, and that I won't have to wait long times to get myself into the market. By being out, I'm missing opportunity.
---
Baby bonds traded on the market, are easier than par value buying bonds directly? ($1k and $100)
What about it takes less skill?
14% is nice, but BBB- is junk? You have to be able to assess a company, and keep a close watch for indicators to get out?
---
I missed a lot of tonight's conference. My mild mannered, proper, 94 year old aunt called and has a question. Politicians get assassinated. Why is no one taking a shot at Trump? She then wondered why when she told her son, his friends found it funny that she keeps saying this. Her bluntness with this is funny.
Media keeps saying the conference was nailed. I'm not as sure. I'm worried that they are being too dark. Too much catering to concerns of the far left. Polls will show the answer soon.
Land: BBB- is the lowest S & P and Fitch rating for investment grade. The equivalent Moody's rating is Baa3. So ARGD, rated at BBB-, is hanging on to an investment grade rating.
DeleteExchange traded bonds are generally easier to trade than $1K par value bonds. My Tennessee Municipal bonds are extremely illiquid as are the bonds sold by brokers in their corporate notes offering programs. Generally, $1K corporate bonds become easier to trade once the lot size is 5 or 10 but some are liquid at 1 or 2 bonds.
When evaluating common stock purchases, an investor already needs to research credit risk issues. If there is rational reasons to be concerned about the ability to service senior unsecured debt, then the common stock probably needs to be avoided. There is no option but to pay interest on senior unsecured debt if the company wishes to stay out of bankruptcy court. Bond interest payments are consequently more secured than preferred stock and common stock dividends. The total return number can be calculated once the bond is purchased with precision to the penny, assuming no default.
The Stock Jocks remain 100% certain of their future forecast, so anything inconsistent with that forecast, including FED staff predictions about the economy, is per se Fake News or irrelevant noise.
As to stock declines, there have been two major ones over the past two years, one starting in September 2018 and the other in March 2020.
Longer term, I view financial markets as being in a long term period of instability resulting in large part from parabolic increases in debt and central bank efforts to deal with the instability adding to it over the long term (e.g. helping to create bubbles in bonds and stock prices). I start that period of financial instability with the 1997 Asian Contagion, with two Catastrophic Stock Market Events since then.
So the increased skills are dealing with liquidity, and doing the calculations.
DeleteI'm now suspecting the stock jocks are so convinced because some of them are trump true believers. It's an obvious thought. But I have no evidence. But I am now willing to consider it more, even without a research study that shows it.
Hard as it is to believe, that father who's daughter talked at the conference about his covid death, actually believed Trump's comments about it being safe. I'd been sure that bigger investors and most investors would be less gullible/susceptible. I'm not so sure any more. So I'm now willing to entertain that that may be a factor in this run up.
So you are expecting a when, but it's not necessarily as part of the covid or election issues. Just that all the "efforts" and factors like debt, create instability and central banks haven't fought a way to deal that doesn't add to it.
Hanover Insurance Group Inc. 6.35% Subordinated Debenture due 2053 (THGA)
ReplyDelete$25.34 -0.0643 -0.25%
https://www.marketwatch.com/investing/stock/thga
This is another baby bond that I bought during the March meltdown.
I noticed yesterday a price decline from close to $26 down to $25.4 and thought that the reason might be an issuer call.
The issuer is Hanover Insurance. The company sold yesterday $300M in 2.5% senior unsecured notes maturing in 2020 and announced its intention to use the proceeds to redeem THGA.
https://www.prnewswire.com/news-releases/the-hanover-insurance-group-inc-announces-pricing-of-300-million-senior-notes-offering-and-intention-to-redeem-its-2053-subordinated-debentures-301115161.html
THGA is now being priced for redemption which includes the payment of accrued and an unpaid interest on the note.
Last Discussed:
Item # 3.A. Bought 50 THGA at $22.51; 5 at $19.25 and 10 at $13.51:
https://tennesseeindependent.blogspot.com/2020/03/aresf-ddt-duk-fax-gis-igr-k-mspra-opini.html
I also bought a few shares in Roth IRA accounts.
Does this seem true? Are there still undervalued but healthy smallcaps?
ReplyDeletehttps://www.marketwatch.com/story/a-strategy-to-outsmart-the-sp-500-bubble-2020-08-20
Land: Buying value vs. growth ETFs has been a losing strategy in recent times.
DeleteThere are undervalued sectors that are included in small cap value ETFs, but undervalued assumes a return to normalcy relatively soon.
There is no shortage, for example, of small cap regional bank stocks that have dividend yields over 5% and selling at less than 12 times trailing GAAP earnings through the 2020 second quarter.
If money managers started buying those types of stocks rather than continuing to load up on Apple, Amazon, Google, Facebook and similar QQQ names, they would probably lose their jobs unless they were a small cap value fund manager.
The Russell 2000 does have value and growth ETFs. The Ishares Russell 2000 Growth ETF (IWO) had a total return of 28.48% last year and is up 5.71% YTD.
The Russell 2000 Value ETF was up 22.01% last year and is down -18.3% this year.
I do not profess to understand why the market is reaching new highs during a pandemic and a recession of unknowable duration and depth. I just view it as irrational behavior.
My favorite theory is simply there is no where to go except stocks.
The second explanation is that money managers are crowding into the same stocks since that is absolutely required if they are to have any chance of equaling their benchmarks (e.g. S & P 500).
Apple Inc. (AAPL)
$497.48 +24.38 (+5.15%)
PE Ratio (TTM) 37.73
Market Cap 2.127T
https://finance.yahoo.com/quote/AAPL?p=AAPL&.tsrc=fin-srch
Maybe the Stock Jocks are trying to take Apple's price to a point where its market cap equals U.S. annual GDP. Just half joking there.
Some argue that low inflation and low interest rates, both now and predicted until the end of days, make stocks more valuable since their future earnings stream, discounted to present value using a treasury rate like the 10 Year, becomes more valuable in that type of environment.
That is true up to a point, which has IMO long been passed IMO.
I also recall hearing a different argument from the Stock Jocks, which postulates that stocks will go up as an inflation hedge, when inflation is running much hotter.
Donald says the market will crash if Biden is elected. That was not the case over 8 year terms of Clinton and Obama when stocks soared in value.
Maybe the market is going up since the Stock Jocks are predicting that the Dark Force will lose to Biden. Or maybe they don't care when money can be made in the here and now as long as everyone quits thinking and worrying and just go with the flow.
I have published a new post:
ReplyDeletehttps://tennesseeindependent.blogspot.com/2020/08/argopra-brkl-ciopra-des-esgv-fisi.html