Economy:
U.S. retail sales August 2020 (up. .6% vs. 1% consensus estimate)
"Industrial production rose 0.4 percent in August for its fourth consecutive monthly increase. However, even after the recent gains, the index in August was 7.3 percent below its pre-pandemic February level. Manufacturing output continued to improve in August, rising 1.0 percent, but the gains for most manufacturing industries have gradually slowed since June." The Fed - Industrial Production and Capacity Utilization - G.17
Seasonally adjusted initial unemployment claims for the week ending 9/12 was reported at 860,000 by BLS. U.S. weekly jobless claims total 860,000, vs 875,000 expected
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Markets and Market Commentary:
It’s time for income-seeking investors to take a fresh look at these 28 utility stocks - MarketWatch (9/17/20)
Schwab strategist Sonders: Stock market today is ‘a small handful of winners and a heck of a lot of pain’ - MarketWatch (Sonders: “In very early September, the top five stocks were up almost 50% [thus far in 2020] and the bottom 495 stocks were actually still negative on the year. That narrowness to some degree reflects what's going on in the economy, which is a small handful of winners and a heck of a lot of pain.”)
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Portfolio Management:
I am trying to replace income lost through early bond redemptions in part by buying utility common stocks.
The apartment REIT Essex (ESS) exercised its optional redemption right to redeem a 3.625% SU note maturing on 8/15/22 issued by its operating company. The company had to pay $119.40 over the $2K principal amount to exercise that option due to a make whole provision:
Essex raised funds to redeem this bond by issuing $600M in SU notes at lower coupons and significantly longer maturities:
Prospectus (see Use of Proceeds section at page S-10)
Below, I discuss some purchases of electric utility stocks that provide me with a greater current yield plus likely dividend increases. I do face a greater risk with those stocks of losing principal.
I still own 10 Essex 3.375% SU bonds maturing in 2023. Item #3.A. Bought 10 at a TC of 97.144 (6/6/20 Post):
I also still own this one: 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)
It is becoming common for corporations to redeem bonds early even with meaningful make whole payments.
Today, I received notice that Healthcare REIT (HTA) will redeem my 3.75% SU bond maturing on 4/15/23. A make whole payment will have to be made, but I do not yet have the number. It will be significant. HTA just sold $800M of senior unsecured notes maturing in 2031. Prospectus (used of proceeds at page S-16)
Proceeds from optional bond redemptions and matured fixed coupon investments are piling up into market market funds in 4 taxable accounts. I am currently at the highest cash level as a percentage of total assets held in brokerage accounts since 2000-2001 period.
Regional Banks: I am extremely cautious in buying regional bank stocks. NIM suppression is likely to continue for years. Banks have benefited somewhat from lower deposit costs as CDs and saving accounts reprice at lower interest rate levels. Interest income from investments and loans, however, have also trended down. Reserve builds for new or potential sour loans have taken big bites out of current earnings. It is not certain by any means whether the reserve buildup will be sufficient to cover charge-offs that will occur. And, it remains unclear how many loans will become nonperforming that are now subject to loan modifications. My naturally cautious approach to risk taking is heightened given those unknowns and reasonable forecasts about the future. Note below how many trades it took for me to reach a 16 share position in CATY and a 13 share position in SBSI. I will probably cap the positions at 50 shares each.
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Trump:
With Justice Ginsberg's death, Trump and the Trump controlled U.S. Senate will likely be able to place another far right reactionary judge on the Supreme Court even with Biden winning in November and the Democrats regaining control over the Senate. Congress is getting ready for a fight over who will fill RBG's seat as McConnell vows to have a vote on Trump nominee
For almost all of its history, the Supreme Court has been a reactionary institution, not a conservative or liberal one.
It was simply a matter of decree as to how reactionary.
"Liberals" have dominated the court for about 2 decades (the 1960s and 1970s) before the Court started to tilt back to the right. For the next 2 decades, the Supreme Court will revert to its traditional role as far right reactionary institution.
A flavor of this history can be found here:A Century of Racial Segregation 1849–1950 - Brown v. Board at Fifty: "With an Even Hand" | Exhibitions - Library of Congress and these books The Burger Court and the Rise of the Judicial; We the Corporations: How American Businesses Won Their Civil Rights; The Constitution in the Supreme Court: The First Hundred Years, 1789-1888
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Fareed: We need to prepare for this 'deeply worrying' scenario on and after election day - YouTube All Biden voters in swing states need to vote in person. Polls, however, show that far more Biden than Trump voters plan to cast their votes by mail. The early, in person vote tallies will favor Trump; and then he will claim fraud when mail-in ballots are counted and he starts to fall behind. I am not anticipating a smooth and non-eventful transition of power if Biden wins.
How Fox News covered the Woodward recordings of President Trump - YouTube Fox "news" creates an Alternate Reality for the Trumpsters and talking points for Donald that are untethered from reality.
How Conspiracy Theories Are Shaping the 2020 Election | Time ("They are impervious to messaging, advertising or data. They aren’t just infected with conspiracy; they appear to be inoculated against reality.")
This Republican Party Is Not Worth Saving - The Atlantic I would agree that the "only decent, sensible, and conservative position is to vote against this Republican Party at every level, and bring the sad final days of a once-great political institution to an end. Then build the party back up again—from scratch."
The columnist Roger Cohen, having just recovered from Covid-19, summed Donald up succinctly as follows: "the president’s personality is consistent: a mix of coward, racist, liar, con artist, narcissist, grifter, and blowhard, with uncanny antennae for the worst instincts of humanity, and for how to use the media to channel insecurity and hatred into a mass political movement galvanized by his fiendish energy."
The Trumpsters cheered Donald at his Nevada Mass Infection Event when he declared that he could now be "really vicious". Donald Trump relishes his role as a divider as he vows to be "vicious; Trump fumes over Biden ad, media coverage at Nevada rally - POLITICO; An inside look at President Donald Trump's Minden Rally; Trump claims that Democrats are try to rig the election-USA Today
The Duck has always been a vicious, mean spirited person.
Demagogue Don, as part of his effort to restore calm and to prevent panic, further claimed at his Minden, Nevada Mass Infection Event that the Democrats were trying to rig the election since that is "the only way they're gonna win." This is part of Don the Authoritarian's effort to undermine confidence in voting results and to suppress voting by those who are likely to cast their ballots for the wrong candidates.
And as the Trumpsters cheered, Demagogue Don claimed that the goal of Democrats was to "lock law-abiding Americans in their homes" as they fight "God, guns and oil".
Michael Cohen's Book "Disloyal":
Cohen's book will have no impact on voters. Those who are opposed to Don the Con already know, in Cohen's words, that Donald is " a cheat, a liar, a fraud, a bully, a racist, a predator, a con man." None of that is news.
Cohen's book will have no impact on voters. Those who are opposed to Don the Con already know, in Cohen's words, that Donald is " a cheat, a liar, a fraud, a bully, a racist, a predator, a con man." None of that is news.
I am reading the book on Scribd.
Everything We Learned About Trump From Michael Cohen’s Book; Michael Cohen book: President Trump's ex 'fixer' publishes 'Disloyal'
Cohen recounts instances where Trump refused to pay a mom and pope contractor for work performed on a project. The general approach was to refuse to pay and then threaten ruinous litigation. USA TODAY exclusive: Hundreds allege Donald Trump doesn’t pay his bills
Cohen recounts an example where Donald selected a cheap paint to use and was warned by all concerned that the cheap paint was inappropriate and would not last long.
After seeing the result of his own paint selection, Donald refused to pay the painting contractor who was then unable to pay a mom and pop paint store.
The store then placed a materialman's lien on Trump's property, the Doral golf club, which was clearly permitted by Florida law.
Trump instructed his lawyers to fight and the paint store owner attorney's fees ate up for more than was owned for the paint. That is the behavior of a psychopath.
Trump made the mistake and had no qualms about stiffing small businesses nonetheless. Yet the Trumpsters believe that Donald actually cares about them.
After Obama's election in 2018, Cohen claims that Trump made the following comment: “Tell me one country run by a black person that isn’t a s---hole. They are all complete f---ing toilets.” This is similar to a comment that Donald made when referring to African countries as shitholes.
Trump referred to Haiti and African nations as 'shithole' countries Some of the Trump loyalists issued denials that were based on their claim that he did not use the word "shithole", but their denial was based on them hearing him say "shithouse" rather than "shithole". Trump “shithole” or “shithouse” comments: The dueling accounts of what the president said, explained - Vox Similar Trump comments were quoted in this NYT article from December 2017: Stoking Fears, Trump Defied Bureaucracy to Advance Immigration Agenda - The New York Times
Regarding Nelson Mandela, Trump is quoted as saying “Mandela f---ed the whole country up. Now it’s a s---hole. F--- Mandela. He was no leader.”
Trump referred to Haiti and African nations as 'shithole' countries Some of the Trump loyalists issued denials that were based on their claim that he did not use the word "shithole", but their denial was based on them hearing him say "shithouse" rather than "shithole". Trump “shithole” or “shithouse” comments: The dueling accounts of what the president said, explained - Vox Similar Trump comments were quoted in this NYT article from December 2017: Stoking Fears, Trump Defied Bureaucracy to Advance Immigration Agenda - The New York Times
Regarding Nelson Mandela, Trump is quoted as saying “Mandela f---ed the whole country up. Now it’s a s---hole. F--- Mandela. He was no leader.”
Trump: “I will never get the Hispanic vote. Like the Blacks, they’re too stupid to vote for Trump. They’re not my people.”
You may recall the photo op where Donald pretended to be a christian and several "christian" evangelical preachers laid their hands on him.
Afterward, Donald told Cohen "Can you believe that bullshit? Can you believe people believe that bullshit".
What I can't believe is that anyone actually believes the prosperity televangelist Paula White converted Donald to christianity. Apopka preacher Paula White and presidential nominee Donald Trump are a match made in alt-right heaven-Orlando Weekly Aren't real Christians supposed to behave and talk a certain way?
It is equally amazing to me that anyone pays any attention to what Ms. White has to say about anything.
Trump first gained prominence among republicans by becoming the foremost spreader of the Obama birther conspiracy.
Obama's birth certificate showed that he was born at the Kapiolani Maternity and Gynecological Hospital in Honolulu, Hawaii and was consequently a U.S. citizen. President Obama's Long Form Birth Certificate; Indeed, Born in the U.S.A. - FactCheck.org
Facts are "Fake News" in Trumpworld.
A prominent Trump birther conspiracy lie was when he told a reporter that he had a team investigating where Obama was born and would announce the shocking results soon. That made headlines around the world.
Cohen asked Donald whether he had anyone conducting an investigation. Donald had nothing so Cohen asked Donald "Do you want me to put someone on that". Donald replied according to Cohen "No. Who fucking cares". That is consistent with the behavior of a psychopath IMO.
The existence of an investigation was irrelevant to Trump as was his lie that there was an ongoing one. The Donald was simply promoting himself to republicans who readily accept fact free conspiracy theories and using a gullible news media to so ingratiate himself with free publicity.
In Chapter 2, Cohen claims that Donald essentially called his son Don Jr. an idiot in front of Cohen and others for getting Donald into the mortgage brokerage business, just another of Donald's many failures. Remember Trump Mortgage? Inside the GOP frontrunner's failed mortgage venture - HousingWire; The lesson of Donald Trump's failed, sketchy mortgage business
In another chapter, Cohen quotes Donald saying in front of a room of people that Don Jr. "has the worst fucking judgment of anyone I have ever met".
When Donald received a $10M refund check from the IRS, Cohen quotes the Duck saying "Can you believe how fucking stupid the IRS is. Who would give me a refund of ten fucking million dollars? They are so stupid".
Cohen also discusses Trump's purchase of a $41.35M home in Palm Beach. Florida, hoping to flip it, but no one wanted it until a Russian oligarch, Dmitry Rybolovlev, came along and bought it for $95M on 7/15/2008 during the financial crisis when Donald may have needed a cash infusion. Trump's sale of $100 million mansion in Palm Beach to Russian is a wild, weird tale | Miami Herald Donald claims that he netted $100M at closing.
Russian Oligarchs, Putin and Trump:
Anne Applebaum mentions that transaction in her book review of ‘Putin’s People’ by Catherine Belton.
In the last chapter of this book, Belton discusses Russia's efforts to help Donald over a 30 year period "bailing him out, buying apartments in his buildings for cash, offering him 'deals,' always operating in 'the half-light between the Russian security services and the mob, with both sides using the other to their own benefit.'"
Applebaum notes that Trump was not unique in receiving Russia's help.
Trump was just "another amoral Western businessman, one of many whom the ex-KGB elite have promoted and sponsored around the world, with the hope that they might eventually be of some political or commercial use."
Putin hit the jackpot with Donald's election in 2016, according to Applebaum, by helping to elect an American President "who would not only sow chaos, but systematically undermine America’s alliances, erode American influence, and even, in the spring of 2020, render the American federal government dysfunctional, damaging the reputation of both the U.S. and democracy more broadly."
Russia is of course a Kleptocracy with a lot of money controlled by Putin, directly or indirectly. Putin’s Kleptocracy: Who Owns Russia? | Wilson Center
FBI Director Wray warns Russians actively influencing 2020 election The Russians are spreading misinformation about Joe Biden, just like Trump and the RNC. In response to Wray's testimony, Donald has already threatened to fire him. Trump suggests he'd consider removing Christopher Wray, FBI director, over testimony - The Washington Post Truth that Donald does not like can not be allowed to exist in Trump's America.
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Donald Trump trails Joe Biden by 4 points in Minnesota, poll finds That is within the margin of error. The same polling organization had Biden leading Trump by 17 points in mid-May. The decline in support for Biden is attributed to the racial unrest in Minnesota occurring after the death of George Floyd which Trump has turned into a campaign issue.
‘Science’ itself is on the ballot, so this 175-year-old institution makes its first ever endorsement for president - MarketWatch Scientific American did not endorse the science denier and heathen.
Trump Dismisses Climate Change as Wildfires Blaze Along West Coast Some republicans may start to consider the possibility of climate change when it is too late to avoid an extinction event.
Medicare administrator Verma said to have paid private consultants nearly $6 million in taxpayer money for personal image-building campaign - MarketWatch Donald will start draining the D.C. swamp at some unknown future time. To do so effectively, he will need to resign since he is the Swamp Creature in Chief. Tracking President Trump's Unprecedented Conflicts of Interest - CREW The Trumpsters nonetheless continue to cheer when Donald says he is going to drain the swamp.
Top federal prosecutor quits Barr-ordered Durham probe into origins of Russia-Trump investigation - MarketWatch She was concerned that political pressure was influencing the outcome. Donald dictates the results that he wants and then finds someone willing to sacrifice whatever principles that may have left to produce the desired result.
Trump's Baseless Claim of Russian Support for Biden- FactCheck.org Donald of course lies all of the time about everything.
PolitiFact | Donald Trump’s ridiculous claim about Joe Biden and coverage for pre-existing conditions (rated Pants-on-Fire)
South Dakota AG Jason Ravnsborg (R) fatally struck man with car, initially told authorities he hit a deer He called authorities on Saturday night saying he had hit a deer. He had hit and killed a man whose body was found on Sunday.
We will know soon how many Americans will vote to give a lying, demagogic psychopath with strong authoritarian tendencies another 4 years as President. We will then be better able to assess the very real dangers to our freedoms and democracy that come from within.
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Covid 19 Updates:
In TrumpWorld, the pandemic remains well under control and will soon disappear with the onset of summer. The only reason why there are more infections is that people are being tested according to our Dear Leader.
 |
| As of 9/18/20 |
Trump disputes CDC head's vaccine timeline and mask claims (Trump: "there are a lot of people that think that masks are not good." He was asked to identify those people. Trump responded "waiters".)
The Extremely Stable Genius blamed Joe Biden for the lack of a national mask mandate: Trump chides Biden – who doesn't hold office – for not mandating masks : USA Today
Trump Supporters Explain Why They Aren't Wearing Masks | NowThis - YouTube; Acosta asks Trump supporters why they aren't wearing masks - YouTube It is important to listen to Trump supporters. They really could care less that they could infect others. And, they do not believe that the pandemic is real or serious and view wearing a mask to be too much of a burden on their freedom to infect and kill others.
CDC didn't write or approve changes to coronavirus testing guidelines: report-MarketWatch; CDC Virus Testing Guidance Was Posted Against Scientists’ Objections-The New York Times The CDC published a recommendation that an asymptomatic person who comes in contact with an infected person or persons does not need to be tested, even though the person could have been infected by that contact and was capable of transmitting Covid-19 to others.
The recommendation was written by Trump officials, possibly relying in part IMO on Scott Atlas, not by CDC scientists who objected to the recommendation. Stanford doctors denounce Trump appointee Dr. Scott Atlas Atlas is going to take a page out of Donald's playbook when dealing with criticism that is justified IMO based on the opinions and recommendations previously made by him. Scott Atlas lawyer threatens defamation suit over critical Stanford open letter - POLITICO; Michael Fischbach on Twitter (posts a letter from attorney Marc Kasowitz. one of Donald's outside attorneys, threatening legal action against the Stanford doctors for criticizing his client; hopefully the doctors will file a malicious prosecution suit against Kasowitz and Atlas when they emerge victorious from any such defamation suit. Trump’s lawyer in Russia probe has clients with Kremlin ties - The Washington Post)
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I am listening to the audio recording of Woodward's new book "Rage", available to me as a Scribd subscriber. The introduction was just frightening.
Donald was told on January 28, 2020 exactly what was about to happen in the U.S.
Trump's national security advisor, Robert C. O'Brien, told him that the coronavirus was then the most serious national security threat that he had faced so far. Donald was told that coronavirus spread easily through air and that asymptomatic people were capable of infecting others.
Donald's deputy national security advisor, Matthew Pottinger, told him that the coronavirus could have similar mortality rates as the 1918 Spanish flu based on conversations that Pottinger, who speaks fluent Manchurian, had with knowledgeable Chinese sources. What Woodward recordings reveal about Trump’s pandemic response | PBS NewsHour
Trump again downplays coronavirus with indoor campaign rally (9/14/20) The Trumpsters did not bother to socially distance and most did not bother to wear a mask which goes without saying.
Trumpsters are like James Bond-they have a license to kill.
I frequently watch or read interviews with Trumpsters who refuse to wear masks in congregate gatherings.
The reporter asks why are you refusing to wear a mask. Many become angry and animated at such an impertinent question from a Fake News reporter.
The most common reply is that there is no pandemic, its a hoax cooked up by Donald's opponents to hurt him politically.
One Trumpster, among the more intelligent ones, said he could not hear when wearing a mask covering his nose and mouth.
Another frequent response is to create a false choice, with the Trumpster saying that they are not going to stay locked up in their homes, as if the choice is between not wearing a mask in public or staying at home.
Then I hear Trumpster comments like "only child molesters wear masks". Viral Utah Anti-Mask-Rally Clip Feels Like a Parody
Global cases edge toward 30 million; Trump denies playing down crisis, says U.S. will have ‘herd mentality’ - MarketWatch; Trump fumbles during tough encounter with undecided voters in Philadelphia Maybe he was thinking about his cult members when using that phrase.
Trump and His Appointees Call the Shots at the CDC:
Trump officials interfered with CDC reports on Covid-19- POLITICO ("In some cases, emails from communications aides to CDC Director Robert Redfield and other senior officials openly complained that the agency’s reports would undermine President Donald Trump's optimistic messages about the outbreak"); Health experts criticize Trump over reports of CDC interference; Trump officials seek greater control over CDC reports on coronavirus-The Washington Post ("Political appointees at the Department of Health and Human Services have sought to change, delay and prevent the release of reports about the coronavirus by the Centers for Disease Control and Prevention because they were viewed as undermining President Trump’s message that the pandemic is under control.")
Trump political appointees are calling the shots including Michael Cuputo whose qualifications for office are discussed below. Political Appointees Meddled in C.D.C.’s ‘Holiest of the Holy’ Health Reports - The New York Times
Emails Detail Effort to Silence C.D.C. and Question Its Science - The New York Times republished at MSN: Emails Detail Effort to Silence C.D.C. and Question Its Science
Trump Health Aide Michael Caputo Falsely Alleges Conspiracies and Warns of Armed Revolt - The New York Times, republished by MSN at Trump Health Aide Alleges Broad Conspiracies and Warns of Armed Revolt (Caputo "accused career government scientists on Sunday of “sedition” in their handling of the pandemic and warned that left-wing hit squads were preparing for armed insurrection after the election.")
The following are quotes from Caputo's latest Trump-like rant: “There are scientists who work for this government who do not want America to get well, not until after Joe Biden is president. If you carry guns, buy ammunition, ladies and gentlemen, because it’s going to be hard to get. You understand that they’re going to have to kill me, and unfortunately, I think that’s where this is going” Michael Caputo Is What a Second Trump Term Looks Like - The Atlantic
Trump coronavirus official Michael Caputo says the CDC is conspiring to murder him. Caputo is one of the "best" people selected for important posts in government. Michael Caputo, a long time pure Trumpster with no experience in healthcare, is an Assistant Secretary at Department of Health and Human Services.
Only Trump would appoint someone like Caputo to a high ranking position in government. Michael Caputo made racist comments about Chinese people in now-deleted tweets - CNN
In the event Biden wins in November, all political appointees need to be fired on inauguration day. That would include the CDC Director Robert Redfield and the FDA Commissioner Stephen Hahn.
Bill Gates questions whether FDA can be trusted on vaccine | TheHill; Bill Gates Is Rapidly Losing Trust in the FDA and CDC
The problem is that both the FDA and CDC have become infected with Trumpism, where Donald's political considerations trump good science.
Ex-Pence adviser Olivia Troye who worked on coronavirus task force denounces Trump in blistering ad - CBS News; AD: Top Pence staffer on Covid-19 speaks out against Trump, endorses Biden - YouTube; Olivia Troye’s charge that Trump fumbled the pandemic is strongly supported by available evidence - The Washington Post Ms Troye claimed that Trump said in a meeting that he no longer had to shake the hands of "disgusting" people. Pence called her a disgruntled former employee even though Ms. Troye praised the servile sycophant VP.
Any former staffer in the Trump administration who comes forward has burned their bridges forever within that party. Republicans will view that as a betrayal and will never forget her name. There is nothing for Ms. Troye to gain by telling the truth about Donald; and she has a great deal to lose including future job offers from republicans and now standard death threats and verbal abuse from the Trumpsters.
Deep skepticism for Trump's coronavirus response endures: POLL - ABC News It is too late for the President to improve his disapproval rating particularly when he flouts mask wearing and social distancing guidelines at his Mass Infection Events and continues to make false and misleading statements daily relating to the coronavirus.
I have noticed more people entering retail establishments without wearing a mask, even though the business has a sign that a mask is required for entry and service. The employees make no effort to enforce the mask wearing rule. The most flagrant examples that I have seen so far is at Kroger (about 20% maskless on my last visit)
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All trades are commission free unless otherwise noted.
1. Small Ball:
Last Discussion Item # 1.J. Pared DUK-Sold 2 at $91.81 and Bought 1 at $84.3; 1 at $82.78; 1 at $80.64; 1 at $79.63; 1 at $78.6 (7/3/2020 Post) The last substantive discussion was in this post: Item # 1.H. Added 1 DUK at $65.7 (5/16/20 Post).
Dividend: Quarterly at $.945 ($3.78 annually)(good growth for a utility)
Last Ex Dividend: 8/13/20
Average Cost Per Share : $83.63 (26+ shares)
Last Earnings Report (6/30/20 Post): SEC Filed Press Release
"Adjusted earnings per share (EPS), which exclude the impact of the ACP impairment, were $1.08. These results compare to reported and adjusted EPS of $1.12 for the second quarter of 2019."
The cancellation of the Atlantic Coast Pipeline (ACP) resulted in a GAAP loss of $1.13 per share. I previously discussed that event.
Other Sell Discussions: Item # 2.G. Sold 1 DUK at $100.73 (3/21/20 Post); Item # 1.C. Sold 2 DUK at $97.05 (2/16/20 Post)
Largest Prior Round-Trip Since 2007:
 |
| 2011 DUK 187+ Shares +$638.28 |
Item # 3. Sold Duke Energy at $19.925 (9/29/11 Post)
For reasons that I do not recall, Duke Energy did a 1 for 3 stock split in 2012. Stock Split History - Duke Energy The adjusted price for that 2011 sell would be $59.775.
Trading Strategy: I am treating the common shares as a bond substitute. When a common stock is so characterized, the main objective is to harvest the dividend. An acceptable total return is the dividend plus any profit on the shares. I will generally lighten up over $90 and start adding back when the price falls into the $78 to $82 range, or lower.
I discuss starting two other utility stocks in Items B. and C. below. Those common stock positions are also viewed as bond substitutes with the underlying assumption being that interest rates will remain abnormally low for an extended period. That assumption may prove to be erroneous but appears to be now a rational forecast based on currently available information. The reasonable forecast now is that the FED will continue its Jihad against savers for several years.
B. Started PEG-Bought 1 at $55.08; 1 at $54.5; 1 at $53.32; 1 at $53; 1 at $52; 1 at $51.16:
PEG is a large electric and gas utility holding company whose primary operating subsidiaries are Public Service Electric and Gas Co. (PSE&G), PSEG Power and PSEG Long Island. PEG is a component of the S & P 500.
Dividend: Quarterly at $.49 per share ($1.96 annually)
The quarterly penny rate has been rising two cents per year since 2014. Increases occur during the first quarter.
Last Ex Dividend: 9/8/20
Average Cost Per Share: $53.18
Yield at AC = 3.69%
5 Year Chart:
Last SU Bond Offering (8/2020):
PEG "reported Net Income for the second quarter of 2020 of $451 million, or $0.89 per share, compared to Net Income of $153 million, or $0.30 per share, in the second quarter of 2019. Non-GAAP Operating Earnings for the second quarter of 2020 were $404 million, or $0.79 per share, compared to non-GAAP Operating Earnings for the second quarter of 2019 of $294 million, or $0.58 per share. "
Reaffirmed Non-GAAP operating E.P.S. guidance of $3.3 to $3.5 for 2020.
Prior Trades: None. I have bought and sold PEG's senior unsecured and first mortgage debt. An example of a first mortgage bond is this 2.25% coupon bond maturing in 2026 (rated Aa3 by Moody's). Item # 2.A. Bought 1 Public Service E& G 2.25% First Mortgage bond Maturing in 2026 at a T.C. of 94.387 (5/28/17 Post) Recent trades have been near 108 producing a YTM of less than 1%.
Purchase Restriction: Each subsequent purchase, other than through dividend reinvestment, must lower my average cost per share.
Maximum Position: 50 shares
While I do not have access to the report, I noticed a news item that Morgan Stanley raised its PT to $68 from $67 yesterday and kept its overweight rating.
C. Started EVRG-Bought 2 at $53.15, 1 at $52.65; 2 at $52.49; 1 at $51.86; 1 at $51.8; 1 at $51.1; 1 at $50.65; 1 at $50.35:
Stock Information as of 9/18/20:
Investor Overview | Evergy, Inc.
EVRG is an electric utility holding company operating in Kansas and Missouri through several subsidiaries:
"the Evergy Companies have approximately 14,700 MWs of owned generating capacity and renewable purchased power agreements and engage in the generation, transmission, distribution and sale of electricity to approximately 1.6 million customers in the states of Kansas and Missouri."
Evergy was created with the merger of Westar and Great Plains Energy in June 2018. Merger of Great Plains Energy and Westar Energy Approved, Paving Way for Benefits to Customers, Communities and Shareholders
EVRG Analyst Estimates | MarketWatch
EVRG SEC Filings
EVRG is an electric utility holding company operating in Kansas and Missouri through several subsidiaries:
Evergy was created with the merger of Westar and Great Plains Energy in June 2018. Merger of Great Plains Energy and Westar Energy Approved, Paving Way for Benefits to Customers, Communities and Shareholders
EVRG Analyst Estimates | MarketWatch
EVRG SEC Filings
Dividend: Quarterly at $.505 (good growth for a utility)
Last Ex Dividend: 8/19/20
Average Cost Per Share: $51.94
Yield at AC: 3.89%
5 Year Chart:
"second quarter 2020 earnings of $133 million, or $0.59 per share, compared with earnings of $140 million, or $0.57 per share, for the second quarter of 2019. Evergy’s adjusted earnings (non-GAAP) and adjusted earnings per share (non-GAAP) were $154 million and $0.68, respectively, in the second quarter of 2020 compared with $140 million and $0.58, respectively, in the second quarter of 2019."
2020 Guidance:
10-Q for the Q/E 6/30/20
Broker Report:
S & P (8/6/20): 4 stars with a $66 twelve month PT.
Recent News: Evergy, Elliott Management develop new strategy, avert a sale - Kansas City Business Journal (8/5/2020)Investors reacted negatively to this development, having driven up the price of EVRG stock in anticipation that the company would be sold. The stock price closed at $62.08 on 8/3/20 and at $54.07 the next day in response to this announcement. EVRG Price History My first purchase was on 8/17.
Prior Trades: None
Prior Trades: None
D. Started CATY-Bought 1 at $25.48; 2 at $25.03; 2 at $23.8; 3 at $23.45; 2 at $23.1; 2 at $22.9; 2 at $22.7:
"Cathay General Bancorp is the holding company for Cathay Bank, a California state-chartered bank. . . . Cathay Bank currently operates 38 branches in California, 10 branches in New York State, four in Washington State, three in Illinois, two in Texas, one in Maryland, Massachusetts, Nevada, and New Jersey, one in Hong Kong, and a representative office in Taipei, Beijing, and Shanghai."
"The Bank’s head office is located in a 36,727 square foot building in the Chinatown area of Los Angeles. The Bank owns both the building and the land upon which the building is situated. The Bank maintains certain of its administrative offices at a seven-story 102,548 square foot office building located at 9650 Flair Drive, El Monte, California 91731. The Bank also owns this building and land in El Monte. The Bank owns its branch offices in Monterey Park, Alhambra, Westminster, San Gabriel, City of Industry, Cupertino, Artesia, New York City (2 locations), Flushing (3 locations), Chicago, and Rockville in the state of Maryland. In addition, the Bank has certain operating and administrative departments located at 4128 Temple City Boulevard, Rosemead, California, where it owns the building and land with approximately 27,600 square feet of space. The other branch and representative offices and other properties are leased .. As of December 31, 2018, the Bank’s investment in premises and equipment totaled $103.2 million, net of accumulated depreciation." 2019 Annual Report at page 40
Investment Category: Regional Bank Basket Strategy
Dividend: Quarterly at $.31 per share ($1.24 annually)
Last Ex Dividend: 8/31/20
Average Cost Per Share: $23.76 ( 16 shares)
Dividend Yield at average cost: 5.22%
5 Year Financials: Good+
Sourced: CATY 2019 Annual Report at page 51
Stock Information as of 9/18/20:
5 Year Chart:
Last Earnings Report (Q/E 6/30/20): SEC Filed Press Release
The efficiency ratio is excellent:
NPL Ratio: .4%
Coverage Ratio: 219%
"The $169.7 million allowance for loan losses at June 30, 2020, increased $46.5 million, or 37.7%, from $123.2 million at December 31, 2019. This increase includes additional provisions for credit losses and reflects the deterioration in economic conditions related to COVID-19 and an increase in specific reserves of $4.3 million. "
Capital Ratios: Good IMO as of 6/30/20
Investment Securities Available for Sale:
Prior Trades: None
E. Restarted SBSI-Bought 1 at $28.51; 1 at $27.71; 1 at $27.34; 2 at $27.1; 1 at $26.62; 1 at $26.22; 3 at $26.1; 2 at $25.7; 1 at $25.35 :
"Southside Bancshares, Inc. is a bank holding company with approximately $7.33 billion in assets as of June 30, 2020, that owns 100% of Southside Bank. Southside Bank currently has 59 branches in Texas."
Stock Information as of 9/18/20:
Southside Bank - Corporate Profile
Investment Category: Regional Bank Basket Strategy
Dividend: Quarterly at $.31 per share ($1.24 annually)
Investment Category: Regional Bank Basket Strategy
Dividend: Quarterly at $.31 per share ($1.24 annually)
Southside Bank - Dividends
Last Ex Dividend: 8/19/20
Last Ex Dividend: 8/19/20
Average Cost Per Share: $26.59 (13 shares)
Dividend Yield at Average Cost: 4.66%
Dividend Yield at Average Cost: 4.66%
5 Year Financials:
5 Year Chart:
"for the quarter ended June 30, 2020. Southside reported net income of $21.6 million for the three months ended June 30, 2020, an increase of $2.9 million, or 15.8%, compared to $18.6 million for the same period in 2019. Earnings per diluted common share increased $0.10, or 18.2%, to $0.65 for the three months ended June 30, 2020, from $0.55 for the same period in 2019. The annualized return on average shareholders’ equity for the three months ended June 30, 2020 was 10.82%, compared to 9.68% for the same period in 2019. The annualized return on average assets was 1.17% for the three months ended June 30, 2020, compared to 1.20% for the same period in 2019."
NIM: 3.02%, down from 3.17% in the 2019 second quarter
Efficiency Ratio: 48.29% (good)
The capital, coverage, NPL and charge-off ratios are reassuring as of 6/30/20:
Previous Sell Discussions: Item # 3 Sold 107+ SBSI at $20.5 (7/18/11 Post); Item # 2 Sold 100 SBSI at $21.53 (6/28/12 Post); Item # 2.B. Sold 50 SBSI at $21.27 (4/29/13 Post)
SBSI Trading Profits to Date: $345.21
Purchase Restriction: Each purchase must be at the lowest price in the chain.
Maximum Position: 100 shares
F. Restarted LARK-Bought 5 at $21; 5 at $20.5:
Landmark has "30 offices in 24 communities across Kansas: Manhattan (2), Auburn, Dodge City (2), Fort Scott (2), Garden City, Great Bend (2), Hoisington, Iola, Junction City, Kincaid, LaCrosse, Lawrence (2), Lenexa, Louisburg, Mound City, Osage City, Osawatomie, Overland Park, Paola, Pittsburg, Prairie Village, Topeka (2), Wamego and Wellsville, Kansas. The Company owns its main office in Manhattan, Kansas and 26 branch offices and leases three branch offices. The Company leases the branch offices in Topeka, Wamego and Prairie Village, Kansas."
LARK SEC Filings
Investment Category: Regional Bank Basket Strategy
LARK SEC Filings
Investment Category: Regional Bank Basket Strategy
Dividend: Quarterly at $.20 per share
Last Ex Dividend: 8/11/20
Average Cost Per Share: $20.75
Dividend Yield at Average Cost = 3.86%
Stock Information as of 9/18/20:
5 Year Financials:
Sourced: 2019 Annual Report at page 39
Last Earnings Report (6/30/20): SEC Filed Press Release
The Y-O-Y increase in net earnings was fueled by "an increase of $3.1 million in gains on sales of loans as the decline in mortgage interest rates has fueled a robust housing market and refinance activity."
E.P.S. $1.13, up from $.56 in the 2019 second quarter
E.P.S. $1.13, up from $.56 in the 2019 second quarter
NIM: 3.72%
NPL Ratio: 1.18%
NPA Ratio: .76%
Coverage Ratio: 93.96%
ROA: 1.86%
ROE: 18.03%
Charge Offs: $132,000
PPP Loans as of 6/30: $130.1M
Covid Related Loan Modifications:
Prior Sell Discussions: Item # 3 Sold 52 LARK at $18.75 (1/9/12 Post); Item # 4 Sold 50 LARK at $23.5 (6/29/14 Post); Item # 3.B. Sold 50 LARK at $22.42 (9/29/14 Post); Item # 2 Eliminated LARK: Sold 50 AT $25.27 and 50 at $25.4 -Update For Regional Bank Basket Strategy As Of 7/1/16 - South Gent | Seeking Alpha
LARK Trading Profits to Date: $506.32
G. Restarted NBTB-Bought 2 at $31; 1 at $30.5; 1 at $30.3; 1 at $29.91; 1 at $29.1; 1 at $28.83; 1 at $28.5:
Quote: NBT Bancorp Inc. (NBTB)
"NBT Bancorp Inc. is a financial holding company headquartered in Norwich, NY, with total assets of $10.8 billion at June 30, 2020. The Company primarily operates through NBT Bank, N.A., a full-service community bank, and through two financial services companies. NBT Bank, N.A. has 146 banking locations in New York, Pennsylvania, Vermont, Massachusetts, New Hampshire and Maine, and is currently entering Connecticut."
Stock Information 9/18/20:
Investor Overview | NBT Bancorp
Investment Category: Regional Bank Basket Strategy
Investment Category: Regional Bank Basket Strategy
Dividend: Quarterly at $.27 per share ($1.08 annually)
Last Ex Dividend: 8/31/20
Average Cost Per Share: $29.89 (8 Shares)
Dividend Yield at Average Cost: 3.61%
5 Year Chart:
5 Year Financials:
Sourced: 2019 Annual Report at page 28
Last Earnings Report (Q/E 6/30/20): SEC Filed Press Release
"Net income for the three months ended June 30, 2020 was $24.7 million, or $0.56 per diluted common share. Net income was up $14.3 million from the previous quarter primarily due to lower loan loss provision and lower noninterest expense and down $5.8 million from the second quarter of 2019 primarily due to higher provision for loan losses related to the deterioration of economic conditions caused by the COVID-19 pandemic. Excluding real estate repositioning charges of $0.7 million, net income and earnings per diluted share were $25.2 million and $0.57, respectively."
"PPP loans as of June 30, 2020 were $510 million (net of unamortized fees); originated $547 million with an average loan size of $185,000 and an average fee of 3.2%."
NIM: 3.38%
Loan to Deposit Ratio: 86.5%
NPA Ratio: .37%
Charge Off ratio: .28%
Coverage Ratio: 410.87%
Tangible Book Value Per Share: $19.46
Deposit Cost: .23%
Capital Ratios : Good as of 6/30/20
Prior Trade: 50 shares, realized gain of $148.07
I apparently did not discuss the sell, which occurred in July 2015. I did discuss the 50 share purchase. Item # 2 Bought: 50 NBTB at $22.76 (2/17/14 Post)
H. Started NBGNX-Bought $100 at $62.9; $50 at $61.21; $100 at $59.93 :
Quote Neuberger Berman Genesis Fund;Investor Overview
Neuberger Berman Genesis (NBGNX) Quote | Morningstar (currently rated 3 stars)
I am considering this mutual fund as my small cap growth position. I generally limit myself to small cap "value" individual stock purchases.
Small cap growth funds are going to be volatile.
I. Restarted FNLC-Bought 5 at $20.2:
"The First Bancorp, the parent company of First National Bank, is based in Damariscotta, Maine. Founded in 1864, First National Bank is a full-service community bank with $2.24 billion in assets. The Bank provides a complete array of commercial and retail banking services through sixteen locations in mid-coast and eastern Maine."
Investment Category: Regional Bank Basket Strategy
Investment Category: Regional Bank Basket Strategy
FNLC SEC Filings
Dividend: Quarterly at $.31 per share ($1.24 annually)
Last Ex Dividend: 7/6/20
Yield at $20.20 = 6.14%
Dividend: Quarterly at $.31 per share ($1.24 annually)
Last Ex Dividend: 7/6/20
Yield at $20.20 = 6.14%
5 Year Financials:
Sourced: 2019 Annual Report at page 21
Last Earnings Report (6/30/20): SEC Filed Press Release
"Unaudited net income was $6.6 million, up $174,000 or 2.7% from the $6.4 million reported for the three months ended June 30, 2019. Earnings per common share for the period on a fully diluted basis were up $0.01 to $0.60 per share, an increase of 1.7% from the prior year. The Company also reported results for the six months ended June 30, 2020. Net income was $13.1 million, up $513,000 or 4.1% from the first six months of 2019, with earnings per share on a fully diluted basis of $1.20, up $0.05 or 4.3% from the same period in 2019."
Tangible Book Value per share = $17.07
FNCL Realized Gains to Date: $1,143.16 (snapshots at Regional Bank Basket Strategy)
J. Started as a Placeholder VBR-Bought 1 at $115.5; 1 at $112.9 :
Quote: VBR | Vanguard Small-Cap Value ETF Overview
Sponsor's Webpage: VBR - Vanguard Small-Cap Value ETF
Expense Ratio: .07%
Vanguard Small-Cap Value ETF (VBR) Quote | Morningstar (rated 5 stars on day of purchase)
This ETF attempts to track this index: CRSP U.S. Small Cap Value Index | CRSP - The Center for Research in Security Prices
K. Restarted DISCA-Bought 1 at $22.8; 2 at $22.3, 2 at $21.62; 1 at $21.32:
Quote: Discovery Inc. Series A (DISCA)
J. Started as a Placeholder VBR-Bought 1 at $115.5; 1 at $112.9 :
Quote: VBR | Vanguard Small-Cap Value ETF Overview
Sponsor's Webpage: VBR - Vanguard Small-Cap Value ETF
Expense Ratio: .07%
Vanguard Small-Cap Value ETF (VBR) Quote | Morningstar (rated 5 stars on day of purchase)
This ETF attempts to track this index: CRSP U.S. Small Cap Value Index | CRSP - The Center for Research in Security Prices
K. Restarted DISCA-Bought 1 at $22.8; 2 at $22.3, 2 at $21.62; 1 at $21.32:
Quote: Discovery Inc. Series A (DISCA)
Average Cost Per Share: $21.99 (6 shares)
About Discovery:
Dividend: None
Last Earnings Report (6/30/20): SEC Filed Press Release
10-Q for the Q/E 6/30/20 (debt heavy see page 20)
Maximum Position: 50 shares
I will not invest much since the company is too debt heavy IMO; does not pay a dividend; and faces long term headwinds from cord cutting. Still, I view most of the major brands to be long term survivors, and a larger media company may at some point decide to acquire DISCA.
Purchase Restriction: Each subsequent purchase must reduce my average cost per share.
L. Restarted FNCL-Bought 5 at $35.28; 1 at $34.71:
L. Restarted FNCL-Bought 5 at $35.28; 1 at $34.71:
Quote: Fidelity MSCI Financials Index ETF Overview
Sponsor's Website: FNCL | ETF Snapshot - Fidelity
Expense Ratio: .08%
Sponsor's Website: FNCL | ETF Snapshot - Fidelity
Expense Ratio: .08%
Some Holdings as of 9/17/20:
Information as of 9/18/20:
Dividends: Quarterly
Prior Trades: Item # 4.F. Sold 50 FNCL at $34.47 (2/10/2017 Post)(profit Snapshot = $278.53); Item # 2 Sold 60 FNCL at $28.75 (1/6/2015 Post)(profit snapshot = $135.71)
M. Started HBNC in Vanguard Account-Bought 10 at $10.61; 5 at $10.2 :
Quote: Horizon Bancorp Inc. (HBNC)
Last Discussed: Stocks, Bonds & Politics: (9/12/20 Post)
I discussed what I am doing owning the same stock in several accounts, including this one, here.
N. Started HBNC in Schwab Account-Bought 10 at $10.58:
See Item M. above.
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.
"he could not hear when wearing a mask covering his nose and mouth. "
ReplyDeleteLol.
Talking about bond substitutes. I have a conundrum. I had F for it's div. It's suspended it. I'm underwater about 60%.
It was an early purchase in 2014, right before the correction. My purchase has never turned green since.
On retail real estate...after going through zoom holidays. And trying to buy yet some more stuff online instead of in store, and yet another around of zoom meetings... there's a real possibility that the result of the pandemic may be not just more use of online and technical in the future... but a reopening of the pleasure of going shopping physically. People are craving spaces to be in besides their homes, and walks. I want to wait until a hint of this idea shows up in retail reit prices. It could be a while off (since we don't even know what will happen with a 2nd wave yet.) I'm tucking away this idea in case this starts happening in the future.
Land: I will harvest losses on stocks.
DeleteEven now, when my stock allocation is at less than 10%, I will still own more than 100 individual stock positions. Some of those positions will not work out.
During the year, I will assess whether to sell some positions at a loss, thereby reducing my realized capital gain number.
Since I am an income oriented investor, a dividend elimination ("suspension") or cut will be one important factor that will lead me to harvest a loss.
So far this year, I harvested some losses in hotel REIT common and preferred stocks due to dividend "suspensions". I am holding onto to other positions hoping that the dividends will be restored late next year.
I will also sell a stock that has deferred its common or preferred dividend when I can do so profitably. I mentioned a preferred stock in a recent post, HTPRD, and I will discuss a common stock example in a subsequent post (ING).
The recent pare of Viacom (VIAC), which I discussed in my prior post, was at a net gain, but the initial purchases were sold at a loss. So that is one way that I deal with a position where there was a major slide after I started to buy shares.
The dividend cut or elimination is a sign of operational weakness that may be permanent or likely to last for months or years.
Since I always build up a pot of capital gains during a year, somewhere over $30K in 2020, that fact alone can cause me eliminate or pare a stock that no longer produces income in order to reduce my tax obligation.
I have no interest currently in pure retail REITs.
Those are good points about biting the bullet. I need to do some assessment. This div stop was proactive based on the virus. I suspect they'd wanted to cut for a while anyway and it won't go back to full div. That operational weakness is important. Also nice to take the tax writeoff. I can buy back later if it's a good investment. I'm not quite there because the loss is so big. 60%, $3500. I've been tempted to wait until after recovery. I think I need to spot things I want to buy instead, take the loss and hope for better returns in a downtrodden but stronger stock... Thanks!
DeleteI did not expect today's push downward.
I know dips should be bought. But I'm not doing anything today. It feels like a value trap to me. SPY is 1/2 between 50day and 200 day MA. If it gets close to 200 day, I'll buy that bounce. I doubt it will crash straight through, especially with two other supports from June at that price point.
Land: I have executed a small ball "wave buying" program about an hour ago in 3 accounts. I am talking about 1 or 2 shares in several dividend paying stocks; and, in some cases, more than 1 buy in the same stock as the price continued to trend down.
DeleteI had an exchange traded bond redeemed today by the issuer. I am trying hard to buy dividend stocks with the proceeds but doubt that I will come close.
Regional banks are being smashed.
SPDR S&P Regional Banking ETF
$35.38 -$1.86 -5.00%
Last Updated: Sep 21, 2020 at 3:12 p.m. EDT
https://www.marketwatch.com/investing/fund/kre
The only news is that several of the large banks may have some exposure to money laundering charges from U.S. regulators, which includes JPM and BK. The small banks, where I have the most exposure, are not moving money around for the North Koreans.
If there is a reason for today's selloff, I would choose 4.
(1) It looks to me like there is a better than 50/50 chance now that the Democrats win the trifecta. If that happens, top earners will face a huge increase in the long term capital gains rate. This will trigger stock selling by wealthy individuals.
(2) The CDC put out revised guidance over the weekend that the virus can travel for more than 6 feet and can linger in the air long enough to cause an infection. The new guidance was taken down quickly, even though there is scientific evidence supporting it. The CDC claims the posting was an error but the quick removal of the newly added recommendation smells like another hit job on the CDC scientists by Trump and his political appointees. The CDC has lost credibility when it needs it the most.
(3) infection rates are increasing rapidly in Europe as a significant number of people start to ignore mask wearing and social distancing, which has been the case in the U.S. since the start of the pandemic.
https://www.cnbc.com/2020/09/21/europe-coronavirus-latest-more-restrictions-likely-in-the-coming-days.html
(4) market dynamics, piling on with short selling and derivative trades, selling to harvest profits due to fear.
That's a helpful list of the whys. There's technicals too in #4, under 50 with no stops still the 200 D.
DeleteI doubt the DNC trifecta is influencing the market yet. It is after all, not taking place till Jan 21 at earliest! Light years away.
The buys in tech, mean the shine is not off this apple yet. Exuberance and ongoing insistence on betting on tech is still alive and well.
A healthy rotation to value would be a very positive sign on economic expectations.
(Tech itself doesn't mean neg or positive expectations, just a body in motion keeps doing that.)
The CDC guidance is puzzling. We all know it can travel in the air for more than 6 feet and linger. This looks like yet another game of the emperor has no clothes.
Doesn't sound like time to buy regional banks yet. I guess they pulled back over general worries. I can't imagine it was over foreign money laundering either. There was a Chinese restaurant buffet near by that was closed due to money laundering. It explained the good prices to get lots of business. But that was drugs, not foreign gov'ts and large money.
Land: I suspect that it is too early for regional bank stocks which explains why I investing so little and averaging down frequently, sometimes 2 or more times for a stock in 1 trading day as I did yesterday.
DeleteA suspicion is a long way from being certain, however. The dividend yields are high and the P/E ratios are low.
They will be beneficiaries of a strong V- shaped economic recovery.
And, if there is to be an effective vaccine by yearend, loan loss reserves probably peaked last quarter for most of them. Those reserves are treated as an expense and reduce income in the quarter taken.
Charge-offs will accelerate in the coming quarters as borrowers, currently in a loan modification, are not able to survive.
The open question is whether the existing loan loss reserve for each bank is more than adequate to cover those charge offs with some of loan loss reserves being reversed which creates income and money that can be lent out.
During the first 6 months of 2020, the 12 largest banks set aside $72B in loan loss reserves, more than double the amount for 2019.
As to money laundering, the report that caused the Stock Jocks to hyperventilate yesterday can be found here:
https://www.buzzfeednews.com/article/jasonleopold/fincen-files-financial-scandal-criminal-networks
This link appears to be an updated version of what I read earlier yesterday.
The report is based on an analysis of SARs reports filed by banks between 1999-2017. It is unclear how many of those transactions were of recent vintage.
The government agency that processes the SARs filings compiles a report, called the
“Kleptocracy Weekly” that summarizes the dealings of foreign leaders such as Russian President Vladimir Putin. Russia is a kleptocracy with nuclear weapons at the disposal of the Kleptocrats. Russia's GDP is less than Italy; and the nation would be largely ignored but for its military. Russia's economy has had enormous potential which will likely never be realized due to Kleptocracy and generally the way the Russians elect to govern themselves.
There hasn't really been news on the bankrupcies and businesses going out of business yet.
DeleteAll I've heard is Yelp's 55% of it's listings are drying up.
The earnings reports aren't talking about it being a problem for banks yet, in significant ways.
Many of the technology growth stocks finished up today, rallying into the close and bringing the Nasdaq and S & P 500 significantly off their worst levels.
ReplyDeleteI have small positions in these ETFs:
Global X Cloud Computing ETF (CLOU)
$23.06 +$0.47 (+2.08%)
https://finance.yahoo.com/quote/CLOU?p=CLOU
Technology Select Sector SPDR Fund (XLK)
$112.44 +$0.93 (+0.83%)
https://finance.yahoo.com/quote/XLK/?p=XLK
First Trust Dow Jones Internet Index Fund (FDN)
$181.52 +$1.61 (+0.89%)
https://finance.yahoo.com/quote/FDN/?p=FDN
The Russell 2000 was the worst performing major index.
Russell 2000 (^RUT)
1,485.25 -51.53 (-3.35%)
https://finance.yahoo.com/quote/%5ERUT?p=^RUT
The SPX recent intraday high was at 3,588.11 on 9/2/20, with today's close at 3,281.06 or 8.56% below the peak.
The VIX remains unstable:
CBOE Volatility Index (^VIX)
27.78 +1.95 (+7.55%)
https://finance.yahoo.com/quote/%5EVIX?p=^VIX
There was not much of a flight to safety with IEF rising only .18%:
iShares 7-10 Year Treasury Bond ETF (IEF)
$121.92 +$0.22 (+0.18%)
I was not that concerned about the revelations about money laundering. The report was based on documents the FEDs have had a long time called Suspicious Activity Reports dating back to 1999. The big banks have upgraded their money laundering detection systems since many of those SARs were filed and some of the activities may have continued notwithstanding the SARs at the request of law enforcement. If there is a problem, it appears to me to be more with the government than the banks.
I did buy 1 JPM at $94 today.
$95.31 -$3.04 -3.09%
DAY RANGE $93.82 - $96.05
That makes sense if the info is that old, so much has changed.
DeleteI mentioned in a prior comment that HTA was calling early its 3.75% SU bond maturing on 4/15/23. I own 2 bonds. The exercise of that optional redemption will require a make whole payment of $163.71 + the $2K in principal amount (8.19% premium payment to par value) + accrued and unpaid interest. My last purchase was 1 bond bought in January 2019 at a total cost of 98.681. The redemption price is 108.19. The total principal payment will be $2,163.71 for 2 bonds.
ReplyDeleteThe make whole payment provision shifts part of the interest rate risk to the bond issuer. Exchange traded bonds do not have this provision. I had an issuer today redeem THGA, a 6.375% junior bond issued by Hanover Insurance at its $25 par value + accrued and unpaid interest. There was no make whole provision which would have made a Hanover redemption prohibitively expensive since the bond would have matured in 2053 and a make whole would be discounting almost 33 years of interest payments using a very low treasury rate. You can see what happened when discounting the HTA interest payments using a low treasury rate for about 2 1/2 years.
The protection for the bond owner applies only to the interest rate risk tied to declining interest rates.
The bond owner still faces the interest rate risk flowing from rising interest rates.
Did you have any observations about the rally today and what was being bought?
ReplyDeleteI don't chase well into rallies. I hereby declare my intent to waffle and try to chase here tomorrow.
Land: My feel is that stock market is a dominant downtrend. Value stocks have difficulty mounting a rally lasting a few days. When in doubt about what lies ahead, the Stock Jocks return to the growth stocks that benefit from stay-at-home trends (e.g. internet shopping, home entertainment, less dining out and more food at home, cloud computing)
DeleteThe Stock Jocks may be developing more anxiety about several issues, including the election and a potentially messy aftermath, a second wave in the pandemic made worse by the flu season, and a longer than previously expected vaccine rollout that may not end up being the final solution.
I was not impressed by the rally today.
I can continue to implement my small ball "buying programs"at my current pace for the next 100+ years.
I received a notice today of yet another early bond redemption that will be subject to a make whole.
I threw caution to the wind today and bought 1 share of a cloud company based in China, near the low price for today, which declined based on a share offerings from the company and insiders. This is about as crazy as I can get.
Kingsoft Cloud Holdings Ltd. ADR
$32.29 -$4.61 -12.49%
https://www.marketwatch.com/investing/stock/kc
2nd quarter report:
https://www.globenewswire.com/news-release/2020/08/18/2079765/0/en/Kingsoft-Cloud-Announces-Unaudited-Second-Quarter-2020-Financial-Results.html
Lol, you really did throw caution to the wind. Next you'll walk in the rain, with an umbrella.
DeleteSo, interesting, today wasn't some obvious rotation. Just more of the same rally kicking away as best it can from it's new deflated position.
The election is finally beginning to get real.
It's going to be a long 40+ days. That's stock market aside.
LAND: I had a brain transplant before buying that share of a Chinese cloud company that turned me into a wild and crazy guy.
DeleteI had to do the brain transplant after I decided to replace my mailbox post rather than wait for the Mexicans. Perhaps tiring after digging the hole and pulling the damaged post out of its concrete formation, which deprived my brain of oxygen, killing most of my remaining brain cells (thus the need for a brain transplant), my foot turned the wrong way in the hole and the post and I went backward into the street. Fortunately my timing was good and no car rolled over my head. Since I have a good cushion on the rear end, roughly equal to two pillows, there was no permanent bodily injury.
I then confirmed the need for a brain transplant when I took my 2007 Saturn Aura to Walker Chevrolet in Franklin to fix a coolant leak. I like to keep my cars running for as long as possible. Without asking, as service departments are prone to do, the “mechanic” found many other problems that, together, would cost about 8 times the value of the vehicle to fix. The coolant repairs, the only one that I requested a quote on, would cost $1740 with tax. I knew that I needed a brain transplant when I authorized the repair. So after a full day, Walker Chevrolet in Franklin, TN. called me and informed me that the car was ready. I picked it up and drove about 300 yards before the check engine light and another light came on. The “mechanic” had broke my car and the dealer charged me $1740 for the result. I turned around and took it back. That was on Monday. I have heard from them since.
YTD, through yesterday, QQQ had a total return of +28.84% while the Vanguard Value ETF (VTV) had a total return of -11.49%. Who can blame the Stock Jocks for buying the growth names?
That is quite a few days. It appears that while the mailbox won in this tousle, no permanent damage was done. Short of buying one share of exciting tech stock. There's a bit of a scare that goes with landing in the road unexpectedly. But that wears off.
DeleteIt does seem like ""s are a proper addition for the "mechanic."
13 years is not that old for a car if it's not huge mileage. One of my cars got old enough to legally join the army. It would have been old enough to drink and drive in some states. I liked it. So I kept it.
Saturns can keep going for a long long time. I was on a Saturn forum for repairs and people told tales of 200-350k...
I hope the dealership figures things out and makes them right. That problem definitely authorizes you to a nice bowl of ice cream. At least once you get the car back and can go to the store again.
On personal notes (and ice cream), I have met my weight goal. That's the good news, 30+lbs gone. The bad, is that it seems like another 5 or 10 or 15 are needed. So probably around end of Nov I'll finally be done. At least with covid, I won't be tempted at *virtual* holiday parties to gain it back.
I have not played this crash well yet. I missed that QQQ return. (I think I bought a few shares when it was down is all.)
I would be much happier if I did. I'd like to know that whatever happens to SS, I'm quite independent of it.
I haven't chased today. SnP isn't at it's recent intraday low yet. IWM is right at it's 200 day.
DeleteDowntrend is a good point. A look at the chart confirms that look, rather than a simple pullback on an upward momentum.
I wouldn't be surprised to see a rally soon to about 1/2 or 2/3s back up before starting a new climb down. So much depends on how news is perceived and not the technicals.
Order in for 5 SPY at 322.75. $1600-ish. Afterhours included.
DeleteIt's probably too soon. Tomorrow or next day may have the dip that's the very near term bottom. But I should be following the philosophy of some buying on the way down.
Land: The S & P 500 pierced to the downside its 50 day SMA line on 9/18. That has probably triggered some selling this week.
DeleteToday I had about 70 buy orders filled, with each being a tiny order. In the Fidelity taxable account, I had fills on 30 orders with a total expenditure of only $1,100 or an average of just $37 per order or what I call shotgun wave buying.
I have picked up the $ expenditure pace some.
Even with that pickup, however, I am not yet redeploying the entire amount of recently received redemption proceeds from maturing fixed income securities or early redemptions by issuers.
About all I can say is that my recent buys are providing an abundance of average down possibilities; and the only conclusion that I can reach is that my dividend yield for each position is going up with each subsequent buy.
Land: The dealer claims that it fixed my Saturn and returned the car to me this afternoon. The mechanic purportedly broke a wire on the vehicles last operation and did not notice it when I tried to drive it last Monday, making it about 300 yards before 2 warning lights came on. So alls well that ends well. My other car is a 1987 Merceds 260, still in mint condition.
DeleteI have been reading stories recently about Biden supporters calling or emailing voters. When contacting a Trumpster, many have had their lives threatened. I read a story about that in a NYT article published earlier today regarding outreaches to white voters in Wisconsin.
My involvement in this election will be voting, even though I know it is a futile gesture in Tennessee, and more importantly in campaign contributions. I never made a campaign contribution before 2018, other than to my cousin who was running for a state representative seat. Trump's obvious pathologies (e.g. non-stop lying, malignant narcissism, and being an in your face psychopath, authoritarian/God complex), has cause me to do more than just vote. I have voted for republicans in the past, but will no longer do so.
Good about the car! Unexpecteds happen, as long as they made it right.
DeleteI forgot you've got another car that can act as backup, when it's not hanging around showing itself off as pristine.
I would be curious if GOP canvassers are getting as rude replies as some of the texts I got. Some said no politely. But the # of disgusting replies was noticeable. Several explained the "facts" that were pure projection. They're just culling the list for who to make sure has voted later on, so the reply is "thanks for letting me know. Have a good day!."
Contributions are a big deal. Even in Tennessee, it will help when it adds to the national vote for the argument of what the people's wishes are.
There has been a stampede to do texting canvassing. Sessions are getting so many volunteers, they're closing them. Phone banking and letter writing is still available. The letter writing to let people know they've been de-registered seems worth it.
ReplyDeleteI'm going back to phone banking. There's a tool thrutalk that auto dials and handles no-answers so you don't talk until a person's on the phone.
I wish there was more I could do that feels like it makes a difference.
Bluerock Residential (BRG)is calling for redemption 25% of its 8.25% cumulative equity preferred stock.
ReplyDeletehttps://www.prnewswire.com/news-releases/bluerock-residential-growth-reit-announces-partial-redemption-of-8-250-series-a-cumulative-redeemable-preferred-stock-301134485.html
I noticed that Schwab had segregated 13 of my 50 shares to meet that call. BRG will pay the full preferred dividend for the current quarter (ex on 9/24/20) and a partial quarterly dividend on the redeemed shares.
This preferred stock closed at $25.44 yesterday. The redemption is at the $25 par value.
Bluerock Residential Growth REIT Inc. 8.25% Series A
https://www.marketwatch.com/investing/stock/brg.pra
I also own shares in my Fidelity and Vanguard accounts where the shares have not yet been segregated. If I sold the entire position in those accounts today, I would have to buy back the shares subject to the partial redemption. When there is a segregation of the shares subject to redemption, they can not be sold.
General Mills Inc.
ReplyDeletePREMARKET $59.00 +$0.99 +1.71%
https://www.marketwatch.com/investing/stock/gis
GIS reported better than expected earnings this morning and raised its quarterly dividend to $.51 per share from $.49:
https://www.businesswire.com/news/home/20200923005455/en/General-Mills-Reports-Strong-Fiscal-2021-First-Quarter-Results-and-Announces-Dividend-Increase
GIS had suspended its dividend increases after acquiring Blue Buffalo, a premium pet food company, as I previously discussed.
GIS is benefiting from the stay-at-home trend. Net sales were up 9% to $4.4B with organic net sales up 10%.
"Diluted earnings per share (EPS) totaled $1.03, up 21 percent from the prior year; adjusted diluted EPS of $1.00 increased 27 percent in constant currency."
I own a few shares.
With the strong sales, that's a surprise that they're halting div raises by announcement (and not just hoping they'd get to do a small one within a year.)
DeleteWonder what will win, the halt bringing price down, or the good earnings.
My sister's dogs like how many walks they are now getting. However they have no reached a point of turning them down. Even they seem a little stressed from how stressed everyone else is.
Land: GIS resumed its dividend increases with today's announcement. Dividend increases had previously been suspended to help pay for the Blue Buffalo acquisition which was completed in 2018:
Deletehttps://www.prnewswire.com/news-releases/general-mills-completes-acquisition-of-blue-buffalo-pet-products-300635629.html
I'd misunderstood. It seems like a forgivable reason to put them on freeze.
DeleteDonald made this statement today in response to
ReplyDeletea reporter's question whether he would agree to a peaceful transfer of power:
"Well, we’re going to have to see what happens You know that I’ve been complaining very strongly about the ballots and the ballots are a disaster. We’ll want to have — get rid of the ballots and you’ll have a very — we’ll have a very peaceful — there won’t be a transfer frankly, there’ll be a continuation."
https://www.nbcnews.com/politics/2020-election/trump-peaceful-transition-if-he-loses-get-rid-ballots-there-n1240896
see also:
https://www.nbcnews.com/tech/tech-news/americans-worry-about-mailed-ballots-most-states-now-offer-way-n1240838
So get rid of the ballots, and Donald and the GOP senators will remain in power.
When he refers to ballots, that is a lie intended to deceive the weak minded and uninformed.
A few states are mailing out ballot applications to registered voters. Five of those states have done that in the past, both red and blue states, with no major cases of fraud, and a few more will do that this year due to the pandemic with only Nevada being a swing state:
https://www.nbcnews.com/nightly-news/video/trump-pushes-for-supreme-court-replacement-calls-mail-in-voting-a-scam-by-democrats-92418117999
I will discuss these authoritarian trends in my next post including one legal tactic that republicans are considering, which involves a republican controlled state legislature taking away the selection of electors from the voters. The 5 to 4 decision in Bush v. Gore held in part that the state's had that power (only the republican justices so held)
I just saw that on Maddow. There's something wrong when our own legal system can make voting irrelevant. I hope the Dems aren't so dedicated to playing by the rules, that they can't find a way to stop this before it becomes a supreme court case. We can not afford more playing nice and footsie when serious actions are needed.
DeleteProblem is that there are dem voting states with repub legislatures. (There aren't any repub voting with dem legislatures.)
The market isn't worried about it at this time. But I am worried.
Chart of Rep controlled state leg.
Deletehttps://ballotpedia.org/Partisan_composition_of_state_houses
This is reassuring:
ReplyDelete"State legislatures do determine how each state chooses its electors, but they do so by enacting laws according to regular processes. This means the governor must sign them, or the Republican legislature must override the governor’s veto, usually by a supermajority. They do not have the necessary supermajority in the four states where Republican legislatures face Democratic governors (Michigan, North Carolina, Pennsylvania and Wisconsin)."
"If Trump lost any three of these four states, he would lose the election. This fact alone means that it may be unlikely the Electoral College scenario will come to pass... However, Trump could win most or all of these four states but lose one or more of the other six states listed above where the governors are Republican. Then Republican governors and secretaries of state might become vital players, as well as Republican-majority state legislatures."
https://blogs.lse.ac.uk/usappblog/2020/08/04/if-trump-lost-the-popular-vote-it-would-be-hard-for-him-to-rig-the-electoral-college-to-stay-in-office/
The article has one weakness. He thinks that if things are set up to depend on the GOP, the GOP won't go along with Trump. That's a puzzling view considering all that's happened for 4 1/2 years.
(I am still up.)
Land: The mechanics of how a republican state legislature would appoint its own slate of electors needs more research. The fact that the republican controlled legislatures in several battleground states have Democrat governors may not entirely resolve the issue. There still may be a path for the state legislature to appoint its own slate of electors, claiming fraud in the election, as an alternative to the electors selected by the popular vote. Another possible path could be for a republican controlled state Supreme Court (e.g. Wisconsin) rejecting the election result favoring Biden and sending both slates of electors to Congress to sort out whether the Biden or Trump electors can cast the vote for President.
DeleteSee: How the 1876 Election Tested the Constitution and Effectively Ended Reconstruction
https://www.history.com/news/reconstruction-1876-election-rutherford-hayes
And it does not resolve the potential issue in states where there is a republican governor and a republican controlled legislature (e.g. Florida, Iowa, Texas)
Once I started to make campaign contributions in 2018, I have acquired a lot of new friends who send me emails daily asking for money. Those emails generally run 60 to 100 per day and go into my junk mail folder. I do not view them before hitting delete all.
If I give a candidate money, that increases the number of emails from that candidate wanting more.
In 2018, I mostly donated to candidates running against republican incumbents, primarily in House races. I had seen enough of where Trump's party was going.
I was pretty good at selecting candidates since all but one unseated the republican incumbent.
Once elected, I no longer need to send money for a reelection effort since money flows to incumbents from a variety of sources who wish to have a seat at the influence table, regardless of party affiliation of the candidate.
In 2020, I am donating mostly to Senate candidates who are running against republican incumbents in Arizona, Colorado, Kansas, Kentucky, Iowa, Maine, North Carolina, South Carolina, and Texas where there are varying decrees of possible success. Tennessee is hopeless.
It is not that I like giving money to Democrats. I am mostly critical of both parties.
I have tilted to Democrat candidates since I view Trump's party as a serious danger to the rule of law, the conservative values expressed in the Constitution, and conservative values generally. And, since all incumbent republicans at the federal level are enabling and protecting a lying, authoritarian, psychopathic demagogue, with the exception of Romney's vote on impeachment, all most go where there is a possibility to send them into retirement.
The article went into many of those possibilities.
DeleteIt makes it even more important to flip the Senate, to get favorable outcomes if two sets of counts are sent in.
It creates risk for Arizona which is otherwise looking good. And for Florida, but I hadn't been counting on Fl.
I was taking solace that at least in a few places, if the Senate is flipped, the governor veto reduces ways this can be done.
I want to figure out what senate races to support with phone banking. I'd like to figure out the possible but not put energy into the already very probable.
On the presidential race I think that's Penn and Az. I haven't figured it out for the senate races yet.
I'm glad Biden is a moderate. So is Harris in many ways. I hope they bring the party back to that familiar middle that used to exist on both sides.
I have plenty of reservations about DNC party. It's the same thing - the opposing is so intent on re-creating the dark ages and a post-truth world, that I want something resembling reality again.
---
On justice, there's been interesting commentary that 30% (or 20%) of current GOPs want the fill to wait. Also that 50% of GOP support roe v wade. So that if Trump picks an ultra conservative, he may be going against part of his base.
I have no idea how realistic that possibility is. But it was nice to ponder.
Land: For some reason, republican politicians believe that confirming a reactionary judge before the election will energize their base. I have difficulty understanding that argument.
DeleteThere will be 6 republican Justices when that happens and all of them believe that Roe v. Wade and other hot button cases like the gay marriage decision were wrongly decided.
In short, the rational reaction is to conclude the republicans, recognizing more than democrats that elections matter, have gotten what they wanted and can now relax.
The more moderate Justices will be throwing spitballs for the next two decades or so.
I do view the republican Supreme Court Justices as more friendly to business. In the coming years, national legislation passed by Democrats will be found unconstitutional as the court further restricts the ability of Congress to legislate through more restrictive readings of the Commerce Clause, a trend that has already been set in motion.
The main difference between a "conservative" and "liberal" Justices are that the later will admit that they will occasionally create law while the later falsely deny they are doing the same.
There is no "right of privacy" constitutional right spelled out specifically in the Constitution, the underlying principle in Roe v. Wade, but only a restraint on unreasonable search and seizures contained in the 4th Amendment.
This article explains the rational underlying the Roe v. Wade decision.
http://law2.umkc.edu/faculty/projects/ftrials/conlaw/rightofprivacy.html
On the other hand, the "conservatives" will create rights that do not specifically exist when it suits them and will even posit the existence of facts that are not in the record to justify a decision.
For example, relating to the first point, only "persons" and "people" have constitutional rights. There is no reason to believe that a person means anything other than a human being.
Yet, the "conservative" Justices have interpreted person to include corporations.
This is done through the same 14th Amendment to the Constitution that forms the underlying rationale for Roe v. Wade.
And, as I will discuss in my next post, while it is clear that the 14th Amendment was passed to guarantee civil and constitutional rights to former slaves, the "conservative" Supreme Court Justices, starting soon after its passage, declared civil rights laws intended to protect those Americans unconstitutional while at the same time using that Amendment to grant constitutional rights to corporations.
I don't really know much about Roe v. Wade, so this is all informative.
DeleteI've looked at the data claims on abortion (from both sides). I've dug into what Judaism says on the topic. I've helped a friend through the situation. But Roe v Wade has been such assumed settled law for my life, that I haven't looked closely.
The contradictions in "interpretations" of law are coming through. Kind of nauseatingly so.
The item I've read on that's stuck with me the most was about an woman in Israel who decided to fight to end abortions by... promising anyone who was not going to have a child because it was too hard, that for 5 years her organization would provide money for food, housing and emotional & caretaking assistance as needed. Turned out once the women gave birth, no one needed help for more than 6 months or a year to become independent.
Land: Personally, I am opposed to abortions. But, as a constitutional law issue, that is irrelevant. There probably is more support for the right to privacy via the "liberty" reference in the 14th Amendment than there is calling a corporation a "person". Both sides play fast and loose with what the Constitution actually says on several contentious issues, with the right to privacy constitutional right and constitutional protections for corporations as persons just being two examples.
DeleteI view it as more likely that "conservative" justices will create a factual record that does not exist to support a conclusion.
One example is the Citizens United case "that reversed century-old campaign finance restrictions and enabled corporations and other outside groups to spend unlimited funds on elections."
https://www.brennancenter.org/our-work/research-reports/citizens-united-explained
Corporations have a right to free speech as "persons", but the decision went beyond that constitutional right creation. The "conservatives" had to dispose of the countervailing interest to prevent the corruptive influence of unlimited money on democracy and political corruption. The majority concluded, basically, that we all know that politicians do not exchange votes for money.
https://theintercept.com/2018/06/28/farewell-to-anthony-kennedy-author-of-some-of-the-most-ludicrous-words-in-supreme-court-history/
I believe the soul enters at an unspecific varied times during 2nd trimester. That influences my views.
Delete(This is not a Jewish-based view, which does not have dogma on when the soul enters. Sagas give suggestions from before conception, first kick, at birth, to when the 1st word is spoken. Only dogma is that abortion is serious and should only be done when the mother's health is at risk, including significant mental health issues.)
I would like to see legal safeguards that prevent using abortion as a form of birth control. Also see more focus on helping parents survive having a child early on, like that program.
Whatever the case on abortion, I do not conclude that a company is a person for the sake of rights.
Nor do I believe that politicians are immune to money influencing their votes.
I also don't think time travel is well enough developed to use it.
Apparently if this justice is installed, the ACH is at risk as well. While many people are covered by the ACH and covid can become a pre-existing condition.
I implemented earlier today small ball "wave buying programs" in 3 taxable accounts, focusing on "contrarian value" dividend stocks that were continuing their march toward zero. I quit about an hour+ ago when those stocks turned up.
ReplyDeleteEarlier today, the VIX went over 30. As previously discussed, I have been buying into volatility spikes. A more positive tone started to develop when the growth stocks turned up, taking the "value" stocks with them, though to a lesser decree.
I continued my wild and crazy ways by buying another share of KC earlier today, bringing me up to 2 shares in that Chinese cloud company. The share offering was priced at $31.
https://www.sec.gov/Archives/edgar/data/1795589/000119312520252798/d939814dex991.htm
New home sales looked good:
https://www.marketwatch.com/story/new-home-sales-surge-to-highest-level-since-before-the-great-recession-as-buyers-are-pushed-into-the-construction-market-2020-09-24?mod=mw_latestnews
I kept by $1600 buy. I would have been dizzy today trying to decide whether to sell.
DeleteI heard the mid-day climb was over hopes of a stimulus package. I had CNBC on for 5 mins around 5pm, and heard that comment. I found it hard to believe, that anyone would buy on that idea at this point.
The # of recent stocks making new lows well exceeded the 16 recent new highs. So apparently quite a bit is marching to zero.
Home sales are doing well. Maybe a bi-product of being stuck at home? One gets around to thinking about greener pastures...
KC is certainly an unusual investment for your portfolio.
Deletehttps://finviz.com/quote.ashx?t=kc
That one? No divs. Negative earnings. But 33% earnings increase YOY. No debt which is impressive in a storage company.
It's at the bottom or just below a persistent trading range. Market didn't like it much today.
Intriguing...
What makes this tempting over all the other tech possibilities?
Land: Since my diagnosis is that the stock market is in a dominant downtrend, as previously mentioned, I am not even reinvesting anywhere near the proceeds receive from matured or called fixed income securities. I am probably reinvesting cash received from dividends and interest payments + $1K to $2K per month.
DeleteI have expanded what I am willing to buy starting last March. The first foray was into ETFs like XLK, EBIZ, FDN, CLOU, SKYY, BOTZ, FINX, CIBR, XT, KOMP, MILN, and IRBO; CEFs AIO and STK; and mutual funds FTEXX,FGDFX, FBIOX, and FSPTX (all small ball). I have tossed those kind of investments already that were bought in Roth IRA accounts.
My two shares of KC fit into that approach. I am looking for bungie jumpers that are in sectors that are working. Cloud computing stocks have been working. KC was recently added to the ETF SKYY. Value sectors and stocks are not working.
I am also throwing tiny amounts of money at companies growing their revenues at a rapid pace which is the case for KC.
In some industries, a company has to spend a lot of money, incur boatloads of expenses, and report losses sometimes for years, to grow its business. That was the case, for example, with Amazon, and is the case for companies like SNOW and KC. I also suspect that a Chinese cloud services company will do better going forward in that country than a western domiciled one.
I would estimate that over 90% of my new dollar purchases are in my traditional bailiwick, dividend paying "value" stocks marching toward zero-to varying decrees. The regional bank stock purchases are marching at a faster past than some of the others. There is no shortage of those stocks now. I am after all a "dumpster diver".
I've started a list of names to buy on opportunity. I need to do more. None very exciting at the moment.
DeleteThose are strong arguments for KC. I don't know a lot about the competition. SNOW is certainly popular. I'd agree that a Chinese or Asian cloud market is a place for opportunity.
The percentage of S & P 500 components trading below their 200 day SMA line is close to 50% and falling rapidly.
ReplyDeletehttp://www.indexindicators.com/charts/sp500-vs-sp500-stocks-above-200d-sma-params-3y-x-x-x/
In same sectors, like banks and energy, the stocks are trading well below their 200 SMA lines. Exxon, for example, has a 200 day point using a one year chart at $48.86 and closed yesterday at $34.42. JPM closed yesterday at $92.66 with its 200 day SMA point at $107.38 (down from $121.37 on 2/27/20)
All of this is very interesting, the 200 day line, and div and opportunity stocks. I read earlier and will again, but am not going to try to be coherent now. I did phone banking, wrote GOTV postcards, and swam for 1 1/2 hour of laps). So fuzzy is here.
Delete(Does a handwritten postcard work if I have to cross off a mis-spelling? The recipients will know it was certainly handwritten. Apparently postcards can add an entire 1% turnout studies have shown.)
I gathered that the change into rally today was China's fasttracking a vaccine.
The response was in my view tepid for that type of news. The exuberance as broken. A few months ago that'd be a 3-4% up day.
More positive jawboning may still come.
I was being conservative. Postcards added 2 1/2 or more in other experiments.
DeleteLand: I was able to do some buying today, primarily in the morning session.
DeleteI added 1 share of KC and have not found it necessary-yet-to hook myself up to an IV of chill juice.
To correct an earlier comment, I still own a few growth stock ETFs in Roth IRA accounts, but the total investment is down to less than $2000 after selling a bunch. Those ETFs which are still owned in Roth IRAs are TECB, AIQ, FIVG, KOMP, IRBO, MILN, FINX, and SKYY, plus the CEFs AIO and STK; and the mutual fund FTEKX. Given brain cell death causing multiple brain malfunctions during the day exacerbated the sheer number of holdings, I forget what I own. The largest Roth IRA account probably has over 100 holdings yet is sitting on 68.48% in cash, mostly built up through proceeds received for fixed coupon securities that landed in the MM account and never left, like a lot of young adults living with their parents.
https://www.pewresearch.org/fact-tank/2020/09/04/a-majority-of-young-adults-in-the-u-s-live-with-their-parents-for-the-first-time-since-the-great-depression/
Lol, well covid isn't providing a great jobs and moving out environment for young adults... or dollar bills.
DeleteCVX is also well below 200day. Energy in general is doing poorly. CVX is sometime stronger than Exxon, so I checked. Total and Shell are doing poorly too.
DeleteIs that link related to Stockcharts? It looks a lot the same.
I've never seen it before. Lots of useful info.
I won't be buying tomorrow. I won't buy on Yom Kippur. The pattern needs a gain tomorrow to hold. 33.17.47 on Feb 18. Closed Friday below that.
Futures are green but not enough to make that vaccine news the guaranteed theme of the day tomorrow.
Maybe the debates are on investors minds.
I have published a new post:
ReplyDeletehttps://tennesseeindependent.blogspot.com/2020/09/aiq-amcx-cxp-cznc-fbnc-fcpvx-mgc-ppt.html