Economy:
Despite supply issues and omicron, holiday sales rise 8.5%
Omicron's Spread Will Slam First-Quarter GDP | Barron's
U.S. CDC says people should 'avoid cruise travel, regardless of vaccination status' I would not have to be told twice to avoid cruise ships.
580,000 new Covid infections were reported yesterday in the U.S.. Covid in the U.S.: Latest Map and Case Count - The New York Times Over the past 14 days, hospitalizations have increased 19% over the past 14 days to 81,497. The 7 day average of new infections was reported at 344,543 which is a new high.
South Africa is claiming that new infections have peaked in that country without a major increase in deaths and hospitalizations. South Africa Says It Has Passed Its Fourth Wave of Cases and counts few added deaths-The New York Times; Omicron covid wave past peak in South Africa with relatively few deaths - The Washington Post One assumption is that the government actually has a reasonably accurate count of new infections and deaths.
The virus will continue to mutate and a question remains whether those infected with Omicron or one of the previous variants will have immunity from Covid symptoms, or close to it, from future variants that become dominant due to a combination of vaccines and/or previous infections.
++++
Markets and Market Commentary:
Shiller PE Ratio at 40.09, near its all time of 44.19 (12/1999), data from 1870 to date.
Berkshire Stock Is Cheap. It's One of Barron's Top Stock Picks, Too. | Barron's I own a few shares of the Baby B shares.
JetBlue Cancels Nearly 1,300 Flights to Manage Omicron Staff Shortage | Barron's
Capacity Utilization: Total Index-St. Louis Fed
All Sectors; Debt Securities and Loans; Liability, Level/Gross Domestic Product-St. Louis Fed
Nonfinancial Corporate Business; Debt Securities; Liability, Level-St. Louis Fed
Federal Debt Held by Federal Reserve Banks-St. Louis Fed
Households and Nonprofit Organizations; Consumer Credit; Liability, Level-St. Louis Fed
Household Debt Service Payments as a Percent of Disposable Personal Income-St. Louis Fed
Household Financial Obligations as a percent of Disposable Personal Income-St. Louis Fed
Personal Consumption Expenditures (PCE-St. Louis Fed
Velocity of M2 Money Stock St. Louis Fed
Personal Saving Rate-St. Louis Fed
4-Week Moving Average of Initial Claims- St. Louis Fed
Unemployment Rate-St. Louis Fed
Households; Owners' Equity in Real Estate, Level -St. Louis Fed
15-Year Fixed-Rate Mortgage Average in the United States-St. Louis Fed
S&P/Case-Shiller 20-City Composite Home Price Index-St. Louis Fed
Median Sales Price for New Houses Sold in the United States-St. Louis Fed
Share of Labor Compensation in GDP at Current National Prices for the United States -St. Louis Fed
Light Weight Vehicle Sales: Autos and Light Trucks- St. Louis Fed
Cass Freight Index: Shipments-St. Louis Fed
Leading Index for the United States-St. Louis Fed
University of Michigan: Consumer Sentiment-St. Louis Fed
E-Commerce Retail Sales-St. Louis Fed
Consumer Price Index for All Urban Consumers: All Items in the U.S. City Average-St. Louis Fed
Crude Oil Prices: West Texas Intermediate (WTI) - Cushing, Oklahoma-St. Louis Fed
++++
Jesse Watters's Incendiary Fauci Comments Follow a Fox News Pattern - The New York Times
Louie Gohmert (R-TX) Says 2nd Amendment Solutions Getting Closer Gohmert will be remembered primarily for his claims that wearing a mask will give you Covid. GOP Rep. Louie Gohmert Suggests Mask Wearing Gave Him Coronavirus
Marjorie Taylor Greene (R-GA), An Anti-vaxxer, Owns Stock in Pfizer
Pro-Trump lawyer says his plantations were go-to spots for election conspiracy theorists
Omicron helps fuel hospital staffing shortages - The Washington Post
Putin Warns Biden of ‘Complete Rupture’ of U.S.-Russia Relationship Over Ukraine - The New York Times If Russia invades Ukraine, and the U.S. imposes economic sanctions as a result, Putin says that response will completely rupture relations. So be it. Russia is moving decisively and inevitably toward a totalitarian state controlled by a Kleptocracy. Putin claims that the U.S. has provoked this crisis involving Russia's military aggression by supplying Ukraine with what he terms as offensive weapons, such as anti-tank missiles and small arms munitions that are grossly inadequate to protect that nation from a Russian invasion. Under centuries of extremely poor leadership, with Putin just being the latest incompetent autocrat, Russia's GDP is currently lower than that of Italy and South Korea. Countries by GDP: The Top 25 Economies in the World
+++
1. Small Ball:
For the most part, I have been selling low dividend yielding stocks and stock ETFs and reinvesting the proceeds into higher yielding dividend stocks.
There are exceptions to that trend.
For example, I have substantially reduced my small ball exposure to Office REITs that pay higher than average dividends due to the pandemic's recent resurgence. My concern is that the pandemic's long duration will cause many firms to abandon office space, permitting many or all employees to work at home, thereby creating an oversupply, significant vacancies, and rent concessions.
Another example involves purchasing low yielding stocks that are in what I view as a fair value range. CMCSA, discussed below, is one of those. I view CSX, another low yielder, to be overvalued so I sold my small ball position. (Item # G. Below)
While some money is being used to buy stock Lottos, the amounts are small, and I am trading many of them for small gains, as a form of entertainment for the Old Geezer. Some examples are discussed in this post.
While I certainly have an excess amount of cash earning .01%, and that pile is growing through bond redemptions, net equity sales, and cash flow from dividends and interest payments, I am reluctant to redirect the cash into risk assets.
I am more negative on bonds than stocks.
A. Eliminated PDM in Schwab Account -Sold 5 at $18.71 and 34+ at $18:
Schwab Account History:
Quote: Piedmont Office Realty Trust Inc. Cl A (PDM)
Buy discussions: Item # 3.K. Started PDM in Vanguard Taxable Account-Bought 10 at $11.45 (10/7/20 Post); Item # 1.H. Added to PDM in Schwab Taxable Account-Bought 5 at $13.6; 5 at $13.3; 5 at $12.5; 5 at $12.3; 5 at $11.69; 5 at $11.4 and 10 at $10.30(10/31/20 Post)
Piedmont Office Realty Trust, Inc- Investor Relations
Investment Category: Equity REIT Common and Preferred Stock Basket Strategy
Profit Snapshot: +$235.88
Dividend: Quarterly at $.21 per share, last raised from $.20 effective for the 2014 4th quarter payment.
Last Earnings Report (Q/E 9/30/21): Piedmont Office Realty (PDM) SEC Filed Earnings Press Release and Supplemental Filing
Core FFO per share = $.50;
2021 core FFO per share share guidance now at $$1.95- $1.98;
"Debt-to-Gross Assets ratio was 34.4% as of September 30, 2021";
revenues = $60.2M; A
AFFO, which deducts maintenance expenses and pretend revenues created by the straight line accounting convention reported at $41.213M or about $.33 per share;
Quarterly dividend at per share = $.21;
Leased at 85.6%; number of properties = 54;
"issued $300 million in aggregate principal amount of 2.75% Senior Notes due 2032 and used the proceeds to repay its Amended and Restated $300 million Unsecured 2011 Term Loan that was scheduled to mature in November of 2021.";
SU debt rated at BBB/Baa2;
No mortgage debt
B. Added to CMCSA-Bought 1 at $49.55; 1 at $48.92; 2 at $47.75:
Quote: Comcast Corp. Cl A
CMCSA Analyst Estimates | MarketWatch
Average Cost per share: $51.05 (9 shares)
Dividend: Quarterly at $.25 per share, last raised from $.23 effective for the 2021 second quarter payment.
Yield at AC = 1.96%
Last Discussed: Item # 2.J. Added to CMCSA-Bought 2 at $51.91 (12/3/21 Post) I discussed the last earnings report in that post and have nothing to add here. SEC Filed Earnings Press Release
C. Bought 10 EPRT at $27.95:
Quote: Essential Properties Realty Trust Inc. - Internally managed net lease REIT
This is a new names for me.
"Essential Properties Realty Trust, Inc. is an internally managed REIT that acquires, owns and manages primarily single- tenant properties that are net leased on a long-term basis to companies operating service-oriented or experience-based businesses. As of September 30, 2021, the Company’s portfolio consisted of 1,397 freestanding net lease properties with a weighted average lease term of 13.9 years and a weighted average rent coverage ratio of 3.5x. In addition, as of September 30, 2021, the Company’s portfolio was 99.9% leased to 297 tenants operating 423 different concepts in 17 industries across 45 states."
Yield at $27.95 = 3.58%
Last Ex Dividend: 12/30/21 (owned as of)
Last Earnings Report (Q/E 9/30/21): SEC Filed Press Release
AFFO per share = $.33, up from $.27 in the 2020 third quarter
GAAP Income to FFO to AFFO Calculations:
SEC Filed Investor Presentation for 2021 Third Quarter
AFFO per share Guidance:
2021: "The Company reiterates its previously issued expectation that 2021 AFFO per share on a fully diluted basis will be within a range of $1.30 to $1.32."
2022: "The Company currently expects 2022 AFFO per share on a fully diluted basis to be within a range of $1.46 to $1.50."
The P/AFFO using the AFFO midpoint guidance for 2022 and a $27.95 price is 18.88.
Purchase Restriction: Each subsequent purchase must be at the lowest price in the chain.
D. Added to AQN-Bought 5 at $13.95; 5 at $13.67-Schwab Taxable:
Quotes:
CADS: Algonquin Power & Utilities (Canada: Toronto)
USDs: Algonquin Power & Utilities (U.S.: NYSE)
Website: Algonquin Power & Utilities Corp.
Average Cost per share this account: US$14.25 (30 shares)
Dividend: Quarterly at US$.1706 per share, last raised from $.1551
As previously discussed, AQN has a good dividend growth history for a utility. I am expecting that growth to slow down, or possibly stop, until the company digests its acquisition of Kentucky Power. Algonquin Power & Utilities Corp. Announces Agreement to Acquire Kentucky Power and Concurrent Bought Deal Financing (10/26/21) AQN will spend a lot of money transitioning from coal generation to clean energy.
Yield at AC: 4.79%
Last Ex Dividend: Yesterday, 12/30/21 (owned all as of)
Last Discussed: Item # 1 Bought 300 AQN:CA at C$18.18 and Item 2.G. Bought 10 AQN at US$14.69; 5 at US$14.45; 5 at US$14.06 (11/18/21 Post) I discussed the third quarter report and recent developments in that post.
Material News Since Last Discussion: Algonquin Power & Utilities Corp. to Provide Business Update at Investor Day (12/14/21)(guides to 2022 adjusted E.P.S. of $.72 to $.77 and then adjusted E.P.S. compound annual growth rate of 7% to 9% for the five year period starting in 2022 through 2026. RBC commented that the 2022 guidance was disappointing but maintained its outperform rating with a C$18 PT. I do not have access to that report, but am merely repeating here a news summary of it.
Broker Report (available to Schwab customers):
Credit Suisse (12/15/21) Neutral with a US$16 PT
AQN Exchange Traded Bond:
AQN has one $25 par value exchange traded, fixed-to-floating rate junior bond that is traded in the U.S. Algonquin Power & Utilities Corp. 6.875% Fixed-to-Floating Rate Subordinated Notes Series 2018-A due October 17, 2078 (AQNA); Prospectus. As with other fixed-to-floating rate securities sold in the U.S., AQN has the right to call at par value at anytime on or after the transition to a floating rate which will be on 10/17/23. The floating rate is based on a spread to the 3 month Libor rate which is being phased out due to its manipulation by large financial institutions and will be replaced by a more transparent rate (e.g. Secured Overnight Financing Rate; The Biggest Price-Fixing Scandal Ever - Rolling Stone) The spread starts at 3.677% with two spread bumps over time (page S-7 and S-8), provided the bond is not called prior to the 2078 maturity. As with many junior bonds, AQN may defer interest payments for up to 5 years subject to a Dividend Stopper clause on more junior securities (must eliminate a cash common share dividend before deferring payment). Deferred interest will accrue and be compounded until paid.
I do not own this exchange traded bond. I would consider purchasing it at below par value or at a premium smaller than the amount of accrued interest.
E. Eliminated BBCA-Sold 2 at $65.14:
Quote: BBCA | JPMorgan BetaBuilders Canada ETF Overview
Sponsor's Website: JPMorgan BetaBuilders Canada ETF
Expense Ratio: .19%
The iShares MSCI Canada ETF (EWC) has an expense ratio of .51%.The one year total return for EWC through 12/23 was 25.41% compared to 26.44% for BBCA.
Profit Snapshot: +35.92
Last Discussed: Item 2.F. Bought 5 BBCA at $23.6 (8/15/20 Post)
Subsequent to my purchase, there was a 1 for 2 reverse stock split. I received cash for the fractional share in April 2021.
Top 10 Holdings as of 12/23/21:
I own a number of higher yielding Canadian stocks. Of the this ETF's top 10 holdings, I currently own BMO, BNS, ENB, RY and TD. My largest dollar exposure is in ENB followed by TD. The BMO and RY positions are less than 5 shares.
Dividends: Quarterly at a variable rate.
Last 4 Dividends: $1.35, rounded down
Yield at $65.14 = 2.1%, rounded up
F. Eliminated EAF Again-Sold 10 at $11.51:
Quote: GrafTech International Ltd.
"GrafTech is a leading manufacturer of graphite electrodes, the critical consumable for the electric arc furnace industry. We are the only graphite electrode producer that is substantially vertically integrated into petroleum needle coke, a key raw material for graphite electrodes. This vertical integration allows GrafTech to enter into longer term agreements with its customers. These agreements have a duration of more than 12 months and include pre-determined ranges of volumes and prices. This provides greater earnings stability and visibility for GrafTech and a committed, secure source of supply for our customers." Page 25, 10-Q for the Q/E 9/30/21
EAF Analyst Estimates | MarketWatch
Profit Snapshot: +$9.65
Last Discussed: Item # 2.A. Restarted EAF- Bought 10 at $10.55 (9/10/21 Post)
Dividend: Quarterly at $.01, cut from $.085 effective for the 2020 second quarter payment.
Investment Category: Lottery Ticket Basket, recently downgraded to that category based on chart history, recent financial reports, cyclical business, and expiring fixed rate contracts with higher than spot prices.
Last Earnings Report (Q/E 9/30/21): SEC Filed Press Release
Net Income = $120M
E.P.S. = $.45
Reduced debt by $100M
Revenues up 33%
Repurchased 4.3M shares
Other Sell Discussions: Item # 1.R. Eliminated EAF-Sold 53+ at $12.37 (2/13/21 Post)(profit snapshot = $110.97); Item # 1.Q. Pared EAF-Sold 25 at $11.8 (1/16/21 Post)(profit snapshot = $1.99); Item # 3.I. Eliminated EAF in Fidelity taxable account-Sold 46+ at $9.94 (1/1/21 Post)(profit snapshot = $48.46); Item # 2.B. Sold 27 EAF at $11.2 (2/12/20 Post)(profit snapshot = $17.94); Item #3.C. Sold 25 at $14.48 (12/18/19 Post)(profit snapshot = $125.38); Item # 2.A. Sold 110 EAF at $13.48 (11/20/19 Post)(profit snapshot = $61.69)
EAF Trading Profits to Date: $380.07
G. Eliminated CSX-Sold 5 at $35.74:
Quote: CSX Corp.
Website: CSX rail, intermodal and rail-to-truck transload services - CSX.com
CSX Analyst Estimates | MarketWatch (As of 12/29/21, the consensus E.P.S. estimate for 2022 was at $1.79 and at $1.94 for 2023). Using the 2022 consensus and a $35.74 price, the forward P/E is 19.97. IMO, the stock is more appropriately priced at close to 15 times 12 month forward estimated E.P.S. which translates into a $26.85 price.
The trade group for railroads report weekly traffic numbers. News & Events - Association of American Railroads, e.g. Rail Traffic for the Week Ending December 18, 2021 - Association of American Railroads, see chart at AAR Weekly Rail Traffic
Last Buy Discussions: Item # 1.B. Added to CSX-Bought 2 at $30.5, 1 at $29.66 and Sold 1 at $33.09 (10/15/21 Post); Item # 4.D. Restarted CSX-Bought 2 at $31.74; 1 at $30.67 (7/31/21 Post)
Profit Snapshot: +$25.68 (12/3/21 sale only)
Dividends: Quarterly at a negligible rate of $.09 per share
Yield at $35.74 = 1%
Last Earnings Report (Q/E 9/30/21): SEC Filing
Net earnings: $968M
E.P.S. = $.43 up from $.32 in the 2020 third quarter
Revenues: $3.292B, up from $2.648B
Volume and Revenue Breakdown:
My largest gain trading CSX was a 100 share lot sold for a $390.78 profit. Item # 1 Sold 100 CSX at $30.4 (6/21/14 Post) There was subsequently a 3 for 1 stock split.
H. Eliminated QUAL in Fidelity Account-Sold 1 at $141.09:
Quote: QUAL | iShares Edge MSCI USA Quality Factor ETF Overview
Sponsor's website: iShares Edge MSCI USA Quality Factor ETF | QUAL
Expense ratio = .15%
Profit Snapshot = +$47.78
Last Discussed: Item # 1.C. Bought 1 QUAL at $93.3 (7/3/2020 Post)(" large- and mid-cap U.S. stocks exhibiting positive fundamentals (high return on equity, stable year-over-year earnings growth and low financial leverage")
Some Top Holdings as of 12/23/21:
The largest weighing is in Meta Platforms, formerly known as Facebook.
Of the stocks included in the preceding snapshot, I have small ball positions in AMGN, CSCO, LMT, MMM and QCOM. I also own Microsoft shares, but not in a brokerage account. I was given 1 share many years ago that is enclosed in a frame. With dividends reinvested through Computershare, the service used by MSFT for dividend reinvestments, and a 2 for 1 stock split occuring in 2003, I am up to almost 3 shares:
Dividends: Quarterly at a variable rate:
Last 4 Dividends: $1.744 per share
Yield at $141.09: 1.24% rounded up
I. Added 10 ORAN at $10.48:
Quotes:
USD: Orange ADR
Euros: Orange Stock Quote (France: Euronext Paris)
Euro to US Dollar Exchange Rate Chart | Xe
ADR Ratio: 1 to 1
Investment category: Bond Substitute
Website: Orange
ORAN SEC Filings - foreign company SEC Forms.
ORAN ADR Analyst Estimates (as of 12/29/21, the consensus E.P.S. estimate for 2022 is at $1.24 and at $1.33 for 2023)
ORAN.PA - Orange SA Profile | Reuters
ORAN.PA - Orange SA Key Metrics | Reuters (in Euros)
Last Discussed: Item # 2.D. Added to ORAN-Bought 10 at $11.11 (8/12/21) I discussed the last earnings report in that post.
Dividends: Semi-annually. ORAN paid $.9345 per share in 2021, subject to France's withholding tax.
Last Ex Dividend: 12/9/21 (owned all as of)
 |
| ADR Custodian Fee at $.03 per share/Owned 120 |
I computed the foreign tax as 12.8% of the total amount. The tax treaty allows for 15%, Article 10, France - Tax Treaty Documents, but I believe 12.8% is the tax rate on dividends. Claiming Foreign Taxes: Credit or Deduction? | Charles Schwab
Average cost per share = $11.50 (120 shares)
Yield at $11.5 = 8.13% (using 2021 actual dividend payment)
Last Financial Report (Q/E 9/30/21): SEC Filed Press Release and SEC Filed Presentation Earnings reports are provided semi-annually.
2021 Guidance:
Broker Reports (available to Schwab customers):
Morningstar (11/23/21): 5 stars with a FV of $15.5 per share
S & P (10/28/21): 5 stars with a 12 month PT of $14
J. Eliminated EBIX Again-Sold 2 at $33:
Last Discussed: Item # 2.L. Bought 2 EBIX at $27.3 (8/27/21 Post)
Dividend: Quarterly at $.075 per share
Yield at $33 = .9%
Last Earnings Report (Q/E 9/30/21): Ebix Announces Third Quarter Fiscal Year 2021 Financial Results
GAAP Net Income = $15.451M
GAAP E.P.S. = $.50
Non-GAAP E.P.S. = $.72
Consensus at per Fidelity
Revenue = $191.7M
On a constant currency basis, revenues increased 18.8% Y-O-Y.
Other Sell Discussions: Item # 2.N. Started EBIX-Bought 8 at an AC of $20.72 and Sold 3 at $28.05 (11/13/20 Post)(profit snapshot = $19.71); Item # 2.N. Sold 2 EBIX at $36.28 (6/25/21 Post)(profit snapshot = $18.86); Item # 1.D. Eliminated EBIX-Sold 4 at $30 (3/13/21 Post)(profit snapshot = $40.05); Item # 1.M. Sold 1 EBIX at $53 (1/20/21 Post)(profit snapshot = $31.51).
EBIX Realized Gains to Date: $121.53
There was about a 40% price decline on 2/22/21 due to a spat with the accountants who had resigned in a huff, as previously discussed in more detail.
Even though the company has hired new accountants who signed off on the financials, this episode does create IMO considerable uncertainty since there is no way for an investor to know which accounting firm was right.
I view this episode as a long term dark cloud with the cockroaches being invisible at the moment but possibly still present.
Another uncertainty is the outcome of the class action lawsuits filed against the company.
For EBIX, I will only play with the house's money, currently at $121.53, given this history.
Current Position: None.
K. Eliminated FCOM-Sold 3 at $51.55:
Quote: Fidelity MSCI Communication Services Index ETF Overview
Sponsor's Website: FCOM | ETF Snapshot - Fidelity
Holdings: Weighted at .5% or higher as of 12/23/21
Of the stocks referenced in the previous snapshot, I currently own CMCSA, T, VIAC, VZ. I own Walt Disney Co. (DIS) in the same way that I own MSFT, see Item # 1.H. above. A certificate for 1 share of DIS is in a frame and 2 shares were received in certificate form as a result of a 1998 3 for 1 stock split.
Expense Ratio: .08%
Profit Snapshot: $48.5
Last Buy Discussion: Item # 4.A. Bought 10 FCOM at $32.81 (4/20/19 Post)
Dividends: Irrelevant, paid quarterly at a variable rate.
L. Added to ARI- Bought 5 at $13.45:
Quote: Apollo Commercial Real Estate Finance Inc.
Average Cost per share = $14.22 (35 shares)
Dividend: Quarterly at $.35 per share ($1.4 annually)
Yield at AC: 9.85%, rounded up
Last Ex Dividend: 12/30/21 (owned all as of)
ARI has been declining since my first purchase due IMO to fears about omicron variant. ARI deals in commercial mortgages. ARI Profile | Reuters
I discussed this mortgage REIT in a recent post and have nothing further to add here. Item # 2.C. Bought 10 ARI at $15.04, 5 at $14.43, 5 at $14.15, 10 at $13.7 (12/10/21 Post I am just averaging down in either 5 or 10 share lots.
M. Bought 5 TRP at $45.61-Vanguard Taxable:
Quotes:
USD: TC Energy Corp.
CAD: TC Energy Corp. (Canada: Toronto)
Canadian Dollar to US Dollar Exchange Rates Chart | Xe
Investment Categories: Bond Substitute/Dividend Growth
Website: TC Energy — Home
Last Buy Discussions: Item # 3.B. Added to TRP-Bought 1 at $41.92; 1 at $39.59; 1 at $39- Fidelity Taxable Account (11/7/20 Post); Item # 1.G. Added to TRP-Bought 1 at $40.26; 1 at $38.49; 1 at $34.2; 1 at $33 (4/18/20 Post)
Dividends: Quarterly, paid in CADs, converted into USDs for owners of TRP, and subject to Canada's 15% withholding tax for U.S. citizens when owned in non-retirement accounts.
TC Energy — Dividend Information
I own TRP in my Roth IRA accounts where dividend payments are not currently subject to the Canadian tax as required by Canada's tax treaty with the U.S. I will not own foreign dividend paying stocks in my retirement account where the host country collects a tax, since there is no way to recover that amount through a foreign tax credit. Should You Keep Foreign Stocks Out of Your IRA? | Morningstar
Last Ex Dividend: 12/30/21 (owned as of). The dividend amount will fluctuate with the CAD/USD conversion rate.
Yield with Assumptions: The last dividend was C$.87 per share which resulted in a US$.6784 payment. Assuming 4 quarters paid at US$.6784 (US$2.7136 annually) and a U.S.$45.61 constant cost basis, the yield would be about 5.95%. Note that the assumptions include a constant exchange rate, which will not happen, and no dividend increases when TRP has historically raised its dividend each year.
Last Earnings Report (Q/E 9/30/21): SEC Filing
Reported E.P.S. = C$.80
Adjusted Earnings = C$.99 with the consensus at C$.99 per Fidelity
Adjustments:
Last Sell Discussion: Item # 2.E. Sold Fractional Share Bought with Dividends at $51.25 (5/28/21 Post)(profit snapshot = $6.17). I noted in that post the C$2.2B charge related to the cancellation of the Keystone pipeline project.
Current TRP Reset Equity Preferred Positions (prices as of 12/30/21 close):
Unrealized gain as of 12/30/21 = C$2,454.
Those preferred stocks were ex-dividend yesterday. The largest unrealized gain is C$1,660 in TC Energy Corp. Cumulative Preferred Series 9 Stock (CA: TRPPRE) that currently has a 3.762% coupon paid on a C$25 par value that resets in October 2024 at a 2.35% spread to the 5 year Canadian government bond yield. Last discussed at Item # 5.A. Bought 100 CA:TRPPRE at C$15 and 50 at C$11.12 (3/28/20 Post); Canada 5 Year Government Bond Overview | MarketWatch (closed yesterday at 1.29%)
N. Early Redemption of 4 Ares Capital SU Bonds:
Profit Snapshots: +$42
Ares had the right to redeem this bond one month early without making a make whole payment. I bought this 3.625% bond at below par value. Item # 2.B. - Bought 2 at a TC of 98.8 and 2 at a TC of 99.1 (6/13/20 Post)
If the ARES 4.2% SU bond maturing in 2024 trades below par value, I will consider buying it. That bond is now trading near 105 which produces a YTM near 2.2%. Bond Detail During March 2020, this bond traded as low as 82.26. I have already flipped that bond twice, holding for a few days and realizing a $195.25 gain.
O. Year End Dividend Distribution for VHCOX:
The total dividend was $562.88 which was $8.76 per share:
I took the dividend in cash. While that increases my excess cash conundrum, it is consistent with my dominant goal of capital preservation. Taking fund dividends in cash is in essence a form of liquidation without selling shares.
Quote: VHCOX | Vanguard Capital Opportunity Fund;Investor Overview
Fund Sponsor's Website: VHCOX-Vanguard Capital Opportunity Fund Investor Shares (closed to new investors)
Expense Ratio: .44%
Current Position Reflecting Ex Dividend:
 |
| As of 12/22/21 Close/Unrealized Gain = $2,846.04 |
Prior Sales: Item # 3.A. Pared VHCOX-Sold $500 at $71.62 and $500 at $73/02 (9/5/20 Post)(profit snapshot = $470.23); Item # 4 Sold 24+ VHCOX at $71.16 (1/21/18 Post)(profit snapshot = $562.11); Item # 6-Sold All VHCOX Shares Bought with Dividends (12/4/17 Post)(profit snapshot = $222.86): Item # 2.A. Sold 115+ VHCOX at $57.97 (3/1/2017 Post)(profit snapshot = $522.35)
Last Buy Discussion: Item # 5 Initiated Position in VHCOX (4/9/13 Post)
Some Top Holdings as of 9/30/21:
Recent performance has not been good, compared to its category, which has resulted in Morningstar downgrading the fund from 4 stars, the rating when I last discussed the fund, to the current 2 star rating. Vanguard Capital Opportunity Inv (VHCOX)-Morningstar
For example, the category returns in 2019 and 2020 were 31.9% and 35.86% respectively compared to VHCOX's total returns of 27.19 and 22.79%. I am certainly content with those returns. VHCOX outperformed Morningstar's category in 2012, 2013, 2014, 2016, and 2017.
Starting in 2016, I started to take the dividends in cash.
2021: $562.88
2020: $449.61
2019: $341.65
2018: $540.21
2017: $311.60
2016: $334.26
Total Cash Dividends: $2,540.21
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 sale 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 my family members.
