Economy:
U.S. home prices rise at fastest pace in more than 6 years The Case Shiller 20-City home price index rose 7.9% in October.
China set to surpass U.S. as world's biggest economy by 2028, says report
Can public transportation survive the pandemic? Experts warn of 'death spiral'
Half of U.S. states will raise their minimum wage in 2021
McConnell says bill to increase stimulus checks to $2,000 has 'no realistic path to quickly pass the Senate If McConnell allowed a vote, there would be 50+ votes in favor but not enough to overcome a filibuster which requires 60 votes. This opinion is based on my estimate that more than 40 republican senators would vote against it. What is the Senate filibuster, and what would it take to eliminate it?
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Markets and Market Commentary:
S & P P/E Ratios as of 12/31/20:
Trailing TTM GAAP : 40.4
Forward 12 Months Estimated NON-GAAP = 26.75
Dividend Yield: 1.6%
Sourced P/E & Yields
S&P 500 Dividend Yield-Chart starting in 1870
Shiller PE Ratio = 34.19
Shiller PE Ratio - 150 Year Chart | Longtermtrends
Market Cap to GDP Ratio - The Buffett Indicator - Updated Historical Chart | Longtermtrends
Stock-market pros are having a tough time imagining an S&P 500 slump in 2021 - MarketWatch Among brokerage firms, the highest S & P 500 2021 target is 4,400 and originates from J P Morgan.
U.S. airline 2020 losses expected to top $35 billion in dismal year
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PortfolioManagement-Energy Stocks:
Exxon (XOM) took another large writedown last week. Exxon signals up to $20 billion writedown to overwhelm 4th-qtr gains in oil, chemicals | Reuters; Exxon Set To Make Up To $20B Writedown In 4Q; Merrill Sees 78% Upside; Exxon points to another expected quarterly loss amid $20B writedowns (NYSE:XOM) | Seeking Alpha
XOM'S chemical operations are starting to shine and the oil and gas operations will be profitable in the 4th quarter.
2020 was an awful year for the energy sector with the ETF XLE producing a total return of -33.51% Energy Select Sector SPDR® ETF (XLE) Performance-| Morningstar
The Stock Jocks are predicting robust worldwide growth this year and in 2022 when pricing stocks in non-energy sectors. If that forecast proves prescient, then 2021 could be a banner recovery year for oil stocks, but investors may be slow to return to this sector after being burned so badly.
I have been attempting to work my way out of losing position in Royal Dutch Shell PLC ADR Class B which had a -40.77 total return last year and has a rough 10 years with an average annual total return of .25%. Royal Dutch Shell PLC ADR Class B (RDS.B) Trailing Returns-Morningstar
The losing position consists of 50 + shares held in my Schwab account, where I have been averaging down. {e.g. Item # 1.F. Added to RDS/B; Bought 1 at $34.08; 1 at $28.9; 1 at $27.61; 1 at $24,88; and 1 at $24.186, (5/23/20 Post)}
In my Vanguard and Fidelity accounts, I have trading shares, realizing gains and currently have a much lower cost basis. {e.g. Item # 1.G. Eliminated RDSB in Fidelity and Schwab Accounts-Sold 5 at $32.09 and 9 at $32.09)}
After eliminating the RDS/B positions in those accounts, I restarted back up and have started to sell those shares.
Currently I own 10+ shares in my Vanguard taxable account:
 |
| Average Cost Per Share $26.76 |
My maximum share limit is 100 shares aggregating the positions in all accounts including the Roth IRAs.
My RDS/B plan for 2020, and yes I have plans for just about everything, is to reinvest the dividends in all accounts and to average down in my Schwab account, possibly starting in January on price weakness.
I will also average down some in Fidelity MSCI Energy Index ETF (FENY) and the CEF Adams Natural Resources Fund Inc. (PEO)
Prior to the 2020 collapse, I was successful in trading U.S. energy stocks and funds. It remains to be seen whether I will be successful in digging myself out from the 2020 debacle.
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Portfolio Management:
Objectives in order of importance:
1. Capital Preservation
2. Income Generation through dividend and interest payments
3. Capital Appreciation
It is no longer possible to achieve the second and third objectives while completely preserving capital in credit risk free investments.
I am consequently assuming some risk, even though I believe that both the bond and stock markets are in bubbles rising on a flood of money created by central banks that has nowhere else to go and their suppression of interest rates below the actual and long term anticipated inflation rates.
I am attempting to mitigate risk through a variety of techniques.
The main shock absorber is my cash allocation that is on an extended vacation waiting for another meltdown. The Fidelity taxable account, for example, ended 2020 with the cash weighting at 44+%.
The small ball trading strategy is another way that I am managing risks.
Most of the stocks that I am paying have dividend yields at least twice as high as the S & P 500.
Taking distributions paid by mutual funds in cash is another risk mitigation strategy that I have been using. That is an alternative to selling shares.
At year end, my largest mutual fund position is the T. Rowe Price Capital Appreciation (PRWCX) fund, rated 5 stars by Morningstar.
That fund pays dividends annually.
Year End PRWCX Dividend payments = $2,845.58
After taking dividend payments in cash over the past 4 years or so, which I have used to partially fund expenses, I still have an unrealized gain of $13,539.27 as of 12/30/20:
Vanguard Capital Opportunity: $449.61
Covid:
The pandemic remains "under control" in TrumpWorld:
 |
| As of 1/1/21 |
A new forecasts projects more than 80,000 Americans could die in next 3 weeks
The more contagious mutant coronavirus was first detected in a young man who was working in Simla, Colorado, an isolated farming community with 600 residents. He was a member of the national guard, sent to help nursing home residents and arrived in the community on 12/23.
Florida Becomes 3rd U.S. State To Identify New Coronavirus Variant : Coronavirus Updates : NPR
The Mutated Coronavirus Is a Ticking Time Bomb - The Atlantic
60% of Ohio's nursing home workers have refused to take the vaccine. 60% of Ohio nursing home workers refuse vaccine - Ohio Capital Journal
Biden pledges new Covid-19 relief package and to invoke Defense Production Act - Vox
The CDC provides data on the vaccine does distributed and administered in the U.S. CDC COVID Data Tracker At the current vaccination rate, taking into account that those already inoculated with have to receive a second shot in a few weeks, it will take years to vaccinate the entire U.S. population twice. The vaccination rate needs to be 3M per day and the current rate is less than 3M per month.
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Demagogue Don:
Donald has won my awards for the foremost spreader of fact free conspiracy theories in world history and for the greatest number of false statements published worldwide. Nonetheless, Don the Con is viewed as honest by 79% of republicans, down from 81% in a prior poll that I have referenced here.
The biggest Pinocchios of 2020-The Washington Post Donald is the champion of course. WP: "We have struggled to keep up with his torrent of falsehoods during the final weeks of the campaign, when he barnstormed the country making 600 to 700 false or misleading claims a week. The next update will show he crossed the 25,000 mark by mid-October." (emphasis added) He will probably go over 30,000 when the final tally is made covering only his publicly disseminated statements while President.
The threat to U.S. democracy from Donald and his cult will not end when Biden is sworn in as President. Those of us who believe in American democracy, the free press, facts, science, rational discourse where conspiracy theories are mocked rather than accepted, and the Constitution will have a very long fight ahead of us with the ultimate outcome far from clear now. I would agree with the observations and recommendations made by David Frum in this article: Trump’s Pardons Prove That the Lies Will Not End - The Atlantic
Donald's use of the pardon power is what I would expect from a mob boss.
Trump's Pardon of Manafort Realizes the Founders' Fears - The Atlantic
Pennsylvania man Bruce Bartman is accused of casting Trump vote for his dead mother.-The New York Times Trump identified 7 persons who were allegedly deceased that cast votes including Mr. Bartman's mother. Three of the other 7 claims were just false. Local officials rebut 3 dead-voter claims by the Trump campaign. - The New York Times
Trump Flips Out on Supreme Court in Twitter Rant | Law & Crime Donald, the leading expert on the U.S. law, called the 6 republican Supreme Court Justices, including the 3 that he appointed, incompetent for refusing to overturn the election since he won in a landslide.
Biden accuses Trump's Pentagon and OMB of obstruction, demands cooperation (12/28/20)
Louie Gohmert (R-TX): How suing Mike Pence is the last gasp of the 'election fraud' crowd Republicans have sued V-P Pence requesting a declaratory judgments from a Trump appointed federal district court judge that he has the discretion to anoint Donald as the winner. Dumbest member of Congress": Louis Gohmert mocked for filing a lawsuit against Mike Pence | Salon.com Gohmert IMO is one of the most intelligent republican House members. Gohmert, who had refused to wear a mask while attending a committee hearing last June, was shortly thereafter diagnosed with Covid. He defended his refusal to wear a mask by arguing that, on a rare occasion where he wore the mask, he may have become infected. GOP Rep. Louie Gohmert Suggests Mask Wearing Gave Him Coronavirus
Dangerous Don called the republican leaders in Congress "pathetic". Trump lashes out at Republicans after they override his veto
Senator Josh Hawley (R-MO) to delay affirming Biden victory by forcing votes on Electoral College results It will be interesting to see how the Senate and House republicans vote on accepting the certified electoral college votes. Hawley is a 100% pure Trumpster who wants to run for President in 2024.
Trump takes aim at Georgia official's non-existent brother Trump just republished worldwide a reality creation from one of new favorite Fake News networks. Fact-checking Trump's conspiracy theory connecting Georgia's secretary of state to China
Trump Demands Brian Kemp Resign as Governor Of Georgia: 'An Obstructionist Who Refuses to Admit That We Won'; Cobb County Found No Fraud After Signature Audit Trump Wanted
Trump Attacks Fox News After Interview With Georgia's Republican Lt. Governor Geoff Duncan (Duncan asserted that Lying Don needs to quit spreading false information about the election)
Two House Republicans tell CNN they expect at least 140 House Republicans to vote against counting electoral votes They have already branded themselves as enemies of democracy by joining the Supreme Court petition requesting that the Pennsylvania votes be discarded and allowing the republican controlled legislature to nominate Trump electors. The anti-democracy brand is a permanent one and will never wash off.
Trump proved his incompetence early in his life through bankrupting 6 businesses. His competence was confined to creating a brand that he was a hugely successful entrepreneur and then licensing his name to others who took the risks and to host a reality TV show based on that self-created image.
++
Fact check: Georgia Republicans run more misleading attack ads against Warnock and Ossoff; Perdue's Shaky Claim of a Nonexistent 'Investigation' -FactCheck.org (Perdue's ad is proof of his lack of integrity IMO). Unfortunately, tens of millions will be influenced by false and misleading advertising. They are effective because tens of millions are just ignorant about the facts and are consequently easily manipulated by false information and narratives.
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1. Eliminated IVZ in Two Taxable Accounts:
A. Sold 83+ IVZ at $17.3 (Schwab taxable):
Profit Snapshot: +$196.15
After averaging down several times, I decided to eliminate most of my IVZ positions in response to this stock's rally. I am keeping only a few shares held in 1 Roth IRA account and a 10+ share position in my Vanguard taxable account where my average cost per share is currently at $8.58:
 |
| Unrealized Gain Based on Closing Price as of 12/24/20 |
Dividend: Quarterly at $.155 per share ($.62 annually), reduced from $.31 effective for the 2020 second quarter payment. Dividend information The primary reason for initiating a small position was the $.31 per share dividend.
The yield on the remaining 10+ shares held in the Vanguard taxable account is 7.23%.
Last Ex Dividend: 11/20/20
Last Earnings Report (9/30/20): Invesco Reports Results for the Three Months Ended September 30, 2020
Profit Snapshot: $134.73
 |
| Withholding Tax at 15% |
3. Small Ball:
A. Started SJI-Bought 5 at $23; 5 at $22.6; 5 at $22.2; 5 at $20.87; 5 at $20.5:
Quote: South Jersey Industries Inc
Closing Price 12/31: SJI $21.55 -$0.04 -0.19%
SJI - South Jersey Industries Inc Profile | Reuters
SJI, "an energy services holding company based in Folsom, NJ, delivers energy services to its customers through three primary subsidiaries. SJI Utilities, SJI’s regulated natural gas utility business, delivers . . . natural gas to approximately 700,000 South Jersey Gas and Elizabethtown Gas customers in New Jersey. SJI’s non-utility businesses within South Jersey Energy Solutions promote efficiency, clean technology and renewable energy by providing customized wholesale commodity marketing and fuel management services; and developing, owning and operating on-site energy production facilities. SJI Midstream houses the company’s interest in the PennEast Pipeline Project."
I also recently bought shares in another natural gas distribution company based in New Jersey: Item # 1.A. Started NJR-Bought 10 at $29.08 (11/21/20 Post); New Jersey Resources Corp. (NJR)
SJI Analyst Estimates | MarketWatch
Investors Home | South Jersey Industries
Investment Category: Bond Substitute with Dividend Growth
Average Cost Per Share: $21.83 (25 shares)
Dividend: Quarterly at $.3025 per share ($1.21 annually)
SJI Raises Dividend for 22nd Consecutive Year
The last increase was from $.2950 or +2.54% which is higher than the current inflation rate.
Yield at AC = 5.54%
Last Ex Dividend: 12/9/20
5 Year Chart:
Last Earnings Report (Q/E 9/30/20): SEC Filed Press Release
Earnings will generally be negative or slightly positive in the third quarter. The natural gas distribution business will generate profits during the colder months.
Goal: Annualized return of dividend + 2% profit on the shares. This is a low expectation investment.
B. Restarted UL-Bought 5 at $57.78:
Quote: Unilever PLC ADR
Closing Price 12/31/20: UL $60.36 -$0.54 -0.89%
ADR Ratio: 1 for 1
All brands | Unilever global company website
Investment Categories: Dividend Growth/Bond Substitute
I discussed this buy in a 12/27/20 comment. My comfort price buy would be around $45 or 15 x. a $3 E.P.S. for 2020. Unilever last broke below $45 on 3/23/18, just for one day when the S & P closed at 2,237.40. Unilever PLC (UL) Stock Historical Prices & Data
Completion of Unilever’s Unification | News | Unilever global company website The surviving corporation was Unilever PLC based in the U.K. whose shares were priced in British Pence. Shareholders of Unilever NV, based in the Netherlands and whose shares were priced in Euros, received shares in the U.K. company. For U.S. ADR owners, the result is that Unilever NV ADR, formerly traded under the UN symbol, no longer exists, and UL is the symbol for the combined entities ADR.
I have traded UL many times and have 1 round trip for UN.
From my perspective, I have been forced back into starting a position in the high 50s due to conditions beyond my control. I would take the position up to 100 shares at between $45 to $50.
Those conditions include a paucity of acceptable investments occurring during a massive pile up proceeds from redeemed bonds and CDs into broker money market funds yielding .01% and a likely continuation of the FED's Jihad Against Savers for an extended period.
Last Elimination: Item # 1.A. Eliminated UL-Sold 70 at $52.62+ (12/23/18 Post)(profit snapshot = $2,412.2) That lot was purchased on 3/23/2009. Added to UL at 18.05 (3/23/2009 Post)
Dividend: Quarterly. Dividend history The last dividend was $.4845 per share and went ex dividend on 10/29/20. Dividend growth has been good over the years.
Last Financial Report (Q/E 9/30/20):
Brief Summary: Strong third-quarter performance shows resilience and agility
The quarterly results for the first and third quarters do not have profit statements that are reported semi-annually.
Discussed at Unilever Beats Sales Targets but Warns of Unpredictable Future Weights on Shares | Barron's (10/22/20) The consensus analyst revenue estimate was for +1.3%.
Broker Reports (available to Schwab customers):
Morningstar (10/22/20): 3 stars with a $59 FV
S & P (10/23/20): 3 stars with a 12 month $63 PT
Most Other UL Discussions (starting in 2009): Item # 4.B. Sold 30 UL at $47.66 (3/10/17 Post Post)(a flip, profit snapshot = $264.7; contains snapshots of other trades as well); Item # 1. Bought Back 30 UL in Roth IRA at $40.4-Portfolio Positioning And Management As Of 9/1/15 - South Gent | Seeking Alpha; Dividend Growth Strategy: Added 30 UL At $39.25 Roth IRA - South Gent | Seeking Alpha (10/25/14 Post); Item # 4 Pared 30 Unilever at $23.38 (5/31/2009)(profit snapshot = $138.78)
The two 30 share lots bought in the ROTH IRA were flips:
 |
| 2015 UL 60 Shares +$231.48 |
UN Trades: I can only find 1 round-trip. Item # 2 Bought 100 UN at $38.10+ (9/21/13 Post) That lot was sold in 2015:
 |
| 2015 UN 103+ Shares +$497.61 |
C. Pared ARCC-Sold 20 at $17.44:
Quote: Ares Capital Corp. - An externally managed BDC
Stock Information as of 12/31/20:
Investment Category: Bond Substitute
Profit Snapshot: +$24.43
Last Buy Discussion: Item # 4.C. Added 5 ARCC at $14.3; 5 at $14; 5 at $13.67; 5 at $12.5; 5 at $12.4; 5 at $12; 5 at $11.74; 5 at $10.44; 5 at $9.4 (4/4/20 Post)
New Average Cost per share this Account: $13.47
Dividend: Quarterly at $.40 (regular only)
Yield at New AC = 11.88%
Last Ex Dividend: 12/14/20
Net Asset Valuer Per Share history: Better than Most, if not all, Externally Managed BDCs
9/30/20: $16.48 10-Q3/31/20: $15.58 10-Q
9/30/19: $17.26 10-Q
9/30/18: $17.16
12/21/17: $16.65
9/30/17: $16.49 10-Q
12/30/16: $16.45
9/30/16: $16.59
6/30/16: $16.62
3/31/16: $16.5
12/31/14: $16.82
9/30/13: $16.35
3/31/12: $15.47
6/30/10: $14.11
12/31/09: $11.44 10-K
9/30/09: $11.16 10-Q
12/31/08: $11.27
6/30/08: $12.83 10-Q
12/31/07: $15.47 10-K at page 57
9/30/07: $15.74
3/31/05: $14.96
52 week low at $7.9 on 3/16/20
NII per share was 1 cent below the regular quarterly dividend rate.
10-Q for the Q/E 9/30/20 (summary of investments starts at page 5)
JPMorgan downgrades Ares Capital to Neutral on valuation (NASDAQ:ARCC) | Seeking Alpha (12/10/2020)
Ares SU Bonds: I currently own 4 ARES 3.625% senior unsecured bonds maturing in 2022. Item # 2.B. - Bought 2 at a TC of 98.8 and 2 at a TC of 99.1 (6/13/20 Post); Bond Detail I still own those bonds.
Earlier this year, I flipped 2 ARES 4.2% SU maturing in 2024 twice, holding for a few days and realizing a total profit of $194.25 gain:
D. Pared ARCC in Fidelity Taxable Account-Sold 5 at $17.32:
Profit Snapshot: $15.09 (12/7/20 sell only):
New Average Cost Per Share this Account: $11.94 (51 shares)
Yield at New AC of $11.83 = 13.52% (regular dividend only)
See Item # 1.C. above
The AC per share in this account is at a 28.22% discount to the net asset value per share as of 9/30/20.
Sell Discussions: Item # 1.C. Sold 50 ARCC at $16.98 (6/18/18 Post); Item 2.A. Eliminated ARCC-Sold Remaining 50 Shares at $17.25 (2/15/17 Post); Item # 1, Sold 102+ ARCC at $15.32 and 50 at $15.26: Update For Portfolio Positioning And Management As Of 8/21/16 - South Gent | Seeking Alpha; Sold 100 ARCC at $17.195 (4/28/15 Post); Item # 3 Sold 100 ARCC Roth IRA at $17.05 (2/25/15 Post); Sold 100 ARCC at $17.54-IRAs in Two 50 Share Lots (9/13/12 Post)
Goal: Total return in excess of dividend payments.
ARCC Realized Gains to Date: $696.69 No realized losses yet.
2020: $46.02 (snapshots this post)
2017-2018: $223.75
 |
| 2017 ARCC 50 Shares +$160.51 (largest profit 1 trade) |
Quote: United Bankshares Inc.
Investment Category: Regional Bank Basket Strategy
UBSI SEC Filings
Profit Snapshot: $8.41
New Average Cost Per Share this Account: $24.1
Dividend: Quarterly at $.35 per share ($1.4 annually)
Yield at $24.1: 5.81%
Last Ex Dividend: 12/10/20
5 Year Chart:
Last Earnings Report (Q/E 9/30/20): SEC Filed Press Release
Earnings for the third quarter of 2020 were a record $103.8 million, or $0.80 per diluted share, as compared to earnings of $66.0 million, or $0.65 per diluted share for the third quarter of 2019.
Tangible Book Value Per Share: $18.84
"Annualized net charge-offs as a percentage of average loans & leases, net of unearned income were 0.12% and 0.13% for the third quarter and first nine months of 2020, respectively."
UBSI has adopted CECL. Some of the increase in non-performing loans originated from UBSI's acquisition of Carolina Financial. United Bankshares, Inc. Completes Its Acquisition of Carolina Financial Corporation
UBSI Trading Profits to Date: $1,251.05
Almost all of the realized gains came from this 100 share sell: Item # 1 Sold 50 UBSI at $41.58-Update For Regional Bank Basket Strategy As Of 8/7/15 - South Gent | Seeking Alpha (profit snapshot = +$1,235.01)
F. Pared OKE-Sold 1 at $40.61:
Profit Snapshot: +$12.83
Investment Category: Bond Substitute
New Average Cost per share this account: $27.47 (5+ shares)
I own a small number of shares in several accounts including 2 ROTH IRAs.
Dividend: Quarterly at $.935 per share ($3.74 annually)
Yield at AC of $27.47: 13.61%
Last Discussed: Item # 1.G. Started OKE in Fidelity Taxable Account-Bought 5 at $27.77 (6/13/20 Post); Item # 1.L. Added to OKE-Bought 1 at $24.9 (10/24/20 Post) I also discussed in the last linked post (Item #2.C.) buying 2 OKE 3.375% SU bonds maturing on 1/1/2022. My total cost was at 97.01. FINRA Bond Detail I will have greater dollar exposure to the OKE SU bonds than to the common stock, based on my risk evaluation of the stock which is reflected in the bungee jumping 5 year chart. There is some risk of a dividend cut. The OKE bonds carry a promise to pay the principal amount at maturity, or earlier if the optional redemption right is exercised, and the coupon interest payments have to be made and a failure to pay would likely be associated with a bankruptcy.
5 Year Chart:
G. Pared NMFC in Fidelity Taxable Account-Sold 20 at $12.27:
Quote: New Mountain Finance Corp. (NMFC)- a BDC
Closing Price 12/31/20:
Profit Snapshot: +$19.54 (12/8/20 sell only)
Average Cost Per Share Prior to Pare: $9.63
Average Cost After Pare: $8.55 (31+ shares with last dividend reinvested)
Dividend: Quarterly at $.30, reduced from $.34 earlier this year.
Yield at AC this account: 14.04%
Last Ex Dividend: 12/15/20
Net asset value per share as of 9/30/20: $12.24
Discount to 9/30 NAV per share at $8.55 = 30.15%
5 Year Chart:
Crash and burn in March 2020, with a 52 week low at $4.62 on 3/19/20
Prior Sell Discussions: Item # 2 Eliminated NMFC-Sold 102+ at $14.2 (1/25/20 Post); Item # 2.A. Sold 50 NMFC at $13.95 (1/15/20 Post); Item # 1.B. Eliminated NMFC-Sold 60 at $13.96 and 50 at $13.94 (2/9/19 Post); Item # 1 A. Sold 50 NMFC at $14.06 (8/19/18 Post); Item # 1 Sold Remaining 50 Shares of NMFC at $14.63 (11/1/14 Post); Sold 100 of 150 NMFC at $14.4773 (10/23/14 Post); Item # 8 Sold Highest Cost NMFC Lot at $15.37 (9/14/2014 Post)
NMFC Realized Gains to Date: $249.11
Goal: Total return in excess of the dividends.
H. Bought 10 MSGN at $12.45:
"Investment" Category: Lottery Ticket Basket
This is my first purchase.
5 Year Financials:
5 Year Chart:
Last Earnings Report (Q/E 9/30/20): This quarter was MSGN's first fiscal quarter.
I. Eliminated EAF in Fidelity Taxable- Sold 46+ at $9.94:
Quote: GrafTech International Ltd.
Closing Price 12/31/20: EAF $10.66 +$0.27 +2.60%
GrafTech is a leading manufacturer of high-quality graphite electrode products essential to the production of electric arc furnace steel and other ferrous and non-ferrous metals.
GrafTech was taken private by BAM (8/17/15) when the company was in the dumpster (see summary at page 8) In 2018, BAM took the company public with an IPO, selling 35M of its shares plus the standard greenshoe option granted to the underwriters of up to 5.25M. Prospectus (offering price at $15). BAM has been selling shares. GrafTech Announces Secondary Block Trade by Stockholder and Share Buyback (12/5/19) In addition to BAM's public offering of EAF stock, Graftech bought $250M of its own shares from BAM. The price paid by EAF to its controlling shareholder was the same as the public offering price. The price was $13.125 per share. Page 37
The most recent sell was absorbed better by the market than the first. GrafTech Announces Upsizing and Pricing of Secondary Offering of Common Stock by Existing Stockholders (12/14/20); Prospectus
EAF Analyst Estimates | MarketWatch
As of 12/30/20, average E.P.S. estimates are:
2020 $1.56
2021 $1.74
2022 $2.02
The P/E ratios are indicative of concerns about the sustainability of profits anywhere near 2020-2021 levels. Take-or-pay contracts at prices higher than the current market price for graphic electrodes expire in the 2021-2022 period.
2019 Annual Report (business description at pp. 6-16)
Company Website: GrafTech International Ltd. - Home
Factbox: What are graphite electrodes and needle coke? - Reuters Needle coke is the main raw material used to make graphite electrodes but is also used in lithium ion batteries. EAF is vertically integrated, meaning it manufactures needle coke as well. (see discussion at pages 7-12, 21-24 2019 Annual Report)
Profit Snapshot: $48.46 (12/10 sell only)
This is another example of selling a stock into strength that had been a less than optimal selection. I still own 103+ shares in another taxable account where the average cost per share is $10.87. The highest remaining lot was bought at $11.25 with the lowest cost at $6.96. My inclination is to wait for the stock to cross back over $11.25 and sell only the highest cost lot which is 25 shares.
Dividend: $.01, slashed from $.085 per share or $.34 annually effective for the 2020 second quarter payment.
Liquidity was drained by EAF buying $250M of stock from its controlling shareholder.
3 Year Financial Metrics:
Last Earnings Report (9/30/20):
Sourced from SEC Filed Press Release
Take or Pay Contracts:
10-Q For the Q/E 9/30/2020 at page 12
As noted in the excerpt regarding the third quarter earnings report, EAF's revenues were severely impacted by the global pandemic. Theoretically, a robust recovery in 2021-2022, which is the current Stock Jock forecast, would improve revenues through increased sales and higher prices for EAF's products.
While I do not share the Stock Jock's exuberant enthusiasm for worldwide growth over the next few years, I will likely be able to sell my remaining shares for a profit if those expectations come to pass.
Other Recent News: GrafTech Prices Offering of $500 Million of 4.625% Senior Secured Notes Maturing in 2028 (12/8/20)
Last Sell Discussions: 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 (12/1819 Post)(profit snapshot = $125.38); Item # 2.A. Sold 110 EAF at $13.48 (11/20/19 Post)(profit snapshot = $61.69);
EAF Realized Gains to Date: $253.47
And this is something to hate when a company is taken private and then brought public:
I view those kind of transactions to be egregious.
I have access to only one broker report. The Credit Suisse analyst has an outperform rating and a $13 PT. The last report, dated 11/4/20, is available to Charles Schwab customers.
J. Pared WTBA (Fidelity Taxable)-Sold 10 at $20.7 (highest cost lot in this account):
Quote: West Bancorp Inc. (WTBA)
Profit Snapshot: $36
Last Discussed: Item # 1.C. Bought 10 WTBA at $17.1; 10 at $16.7; 10 at $16.2-Vanguard Taxable Account (8/1/2020 Post) I discussed the second quarter earnings report in that post.
New Average Cost per share this account: $16.45
Dividend: Quarterly at $.21 per share
Yield at $16.45 = 5.11%
Last Earnings Report (Q/E 9/30/20): West Bancorporation, Inc. Announces Third Quarter 2020 Net Income, Declares Quarterly Dividend
"third quarter 2020 net income was $8.1 million, or $0.49 per diluted common share, compared to third quarter 2019 net income of $7.5 million, or $0.46 per diluted common share. For the first nine months of 2020, net income was $24.2 million, or $1.46 per diluted common share, compared to $21.1 million, or $1.28 per diluted common share, for the first nine months of 2019."
NPL Ratio: .79%
NPA Raio: .64%
While this pare was a normal part of small ball trading, the lightening up would be justified IMO based on the total loan modification amount still in effect as of 9/30/20:
(data in thousands) "As of September 30, 2020, approximately $434,361, or 19.3%, of loans were in payment deferral status under COVID-19 related modifications. COVID-19 related modifications primarily involve a delay of principal and/or interest payments for up to six months. As of September 30, 2020, approximately $361,015 of these loans are scheduled to return to regular payment status in October and November of 2020. Additional modifications, including payment deferrals for up to an additional six months, have been made for one hotel company totaling $7,364 and one movie theater company totaling $16,195 as of September 30, 2020. Additional modifications are expected to be made for approximately $67,000 of loans in the hotel industry in mid-November 2020, at the end of the term for the initial modifications."
Last Elimination: Item # 3.A. Sold 100 WTBA at $23.12-Used Commission Free Trade (4/29/17 Post)(profit snapshot = $1,146.24)-Bought 100 WTBA at $11.67 (6/29/13 Post)WTBA Realized Gains to Date: $1,188.87
K. Eliminated PFC-Sold 10 at $22.52:
L. Pared FAX-Sold 12 Shares Bought with Dividends at $4.39:
Quote: FAX | Aberdeen Asia-Pacific Income Fund Inc. Overview
Fund Sponsor's Website: Aberdeen Asia-Pacific Income Fund, Inc.
Last SEC Filed Shareholder Report (semi-annual for the period ending 4/30/20)
Profit Snapshot: $6.26 (12/16 sell only)
The profits realized in 2020 will be slightly higher after the ROC adjustment is made to the tax cost basis.
Previous Pare: Item # 1.E. Pared FAX-Sold 130 at $4.19 (12/12/20 Post)
Recent Buy Discussions: Item # 2.F. Added 10 FAX at $3.29 and 100 at $3.43 (5/30/20 Post); Item # 2.E. Restarted FAX-Bought 100 at $4.18; 10 at $3.5; 20 at $3.25; 10 at $2.95; 10 at $2.7 (3/21/20 Post)
New Average Cost Per Share: $3.31 |
| Snapshot Intraday on 12/16/20 |
Since this position was initiated in 2020, there has not yet been a ROC adjustment to the tax cost basis. Fidelity will make that adjustment when the sponsor reports the 2020 information in the 2021 first quarter. That adjustment, which reduces my tax cost basis by the amount of ROC, will increase my profit and reduced my taxable dividend income but has no effect on my total return before taxes.
Dividend: Monthly at $.0275 (Supported by ROC)
Yield at AC = 9.97%
Data Date of 12/16/20 Trade:
Closing Net Asset Value Per Share: $4.91
Closing Market Price: $4.45
Discount: -9.37
Sourced: FAX-CEF (Click "Pricing Information" tab)
Goal: Total Return in excess of the dividend yield prior to a ROC adjustment to the tax cost basis.
M. Added to BMY in Fidelity Taxable-Bought 2 at $61.05:
Quote: Bristol Myers Squibb Co.
Closing Price 12/31/20: BMY $62.03 +$0.60 +0.98%
I discussed BMY in my last post.
I currently own 10 shares in this account with an average cost per share at $61.71.
Yield at AC = 3.18%
Since my last discussion, BMY reported that its cancer drug Opdivo, which has been approved for several indications, failed a late stage trial for newly diagnosed glioblastoma.
I do not regard that failure as material to BMY.
This is the another recent news release: European Medicines Agency Validates Bristol Myers Squibb’s Application for Zeposia (ozanimod) for the Treatment of Ulcerative Colitis (12/28/20).
The FDA approved this drug in March 2020 for relapsing forms of muliple sclerosis. U.S. Food and Drug Administration Approves Bristol Myers Squibb’s ZEPOSIA® (ozanimod), a New Oral Treatment for Relapsing Forms of Multiple Sclerosis (3/26/20). EC approved for this indication in May 2020. Bristol Myers Squibb Receives European Commission Approval for Zeposia (ozanimod) for the Treatment of Adult Patients with Relapsing Remitting Multiple Sclerosis with Active Disease Zeposia generated only $2M in revenues during the 3rd quarter. 10-Q for the Q/E 9/30/20 at page 40
Zeposia was one of the drugs acquired by BMY through its Celgene acquisition.Bristol Myers nabs long-sought FDA nod for Celgene's MS drug ozanimod, but pandemic delays launch
BMY went ex dividend on 12/31/20.
N. Added to TECTP-Bought 10 at $8.24:
This one is unusual in that the issuer is a privately owned bank holding company based in Texas. There is a stopper clause that would prevent the owners from eliminating the preferred dividend and paying themselves a common stock dividend (page 170 of the prospectus). However, there is no legal requirement to pay the preferred non-cumulative dividend provided no cash dividend is paid to the common shareholders.
The fixed coupon of 9% will be the applicable rate to but excluding 5/15/2024. If not redeemed at that time, the coupon will change to a floating rate.
I have not seen anything in the financial reports that would justify eliminating the preferred stock dividend.
I discussed this fixed-to-floating rate equity preferred stock in my lost post. Item # 3.A. Bought 10 TECTP at $8.59 (12/25/20 Post)
Par Value: $10
Average Cost Per Share 8.42 (20 shares)
Current Yield at AC = 10.69%
Dividends: Non-Cumulative and Paid Quarterly
Last Ex-Dividend: 11/5/20
Issuer SEC Filings
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.
Settled down to review my portfolio to be more ready for the next market moves.
ReplyDelete-----
Shell is 50% under water for me. I'm so overweight energy, I didn't buy any issue at lower prices.
Total (TOT) is underwater. But the $123 div at ~7% is more encouraging.
Vanguard takes out 10% withholding, which I recover on my 1040. You're pointing that out, is why I moved it to Vanguard. (Scottrade took out more. I don't know whether Ameritrade honors the deal.)
Big oil's been in a bear market since ~2014. I've been holding & waiting for the bull to return. Me & everyone else who will sell & create headwinds.
----
Decided to sell VTRS. I was looking for your comments on divs for it and PFE.
VTRS has no divs. Is up 18% (on all of 5 shares). I didn't intend to own it, and haven't researched the company, so I'll sell.
----
Selling INTC Intel into the rally. Too bad I lost profits. It's near break even. 2.5% div isn't high enough for the risks.
Keeping F Ford. No div, but this will rally big when they reinstate one, when the economy finally recovers.
BMY is interesting. Will look at it. BeiGene has good products, but it's already climbed.
---
My portfolio - 55% regular and 47% IRA/401k invested .
Surprisingly, stocks grew ~ 15% since Feb.
So my goal was to look for profit taking.
Ciovocca's charts indicate in the past, this last dip was usual one post crashes, & long term there's big break out from here. They also show a sort term 7% average down before that starts (he barely referenced.)
For next crashes, he sees it being years, and a much longer time of consistently above the moving averages, before exuberance leads to sell offs. It fits my sense. Everyone and his uncle isn't investing yet. Headlines in non-finance papers aren't about stocks yet.
So it's possible this will recover and do well for a while. The market & economy is unclear. I have plenty of cash. So I'm not rushing to sell. But these climbs & valuations makes me so nervous so, I'll stay alert.
Certainly Dems will push for money programs. GOP will reject all but for business. The only political policy down is regulations will take down certain sectors.
---
So what now? My assessment of my portfolio led to the same problem you've expressed.
When I originally planned, I needed growth in capital. 4% a year would have done it to retirement. Then towards retirement, I needed returns of 4% over inflation... or if I include SSDI then 2% over inflation.
They seemed like reasonable goals.
The only option I can see is 3 1/2 to 4% div paying stocks that are either:
1) not overinflated
2) overinflated and might deflate but so unlikely to cut div or go bankrupt that it's worth getting.
Also he pointed out that breath as improved a great deal in the last few weeks.
ReplyDeleteCorrection: Investment portfolio grew ~15% so inclusive of cash & divs.
ReplyDeleteLand: For VTRS, and I recall, VTRS will declare its first quarterly dividend this quarter. Pfizer will reduce its dividend by the amount Pfizer shareholders would receive from VTRS. One analyst estimates that will result in a 10 cent per share quarterly dividend cut from Pfizer.
ReplyDeleteI do not own Intel. I will take a look when and if crashes below $40. Next year may be a tough one, particularly if Microsoft starts to develop its own chips using a third party manufacturer like Taiwan Semiconductor.
"Microsoft Designing Its Own Chips for Servers, Surface PCs"
https://www.bloomberg.com/news/articles/2020-12-18/microsoft-is-designing-its-own-chips-for-servers-surface-pcs
I may lower my entry point to less than $35.
I am more likely to add to RDS/B then sell now.
The U.S. has tax treaties that limit foreign withholding taxes to 15%. The broker still needs to claim treaty rights for their customers to receive that rate and many do not bother. When failing to make a tax treaty right claim "at source", the foreign country will tax the dividend as if the recipient had no tax treaty with that nation. The result is that the highest rate will be applied which can hit 30% or 35% depending on the country.
The U.S.-France tax treaty follows the normal pattern which caps the tax rate at 15% for a U.S. citizen.
Article 10 # 2
https://www.irs.gov/pub/irs-trty/france.pdf
Generally, among my brokers, Vanguard and Fidelity are the best at claiming relief under the U.S. tax treaties which caps withholding at 15%.
You can not recover as a credit taxes paid on foreign dividend when the security is held in a retirement account. I consequently would not own any security which has a dividend withholding tax in my Roth IRA accounts.
https://www.morningstar.com/articles/914550/should-you-keep-foreign-stocks-out-of-your-ira
Another issue with France's stocks is that investors have to pay a .3% tax when buying them. I restarted SNY last week, buying 10 at $48.35. France collected a $1.46 on the $483.50 purchase. (.003% x. $483.5) I think that I was screwed out of a penny.
https://ibkr.info/node/1965
There will be an ADR custodian fee taken out of an ADR's dividend payment.
See the Orkla snapshot in Item # 2 which as I recall is not a percentage amount but based on the number of shares.
So i should sell the last 14 PFE that's 10% up. Hold the VTRS until after div. I was remembering it something like that. If I want to re-buy wait till the dust settles.
DeleteI need to look at INTC's competitors. Get them on a list for if there's ever even a small pullback.
TXN & Garmin's (up 90%) done well. But whether to sell some... timing is hard to figure out.
Total, at $16 out of $123 is closer to 13%. Not 10% that I got earlier. I had the shingrix 1st shot yesterday. A bit under the weather and fuzzy today. But maybe it means it's working!
There's an ADR fee that used to be a trivial .80 a month. Now it's 2.80 a month. It still didn't impact much. So decided to ignore it.
Divs and share prices for ADRs are effected by the exchange rate, right?
Right now US$s to French Franks is at a low in a cycle ($ is low). So both are benefiting. (I'm not backwards?)
When US$ starts back up, might be time to sell.
$US to EU isn't helping Shell much. I have Shell in IRA, but if there's taxes being removed, Vang isn't listing them.
I made some mistakes on what I bought in my IRA.
Land: The Total ADR will reflect the Euro priced ordinary shares converted into USDs.
DeleteWhen the Euro is rising against the USD, the ADR will outperform the shares priced in Euros. If the Euro priced shares are rising when the Euro is gaining ground against the USD, that is a Twofer. The Double Whammy happens when the shares priced in Euros are declining when the Euro is declining in value.
The ordinary shares of the RDS/B ADR are not priced in Euros but in British Pence. No dividend tax is currently being collected by the U.K. on that share class. The RDS/A is based in the Netherlands and its ordinary shares are priced in Euros and the Netherlands will withhold 15% provided the broker makes a tax treaty claim at source.
Pfizer will probably avoid cutting its dividend until the second quarter. When announced, it would be a surprise to many individual investors.
For an IRA, and based on current foreign withholding laws, it would be better to own RDSB in an IRA and avoid RDSA since the tax applied by the Netherlands can not be recovered as a foreign tax credit when owned in a U.S. citizens retirement account.
The Euro and several other major currencies have been in an uptrend against the USD. One Euro bought US$1.09 in late May and will currently buy about US$1.22.
https://www.marketwatch.com/investing/currency/eurusd/charts?mod=mw_quote_tab
The Total ordinary shares price in Euros closed last at €35.3.
https://www.marketwatch.com/investing/stock/fp?countrycode=fr
Over the past 6 months, due to the rise in the Euro, the ADR has risen about 7.54% compared to 1.31% for the € price shares traded in Paris.
So it is a Twofer that's happening! When I bought, one reason was exchange rate made the shares cheaper. How do you find price of a foreign stock?
Delete7% benefit - I'll want to get out and keep that. Though still no place else to put money, sigh.
So that's why I got RBS/B not A. I couldn't remember what the difference was. Also why I thought it fine to put into an IRA. That didn't work well, my post-tax Roth money in that stock has not done well.
With it's vaccine success, I wonder if PFE will decide not to cut the div after all... But 2nd quarter - good to know it'll is likely to take awhile, and pick my spot to get out.
Land: The divested Upjohn business accounted for $2.022B of Pfizer's third quarter revenues.
DeletePage 40
https://www.sec.gov/ix?doc=/Archives/edgar/data/78003/000007800320000037/pfe-03292020x10q.htm
As I recall, the PFE vaccine will cost $19.5 a shot. And, BioNTech is a partner (see page 44). While the vaccine will be profitable, I do not see it as moving the needle for PFE given its size and market cap. There was some enthusiasm after the FDA approved the vaccine but that quickly went away.
I believe PFE will cut is dividend to reflect what PFE shareholders receive from VTRS but will then be in a position to grow the dividend given its retention of more profitable drugs.
In an interview appearing in Barron's (12/30/20), Liz Ann Sonders noting that the S & P 500 peaked on 9/2 with Apple
(AAPL), Amazon. com (AMZN), Microsoft (MSFT), Facebook (FB), and Alphabet (GOOGL) up 65% and the other 495 components up only 3%.
If I added about 4 or 5 more stocks to those 5, the remaining components would be negative contributors.
The issue is what happens to the stocks that are reasonably priced using historically proven valuation criteria when there is a massive reset in multiples for those stocks that have led the market up.
If the past is prologue, they will go down but not as much.
Barron's currently has the P/E multiple of Apple at 40.62 with a market cap of $2.26T.
Amazon has a P/E of 95.38 and a market cap of $1.63T.
Microsoft is at a 35.88 P/E with a market cap of 1.68T.
I seriously doubt that companies that large can grow fast enough to justify those multiples. But for now, there is no end in sight yet to their multiple expansions.
Since they announced it, seems like they would. Sounds like it's good for PFE to gain funding, and focus on more profitable newer drugs.
DeleteThe payout rate is 95%. PE 24.75. That seems high.
I guess they raised div last time, to give confidence to investors.
---
""what happens to the stocks that are reasonably priced using historically proven valuation criteria when there is a massive reset in multiples for those stocks that have led the market up.""
I assume you're saying a sell off of the overpriced, triggers general market blahs and sell off for the reasonably priced too.
Then of course, they get bought & things start to recover into more normal valuations. Only the indices stay down because they were so overweighted in overpriced stocks.
A/D lines count by # of shares going each way. Not by a graph of % gain/loss by the shares going each way?
DeleteThe 1st implies solid breath.
The 2nd graph would show what you've pointed out.
I've seen A/D charts. I haven't seen one with % per stock taken into account.
Land: The A/D line does not measure percentages.
Deletehttps://school.stockcharts.com/doku.php?id=market_indicators:ad_line
Consequently, its value is diminished which is the case for many indicators.
I am not clear on whether those who compile the A/D exclude exchange traded bonds, preferred stocks and CEFs which trade on the exchanges like stocks. Those securities would need to be excluded since they are not common stocks.
The problem with aggregate data is that the signal being sent may not be the real or important one.
For example, there is an important ratio compiled by the FED that measures household debt service payments to disposable income.
https://fred.stlouisfed.org/series/TDSP
That is an aggregate data series.
The ratio started to trend up in 1995 and hit a peak in the 2007 4th quarter.
The aggregate numbers did not look that worrisome, since the ratio moved from around 10% to 13%. But nonetheless that trend was ominous, as I have discussed in the past, since the aggregate data included households with no mortgage debt which is almost 1/3rd of the total based on census data. If you removed those households from the data series, then the number would have been clearly ominous.
Another ratio, total household debt to disposable income, went over 133% in 2007, which was another clear danger signal since it was aggregate data.
https://fred.stlouisfed.org/graph/?g=17v
That number, when excluding those with no debt (like myself) would indicate that a sizable part measured in millions of households were carrying debt in excess of 200% of disposable income.
One of the long term positive secular forces is that these ratios have declined substantially, mostly due to refinancing mortgage debt at historically low rates and to a lesser extent bankruptcies. The refinancing tsunami means that households have a lot more disposable income to save, spend and/or pay down debt after paying their mortgage debt service payments. I started talking about this secular force a decade ago both here and in comments at SA.
Land: Pfizer's payout ratio depends on whether you use GAAP or Non-GAAP earnings. The Stock Jocks use non-GAAP.
DeleteIn the last quarter, PFE reported GAAP E.P.S of $.32 and non-GAAP at $.72.
https://www.sec.gov/Archives/edgar/data/78003/000007800320000065/pfe-09272020xex99.htm
When there is a major stock market decline, such as the one experienced last March, there are several reasons why it spreads to just about every stock. The most important is the fear response that it engenders as investors see unrealized gains evaporate. Selling in index funds will accelerate as well as short selling and trading in derivatives including futures contracts that adds to the broad based downside pressure.
That's all interesting stuff with the A/C. Good question on what's included.
DeleteAlso that debt's declined. It used to be a badge of patriotism to support capitalism by spending (I had people say to me.)
I hadn't thought about using non-GAAP. It's way different.
I did nothing today. I want to sell & take profits. But Tues's election may make a big difference.
I want to buy but this wasn't enough to trigger that. Plus I hadn't slept all night (not on purpose) so was back asleep by the time of the drama.
Land: If both democrats win today, the consensus opinion is that the market will decline.
DeleteI would be surprised by that election result.
If the democrats do win, there would be a corporate tax increase which would reduce profits.
The democrats would be in a better position to pass the fiscal stimulus measures they want, though I am not clear on what measures would be subject to a Senate filibuster requiring 60 votes to end. A few republican senators support an increase in the stimulus checks to $2,000 from $600 that has already been approved.
50 MG dose of Trazodone may help on the sleep front. And, unlike prescription sleep medications, it washes out of the system by morning.
https://www.healthline.com/health/sleep/trazodone-for-sleep
Futures are split. QQQ down 1.2 IWM up 1.5. The end of day had that same humor in it. Two did a final move down, while QQQ ended on an up.
DeleteIt's still very undecided. I stopped listening well enough to know what the probabilities are. I was summarizing data for a doctor's visit. I put in too many details. It took me hours. I still need to learn how to do things the short ways.
I don't know what the market will do either way. Both have market pluses and minuses.
The trazodone is a very interesting idea. You've noticed I'm up late a lot :). Yesterday was more fallout from the Shingrix vaccine malaise messing up when I was napping. Years ago I'd tried various antidepressants off label. I had so many side effects, my doctors decided to quit. But it's been a lot of years so can talk about it again. I normally get enough sleep, just not at regular hours.
So one of the problems is that the same amount of money is squeezing into less # of stocks.
ReplyDeleteSome shares lost price, and haven't recovered. Others gained immensely, in part because there's less # of stocks that are considered reasonable to invest in.
Also with zirp back, there's more, not simply the same $.
This came to mind while looking at my TXN shares. The amount risen *above* the pre-crisis high point 25%, is nearly as much as the amount of it's decline during the covid crisis 30%.
Jeremy Grantham's warnings about stock valuations are becoming more ominous.
ReplyDeleteThis is quote from his letter published today:
"The long, long bull market since 2009 has finally matured into a fully-fledged epic bubble. Featuring extreme overvaluation, explosive price increases, frenzied issuance, and hysterically speculative investor behavior, I believe this event will be recorded as one of the great bubbles of financial history, right along with the South Sea bubble, 1929, and 2000."
https://www.gmo.com/americas/research-library/waiting-for-the-last-dance/
I would agree with that assessment. The problem for me is when to jump off the gravy train.
Selling into strength now means the proceeds will land in one of MM funds yielding .01%.
The lack of alternatives to stocks, massive money creation that has nowhere else to go, free commissions, and momentum trading, have created the bubble.
In 2000, I had more difficulty finding anything to buy compared to now. My reaction to the 1990s stock market bubble was to sell everything. Cash paid decent interest then however.
I will probably continue unloading small ETF positions that own stocks in the frothiest part of market. I sold a few yesterday. Those kind of stocks are not in my comfort zone anyway.
I will keep the CEF AIO which pays a monthly dividend of $0.1083 per share and made a year end distribution of $1.1558 per share. (click distribution tab)
AllianzGI Artificial Intelligence & Technology Opportunities Fund
https://www.marketwatch.com/investing/fund/aio
CEF Connect Page:
https://www.cefconnect.com/fund/AIO
++
In mid-December, Landmark Bancorp (LARK) paid a 5% stock dividend, and Schwab just credited my account with the cash equivalent. LARK has paid a 5% stock dividend annually since 2016:
http://investor.banklandmark.com/Dividend
Market Cap at today's $23.55 close about $110M.
https://www.marketwatch.com/investing/stock/lark
+++
Capital Southwest Corporation 5.95% SU Note Maturing in 2022 (CSWCL)
The issuer of this exchange traded $25 par value bond has already made two partial calls. It has now decided to call the remaining bonds. This BDC just issued $75M of a 4.5% SU maturing in 2026 which will trade in the bond market:
https://www.sec.gov/Archives/edgar/data/17313/000001731320000131/finalprospectussupplementd.htm
I own a few shares of the exchange traded bond being redeemed and the common stock. I will keep an eye out for an opportunity to buy the $1K par value bond. That will mean looking only when there is another meltdown in BDC bonds.
Finra Page:
http://finra-markets.morningstar.com/BondCenter/BondDetail.jsp?ticker=C954985
Looked up Jeremy Grantham. He predicted other crashes, but has been early at times. Lots of good predictions, but not a timing tool on the downside (might be one on the upside.)
DeleteHe's interesting. Thinks about his investments and environment with creativity.
https://www.ft.com/content/a109af64-605a-11e9-9300-0becfc937c37
Never heard this before:
"Ken Fisher: “Bear markets always begin gently and quietly,” Fisher says in a phone interview. “A short, sharp break off of all-time highs is never how bear markets begin.”
Instead, they tend to fall by 2 to 3 percent a month over their entire duration, with most of the decline coming in the last 40 percent. Bear markets begin by “lulling in greater fools with peaceful, minor” declines, says Fisher. “Nobody gets lulled by what just happened.”"
Is it a known thing?
https://www.institutionalinvestor.com/article/b1743d0x0ms3yx/why-is-no-one-listening-to-jeremy-grantham
Though with free trades, home computers, it might change to a more aggressive pattern.
FG has a good idea to sell calls on shares one wants to take profits in. That works, unless the market does a short downturn & you can't sell because you have a call in place. I can't because I have very few issues in 100 shares. I don't know if it's do-able on indices.
GRMN & TXN were down a little. I think profit taking might be. I was looking at them for that. But SOXX did a nice gain. Is it trying for a nose bleed? My 5 shares is so small...
Currently:
1) The conditions causing the bubble still exist.
2) If 5-10 stocks are so much of the rise, then there are stocks that aren't as overvalued. They may still not be cheap. But it's not like when staid old slow growth companies had PEs of 60 in 1999.
There might be a pullback. I don't expect a big crash. Too much of those conditions you listed. The VIX model hasn't spiked for another catastrophic event.
I want to freshen up on trading ETF symbols. If there's a day with a moment I spot, I may want to jump in. I have a rule not to hold overnight. So I have to actually spot a moment.
I was expecting Warnock to have a hard time and Ossoff to have it easier. I suspect it's that Loeffer is that untenable.
ReplyDeleteI made it sound like I'm clear sailing ahead, so I wanted to add:
ReplyDeleteI am planning to lock in some gains. Soon. Like should in next few days. Just super high flyers relative to their earnings. Need to get past that moment of fear that I'm not selling at the very top, & do it.
Also looking around so maybe I won't freeze and will know what to buy on a down day.
But most I'll just hold. I think a pullback is coming, but that it won't lead to a full crash. The vaccine coming is a stopper for that. Unless there's a black swan.
Land:I try very hard to reach opinions about valuations independent of what anyone else thinks.
DeleteEven if Grantham did not exist, I would have the same opinions that he expressed in his latest letter.
There are still reasonably priced stocks IMO that pay dividends at 2x or higher than the S & P average. So those stocks are my focus now.
++++
I am surprised by the Georgia results and republicans can blame Trump IMO who has become toxic for many voters who formerly voted down ballot for republicans. The two republican candidates made it clear to those voters that they were pure Trumpsters.
I did not consider either Perdue or Loeffler to be good candidates. Both were bland and super rich white people.
Warnock has a few thousand more votes than Ossoff. Hard to know for sure why. Maybe it is because Ossoff is Jewish. Maybe Loeffler lost some votes because she is a woman and some of the North Georgia crackers just could not vote for her.
+++
I am concerned about the extremely slow pace of vaccinations. It is clear now that the entire nation was not ready for a robust rollout.
+++
The ADP employment report released this morning estimated that the private sector lost 123,000 jobs in December.
https://adpemploymentreport.com/2020/December/NER/NER-December-2020.aspx
+++
Marijuana stocks are rallying on the Georgia results.
I own a few shares of ETFMG Alternative Harvest ETF (MJ):
PREMARKET $16.49 +$1.20 +7.85%
Before Hours Volume: 174.5K
Last Updated: Jan 6, 2021 at 8:57 a.m. EST
https://www.marketwatch.com/investing/fund/MJ
From what I am seeing in early morning trading, the Stock Jocks have called the Georgia election for both democrats and have reached a different conclusion from several strategists.
ReplyDeleteThe theme so far is that interest rates will rise based on more economic stimulus being passed.
U.S. 10 Year Treasury Note 1.039% +0.082%
Last Updated: Jan 6, 2021 at 9:57 a.m. EST
https://www.marketwatch.com/investing/bond/tmubmusd10y?countrycode=bx&mod=home-page
This opinion being expressed in stock prices shows up boldly in regional bank stocks.
SPDR S&P Regional Banking ETF
$55.71 +$3.27 +6.24%
https://www.marketwatch.com/investing/fund/kre
Value stocks are outperforming growth.
Vanguard Value ETF (VTR)
$120.18 +$1.86 +1.58%
Vanguard Growth ETF (VUG)
$248.72 -$2.56 -1.02%
Last Updated: Jan 6, 2021 at 9:59 a.m. EST
https://www.marketwatch.com/investing/fund/vug
The theme is also boosting life insurance stocks like MET, PRU and LNC. I own those stocks, though I have not discussed LNC here.
Prudential Financial Inc. (PRU)
$81.50 +$4.36 +5.65%
https://www.marketwatch.com/investing/stock/pru
MetLife Inc. (MET)
$49.36 +$2.71 +5.81%
https://www.marketwatch.com/investing/stock/met
All the bank stocks that I wasnt buying because they'd risen 15-20% ... are now rallying more. Insurance too.
DeleteNot sure when or how I'll get into them. Grrrr. I was in the process of buying in when they jumped up that one day.
IWM is flying.
I sold 20 TXN at 164.83. I have a small amount left.
GRMN order in for 119.05 on about 1/2 of what I own. Which is already 1/2 of what I owned originally.
I need to sell some SOXX.
I should also look at VT, IWM, VYM, SPY, QQQ...
It's uncomfortable to sell.
F's been rallying and making up that recent 3% down day.
DeleteOil's been up over 1% several days in a row now. CVX.
Walmart's rallying today. It's normally been a rally on down days stock. And rally on bad pandemic news.
The slow rollouts of the vaccine are beyond frustrating.
I down own any weed stocks. That rally seems about right. But so off my radar. I wouldn't have thought of it...
Land: In my mile wide and inch deep approach to my stock allocation, I have a large inventory of stocks, probably somewhere in the 250-300 neighborhood. I consequently did some light selling in regional bank stocks so far today. I own 54 stocks in that sector.
DeleteThe rally today is not so much spilling over into drug, defense and packaged food stocks.
GIS which goes ex dividend tomorrow was last traded at $59.19, up only $.15 per share. Kellogg is down $.54. BMY is up less than SPY with a .63% gain compared to SPY at 1%.
Yes, I am surprised any time I mention a stock, and you haven't happened to have owned it, or researched it...
DeleteIt's worth my considering selling a couple (literally) shares of JPM & KRE, UMN, and PBCT... But... I'm afraid I'll lose track for buying more on a pullback. I want to own more of all of these!
LAZ is now down $173 for me. That's a big improvement. So the rally is giving me that. 4.48% div. PE of 16.5 seems high for a stock that's struggling on price & fundamentals.
MMM is now down $307 for me.
Might be worth taking the losses in both to not risk more downside surprises. No immediate conviction on what I'd buy instead.
INTC's turned green 1.5%. At time of the recent trading range after the falldown. Do I wait to see if it shoots up out of this range and is a big gain, or get out while the getting is good? Or wait 1 more day for more rally before getting out? Again, if I sell, what do I buy?
I guess that's the emotional problem with sellng a loser. Other stocks are up in value for moving the money.
I put in INTC sell order.... then removed it. So a decision is made.
DeleteTypo:
DeleteIntc is at the TOP (not time) of the recent trading range that's been happening since it's most recent falldown.
Land: I spent most of the day paring or eliminating positions.
DeleteThe largest sell was my remaining VIAC shares (107+) sold at $40.18.
ViacomCBS Inc. Cl B
$40.20 +$3.21 +8.68%
https://www.marketwatch.com/investing/stock/viac
MMM had IMO been overvalued but may be within a reasonable valuation range now provided the Stock Jocks are right about the economic cycle in 2021-2022.
So far, I have only managed to buy $50 at $173.68 which I will discuss down the road.
The average E.P.S. for 2021 is currently at $10.2 and $11.2 for 2022.
https://www.marketwatch.com/investing/stock/mmm/analystestimates?mod=mw_quote_tab
I was more enthusiastic in a Roth IRA account, buying a whole share.
I have been nibbling in dollar amounts on LMT, buying $50 today at $344.03. Working myself up gradually to 1 share.
I have recently being doing those kind of $ buys for AMGN and GD.
I have LMT. And Grmn (or had). Why is LMT sinking since mid-Oct. Earnings were in range. But the chart does a slide.
DeleteI'm up from when I originally bought. Could add $800 to round out the position, but won't be getting to a 100 share position.
Is GD stronger than LMT? They look very similar. Except GD's not in a slide, and 1/2 the debt.
Viacom is in the same sector as the VZ that I own? That stock is up from where I bought it, about 8%, but hanging there. Too high to buy more. Too low to sell. Bought for the div.
Land: GD has a more diversified defense business. The aerospace segment (private jets and services for) has been a drug during the pandemic period with that segment's revenues down 20.8% Y-O-Y in the 2020 third quarter. GD is in the private jet business through Gulfstream and a significant service operation for private jets. The declines in that business make no sense to me since I would think that rich people would prefer flying in private jets now.
DeleteGD also has tanks, rockets, missiles, warships and submarines.
https://www.gd.com/our-businesses
Last earnings report:
https://www.sec.gov/Archives/edgar/data/40533/000004053320000061/gd-20200927exhibit991.htm
I would not consider the overlap between VIAC and VZ to be material. VZ is primarily a wireless carrier. Its media business generated about $1.7B last quarter out of $21.7B total revenues. VIAC is a content media company.
I sold it primarily to realize a profit after a long loss period and a few average downs. After my initial 100 share purchase in that account, the price sank all the way down to $10.10 intraday on 3/18.
https://finance.yahoo.com/quote/VIAC/history?p=VIAC
I prefer to avoid that kind of decline. I will discuss the trade later this month.
I still own a few shares in DISCA and AMCX, two U.S. media content companies. I also own shares in Corus Entertainment, priced in CADs and USDs, a smaller Canadian media content company.
I imagine there's less places to fly to? Seems like a good add to diversify from LTM. GD's holding steady. LTM slide then continuing down since. I haven't spotted why yet.
DeleteI didn't know there's a category called "content media company." Will read on VIACOM when you discuss.
First Hawaiian Inc. (FHB)
ReplyDelete$25.24 +$1.61 +6.81%
Last Updated: Jan 6, 2021 at 2:36 p.m. EST
https://www.marketwatch.com/investing/stock/fhb
FHB is one of my larger regional bank stock positions with over 200 shares.
An example of a pare earlier today was to sell 10 at $24.35. Most of my pares involve selling the highest cost lot but I could not do that with this stock. Instead, I used the specific identification cost method and sold the highest cost lots in a long chain that I could profitably sell.
The gain was only $5.29, which is fine. When doing pares this way, I am trying to reduce the taxable gain while lowering my average cost per share and increasing my dividend yield.
The new average cost per share in this account is now at $20.84 (75 shares). The highest cost lot (other than shares purchased with dividends) is 5 shares bought at $27.7 which will be sold when and if it becomes profitable to do so. The lowest price lot is 2 shares bought at $13.7 on 5/14/20. I will liquidate the shares bought with dividend when and if I can sell all of them at a profit (highest cost at $30.4, lowest at $16.32) That is my way of generating a dividend yield greater than just from the dividends paid.
I'm selling first, but plan to buy back TXN & Grmn.
DeleteThe problem is when they keep gaining & I can't get back in later.
Maybe I should consider buying on the way up, to have lots so can sell higher cost ones.
These didn't do much dipping, but I could pay more attention and buy on dips.
Natulius is up 1500%. I'd say something but I'm kind of speechless. It a stationary bike.
Deletehttps://finviz.com/quote.ashx?t=NLS
Media's gotten it's desire for drama today.
ReplyDeleteNew Lincoln ad
ReplyDeletehttps://twitter.com/ProjectLincoln/status/1346984355214852096?s=20
Added 30 PPL a 27.92. Not the most super price, not the worst.
ReplyDeleteLand: The bond like common stocks, which include utilities and REITs, are under pressure due to spike in interest rates.
DeleteRegional bank stocks continue to explode higher.
SPDR S&P Regional Banking ETF
$58.22 $1.73 +3.05%
Last Updated: Jan 7, 2021 at 10:48 a.m. EST
https://www.marketwatch.com/investing/fund/kre
I eliminated 1 and pared some others including a 50 share high cost HBAN lot which lowered my average cost to $10.44 (Fidelity taxable-92+ shares after pare) I now own 53 regional bank stocks.
I own PPL in 5 of my accounts, with unrealized gains in 4 and an unrealized loss in the largest position (118+ shares). On a net basis, I am about even.
Management had previously said that PPL was looking to sell its UK operations but put the process on hold until there was a Brexit deal. I am assuming that will happen this year and would view it favorably at a decent price given the worsening regulatory climate in the U.K.
I more than doubled my existing MMM position with a $50 purchase earlier today at $167.75 (.298 of a share)The prior $50 purchase only got me .287 of a share. Now a proud owner of .585 MMM.
The defense stocks are volatile based on fears of what the democrats might do. I view that as unfounded. Democrats do not have the power yet to make significant cuts and it would be suicidal for many of them in the House and Senate to do so.
"proud owner of .585 MMM" lol.
DeleteMay you find yourself staring at opportunity to leap to .685 shares.
I was wondering if defense is reacting to the dem win. In that case, I'll buy some.
I need stuff in my IRA account the most. (25% in the market - due to everything that did poorly.)
MMM sells home-improvement related products, and transportation. The former should have helped this stock a lot during lockdown. I have to look more. It seems like it must be a poor management problem.
Land: Barron's published a favorable article on MMM last month, titled "3M Had a Solid 2020, but the Stock Doesn’t Show It"
Deletehttps://www.barrons.com/articles/3m-had-a-solid-2020-but-the-stock-doesnt-show-it-51609234200
Health care revenues were up 8.1% in the last quarter.
I mentioned in a prior comment when you brought this stock up that MMM faces some serious environmental cleanup issues for its PFAS chemicals.
This is a major problem for MMM and is summarized at pp. 39-49 of its last filed 10-Q.
https://www.sec.gov/Archives/edgar/data/66740/000155837020011804/mmm-20200930x10q.htm
That issue is a serious restraint on my buying now.
Chemours (CC), another stock that I recently discussed in a comment, also has potential liability partly through what DuPont claims is an indemnity agreement.
page 30
https://www.sec.gov/Archives/edgar/data/1627223/000156459020050526/cc-10q_20200930.htm
I have already halved my recently acquired position in CC.
Thanks. I'll check the article. The chemical stuff must have left through the hole in my brain. I remember now. Will make a note in red.
DeleteI need to buy stuff in my IRA. Need to find good ideas...
ReplyDeleteLand: I have lots of ideas but my enthusiasm for buying is at a low ebb.
DeleteI would describe myself as a dumpster diver. A more respectable phrase with the same meaning would be "value contrarian". What that means in practice is purchasing stocks with awful looking charts. The regional bank stock charts as of last March-April would be an example.
I bought about 50 regional bank stocks when their prices collapsed earlier this year. In many cases, the prices were near or at 2009 price levels and below tangible book value per share. Now, I am paring those positions.
In my next post, I will refer to an article where Bill Gross, not a stock investor, recommends MLP pipeline stocks. I avoid those, but do own stock in 5 regular "C" corporations that own pipelines: ENB, KMI, OKE, PBA, and TRP. Of those, the largest share position is in PBA and the most recent add, which I have not yet discussed was in TRP (up to 20+ shares in my Fidelity taxable with an AC at $44.25, above the current price).
I recently discussed a 100 share purchase of PBA:
Friday, November 13, 2020
Item # 1 Bought 107 PBA-100 at $21.84; 5 at $20.89; 2 at $20.66 and Sold 7 at $23.18
https://tennesseeindependent.blogspot.com/2020/11/buse-bxmx-duk-ebix-fcbc-fpf-opi-orcc.html
Pembina Pipeline Corp.
$26.69 +0.51 +1.95%
Last Updated: Jan 7, 2021 at 1:15 p.m. EST
https://www.marketwatch.com/investing/stock/pba
ENB, PBA and TRP are Canadian corporations that are priced in USDs but pay dividends in CADs that are converted into USDs. The value of the dividend and the share price will in part be dependent on the CAD/USD exchange rate.
Under Canada's tax treaty with the U.S. Canada does not currently collect a tax on the dividends paid by regular C corporations when the stock is owned in a U.S. citizens retirement account. Canada does collect a tax on pass through entities like REITs which are not taxed at the corporate level.
REITs are being hit today and the decline may continue for as long as interest rates continue to spike higher.
One of the quality REITS, WPC, which just went ex dividend, is one to watch on the way down for an entry point IMO.
I will be discussing a tepid buy of GSK in a subsequent post (total 10 shares in 2 five share lots at $36.36 and $36.13).
GlaxoSmithKline PLC ADR
https://www.marketwatch.com/investing/stock/gsk
GSK is a U.K. based company which does not currently collect a tax on dividends. It would be the same for RDS/B and UL.
I am staying away from new stock fund purchases at these levels.
I will be discussing tepid buys of the CEFs GAM and GDV.
I am surprised that I am able to buy anything given my overall opinion about the potential downside risk. All that I can say is a .01% MM rate is a powerful incentive for me to do something and I don't like it when the FED forces me in that manner.
The downdraft in LMT today was probably linked to a Baird downgrade to neutral with a $368 PT.
ReplyDeleteI am surprised that this firm's recommendation would carry that kind of weight.
I do not have access to that report. I have reviewed reports from Credit Suisse, Morningstar, S & P and Argus that are available to Schwab brokerage customers.
The recommendations and price targets are all over the place, rendering them meaningless IMO.
Argus (10/20/20): Buy with a $450 PT
S & P (10/26/20): 5 stars with a 12 month PT of $504
Credit Suisse (multiple reports): Neutral with a $409 PT
Morningstar (12/23/20): 4 stars with a $433 FV
Reading these reports can provide information and clarity about whether or not to buy and possible entry points.
The chart looks weak to me which is one reason for a go slow approach.
I only provide the basic recommendation information, believing that anyone interested needs to read the reports for themselves.
+++
3D Systems Corp. (DDD)
$22.96 $11.72 +104.27%
https://www.marketwatch.com/investing/stock/ddd?mod=over_search
Apparent Cause:
https://www.globenewswire.com/news-release/2021/01/07/2154887/0/en/3D-Systems-Completes-Sale-of-Cimatron-and-GibbsCAM-Businesses-and-Provides-Preliminary-Financial-Results-for-Fourth-Quarter-2020.html
I sold that lotto too soon, but I can not anticipate crazy behavior.
Item # 2.O.
https://tennesseeindependent.blogspot.com/2020/12/akba-aresf-bdge-brgpra-brkl-ccne-csco.html
I had bought 10 DDD at $6 and 5 at $5.8 last November.
I still have a placeholder in the ETF PRNT which has DDD as a #2 weighting:
3D Printing ETF
$36.40 +$4.26 +13.25%
AFTER HOURS $38.74 +$2.34 +6.43%
After Hours Volume: 3.91K
Item # 2.E. Started PRNT as a Placeholder-Bought 2 at $26.85:
https://tennesseeindependent.blogspot.com/2020/12/agr-dpg-ebmt-flgb-fraf-glq-imgn-ipay.html
I do not want my brain to become infected with whatever is causing these moves, so I may sell that 2 shares tomorrow.
+++
GIS was ex dividend today and I added 5 shares at $57.95 near the close.
+++
My newest Lotto, which I will discuss in my next post is Glu Mobile Inc. (GLUU):
Quote:
https://www.marketwatch.com/investing/stock/gluu?mod=over_search
SEC Filings:
https://www.sec.gov/cgi-bin/browse-edgar?CIK=1366246&owner=exclude
Last Earnings Report:
https://www.sec.gov/Archives/edgar/data/1366246/000115752320001448/a52321437ex9901.htm
For LMT that's good info. It looks like something's wrong but it's not expressed to the general public yet (doubts on a sale or something.) This is going to take time to dig.
DeleteThe chart does look so-so. GD's is much more steady, which makes it clearer that it's not the subsector, but the individual stock.
I'm still green. Will need to look.
I'm going to look at DDD and PRNT. Those are wild climbs. But in this market, that might be a good momentum chase (for small amounts). It's counter intuitive, but I've been missing out on these types of things.
I've bought or shopped for a couple things in the last 6 months where part was made with 3-D printing. The technology might have reached a tipping point of working and being accepted. Will have to see if I still think that after looking.
GLUU was lauded by a wall street big wig who had made a fortune and was sharing on SA. (I looked him up, not just took his boosting as fact.) He got tired of doing it for free on SA. He liked this 5 or more years ago when it was a penny stock. It was his BIG PICK.
That could be a good buy. Need to read up on it.
Land: My LMT position surged over 1 share to 1.009 shares (is that plural or singular?) after 3 $50 buys today.
DeleteI saw that Pfizer preliminary study. I would not call it conclusive, but the Stock Jocks will.
https://www.statnews.com/2021/01/08/pfizer-biontech-vaccine-mutation-contagious/
I had 4 five share GIS buys with the last at today's closing price of $56.4.
I will discuss LMT and GIS in my next post. The discussion of stocks where I am buying in $50 and $100 dollar amounts will not be very detailed.
Except for Romney, I did not see any republican politician claim that Trump at least had some responsibility for inciting the riot. It is easy for them to condemn the lawfulness but they are unwilling to go the next step.
The entire false election fraud, conspiracy ladened claims, spread by Trump, thousands of republican politicians nationwide and their media propaganda outlets (FOX, OANN, Newsmax) created the necessary conditions for the Trumpster attack on the capital. I am confident that they genuinely believe the false narratives and baseless conspiracy theories conveyed to them by those people. They were already filled with rage before Trump, Don Jr. and Giuliani egged them on. None of those people will ever admit to their personal culpability.
The response by the Capital police was practically non-existent. They clearly were not prepared, and there will be an investigation as to why. Only a few arrests were made at the capital.
Lol, I guess plural. Yes, if I eat most of an apple & had one more, I'd have apples. One of them with that browning look.
DeleteI strongly suspect Trump or a Trump fixer got to the Capital Police. One of the top said "we decided to try for a softer image this time." Someone gave them that idea, after many years of doing their job properly.
Media's talked about Members helping rioters. But no one's talked about CP behavior coming from a Trump deal. And I'd bet there was one.
I did not notice until today that BAC downgraded MMM to sell yesterday based on its environment exposure that involves the PFAS groups of chemicals.
ReplyDeleteBarron's: "3M Stock Is a ‘Sell’ Because a Blue Wave Could Mean Trouble"
https://www.barrons.com/articles/3m-stock-is-downgraded-because-a-blue-wave-could-mean-trouble-51610057477
The analyst notes that the House passed legislation in 2019, when the democrats had a large majority, that would designate this chemical as a hazardous substance under the Superfund law, which would get the EPA involved in the cleanup under a Biden appointed director.
The analyst estimates that the total liability for all firms could be $100B, with MMM's share at 30% to 35% of that amount, but that total is just a wild speculative guess IMO.
The issue involves the seepage of the chemicals into ground water near the plants that manufactured the chemicals.
As I have said in the past, this issue is known and has kept a lid on MMM's price movement. It is impossible to quantity with any precision the monetary exposure.
I suspect, which is a guess, that MMM has under reserved for this potential liability. No one IMO can come up with a figure of the likely future liabilities.
My mind is a bit fuzzy on when the last charge was taken, but the last reserve that I recall was $214M pre-tax taken for litigation in the 2019 4th quarter:
https://www.sec.gov/Archives/edgar/data/66740/000110465920007328/tm205961d1_ex99-1.htm
++++
The packaged food companies are being hit today. I did not see any news. Maybe the Stock Jocks need to raise capital to redeploy into Tesla and other similar P/E multiple Big Mo stocks.
Regional Banks stocks are pulling back some from their recent robust rally which caused me to execute some widespread paring.
SPDR KBW REGIONAL BANKING (ETF)
$57.175 -$0.625 (-1.0813%)
AS OF 12:24:25PM ET 01/08/2021
Interest rates are continuing to spike higher.
U.S. 10 Year Treasury Note
1.118% +0.034%
Last Updated: Jan 8, 2021 12:22 p.m. EST
https://www.marketwatch.com/investing/bond/tmubmusd10y?countrycode=bx&mod=home-page
This is good news, Pfizer vaccine is effective against new mutation:
ReplyDeletehttps://www.jpost.com/health-science/pfizer-vaccine-appears-effective-against-new-coronavirus-mutation-study-654719
I personally think the storming of the capital is good news (in spite of all the bad it is). It's creating some first cracks. Eventually more will follow, even if slowly. I wasn't sure Trump would ever push it in a way that would split his GOP member sycophant support at all. This is the first errosion that sidelines his future endeavors some.
Media's driving me crazy. I wish they'd consider that Trump el al, made a deal with top of the capital police. They've considered individual deals with some congressmen, but not the usual sociopath plan that's arranged from the top. Someone at the top said "we were trying for a softer look." Right there is what happened. The idea didn't just pop into their heads.
I sold INTC at 152.18. I put the order in, and it sold even though the market did not reached that price since I put it in. It must have barely touched on it as a high trade one moment. Yay. I hope. Out with $110-ish (sad not to have sold while it was flying.) May buy back...lower.
BAC on MMM - that explains it. I missed the moment, but I think I should get out with $180 loss if I get a chance again, rather than hold this. My entry isn't good enough for lasting through this problem. It's this close & not a huge loss because the market is high.
I should keep an eye on entry into food then. Owning super extended multiple PE stocks is very important though!
I kind of missed the moment and will look for it, but want to sell some IWM & lock in that climb. A little QQQ too.
VIX isn't below 20 yet.
I kept 1 INTC - so I can see it more easily.
ReplyDeleteI got lucky on INTC. There's this short but very high spike at 3pm.
ReplyDeleteWonder how that happened. Maybe a floor trader spiked it in order to sell out other shares. I've never seen a look like that before mid-chart.
Land: There was a report released by Bloomberg that Intel was holding discussions with Taiwan Semiconductor (TSM)about manufacturing some of Intel's chips. The report was released around 2:00 P.M. C.S.T. Intel has been experiencing significant manufacturing as of late which I have discussed earlier.
Deletehttps://www.businessinsider.com/intel-delay-chip-production-stock-plunges-2020-7
Some Stock Jocks would view it as positive when and if something beneficial could be worked out with TSM who is not having those problems.
Oh! So I sold just as it will climb, err...
DeleteThe report's release times with the spike at 3pm. Curiously the spike was no more than 1-2 mins.
I have published a new post:
ReplyDeletehttps://tennesseeindependent.blogspot.com/2021/01/amgn-bif-btz-crm-dcomp-eaf-ed-gass-gd.html