Economy:
Powell: "Inflation is still too high, further progress in bringing it down is not assured, and the path forward is uncertain".
My Video: Fed's Monetary Policy Statement and Powell Press Conference - YouTube
Personal Income and Outlays, March 2024 | U.S. Bureau of Economic Analysis (BEA)
Annual PCE Inflation: 2.7%
Annual Core PCE Inflation: 2.8%
Month-To-Month PCE and Core PCE Inflation: .3%
Real PCE: +.5%
As I have mentioned previously, the problem is the month-to-month inflation trend.
Note that the month-to-month core PCE inflation was .1% from October to November and .2% from November to December. September to October 2023 was at .2%. The first three months of 2024 had month-to-month core PCE inflation numbers of .5%, .3% and .3%.
It is possible that the first quarter inflation numbers will prove to be a blip, based in part on annual price increases adopted in the quarter. Stalled Inflation Vexes the Fed. Is It Noise or a New Trend? - WSJ
Median Income Household - Home Affordability:
The "Atlanta Fed developed an interactive home affordability tool, the HOAM (Home Ownership Affordability Monitor) Index, which measures the ability of a median-income household to absorb the estimated annual costs associated with owning a median-priced home. Using the HUD standard 30 percent share of income threshold to measure affordability, this tool presents a national view of affordability for the median home owner from January 2006 through the most current data as well as metro-level and county-level (within metropolitan areas) views of affordability for the median home owner from January 2014 through the most current data."
Home Ownership Affordability Monitor - Federal Reserve Bank of Atlanta
S&P Corelogic Case-Shiller Index February 2024 U.S. National Home Price Index was reported a 6.4% annual gain through February.
ADP estimated that the economy created 192,000 new private sector jobs last month. ADP National Employment Report: Private Sector Employment Increased by 192,000 Jobs in April; Annual Pay was Up 5.0%
Earlier today, the BLS estimated that the economy created 175,000 jobs last month. Employment Situation Summary-2024 M04 Results The unemployment rate was at 3.9%. Over the past 12 months, average hourly earnings increased by 3.9% but the increase in April was just 7 cents or .2%. The February job increase number was revised to +236,000 from 270,000; and the March increase was revised up to 315,000 from 303,000.
 |
| In Thousands |
Bureau of Labor Statistics Data
Starbucks, McDonald's, Yum earnings show consumers pulling back
+++
Allocation Shifts Discussed in this Post:
Treasury Bills Purchased at Auction: $20,000 in principal amount
Corporate Bonds: $14,000 in principal amount.
In compiling inflow into Treasury Bills and corporate bonds, I do not net out redemption proceeds.
Outflow Common Stocks: -$2,863.71
(Consisting of $3,142,46 in proceeds minus $278.75 in purchases)
The outflow comes almost entirely from the banking stock sector.
Inflow Stock Funds: +$228,3
Outflow Common Stocks/Stock Funds: -$2,677.21
Equity Preferred Stock: -$186.5
2024 Net Outflow Stocks/Stock Funds: -$21,233.32
++++
Trump and His Anti-Democracy Party:
RealClearPolitics - Election 2024 - General Election: Trump vs. Biden
Donald Trump on What His Second Term Would Look Like | TIME This needs to be required reading for every voter.
'More ruthless': Key takeaways from Trump's TIME interview - YouTube
My video: Trump's Interview with Time Magazine Reporters - YouTube
CNN Poll: Trump maintains lead over Biden in 2024 matchup as views on their presidencies diverge 61% of voters stated in this poll that Biden's Presidency has been a failure, while only 44% made that claim for Trump's term. The two substantive policy problems for Biden is that he is being blamed for inflation and the influx of immigrants across the southern border.
What struck me about the oral argument on the presidential immunity issue was the total lack of interest among the Republican Justices about the insurrection case that was actually before them.
The Trumpification of the Supreme Court - The Atlantic
15 Historians File Amicus Brief in Trump v. US Debunking Immunity Claim | Brennan Center for Justice; Historians Amicus Brief.pdf There is no provision in the Constitution that would grant an ex-President immunity from crimes committed while in office. There is an immunity for legislators in the Speech and Debate Clause. Speech and Debate Privilege-Legal Information Institute
My Video: Presidential Immunity for Crimes and the Hypocrisy of the Originalists - YouTube The Revolutionary War was fought to sever the connection with a King who was above the law. The Republican Justices who are originalists, claiming to interpret the Constitution as it would have been construed when written, want to create in 2024 a Presidential immunity from criminal prosecution. How does that square with the provision in Article 2 that the President is obligated to "take Care that the Laws are faithfully executed" but is then allowed to break the laws with impunity.
Historian says Trump lawyer "deliberatively misleading" SCOTUS: Ben Franklin "would be horrified"
The Supreme Court majority sounds sold on Trump's Big Lie
'That was embarrassing': Tribe torches Trump-friendly SCOTUS justices on immunity - YouTube
Trump is a 'wrecker,' says historian Robert Kagan - YouTube
Barr, who said Trump shouldn’t be near Oval Office, says he will vote for him in 2024; New Ad: Are you or is someone you love suffering from Partisan Derangement Syndrome? - YouTube
S.D. Governor Kristi Noem (R) Says She Shot, Killed Her Puppy in Book Excerpt; Trump VP contender Kristi Noem defends dog killing amid ridicule Noem is one of the contenders for the republican VP nomination.
How Trump’s Rhetoric at Rallies Has Escalated - The New York Times
Michigan AG executes search warrants on Google and X in ongoing 2020 fake electors probe
Eric Hovde, the Trump endorsed Republican candidate for the U.S. Senate in Wisconsin, has repeatedly stated that nursing home residents should not be allowed to vote since he believes they lack the mental capacity to vote. Sen. Baldwin slams Trump-backed rival Hovde: Can't let him ‘anywhere near' the U.S. Senate - YouTube (Hovde" “If you’re in a nursing home, you only have a five-, six-month life expectancy Almost nobody in a nursing home is at a point to vote.")
Trump will never accept an election defeat. Trump gives his strongman’s ambitions free rein on a day off from court
++++
Putin and His Violent Orwellian State:
Losses ∙ Russia ∙ WarSpotting — documented material losses in Russo-Ukrainian war
Ukrainian Drones Hit Oil Refineries in Krasnodar and Smolensk! - YouTube
It is clear that Putin is unable to protect oil refineries and depots from slowi moving drone attacks.
Russian missile hits educational institution in Odessa, kills four in Ukraine's Odesa | Reuters
Russia launched a missile attack against a psychiatric hospital in Kharkiv. Russian Missile Hits Ukrainian Health-Care Compound
Russian missile strike hits Odessa building in Ukraine - YouTube
The second most powerful man in Russia is Nikolai Patrushev who is a far more crazy and violent psychopath than Putin. What Putin’s No. 2 Believes About the West - The Atlantic
Ukraine special forces destroy six BUK launchers worth $600,000,000 in six weeks - YouTube
Javelin missile easily destroys 'famous' Russian T-80BV tank in Urozhaine - YouTube
Putin will continue his war in Ukraine for as long as he remains in power. Having made the mistake of invading Ukraine, based on his delusional forecast that victory would be achieved in a few days, his life, power and wealth are at risk without succeeding in his imperial ambitions irrespective of the costs in Russian lives and the extremely negative long term impacts on the Russian economy. Ukraine is not going to surrender and be absorbed into Putin's totalitarian state.
++++
1. Eliminated TD - Sold 35 at $59.08:
Quotes:
USDs: Toronto-Dominion Bank (U.S.: NYSE)
CADs: Toronto-Dominion Bank (Canada: Toronto)
Canadian Dollar to US Dollar Exchange Rates Chart | Xe
Proceeds: $2,067.78
SEC Filings (foreign company forms)
TD Analyst Estimates | MarketWatch
Profit Snapshot: $280.15
Last Discussed: Item # 2.N. Sold 1 TD at $70.54 (2/20/23 Post)(profit snapshot = $16.25)
Dividend: Quarterly at C$1.02 per share
Last Ex Dividend: 4/10/24 (owned all as of)
Historical Dividends in USDs: The Toronto-Dominion Bank (TD) Dividend History | Seeking Alpha
Last Earnings Report (Fiscal First Q/E 1/31/24): TD Bank Group Reports First Quarter 2024 Results - Feb 29, 2024
All amounts are in CADs.
Some Previous Sell Discussions: Item # 1.F. Sold 2 TD at $82 (1/27/22 Post)(profit snapshot = $55.42); Item # 2.H. Pared TD-Sold 2+ shares at $70.97 (5/28/21 Post)(profit snapshot +$52.81, shares bought with dividends); Item # 2..N. Pared TD-Sold 1 at $60.54 (3/6/21 Post)(profit snapshot = $6.25); Item # 3.J. Sold 2 TD at $58.39 (1/31/21 Post)(profit snapshot = $6.99); Item # 1 Eliminated TD-Sold 53+ Shares at $58.31 (3/19/18 Post)(profit snapshot +$910.82); Item 4.A. Sold 54+ TD at $56.97 (11/4/17 Post)(profit snapshot +$718.78)
TD Realized Gains to Date: $2,047.47
2. Small Ball Stock Purchases:
A. Added to SWZ - Bought 10 at $7.56:
Quote: Swiss Helvetia Fund Inc. Overview - Stock CEF
Cost: $75.6
Sponsor's Website: Schroders | SWZ
New Average Cost per share: $7.687
Data Date of 4/26/24 Trade:
Closing Net Asset Value per share: $9.08
Closing Market Price: $7.56
Discount: -16.74
Average 3 year discount: -14.3%
Sourced: SWZ - CEF Connect
I discussed this CEF in my last post and having nothing further to add here Item # 1. Restarted SWZ - Bought 100 at $7.7 (4/26/24 Post)
B. Added to IDE - Bought 15 at $10.18:
Quote: Voya Infrastructure, Industrials & Materials Fund Overview - A Buy/Write CEF
Cost = $152.7
Investment Strategy: Monthly Income Generation
Earlier this year, I decided to increase my monthly dividend paid by CEFs owned in my Fidelity account to $200. Having hit that target, I am now increasing the goal to $300 per month which will allow me to profitably sell my highest cost shares into rallies while keeping the monthly total above $200.
Last Discussed: Item # 2.D. Added to IDE - Bought 5 at $8.9 (10/14/23 Post); Item # 2.B. Added 5 IDE at $9.31 (6/10/23 Post)
SEC Filed Semiannual Report for the period ending 8/31/23 (Cost of investments then at $158.7+M, valued then at $175.55+M)
Sponsor's website: Voya Infrastructure, Industrials and Materials Fund
Old Average cost per share: $9.28
New Average cost per share: $9.54 (50+ shares)
 |
| Snapshot Intraday on 4/26/24 after add |
Dividend: Monthly at $.10 per share.
This CEF recently switched from paying quarterly dividends. The prior quarterly rate was $.229 per share.
Some ROC Support.
Yield at AC per share: 12.58%
Last Ex Dividend: 5/1/24 (owned all as of)
Data date of 4/26/24 Trade:
Closing Net Asset Value per share: $11.66
Closing Market Price: $10.18
Discount: -12.69%
Average 3 Year Discount: -11.22%
Sourced: IDE-CEF Connect
Largest Gains: Item # 2 Sold 100 of the Stock CEF IDE at $20.3 (3/11/11 Post)(profit snapshot = $227.25);
Item # 5 Sold 100 IDE at $17.47 (3/24/2014 Post)(profit snapshot = $138.39)
Last Elimination: Item # 3. Eliminated IDE - Sold 100 at $13.85 (1/29/2017 Post)(profit snapshot = $46.96)
Some Other Sell Discussions: Item # 1 Sold 50 IDE at $18.7 (9/30/10 Post)(profit snapshot = $49.08); Item # 2 Sold 50 of the Stock CEF IDE at $18.61 (5/10/12 Post)(profit snapshot = $55.58); Item # 3 Sold 50 IDE at $17.12 Roth IRA (7/6/13 Post)(profit snapshot = $34.48).
IDE Realized Gains to Date: $621.55
I highlighted the prior sale dates and prices just to emphasize that this CEF had to be traded to realize acceptable total returns.
C. Added 5 NSA at $34.95:
Quote: National Storage Affiliates Trust (NSA) - Internally Managed Storage REIT
Cost: $174.75
Last Discussed: Item # 2.B. Added to NSA - Bought 5 at $35.25 (4/26/24 Post). I discussed the 2023 4th quarter report in that post.
Website: National Storage Affiliates Trust (NSA)
New Average cost per share: $36.6 (35 shares)
Dividend: Quarterly at $.56 per share ($2.24 annually), last raised from $.55 effective for the 2023 second quarter payment.
Dividend History-National Storage Affiliates Trust (NSA)
Yield at $36.6 AC : 6.12%
Last Ex Dividend: 3/14/24 (owned 25 as of)
Last Earnings Report (Q/E 3/31/24): SEC Filing
Net Income: $95.088M
GAAP E.P.S. = $.65, juiced by $61.173M gain on property sales
Core FFO per share: $.60
The core FFO calculation adds to the net income number the depreciation and amortization non-cash expense of $46.964M and deducts the $61.173M gain.
Wholly Owned Properties: 809
Joint Venture Properties: 241
Same Store Occupancy: 85.6%, down from 89.4% as of 3/31/23.
D. Added to PSEC - Bought 10 at $5.23; 10 at $5.16:
Quote: Prospect Capital Corp. (PSEC) - Externally managed BDC
Cost: $104
Website: Prospect Capital Corporation
After these purchases, I changed my dividend option from payment in cash to reinvestment based on the current discount to the last reported net asset value per share.
Net Asset Value per share as of 12/31/23: $8.92
New Average cost per share: $5.49 (70+ shares)
Dividend: Monthly at $.06 per share ($.72 annually)
PSEC Stock Dividend History & Date
Yield at $5.49: 13.11%
Last Ex Dividend: 4/25/24
I discussed PSEC in my last post and have nothing further to add here. Item # 2.F. Added 15 PSEC at $5.42 (4/26/24 Post) I discussed the last earnings report in that post. SEC Filing and 10-Q
3. Small Ball Sells:
A. Eliminated FISI - Sold 26+ at $17.45:
Quote: Financial Institutions Inc. (FISI)
Proceeds: $459.95
Investment Category: Regional Bank Basket Strategy
FISI is a bank holding company that is the parent company of Five Star Bank which has branches in central and western New York.
FISI somehow became a victim of a check kiting scheme and lost about $18.4M. Check fraud scheme at Five Star Bank highlights growing vulnerability for banks; Crescent Beach owner set up multiple accounts for fraud, bank alleges
FISI Analyst Estimates | MarketWatch
Profit Snapshot: $59.74
Dividend: Quarterly at $.30 per share, last raised from $.29 effective for the 2023 first quarter payment.
Financial Institutions, Inc. (FISI) Dividend History | Seeking Alpha
Last Ex Dividend: 3/14/24
Last Earnings Report (Q/E 3/31/24):
Net income after preferred share dividends of $1.7M or $.11 per share, down from $11.7M in the 2023 first quarter of $.76 per share.
The company recorded a $18.4M pre-tax loss from the check kiting scheme. This was down from a $18.9M previous estimate due to recovery of some funds in late March 2024.
Prior Sell Discussions: Item # 2.B. Pared FISI in Schwab Taxable Account - Sold 5 at $21.48 (1/6/24 Post)(profit snapshot = $24.7); Item #1.F. Pared FISI in Schwab Taxable-Sold 5 at $29.15 (4/17/21 Post)(profit snapshot = $69.85); Item # 3.F. Pared FISI Schwab Taxable Account-Sold 5 at $20.6-highest cost lot (12/4/20 Post)(profit snapshot = $23.26); Item # 3 Sold 50 FISI at $24.71 Update For Regional Bank Basket Strategy As Of 8/21/15 - South Gent | Seeking Alpha (profit snapshot = $442.07); Item # 2 Sold 51+ FISI at $24.1 (5/3/2015 Post)(profit snapshot = $254.18); Item # 5 Sold 50 of 150 FISI at $21.16 (10/11/13 Post)(profit snapshot = $59.15)
FISI Realized Gains to Date: $926.09
B. Eliminated FULT - Sold 31+ at $17.12:
Proceeds: $531.09
Investment Category: Regional Bank Basket Strategy
FULT Analyst Estimates | MarketWatch
Last Discussed: Item # 2.E. Eliminated Duplicate Position in FULT - Sold 31+ at $15.74 (2/23/24 Post)(profit snapshot = $19.44)
Last Buy Discussion: Item # 1.I. Added to FULT - Bought 2 at $13.83 (4/1/23 Post)
I sold into the rally on 4/29 that resulted from an announcement that the FDIC had sold the assets and branches of a failed bank to FULT. Fulton Financial Corporation Acquires Substantially All of the Assets and Assumes Substantially All of the Deposits of Republic First Bank from the FDIC
Profit Snapshot: $62.57
C. Sold 3+ EPRT at $26.33:
Proceeds: $83.64
I sold all shares bought with dividends. This is part of my risk reduction strategy. Given my age and financial objectives, I am more interested in profitably selling shares bought with dividends rather than keeping them for a compounding effect over time which risks losing some of their original value as cash dividends.
10-Q for the Q/E 3/31/24 (Debt is discussed at pages 49-51, 65)
Last Discussed: Item # 3.D. Eliminated Duplicate Position in EPRT - Sold 13+ at $24.22 - Schwab Account (8/19/23 Post)(profit snapshot = $32.9)
Last Buy Discussions: Item # 6.I. Added to EPRT - Bought 2 at $19.19 - Fidelity Account (11/1/22 Post); Item # 4.N. Added to EPRT - Bought 2 at $19.95 (10/11/22 Post)
Profit Snapshot: +$9.89
New Average cost per share: $23.77 (39 shares)
 |
| Snapshot Intraday on 4/29/24 after pare |
Dividend: Quarterly at $.285 per share ($1.14 annually), last raised from $.28 effective for the 2023 4th quarter payment. The quarterly dividend was at $.21 per share in first quarter of 2019.
Essential Properties Realty Trust, Inc. (EPRT) Dividend History | Seeking Alpha
Yield at $23.77 AC = 4.8%
Last Ex Dividend: 3/27/24 (owned all as of)
Last Earnings Report (Q/E 3/31/24):
FFO per share: $.46
AFFO per share: $.40
For a triple net lease REIT, the tenant has the obligation to pay routine maintenance expenses. Consequently, the major reduction from FFO will be to deduct non-cash revenues created by the straight line accounting convention. Pretend revenues are not available to support the cash common share dividend.
Revenues: $103.501M
Number of Properties: 1,937
Weighted average occupancy: 99.9%
Increased 2024 AFFO guidance to $1.72-$1.75 per share.
4. Corporate Bonds: $14,000 in principal amount
The current focus is to build up my 2025 bond ladder. I have quit buying corporate bonds maturing in 2024. I am only nibbling in corporate bonds maturing in early 2026.
The one year treasury bill has continued to move up in yield after I bought these bonds, narrowing their yield advantage over that T Bill. U.S. 1 Year Treasury Bill Advanced Charts | MarketWatch A state cannot tax interest paid by the U.S. Treasury but can tax corporate interest payments. Tennessee does not have a state income tax so I do not need to adjust the yields for corporate by a state tax rate and then compare the result with the yield on a comparable maturity treasury. If I lived in a state with an income tax, I would focus more on buying treasuries in a taxable account and corporate bonds in a retirement account.
A. Bought 2 Southern Copper 3.875% SU Maturing on 4/23/25 at a Total Cost of 98.178 (Interactive Brokers Account):
Finra Page: Bond Page | FINRA.org
Credit Ratings: Baa1/BBB+
YTM at Total Cost: 5.79%
Current Yield at TC = 3.947%
B. Bought 2 Brookfield 4% SU Maturing on 1/15/25 at a Total Cost of 98.894 (IB Account):
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Issuer: Brookfield Corp. (Canada: Toronto) | MarketWatch
Website: Homepage | Brookfield Corporation
Brookfield Corporation Reports Strong 2023 Results
Finra Page: Bond Page | FINRA.org
Credit Ratings: A3/A-
YTM at Total Cost: 5.568%
Current Yield at TC = 4.045%
I now own 4 bonds.
C. Bought 1 Public Service Electric & Gas 3% First Mortgage Bond Maturing on 5/15/25 at a Total Cost of 97.629 (Fidelity Account):
%20.png)
Issuer: Operating utility for the utility holding company Public Service Enterprise Group Inc. (PEG)
PEG SEC Filed Earnings Press Release for the Q/E 12/31/23
PEG SEC Filed 2023 Annual Report (operating results and other financial information of operating subsidiary at pages 66-71)
Finra Page: Bond Page | FINRA.org
Credit Ratings: A1/A
Prospectus and General Prospectus for all Medium Term First Mortgage Bonds
YTM at Total Cost: 5.344%
Current Yield at TC = 3.073%
I now own 2 bonds.
Last Bond Issuance (2/24): Prospectus for 5.45% FM due in 2054
D. Bought 2 Discover Financial 3.75% SU Maturing on 3/4/25 at a Total Cost of 98.338 (IB Account):
%203:4:25%203.75%25.png)
Issuer: Discover Financial Services (DFS)
DFS Analyst Estimates | MarketWatch
DFS is in the process of being acquired by Capital One Financial Corp. (COF) I am skeptical that the merger will be approved by regulators. Capital One to acquire Discover Financial Services in $35.3 billion all-stock deal
SEC Filed Earnings Press Release for the Q/E 3/31/24
Finra Page: Bond Page | FINRA.org
Credit Ratings: Baa2/BBB-
YTM at Total Cost: 5.78%
Current Yield at TC = 3.813%
E. Bought 1 GATX 3.25% SU Maturing on 3/20/25 at a Total Cost of 97.841 (Fidelity Account):
%203:30:2025%203.25%25%20.png)
Issuer: GATX Corp. (GATX)
GATX Analyst Estimates | MarketWatch
DGATX SEC Filed Earnings Press Release for the Q/E 3/31/242ocument
Finra Page: Bond Page | FINRA.org
Credit Ratings: Baa2/BBB
YTM at Total Cost: 5.697%
Current Yield at TC = 3.322%
I now own 4 bonds.
F. Bought 2 J.M Smucker 3.5% SU Maturing on 3/15/25 at a Total Cost of 98.304:
%203.5%25%203:15:25.png)
Issuer: J.M. Smucker Co. (SJM)
SJM Analyst Estimates | MarketWatch
SJM SEC Filed Earnings Press Release for the Fiscal Q/E 1/31/24
Finra Page: Bond Page | FINRA.org
Credit Ratings: Baa2/BBB
YTM at Total Cost: 5.507%
Current Yield at TC = 3.56%
G. Bought 2 Spectra Energy Partners L.P. 3.5% SU Maturing on 3/15/25 at a Total Cost of 98.228:
%203.5%25%20.png)
Issuer: Spectra Energy Partners is now owned by Enbridge Inc. (ENB)
Enbridge and Spectra Merger FAQs - Enbridge Inc. (The merger was completed on 2/27/2017); Enbridge Inc. and Spectra Energy Partners, LP Complete Merger (12/17/2018)
Enbridge later guaranteed the Spectra Energy Partner notes:
ENB 2023 SEC Filed Annual Report at page 86 Spectra Energy Partners also guarantees the ENB notes.
Finra Page: Bond Page | FINRA.org
Credit Ratings: Baa2/BBB+
YTM at Total Cost: 5.604%
Current Yield at TC = 3.56%
I now own 4 bonds.
Last ENB Bond Issuance (4/2024): Prospectus
H. Bought 2 FS KKR 4.125% SU Bonds Maturing on 2/1/25 at a Total Cost of 98.41:
Issuer: FS KKR Capital Corp. (FSK) -Externally Managed BDC
2023 SEC Filed Annual Report Debt is listed at page 60. A summary of investments starts at page 94. Summary of risk factors starts at page 17 and ends at page 46.
I have a position in the common stocks that I last discussed here: Item # 4.B. Eliminated 1 of 3 Duplicate Positions in FSK - Sold 12 at $20.35 (9/16/23 Post)
Finra Page: Bond Page | FINRA.org
Credit Rating: Baa3
YTM at Total Cost: 6.318%
Current Yield at TC = 4.19%
I now own 4 bonds.
The YTMs of BDC SU bonds is not consistent with their ratings. The Bond Ghouls assign a higher risk to them than would be reflected in non-pass through entity with the same credit rating. I view BDC bonds as having an elevated risk due to paying out all or almost all net investment income as common dividends (pass through entity), their leverage, and the inherently risky nature of their loans.
I own 2 FSK 4.625% SU bonds that mature on 7/15/24. So I am basically reinvesting the proceeds in advance of maturity into the bond maturing on 2/1/25. This rolling forward in time, usually by less than 1 year, is a normal process for me. If yields become unattractive, or I become more concerned about credit risk, I will just stop doing it.
5. Treasury Bills Purchased at Auction:
I participated in the 3 month treasury bill auction. The general idea is to reinvest the proceeds received on 8/1/24 into a 6 month T Bill that matures in 2025, thereby shifting the interest income tax recognition to 2025.
A. Bought 10 Treasury Bills at the 4/29/24 Auction (Schwab and Fidelity Accounts):
%208:1%20:24%20Fidelity%20.png)
%208:1:24%20.png){kind=small}
91 Day Bill
Matures on 8/1/24
Interest: $132.7
Investment Rate: 5.395%
B. Bought 5 Treasury Bills at the 5/1/24 Auction- Schwab Account:
%209:3:24%20.png){kind=small}
119 Day Bills
Matures on 9/2/2024
Interest: $86.69
Investment Rate: 5.412%
C. Bought 5 Treasury Bills at the 5/2/24 Auction - Schwab Account:
56 Day Bill
Matures on 7/2/24
Interest: $40.99
Investment Rate: 5.387%
6. U.S. Equity Preferred Stock:
A. Eliminated Duplicate Position in FULTP - Sold 10 at $18.65 (Fidelity Account):
Quote: Fulton Financial Corp. Preferred Series A
Proceeds: $186.5
Issuer: Fulton Financial Corp. (FULT) - A Bank Holding Company
Profit Snapshot: +$25.8
Last Discussed: Item # 2.C. Bought 5 FULTP at $15.09; 5 at $14.64 (5/13/23 Post)
Preferred Stock Prospectus
Coupon: 5.125%
Annual Dividend per share: $1.28, rounded down
Par Value: $25
Dividends: Paid Quarterly, qualified and non-cumulative
Optional Call: On or after 1/15/2026
Stopper Clause: Standard (FULT must eliminate the common share cash dividend before eliminating the non-cumulative preferred stock dividend)
Last Ex Dividend: 3/27/24
I still own 10 shares in my Schwab account with an average cost per share of $14.87:
 |
| Snapshot Intraday on 4/29/24 |
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.
Atlantica Sustainable Infrastructure PLC (AY)
ReplyDelete$21.51 +$0.09 +0.41%
As of 10:15AM EDT.
https://www.marketwatch.com/investing/stock/ay?mod=search_symbol
I have noted that AY has been trending higher since closing at $18.51 on 4/22. Volume accelerated on 4/23 to 5,244,600 with the price closing at $19.91.
That volume acceleration and percentage price change suggested that the company was in play and possibly there was trading on non-publicly available information.
There was a reason supporting a possible AY acquisition, which I have discussed previously. AQN owns 42.2% of AY stocks as of 12/31/23 and is exploring the divestiture of his renewable energy generation. I noted previously that it would make some sense to divest the AY stock ownership as part of that divestiture process.
There were several financial reports yesterday and earlier that a company was close to acquiring AY.
https://www.power-technology.com/news/ecp-atlantica-sustainable-infrastructure/
The current AY price indicates that those, possibly with inside information, do not believe that there will be much of a takeover premium, if any.
I sold my highest cost 5 share lot in response to the recent run up in AY's price which I will discuss in my next post. That is just a standard risk management technique that I regularly use now.
Powell's comments are ominous sounding. I'm surprised the market is as comfortable as it's been. Especially with some of the earnings going down in businesses that indicate public buying slowing. The social media/large tech (Google) that are growing, are more reflective of their own business model success of getting small business advertising and sales to business than of the economy.
ReplyDeletePartisan derangement syndrome - I'd laugh, if it wasn't real. I don't know how we fix that.
Unlike the CNN poll, I heard a poll on Bloomberg that 40 or 60% (I wish I could remember which) of Republicans believe that Trump has acted immorally, and a portion of those that he's behaved illegally. Doesn't look like it's translating into less votes though.
Noem has outed herself as a psychopath. There are three pre-indicators. A significant one is harm to animals.
While cooking for Passover, I got a chance to listen to some of your videos. Made cutting up apples and onions more interesting!
The housing chart is interesting; glad an indicator was developed. My suspicion is that when interest rates go down, house prices will increase because demand will increase once it's affordable. In other words that now is a decent time to invest in a house if you can pay cash. The only contrary is if rates go down because of a recession.
I'd be curious to see something similar for college costs. The numbers I've seen relative to inflation, would be similar to when I went to school. There's the claim is that costs are substantially inflated. Another angle is.. If they have increased.... there's been a higher demand for college as we've culturally pushed the idea that everybody should go to college and ignored funding and respect for vocational fields. With higher demand, prices will increase. So a shift back to respect for vocational could improve college costs.
____
I'd moved my TTE TOTAL stock to vanguard because Scotttrade/Ameritrade wasn't handling the foreign tax credit correctly. It's the only stock I have in that account. Now that I have a Schwab account instead of Ameritrade, does Schwab handle that correctly?
I haven't had nearly as much time to spend on investing recently as I'd like. Between the travel, and my dad's not in great shape emotionally & been living with me. I'll be heading home by myself in a few days so hopefully.
In preparation of wanting to plant grass to replace the weeds that have taken over my yard... I put black plastic bags down to block the sun hoping to kill them by the time I get home. I was home for one night between trips, and the weeds are growing healthfully under the black plastic. Sigh. It reminds me of something political lately.
Land: The slowing of wage growth that is reflected in today's jobs report for April may lead to lower inflation numbers. Investors are focused more on inflation than anything else now.
ReplyDeleteThe owners equivalent rent component, which has been a major contributor to inflation, has yet to reflect the slowdown in rent increases. That pretend expense is calculated to using rents, not home prices and has a very long lag.
The fact that Powell was not more hawkish given the first quarter inflation numbers is viewed positively. There are reasons to believe that the first quarter inflation numbers, which significantly accelerated from the benign pace during the 2023 4th quarter, were caused by idiosyncratic factors that are not likely to repeat in the mont-to-month numbers.
If the April month-to-month PCE inflation number comes at .2% or less then a lot of fears about an inflation resurgence would dissipate.
No broker handles foreign tax withholding consistently well. Fidelity probably does the best.
I do not have issues with any of my brokers relating to Canada's 15% withholding tax or no withholding for dividends paid by non-pass through Canadian companies into my Roth IRA account.
The problems generally occur with EU countries, which includes France, Italy, and Norway where many brokers will not claim tax treaty rights that generally limits the withholding to 15%. If the tax treaty limitation on the amount of withholding is not claimed at the source, the foreign country will withhold its maximum amount as if there was no tax treaty applicable to the U.S. citizen.
As to home prices, one reason for the home price collapse in the 2004-2008 time frame was that the median price home was not affordable to most median income households. Affordability improves with lower mortgage rates but median price homes would still be unaffordable to many median income households without a significant price correction.
The affordability issue primarily impacts first time home buyers, but it can also impact households who need to buy larger homes to accomodate children.
College tuition has accelerated at a far faster rate than inflation. When I started college, the all in cost for 1 semester (tuition, room and board, health insurance, etc) was $2,200. If I inflated that number to March 2024 using just CPI, the cost would be $19,301.42 but the actual all in cost would be closer to $100,000.
"The fact that Powell was not more hawkish"
DeleteAh, that's what it was. I would never have guested. I thought he sounded more hawkish than transient numbers would bring out.
On tax withholding, thanks for the details! Interesting that CA is treated accurately and EU isn't always.
True that home affordability is high and will still be if rates come down. With rents high too, not sure how people will reduce the need for 'supply' to bring the prices down. Maybe living longer with parents. But these are factors I need to include in my projections.
College tuition for me was about I think about 30k including B&R for a state school, 10 or 15 years later. Over the weekend talking with students, the costs seems to be 60k w/o B&R for smaller private liberal arts & state schools. Similarly when I've seen data charts my baseline makes it seem less insanely higher. Not a topic I've studied. Your data point makes more sense of it.
Toronto-Dominion Bank (TD)
ReplyDelete$55.07 -$3.01 -5.19%
Last Updated: May 3, 2024 at 12:58 p.m. EDT
https://www.marketwatch.com/investing/stock/td?mod=search_symbol
I discussed eliminating my TD position in Item # 1 of this post. I sold my shares on 4/25.
The downdraft today is due to market chatter that the DOJ is seeking large penalties for alleged non-compliance with anti-money laundering rules. While I was aware of that problem when I eliminated my position, I was not aware of the extent. Earlier this week, TD took an initial $450M charge for this issue and added that it expects further penalties. Possibly more concerning to investors is that some of the money laundering is tied to illicit fentanyl profits according to a WSJ story.
That's that chatter about TD non-compliance that's been around since that takeover that didn't happen that we'd both profited from. Seems prudent to take profits and leave!
DeleteThere are younger people in my life who smoke pot & do 'srums. I don't know if fentanyl shows up in those. I plan to warn them to research it. A big disadvantage of drugs is you don't know where they came from & who did what to them.
Land: It has occurred to me that the reason that TD was not allowed to acquire FHN was this ongoing investigation. When I eliminated TD, I was only aware that there was some kind of money laundering investigation, but had no idea how serious it was and that it involved Chinese using the bank to launder sales from U.S. fentanyl sales.
DeleteGoes to show, even seeming no risk moves can have hidden oddities! China & drugs are unexpected. I was picturing merely a CEO with low integrity.
DeleteThe slowdown in wage and job growth in April is being interpreted as placing downward pressure on inflation which is the main concern of investors now. The CME FED Watch tool is still predicting at least one 25 basis cut in the Federal Funds rate on or before the September meeting at a 68.3% probability as of 3: 42 CST today 5/3. Most of the change from yesterday is the odds of no change by then moved down from 38.4% to 31.7%. For the FED to cut before then, there will need to be at least two month-to-month PCE inflation numbers of .2% or less and some further weakening in economic indicators particularly the job creation numbers, a slight rise in the unemployment rate and a further slowdown in wage growth.
ReplyDeleteThe slower wage growth numbers in April has caused me to switch back to buying the 6 month Treasury bill at next Monday’s auction rather than the 3 month. I will probably participate as well in the 4 month auction next Wednesday.
Switched to 6 mo since rates are slightly more likely to come down sooner?
DeleteLand: Buying the 6 month rather than the 3 month last Monday was based on the jobs report making it slightly more likely that the FED will cut 25 basis points on or before the September meeting. The treasury bill yield are extremely sensitive to changes in the FF rate.
DeleteIt is also possible that the odds of a cut could go up with the April month-to-month PCE core inflation falling to .2% or lower and even more if that is followed in May by a .2% or lower, particularly with weakening wage and job growth. I bought $10K of the 6 month bill and $5K of the 4 month bill auctioned today that had a 5.406% investment rate.
Investors who lived through the 1970s took a long time to shake the fear of problematic inflation returning.
The fear now is not that problematic inflation is the new normal but that real yields will become negative again for an extended period, made even more negative on an inflation adjusted basis when computing the after tax real yield.
After so many horrible years of inflation in the 1970s and early 1980s, investors were so fearful of that trend continuing that 30 year treasury bonds could have been bought in 1984 with 14% coupons at auction even though the inflation rate that year had fallen to 3.2% in 1983 and 4.3% in 1984.
https://www.minneapolisfed.org/about-us/monetary-policy/inflation-calculator/consumer-price-index-1913-
I have been stepping up my purchases of investment grade corporate bonds maturing in 2025. I will be discussing purchases of $17K in principal amount in my next post, cutting off the discussion with bonds bought through last Friday.
I need to focus on 8mo bonds.
Delete- Tbills to defer income.
- Corporate Fed tax free.
- Stocks so the increase is qualified divs, or unrealized gains.
Ibonds defer but with the penalty until 5years & lower rates when inflation is down, they likely won't give enough interest.
I've finally done more calculations to see what maximum amount of 401k to convert. Basically staying under $200k income would avoid a jump in tax rate to 32 & 35% rates. Also the NIIT 3.8% on all interest and non-qualified cap-gains.
But even with a market pullback some of my 401k will jump to that higher tax if I convert most. I'm going to opt to (for several calculation factors that I'll skip the details).
So the more I can earn on the rest of my non-qualified regular money with qualified divs or deferred taxes or tax-free the better.
I should have done this at beginning of the year. But I can now concentrate, at least for the moment.
_____
I've decided I'm planting a clover ground cover yard and skipping replanting the grass (that no longer exists). It's a new trend. Less watering, better drought and deep shade tolerance. Yet traffic tolerant and good for pollinators. Getting on board with the new generation's trends.
The rate inversion challenges the traditional idea that since rates are likely to go down or hover, some 3-5 yr bonds can be bought.
DeleteJust when the market seems familiar, it goes and changes a lot.
There's 8 week not 8 month. I mixed those up. Looks like I'd need 1 year (52 week) in May.
DeleteIn June 6mo (26 week) will suffice.
52 weeks are Tues 5 /14
Deletehttps://home.treasury.gov/system/files/221/Tentative-Auction-Schedule.pdf
Land: The 52 week bill is auctioned monthly. The 1, 2, 3,4 and 6 month bills are auctioned weekly.
DeleteThe 1 year treasury bill is currently trading at a 5.15% yield:
https://www.marketwatch.com/investing/bond/tmubmusd01y?countrycode=bx
Since the current FF range is 5.25% to 5.5% and that bill matures in May 2025, the current yield is inconsistent with any FF cut this year, or even in January 2025, and that is more pessimistic than the federal funds future contracts that the CME uses in its FedWatch tool which currently has a 65.7% probability of at least a 25 basis point cut on or before the September meeting with no cut now at 34.3% down slightly from 46% a week ago. I attribute the decline in the no cut odds to the jobs report.
https://www.cmegroup.com/markets/interest-rates/cme-fedwatch-tool.html
Land: States with income taxes can not tax treasury interest but will generally tax interest paid by corporations. If I lived in a state with an income tax and that is not going to happen, I would consider buying treasuries in a taxable account with the corporate bond purchases in a Roth IRA account.
DeleteBuying the 1 year T Bill and holding to maturity will result in the tax recognition of the interest income in 2025 which would also be true for the 6 month bills purchased starting in July.
The MM funds will go down quickly in yield when the FED cuts. The treasury MM funds that I own have the same interest rate sensitivity as a 1 month T Bill.
I will be redeeming a IBond, bought in the original principal amount of $5,000, when the ownership period exceeds 5 years in July. One reason is that the fixed rate for that one is just .5%. The 5 year TIP real yield closed today at 2.19%. That will add something over $1,000 in interest income this year so I will need to defer more into 2025. I will be using T Bills and CDs maturing in 2025 in part but will do some shifting by buying relatively low current yield corporate bonds that mature in January or February 2025 at discounts to par value where 80-90% of the total return will be recognized for tax purposes in 2025.
So far I've decided not to get the 1yr Tbills. I've spent the last few days scribbling notes for hours to figure out different ways to convert. Looks like over 2 years with some leftover, instead of all in 1 year, will save 8k by not floating too much into the 32-35% brackets. So deferring to next year isn't my best move. (Though if I decide to, I can wait till June & use 6 mos. tbills.)
DeleteWith how many undetermined factors go into this, I'm not sure 8k saving is worth the effort I've put in. Could just convert it all and be done...
It'll help if the market finally pulls back. Not only less to convert, but a chance to buy stocks lower! I don't see a big pullback yet.
There's about $115k in an income bond fund in the 401k. I'm holding that as a wild card that can be converted in whichever year I need (without worrying about market value since it's value doesn't change much).
So for now I'm trying to find Fed tax-free bonds or short term ETFs. Be able to convert more (without getting into 32-35% tax) and have less leftover before the 2026 possible tax rate increases.
____
Looks like there aren't Fed tax free short term Mutual Funds /ETFs like Vanguard's VMRXX. Anything Fed tax free will be longer.
I'm hesitant to get into a bond ETF like VTEB (Vanguard Tax-Exempt Bond ETF), and VWIUX (Vanguard Intermediate-Term Tax-Exempt Fund Admiral Shares).
There's betting on the direction of bonds, not just gaining tax free divs that way VMRXX is.
Maybe I'll spot a munies on the 2nddary market. Or defer this year to next, and next year's to the one after.
Land: Bond funds have been poor performers.
DeletePossibly with a sustained decline in yield for similar maturity bonds owned by a fund, the performance will shift into positive real territory which has not been the case for a long time.
You can access the Morningstar performance pages for funds without being a subscriber.
This is a link to that page for VTEB:
https://www.morningstar.com/etfs/arcx/vteb/performance
The 5 year annual average total return is +1.32% and -.66% for three years.
VWIUX is not any better:
https://www.morningstar.com/funds/xnas/vwiux/performance
I own Tennessee municipal bonds but all of them are individual bonds with staggered maturities and an average weighted credit rating of AA+.
Ligand Pharmaceuticals Inc. (LGND)
ReplyDelete$79.32 +$6.10 +8.33%
Intraday $72.95 - $81.42
Last Updated: May 8, 2024 at 11:06 a.m. EDT
https://www.marketwatch.com/investing/stock/lgnd?mod=search_symbol
I am not sure that investors are looking under the hood. Briefing.com notes that LGND reported today E.P.S. of $3.84, beating the consensus estimate of $.83.
SEC Filed Earnings Report:
https://www.sec.gov/Archives/edgar/data/886163/000088616324000029/q12024earningsrelease_ex991.htm
I expected prior to this report that LGND would have sold all or almost all of its remaining position in Viking Therapeutics during the quarter. Included in the GAAP E.P.S. number was a $60M gain from selling those shares. Excluding that gain, E.P.S. was $1.2. LGND had cash/cash equivalents of
The market reacted may also be responding favorably to the recent announcement that Ligand had announced a $100M royalty financing agreement with Agenus.
"Under the terms of the agreement, Ligand will pay $75 million to Agenus at closing in exchange for pre-set portions of future royalty and milestone payments related to the botensilimab/balstilimab program and five other partnered oncology programs with Incyte (INCY), Bristol-Myers Squibb (BMY), Gilead Sciences (GILD), Merck (MRK), and UroGen Pharma (URGN)." Ligand has the option to invest another $25M on the same terms.
https://investor.ligand.com/news-and-events/press-releases/news-details/2024/Ligand-and-Agenus-Enter-Into-100-Million-Royalty-Financing-Agreement/default.aspx
LGND is primarily a drug discovery company that licenses its discoveries to other drug companies, thereby avoiding the cost risks associated with the trials, the FDA approval process and the costs related to marketing an approved drug. The main product is Captisol whose sales have fallen substantially since it was used in the formulation of a GILD covid drug which is no longer generating revenues as previously discussed.
My last discussion:
Item # 1.B. Added to LGND - Bought $30 at $77.32; 1 at $76; 1 at $75; 1 at $73; 1 at $71.8:
https://tennesseeindependent.blogspot.com/2024/03/agr-bhb-cfg-eprprc-ffbc-lgnd-mbwm.html
That post is probably my most extensive discussion of LGND to date.
During the conference call, LGND reported that it still owned $82M in Viking stock as of 3/31/24. VKTX closed at $82 on the last trading day in March, so that means 1M shares still owned as of 3/31/24
DeleteEarnings Call Transcript:
https://www.insidermonkey.com/blog/ligand-pharmaceuticals-incorporated-nasdaqlgnd-q1-2024-earnings-call-transcript-1298949/?singlepage=1
LGND is a micro cap with only 18.122M diluted shares outstanding as of 3/31/24.
Ligand 10-Q at page 12:
ReplyDeletehttps://www.sec.gov/Archives/edgar/data/886163/000088616324000032/lgnd-20240331.htm
"During the three months ended March 31, 2024, we sold 0.7 million shares of Viking common stock and recognized a realized gain of $60.0 million in total."
On the same page, the remaining VKTX shares were valued at $82M.
As part of the royalty financing deal with Agenus, which I discussed in a prior comment, Agenus issued a warrant to LGND "to purchase 867,052 shares of its common stock, at an exercise price equal to $17.30. The exercise price of the Warrant and the number of shares issuable upon exercise of the Warrant are subject to adjustments for stock splits, combinations, stock dividends or similar events. The Warrant is exercisable until May 6, 2029."
P. 24
Agenus is traded under the symbol AGEN and closed today at $11.47.
There was a 1 for 20 reverse stock split in April 2024. So the Stock Jocks were treating the stock as road kill. Maybe LGND sees an opportunity that was overlooked by investors.
https://investor.agenusbio.com/news/news-details/2024/Agenus-Announces-Reverse-Stock-Split-of-Common-Stock/default.aspx
Agenus Reports First Quarter 2024 Results
https://www.sec.gov/Archives/edgar/data/1098972/000095017024053952/agen-ex99_1.htm
Citizens Financial Group, Inc. (CFG-PD)
ReplyDelete$25.31 -$0.03 (-0.14%)
As of 09:30 AM EDT.
https://finance.yahoo.com/quote/CFG-PD
When looking at the WSJ dividend declaration page, I noted that this preferred stock had increased its quarterly dividend to $.5945 from $.3969 per share.
I had a faint recollection of owning this one. The only reason for that percentage dividend increase would be a floating rate preferred stock that just transitioned from a fixed rate to a floating rate calculated at a spread to the 3 month SOFR + the tenor spread (as the substitute for the 3 month Libor)
This preferred stock did transition from a 6.35% fixed rate paid on a $25 par value a 3.62% spread to the 3 month SOFR + the tenor of .26161% on 4/6/24, so that accounts for the higher rate for the next dividend payment.
I currently own only 6 shares at an average cost per share of $21.4, having sold 10 at $24.56 and having no memory of selling that lot prior to refreshing my malfunctioning memory system:
Item # 3.D. Eliminated Duplicate Position in CFG.PRD (Fidelity Account) - Sold 10 at $24.56:
https://tennesseeindependent.blogspot.com/2023/12/ay-ccnep-cfgprd-cto-dow-eai-emp-gnlpra.html
I opened a Citizens account for the 1st time for a $600 bonus offer that came on a postage card in the mail. Need a direct deposit is all.
DeleteHaven't owned their stock yet.
Land: That is a hefty bonus. I googled Citizens and found this summary for May 2024:
Deletehttps://www.citizensbank.com/promo/checking/special-offer-2024-b2.aspx
I sold all of my shares in CFG held in taxable accounts, but still own a few in at least one Roth IRA account which has a very low cost basis.
My primary CFG position is owning 2 CFG 4.3% SU bonds maturing on 12/3/25.
I will only be buying 2 of the 1 year treasury bill on Wednesday and 5 of the 4 month bill that day. The close today for the 1 year bill was at a 5.17% yield. I bought 5 of the 6 month T Bill that had an investment rate of 5.377%. I also bought 3 of the three month that had a 5.395% investment rate.
I've been all frustrated that I (legitimately) used the $600 bonus offer that came in my door with my neighbor's address but a name that's never lived there...instead of the offer that came for me with more requirements (10k in direct deposits from employer!).... when another offer came in my name as well, for $800 with easy requirements. A call to Citizens didn't get them to swap it.
DeleteTook American Airline's offer of $200 for getting a card if you flew their airline. Seemed good! Checking my next trip's flights, to Florida this time, and an offer popped up for $400 if you flew & didn't get an offer recently.
Hard to guess what the offer algorithim's are these days !
With Vang paying 5.3%, I don't have reason to buy the 6 month (the end in 2024) at small rates more. Since I need to pick up stocks eventually, more flexibility is good.
I have published a new post:
ReplyDeletehttps://tennesseeindependent.blogspot.com/2024/05/ay-cgbd-cto-nomd-ofs-sarwba.html