AHHPRA, CTRA, FAX, GCT, LGI, NSA, OLP, ORKLY, REXRPRC, RYLD, TCPC, TXNM

Economy: 

The CPI report for July does not support more than a .25% cut in the federal funds range in September IMO. 

Consumer Price Index Summary - 2024 M07 Results

CPI Month-to-Month: .2%

Annual CPI: +2.9%, down from 3%

Core CPI Month-to-Month:  .2%

Annual Core CPI: 3.2%, down from 3.3%

Annual Core CPI ex shelter 1.8%

Table 2. Consumer Price Index for All Urban Consumers (CPI-U): U. S. city average, by detailed expenditure category - 2024 M07 Results

Owners Equivalent Rent: Weighted at 26.762% 

+5.3% annually

+.4% month-to-month June-July, up from .3% May to June. 

My Video: Owners Equivalent Rent, a fictional expense, is distorting the CPI numbers higher - YouTube

Producer price index July 2024 Up .1% in July, less than the consensus estimate of .2%. The annual increase through July 2024 was 2.2%, down from the 2.7% annual increase through June. 

Three-year inflation outlook hits record low in New York Fed consumer survey

Trump says he should get a say on Federal Reserve interest rate decisions

China's consumer prices pick up more than expected in July, up by 0.5%

Mortgage refinancing surges 35% in one week, as interest rates hit lowest level in over a year

Weekly unemployment initial claims for the week ending 8/10 was reported earlier today at 227,000, a decrease of 7,000 from the previous week. The 4 week moving average was reported at 236,500. DOL News Release.pdf

Average Hourly Earnings - Private Sector: 

Average Hourly Earnings of All Employees, Total Private - St. Louis Fed

Real GDP: Nominal GDP adjusted down by the inflation numbers. Real Gross Domestic Product (Real GDP): How to Calculate It, vs. Nominal

Real Gross Domestic Product-St. Louis Fed

+++

Allocation Shifts Discussed in this Post: 

Treasury Bills Purchased at Auction: $12,000 in principal amount 

Corporate Bonds: None.  

Tennessee Municipal Bonds: $5,000 in principal amount. 

Individual Common Stocks: -$2,312.34

(consisting of $2,542.83 in proceeds minus $230.49 in purchases)

Stock Funds: Net of +$62.48

Net Outflow Stocks/Stock Funds: -$2,480.35

U.S. REIT Preferred Stocks: +$436.5

Leveraged Bond CEFs: -$51.17

2024 Outflow Stocks/Stock Funds: -$30,712.73

Nominal Treasury Yield Curve August 2024: 

Resource Center | U.S. Department of the Treasury

Real Treasury Yield Curve August 2024 (TIPs)

Resource Center | U.S. Department of the Treasury

10 Year TIP Breakeven Inflation Rate: 2.06% This is a relevant number for the FED when making monetary policy decisions. 

CME FedWatch - CME Group As of 8:27 C.S.T. today, the probability of a .25% basis point cut in the FF rate at the September meeting remains at 100%, but the odds have declined to just 25.5% for a basis point cut, down from 55% a week ago. That is in part a reaction to the CPI report discussed above. 

+++

Fidelity Account Asset Allocation as of 8/15/25 (1 of 5 taxable accounts): 

The "Bonds" category includes treasury bills, treasury notes, Tennessee Municipal Bonds, CDs and corporate bonds. 

+++

Bond Early Calls-Fidelity Account: I am starting to receive more early redemptions. The following snapshots are 3 recent examples: 

+++

Trump and His Party: 

President: general election : 2024 Polls | FiveThirtyEight

2024 General Election: Trump vs. Harris Polls | RealClearPolling

'Not a dog whistle but a dog howl': Experts blast latest Trump campaign ad - Alternet.org The campaign ad is racist. 

Jason Stanley: Did This 2 Min. Video Help Incite the Jan. 6 Rioters? | Amanpour and Company - YouTube Stanley, a Yale Professor, argues that this Trump video contributed to inciting his followers to attack the Capitol. Movie at the Ellipse: A Study in Fascist Propaganda  

Trump Reportedly Refers To Harris As A 'Bitch' In Private;  Inside the Worst Three Weeks of Donald Trump’s 2024 Campaign - The New York Times  Trump "has ranted about Ms. Harris. He has called her “nasty,” on “Fox & Friends,” and a “bitch,” repeatedly, in private, according to two people who heard the remark on different occasions." Trump's campaign spokesperson denied that he called Harris a bitch.  

According to the NYT article linked above, Trump told his mega rich donors at a fundraiser, which was held at the home of Cantor Fitzgerald CEO Howard Lutnick and attended by Bill Ackman, that he was right when he claimed at the National Association of Black Journalists conference that Harris only recently turned black for political purposes.  

MAGA misinformation-industrial complex and Trump conspiracy theories | CNN Politics Trump and most of his supporters will not accept the election totals even if he wins.   

Trump promotes false Harris AI crowd size conspiracy

Donald Trump stokes fears claiming Harris candidacy ‘unconstitutional’ If Trump loses the election, he may request a court to just throw out the election results claiming that Harris was nominated through unconstitutional means. 

If Harris wins, I am expecting that Trump will challenge her election under Article II, Section 1 of the Constitution that requires the President to be a "natural born citizen". Neither of her parents were U.S. citizens when she was born.  

The "natural born citizen" language requires an analysis of what was meant by natural born citizen when the Constitution was adopted and more importantly by this sentence in the 14th Amendment:  "All persons born or naturalized in the United States, and subject to the jurisdiction thereof are citizens of the United States." 

If the republican Supreme Court Justices canceled the 2024 election results based on a holding that Harris was not a "natural born citizen", then the U.S. will be in turmoil until the 2028 election. 

And, if Trump commits crimes during his second term notwithstanding losing the election and becoming President again only after Harris is disqualified by Republican Justices, and is immunized from criminal prosecution, then the House Democrats will impeach the Republican Supreme Court Justices, creating even more turmoil. (My Video: Will the 6 Republican Supreme Court Justices Bear Responsibility for Presidential Crimes Hereafter - YouTube)

For more information, see The birthright citizenship debate returns for 2020 election | Constitution Center Trump supporters wasted no time in claiming Kamala Harris is ineligible to be president, but they’re wrong; PolitiFact | Vice President Kamala Harris is a natural-born citizen and eligible for the presidency

GOP nominee to run North Carolina schools advocated pro-Trump military coup in January 6 video 

We fact-checked Trump's recent news conference-NPR (162 lies and distortions); Fact Checking Trump's Mar-a-Lago News Conference - The New York Times  Trump is incapable of being truthful. 

Bolton: ‘Trump can’t tell the difference between what’s true and what’s false’ - YouTube

Trump routinely promotes fact free conspiracy theories and false claims. This is just one example in the past week: 

Trump:  "Has anyone noticed that Kamala CHEATED at the airport? There was nobody at the plane, and she “A.I.’d” it, and showed a massive “crowd” of so-called followers, BUT THEY DIDN’T EXIST! She was turned in by a maintenance worker at the airport when he noticed the fake crowd picture, but there was nobody there, later confirmed by the reflection of the mirror like finish on the Vice Presidential Plane. She’s a CHEATER. She had NOBODY waiting, and the “crowd” looked like 10,000 people! Same thing is happening with her fake “crowds” at her speeches. This is the way the Democrats win Elections, by CHEATING - And they’re even worse at the Ballot Box. She should be disqualified because the creation of a fake image is ELECTION INTERFERENCE. Anyone who does that will cheat at ANYTHING!"

{The second half of this message is consistent with other Trump messaging that he will not accept the election results and will cause even more havoc than he did after losing the 2020 election.} 

The fact that there are multiple videos and photographs showing the crowd size that were taken by a variety of news media organizations will not stop Trump from making the false statement that no one was there. Trump knows that his demonstrably false statements will be accepted as true by tens of millions of voters.  

Trump falsely accuses Harris campaign of fabricated AI crowd photos - The Washington Post

Trump said he ‘went down’ in helicopter ‘emergency landing’ with former San Francisco mayor Willie Brown, who says it never happened 

Brown: "I’ve never been in a helicopter with him in my life. He is trying his best to get some way to degrade Kamala. There is no reason why her name ought to be mentioned anywhere near his lies, period."  

The persons in the helicopter with Trump were Jerry Brown and the current California governor Gavin Newsom, both of whom told reporters that there was no emergency landing and that there was no discussion about Harris with Trump.  

Trump claims that there is a letter from Willie Brown that was published in his picture book titled "Letters from Trump" where Brown allegedly supported this fiction created by Trump. The 2020 letter is brief and makes no mention of a helicopter trip, see PolitiFact | Trump’s unproven story about Willie Brown and a harrowing emergency helicopter landing (rated as "Pants on Fire")

Trump called Maggie Haberman to complain about helicopter story. Hear what she told him - YouTube; Trump's tale of harrowing helicopter ride, emergency landing? Didn't happen, Willie Brown says - YouTube Trump has threatened to sue the NYT for publishing the denials made by Willie Brown. Trump called Maggie Haberman to complain about helicopter story. Hear what she told him - YouTube (see at 3:50) Trump says that "they" have found records of the emergency landing and will produce them for the press. 

Another black politician, Nate Holden, says that he was in a helicopter with Trump around 1990 that had to make an emergency landing in Linden, New Jersey. Yes, Trump Was in a Scary Helicopter Ride. But Not With That Politician. - The New York Times 

Holden: "I just think he makes things up. That’s what I think. He never thought anybody’s going to check." 

Willie Brown: "I wouldn’t want to conclude that he can’t tell Black people apart, because I’d hate for him to think that I’m Beyoncé."

The truth about Trump's press conference - The Atlantic Tom Nichols: "The Republican nominee, the man who could return to office and regain the sole authority to use American nuclear weapons, is a serial liar and can’t tell the difference between reality and fantasy. Donald Trump is not well. He is not stable. There’s something deeply wrong with him."

Opinion | Trump’s newest social media meltdown is flirting with delusion - The Washington Post The Trump posts are not flirting with delusion. They are delusionary and completely unhinged with no tether to reality. 

'Grandpa Donald' is 'not capable of being president': Rick Wilson - YouTube

My Video: Trump's Proposal to Eliminate Taxes on Social Security Benefit Payments - YouTube

Elon Musk Throws a Trump Rally - The Atlantic; Fact check: Trump made at least 20 false claims in his conversation with Elon Musk | CNN Politics

Inside Elon Musk’s Hands-On Push to Win 800,000 Voters for Trump - WSJ Musk has gone all in for Trump. This is having some impact on Tesla sales as Democrats shun purchases. Elon Musk’s Politics May Be Pushing Some Buyers Away From Tesla - The New York Times Tesla reported that global sales fell 4.8% in the second quarter after an 8.5% decline in the first quarter.  

David Frum on Musk's fawning "interview" with Trump: "The X Spaces interview delivered Donald Trump without makeup or dress-up, talking unselfconsciously: manic, boastful, untruthful, aggrieved, abusive, obsessive, random, ignorant, tedious, bitchy—and ultimately, formless and endless."The Trump Campaign’s ‘Please Shut Up’ Phase - The Atlantic

How Elon Musk has turned X into a pro-Trump machine 

Trump is setting the stage to challenge the election - The Atlantic

A trio of silly, false claims that JD Vance makes about Kamala Harris - The Washington Post  

Photos of JD Vance in drag have surfaced. Trump media outlets are ignoring the photos. If the photos were of a democrat politician,  those apparatchiks and propagandists of Trump's party would be flooding the zone with coverage. Yes, Photos Do Show JD Vance Wearing Dress and Blonde Wig While at Yale Law School | Snopes.com

Workers allege ‘nightmare’ conditions at startup JD Vance helped fund - YouTube

Epic Disaster: Trump MELTS DOWN in North Carolina Speech | Bulwark Takes-YouTube Trump held this rally in Ashville's Thomas Wolfe Auditorium which seats only 2,431. His campaign chose to avoid a stadium next door that seats about 7,200 which was used by him in 2016. Trump Books Asheville Venue Significantly Smaller Than in 2016 - Newsweek

Project 2025 Leaks Reveal Trump Connection, While He Continues to Play Dumb | The Daily Show - YouTube

+++

Putin and His Declining Orwellian State: 

Losses ∙ Russia ∙ WarSpotting — documented material losses in Russo-Ukrainian war

Putin reacts to Ukraine invading Russia - YouTube.  This YouTube channel takes the Hitler bunker scene in the movie Downfall (2004), near the end of his reign, and then creates new dialogue for all of the actors about some current event. In this case, Hitler is Putin talking to his generals about Ukraine invading Russia. One woman's dialogue is changed to say "don't cry the bots say we are winning" (at 3:11).  

Kursk Update: Russian Reinforcement Convoy Destroyed, Ukraine Pushes North, Lgov Evacuated - YouTube

Ukraine launches ‘massive’ drone strike on Russia’s Lipetsk region, as cross-border attack rages on | CNN; Kyiv offensive: Ukraine unleashes drone attack on Russian airfield

Ukraine launches 'massive' drone strike inside Russia - YouTube

Ukraine says Russia strike killed several at mall in Donetsk region - YouTube

During his Musk interview, Trump invented a conversation that he had with Putin about Ukraine. Trump "I got along with (Putin) very well, and he respected me. We would talk alot about Ukraine. It was the apple of his eye. But I told him, don't do it. But I said, don't ever do it. Don't ever do it. . . You can't do it, Vladimir. You do it. It's gonna be a bad day. You cannot do it. And I told him things that what I do. And he said no way"  Pages 19 and 21 in pdf. version Donald Trump and Elon Musk (Full Transcript)-TurboScribe 

Donald Trump lied about a conversation he had with Putin | John Bolton - YouTube; Musk interview on X: Trump blames US President Biden for Russia's invasion of Ukraine | Euronews

+++

1. Eliminated ORKLY - Sold 190 shares at $8.52: 

Quotes: 

USDs: Orkla ASA ADR (ORKLY), traded on the pink sheet exchange. Some brokers will no longer allow their customers to enter buy orders for foreign ADRs listed on the pink sheet exchange or what is known as the Grey Market. Schwab will allow trades but will charge a commission. Fidelity does not currently charge a commission to trade on the pink sheet exchange, but that may change.  

Ordinary Shares in NOKs: Orkla ASA (Norway: Oslo)

ADR Ratio 1 to 1

Norwegian Krone to US Dollar Exchange Rate Chart | Xe

Proceeds: $1,619.7

Last Discussed: Item # 2.D. Added to ORKLY - Bought 10 at  $6.56 (4/26/24 Post) 

This stock has been underperforming over the past several years, but has been doing better since I last discussed a purchase. 

Another negative factor is that the dividend yield is relatively low and Norway has withheld 25% as a tax since Fidelity is not claiming my tax treaty right to no more than 15%. I am more inclined now to own Nomad Foods Ltd.  (NOMD), a European frozen food company based in the U.K. that does not currently have a withholding tax for dividends.  

Another negative from my perspective is that Orkla started an acquisition spree several years ago, possibly paying too much to acquire businesses but certainly adding substantially to its debt load. Most of the businesses were acquired just in time for the input cost inflation spiral caused by the pandemic which squeezed margins. 

Website: Orkla.com

Profit Snapshot: +$83.98

Last Annual Ex Dividend Date: 4/18/24, which included a 3 NOK per share special dividend paid in connection with an asset sale. 

Orkla ASA ADR (ORKLY) Dividend History | Nasdaq

Last Earnings Report (Q/E 6/30/25): 

Q2-2024.pdf and Orkla reports strong profit improvement

Amounts in NOKs

Prior Sell Discussions: Item # 2.D. Eliminated ORKLY in Vanguard Account- Sold 10 at $9.53 and Eliminated in Schwab Account -Sold 10 at $9.53 -Consolidating Position in Fidelity Account (12/22/21 Post)(profit snapshots = $10.37); Item # 1- Sold 100 ORKLY at $10.33 (5/23/21 Post)(profit snapshot = $66.55); Item # 1.A. Eliminated ORKLY in Schwab Account-Sold 120 at $9.47 and Item # 1.B. Sold 10 of 110 in Fidelity Account at $9.47 (8/15/20 Post)(profit snapshots = $65.61; also contains snapshots of 2017 round-trips with a total realized gain of $65.45); Item # 4.B. Sold 100 ORKLY at $10.1 (1/5/20 Post)(profit snapshot = $4.97); Sold 100 ORKLY-Update On Portfolio Positioning And Management -South Gent | Seeking Alpha August 2015 (profit snapshot = $51.08); Item # 4 Sold  100 ORKLY at $9 (9/6/14 Post)(profit snapshot = $122.48)

ORKLY Realized Gains to Date: $470.49

Current Position: None

2. Small Ball Sells: 

My primary investment goal is capital preservation followed by income generation. I do not need to take risks, which is inherent when purchasing a security that fluctuates in price, particularly when the security does not have a promise to pay a sum certain on a date certain (e.g. bond).   

I will take some risks but will attempt to mitigate them through a variety of trading techniques, including selling my highest cost lots and liquidating shares purchased with dividends, both when it is profitable to do so.  Some of the trades discussed below are part of that now standing risk mitigation activity. 

I am more likely to sell shares purchased with dividends after I have turned off dividend reinvestment, having no interest in acquiring more shares at the current prices.  

Given my age, I am more concerned about losing the value of the dividend through price depreciation than losing the compounding effect of dividends paid on shares purchased with dividends. 

The capital preservation objective is also implemented by owning treasury bills and short term investment grade corporate bonds. Unlike a common stocks, those securities promise to pay me a sum certain at maturity along with interest.  

A. Pared OLP - Sold 5 at $25.125 - Schwab Taxable Account: 

Quote: One Liberty Properties Inc. (OLP) 

Proceeds: $125.63

I sold my highest cost lot. 

Management: Internal

OLP owns  a "geographically diversified portfolio consisting primarily of industrial and, to a lesser extent, retail properties, many of which are subject to long-term net leases. As of June 30, 2024, we own 106 properties (including two properties owned by consolidated joint ventures and two properties owned by unconsolidated joint ventures) located in 31 states. Based on square footage, our occupancy rate at June 30, 2024 is approximately 98.2%."

OLP SEC Filings 

10-Q for the Q/E 6/30/24  

Sale of Properties during the 6 months ending in June 2024:

10-Q at page 12

2023 SEC Filed Annual Report

Last Buy Discussion: Item # 1.A. Added to OLP - Bought 5 at $18.8; 5 at $17.6 (10/7/23 Post)

Profit Snapshot: +$16.38

New Average cost per share: $19.35 (35+ shares)

Snapshot Intraday on 8/8/24 after pare

The 7.21% yield shown in the snapshot is at a $25.06 price. My yield will be higher at $19.35.  

Dividend: Quarterly at $.45 per share ($1.8 annually), last raised from $.43 effective for the 2017 4th quarter payment. 

OLP Dividend History | Nasdaq

The lack of dividend growth indicates that the only way to increase the dividend yield is to sell my highest cost lots and then wait for an opportunity to buy the shares back at prices that will lower my average cost per share.  

Yield at New AC: 9.3%

Last Ex Dividend:  6/25/24

Last Earnings Report (Q/E 6/30/24): 

SEC Filing 

Revenues: $21.8M

GAAP E.P.S. : $.45 (includes gains on real estate sales)

FFO per share: $.43 (excludes gains on sales)

Adjusted FFO per share: $.48

Reconciliation of Net Income to AFFO: 

The non-cash depreciation and impairment expenses are added back to GAAP net income in the funds from operations calculation. The gain of $7.448M from selling properties is deducted. The primary changes to FFO when calculating AFFO are to add non-cash compensation expenses and to deduct the non-cash revenues created by the straight line accounting convention.

"During the quarter, the Company acquired, as previously disclosed, two industrial properties for $11.7 million, including a 63,421 square feet property located in Albuquerque, New Mexico and a 35,249 square feet property located in Savannah, Georgia. The Company obtained new mortgage debt on these properties of $6.2 million. The weighted average remaining lease term on these properties is 8.4 years. The Company anticipates the quarterly rental income (excluding variable lease revenues), depreciation and amortization expense, and mortgage interest expense from these properties will be $252,000, $103,000 and $93,000, respectively."

Pending Acquisitions: 2 Industrial Properties

OLP says that many of its properties are subject to net leases but does not identify the number, nor does the REIT specify whether the properties are subject to triple net leases. Triple Net Lease (NNN): What It Means and How It's Used 

In a triple net lease, the tenant pays for maintenance expenses, property taxes and insurance. 

A single net lease requires the tenant to pay property taxes. 

A double net lease requires the tenant to pay property taxes and insurance. 

For properties that are not subject to net leases, OLP does not provide a number used for maintenance expenses. The number may not be material which is the case for office and apartment REITs. 

Multi-tenant properties are generally not subject to net leases that are limited to single tenant properties. 

B. Eliminated Duplicate NSA Position in Schwab Account - Sold 7 at $41.91 and Pared Position in Fidelity Account - Sold 5 at $43: 

Quote: National Storage Affiliates Trust (NSA) - Internally managed storage REIT. 

Proceeds: $508.56

I sold the highest lot in my Fidelity account. 

I also eliminated my positions in Roth IRA accounts. 

NSA SEC Filings

10-Q for the Q/E 6/30/24 

SEC Filed 2023 Annual Report 

Website: National Storage Affiliates Trust (NSA)

Last Discussed: Item # 2.C. Added to NSA - Bought 5 at $34.95 (5/3/2024 Post); Item # 2.B. Added to NSA - Bought 5 at $35.25 (4/26/24 Post)

Profit Snapshots: $67.91   

New Average cost per share Fidelity Account: $36.3 (30 Shares)

Snapshot Intraday on 8/7/24 after pare

Dividend: Quarterly at $.56 per share ($2.24 annually), last raised from $.55 effective for the 2023 second quarter payment. 

NSA Dividend History | Nasdaq

Yield at $36.3 AC: 6.17%

Last Ex Dividend: 6/14/24

Last Earnings Report (Q/E 6/30/24) SEC Filing

I was not impressed. 

Comparisons are to the 2023 second quarter. 

Going the wrong way:

Revenue: $174.182M, down from $179.243M

FFO per share: $.61, down from $.68 

Core FFO per share: $.62, down from $.68

Occupancy: 86.4%, down from 89.6%

"Reported a decrease in same store net operating income ("NOI") of 5.6% for the second quarter of 2024 compared to the same period in 2023, driven by a 2.8% decrease in same store total revenues and an increase of 4.8% in same store property operating expenses."

"Repurchased 1,908,397 of the Company's common shares for approximately $71.6 million under the Company's previously announced share repurchase program."

Guidance for 2024: 

Core FFO per share guided down to $2.36-$2.44 from $2.4-$2.56. 

C. Eliminated TXNM - Sold 5 at $40.37: 

Quote: TXNM Energy Inc (TXNM) - Utility Holding Company

The operating subsidiaries are Public Service of New Mexico and Texas-New Mexico Power company. Those two utilities serve about 827,000 residential, commercial and industrial customers. 

I own an SU bond issued by the Public Service of New Mexico operating subsidiary. Bond Page Finra: 3.85% SU Maturing on 8/1/25 

This utility holding company recently changed its name and symbol from PNM Resources and PNM. 

Proceeds: $201.84

TXNM Analyst Estimates | MarketWatch As of 8/12/24, the consensus 2024 E.P.S. is $2.67; $2.81 in 2025; and $3.03 in 2026. The 2023 non-GAAP E.P.S. number was $2.82, SEC Filed Press Release 2023 GAAP E.P.S. was at $1.01, down from $1.97 in 2022, "primarily due to $242.0 million in regulatory disallowances and restructuring costs, which includes a settlement involving rate credits associated with the retirement of the San Juan Generating Station and disallowances in PNM’s recent rate case outcome related to legacy generation assets. These costs were offset by $33.3 million of net unrealized gains on investment securities in 2023 compared to $63.8 million of net unrealized losses in 2022." 

Based on those estimates, I did not see much upside left at $40.37, and the dividend yield is not that attractive to me compared to what I can earn on other dividend paying stocks that are experiencing better earnings growth. 

TXNM SEC Filings

Investors – PNM Resources

Last Discussed: Item # 2.F. Bought 5 PNM at $36.14 (7/12/24 Post) 

Profit Snapshot: +$21.14

Dividend: Quarterly at $.3875 ($1.55 annually), last raised from $.3675 effective for the the 2024 first quarter payment. In 2014, the quarterly dividend was at $.185. 

TXNM Dividend History | Nasdaq

Last Ex Dividend: 7/26/24 (owned as of)

Last Earnings Report (Q/E 6/30/24): 

SEC Filed Press Release 

GAAP E.P.S. = $.53

Non-GAAP E.P.S. at $.60, up from $.55 in the 2023 second quarter. 

GAAP to Non-GAAP for the Quarter and 6 Months Ending on 6/30/24:

The largest add back to the GAAP $.35 per share number was 5 cents for an unrealized loss on investments. Those investments include common stocks, mutual funds and available for sale debt securities (municipal bonds, treasuries and a lesser amount of corporate debt, see page 42, 10-Q)

"GAAP earnings in the second quarter of 2024 included $5.6 million of net unrealized losses on investment securities compared to $2.5 million of net unrealized gains in the second quarter of 2023."

Disaggregation of Revenues: 

PNM: Public Service of New Mexico and its subsidiaries; 

TNMP: Texas-New Mexico Power Company and its subsidiaries. 

Source: 10-Q at page 34 

D. Sold 18+ Shares of FAX Purchased with Dividends at $2.82:

Quote: abrdn Asia-Pacific Income Fund Inc. (FAX)-Leveraged Bond CEF

Sponsor's website: abrdn Asia-Pacific Income Fund, Inc.

The fund is leveraged using senior secured notes and a credit facility to a lesser extent.  

FAX SEC Filings 

SEC Filed Semiannual Report for the Period ending on 5/30/24 

Leveraged bond CEFs had performed poorly over the past two years, as bond prices declined as interest rates rose 

It is more likely than not that borrowing costs are about to decline and bonds have been performing better as intermediate and longer term rates have declined from their recent peaks. 

Investment Strategy: Monthly Income Generation with CEFs. 

In my Fidelity account, one objective is to generate over $200 per month from CEFs that pay monthly dividends. I will fluctuate up and down in the $200 to $300 per month range. 

I will periodically pare positions by selling lots purchased with dividends or the highest cost lots bought on the stock exchange.  It will then wait for an opportunity to buy back the shares sold when the purchase reduces my average cost per share. 

In this example, I simply sold the highest cost lots that had been purchased with dividends. Most of those purchases were within the past year. 

Profit Snapshot: $2.71

New Average cost: $2.4 (153+ shares)

Snapshot Intraday on 8/9/24 after pare

The old AC was $2.43

Dividend: Monthly at $.0275 per share ($.33 annually). 

FAX Dividend History | Nasdaq

ROC supported. 

Yield at $2.4: 13.75%

Last Ex Dividend: 7/24/24

Data Date of 8/9/24 Trade: 

Closing Net Asset value per share: $2.98

Closing Market Price: $2.82

Discount: -5.37%

Average 3 year discount: -12.17%

I will consider reducing a CEF position when the current discount is significantly lower than the average 3 year discount. 

Sourced: FAX - CEF Connect 

Credit Quality and Top 10 Holdings as of June 2024: 

Sourced: Fact Sheet.pdf

FAX Net Realized Gain: $473.17 (some shares sold for losses)

Largest Realized Gains: 

E. Sold .928 LGI Share Purchased with 3 monthly dividend payments: 

Quote: Lazard Global Total Return & Income Fund Overview - a Lightly Leverage CEF

Proceeds: $15.02

The leverage is at spreads to short term rates. CEF Connect has the leverage number at close to 10%. 

LGI SEC Filings

SEC Filed 2023 Annual Report (information about the fund's leverage can be found at page 31)

SEC Filings: Holdings as of 3/31/24 

Sponsor's website: Lazard Global Total Return and Income Fund, Inc. | Lazard Asset Management

I have turned off dividend reinvestment and have eliminated the fractional shares purchased with dividends. 

I sold on the ex dividend date. 

Investment Strategy: Monthly Income Generation through CEFs

Last Discussed: Item # 2.D. Added to LGI - Bought 10 at $13.01 (10/28/23) 

Profit Snapshot: + $1.03

Average Cost per share after pare: $13.37 (35 shares)

Snapshot Intraday on 8/12/24 after pare

Dividend: Monthly at $.1494 per share ($1.7928 annually), raised from $.1046 effective for the July 2024 payment. The dividend was raised to $.1046 from $.0934 effective for the 2024 second quarter payment. That rate was reduced from $.1247 effective for the January 2023 payment. 

LGI Stock Dividend History

The dividend history indicates that there will be significant percentage changes up and down in the dividend rate that will be tied to fund performance over time. 

Yield at $13.37 using the current monthly rate of $.1498: 13.41%

Last Ex Dividend: 8/12/24

Data Date of 8/12/24 Trade: 

Closing Net Asset value per share: $17.84

Closing Market Price: $16.24

Discount: -8.97%

Average 3 Year Discount: -8.72%

Sourced: LGI  - CEF Connect 

Lazard Glb Total Return & Income (LGI) Portfolio | Morningstar Has list of top 25 holdings

F. Eliminated TCPC - Sold 10 at $8.71:

Quote: BlackRock TCP Capital Corp. (TCPC) 

Proceeds: $87.1

I only owned 10 shares and had a very negative reaction to the second quarter report. TCPC and a few other BDCs are experiencing a rapid escalation of non-accruing loans even though the economy is still in an expansion mode. 

TCPC SEC Filings 

10-Q for the Q/E 6/30/24 Investments are summarized starting at 7. Loans on nonaccrual will have a "C" in the note section, far right. I did not look at the ones on nonaccrual status but simply noted in the press release that 10.5% of the debt portfolio was on nonaccrual based on cost.    

Profit Snapshot: $.34

Dividend: Quarterly at $.34

TCPC Dividend History | Nasdaq

Last Ex Dividend: 6/14/24

Last Earnings Report (Q/E 6/30/24):  SEC Filed Press Release

I would characterize this report as having at least a taste of the Masters of Disaster management style.  

Net Asset value per share: $10.2, down from 11.14 as of 3/31/24. The net asset value was at $11.9 per share on 12/31/23. Over the first six months of 2024, net asset value per share has declined by 14.29%.

As of June 30, 2024, debt investments on non-accrual status represented 4.9% of the portfolio at fair value and 10.5% at cost.

Adjustment Net Income per share: $.38, exceeded the current quarterly dividend. 

I would add that the 14.29% 2024 decline in net asset value through 6/30/24 has occurred during an economic expansion.  

Ares Capital (ARCC) which I discussed in my last post reported a net asset value per share of $19.61 as of 6/30/24 and at $19.24 as of 12/31/24.   

When there is a sudden and significant decline in net asset value per share, the prior valuation marks were obviously off. I have seen some examples where a loan is marked near cost at the end of a quarter and the company goes into bankruptcy within 6 months. That raises a question on whether the BDC is actually monitoring the financial condition to any meaningful decree or possibly even the honesty of the pre-bankruptcy mark. The investor needs to remember that the externally managed BDCs earn a fee on total assets. There is a financial incentive to mark the loan values higher than may be warranted. I did not attempt to make this kind of assessment for TCPC. I did for TPVG. 

3. Treasury Bills Purchased at Auction: 

A. Bought 5 Treasury Bills at the 8/12/24 Auction: 

91 Day Bill

Matures on 11/14/25

Interest: $64.08

Investment Rate: 5.207%

B. Bought 2 Treasury Bills at the 8/12/14 Auction: 

182 Day Bills 

Mature on 2/13/2025  

Interest: $48.48

Investment Rate: 4.982%

C. Bought 5 Treasury Bills at the 8/14/24 Auction: 

119 Day Bill

Matures on 12/17/24

Interest: $82.31

Investment Rate: 5.134%

4. REIT Equity Preferred Stocks: 

I am adding some to equity REIT preferred stocks, even though I am averaging up some. The concern is that interest rates paid by treasury bills and short term fixed coupon securities will start to decline more soon. 

Advantages and Disadvantages of Equity REIT Cumulative Equity Preferred Stocks

A. Added to REXR.PRC - Bought 10 at $21.4: 

Quote: REXR-PC

Cost: $214

Last Discussed: Item # 6.A. Added to REXRPRC -Bought 5 at $20.76 (4/26/24 Post) 

Issuer: Rexford Industrial Realty (REXR) - An industrial REIT

REXR SEC Filings 

REXR SEC Filed Earnings Press Release for the Q/E 6/30/24

REXRPRC Prospectus

Coupon: 5.625% paid on a $25 par value. 

Dividends: Paid Quarterly and Cumulative  

Stopper Clause: Standard.

Issuer Optional Call: On or after 9/20/24

Maturity: None, potentially perpetual.  

New average cost per share: $21.21 (30 shares)

Snapshot Intraday on 8/8/24 after add

Yield at New AC  = 6.63%

(.05625% x $25 par value = $1.40625 annually per share ÷ $21.31 average cost per share = 6.63%) 

Next Ex Dividend: 9/16/24

B. Bought 10 AHHPRA at $22.25- Duplicate Position Fidelity Account: 

Quote: AHH-PA

Cost: $222.5

Issuer: Armada Hoffler Properties Inc. (AHH) - An Equity REIT

I have a small ball position in the common stock.  

AHH SEC Filings

AHH SEC Filed Earnings Press Release for the Q/E 6/30/24 

Last Discussed-Purchases in Schwab Account: Item # 2.B - Bought 5 at $19.59  (11/11/23 Post)  Item # 4.H. Bought 10 AHHPRA at $20.3 (11/29/22 Post) 

Description: Equity Preferred Stock, senior only to common stock in the capital structure

Prospectus (public offering price of $25 in June 2019)

Coupon: 6.75% paid on a $25 par value.  

Yield at $22.25 Purchase Price: 7.58%

(.0675% x. $25 par value = $1.6875 annually per share ÷ $22.25 Total Cost per share = 7.5843%)

Dividends: Paid quarterly and cumulative 

Common and preferred dividend paid by REITs will not be classified as qualified given the pass through corporate status where income is not taxed at the corporate level.  

Last Ex Dividend: 7/1/24

Stopper Clause: Yes, standard (see page S-17 Prospectus) This clause enforces the preferred shareholders preferential claim to cash vs. only the common shareholders. To defer the preferred stock dividend, the company must first eliminate the common cash dividend and avoid using cash to buy back common stock during the deferral period. 

Maturity Date: None, potentially perpetual 

Issuer Optional Call Date: At par value + accrued and unpaid dividends on or after 6/18/24 

5.  Small Ball Purchases: 

A. Started GCT - Bought 5 at $22.29: 

Quote: GigaCloud Technology Inc. (GCT) 

Cost: $111.45

52 Week Range: $6.71 to $45.18

The high was hit intraday on 3/15/24, GCT Stock Historical Prices & Data - Yahoo Finance Volume accelerated that day to $9M from 2.676M the previous day. 

The company announced its 2023 4th quarter earnings that day, SEC Filed Press Release, reporting revenues of $244.737M and E.P.S. of $.87, up from $.31 in the 2022 4th quarter. The company also filed that day a notice with the SEC that it needed additional time to file its 2023 Annual Report which was filed on 3/27.

Website: GigaCloud Technology | Reimagining Global B2B

Corporate Profile - GigaCloud Technology Inc.

GCT SEC Filings 

GCT Key Metrics at Reuters

The company has its headquarters in the Cayman Islands but it operates out of mainland China and Hong Kong which adds considerable country risk. 

"GigaCloud Technology Inc is a pioneer of global end-to-end B2B technology solutions for large parcel merchandise. The Company’s B2B ecommerce platform, which it refers to as the “GigaCloud Marketplace,” integrates everything from discovery, payments and logistics tools into one easy-to-use platform. The Company’s global marketplace seamlessly connects manufacturers, primarily in Asia, with resellers, primarily in the U.S., Asia and Europe, to execute cross-border transactions with confidence, speed and efficiency. The Company offers a truly comprehensive solution that transports products from the manufacturer’s warehouse to the end customer’s doorstep, all at one fixed price. The Company first launched its marketplace in January 2019 by focusing on the global furniture market and has since expanded into additional categories such as home appliances and fitness equipment."

A major concern is whether the company has a durable business model. I have concerns about competition from other existing distributors and new entrants into this distributor market, as well as some existing customers cutting out the middleman and performing these kind of services in house.

10-Q for the Q/E 6/30/24 

2023 SEC Filed Annual Report Risk factor summary starts at page 22 and ends at page 66. A number of the risks are inherent in doing business in China. A more detailed description of the businesses can be found at pages 7-16, 78-82.

Investment Category: Lottery Ticket Basket

On the day of purchase, the stock closed at $22.43, down $1.71 or 7.08%.  

GCT Analyst Estimates | MarketWatch As of 8/9/24, the date of purchase, the average E.P.S. estimate was $2.9 this year; $3.05 in 2025 and $4.15 in 2026. If that trajectory actually occurs, and I have no opinion on whether that will or will not happen, then the stock is underpriced at $22.29. 

Dividend: None

Last Earnings Report (Q/E 6/30/24): 

SEC Filed Press Release

Comparisons are to the 2023 second quarter

Revenues: $310.9M, up 103.1% from $153.1M

GAAP E.P.S. $.65, up from $.45

Adjusted E.P.S. = $1.03, up 68.9% from $.61. 

Consensus at $.73

GAAP to Adjusted E.P.S. Reconciliation: 

Revenue Guidance for the 3rd Q: $266m to $2.82M compared to the FactSet consensus of $285.73M. 

Notwithstanding the earnings beat, the stock declined based on this disappointing revenue guidance. 

There may have been some anxiety created on 8/8/ with this announcement. GigaCloud Technology Inc Announces CFO Transition 

Even using the $285+ consensus for third quarter revenues, that would be a substantial decline from the actual $310.9M reported in the second quarter.  

Revenues and earnings will be erratic. I would pay more attention to the annual numbers year-over-year than to quarterly comparisons.  

Cash and Cash Equivalents as of 6/30/24: $183.283M

B. Added to RYLD in Schwab Account - Bought 5 at $15.5: 

Quote: Global X Russell 2000 Covered Call ETF Overview 

Cost: $77.5

Investment Category: Monthly Income Generation 

Sponsor's website: Russell 2000 Covered Call ETF (RYLD)

Net Expense Ratio: .6% until 3/1/25 than at .63%

Last Discussed: Item # 1.A. Bought 5 RYLD at $16.54 (5/24/24 Post) 

New average cost per share this account: $17.19 (80+ shares)

Dividend: Monthly at a variable rate. 

Next Ex Dividend: 8/19/24

On the day of this add, I turned back on the dividend reinvestment option. Generally, I will likely keep the dividend reinvestment option on for as long as the likely reinvestment price reduces my average cost per share. 

C. Restarted CTRA - Bought 5 at $23.81: 

Quote: Coterra Energy Inc. (CTRA) 

Cost: $119.04

CTRA is an exploration and production energy company with operations focused in the Permian Basin, Marcellus Shale, and Anadarko Basin.    

CTRA Analyst Estimates | MarketWatch As of 8/14/24, the average E.P.S. estimate for 2024 was $1.92; at $2.94 in 2025 and at $3.12 in 2026. 

Website: Coterra Energy

Last Discussed: Item # 1.A. Eliminate CTRA - Sold 22+ at $25.6 (5/27/23 Post)(profit snapshot =  $112.59); Item # 2.A. Eliminated CTRA in 2 Taxable Accounts- Sold 10 at $25.17 and 5 at $25.41 (2/5/23 Post)(profit snapshot = 95.4) I eliminated my position in 2023 when natural gas prices had plummeted from unusually high 2021-2022 levels and the CTRA variable rate dividends would cease. 

Last Buy Discussion: Item # 2.J. Started CTRA in Fidelity Taxable Account - Bought 5 at $21.53; 2 at $21.1; 2 at $20.75;  2 at $20.4; 2 at $20 and 1 at $19.56 (12/10/21 Post)

Dividend: Quarterly at $.21 per share (regular) 

Coterra Energy - Dividend History

As shown in that link, CTRA paid out quarterly variable dividends in addition to its regular dividend starting in the 2021 4th quarter through the 2023 first quarter. Those dividend totalled $1.05 per share, rounded up. No variable dividend has been paid since the 2023 first quarter. I would not count on a resumption of dividends in excess of the regular dividend rate, at least until there is a robust and sustained recovery in natural gas prices from currently depressed levels. 

There was a surge in natural gas prices in 2021 and 2022 that supported the variable dividend payments. 

Natural Gas Prices - Historical Chart | MacroTrends

Yield at $23.81 = 3.53%

Last Ex Dividend: 8/15/24 (owned as of)

Last Earnings Report (Q/E 6/30/24): 

SEC Filed Press Release 

E.P.S. $.30

Adjusted E.P.S. $.39

GAAP to Non-GAAP E.P.S. Reconciliation: 

Cash and short term investments: $1.32B

Long Term Debt: $2.071B

"Total equivalent production of 669 MBoepd (thousand barrels of oil equivalent per day), was above the high end of guidance (625 to 655 MBoepd), driven by improved cycle times and strong well performance in all three of our regions."

"Oil production averaged 107.2 MBopd (thousand barrels of oil per day), slightly exceeding the high end of guidance (103 to 107 MBopd)."

"Natural gas production averaged 2,780 MMcfpd (million cubic feet per day), exceeding the high end of guidance (2,600 to 2,700 MMcfpd) as Marcellus base production outperformed expectations."

"NGLs production averaged 98.8 MBoepd." 

NGL: Natural Gas Liquid

Realized Prices During the Quarter: 

Free Cash Flow (non-GAAP) totaled $246 million. 

Estimates "2024 Discretionary Cash Flow (non-GAAP) of approximately $3.2 billion and 2024 Free Cash Flow (non-GAAP) of approximately $1.3 billion, at $80/bbl WTI and $2.37/mmbtu annual average NYMEX assumptions."

"For the second quarter of 2024, shareholder returns totaled 120% of Free Cash Flow (non-GAAP), inclusive of our declared quarterly base dividend and $140 million of share repurchases during the quarter (cash basis, excluding 1% excise tax). The Company remains committed to returning 50% or greater of its annual Free Cash Flow (non-GAAP) to shareholders and has returned 103% year to date.

Purchase Restriction: 5 share lots with each subsequent purchase required to be at the lowest price in the chain. It is not possible to day whether the current low natural gas prices are here to stay.  

6. Tennessee Municipal Bonds: 

A. Bought 5 Harpeth Valley Utility District of Davidson and Williamson Counties Tennessee 3% Maturing on 9/1/2030 at a Total Cost of 98.04: 

Emma Page 

YTM at 3.361%

On 8/15/24, I received $6,000 in proceeds from maturing corporate bonds and redirected most of that amount into this purchase. 

Comparing just the coupons of this municipal bond with those corporate bonds, I will generate slightly less current interest income from this municipal bond compared to the McCormick and Public Service Electric and Gas corporate bonds, both having 3.15% coupons, but the after tax current income will be greater for the tax free bond. The Public Service Electric and Gas securities were first mortgage bonds issued by an operating subsidiary of Public Service Enterprise Group Inc. (PEG). 

Credit Rating: AA+ by S&P

Optional Redemption: On or after 9/1/23 at par value + accrued and unpaid interest. 

Interest: Federally Tax Exempt  

Security: Lien on Water/Sewer Revenues

I now own 10 bonds. 

Accrued Interest Paid to Seller: $67.92

Summary of Operations: 

Website: HVUD | Harpeth Valley Utilities District

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.