Economy:
Fed cuts rates September 2024: Fed cuts interest rates by a half-point This decision lowers the FF range to 4.75% to 5%. I discussed this rate cut in a comment published yesterday.
Federal Reserve issues FOMC statement One Fed member voted against the 50 basis point hike and was in favor of only a 25 basis point cut.
The Fed's Dot Plot has at least another 50 basis point by year end as the more probable than not current prediction. 10 out of 19 are making that prediction (one of those ten have 75 basis points). 2 members expect no change by year end while 7 are currently predicting another 25 basis point cut.
The Fed - September 18, 2024: FOMC Projections materials, accessible version
I have been expecting a 75 basis point reduction in the federal funds rate this year.
Another cut of 50 basis point cut this year would require troubling economic data IMO, meaning increases in unemployment, a negative monthly jobs number with continued revisions down in the prior two months bringing the prior reported growth numbers closer to zero, and an uptick in the U-6 rate to 9+%, last reported at 7.9%. Table A-15. Alternative measures of labor underutilization - 2024 M08 Results
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Senator Todd Young (R-IN), viewed as the GOP's top expert on finance in the Senate, had this to say about the 50 basis point cut in an WP interview:
The Post: How are you?
Young: Good, but not particularly effusive these days.
The Post: What about rate cuts, would you be effusive on that?
Young: What’s that?
The Post: Rate cuts?
Young: I’m especially laconic as it relates to Fed-speak. That means terse.
The Post: It’s a 50 point cut.
Young: That means sparing in words.
The Post: Okay, so Goldilocks: Too hot, too cold or just right?
Young: Oh, you’re asking me to assess not just the decision they made to cut, but also the quantity based on my reading of the data.
The Post: Yes.
Young: Um, you know what, I don’t dive at a granular level into monetary policy and there’s a reason I don’t, because it can be an abstruse area of macroeconomics. You know when I was in business school, I took a lot of banking because I wanted to understand financial markets and currencies, and it’s fascinating. But it takes almost a daily immersion, in this area of economics, to penetrate it and to be able to offer thoughtful reflections on interest rate decisions. And I’m just not as close to it now in light of my committee assignments. But I’m sure any Banking Committee member could give you a lengthy response.
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The import price index declined by .3% in August led by lower gasoline prices. Excluding energy prices, the index declined by .9%. U.S. Import and Export Price Indexes summary - 2024 M08 Results The index rose .1% in both June and July and were up .8% for the 12 month period ending in August 2024.
Trump says he will 'end' inflation. Economists say he'd make it worse (9/15/24, published at USA Today), republished at MSN, Tax cuts, tariffs and deportation: How economists say Donald Trump would increase inflation Who will the Trumpsters blame if Donald is elected and inflation soars again as a result of his policies as discussed in that article? It will not be Donald Trump who will disclaim all responsibility, blaming others since the buck never stops at his desk. "The Buck Stops Here" Desk sign | Harry S. Truman
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Allocation Shifts Discussed in this Post:
Treasury Bills Purchased at Auction: $10,000
Corporate Bonds: None
Maturing Corporate Bonds in Fidelity Account - 9/15-16/24 (bought at discounts to par value):
Early Corporate Bond Redemptions on 9/19/24: $3,000
Corporate Bond Interest Payments Received in my Fidelity Account on 9/16/24: $592.67
The National Rural Utilities Cooperative Finance bonds pay monthly. The others pay semiannually.
Other Corporate Bond Maturities W/E 9/20: $15,000 in principal amount
CDs and Treasury Bills Maturing the W/E 9/20: $23,000 in principal amount.
I have an ongoing reinvestment problem that is growing more troublesome as the FED cuts rates.
Inflow Tennessee Municipal Bonds: +$10,000 in principal amount
Over the past few weeks, I have been using proceeds from maturing corporate bonds in my Fidelity account to buy Tennessee municipal bonds. I am picking up slightly more than 3% tax free current interest. Since I am buying the bonds at slightly below their par values, I will realize a gain at maturity or an early call.
Outflow Canadian Reset Equity Preferred Stocks: -C$2,219 (realized gain of +C$559)
Inflow Bond CEF and ETF: +$27.06
(Consisting of $265.99 in purchases minus $238.93 in proceeds, lightened up an leverage bond CEF selling at a premium to net asset asset value per share).
Inflow Equity Preferred Stock: +$23.95
(consisting of $113.9 in purchases and minus $89.95 in Proceeds)
Net Outflow Common Stocks: -$45.88
(consisting of $477.28 in proceeds minus $431.4 in purchases)
Net Inflow Stock Funds: +$160.85
(consisting of $196.75 in purchases minus $35.9 in proceeds)
Net Inflow Stocks/Stock Funds: +$114.97
2024 Net Outflow Stocks/Stock Funds: -$35,195.76
Asset allocation in Fidelity Account as of 9/19/24:
Treasury Yield Curve September:
The high yield this year for the 6 month treasury bill was at 5.6%.
Note that the 10 year treasury yield rose 5 basis points in response to the Fed's rate cut. That indicates a currently minor concern that inflation may reignite some and/or that part of the yield reflecting concerns about a recession has been relieved some.
The ten year TIP breakeven inflation rate rose to 2.12% as of 9/18/24, up from 2.02% a week ago.
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Trump is Bat Sh-- Crazy:
President: general election : 2024 Polls | FiveThirtyEight
2024 General Election: Trump vs. Harris Polls | RealClearPolling
Donald Trump : Favorability Polls | FiveThirtyEight Unfavorable hovers near 55%.
Johnson under pressure after House fails to pass GOP funding plan and Trump pushes shutdown | CNN Politics If the government shutdowns shortly before the election, because the republicans are incapable of agreeing on a budget among themselves or a clean continuing resolution that keeps the government open, then that will most likely insure that they will deservedly be in the minority in January 2025 and need to remain there, forever if necessary, until they mature into responsible adults tethered at least slightly to the real world.
Trump pivots from second apparent assassination attempt to more incendiary claims
Leaked Supreme Court memos reveal John Roberts' role in shielding Trump from prosecution | Salon.com, citing How Chief Justice Roberts Shaped Trump’s Supreme Court Winning Streak - The New York Times The Republican Justices created for the first time in U.S. history a sweeping Presidential immunity from criminal prosecution that has zero support in the Constitution, placed the President above the law, incentivized the President to commit crimes without consequence other than a possible impeachment, and contradicts the express language in Article II that the President has a duty to see that the laws are faithfully executed. Those Justices are not conservative and have lost all credibility. (My Videos: Republican Justices Greenlight the President to Commit Crimes - YouTube; Will the 6 Republican Supreme Court Justices Bear Responsibility for Presidential Crimes Hereafter - YouTube)
Trump says he hates Taylor Swift after pop star endorses VP Harris : NPR
AI Trump: I Hate Taylor Swift 2 - YouTube
So Trump hates Taylor Swift and loves Laura Loomer. That makes sense in TrumpWorld.
A quarter of Republicans think Trump should seize power even if he loses - The Washington Post
The Supreme Court’s Effort to Save Trump Is Already Working - The Atlantic
Republicans Attempt To Keep Abortion Off Ballots They want to prevent voters from making a decision on this issue.
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Trump and Vance Continue Making False Claims about pets being stolen and eaten by Haitian immigrants:
PolitiFact | Trump repeats baseless claims that Haitian immigrants in Springfield, Ohio, are eating pets Rated as pants on fire.
Trump spreads more lies about Springfield, Ohio - YouTube Trump and Vance have reiterated their claims about Haitians stealing cats and dogs in Springfield, Ohio and then eating them, notwithstanding knowing that those claims are causing bomb threats forcing school evacuations.
Last Sunday, J.D. Vance doubled down on his false claim about Haitian immigrants stealing pets and eating them in Springfield. JD Vance, Dana Bash get into heated back-and-forth over Springfield (9/15/24)
Trump and Vance are completely shameless and has no difficulty in spreading ginned up rumors created by their cult members as facts for their own personal political gain. Vance has admitted twice inventing his claim about Haitian immigrants. "We're creating a story": Vance admits he's making up Haitian immigrant smears; Vance Admits to “Creating” Stories About Haitian Immigrants, Stoking Hate | Truthout
Vance claims that his constituents have called his office making that claim, though he provides no details.
His office may have received calls making that claim. There is no shortage of Trumpsters who will call the Springfield police or J.D. Vance's office and claim that they saw a Haitian steal a pet and eat them.
Perhaps, his office needs to be called by someone claiming to be a "constituent" asserting that J.D. Vance was seen stealing a cat and roasting the pet over a campfire, then wait for Vance to repeat the claim as true, or that the constituent saw a flying saucers deposit a Martian army who were going to install Harris as President after a Trump victory in November.
The Most Shameful Interview in the History of American Politics-YouTube
Vance asked an ex-professor to delete his 'scathing rebuke' of the GOP from the internet - Alternet.org; JD Vance got a former professor to delete a blog post he wrote in 2012 attacking GOP over anti-immigrant rhetoric
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Trump and Vance Blame Democrats for Assassination Attempts:
My Video: Trump Blames Democrats for the Assassination Attempts- Something Reagan or Ford did not do - YouTube
Trump told Democrats to tone their rhetoric while using vitriolic rhetoric to describe them. Trump Claims Democrats’ Language Provoked Apparent Assassination Attempt - The New York Times When making that statement, Trump called Democrats the "enemy from within" and the "real threat" to America. Trump has called his political opponents "vermin". He repeatedly calls Harris a Marxist and Fascist.
Vance had this exchange with David Frum, a republican who was a speechwriter for George W. Bush:
Frum also responded with this article: What a Losing Campaign Looks Like - The Atlantic
Trump’s ‘bloodbath’ and other rhetoric inflame his 2024 campaign trail | Reuters
Trump calls political enemies ‘vermin,’ echoing dictators Hitler, Mussolini - The Washington Post
After Calling Foes ‘Vermin,’ Trump Campaign Warns Its Critics Will Be ‘Crushed’ - The New York Times
Trump's dystopian view of America - YouTube
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Trump Advisor Laura Loomer:
The Trump advisor Laura Loomer had this to say about Harris: "If @KamalaHarris wins, the White House will smell like curry & White House speeches will be facilitated via a call centre and the American people will only be able to convey their feedback through a customer satisfaction survey at the end of the call that nobody will understand."
Marjorie Taylor Greene (R- GA) vs. Laura Loomer: Trump allies clash over 'racist' Harris attack Greene who stated that the California wildfires were caused by Jewish space lasers thought that Loomer's comment about Harris was racist.
Loomer doubled down on her remarks after Greene criticized her, calling Harris an "evil bimbo" and a DEI hire.
Other Loomer comments: Opinion | Laura Loomer is on the campaign trail with Trump for a reason - The Washington Post
In a June podcast about whether Democrats would need to be jailed and prosecuted if Trump loses, Loomer made this statement: "Not just jailed, they should get the death penalty. You know, we actually used to have the punishment for treason in this country." Laura Loomer calling for Democrats to be rounded up and executed when Trump wins
She responded to a news story about the drowning deaths of 2000 migrants by saying "Good...Here's to 2,000 more".
In a July 2024 post, she labeled Harris "a drug using prostitute" adding that "I'm willing to bet she’s had so many abortions that she damaged her uterus. … Republicans need to run with this messaging and ask why a woman with no kids of her own and just a scarred up uterus is so obsessed with wanting to kill your babies. Laura Loomer on X
Loomer has 1.2M followers on X. That says a great deal about where we are in America today.
Marjorie Taylor Greene (R-GA) Blamed Wildfire on secret Jewish Space Laser; QAnon candidate Marjorie Taylor Greene is a 9/11 conspiracy theorist who claimed that there’s no evidence a plane crashed into the Pentagon | Media Matters for America
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Dissecting Trump’s “Peacefully and Patriotically” Defense of the January 6th Attack
This article provides details on why the claims of Trump and his fan boy Elon Musk about crime are false. Trump's New Big Lie-The Atlantic Trump retweeted a "wildly false claim" by an X user whose avatar is an imperial stormtrooper from Star Wars. Both Musk and Trump are shameless. Musk is currently one of the primary spreaders of false statements and conspiracy theories. That has increased the number of people following him on X.
Donald Trump warns of California dystopia if Kamala Harris is elected - POLITICO
Republicans block Democratic bill on IVF protections - POLITICO
Ohio sheriff Bruce Zuchowski suggests residents keep list of Kamala Harris yard sign addresses He is the chief law enforcement officer of Portage County, Ohio. Portage County sheriff defends comments about Harris supporters Zuchowski used the word "locusts" to describe immigrants. He is of course a republican. The NAACP claims that the Portage county sheriff's office targets minority drivers. What to know about Portage County Sheriff Bruce Zuchowski
After being asked at a Town Hall in Michigan about his plan to lower food prices, Trump winds up ranting about windmills. Trump did say that he would block food imports and raise tariffs which would raise food prices rather than lower them. Donald Trump’s plan to lower grocery costs would actually increase them | The Montana Independent "Trump is asked how he’ll bring grocery prices down. He winds up ranting about windmills- X
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Putin's and His Recklessness:
Losses ∙ Russia ∙ WarSpotting — documented material losses in Russo-Ukrainian war
After sacrificing a million or so Russians, Putin may succeed in wearing Ukraine down.
Putin warns NATO risks 'war' with Russia over Ukraine long-range missiles In Putin's Russia, it is okay for Russia to use weapons supplied by North Korea and Iran to destroy civilian buildings in Ukraine, but a red line is crossed when Ukraine uses a western missile to attack a military target in Russia that is used by Putin to launch attacks on Ukraine.
I would just note that the Russian army has been unable to defeat the much smaller Ukrainian army.
Notwithstanding that fact, Putin wants to start a war with NATO in response to a storm shadow missile destroying a military target in Russia that is used to attack Ukraine.
Having made this threat, and broadcast it throughout Russia, how could Putin avoid escalating the war to include NATO countries, including the U.S., if such a missile attack happens, assuming Russians allow him to remain in power.
Putin has no choice now but to continue his war in Ukraine, no matter how many Russians are killed, maimed for life or severely injured physically and/or mentally, and irrespective of the long term damage to Russia's economy. Putin is a disaster for Russia and will continue to be for as long as he remains in power.
S-400 Launcher and K-1 Podlet Radar Destroyed by Neptune at Cape Tarkhankut, Crimea - YouTube
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1. Small ball buys:
I did some nibbling on BDC stocks that are out of favor over the past week.
Those BDC companies have higher than acceptable to me nonaccrual loans as a percentage of total loans. This has occurred during a period of economic expansion and is viewed by me in a highly negative light. The current dividend yields partly relieve ever so slightly that negative assessment.
Private equity portfolio company bankruptcies maintain record pace | S&P Global Market Intelligence (5/15/24)
With the FED's cut in interest rates, net investment income will trend down in the coming months as floating rate loans reset at lower coupons.
I also started a junk bond fund position (SPHY). It has been a decade or so since I owned one. There is some yield attraction in this sector but I still view the risks as outweighing the benefits which explains the 5 share buy.
A. Started SPHY - Bought 5 at $23.71:
Quote: SPDR Portfolio High Yield Bond ETF (SPHY)
Cost: $118.53
High yield means junk rated.
Investment Category: Monthly Income Generation
Sponsors website: SPDR® Portfolio High Yield Bond ETF
Expense Ratio: .05%
As of 9/12/24, the fund had 1,931 holdings, the average maturity in years was at 4.84 years, the average price was $97.16, the option adjusted duration was at 2.95 years and the credit quality was as shown in the following snapshot:
Dividends: Paid Monthly at a variable rate
Last 12 Monthly Dividends: $1.84, rounded down.
Yield at $23.71 Using $1.84 annual: 7.76%
Last Ex Dividend: 9/3/24
The expense ratio is lower than the .4% for JNK and .08% for USGY. SPDR® Bloomberg High Yield Bond ETF (JNK); iShares Broad USD High Yield Corporate Bond ETF (USHY)
B. Added to PPT in Schwab Account - Bought 40 at $3.7:
Quote: Putnam Premier Income Trust (PPT) - Bond CEF
Cost:$147.46
SEC Filed Semiannual Report for the period ending 1/31/24 The funds uses a lot of interest rate swaps, total return swaps, and credit default contracts.
SEC Filing -Holdings as of 4/30/24
Sponsor's website: Putnam Premier Income Trust - PPT
Credit Quality as of 8/31/24:
Effective Duration as of 7/31/24: 4.38 years
Number of Holdings as of 7/31/24: 749
New Average cost per share this account: $3.83 (345+ shares)
Dividend: Monthly at $.026 per share ($.312 annually)
Some ROC support. In 2023, $.0515+ of the total dividend paid that year was classified as ROC.
Yield at $3.83 AC per share: 8.146%
Yield at $3.7-Last Purchase Price: 8.43%
Next Ex Dividend: 9/24/24
Data Date of 9/12/24 Trade:
Closing Net Asset Value per share: $3.9
Closing Market Price: $3.71%
Discount: -4.87%
Average 3 Year Discount: -6.38%
Sourced: PPT-CEF Connect (Click "Pricing Information" tab)
While that website claims that PPT is leveraged at about 32%, I could not find any evidence of borrowings. Another website shows no leverage. Putnam Premier Income Trust (PPT) | Closed-End Funds
C. Added to PEO - Bought 5 at $22.1:
Quote: Adams Natural Resources Fund Inc. Overview - A Stock CEF
Cost: $110.5
This CEF was founded shortly before the 1929 stock market crash. PEO shares office space and personnel with another CEF, Adams Diversified Equity Fund (ADX), founded at about the same time.
Sponsor's website: Adams Funds
Top 10 Holdings as of 6/20/24:
SEC Filed Semiannual Report for the period ending 6/30/24 "At June 30, 2024, the identified cost of securities for federal income tax purposes was $483,468,507 and net unrealized appreciation aggregated $206,386,848, consisting of gross unrealized appreciation of $228,961,466 and gross unrealized depreciation of $22,574,618." (page 10)
Primary Portfolio Changes in the 6 months ending 6/30/24:
Last Discussed: Item # 2.F. Restarted PEO - Bought 10 at $22.76 (6/28/24 Post)
Last Eliminations: Item # 2.B. Eliminated PEO-Sold 15 at $23.94 (4/12/24 Post)(profit snapshot = $50.72); Item # 1. Eliminated PEO - Sold 182+ at $22 (1/16/23 Post)(profit snapshot = $853.25)
Data Date of 9/12/24 Purchase:
Closing Net Asset value per share: $25.34
Closing Market Price: $22.03
Discount: -13.06%
Average 3 year discount: -14.79%
Sourced: PEO - CEF Connect (click "Pricing Information" Tab)
New average cost per share: $22.54 (15 shares)
Dividends: Variable and paid quarterly.
PEO recently started a managed distribution policy "to pay at least 2% of average net asset value each quarter." (emphasis added) Adams Natural Resources Fund Declares Distribution (7/18/24) The prior policy was to pay at least 6% annually but most of the dividend was paid in the 4th quarter which included primarily a long term capital gains distribution. The dividend for the first three quarters was $.10 per share.
The first payment using this new managed distribution was $.54. This change has increased my interest in this CEF some. I am looking for yield alternatives since short term interest rates are about to decline and I am heavy in short term Treasury bill and investment grade corporate bonds.
Last Ex Dividend: 8/5/24 (owned 10 as of)
5 Year Distribution History:
Other Sell Discussions: Item # 3 Sold 100+ PEO at $26.19 (11/15/20 Post) (profit snapshot $144.49); Item # 1 Sold 104+ PEO at $27.06 (8/10/13 Post)(profit snapshot = $205.94); Item # 3. Sold 100 PEO at $26.19 (11/15/2010 Post)(profit snapshot = $144.29).
Goal: Given the prior and current managed distribution policy, which has not been supported by ROC, at least in recent years, I am content to harvest the dividends and ultimately realize a 2% annual capital gain on the shares.
Tax information for distributions is available at the fund's website.
D. Restarted the Deservedly Hated BDC TPVG - Bought 10 at $7.53; 5 at $7.14:
Cost: $111
The 10 share lot was purchased shortly before the ex dividend day and the 5 shares lot was bought on the ex dividend date.
10-Q for the Q/E 6/30/24 A summary of investments starts at page 5.
2023 SEC Filed Annual Report (The risk factor summary starts at page 24 and ends at page 54) The risk factors are so detailed that they are likely to protect the BDC from class actions suits. TPVG recently had a class action lawsuit dismissed based on its risk disclosures and the safe harbor provision. SEC Filing - Court Order.pdf
Last Elimination: Item # 2.A. Eliminated TPVG in all Taxable Accounts - Sold 38+ at $10.76; 11 at $10.8; 29 at $10.88 (8/26/23 Post)(profit snapshot = net of $177.68) I describe in that post, and others cited therein, why I lost confidence in the external managers.
My negative assessment of the managers discussed in that post and previous ones was later confirmed many times over in subsequent quarterly reports. The external managers have been giving off Masters of Disaster vibes for about two years now.
Net Asset Value per share history:
6/30/24: $8.83 (down 36.97% since 12/31/21)
I would not accept at face value the $8.83 NAV per share number as being accurate, rather than being too high. This strong downtrend since 12/13/21 is occurring during an economic expansion which makes it even more concerning.
12/31/23: $9.21
6/30/23: $10.7
12/31/22: $11.88
12/31/21: $14.01
9/30/21: $13.92
9/30/19: $13.47
12/31/18: $13.50
9/30/18: $13.59
12/31/17: $13.25
9/30/17: $13.39
9/30/16: $13.44
9/30/15: $14.52
IPO in March 2014 at $15
Yield at $7.40 (assuming no further cuts): 16.216%
Assuming no further dividend cuts, the stock has some minor attraction for me, even with this BDC's recent negative history, based solely on the dividend yield. The goal is to harvest this dividend and sell shares for any profit down the road.
Last Ex Dividend: 9/16/24 (owned as of)
Last Earnings Report (Q/E 6/30/24):
TPVG recently replaced its CFO who "retired". TriplePoint Venture Growth BDC Corp. Announces Retirement of Chief Financial Officer
Net Investment Income per share: $.33, down from $.53 in the 2023 second quarter.
It is not surprising that NII per share plunged compared to the 2023 second quarter given the number of loans still held that are currently on nonaccrual and the loans that were on nonaccrual that were sold at steep losses.
Weighted average yield on debt investments: 15.8%
"During the second quarter of 2024, the Company recognized net realized losses on investments of $18.8 million, consisting primarily of $20.2 million of net realized losses on the debt investment portfolio from the write-off and restructuring of investments, partially offset by $1.3 million of net warrant and equity gains from the sale and dispositions of investments." (emphasis added)
"As of June 30, 2024, the Company held debt investments in 44 portfolio companies, warrants in 94 portfolio companies and equity investments in 46 portfolio companies." The wildcard is the equity investments. The company has had in the past some success with those positions (e.g. Crowdstrike)
Company assessment of credit quality:
For the reasons discussed in prior posts, I have close to zero confidence in the external managers ability to correctly assess credit risk. I consequently would not pay any attention to their risk assessments.
Loans owned as of 6/30/24 that were on nonaccrual include the following- a (7) next to the name indicates a nonaccrual status:
Women's Designer Clothing Collections & Runway Fashion | Moda Operandi
Since I have a long history with BDC stock investments, I have learned to be skeptical of nonaccrual loans being marked close to cost, particularly when the size is significant for the externally managed BDC.
The external management company is paid a base management fee and an incentive fee.
The base fee is applied to total assets, including assets purchased with borrowed money and is paid even when the external management company is destroying assets through improvidently granted loans. The TPVG external manager is paid a base management fee calculated "at an annual rate of 1.75% of our average adjusted gross assets, including assets purchased with borrowed funds."
There is consequently a financial incentive to incorrectly value the loans too high and to raise capital, through debt and stock issuances, to acquire more assets that will increase the base management fee, even when it is not prudent to make the loans.
The following disclosures are in TPVG's annual report and are standard among externally managed BDCs:
This is not to say that any BDC external managers actually have those motives and have or will implement them, but only that the financial incentives exist.
An individual investor does not have enough information to form a definite conclusion on these matters. It is not like the external managers will admit to doing so. The evidence is at best circumstantial.
A conclusion can be drawn, however, about competence when (1) valuations are way off, as proven shortly thereafter by a bankruptcy filing; (2) an historically high percentage of nonaccrual loans to total loans (7% or more is a flashing red light, 4% to 7% flashing yellow IMO); and loans going on nonaccrual status shortly after being made.
TPVG Realized Gains to Date: $1,294.13
Other Sell Discussions: Item # 2.J. Pared TPVG in Fidelity Taxable Account- Sold 5 at $16.95;5 at $18.83 and Item #2.K. Pared TPVG in Vanguard Account - Sold 3 at $17.62 (11/26/21 Post)(profit snapshots = $84.38 and $30.46); Item #3.R. Finished Selling Fractional Shares Bought with Dividends-Fidelity Account (6/4/21 Post)(profit =$2.01); Item # 1.L. Sold 5 TPVG at $15.67 in Schwab Taxable and Item #1.M. Sold 11 TPVG at $15.67-highest cost shares in Fidelity Taxable (5/16/21 Post)(profit snapshots = $74.43); Item # 1.R. Pared TPVG in Fidelity Account-Sold 5 at $15.35 (4/9/21 Post)(profit snapshot = $20.74); Item # 1.C. Pared TPVG-Sold 4 at $14.85 (4/1/21 Post)(profit snapshot = $13.71); Item # 3.K. Pared-Sold 9 at $13.13-Lots Bought with Dividend (1/30/21 Post)(profit snapshot = $26.95); Item #1.L. Pared TPVG in Vanguard Taxable Account-Sold 10 at $12.41 (8/22/20 Post)(profit snapshot = $17.1; contains snapshots of prior round-trip trade profits); Item # 2.L. Pared TPVG in Vanguard Taxable Account-Sold 10 at $12.6 (8/15/20 Post)(profit snapshot $9.99); Item # 1.J. Eliminated TPVG in Schwab Taxable Account-Sold 30 at $10.58 (8/8/20 Post)(profit snapshot = $94.3); Item # 2.A. Pared TPVG-Sold 14 shares at $15.61-Used Commission Free Trade (9/1/2019 Post)(profit = $46.33); Item # 2.A. Sold 74+ TPVG at $14.87 (7/20/19 Post)(profit snapshot= $246.43 - largest gain single transaction); Item # 4.C. Eliminated TPVG in Roth IRA Account (4/17/19 Post)(profit snapshot = $88.87); Item # 3.B.(4/14/19 Post)(profit = $71.76); Item 3.A. Sold 40 TPVG at $13.44-Schwab Account and Item #3B Sold 50 TPVG at $13.39 Vanguard Roth IRA (3/13/19 Post)(profit snapshots of $4.17 and $4.49 ); Item 2.B. Sold 50 TPVG at $13.39 (3/4/2017 Post)(profit snapshot = $153.08); Item # 3 Sold 50 TPVG at $12.33 (1/16/17 Post)(profit snapshot = $83.48)
E. Added to TRIN - Bought 10 at $13.99:
Quote: Trinity Capital Inc. (TRIN) - Internally Managed BDC
Cost: $139.9
TRIN has been off my radar screen since I purchased 10 shares at $13.59. Item # 4.C. (6/24/2023 Post) In that post, I discussed a nonaccrual loan made by TRIN to Core Scientific, a crypto mining company that had filed for bankruptcy.
For some reason last Friday, I wanted to know what happened to that investment and found everything had worked out okay. Trinity Capital Inc. Exits Its Equity Position in Core Scientific (6/5/24).
Core Scientific emerged from bankruptcy in January 2024. Trinity exchanged its loan for 5,640,372 common shares which were sold for a weighted average price of $5.13. "After the sale of the common stock, the internal rate of return on the initial investment was 17.7%, including loan interest payments received".
10-Q for the Q/E 6/30/24 Summary of investments starts at page 9.
Net asset value per share history: Stability starting in 2023.
6/30/24: $13.12
12/31/23: $13.19
3/31/23: $13.07
12/31/22: $13.15
Part of the net asset value per share decline in 2022 was due to the payment of $.60 per share in special dividends.
12/31/21: $16.40
IPO: $14 per share (January 2021) Prospectus
Debt:
$182.5M in a 7% SU exchange traded baby bond maturing on 1/16/25, Trinity Capital Inc. 7% Notes Due 2025 (TRINL)
$50M in 6% convertible notes maturing on 12/11/25
$125M in 4.375% SU bonds maturing on 8/24/26
$75M in 4.25% SU bonds maturing on 12/15/26
$115M in a 7.875% SU exchange traded baby bond maturing in March 2029, Trinity Capital Inc. 7.875% Notes due 2029 (TRINZ); Prospectus
The credit facility is based on a spread to the SOFR rate which is about to come down in response to FED rate cuts, 10-Q at pages 80-81.
The weighted average effective interest rate was 9.4% in the 2024 second quarter. I personally would not be borrowing money at that rate, or 50 basis points lower, to loan money to any of TRIN's borrowers.
"Net investment income was approximately $26.7 million, or $0.53 per share based on 50.2 million basic weighted average shares outstanding for the second quarter of 2024, compared to $22.1 million or $0.61 per share for the second quarter of 2023 based on 36.0 million basic weighted average shares outstanding."
"Net realized loss on investments was approximately $6.5 million, primarily attributable to the loss on restructuring or exit of three loans partially offset by gains from the exit of equity shares in Core Scientific, Inc."
"As of June 30, 2024, Trinity Capital’s investment portfolio had an aggregate fair value of approximately $1.4 billion and was comprised of approximately $1.0 billion in secured loans, $332.6 million in equipment financings and $89.6 million in equity and warrants across 136 portfolio companies, including the Company’s investment in the muti-sector holdings. The Company’s debt portfolio is comprised of 78.1% first-lien loans and 21.9% second-lien loans, with 69.9% of the debt portfolio at floating rates based on principal outstanding."
Company estimates of credit quality:
TRIN has an ATM program for its common stock. "For the period from July 1, 2024 to August 6, 2024, the Company issued and sold 1,497,621 shares of its common stock at a weighted-average price of $14.07 per share and raised $20.8 million of net proceeds after deducting commissions to the sales agents on shares sold under the ATM program."
Loans on nonaccrual:
Nexii Building Solutions: Cost $18.874M marked down to $5.3M:
B.C. green-tech darling Nexii sold in bankruptcy sales - Business in Vancouver Some debt was assumed by the new owner.
NextCar Holding Company: Cost at $27.768M, marked down to $13.95M
Molecule- Equipment Financing: Cost $1.98M, marked up to $2.039M
F. Added to CALF - 1 at $42.96, 1 at $43.49:
I view free cash flow yield to be a valid investment criteria for stock selection, but using it in isolation from others may result in some stocks being selected that will perform poorly.
Using this metric as the sole criteria will lead to some stocks being included that are only temporarily generating good free cash flow and that is recognized by market participants who value the stock with a low P/E recognizing that the past 12 months is not likely to be repeated in subsequent reporting periods. CVR Energy, Helmerich & Payne, and Patterson-UTI Energy are examples where earnings are tied to wildly fluctuating energy price or refining margins as is the case with CVR.
For this fund, free cash flow is calculated by subtracting capital expenditures from cash flow. The resulting number is then divided by enterprise value (market capitalization plus debt minus cash and cash equivalents).
Expense Ratio: .59%
Last Discussed: Item # 2.H. Added to CALF - Bought 3 at $42.33 (7/12/24 Post); Item # 1.D. Added to CALF - Bought 2 at $42.96 (7/5/24 Post)
Sponsor's website: CALF | Pacer ETFs
New Average cost per share: $42.59 (37 shares)
Dividend: Paid quarterly at a variable rate.
CALF Stock Dividend History & Date
The dividend yield is unlikely to be material IMO unless there is a significant capital gains distribution.
The last quarterly payment that included a significant capital gain distribution was in the 2021 4th quarter. The dividend payment was for $.9869 per share.
Last Ex Dividend: 6/17/24
CALF vs. S&P 600 and Russell 2000: 5 Year Annual Average Total Returns through 9/13/24 (total return includes dividend reinvestment)
+13.97% CALF – Performance – Pacer US Small Cap Cash Cows 100 ETF | Morningstar
+$8.03% IWM – Performance – iShares Russell 2000 ETF | Morningstar
+8.94% VIOO – Performance – Vanguard S&P Small-Cap 600 ETF | Morningstar
CALF is not having a good year so far. The total return YTD through 9/13/24 was -5.39% compared to +8.61% and +6.24% for IWM and VIOO respectively.
Lowest prices paid: Item # 2.H. Bought 1 CALF at $33.5 (6/22/22 Post); Item # 2.O. Bought 1 CALF at $37.52; 2 at $36.48 (5/26/22 Post)
Last Sell Discussion: Item # 2.B. Eliminated Duplicate Position in CALF - Sold 8+ at $42.18 - Schwab Account (9/2/23 Post)(profit snapshot = $13.38). I discussed adding 8 shares in my Fidelity account at $41.95 in Item #1.A. of that post.
G. Started WHF - Bought 10 at $12.2; 5 at $11.7:
Quote: WhiteHorse Finance Inc. (WHF)
Cost: $180.5
I bought 10 shares shortly before the quarterly ex dividend date and 5 shares on the ex dividend date.
Management: External
SEC Filed 2023 Annual Report (Risk factor discussion starts at page 30 and ends at page 78)
Goal: As with all BDC stocks, the goal is to realize any total return in excess of the dividends paid.
Average cost per share: $12.03
Dividend: Quarterly at $.385 per share ($1.54 annually)
Yield at $12.03: 12.8%
Last Ex Dividend: 9/18/24 (owned 10 as of)
Net Asset Value per share history:
6/30/24: $13.45
12/31/23: $13.63
12/31/22: $14.30
12/31/21: $15.10
12/31/20: $15.23
12/31/19: $15.23 10-K at page 65
12/31/18: $15.35
12/31/17: $13.98
12/31/16; $13.63
12/31/15: $13.33
12/31/14: $15.04 10-K at page 57
12/31/13: $15.16
December 2012 IPO Prospectus (Public offering price at $15, proceeds per share to WHF after underwriters commission at $14.1 with WHF paying about $1.5M in internal expenses relating to the offering).
Last Earnings Report (Q/E 6/30/24):
SEC Filed Press Release and SEC Filed Slide Presentation (debt listed at page 17)
Net Investment Income: $9.292M
NII per share: $.4
"The portfolio as of June 30, 2024 consisted of 125 positions across 72 companies with a weighted average effective yield of 11.7% on income-producing debt investments."
"Almost all loans were variable rate investments (primarily indexed to the Secured Overnight Financing Rate) with fixed rate securities representing only 1.2% of loans at fair value. Nearly all performing floating rate investments have interest rate floors."
"distributions declared at or above $0.355 for the forty-seventh consecutive quarter since the Company’s initial public offering."
Investments:
Company Estimates of Credit Risks:
"As of June 30, 2024 the total cost basis of non-accrual loans was $
Total Investments at amortized cost: $705.521M (10-Q at p. 3)
% of Nonaccrual Loans at Cost to Total: 5.7%
Total Investments at "fair value": $660.005M
Nonaccrual Loans: Marked with (17) next to the name
% Nonaccrual loans at "fair value" to Total: 3.38%
Of the preceding loans, Honors Holdings is the most important. HH | Honors Holdings
The "super senior" debt owned by American Crafts is performing but the non-supper senior secured debt is on nonaccrual. That difference would indicate a bankruptcy or a reorganization.
Estimated Impacts from interest rate changes on Net Investment Income:
 |
| 10-Q at page 91 |
The problem with having mostly floating rate loans whose coupons are at spreads to short term rates is that net investment income will decline when the FED cuts the FF rate. While WHF has variable rate borrowings under its credit agreements, most of its borrowings are at fixed rates.
 |
| 10-Q at page 58 |
2. Small ball sells:
A. Sold Remaining MEGI shares purchased with dividends - Sold 2+ at $14.44:
Quote: MainStay CBRE Global Infrastructure Megatrends Term Fund Overview
Proceeds: $35.9
Investment category: Monthly Income Generation
MainStay CBRE Global Infrastructure Megatrends Term Fund - SEC Filed Annual Report for the F/Y ending on 5/31/24.
MEGI Portfolio | Morningstar (lists top 25 holdings)
Sponsor's website: MEGI MainStay CBRE Global Infrastructure Megatrends Fund
Last Discussed: Item # 3.A. Pared MEGI - Sold 22+ at $13.41 (5/24/24 Post)(profit snapshot = $10.31). I sold my highest cost lots plus shares purchased with dividends.
Last Buy Discussions: Item # 2.B. Added to MEGI - Bought 5 at $11.45 (4/19/24 Post); Item # 1.A. Added to MEGI - Bought 50 at $12.32 - Fidelity Account (4/12/24 Post)
Profit Snapshot: +$3.71
New Average cost per share this account: $12.24 (85 shares)
 |
| Snapshot Intraday on 9/13 after pare |
Dividend: Monthly at $.125 per share ($1.5 annually)
MEGI Stock Dividend History & Date
Yield at New AC = 12.255%
Last Ex Dividend: 8/26/24
Data Date of 9/13/24 Trade:
Closing Net Asset Value per share: $16.1
Closing Market Price: $14.37
Discount: -10.75%
Source: MEGI - CEF Connect
B. Pared KRG - Sold 5 at $26.84 - Schwab Account:
Quote: Kite Realty Group Trust (KRG)
Proceeds: $134.23
As of 6/30/24, Kite "owned interests in 178 U.S. open-air shopping centers and mixed-use assets, comprising approximately 27.6 million square feet of gross leasable space.". The focus is on grocery anchored shopping centers.
Portfolio Statistics:
Investment Category: Equity REIT Common and Preferred Stock Basket Strategy
Last Discussed: Item # 1.E. Bought 5 KRG at $20.59 (3/22/24 Post); Item # 1.H. Added to KRG - Bought 5 at $20.9 (3/1/24 Post); Item # 1.A. Added to KRG - Bought 5 at $21.25 (1/26/24 Post); Item # 2.F. Started KRG - Bought 5 at $22.49; 5 at $22.1 (1/6/24 Post)
Profit Snapshot: $21.8
New Average cost per share: $21.03 (25 shares)
 |
| Snapshot Intraday on 9/16/24 after pare |
The AC per share was reduced from $21.27.
Dividend: Quarterly at $.26 per share ($1.04 annually), last raised from $.25 effective for the 2024 4th quarter payment.
Yield at $21.03: 4.945%
Next Ex Dividend: 10/9/24
Last Earnings Report (Q/E 6/30/24):
SEC Filed Press Release and Supplemental (debt listed at pages 10-11)
Comparisons are to the 2023 second quarter.
Revenue = $212.434M, up from $208.759
GAAP E.P.S. = ($.22), down from +$.15
GAAP E.P.S. was negatively impacted by a $66.21 impairment charge in the 2024 second quarter, with none recognized in the 2023 second quarter. The impairment charge appears to be related to 1 asset classified as held for sale.
FFO per share: $.53, up from $.51
GAAP Loss to FFO Reconciliation:
Updated 2024 FFO per share guidance to $2.04-$2.08.
Top 25 Tenants as of 6/30/24 (page 15 supplemental)
SU Bonds: I own 6
I currently own 6 Kite 4% SU bonds that mature on 3/15/25 and 2 Kite 4% SU bonds that mature on 10/1/2026.
The 2025 bonds were originally issued by Retail Properties that was acquired by Kite. Bond Page | FINRA.org; Kite Realty Group Announces Closing of $7.5 Billion Merger with Retail Properties of America: Creates a Top 5 Open-Air, Grocery-Anchored Shopping Center REIT
FINRA Bond Page for 2026 bonds
C. Pared NSA in Fidelity Account - Sold 5 at $48.54:
Quote: National Storage Affiliates Trust (NSA) - Internally Managed Storage REIT
Proceeds: $242.7
Website: National Storage Affiliates Trust (NSA)
Profit Snapshot: $52.95
New Average cost per share: $35.96 (25 shares)
 |
| Snapshot Intraday on 9/16/24 after pare |
The AC per share was reduced from $36.3.
Dividend: Quarterly at $.56 per share ($2.24 annually), last raised from $.55 effective for the 2023 second quarter payment.
Yield at New AC = 6.23%
Last Ex Dividend: 9/13/24
Last Buy Discussions: 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)
Last Discussed: I discussed the last earnings report in this post, mentioning there that I was not impressed. Item # 2.B. Eliminated Duplicate Position in NSA - Sold 7 at $41.91 (Schwab Account) and Pared NSA in Fidelity Account Sold 5 at $53 (8/15/24 Post)(profit snapshots = $67.91); SEC Filing
I suspect the stock has rallied in response to lower interest rates which makes the dividend more attractive and will lower borrowing costs until the next interest increase cycle, rather than anything relating to the last financial report.
D. Pared BHK - Sold 20+ at $11.85:
Quote: BlackRock Core Bond Trust Overview - Leveraged Bond CEF
Proceeds: $238.93
Understanding leverage in closed-end funds | Nuveen; Closed-End Funds and Their Use of Leverage: FAQs | Investment Company Institute
I sold on the ex dividend day.
SEC Filed Annual Report for the period ending 12/31/23
SEC Filed Semiannual Report for the period ending 6/30/24 The list of BHK holdings starts at page 14 and ends at page 36.
This CEF is currently selling at a premium to net asset value per share. I am likely to reduce my small position more if this continues. I have turned off dividend reinvestment.
As with other leveraged bond CEFs, 2022-2023 were bad years as the cost of borrowing money went up and the value of the bonds declined significantly due to the rise in interest rates.
Sponsor's website: Core Bond Trust | BHK
As of 7/31/24, effective duration was at 9.35 years and the leverage was at 34.06%. To predict the impact on net asset value per share resulting from changes in interest rates, multiply the percentage change by the duration as just a rule of thumb. So if interest rates went down 1%, the net asset value per share would increase somewhere close to 9.35% and down 9.35% with a 1% increase.
Leveraged Through Reverse Repurchase Agreements:
 |
| Weighted average interest rate at 5.46% |
What Is a Reverse Repurchase Agreement (RRP)? How It Works, With Example
The weighted average interest rate for borrowings will start to decline after the Fed cuts the federal funds rate.
Credit Quality as of 8/30/24: While this CEF is classified as an investment grade bond fund, it has a significant weighting in junk rated securities.
At some percentage of junk rated bonds, and I have forgotten the number, a CEF will lose its classification as an investment grade bond fund and will be classified as a "high yield" fund, a euphemism for junk.
Last Discussed: Item # 2.N. Pared BHK - Sold 5+ at $11.36 (8/8/24 Post)(profit snapshot = $4.76)
Last Buy Discussion: Item # 2.A. Added to BHK - Bought 5 at $10.56; 5 at $10.33 (5/27/23 Post)
Profit Snapshot: +$21.24
New Average cost per share: $10.55 (69+ shares)
 |
| Snapshot Intraday on 9/16/24 after pare |
Dividend: Monthly at $.0746 per share ($.8952 annually).
Some ROC support.
Yield at $10.55 average cost per share: 8.485%
Last Ex Dividend: 9/16/24 (owned all as of)
Next Ex Dividend: 10/15/24
Data Date of 9/16/24 Trade:
Closing Net Asset value per share: $11.16
Closing Market Price: $11.82
Premium: +5.91%
3 Year Average Discount: -1.64%
Sourced: BHK - CEF Connect (Click "Pricing Information" tab)
Other Sell Discussions: Item # 3.A. Sold 100 BHK at $12.74 (1/20/19 Post)(profit snapshot = $63); Item # 1 Sold Remaining BHK at $13.07 Update For CEF Basket Strategy As Of 3/21/16 - South Gent | Seeking Alpha (profit snapshot = $28.17); Item # 4 Sold 200 of 300 BHK at Update For CEF Basket Strategy As Of 2/26/16 - South Gent | Seeking Alpha (profit snapshot = $47.43); Pared Interest Rate Risk Exposure In Roth IRA: Sold 300 ACG At $7.81 And 200 BHK At $13.86 - South Gent | Seeking Alpha (profit snapshot = $99.55); Item # 1 Sold 200 BHK at $13.86-Taxable Account-Completes BHK Transition to Roth IRA (1/14/15 Post)(profit snapshot = $75.23); Sold All of the Bond CEF BHK at $14.058 (2/21/12 Post)(profit snapshot = $68.3)
Realized Gains in BHK to Date: $414.2 (of which $407.68 discussed)
E. Pared Duplicate Position in SBRA - Sold 5+ at $19.1:
Quote: Sabra Healthcare REIT Inc. (SBRA)
Proceeds: $100.35
I sold the remaining shares in this account that were purchased with dividends.
Investment Category: Equity REIT Common and Preferred Stock Basket Strategy
Website: Sabra Health Care REIT
Profit Snapshot: Net of +$21.73
New Average Cost per share this account: $12.13 (51 Shares)
 |
| Snapshot Intraday on 9/18/24 after pare |
Dividend: Quarterly at $.30 per share
Yield at New AC: 9.89%
Last Ex Dividend: 8/19/24
I discussed the last earnings report in a recent post. Item # 4.H. Pared SBRA in Fidelity Account - Sold 15+ at $16.6 (8/9/24 Post); SEC Filed Press ReleaseSEC Filed Supplemental
I discussed in my last post paring my SBRA position in my Schwab account that reduced my average cost per share to $13.06 (56+ shares)
3. Treasury Auction Purchases:
I am now limiting my purchases of treasury bills to my Schwab account, where I am paid .2% on funds left in the sweep account.
A. Bought 5 Treasury Bills at the 9/16/24 Auction:
%2012:19:24%20.png){kind=small}
91 Day Bills
Mature on 12/19/24
Interest: $60.3
Investment Rate: 4.874%
B. Bought 2 Treasury Bills at the 9/16/24 Auction:
182 Day Bills
Mature on 3/20/25 (interest taxable in 2025 when held to maturity)
Interest: $44.59
Investment Rate: 4.573%
C. Bought 3 Treasury Bills at the 9/18/24 Auction:
%201:21:25%20.png){kind=small}
Mature on 1/31/25 (interest taxable in 2025 when held to maturity)
Interest: $46.21
Investment Rate: 4.799%
4. Tennessee Municipal Bonds:
A. Bought 5 Maryville, TN 3% GO Maturing on 6/1/2031 at a Total Cost of 98.657:
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Emma Page
Credit Rating: AA+ by S&P
Optional Call on or after 6/1/29 at par value + accrued and unpaid interest
Federally Tax Free Interest
Tennessee does not have a state income tax.
YTM at Total Cost: 3.223%
Current Yield at TC = 3.041%
Maryville, Tennessee - Wikipedia
B. Bought 5 Wilson County, TN 3% GO Maturing on 4/1/2031 at a Total Cost of 98.61:
Emma Page
Credit Rating: AA+ by S&P
Federally Tax Free Interest, paid semiannually
Optional Call: On or after 4/1/25
A further decline in interest rates may result in an optional call on or after 4/15/25.
I own 5 Wilson County 4% GO bonds that mature on 4/1/2039. That one may be called on or after 4/1/26.
Wilson County, Tennessee - Wikipedia This county is located next to Nashville/Davidson County and is part of the Metropolitan statistical area.
5. Canadian Reset Equity Preferred Stocks:
I have been reducing my exposure to Canadian reset equity preferred stocks that reset quarterly at spreads to the 3 month Canadian treasury bill.
I am considering redirecting the proceeds into resets that have reset within the past year at a spread to the then existing 5 year Canadian bond yield even if that means to adding to positions that may be 400 or 500 shares already.
A. Eliminated FFHPRD:CA-Sold 100 at C$22.2 (C$1 IB Commission):
Quote: FFH-PD.TO
Proceeds: +C$2,219
Issuer: Fairfax Financial Holdings Ltd. (Canada: Toronto)
Profit Snapshot: +C$559
Prospectus Excerpt:
Par Value: C$25
Coupon: 3.15% spread to the 3 month Canadian Treasury Bill
Canada 3 Month Government Bond Overview | MarketWatch
Resets every 3 month
Purchase Discussions: Item # 5 Added 50 FFHPRD at C$16.32 (10/5/19 Post); Item # 2 Bought 50 FFHPRD at C$16.84
Last Ex Dividend: 9/13/24 (owned as of)
Dividend of C$.50 per share. Fairfax Announces Quarterly Dividend on Series C, D, E, F, G, H, I, J, K and M Preferred Shares
I am anticipating that the dividend will reset at lower coupons as short term yields decline.
Prior Elimination: Item # 1. Sold 100 FFHPRD at C$22 (8/25/2017 Post)(profit snapshot = C$400)
Current Position: None. If the price adjusts down to less than C$17 per share, I will consider restarting a position. I do not foresee that happening anytime soon.
Realized Gains FFH.PRD:CA to Date: +C$959
Realized Gains Other FFH Reset Equity Preferred Stocks:
FFHPRF:CA: +C$552; 100 shares
FFHPRG:CA: +C$431.5; 200 shares
FFHPRI:CA: +C$433.5; 200 shares
Total FFH Reset Equity Preferred Stocks Realized Gains: C$2,374
Total Realized Gain Canadian Reset Equity Preferred Stocks: C$19,301.5 (snapshots are in this post: Advantages and Disadvantages of Equity Preferred Floating Rate Securities
Canadian Reset equity preferred stocks have proven to be, so far, an excellent niche total return sector for me. The reason is that these securities have been frequently mispriced in the past.
I have significant unrealized gains in Canadian resets totalling C$9,171.5 as of 9/13/24.
Prices for the following snapshots were as of the close on 9/13/24.
The unrealized gains exceeding C$1,000 are in these positions:
Unrealized Gains between C$500 to C$1,000:
Unrealized Gains C$200 to C$500:
All Canadian reset equity preferred stock positions are in unrealized gain territory.
6. Equity Preferred Stocks:
A. Added to MNSBP - Bought 5 at $22.78:
Quote: MainStreet Bancshares Inc. 7.5% Preferred Stock Series A (MNSBP)
Cost: $113.9
Issuer: MainStreet Bancshares Inc. - A Bank Holding Company
Par Value: $25
Dividends: Paid quarterly, qualified and non-cumulative.
Average cost per share: $22.89 (15 shares)
Yield at AC: 8.19%
Last Ex Dividend: 9/16/25 (owned all as of)
I discussed this preferred stock in a recent post and have nothing further to add here. Item # 4.B. Started MNSBP - Bought 10 at $22.95 (9/5/24 Post)
B. Pared VNOPRM -Sold Highest Cost 5 Shares at $17.99 (Fidelity Account):
Quote: Vornado Realty Trust 5.25% Cumulative Preferred Series M
Proceeds: $89.95
I sold on the ex dividend day.
Issuer: Vornado Realty Trust - Office/Retail REIT (see pages 35-43, DocSEC Filed Supplemental for the Q/E 6/30/24)
SEC Filed 2024 Second Quarter Report
Investment Category: Advantages and Disadvantages of Equity REIT Cumulative Equity Preferred Stocks, a subcategory of Equity REIT Common and Preferred Stock Basket Strategy
Profit Snapshot: $7.45
Last Discussed: Item # 1.C. Added to VNOPRM - Bought 10 at $14.15 (8/12/23 Post); Item # 2.E. Added 5 VNOPRM at $11.25 (5/27/23 Post)
Average cost before pare: $14.84 (35 shares)
Average cost per share after pare: $14.56 (30 shares)
 |
| Snapshot Intraday on 9/16/24 after pare |
Yield at $14.58 = 9.43%
Last Ex Dividend: 9/16/24 (owned all as of)
Par Value: $25
Coupon: 5.25%
Dividends: Paid quarterly, non-qualified, and cumulative
Stopper Clause: Standard
VNO suspended the payment of its common share cash dividend after the 2023 4th quarter payment. VNO Dividend History | Nasdaq I subsequently eliminated my common share position. VNO has continued to pay dividends on its cumulative preferred stocks.
Until that dividend is resumed, the Stopper Clause becomes a legal impediment to a preferred stock dividend deferral only when the company uses cash to purchase common stock.
Position in Schwab Account: I also own 35 shares in my Schwab account with an average cost per share at $15.79. Ten of those shares are in negative territory.
Sell Discussions: Item # 3.A. Sold 10 VNO.PRM at $25.34 (10/31/2020 Post); Item # 3.C. Sold 5 VNO.PRM at $24.99-Highest Cost lot bought at $19 (7/18/20 Post); Item # 2.A. Eliminated VNO.PRM-Sold 50 at $22.95 (5/23/19 Post)
Realized VNOPRM Gain: $162.29
Goal: Any total return in excess of the dividends.
Purchase Restrictions: 5 or 10 share lots with each subsequent purchase required to reduce my average cost per share and a maximum position of 100 shares in all accounts.
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.
I've been way off on guessing what the Fed would do. I was sure no more than .25%. Meanwhile, market's rallying over it today. I suspect it's worth chasing the rally.
ReplyDeleteThe yield curve is still inverted. Apparently that signal has lost it's meaning.
Looks like we had the big sept pullback, and it was nearly nothing. A garden variety not quite 10%.
____
Heather Cox Richardson came up with why Trump did this drama over Haitians. Kamala is from the Caribbean too. He's trying to subconsciously paint her has dangerous and evil. Media took the bait and went into drama mode, rather than reporting the story that our presidential candidate is trying to win with racism. If media'd announced THAT, Trump would have been reduced to a babbling idiot in minutes. (Though it'd be hard to tell the difference from usual.)
MTG pointing out Loomer is racism is pretty sadly funny after her space laser 'insights.'
But the space laser sweatshirt (joke) logos are getting replaced by exploding pagers. (Hizbollah switched from using tractable cells to old technology untrackable pagers.) It greatly reduces the chance of expanded war since many of their top strategists were effected.
___
That Young exchange is very funny. And worrisome about him.
How soon do you expect MM rates to drop more ? Fidelity is still 4.9% (7-day)
ReplyDeleteMoney market fund yields will adjust quickly to reflect the .5% cut. The weighted average maturity of the Fidelity Government Money Market Fund is 24 days. I would anticipate that the fund will have a .5% lower yield in about 30 - 35 days using a current daily yield, maybe a few days longer using the 7 day yield.
DeleteThe regional bank stock ETF is outperforming the S&P 500 so far today.
ReplyDeleteSPDR S&P Regional Banking ETF (KRE)
$58.86 +$1.60 +2.79%
Last Updated: Sep 19, 2024 at 3:06 p.m. EDT
https://www.marketwatch.com/investing/fund/kre?mod=search_symbol
The thinking behind this move is that net interest margin will improve as borrowing and deposit costs continue to come down.
The problem is that the banks are still holding low yielding mortgage back securities bought prior to the FED rate increase cycle. While many of those will pay down some as interest rates fall, those banks are way behind the curve of investing material amounts when interest rates were higher than now. There will be some improvement in the coming quarters, however, in interest income generated by owned securities.
There will be some offsetting negative impacts on net interest margin from lower loan yields.
I do not expect much NIM improvement when the banks report in the third quarter. The improvement will likely pick up some in the 4th quarter and into 2025.
I still own a number of regional bank stocks, primarily due to their combination of dividend yields and well below market P/E ratios.
In Item # 3, I noted that treasury bill purchases would be limited going forward to my Schwab account. I incorrectly noted that the Schwab sweep account was paying .4% which was the case but the yield has been lowered now to .2%. So I corrected that error. It is obviously unproductive to keep funds idle in that sweep account.
ReplyDeleteI do own a purchased Schwab MM treasury fund (SNOXX) which has a 7 day yield of 4.88% which I am expecting to decline fast in response to the FED's rate cut. To move funds out of SNOXX to my sweep account, I have to enter a sell order before the market closes and the funds would then be deposited the next business day.
MM funds have to keep their weighted average maturity really short to maintain a $1 per share net asset value.