This will be my last post for at least several months.
I am taking a sabbatical from trading stocks until I have a better risk/reward balance than I have now, using my traditional valuation criteria, and more information on the actual economic impacts resulting from U.S. policy changes. I do have major concerns about the negative impacts.
The Buffett Indicator: Market Cap to GDP - Updated Chart | Longtermtrends
S&P 500 PE Ratio - Shiller PE Ratio | Longtermtrends
S&P 500 PE Ratio - Shiller PE Ratio | Longtermtrends
S&P500 Dividend Yield - Updated Chart | Longtermtrends
M2 Money Supply Growth vs. Inflation - Updated Chart | Longtermtrends
Crestmont P/E and Market Valuation: January 2025 - dshort - Advisor Perspectives
Q-Ratio and Market Valuation: January 2025 - dshort - Advisor Perspectives
{Valuation indicators are not short term trading indicators. Markets can remain overvalued for an extended period before there is a valuation reset. An example is the rise in the Nikkei 250, rising from around 3,600 in September 1982 to 38,900 in December 1989, Nikkei Stock Average, Nikkei 225 St. Louis Fed, click "max" for time period. It took about 36 years for that index to return to the December 1989 high. Another example from my youth is the Nifty Fifty stocks in the late 1960s and early 1970s or more recently the parabolic rise in 1996-2000. Are the Magnificent Seven in a Bubble? Ask the Nifty Fifty - Articles - Advisor Perspectives}
There is no reason to write a blog, which requires a lot of time, unless I am active in the stock market. The reason for writing them is to have a quickly accessible summary of my prior research and thoughts about a particular stock when making decisions to buy or sell. If I am not trading, there is no reason for accessing prior research.
As I have been saying, I am not comfortable with stocks. I have no reason to take on stock risk given my age and financial condition. My current allocation to common stocks and stock funds is less than 10% of the total assets held at brokerage firms. A bare minimum range for me is 8% to 10%. I last went to zero in 1999-2000 but will not do that again given the subsequent increase in my wealth.
I am also going to avoid the news as much as possible. The news out of Washington is interfering with my sleep. A 30% decline in the S&P 500 would not have that result.
I will continue buying corporate bonds and treasuries during this hiatus. I will not be discussing here those trades.
My bond ladder is heavily weighted in short maturities. I would prefer for interest rates to resume an uptrend, even though that would have a temporary negative impact on the prices of currently owned bonds. I can hold all owned bonds to maturity which mitigates the relatively small interest rate risk given the weighted average short duration.
With an average yield of 4% or higher from securities that pay interest, I am able to pay all living expenses after taxes, including one time major expenses, and have 30% to 50% left over to invest in more interest paying securities like treasury bills and notes, investment grade corporate bonds, treasury MM funds and Tennessee municipal bonds rated AA or higher.
I will publish videos at YouTube discussing the economy.
I will not be updating developments relating to owned stocks and other securities.
1. Small Ball Buys:
A. Added 5 CAG at $24.7:
Quote: Conagra Brands Inc. (CAG)
CAG Analyst Estimates | MarketWatch
New Average cost per share: $27.38 (75+ shares)
Dividend: Quarterly at $.35 per share ($1.4 annually)
I am reinvesting the dividend.
Yield at New AC: 5.11%
Yield at $24.7: 5.668%
Last Ex Dividend: 1/27/25 (owned 70+ as of)
CAG is in a bear market trend.
Last Earnings Report (F/Q ending 11.24.24): I discussed this report in a recent post and have nothing further to add here. Item # 1.K. Added to CAG - Bought 1 at $27.02 (12/26/24 Post); SEC Filed Earnings Press Release
Until I resume active stock trading, future purchases of depressed dividend paying stocks that are in a bear market trend, which includes packaged food stocks, will be 1 or 2 share lots, with each purchase at the lowest price in that chain.
2. Corporate Bonds: $42,000 in principal amount, trades through 2/7/25 only that have not previously been discussed here. No further trades will be discussed unless I resume discussing stock trades.
A. Bought 2 Brookfield Finance 3.9% SU Maturing on 1/25/28 at a Total Cost of 97.545:
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Issuer: Wholly owned subsidiary of Brookfield Asset Management Ltd. Cl A (BAM) who guarantees the notes.
BAM Analyst Estimates | MarketWatch
BAM SEC Filings (Foreign issuer forms)
Website: Brookfield—Global Investment Firm – Invested in long-term value
Finra Page: Bond Page | FINRA.org
Credit Ratings: A3/A
YTM at Total Cost: 4.79%
Current Yield at TC = 3.998%
B. Bought 2 LYB Financial 3.5% SU Maturing on 3/2/27 at a Total Cost of 97.463:
%203.5%25%203:2:27.png)
Issuer: Wholly owned subsidiary of LyondellBasell Industries N.V. Cl A (LYB) who guarantees the notes.
I have a small ball position in the common stock. Chemical stocks are in a bear market.
LYB SEC Filed Earnings Press Release for the Q/E 12/31/24
Finra Page: Bond Page | FINRA.org
Credit Ratings: Baa2/BBB
YTM at Total Cost: 4.784%
Current Yield at TC = 3.591%
C. Bought 2 Nextera Capital 3.55% SU Maturing on 5/1/27 at a Total Cost of 97.592:
%203.55%25%205:1:27%20.png)
Issuer: Wholly owned subsidiary of NextEra Energy Inc. (NEE) who guarantees the notes.
NEE Analyst Estimates | MarketWatch
Finra Page: Bond Page | FINRA.org
Credit Ratings: Baa1/BBB+
YTM at Total Cost: 4.682%
Current Yield at TC = 3.638%
I now own 4 bonds.
D. Bought 2 Brixmor Operating LP 3.9% SU Notes Maturing on 3/15/27 at a Total Cost of 98.044:
%203.9%25%203:15:27.png)
Issuer: Operating entity for Brixmor Property Group Inc. (BRX) who does not guarantee the notes.
While it is better to have the guarantee, almost all equity REIT assets are owned in the operating LP when the REIT uses that structure and many do.
Finra Page: Bond Page | FINRA.org
Credit Ratings: Baa2/BBB
YTM at Total Cost: 4.875%
Current Yield at TC = 3.978%
Last Bond Offering (5/24): Prospectus for $400M 5.75% SU Maturing in 2025
E. Bought 2 Fortis 3.055% SU Maturing on 10/4/26 at a Total Cost of 97.277 - Vanguard Account:
%2010:4:26%203.1%25%20.png)
Issuer: Fortis Inc. (FTS) - A Utility Holding Company based in Canada with U.S. operations.
I have eliminated my small ball common stock position.
Last FTS Discussion: Item # 4.D. Eliminated FTS - Sold 5 at $44.1 (8/29/24 Post)
FTS Analyst Estimates | MarketWatch
FTS SEC Filings (foreign issuer forms)
FTS SEC Filed 2023 Annual Report The subsidiaries are listed at page 5.
Finra Page: Bond Page | FINRA.org
Credit Ratings: Baa2/BBB+
YTM at Total Cost: 4.758%
Current Yield at TC = 3.14%
FTS Reset Equity Preferred Stock: I own 200 shares of FTS-PM.TO.
The Canadian reset equity preferred stock FTSPRM:CA, issued by the utility holding company Fortis, reset its coupon for 5 years at 5.493% paid on a C$25 par value. That coupon remains in effect until 12/1/29. The coupon resets every 5 years, unless called on the reset date, at a 2.48% spread to the Canadian 5 year government bond.
The new annual dividend is C$1.37325 per share paid in quarterly installments. I own 200 shares with a C$16.01 average cost per share. The dividend yield is now at 8.58%. Item # 5.A. Added to FTSPRM:CA - Bought 50 at C$17.73 (3/6/23 Post);Item # 2.B. Bought 50 FTS.PRM at C$12.4 (5/23/20 Post); Item # 3.A. Bought 50 FTS.PRM at C$16.28 (3/14/20 Post); Item # 2.A. Bought 50 FTSPRM:CA at C$17.55 (11/23/2019 Post)
F. Bought 2 Essex LP 3.625% SU Maturing on 5/1/27 at a Total Cost of 97.756:
Issuer: The operating entity for Essex Property Trust Inc (ESS) who guarantees the notes:
Finra Page: Bond Page | FINRA.org
SEC Filed Earnings Report for the Q/E 12/31/24
I have never owned the common stock but will own the higher yielding SU bonds.
Credit Ratings: Baa1/BBB+
YTM at Total Cost: 4.689%
Current Yield at TC = 3.708%
Last Bond Offering (2/25): Prospectus for $400M 5.375% SU Maturing in 2035
In the "Use of Proceeds" section, the company notes a portion of the proceeds will be used to pay off a 3.5% SU maturing in April. I own 6 of those bonds and 4 that mature on 4/15/26.
G. Bought 2 Ally Financial 4.75% SU Maturing on 6/9/27 at a Total Cost of 99.628:
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ALLY Analyst Estimates | MarketWatch
SEC Filed Earnings Press Release for the Q/E 12/31/24
Finra Page: Bond Page | FINRA.org
Credit Ratings: Baa3/BBB-
YTM at Total Cost: 4.916%
Current Yield at TC: 4.768%
I have 2 Ally Financial SU bonds maturing on 3/15/25. When those 2 mature, I will own only this 4.75% SU maturing in 2027.
H. Bought 2 Boardwalk Pipelines LP 4.45% SU Maturing on 7/15/27 at a Total Cost of 99.163:
%207:15:25.png)
Issuer: Boardwalk Pipelines L.P., a wholly owned subsidiary of Boardwalk Pipeline Partners, L.P. who guarantees the notes:
Boardwalk Pipelines - Who we are
The various entities are controlled by Loews Corp. (L) who consolidates the results.
"Loews Corporation is a holding company. Its consolidated operating subsidiaries are engaged in the following lines of business: commercial property and casualty insurance (CNA Financial Corporation (“CNA”), an approximately
Finra Page: Bond Page | FINRA.org
Credit Ratings: Baa2/BBB-
YTM at Total Cost: 4.814%
Current Yield at TC = 4.488%
I. Bought 2 RPM 3.75% SU Maturing on 3/15/27 at a Total Cost of $98.17:
%20.png)
Issuer RPM International Inc. (RPM)
RPM Analyst Estimates | MarketWatch
RPM SEC Filed Earnings Press Release for the F/Q Ending 11/30/24
About RPM:
Finra Page: Bond Page | FINRA.org
Credit Ratings: Baa2/BBB
YTM at Total Cost: 4.664%
Current Yield at TC = 3.82%
J. Bought 2 Interpublic 4.65% SU Maturing on 10/1/28 at a Total Cost of 99.45 - Vanguard Account:
Issuer: Interpublic Group of Cos. (IPG)
I have eliminated my position in the common stock.
IPG Analyst Estimates | MarketWatch
IPG SEC Filed Earnings Release for the Q/E 9/30/24
Finra Page: Bond Page | FINRA.org
Credit Ratings: Baa2/BBB
YTM at Total Cost: 4.814%
Current Yield at TC = 4.676%
K. Bought 2 Hess 4.3% SU Maturing on 4/1/27 at a Total Cost of 99.078 - Vanguard Account:
%20.png)
Issuer: Hess Corp. (HES)
HES Analyst Estimates | MarketWatch
Hess is in the process of being acquired by Chevron which is currently in arbitration with Exxon who claims that it has the right of first refusal to acquire the Hess 30% interest in the Stabroek Block in Guyana, a key asset in the acquisition. FTC Approves Final Order in Chevron-Hess Deal | Federal Trade Commission (1/17/25); With final say on arbitration due by August-end, Chevron readying for ‘prompt close’ of Hess merger in 2025 - Offshore Energy
HES SEC Filed Earnings Press Release for the Q/E 12/31/24
Finra Page: Bond Page | FINRA.org
Credit Ratings: Baa3/BBB-
YTM at Total Cost: 4.751%
Current Yield at TC = 4.34%
L. Bought 2 Dominion Energy 4.25% SU Maturing on 6/1/28 at a Total Cost of 98.377 - Vanguard Account:
.png)
Issuer: Dominion Energy Inc. (D) - Utility Holding Company
D Analyst Estimates | MarketWatch
I have eliminated my position in the common stock.
Finra Page: Bond Page | FINRA.org
Credit Ratings: Baa2/BBB
YTM at Total Cost: 4.782%
Current Yield at TC = 4.32%
M. Bought 2 Xcel Energy 4% SU Maturing on 6/15/28 at a Total Cost of 97.201 - Interactive Brokers Account:
.png)
XEL Analyst Estimates | MarketWatch
Operating subsidiaries of XEL issue First Mortgage bonds. I recently discussed the purchase of one.
XEL SEC Filed Earnings Report for the Q/E 12/31/24
Finra Page: Bond Page | FINRA.org
Credit Ratings: Baa2/BBB
YTM at Total Cost: 4.686%
Current Yield at TC = 3.944%
N. Bought 2 Oneok 4.25% SU Maturing on 9/24/27 at a Total Cost of 98.695:
Issuer: ONEOK Inc. (OKE)
I own the common stock.
Current Position: 8+ shares with a $21.44 average cost per share
 |
| Price as of 2/7/25 close |
Last OKE Buy Discussion: Item # 1.L. Added to OKE-Bought 1 at $24.9 (10/24/20 Post)
Last OKE Sell Discussion: Item # 2.J. Sold 1 OKE at $111.71 (11/27/24)(profit snapshot = $83.79)
OKE Analyst Estimates | MarketWatch
Finra Page: Bond Page | FINRA.org
Credit Ratings: Baa2/BBB
YTM at Total Cost: 4.78%
Current Yield at TC: 4.306%
I now own 4.
I have 2 OKE bonds maturing on 3/15/25 and 2 more on 9/15/25.
O. Bought 2 Kraft Heinz 3.875% SU Maturing on 5/15/27 at a Total Cost of 98.26:
Issuer: Kraft Heinz Co. (KHC)
KHC Analyst Estimates | MarketWatch
SEC Filed Earnings Press Release for the F/Q ending 9/28/24
I own the common shares, which are in a bear market trend of unknowable duration.
Finra Page: Bond Page | FINRA.org
Credit Ratings: Baa2/BBB
YTM at Total Cost: 4.686%
Current Yield at TC = 3.944%
P. Bought 1 US Bancorp 4% SU Maturing on 9/23/27 at a Total Cost of 98.1 - Vanguard Account:
.png)
Issuer: U.S. Bancorp (USB)
I have a small ball position in the common stock.
Last USB Buy Discussion: Item # 2.J. Added to USB - Bought 1 at $31.65; 1 at $30.63; 1 at $28.7; 1 at $27.95 (5/26/23 Post)
USB Analyst Estimates | MarketWatch
USB SEC Filed Earnings Press Release for the Q/E 12/31/24
Finra Page: Bond Page | FINRA.org
Credit Ratings: A3/A
YTM at Total Cost: 4.774%
Current Yield at TC= 4.078%
Q. Bought 1 US Bancorp 3.9% SU maturing on 4/26/28 at a Total Cost of 97.396
%203.9%25%204:26:28%20..png)
See Item #2.P above
Finra Page: Bond Page | FINRA.org
YTM at Total Cost: 4.816%
Current Yield at TC = 4%
R. Bought 2 General Mills 4.2% SU Maturing on 4/17/28 at a Total Cost of 98.339:
%20.png)
Finra Page: Bond Page | FINRA.org
Credit Ratings: Baa2/BBB
YTM at Total Cost: 4.764%
Current Yield at TC: 4.271%
I have 2 General Mills SU bonds maturing on 4/17/25.
S. Bought 2 Globe Life 4.55% SU Maturing on 9/15/28 at a Total Cost of 99.2:
.png)
Issuer: Globe Life Inc. (GL)
GL Analyst Estimates | MarketWatch
GL SEC Filed Earnings Report for the Q/E 12/31/24
Finra Page: Bond Page | FINRA.org
Credit Ratings: Baa1/A
YTM at Total Cost: 4.792%
Current Yield at TC: 4.587%
U. Bought 2 Equitable Holdings 4.25% SU Maturing on 4/20/28 at a Total Cost of 98.619
%204.25%25%204:20:28%20.png)
Issuer: Equitable Holdings Inc. (EQH)
EQH Analyst Estimates | MarketWatch
EQH SEC Filed Earnings Report for the Q/E 12/31/24
Finra Page: Bond Page | FINRA.org
Credit Ratings: Baa1/A-
YTM at Total Cost: 4.818%
Current Yield at TC = 4.31%
V. Bought 2 Williams 4.9% SU Maturing on 3/15/29 at a Total Cost of 99.984:
%204.9%25%203:15:29%20.png)
Issuer: Williams Cos. (WMB)
I own the common stock and have been paring my position.
Current Position: 50+ shares with a $23.24 average cost per share:
 |
| Price as of close on 2/7/25 |
Last WMB Sell Discussion: Item # 3.D. Sold 5 WMB at $55.55 (2/5/25 Post)(profit snapshot = $160.73)
Last WMB Buy Discussions: Item # 2 Added 95 WMB at $24.98 and 5 at $23.8 (8/20/21 Post); Item # 3.B. Added 5 WMB at $24.2 (10/8/21 Post)
Finra Page: Bond Page | FINRA.org
Credit Ratings: Baa2/BBB
YTM at Total Cost: 4.903%
Current Yield at TC: 4.9%
I replaced two WMB bonds that matured on 1/15/25
W. Bought 2 Oneok 4.25% SU Maturing on 9/24/27 at a Total Cost of 98.695:
%204.25%25%209:24:27%20.png)
See Item # 2.N. above.
YTM: 4.78%
I now own 4 bonds.
3. Small Ball Sell:
A. Pared AIO Again - Sold 10 at $25.4:
Quote: Virtus Artificial Intelligence & Technology Opportunities Fund Overview - A Balanced CEF
Proceeds: $254
The fund owns common stocks, convertible securities and junk rated bonds.
AIO SEC FilingsSEC Filing - Holdings as of 10/31/24
Virtus Artificial Intelligence & Technology Opportunities Fund - SEC Filed Semiannual Report for the period ending 7/31/24
Profit Snapshot: $98.9 (2/6/25 sale only)
New Average cost per share: $14.79 (20 shares)
 |
| Snapshot Intraday on 2/6/25 after pare |
Dividend: Monthly at $.15 per share ($1.8 annually)
AIO Stock Dividend History & Date
Yield at $14.79: 12.17%
Next Ex Dividend: 2/13/25
Last Discussed: Item # 3.F. Sold 5 AIO at $25; 5 at $24.6 (2/5/25 Post)(profit snapshot = $91.06)
Last Buy Discussions: Item # 2.C. Added to AIO - Bought 5 at $15.85; 5 at $15.63; 5 at $15.15 (10/28/23 Post); Item # 2.E. Added to AIO - Bought 3 at $16.37 (10/14/23 Post); Item # 5.B. Bought 5 AIO at $15.7 (10/25/22 Post)
Data Date of 2/6/25 Trade:
Closing Net Asset Value Per Share: $23.93
Closing Market Price: $25.46
Premium: +6.39%
Average 3 Year Discount: -8.4%
Sourced: AIO - CEF Connect (notes leverage at 13.2% as of 1/30/25)
Other Sell Discussions: Item # 1.I. Pared AIO - Sold 5 at $24.7 (12/5/24 Post)(profit snapshot = $44.18); Item # 2.K. Sold 4+ AIO at $22.54 (11/27/24 Post)(profit snapshot = $32.15); Item # 2.F. Sold 8+ AIO at $19.66 (3/15/24)(profit snapshot = $22.87); Item #2.F. Pared AIO - Sold 15 at $19.7 (2/15/24 Post)(profit snapshot = $14.18)
Goal: Any total return prior to any ROC adjustments to the tax cost post in excess of the dividend payments.
I am not likely to sell more shares, but I will also probably avoid buying more unless the purchase reduces my average cost per share.
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.
This was a surprisingly large drop for non-concrete data. Will you be discussing on youtube?
ReplyDeleteLand: There was data released on Friday that fed into the concerns about stagflation.
DeleteI have published a video discussing this subject:
https://www.youtube.com/watch?v=z5-VTVTTeVY
Thanks! I'd seen the stagnation video... but thought it was your 'pickup' on the state of things and not worrying the market yet. ... Since you're often a bit ahead, and I haven't seen it being talked about on investment sources.
DeleteEvery advisor I talked to said their models weren't ringing bells. So I don't think this will be the big run for cover yet. (Even though it probably should be.)
My individual stocks did ok through this. I need the indices to recover.
Garmin was up 14% the other day from earnings beat! That's a rare stock that I picked myself (based on management strength.) Air's come out of it since. But I'm continuing to hold.
Land: I still view the stagflation scenario as a concern among segments of stock investors but that concern is not currently reflected in the economic data. Consumer spending remains solid and inflation, while sticky with some upward movement in the month-to-month numbers, is not flashing - yet - another move into problematic territory.
DeleteThe key is whether something happens soon that turns the concern about stagflation into a fear that it is about to happen, even though the current data does not yet reflect its existence.
The stock market is forward looking and will adjust to a new economic scenario developing, good or bad, before the change is reflected in the data.
That, for example, happened in August 1982, a major kick-off to an 18+ year bull market in stocks, when the Stock Jocks finally realized that problematic inflation, which was still high, was in the rear view mirror and the country was in a recession.
If the feared scenario does not actually appear in the data (lower real GDP growth and continued increases in month-to-month inflation), then the fear dissipates. The economist Paul Samuelson noted in 1966 that the market has predicted 9 out of the last 4 recessions. The concern about stagnation which exists now has to turn into a fear to have more than temporary impact but then even a major adjustment in stock prices caused by the concern becoming a fear still needs to be confirmed with hard data down the road.
A tariff war turning into a reality next month may be what turns the concern about stagflation into a palpable fear that this most unfavorable economic scenario is a high probability event, particularly when combined with rising unemployment numbers which is probably on the horizon, high consumer debt, and the millions of households already on the economic cliff due to the impact of inflation over the past 4 years.
The stock market needs a valuation reset IMO which is another factor that could lead to much lower stock prices and events consistent with the onset of stagflation could be the trigger event.
I am doing almost nothing in the stock market now which is why I am not currently writing blog posts. I have pared some positions by selling the high cost shares into rallies. If a worldwide tariff war starts in March and gathers steam into April, I am likely to remain on the sidelines until there is a major decline in stocks and I can assess the potential fallout with more data.
A lot of the rally's strength has been ongoing strength of consumer spending. So I can see how that report along with Walmart and other companies created 'concern.'
DeleteThe VIX hasn't even hit 20 yet. So it's not worrying more involved investors/traders.
DeleteLand: I have published a new video a few minutes ago where I discuss, starting at 9:15, the lower guidance given today by Home Depot for 2025 which included an adjusted E.P.S. decline of 2%.
Deletehttps://www.youtube.com/watch?v=WKdT8gkDazI
My belief is that households in bottom three quintiles of income are already stressed financially by inflation that has occurred over the past 4 years and many are already too debt heavy as they try to cope. A decrease in discretionary spending by those households is a reasonable prediction. An increase in inflation from current levels, in part caused by a broad based tariff war, will place even more financial stress on them. And if job losses rise, which I expect to continue with the federal government being only the largest employer firing workers, then fear about losing a job (now reflected at about 1 in 5 consumers) will rise and that will curtail consumer spending even more.
Thank you for all the explanations! On stagnation, and market worries, and vs current actual data.
DeleteThe mid-lower end consumer worries seem valid to me.
LAND: The VIX is surging but is currently down from its intraday high of 21.38:
ReplyDeleteCboe Volatility Index
20.25 +1.27 +6.69%
https://www.marketwatch.com/investing/index/vix?mod=search_symbol
If it looks more certain that Trump is actually going to start a broad based trade war, my best guess is that the VIX will spike into the 30s. Investors still believe IMO that he is bluffing and his statement yesterday about the 25% increases on exports from Canada and Mexico are just part of his negotiating technique. For those investors, it may be a shock that Trump actually implements the tariff increases against former U.S. allies in the western democracies.
Even if he's bluffing on some, he's shown he -will- do more chaos and I expect something in the tariff arena to be included.
DeleteIf VIX goes past 30 due to trade wars, normally I'd see it as a temporary spike and market drop and buy.... I will not be because the spike will be based on a real well-justified concern.
Land: From my perspective, it is just more advisable to wait and see whether Trump starts a broad based tariff war. That may commence next Tuesday. I can then process more information about the ramifications.
DeleteTrump ordered that the Commerce Department investigate whether or not to place a tariff on copper imports.
The Chaos King will deliver dysfunction unparalleled in U.S. history, mostly in an authoritarian manner.
Psychopaths/Malignant narcissists, who feel no empathy for anyone, are now in charge of the U.S. government which is not a good thing. The mass firing of U.S. government employees will continue and that will start to show up in the unemployment numbers soon.
The recent decline in interest rates has also resulted in my pausing of corporate bond purchases.
Maybe the PCE inflation report for January, scheduled for release next Friday, will not be down .2% over the past year to 2.6% from 2.8% for the 12 months ending in December. If there is another inflation scare, that may override the flight to safety which is the primary force driving treasury yields down, possibly resulting in better yields for new purchases in March sometime compared to now.
I have been paring some common stock positions by profitably selling shares purchased with dividend or my highest cost 1 to 5 shares. All of that action is immaterial, but I have managed to lock in so far this year over $6K in realized stock/stock fund gains. I would like to see a 30% decline in the S&P 500 sometime this year which I would try to trade.
I had a typo
Delete"I will not BUY" (if VIX spikes)
I would like to see a 30% drop too. It would shrink my portfolio ... but be such a welcome relief to be able to buy at better valuations.
I sold all of $5k a month ago. But want to take more off the top if there's a chance.
In its report for February, the Conference Board reported a decline in consumer confidence to 98.3 from 105.3 in February, the steepest month-to-month decline since August 2021.
ReplyDeletehttps://www.cbsnews.com/news/consumer-confidence-index-plummets-february-2025/
Earlier today, the world's largest advertising company WPP guided 2025 revenues down. This may be a leading indicator of a drop off in consumer spending.
WPP PLC ADR
Premarket Quote
$41.40 -7.15 -14.73%
Last Updated: Feb 27, 2025 8:34 a.m. EST
https://www.marketwatch.com/investing/stock/wpp
The U.S. government will be releasing its January report on personal consumption expenditure and PCE inflation tomorrow.
Currently, the consensus forecast is for PCE to decline to .1% from .7% in December. The consensus estimate for Core PCE inflation is at 2.6%, down from 2.8%.
The consumer sentiment and confidence surveys released by the University of Michigan and the Conference Board respectively have the steep declines in February compared to January.
I do view the actual spending data to be more relevant of consumer sentiment than a survey but the surveys may be measuring a more cautious approach to consumer spending to come.
I'd listened to CNBC, read articles & headlines the other day. Then came here and here's the relevant info! Thank you!
DeleteI just read FG's latest article. While he's positively excited about the admin's (random) cutting of jobs for the debt and macro picture (as trump supporter), he sees the immediate and intermediate as uncertain with pullbacks very possible.
DeleteA lot of Trump's moves don't effect me directly but now they do. Parkinson's research is at the point of big new info and possible solutions. Except the admin's withdrawing of NIH funding. One breakthru is in China. Maybe their funding with stay intact. Hum.
In a housing report for DC area, a significant % of sellers lowered their asking prices last week. Assumption is to sell before it gets worse. House views increased a lot too.
Land: The federal government job cuts will not have any noticeable impact on the debt but will likely negatively impact public services include Social Security, and important medical research. The virtual elimination of USAID will result in preventable deaths. An administrator at USAID was put on leave for making a factual statement along those lines.
Deletehttps://www.reuters.com/world/us/usaid-official-warns-unnecessary-deaths-trumps-foreign-aid-block-then-says-hes-2025-03-03/
In my recent YT videos, I mentioned that it was my best guess that Trump would proceed with the tariff war since his goals are to raise federal revenues to help finance the proposed tax cuts and to destroy the manufacturing base in both Canada and Mexico that produce goods for export to the U.S. Buffett called that a declaration of war and it is.
The Treasury Secretary claimed that the tariffs will not have an inflationary impact on U.S. consumers, a knowingly false representation. We now have a pure Orwellian government. Even when it is easily proven that the tariffs added to inflation, Trump and his minions will deny the facts as fake news.
The tariffs on Canadian crude will cause gasoline prices to rise above the national average in the Midwest, whose landlocked refineries use Canadian crude. There will be some justice in that those states voted for Trump and other republicans.
https://www.cnbc.com/2025/03/03/trump-tariffs-will-raise-gasoline-electricity-prices-canada-minister.html
Trump is now talking about tariff taxes on U.S. food imports.
I did more stock selling earlier today, focusing on stocks that were showing good percentage gains, primarily in the REIT sector.
Good info to know. Sounds about right. Now if I can find a rock to live under for a few years. This all causes so much hard especially to intangibles like trust of USA abroad.
DeleteMy friend in the peace making non-profit arena's company lost their gvn't grant after 20+ years in the cuts. Their jobs are on the line. My sister's working for state gvn't but wondering if this will come to impact her.
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I've been bad at chasing on the way up. Maybe I need to learn to chase on the way down and sell into this. It's going to get worse. (I've been waiting for a rebound....but trump's still alive and talking so that's probably not going to happen.)
I sold at the top. Then saw VIX was stable and bought back in. I need to wobble less.
Sorry, that's a lot of ranting.
Looks like a slide in a playground today.
ReplyDeleteI have just published a SeekingAlpha post discussing my Vix Asset Allocation Model that was originally published on 10/17/24. I have copied that old post verbatim here:
ReplyDeletehttps://tennesseeindependent.blogspot.com/2025/03/my-seekingalpha-post-published-on.html
Notwithstanding Trump's claim that foreign countries will pay his tariff taxes, a false claim repeated over and over again that is believed by tens of millions, the Yale University calculated that the average per household consumer will pay $1,600 to $2,000 annually of the tariff taxes. The computation just uses the existing 25% tariffs on imports from Mexico and Canada and the increase of 20% tariff on China's exports to the U.S.
ReplyDeletehttps://budgetlab.yale.edu/research/fiscal-economic-and-distributional-effects-20-tariffs-china-and-25-tariffs-canada-and-mexico
25% tariff taxes are about to be imposed on all steel and aluminum imports on or about 3/12/25 and retaliatory tariffs next month. Trump has also threatened 25% tariffs on imports from Europe, tariffs on food, pharmaceuticals, semiconductor chips imports. All of the foregoing republican tariff taxes are not yet included in the Yale estimates.
I have continued to do small ball stock selling into stock market rallies since I published my last post on 2/10/25 discussing my trades.
ReplyDeleteMost of the selling since my last post has consisted of my highest cost equity REIT stock lots. That sector performed well in February and into early March as intermediate and long term interest rates declined in significant percentage amounts.
My gut informed me that the decline in interest rates, most likely resulting from a flight to safety caused by the ongoing chaos in the U.S., would not last as investors started to replace that concern with fears about inflation moving higher later this year and into 2026 based on implementation of Trump’s Tariff and mass deportation policies. Almost 1/2 of workers in agriculture and construction are illegal immigrants according to some estimates.
I am not publishing new posts here discussing my stock and bond trades until I start purchasing stocks again. My recent purchases have been few in number and are mainly 1 share average downs. I will need more of a stock market decline before any pickup in purchases worth mentioning in a new post.
I am supplementing an old post that has snapshots of my REIT common and preferred stock trades with my recent small ball trades in those sectors. This is part of my overall risk reduction strategy. That post can be found here:
https://tennesseeindependent.blogspot.com/2014/10/gateway-post-equity-reit-common-and.html
Snapshot are toward the end.
I noticed that Trump has given Mexico another 30 day reprieve on the republican 25% tariff tax for goods that are tariff free under the U.S. - Mexico - Canada trade agreement (USMCA) that he negotiated and signed into law in his first term. Investors are not having the same reaction as they did yesterday to Trump delaying 25% tariff taxes on auto imports that would be tariff free under the existing trade treaty.
NASDAQ Composite Index
18,088.13 -464.61 -2.50%
Last Updated: Mar 6, 2025 at 12:55 p.m. EST
https://www.marketwatch.com/investing/index/comp?mod=home_markets
I discuss that issue in a YT video that I published last night (3/5/25):
https://www.youtube.com/watch?v=dWMd2FZgLHM&t=9s
My stock portfolio is up today. My leading gainers are in the package food, equity REIT and pharma sectors.
ReplyDeleteI attribute most of the price gains to stock investors moving more into defensive sectors.
I did lighten up some today in GIS, selling a few of my highest cost lots profitably. This is a risk mitigation type move rather than a prediction about whether the stock will move higher or lower.
General Mills Inc.
$65.21 +$3.01 +4.83%
Last Updated: Mar 7, 2025 at 11:46 a.m. EST
https://www.marketwatch.com/investing/stock/gis
The move in CPB is hard to explain after a disappointing guidance in a recently released earnings report:
Campbell's Co. (CPB)
$42.75 +$ 3.01 +7.56%
Last Updated: Mar 7, 2025 at 11:50 a.m. EST
https://www.marketwatch.com/investing/stock/cpb?mod=search_symbol
Kraft Heinz Co. (KHC)
$32.38 +$1.50 +4.86%
https://www.marketwatch.com/investing/stock/khc?mod=search_symbol
I'm down by ~$44k from the top.
ReplyDeleteYou're being up makes me wonder what I need to do to have a better distribution.
One major problem is that I got caught with too much in extended market VXF which I'd planned to switch on the next up turn.
The rest is the question of what to buy when it's time. I don't see capitulation or oversold yet so it's not time.
I had no idea anything was getting bought. Those are huge gains...I suppose on the assumption that people don't stop buying basics and eating. Though in reality people can cut back on those too (more food prep, less expensive prepared foods.)
Land: The stocks in my Fidelity account, which I am looking at now, represent about 8% of the total and are currently up about $1,100. Those stocks rising are in what I call bond like sectors that have been benefiting over the past month from the decline in interest rates. CGBD, CTO, DG (more of a contrarian value play)
ReplyDeleteSome of those stocks have these symbols: AHH, ALEX, APLE, ARCC, BBDC, BNL, CUBE, DOC, EPRT, FSK, GBDC, GIS, HR, KMB, LYB, NNN, NSA, NTST, OBDC, OCSL, SAR, SCM, SLRC, STWD, SU, TRP, UL, WPC and WU. That is about 1/2 of them that are up in my Fidelity account so far today.
Several stock ETFs and CEFs that I own in that account are up as well including FENY, NOBL, THQ, SCHV, VTV, VYM.
Most of my stock positions were bought with starting yields at 4% or higher and the yields have gone up with dividend increases and selling my highest cost lots profitably.
In all of my accounts, the focus is on income generation, primarily through bonds (corporate and municipal), T Bills and T Notes. So the portfolio does better when interest rates are trending down.
The 10 year treasury closed at a 4.79% yield on 1/13/25 and at 4.29% yesterday. The decline in intermediate and longer term interest rates has also caused my heavy bond concentration to go up in value. The prices for those securities come from third party pricing services and are not yet reflected in account values for today.
I am now looking at my Schwab account positions. The stock portion is up $400 with the S&P 500 down 1.27%. The bond like and defensive stock sectors, where I am concentrated, are performing better than the high multiple names.
ReplyDeleteSome stocks owned in that account which are currently up as 8:45 CST on 3/10/25:
BMY (recently pared), BNL, CAG, CHCT (recent addition), CPB, CTO, CUBE, EQR, FLO, GMRE, GPC, HIW, MDT, NOMD, NWN, O, OLP, PFE, PINE, PLYM, REYN, SNY, SPTN, STAG, STWD, UDR, UGI, UMH, VZ, and WPC.
I have published a monthly update that discusses a few trades made since I published this post on 2/10:
ReplyDeletehttps://tennesseeindependent.blogspot.com/2025/03/monthly-update-31825.html