Economy:
JPMorgan sees negative GDP growth but says the US will skirt a technical recession JPM is predicting two consecutive negative GDP quarters this year. However, the arbiter of when recessions start and end, the National Bureau of Economic Research, requires more than 2 consecutive quarters of negative GDP growth. Since JPM is predicting a mid-year growth rebound, it does not believe NBER will attach a recession label to the slowdown. It will just feel like a recession without technically being one using NBER's standards.
NBER Historical U.S. Business Cycles Starting in 1854
El-Erian sees 30% market drop and the world skidding to recession A worldwide recession is highly probable IMO, though the U.S. may escape having one. As of Thursday's close, SPX had already declined by about 26.9% from its recent all time high.
JPMorgan sees negative GDP growth but says the US will skirt a technical recession JPM is predicting two consecutive negative GDP quarters this year. However, the arbiter of when recessions start and end, the National Bureau of Economic Research, requires more than 2 consecutive quarters of negative GDP growth. Since JPM is predicting a mid-year growth rebound, it does not believe NBER will attach a recession label to the slowdown. It will just feel like a recession without technically being one using NBER's standards.
NBER Historical U.S. Business Cycles Starting in 1854
El-Erian sees 30% market drop and the world skidding to recession A worldwide recession is highly probable IMO, though the U.S. may escape having one. As of Thursday's close, SPX had already declined by about 26.9% from its recent all time high.
Payroll tax cut would be better than a rate cut — but still won't stop economic fallout I would agree with that assessment. The payroll tax cut would be beneficial when and if consumer spends falls precipitously from current levels.
Consumer spending is not the problem now. The problem is the negative worldwide impact on business revenues and supply chains that are directly related to the coronavirus pandemic. Rate cuts and fiscal stimulus will not cure those problems. And the rate cuts have and will continue to cause a substantial loss in household disposable income through lower interest rates.
Donald had proposed a payroll tax holiday through the election that would cost the federal government about $1 trillion, while depleting the already underfunded Social Security trust fund. But who cares about that when Donald's reelection is at stake? Trump is reportedly seeking to waive payroll taxes for workers until the end of the 2020 election | Markets Insider; Trump pitches 0% payroll tax rate for the rest of 2020 This proposal is a transparent attempt to buy the election regardless of the long term consequences.
Analysis: Why Trump isn’t getting the payroll-tax cut he wanted for the coronavirus
Consumer spending is not the problem now. The problem is the negative worldwide impact on business revenues and supply chains that are directly related to the coronavirus pandemic. Rate cuts and fiscal stimulus will not cure those problems. And the rate cuts have and will continue to cause a substantial loss in household disposable income through lower interest rates.
Donald had proposed a payroll tax holiday through the election that would cost the federal government about $1 trillion, while depleting the already underfunded Social Security trust fund. But who cares about that when Donald's reelection is at stake? Trump is reportedly seeking to waive payroll taxes for workers until the end of the 2020 election | Markets Insider; Trump pitches 0% payroll tax rate for the rest of 2020 This proposal is a transparent attempt to buy the election regardless of the long term consequences.
Analysis: Why Trump isn’t getting the payroll-tax cut he wanted for the coronavirus
Italy shops, bars and restaurants ordered to close (3/12/20 article) A major recession in Italy is inevitable now. Eurostat last reported that Italy had -.3% growth in the 2019 4th quarter. Page 3
France's 2019 4th quarter GDP growth was at -.1% with Germany at zero percent. Those numbers would not have been impacted by the spreading coronavirus epidemic.
CPI rose .1% last month on a seasonally adjusted basis. Over the past 12 months through February, CPI increased by 2.3% without the seasonal adjustment. Core CPI was up 2.4% Y-O-Y.
Consumer Price Index Summary
Mortgage refinance applications spike 79% as interest rates sink For households that can refinance at lower rates now, their disposable income after mortgage interest payments will go up, assuming no increase in the debt balance after refinancing.
Europe is now the 'epicenter' of the coronavirus pandemic, WHO says
U.S. to add Britain, Ireland to European travel ban - airline, U.S. officials
Spain Becomes Latest Epicenter of Coronavirus After a Faltering Response; Coronavirus live updates: Spain to impose nationwide lockdown
Coronavirus Wrecked China's Car Sales, and America Is Probably Next
France's 2019 4th quarter GDP growth was at -.1% with Germany at zero percent. Those numbers would not have been impacted by the spreading coronavirus epidemic.
CPI rose .1% last month on a seasonally adjusted basis. Over the past 12 months through February, CPI increased by 2.3% without the seasonal adjustment. Core CPI was up 2.4% Y-O-Y.
Mortgage refinance applications spike 79% as interest rates sink For households that can refinance at lower rates now, their disposable income after mortgage interest payments will go up, assuming no increase in the debt balance after refinancing.
Europe is now the 'epicenter' of the coronavirus pandemic, WHO says
U.S. to add Britain, Ireland to European travel ban - airline, U.S. officials
Spain Becomes Latest Epicenter of Coronavirus After a Faltering Response; Coronavirus live updates: Spain to impose nationwide lockdown
Coronavirus Wrecked China's Car Sales, and America Is Probably Next
+++
Markets and Market Commentary:
I viewed the rally last Friday, which occurred during the final thirty minutes of trading, to be machine driven.
Market crash has reached the ‘panic’ stage, and ‘demoralization’ is still to come, Wall Street strategist Tony Dwyer says - MarketWatch (Dwyer noted that last Thursday's action can only happen in a "crash" that is indicative of panic. I would agree)
OPEC deal collapse sparks price war: '$20 oil in 2020 is coming' The existing production cuts expire 3/31. Saudi Arabia cut prices 10% last Friday and indicated that it will start selling 1+M more barrels per day starting in April. Saudi is currently pumping about 9.7M barrels a day but has the capacity to produce 12M barrels a day according to some sources.
Saudi Aramco moves to ramp up production amid Russia feud Saudi Arabia could take prices down to $10 to $20 per barrel in the latest price and production feud.
Why Russia wants to crush U.S. shale oil producers in price war - MarketWatch
Putin dumps Saudi leader to start a war on America's shale oil industry Russia tried this strategy in October 2018 and it did not work. U.S. crude production continued to ramp up notwithstanding the abrupt decline in crude oil prices.: Weekly U.S. Field Production of Crude Oil (Thousand Barrels per Day); WTI Crude Oil Prices - 10 Year Daily Chart | MacroTrends
Russia's desire to kill off U.S. shale production did result in those producers becoming more efficient.
Some highly leveraged producers may file for bankruptcy during the latest price slide, but that will not stop the drilling on their leases. Even before that happens, those companies will have to maintain production just to make their interest payments.
If those producers reorganize in bankruptcy, their debt costs will be reduced as will their breakeven cost points. Their lenders take the hits.
A liquidation in Chapter 7 will only mean that the production acres will fall under another company's control, probably a survivor better able to weather the up and down vicissitudes of crude prices.
A prolonged price collapse would likely substantially curtail U.S. shale production by several million barrels per day.
Russia claims that it can withstand a price war at $25 to $30 per barrel for 6 to 10 years. U.S. Shale Collapse Will Lead To Higher Oil Prices | OilPrice.com I would not mind testing that claim.
And in 6 to 10 years, when Russia and OPEC have depleted their resources by selling at $25 per barrel and prices go back to $60 after a new OPEC-Russia production cut agreement, U.S. shale production would come roaring back.
Russia will suffer from lower crude prices. Revenues will decline notwithstanding an increase in production.
There will also be other negative blowbacks that will weaken the Russian economy, including declines in Russia's stock market. The Ruble is declining in value which will make imports more expensive. Chart. Russian Ruble to US Dollar Rates; Russian Ruble to Euro; Russian Ruble to Japanese Yen Rates
Russia also faces debt downgrades that will make borrowing money more expensive. Currently, Russia's sovereign debt is rated junk by S & P at BB+ and at BBB- by S & P. Saudi Arabia can borrow money more cheaply to meet budget shortfalls. Saudi Arabia - Credit Rating
Russian lawmakers told to rally behind Putin's move to extend rule
Putin approves law that could keep him in power until 2036
Bond investors say some energy companies ‘will not survive’ oil rout slamming markets - MarketWatch
I viewed the rally last Friday, which occurred during the final thirty minutes of trading, to be machine driven.
Market crash has reached the ‘panic’ stage, and ‘demoralization’ is still to come, Wall Street strategist Tony Dwyer says - MarketWatch (Dwyer noted that last Thursday's action can only happen in a "crash" that is indicative of panic. I would agree)
OPEC deal collapse sparks price war: '$20 oil in 2020 is coming' The existing production cuts expire 3/31. Saudi Arabia cut prices 10% last Friday and indicated that it will start selling 1+M more barrels per day starting in April. Saudi is currently pumping about 9.7M barrels a day but has the capacity to produce 12M barrels a day according to some sources.
Saudi Aramco moves to ramp up production amid Russia feud Saudi Arabia could take prices down to $10 to $20 per barrel in the latest price and production feud.
Why Russia wants to crush U.S. shale oil producers in price war - MarketWatch
Putin dumps Saudi leader to start a war on America's shale oil industry Russia tried this strategy in October 2018 and it did not work. U.S. crude production continued to ramp up notwithstanding the abrupt decline in crude oil prices.: Weekly U.S. Field Production of Crude Oil (Thousand Barrels per Day); WTI Crude Oil Prices - 10 Year Daily Chart | MacroTrends
Russia's desire to kill off U.S. shale production did result in those producers becoming more efficient.
Some highly leveraged producers may file for bankruptcy during the latest price slide, but that will not stop the drilling on their leases. Even before that happens, those companies will have to maintain production just to make their interest payments.
If those producers reorganize in bankruptcy, their debt costs will be reduced as will their breakeven cost points. Their lenders take the hits.
A liquidation in Chapter 7 will only mean that the production acres will fall under another company's control, probably a survivor better able to weather the up and down vicissitudes of crude prices.
A prolonged price collapse would likely substantially curtail U.S. shale production by several million barrels per day.
Russia claims that it can withstand a price war at $25 to $30 per barrel for 6 to 10 years. U.S. Shale Collapse Will Lead To Higher Oil Prices | OilPrice.com I would not mind testing that claim.
And in 6 to 10 years, when Russia and OPEC have depleted their resources by selling at $25 per barrel and prices go back to $60 after a new OPEC-Russia production cut agreement, U.S. shale production would come roaring back.
Russia will suffer from lower crude prices. Revenues will decline notwithstanding an increase in production.
There will also be other negative blowbacks that will weaken the Russian economy, including declines in Russia's stock market. The Ruble is declining in value which will make imports more expensive. Chart. Russian Ruble to US Dollar Rates; Russian Ruble to Euro; Russian Ruble to Japanese Yen Rates
Russia also faces debt downgrades that will make borrowing money more expensive. Currently, Russia's sovereign debt is rated junk by S & P at BB+ and at BBB- by S & P. Saudi Arabia can borrow money more cheaply to meet budget shortfalls. Saudi Arabia - Credit Rating
Russian lawmakers told to rally behind Putin's move to extend rule
Putin approves law that could keep him in power until 2036
Bond investors say some energy companies ‘will not survive’ oil rout slamming markets - MarketWatch
Foreign investors are piling into U.S. real estate, viewed by them as a coronavirus safe haven Maybe they need to start buying hotel REIT stocks (or taking them private) that offer a better valuation than buying the hotels. There was a saying that circulated many years ago that it was cheaper to drill for oil on Wall Street than with the drill bit. That analogy is appropriate now in a few real estate sectors.
It’s still way too soon to buy stocks, warns Deutsche Bank’s Torsten Slok - MarketWatch
Chip stocks dive after Broadcom rescinds guidance, questions second-half rebound amid coronavirus - MarketWatch
Hotel companies have withdrawn their guidance for the first quarter and 2020 due to the COVID-19 pandemic.
+++++++++++
Portfolio Management:
If I knew how serious the COVID-19 pandemic would become, I could make better investment decisions now. But, alas, I am not an omniscience being. I recognize that I do not know how serious the impact will be on the U.S. or the world economy. What's more, I know that no one else knows either. Everyone is making a wide range of guesses.
For stocks in several sectors, the current prices already reflect a valuation consistent with recessionary conditions with a slow recovery therefrom. Regional bank stock prices are one example.
The odds for a recession have gone up, but no one can say now that the probability of one occurring now is at 100% or even much above or below 50%. To make even a more probable than not prediction of a recession or no recession this year, I would have to know how serious the COVID-19 pandemic will be in the U.S. and how long it will last.
Certain sectors of the economy, including the travel and energy related industries, will experience recessionary conditions for at least a few months.
I still expect the real U.S. GDP growth in the first quarter, but the March number may be negative in that 3 month period. The Atlanta Fed GDP model is currently predicting 3.1% real GDP growth in the current quarter. GDPNow-Federal Reserve Bank of Atlanta The New York Fed Model is more pessimistic at +1.6%. Nowcasting Report - FEDERAL RESERVE BANK of NEW YORK
I am investing based on an assumption that the first quarter GDP growth rate will be closer to the NY FED's current forecast of +1.6% than the Atlanta's FED's +3.1%.
The second quarter will likely have negative growth and the third quarter will be a crap shoot. So no predictions can be made now whether or not the 3rd quarter GDP numbers will be positive or negative.
To make that kind of forecast, it would be necessary to know how serious the pandemic will become and that is unknowable now.
After several days of buying common stock, and without checking, just making a guess, stocks are weighted at about 6% of my assets held at brokers and mutual fund companies.
I have a constant cash flow from interest and dividend payments + proceeds from maturing fixed coupon securities (generally over $100K per month now).
Even though I have been adding to my stock allocation during the volatility event, I have not funded any of those purchases from the cash allocation that existed prior to 2/24/20 which was large.
Instead, I am simply redirecting some of the proceeds received almost daily from fixed coupon securities into stocks and the uninvested amounts from those proceeds are simply increasing my cash balances held in money market funds for now.
The rally late Thursday smelled like program trading. It was not an all clear signal by any means IMO.
It can be claimed with certainty that stocks are more reasonably priced now than they were when the S & P 500 went over 330o which occurred by the way last month. Historical Prices
And, importantly for me, dividend yields do go up when the price goes down. I am certain of that as well.
The uncertainty still exists, however, whether the dividend penny rates will be sustained at current levels, cut, eliminated or increased and by how much.
I will continue to buy common stocks into the volatility spike using the small ball purchase restriction. Chart CBOE Volatility Index-St. Louis Fed When there is a return to below 20 movement in the VIX, and I am able to sell my highest cost shares profitably, I will likely sell the highest cost lots for whatever profit may be available.
The reasons for selling the highest cost lots first are (1) to reduce my income tax obligation resulting from a sell; (2) to generate a total return in excess of the dividend payments; (3) to increase my dividend yield on the remaining shares; (4) to take advantage of normal up and down volatility by selling the highest cost lots profitably and then by buying when the price falls below the lowest price paid in the chain; (5) to make it more likely that I will buy during a meltdown after selling higher cost shares (psychological); and (6) to mitigate risk through less at risk monetary exposure. Risk is also controlled through small odd lot trades.
I am not concerned about the dollar value of the profit provided I am in achieving the objectives set out above.
I did look at my extensive monitor portfolio at Yahoo Finance last Friday and started to buy some securities in that list including the two discussed in Item # 2.A. below: EPRPRC and EPR.
+++++++
It’s still way too soon to buy stocks, warns Deutsche Bank’s Torsten Slok - MarketWatch
Chip stocks dive after Broadcom rescinds guidance, questions second-half rebound amid coronavirus - MarketWatch
Hotel companies have withdrawn their guidance for the first quarter and 2020 due to the COVID-19 pandemic.
+++++++++++
Portfolio Management:
If I knew how serious the COVID-19 pandemic would become, I could make better investment decisions now. But, alas, I am not an omniscience being. I recognize that I do not know how serious the impact will be on the U.S. or the world economy. What's more, I know that no one else knows either. Everyone is making a wide range of guesses.
For stocks in several sectors, the current prices already reflect a valuation consistent with recessionary conditions with a slow recovery therefrom. Regional bank stock prices are one example.
The odds for a recession have gone up, but no one can say now that the probability of one occurring now is at 100% or even much above or below 50%. To make even a more probable than not prediction of a recession or no recession this year, I would have to know how serious the COVID-19 pandemic will be in the U.S. and how long it will last.
Certain sectors of the economy, including the travel and energy related industries, will experience recessionary conditions for at least a few months.
I still expect the real U.S. GDP growth in the first quarter, but the March number may be negative in that 3 month period. The Atlanta Fed GDP model is currently predicting 3.1% real GDP growth in the current quarter. GDPNow-Federal Reserve Bank of Atlanta The New York Fed Model is more pessimistic at +1.6%. Nowcasting Report - FEDERAL RESERVE BANK of NEW YORK
I am investing based on an assumption that the first quarter GDP growth rate will be closer to the NY FED's current forecast of +1.6% than the Atlanta's FED's +3.1%.
The second quarter will likely have negative growth and the third quarter will be a crap shoot. So no predictions can be made now whether or not the 3rd quarter GDP numbers will be positive or negative.
To make that kind of forecast, it would be necessary to know how serious the pandemic will become and that is unknowable now.
After several days of buying common stock, and without checking, just making a guess, stocks are weighted at about 6% of my assets held at brokers and mutual fund companies.
I have a constant cash flow from interest and dividend payments + proceeds from maturing fixed coupon securities (generally over $100K per month now).
Even though I have been adding to my stock allocation during the volatility event, I have not funded any of those purchases from the cash allocation that existed prior to 2/24/20 which was large.
Instead, I am simply redirecting some of the proceeds received almost daily from fixed coupon securities into stocks and the uninvested amounts from those proceeds are simply increasing my cash balances held in money market funds for now.
The rally late Thursday smelled like program trading. It was not an all clear signal by any means IMO.
It can be claimed with certainty that stocks are more reasonably priced now than they were when the S & P 500 went over 330o which occurred by the way last month. Historical Prices
And, importantly for me, dividend yields do go up when the price goes down. I am certain of that as well.
The uncertainty still exists, however, whether the dividend penny rates will be sustained at current levels, cut, eliminated or increased and by how much.
I will continue to buy common stocks into the volatility spike using the small ball purchase restriction. Chart CBOE Volatility Index-St. Louis Fed When there is a return to below 20 movement in the VIX, and I am able to sell my highest cost shares profitably, I will likely sell the highest cost lots for whatever profit may be available.
The reasons for selling the highest cost lots first are (1) to reduce my income tax obligation resulting from a sell; (2) to generate a total return in excess of the dividend payments; (3) to increase my dividend yield on the remaining shares; (4) to take advantage of normal up and down volatility by selling the highest cost lots profitably and then by buying when the price falls below the lowest price paid in the chain; (5) to make it more likely that I will buy during a meltdown after selling higher cost shares (psychological); and (6) to mitigate risk through less at risk monetary exposure. Risk is also controlled through small odd lot trades.
I am not concerned about the dollar value of the profit provided I am in achieving the objectives set out above.
I did look at my extensive monitor portfolio at Yahoo Finance last Friday and started to buy some securities in that list including the two discussed in Item # 2.A. below: EPRPRC and EPR.
+++++++
Trump:
Demagogue Don has claimed that the media has created a hoax involving the COVID-19 pandemic as part of a conspiracy to injure his reelection effort. Trump: 'Fake News Media,' Democrats working to 'inflame the CoronaVirus situation' | TheHill (3/9/20 article); Coronavirus Is Creating a Fake-News Nightmarescape | Vanity Fair
Donald is not claiming that the COVID-19 is a hoax, which was suggested by some Democrats, since that would be beyond the pale even for the Duck.
Donald is claiming that the media's accurate coverage of the epidemic is a hoax concocted by the Democrats and the media to injure him personally. Just another example of Donald's victimization complex that arises when anyone contradicts his reality creations with facts.
The conspirators, according to Delusional Don, are media organizations that are contradicting his reality creations with facts and the Democrats who are doing something in collusion with the media. That sounds coherent and believable to Donald's cult members.
The World Health Organization joined the conspiracy against the Duck last Wednesday when it labeled COVID-19 a "pandemic". Coronavirus: COVID-19 Is Now Officially A Pandemic, WHO Says- NPR The WHO, the Democrats and the media are now in a full blown conspiracy to injure Donald and to Make America UnGreat Again. America can achieve greatness in Trumpworld only when Donald is our Dear Leader.
Fox: Coronavirus Is a Liberal “Scam” to Hurt Trump | Vanity Fair
Doctor Don believes he can second guess infectious disease experts because "he has a natural ability" to know the truth. ‘Maybe I have a natural ability’: Trump plays medical expert on coronavirus by second-guessing the professionals - The Washington Post
Everything Trump says he knows "more about than anybody" - Axios
How Trump fuels confusion about coronavirus (A Trumpster is quoted as claiming that no one has died from the coronavirus because she does not "believe anything the Democrats do".)
Doctor Don, whose medical decree is in lies and B.S., has repeatedly played down the coronavirus pandemic, frequently comparing the infections rates with a normal, seasonal flu season. ‘Stay Calm, It Will Go Away:’ Trump Plays Down Coronavirus Threat - The New York Times (video)
PolitiFact | Fact-checking Donald Trump’s mistakes about European travel due to coronavirus; FactChecking Trump's Coronavirus Address - FactCheck.org It is impossible for Donald to be straight and factual.
Trump’s False Claims About His Response to the Coronavirus - The New York Times
PolitiFact | Donald Trump’s wrong claim that ‘anybody’ can get tested for coronavirus The Duck routinely makes ridiculous and patently false claims. This one was rated "Pants on Fire". Yet, a majority of republicans view him to be honest and a role model for their children.
Coronavirus: US is failing on testing, says Fauci - BBC News
Sick People Across the U.S. Say They Are Being Denied the Coronavirus Test When patients claim that they are being denied tests, those claims are just Fake News in TrumpWorld intended to poor, poor, pitiful Donald. Linda Ronstadt - Poor Poor Pitiful Me - May 6, 1996 at the White House - YouTube
Problems mount with coronavirus testing, limiting access and sowing confusion - Los Angeles Times
Heidi Klum Says She's Sick With a Fever and Cough But Can't Get a Coronavirus Test
The U.S. testing initiative so far has more in common with an impoverished third world country than a major country with abundant resources and medical personnel.
Donald Trump's appalling, blame-shifting Rose Garden news conference (Noting a line from the Office TV series where the Boss made the following statement: "I do want the credit, without any of the blame." President Truman had a sign on his desk saying "The BUCK STOPS here". "The Buck Stops Here" Desk sign For Don the Con, the buck stops anywhere but him.
Angela Merkel: Most people will get the coronavirus That remark caused the Stock Jocks to have a panic attack last Wednesday. The mind conjures up images of U.S. high school gyms and empty industrial warehouses being filled wall-to-wall cots, like the pictures that I have seen of treatment facilities during the 1918 Spanish Flu pandemic. (see photo -Amid 1918 Flu Pandemic, America Struggled to Bury the Dead-HISTORY )
The mind then jumps to the conclusion that Americans will go to die surrounded by strangers in a high school gym, without receiving adequate medical attention since the hospitals are full and the doctors no longer have the time to provide treatment. The image of cots filling a large room was the first image that popped into my mind, uncontrolled by any rational thought, when I read Merkel's statement. The rational mind has to control the lizard brain.
How the Trump administration squandered time and lost control of the coronavirus crisis - The Washington Post It is all Obama's fault in TrumpWorld. If it is not Obama's fault, then the default to position is blame Hillary, even if the blame is being assigned long after they are gone.
Trump Slams 'Nasty' Question As PBS Reporter Challenges Him On Shutdown Of Pandemic Unit
National Guard activated in six states to help fight coronavirus
Worst-Case Estimates for U.S. Coronavirus Deaths - The New York Times; How Much Worse the Coronavirus Could Get, in Charts - The New York Times; Congressional doctor expects 70 million-150 million U.S. coronavirus cases-Axios Pretty scary stuff.
The Institute for Disease Modeling has determined that COVID-19 is roughly equally transmissible as the 1918 Spanish Flu Pandemic that killed an estimated 675,000 Americans in 1918 but is slightly less clinically severe. 2019-nCoV: preliminary estimates of the confirmed-case-fatality-ratio and infection-fatality-ratio, and initial pandemic risk assessment Compared to 1918, there are 30 times more people over 85 and 10 times as many over 65. The COVID-19 death rates are far higher among the elderly and those with underling health issues or compromised immune systems.
Even if several hundred thousand die, it will still be for Donald all about how that impacts him personally.
Reading the infection and death rate predictions being made by experts suggests to me that more comprehensive closures for a few weeks now are necessary to be on the safe side. That would include churches, schools, or any mass meetings of any kind. Last Sunday, when driving down Franklin Road, the Church parking lots were full. Hopefully, people will be practice preventive care tomorrow rather than assembling in close proximity to each other.
++++
Erik Prince Recruits Ex-Spies to Help Infiltrate Liberal Groups - The New York Times
Donald routinely makes false statement about Obama. Some recent examples include the following: PolitiFact | Trump wrongly blames Obama for limits on coronavirus testing; PolitiFact | Donald Trump wrong saying Barack Obama did nothing about swine flu; Trump’s Misplaced Blame on Obama for Coronavirus Tests - FactCheck.org
FactChecking Trump's Scranton Town Hall-FactCheck.org Trump lies and the Trumpsters cheer. Lying all of the time about everything is one of the brand new Christian virtues. There Is No Christian Case for Trump-The Atlantic; Christians ‘have a moral obligation to enthusiastically back’ Trump in 2020, according to prominent evangelical - MarketWatch
Evangelicals view Trump as a born again Christian which is surprising to many: Trump Florida rally: My fellow evangelicals cheered his depraved words For a clear majority of U.S. evangelicals, opposing abortions, even when the opposition is politically motivated which is the case with Donald, is the sine qua non of being a Christian and the only one that matters.
Donald is not claiming that the COVID-19 is a hoax, which was suggested by some Democrats, since that would be beyond the pale even for the Duck.
Donald is claiming that the media's accurate coverage of the epidemic is a hoax concocted by the Democrats and the media to injure him personally. Just another example of Donald's victimization complex that arises when anyone contradicts his reality creations with facts.
The conspirators, according to Delusional Don, are media organizations that are contradicting his reality creations with facts and the Democrats who are doing something in collusion with the media. That sounds coherent and believable to Donald's cult members.
The World Health Organization joined the conspiracy against the Duck last Wednesday when it labeled COVID-19 a "pandemic". Coronavirus: COVID-19 Is Now Officially A Pandemic, WHO Says- NPR The WHO, the Democrats and the media are now in a full blown conspiracy to injure Donald and to Make America UnGreat Again. America can achieve greatness in Trumpworld only when Donald is our Dear Leader.
Fox: Coronavirus Is a Liberal “Scam” to Hurt Trump | Vanity Fair
Doctor Don believes he can second guess infectious disease experts because "he has a natural ability" to know the truth. ‘Maybe I have a natural ability’: Trump plays medical expert on coronavirus by second-guessing the professionals - The Washington Post
Everything Trump says he knows "more about than anybody" - Axios
How Trump fuels confusion about coronavirus (A Trumpster is quoted as claiming that no one has died from the coronavirus because she does not "believe anything the Democrats do".)
PolitiFact | Fact-checking Donald Trump’s mistakes about European travel due to coronavirus; FactChecking Trump's Coronavirus Address - FactCheck.org It is impossible for Donald to be straight and factual.
Trump’s False Claims About His Response to the Coronavirus - The New York Times
PolitiFact | Donald Trump’s wrong claim that ‘anybody’ can get tested for coronavirus The Duck routinely makes ridiculous and patently false claims. This one was rated "Pants on Fire". Yet, a majority of republicans view him to be honest and a role model for their children.
Coronavirus: US is failing on testing, says Fauci - BBC News
Sick People Across the U.S. Say They Are Being Denied the Coronavirus Test When patients claim that they are being denied tests, those claims are just Fake News in TrumpWorld intended to poor, poor, pitiful Donald. Linda Ronstadt - Poor Poor Pitiful Me - May 6, 1996 at the White House - YouTube
Problems mount with coronavirus testing, limiting access and sowing confusion - Los Angeles Times
Heidi Klum Says She's Sick With a Fever and Cough But Can't Get a Coronavirus Test
The U.S. testing initiative so far has more in common with an impoverished third world country than a major country with abundant resources and medical personnel.
Donald Trump's appalling, blame-shifting Rose Garden news conference (Noting a line from the Office TV series where the Boss made the following statement: "I do want the credit, without any of the blame." President Truman had a sign on his desk saying "The BUCK STOPS here". "The Buck Stops Here" Desk sign For Don the Con, the buck stops anywhere but him.
Angela Merkel: Most people will get the coronavirus That remark caused the Stock Jocks to have a panic attack last Wednesday. The mind conjures up images of U.S. high school gyms and empty industrial warehouses being filled wall-to-wall cots, like the pictures that I have seen of treatment facilities during the 1918 Spanish Flu pandemic. (see photo -Amid 1918 Flu Pandemic, America Struggled to Bury the Dead-HISTORY )
The mind then jumps to the conclusion that Americans will go to die surrounded by strangers in a high school gym, without receiving adequate medical attention since the hospitals are full and the doctors no longer have the time to provide treatment. The image of cots filling a large room was the first image that popped into my mind, uncontrolled by any rational thought, when I read Merkel's statement. The rational mind has to control the lizard brain.
How the Trump administration squandered time and lost control of the coronavirus crisis - The Washington Post It is all Obama's fault in TrumpWorld. If it is not Obama's fault, then the default to position is blame Hillary, even if the blame is being assigned long after they are gone.
Trump Slams 'Nasty' Question As PBS Reporter Challenges Him On Shutdown Of Pandemic Unit
National Guard activated in six states to help fight coronavirus
Worst-Case Estimates for U.S. Coronavirus Deaths - The New York Times; How Much Worse the Coronavirus Could Get, in Charts - The New York Times; Congressional doctor expects 70 million-150 million U.S. coronavirus cases-Axios Pretty scary stuff.
The Institute for Disease Modeling has determined that COVID-19 is roughly equally transmissible as the 1918 Spanish Flu Pandemic that killed an estimated 675,000 Americans in 1918 but is slightly less clinically severe. 2019-nCoV: preliminary estimates of the confirmed-case-fatality-ratio and infection-fatality-ratio, and initial pandemic risk assessment Compared to 1918, there are 30 times more people over 85 and 10 times as many over 65. The COVID-19 death rates are far higher among the elderly and those with underling health issues or compromised immune systems.
Even if several hundred thousand die, it will still be for Donald all about how that impacts him personally.
Reading the infection and death rate predictions being made by experts suggests to me that more comprehensive closures for a few weeks now are necessary to be on the safe side. That would include churches, schools, or any mass meetings of any kind. Last Sunday, when driving down Franklin Road, the Church parking lots were full. Hopefully, people will be practice preventive care tomorrow rather than assembling in close proximity to each other.
++++
Erik Prince Recruits Ex-Spies to Help Infiltrate Liberal Groups - The New York Times
Donald routinely makes false statement about Obama. Some recent examples include the following: PolitiFact | Trump wrongly blames Obama for limits on coronavirus testing; PolitiFact | Donald Trump wrong saying Barack Obama did nothing about swine flu; Trump’s Misplaced Blame on Obama for Coronavirus Tests - FactCheck.org
FactChecking Trump's Scranton Town Hall-FactCheck.org Trump lies and the Trumpsters cheer. Lying all of the time about everything is one of the brand new Christian virtues. There Is No Christian Case for Trump-The Atlantic; Christians ‘have a moral obligation to enthusiastically back’ Trump in 2020, according to prominent evangelical - MarketWatch
Evangelicals view Trump as a born again Christian which is surprising to many: Trump Florida rally: My fellow evangelicals cheered his depraved words For a clear majority of U.S. evangelicals, opposing abortions, even when the opposition is politically motivated which is the case with Donald, is the sine qua non of being a Christian and the only one that matters.
There can be no question that Trump's Attorney William Barr misled the public when summarizing the Mueller report. A federal judge, appointed by Bush, came to that conclusion in a recent opinion. Federal Judge Questions William Barr's 'Credibility' in Rollout of Mueller Report | National Law Journal; Court's Opinion Since Barr is intelligent enough to know that he misled the public, the only conclusion that is possible is that he deliberately did so in an effort to protect his client Donald Trump. The top echelon at the DOJ is now inhabited by Trumpsters.
E.P.A. Updates Plan to Limit Science Used in Environmental Rules - The New York Times In TrumpWorld, all of the science that one needs to know can be found in Kentucky's Creation Museum. Adam and Eve in the Land of the Dinosaurs | WIRED
The War on Science - CBS News
+++++
The black major of Kansas City, MO., a state dominated by the GOP at every level, was turned away last Tuesday when he went to the precinct where he always voted. The reason was that he had been purged from the rolls. Kansas City mayor is turned away from polls, told he 'wasn't in the system'
Discriminatory voter laws have surged, federal panel finds That increase is just another naked power play that undermines the proper functioning of a democracy. The GOP will undermine the institutions necessary for a properly functioning democracy to maintain power.
Deadly viruses are no match for plain, old soap- here’s the science behind it - MarketWatch; Why Soap Works - The New York Times ;How to fight the Covid-19 coronavirus with soap and water. And why it works so well. - Vox The shelves at Kroger were empty this morning of antibacterial soap which works less well in breaking down the COVID-19 molecular structure than plain soap. Apparently, the panic buying has spread to toilet paper.
The War on Science - CBS News
+++++
The black major of Kansas City, MO., a state dominated by the GOP at every level, was turned away last Tuesday when he went to the precinct where he always voted. The reason was that he had been purged from the rolls. Kansas City mayor is turned away from polls, told he 'wasn't in the system'
Discriminatory voter laws have surged, federal panel finds That increase is just another naked power play that undermines the proper functioning of a democracy. The GOP will undermine the institutions necessary for a properly functioning democracy to maintain power.
Deadly viruses are no match for plain, old soap- here’s the science behind it - MarketWatch; Why Soap Works - The New York Times ;How to fight the Covid-19 coronavirus with soap and water. And why it works so well. - Vox The shelves at Kroger were empty this morning of antibacterial soap which works less well in breaking down the COVID-19 molecular structure than plain soap. Apparently, the panic buying has spread to toilet paper.
+++++
All trades are commission free except as otherwise noted.
1. Sold 100 RNW:CA at C$17.92 (C$ IB Commission):
Quotes:
CAD Priced Shares: TransAlta Renewables (RNW:CA)
USD Priced Shares U.S. Grey Market | TRSWF
Closing Price 3/13: RNW.TO C$13.40 +C$1.29 +10.65%
Website: TransAlta Renewables
This trade was made during the initial stage of the volatility spike.
Profit Snapshot: +C$511
Item # 2 Bought 100 RNW:CA at C$12.79 (9/14/19 Post)
Previous Round-Trip-Toronto Traded Shares: Item # 3. B. Sold 150 RNW:CA at C$13.97 (profit snapshot = C$165.4)
I have also bought the USD priced shares that trade on the dark Grey Market. Item # 3. B. Sold 100 TRSWF at US$10.36 (5/5/19 Post)-Item # 2.B. Bought 100 TRSWF at US$9.55-Used Commission Schwab Free Trade (6/18/18 Post); Item #2.A. Bought 50 RNW:CA at C$12.45 (7/12/18 Post)
Dividend: Monthly at C$.07833 per share
Dividend Information | TransAlta Renewables
Last Ex Dividend Date: 3/12/20
Last Earnings Report: TransAlta Renewables Reports Fourth Quarter and Full Year 2019 Results, Declares Dividends and Provides Outlook for 2020 | TransAlta Renewables
Current Position: None
All trades are commission free except as otherwise noted.
1. Sold 100 RNW:CA at C$17.92 (C$ IB Commission):
CAD Priced Shares: TransAlta Renewables (RNW:CA)
USD Priced Shares U.S. Grey Market | TRSWF
Closing Price 3/13: RNW.TO C$13.40 +C$1.29 +10.65%
Website: TransAlta Renewables
This trade was made during the initial stage of the volatility spike.
Profit Snapshot: +C$511
Previous Round-Trip-Toronto Traded Shares: Item # 3. B. Sold 150 RNW:CA at C$13.97 (profit snapshot = C$165.4)
I have also bought the USD priced shares that trade on the dark Grey Market. Item # 3. B. Sold 100 TRSWF at US$10.36 (5/5/19 Post)-Item # 2.B. Bought 100 TRSWF at US$9.55-Used Commission Schwab Free Trade (6/18/18 Post); Item #2.A. Bought 50 RNW:CA at C$12.45 (7/12/18 Post)
Dividend: Monthly at C$.07833 per share
Dividend Information | TransAlta Renewables
Last Ex Dividend Date: 3/12/20
Last Earnings Report: TransAlta Renewables Reports Fourth Quarter and Full Year 2019 Results, Declares Dividends and Provides Outlook for 2020 | TransAlta Renewables
Current Position: None
2. Small Ball Trades:
The slide in regional bank stocks is awe inspiring and reminiscent of the rapid declines during the Near Depression period. I have been moving up to 100 share positions, making mostly 5 or 10 share trades.
The current prices assume IMO that a U.S. recession is now inevitable which will cause a surge in non-performing loans and charge-offs. Regional bank stocks that I have been buying have returned to 2010 price levels, where the banks would still experiencing the negative aftershocks of the 2008 Near Depression.
Small Ball Rules
A. Bought 10 EPRPRC at $16.55 and 2 EPR at $27:
Portfolio Overview - EPR Properties
EPR Properties Reports Fourth Quarter and 2019 Year-end Results
When I was going through my monitor list last Friday, I noted that prices for EPR's common and preferred shares and decided to nibble really light in an instantaneous reaction.
I was already familiar with this company, but was too busy last Friday to do any new research.
And it was not difficult to understand why the prices for EPR's common and preferred stocks had plummeted in recent weeks.
EPR owns entertainment properties. EPR Properties defers $1.0B gaming investment, withdraws guidance-Seeking Alpha (3/12/20); EPR Properties Announces Deferral of Uncommitted Investment Spending (“With approximately $500.0 million in unrestricted cash, 100% availability under our $1.0 billion line of credit, low leverage and no near-term debt maturities, we believe the strength of our balance sheet will allow us to weather this period.”)
That sector is well within the investor panic sphere for rational reasons.
The question, as always, is whether the panic selling has gone too far based on what may actually happen. This sector will remain under selling pressure when and if the pandemic infection rates actually accelerate substantially. Some projections have the peak infection rate occurring in July.
Common Stock: EPR Properties (U.S.: NYSE)
Preferred Stock: EPR Properties 5.75% Cumulative Convertible Preferred Series C Overview
Chart EPRPRC:
Chart EPR:
As I said, I am currently at 2 shares of the common bought last Friday at $27.
EPR's preferred and common shares rallied strongly in to the close with the rest of the stock market. The company is not out of the woods.
Closing Prices Last Friday:
EPR $33.15 +$4.86 +17.18% I will not be buying a new home based on the appreciation in my 2 share buy.
EPR-PC +17.21 +1.34 +8.44% However, based on after hours trading last Friday, the price fell -4.56% to $16.97.
I would note the EPR can cut the common share dividend. EPR can not cut the preferred share dividend but can only defer payment after eliminating any cash dividend for the common shareholders.
I have traded EPRPRC in the past far more than the common shares. I will just drag and drop a discussion here from a prior post. It is currently a busted convertible preferred stock.
EPRPRC Trading Profits To Date: +$563.28
Prior Discussion Links: Item # 3 Sold 50 EPRPRC at $27.49 (10/21/18 Post)(profit snapshot = $178.58)-Item # 1 Bought 50 EPRPRC at $23.78-Used Commission Free Trade (4/23/18 Post)
Item # 1.B. Sold 50 EPRPRC at $28.48 (9/12/18 Post)(profit snapshot = $224.22)-Item # 1 Bought 50 EPRPRC at $24 and 50 at $23.78 (4/23/18)
Item # 3 Sold 50 EPRPRC-Update For Equity REIT Basket Strategy As Of 4/6/16 - South Gent | Seeking Alpha (profit snapshot = $160.48)
Dividends: Quarterly and Cumulative
Prospectus
Coupon: 5.75% paid on the $25 par value
Dividend Yield at $16.55 = 8.69%
Next Ex Dividend Date: 3/30/20 according to Marketwatch EPR.PRC
The issuer has a right to call but the call price is so far above the current price that the optional call provision is not relevant now. "We may exercise the Company Conversion Option only if the Closing Sale Price of our common shares equals or exceeds 135% of then applicable conversion price of the Series C Preferred Shares for at least 20 Trading Days in a period of 30 consecutive Trading Days (including the last Trading Day of such period) ending on the Trading Day immediately" (the conversion price was at $61.74 as of 12/31/19 so the optional call price would have to be 130% of that number)
Conversion To Common: "The conversion rate will initially be 0.3504 common shares per $25.00 liquidation preference, which is equivalent to an initial conversion price of $71.34 per common share" The conversion rate is subject to adjustments as explained in the prospectus starting at page S-25, which are incomprehensible to me now.
Here is how the explanation starts:
It then goes on an on.
Perhaps I understood the conversion terms better when I was more compos mentis than now. In an earlier post, I claimed that the conversion rate is adjusted down by the amount the common share dividend exceeds a threshold amount.
The company calculates the conversion rate every quarter in this filing As of 12/31/19, the conversion price was at $61.74. So, if the common was selling at $80 now, EPRPRC would be near its all time high rather than all time low based just on it fixed rate coupon and the perceived credit risk.
When I sold the stock earlier, the conversion provision was causing the stock to sell significantly above its par value.
The conversion right to common shares is arguably having some minor impact on EPRPRC's price since it currently has a slight highly price than the regular fixed coupon preferred Series G which has having a 5.75% coupon. EPR.PRG closed last Friday at $16.07. So there is arguably some fleeting hope that the EPRPRC conversion right may someday cause a spike back above par value.
The common stock pays dividends monthly at $.375 per share or $4.5 annually. At a TC of $27 per share, the dividend yield is about 16.67%.
B. Added 5 FHN at $14.77; 10 at $13.7;5 at $12.73; 5 at $11.46; 5 at $10.8; 5 at 10.3 and 5 at $9.12:
Quote: First Horizon National Corp. (FHN)
Closing Price Last Friday: FHN $9.94 $1.09 12.32%
First Horizon National Corp. Analyst Estimates | MarketWatch
Investment Category: Regional Bank Basket Strategy
Last Purchase Discussion: Item # 1 Bought 50 FHN at $16.18 (1/18/20 Post) I discussed the last earnings report in this post and have nothing to add here.
Last Elimination: Item # 5.B. Sold 21+ FHN at $16.4 (9/28/19 Post)
Dividend: Quarterly at $.14 per share ($.56 annually)
First Horizon National Corporation Common Stock (FHN) Dividend History | Nasdaq
Dividend Yield at Average Cost of $14.06 = 3.98%
Last Ex Dividend Date: 3/12/20
Dividend Reinvestment: Yes.
Current Position: 110 shares
Maximum Position: Revised up to 150 shares provided each subsequent purchase is made pursuant to the small ball purchase restriction (next purchase has to be lower than $9.12)
Purchase Restriction: Small Ball Rule
10 Year Chart:
Last Earnings Report: First Horizon Releases 2019 Fourth Quarter and Full Year Financial Results discussed in Item # 1.
C. Added 5 PBCT at $14.52; 5 at $13.94 and 5 at $12.65:
Quote: People's United Financial Inc (PBCT)
Closing Price Last Friday: PBCT $12.86 +$1.65 +14.72%
PBCT Consensus Analyst E.P.S. Estimates
Investment Category: Regional Bank Basket Strategy
Last Buy Substantive Buy Discussion: Item # 1.D. Bought 10 PBCT at $16.03 (1/29/20 Post) I discussed the last earnings report in that post and nothing to add here.
Last Buy Discussion: Item # 1.E. Bought 10 PBCT at $15.82 and 10 at $15.48 (2/5/20 Post)
Last Eliminations: Item # 3.A. Eliminated PBCT-Sold 101+ at $17.57(5/22/19 Post)
Item # 4 Sold 100 PBCT at $14.61 (9/21/13 Post)- Item # 1 Bought 100 PBCT at $11.47 (6/14/12 Post)
Dividend: Quarterly at $.1775 per share ($.71 annually)
Dividend History | People's United Bank
Average Cost Current Chain: $15.09
Dividend Yield at Average Cost = 4.71%%
Dividend Reinvestment: Yes
Last Ex Dividend Date: 1/30/20
Current Position: 45+ Shares
Maximum Position: 100 Shares + shares purchased with dividends
In the past, I bought 100 shares in one trade. I am now moving slowing to a 100 share position with 5 share purchases. That change is based on a revised risk assessment. The closing price last Friday reflects a consensus opinion that a recession is imminent.
5 Year Chart as of 3/13/20:
Purchase Restriction: Small Ball Rules (each new purchase has to be at the lowest price in the current chain, a risk mitigation strategy)
Last Earnings Report: People's United Financial Reports Fourth Quarter Net Income of $137.5 Million, or $0.31 per Common Share, discussed in Item # 1.D.
The slide in regional bank stocks is awe inspiring and reminiscent of the rapid declines during the Near Depression period. I have been moving up to 100 share positions, making mostly 5 or 10 share trades.
The current prices assume IMO that a U.S. recession is now inevitable which will cause a surge in non-performing loans and charge-offs. Regional bank stocks that I have been buying have returned to 2010 price levels, where the banks would still experiencing the negative aftershocks of the 2008 Near Depression.
Small Ball Rules
A. Bought 10 EPRPRC at $16.55 and 2 EPR at $27:
 |
| EPRPRC |
 |
| EPR |
EPR Properties Reports Fourth Quarter and 2019 Year-end Results
When I was going through my monitor list last Friday, I noted that prices for EPR's common and preferred shares and decided to nibble really light in an instantaneous reaction.
I was already familiar with this company, but was too busy last Friday to do any new research.
And it was not difficult to understand why the prices for EPR's common and preferred stocks had plummeted in recent weeks.
EPR owns entertainment properties. EPR Properties defers $1.0B gaming investment, withdraws guidance-Seeking Alpha (3/12/20); EPR Properties Announces Deferral of Uncommitted Investment Spending (“With approximately $500.0 million in unrestricted cash, 100% availability under our $1.0 billion line of credit, low leverage and no near-term debt maturities, we believe the strength of our balance sheet will allow us to weather this period.”)
That sector is well within the investor panic sphere for rational reasons.
The question, as always, is whether the panic selling has gone too far based on what may actually happen. This sector will remain under selling pressure when and if the pandemic infection rates actually accelerate substantially. Some projections have the peak infection rate occurring in July.
Common Stock: EPR Properties (U.S.: NYSE)
Preferred Stock: EPR Properties 5.75% Cumulative Convertible Preferred Series C Overview
Chart EPRPRC:
EPR's preferred and common shares rallied strongly in to the close with the rest of the stock market. The company is not out of the woods.
Closing Prices Last Friday:
EPR $33.15 +$4.86 +17.18% I will not be buying a new home based on the appreciation in my 2 share buy.
EPR-PC +17.21 +1.34 +8.44% However, based on after hours trading last Friday, the price fell -4.56% to $16.97.
I would note the EPR can cut the common share dividend. EPR can not cut the preferred share dividend but can only defer payment after eliminating any cash dividend for the common shareholders.
I have traded EPRPRC in the past far more than the common shares. I will just drag and drop a discussion here from a prior post. It is currently a busted convertible preferred stock.
EPRPRC Trading Profits To Date: +$563.28
Prior Discussion Links: Item # 3 Sold 50 EPRPRC at $27.49 (10/21/18 Post)(profit snapshot = $178.58)-Item # 1 Bought 50 EPRPRC at $23.78-Used Commission Free Trade (4/23/18 Post)
Item # 1.B. Sold 50 EPRPRC at $28.48 (9/12/18 Post)(profit snapshot = $224.22)-Item # 1 Bought 50 EPRPRC at $24 and 50 at $23.78 (4/23/18)
Item # 3 Sold 50 EPRPRC-Update For Equity REIT Basket Strategy As Of 4/6/16 - South Gent | Seeking Alpha (profit snapshot = $160.48)
Dividends: Quarterly and Cumulative
Prospectus
Coupon: 5.75% paid on the $25 par value
Dividend Yield at $16.55 = 8.69%
Next Ex Dividend Date: 3/30/20 according to Marketwatch EPR.PRC
The issuer has a right to call but the call price is so far above the current price that the optional call provision is not relevant now. "We may exercise the Company Conversion Option only if the Closing Sale Price of our common shares equals or exceeds 135% of then applicable conversion price of the Series C Preferred Shares for at least 20 Trading Days in a period of 30 consecutive Trading Days (including the last Trading Day of such period) ending on the Trading Day immediately" (the conversion price was at $61.74 as of 12/31/19 so the optional call price would have to be 130% of that number)
Conversion To Common: "The conversion rate will initially be 0.3504 common shares per $25.00 liquidation preference, which is equivalent to an initial conversion price of $71.34 per common share" The conversion rate is subject to adjustments as explained in the prospectus starting at page S-25, which are incomprehensible to me now.
Here is how the explanation starts:
Perhaps I understood the conversion terms better when I was more compos mentis than now. In an earlier post, I claimed that the conversion rate is adjusted down by the amount the common share dividend exceeds a threshold amount.
The company calculates the conversion rate every quarter in this filing As of 12/31/19, the conversion price was at $61.74. So, if the common was selling at $80 now, EPRPRC would be near its all time high rather than all time low based just on it fixed rate coupon and the perceived credit risk.
When I sold the stock earlier, the conversion provision was causing the stock to sell significantly above its par value.
The conversion right to common shares is arguably having some minor impact on EPRPRC's price since it currently has a slight highly price than the regular fixed coupon preferred Series G which has having a 5.75% coupon. EPR.PRG closed last Friday at $16.07. So there is arguably some fleeting hope that the EPRPRC conversion right may someday cause a spike back above par value.
The common stock pays dividends monthly at $.375 per share or $4.5 annually. At a TC of $27 per share, the dividend yield is about 16.67%.
Quote: First Horizon National Corp. (FHN)
Closing Price Last Friday: FHN $9.94 $1.09 12.32%
First Horizon National Corp. Analyst Estimates | MarketWatch
Investment Category: Regional Bank Basket Strategy
Last Purchase Discussion: Item # 1 Bought 50 FHN at $16.18 (1/18/20 Post) I discussed the last earnings report in this post and have nothing to add here.
Last Elimination: Item # 5.B. Sold 21+ FHN at $16.4 (9/28/19 Post)
Dividend: Quarterly at $.14 per share ($.56 annually)
First Horizon National Corporation Common Stock (FHN) Dividend History | Nasdaq
Dividend Yield at Average Cost of $14.06 = 3.98%
Last Ex Dividend Date: 3/12/20
Dividend Reinvestment: Yes.
Current Position: 110 shares
Maximum Position: Revised up to 150 shares provided each subsequent purchase is made pursuant to the small ball purchase restriction (next purchase has to be lower than $9.12)
Purchase Restriction: Small Ball Rule
10 Year Chart:
C. Added 5 PBCT at $14.52; 5 at $13.94 and 5 at $12.65:
Closing Price Last Friday: PBCT $12.86 +$1.65 +14.72%
PBCT Consensus Analyst E.P.S. Estimates
Investment Category: Regional Bank Basket Strategy
Last Buy Substantive Buy Discussion: Item # 1.D. Bought 10 PBCT at $16.03 (1/29/20 Post) I discussed the last earnings report in that post and nothing to add here.
Last Buy Discussion: Item # 1.E. Bought 10 PBCT at $15.82 and 10 at $15.48 (2/5/20 Post)
Last Eliminations: Item # 3.A. Eliminated PBCT-Sold 101+ at $17.57(5/22/19 Post)
Item # 4 Sold 100 PBCT at $14.61 (9/21/13 Post)- Item # 1 Bought 100 PBCT at $11.47 (6/14/12 Post)
Dividend History | People's United Bank
Average Cost Current Chain: $15.09
Dividend Yield at Average Cost = 4.71%%
Dividend Reinvestment: Yes
Last Ex Dividend Date: 1/30/20
Maximum Position: 100 Shares + shares purchased with dividends
In the past, I bought 100 shares in one trade. I am now moving slowing to a 100 share position with 5 share purchases. That change is based on a revised risk assessment. The closing price last Friday reflects a consensus opinion that a recession is imminent.
5 Year Chart as of 3/13/20:
Last Earnings Report: People's United Financial Reports Fourth Quarter Net Income of $137.5 Million, or $0.31 per Common Share, discussed in Item # 1.D.
D. Added 1 OXY at $36.35; 1 at $32.13; 1 at $31.29; 1 at $29.7; 1 at $28.11; 1 at $27.52; 1 at $26.65 and 1 at $13.78:
I would describe the rapid decline in OXY's price to reflect both credit risk and dividend cut fears, both of which were rational and flowed from anticipated low energy prices lasting for an extended period.
On the day that I bought 1 share at $13.78, OXY did in fact slash its quarterly dividend from $.79 per share to $.11 effective July 2020. OXY also "reduced its "2020 capital spending to between $3.5 billion and $3.7 billion from $5.2 billion to $5.4 billion and will implement additional operating and corporate cost reductions." Occidental Reduces Dividend and Capital Spending
Given the plunge in energy prices and the increased debt load resulting from the Anadarko acquisition, those changes were necessary IMO since OXY's survival as a going concern is a legitimate open question now.
Quote: Occidental Petroleum Corp.
OXY Analyst Estimates
2019 Annual Report (long term debt listed starting at page 83)
SEC Filings
OXY 5 Year Chart-Ongoing Major Bear Market
Current Position: 12+ shares
Maximum Position: 20 shares, lowered from 50 due to a revised risk assessment based on recent developments.
Purchase Restriction: Small Ball Rule (with each purchase limited to 1 or 2 share buys)
Average Cost Per Share: $31.93
Fortunately, I was being extremely cautious with OXY and my position is immaterial.
Credit Ratings as of 3/5/20:
The acquisition of Anadarko at a premium price was ridiculous when made and has only become more so with the passage of time.
Last Sell Discussion: Item # 3.A. Sold 10 OXY at $45.33 and 10 at $46.5 (1/18/20 Post)
5 Year Chart-Major as of 3/13/20- Major Bear Market:
Dividend: Quarterly at $.11 ($.44 annually). This dividend will provide no meaningful support to the price.
I will receive a $.79 per share dividend that went ex on 3/9/20.
It is my understanding that this will be the last payment at that rate.
That dividend will be paid 4/15/20.
While the next dividend normally goes ex in June, it is normally paid in July.
For now I am interpreting OXY's July 2020 effective date for the reduced dividend to mean the payment date rather than the ex dividend date.
I may be wrong in that assumption, but it does not matter to me one way or the other given my 12 share position.
Dividend Yield using $.44 and $31.93 cost = 1.38%
Last Earnings Report (Q/E 12/31/19): Bad and will get worse
SEC Filed Press Release
Adjusted net loss of $239M or $.3 per share vs. an adjusted profit of $922M or $1.22 in the 2018 4th quarter.
Brokerage Reports: Brokers have turned negative.
Credit Suisse (3/10): Neutral with a $37 price target (the neutral rate makes little sense based on the current price and the the $37 PT)
S & P: 2 stars with a $13 PT
Morningstar (3/9/20): under review which may change the star rating
Argus (3/5/20): Hold
E. Added 5 SKT at $11.72; 5 at $11; and 5 at $10.67:
This one is another crash and burn.
Quote: Tanger Factory Outlet Centers Inc.
Closing Price 3/13/20: SKT $8.95 +0.27 +3.11%
I hit my maximum limit of 100 shares with the 5 share purchase at $10.67. I decided to increase my limit to accommodate 1 and 2 share purchases using the small ball purchase restriction. So far I have bought 1 share at $8.36, 1 share at $8.51, and 1 share at $9.26.
SEC Filings
2019 Annual Report
Investment Category: Equity REIT Common and Preferred Stock Basket Strategy
Last Purchase Discussion: Item # 1.E. Added 10 SKT at (2/22/20 Post)
Last Substantive Buy Discussion: Item # 1.D. Bought 10 SKT at $14.08 (1/11/20 Post)
Last Sell Discussions: Item # 1.C. Sold 10 SKT at $16.73 (1/29/20 Post); Item # 1.A. Sold 50 SKT at $16.85 (9/28/19 Post)
5 Year Chart: Major Bear Market-Widow Maker
Dividend: Quarterly at $.3575 per share ($1.43 annually)
Next Ex Dividend Date: 4/29/20
Current Position: 105+ shares
Average Cost Per Share This Account = $13.03
Dividend Yield at Average Cost = 10.97%
Dividend Reinvestment: Yes for this account and no for the 50 shares owned in my IB account.
Last Earnings Report (Q/E 12/31/19):
"Consolidated portfolio occupancy rate was 97.0% on December 31, 2019, compared to 95.9% on September 30, 2019 and 96.8% on December 31, 2018
4th Quarter FAD Payout Ratio = 66%
Full Year FAD Payout Ratio = 70%
Interest Coverage Ratio for 2019 = 4.3 times
Weighted Average Interest Rate: 3.5%
Approximately 94% of consolidated square footage unencumbered by mortgages
SEC Filed Press Release
Maximum Position This Account: 100 shares + shares purchased with dividends, amended to allow for 1 or 2 share purchases using the small ball purchase restriction.
Current Position This Account: 104+ shares
Purchase Restriction: Small Ball Rule
F. Restarted JRI-Bought 10 at $16.05; 10 at $15.62; 10 at $15.1; 10 at $14.5; 10 at $14.2; 10 at $11.9; 10 at $11.37; and 10 at $11:
Quote: JRI | Nuveen Real Asset Income & Growth Fund Overview-Leveraged CEF
Closing Price 3/13: JRI $11.97 d+$ 0.24 +2.05%
Sponsor's Website: JRI
SEC Filings
Current Position: 80 Shares
Average Cost Per Share = $13.7
This CEF's holdings include global equity REIT common stocks, U.S. equity REIT preferred stocks, energy infrastructure stocks, utility common stocks, and bonds issued by companies in those sectors.
REIT common and preferred stocks were trashed last week. The Vanguard Real Estate ETF (VNQ), which owns only common shares, closed at $91.55 on 3/3 and at $73.1 on 3/12, unadjusted for a quarterly dividend payment that wen ex during that period. Last Friday, VNQ closed at $79.48, up $6.38 but still well below its close 3/3 closing price.
Nuveen Real Asset Income & Growth Fund (last SEC filed shareholder report for the semi-annual period ending 6/30/19)
Holdings: 431 as of 1/31/20
Leveraged: Yes at near 29%
Dividends: Monthly at $.1170 (partial ROC support)
Dividend Yield at $13.7 = 10.25%
Last Sell Discussions: Item # 2.A. Sold 102+ JRI at $17.98 (12/22/19 Post)(profit snapshot = $140.67); Item # 4 Sold 100 JRI at $17.23 (10/2/19 Post)(profit snapshot $40.45)
Last Buy Discussions: Item # 5 Added 100 JRI at $16.83-Used Commission Free Trade (8/24/19 Post); Item # 4 Bought 100 JRI at $16.47 (IB Account) and 100 at $16.59-Used Fidelity Commission Free Trade Fidelity (6/26/19 Post)
Note that my prior buys were 100 share lots. I am now slowly building up to 100 shares with 10 lot buys. That kind of change results from a judgment that downside risks are higher now than when I bought the 100 share lots last year.
Note the Double Whammy in the following data series: As net asset value per share declines, the trend is for the discount to net asset value to expand with the carry over into Friday when net asset value per share went up and the discount hit its highest level.
Data Date 2/28/20 Trade:
Closing Net Asset Value Per Share = $18.4
Closing Market Price: $16.24
Discount: -11.74%
Data Date of 3/9/20 Trade:
Closing Net Asset Value Per Share = $16.67
Closing Market Price: $15.5
Discount: -8.22%
Data Date of 3/10/Trade:
Closing Net Asset Value Per Share = $16.8
Closing Market Price: $13.81
Discount: -10.89%
Data Date of 3/11/20 Trade:
Closing Net Asset Value Per Share: $15.89
Closing Market Price: $13.93
Discount: - 12.33%
Data Date of 3/12/20 Trade:
Closing Net Asset Value Per Share = $13.42
Closing Market Price: $11.73
Discount: - 12.59%
Data Date of 3/13/20 Trade:
Closing Net Asset Value Per Share = $14.14
Closing Market Price: $11.97
Discount: -15.35%
Average 1 Year Discount as of 3/23: -10.41%
Sourced: JRI: CEF Connect
Purchase Restriction: I will not be using the small ball purchase restriction. Instead, I am allowed to buy only when the purchase reduces my average cost per share.
Maximum Position: 200 shares
G. Added 10 HT at $11.6; 5 at $9.21;5 at $7.58 and 5 at $5.18:
Closing Price Last Friday: HT $5.32 -$0.02 -0.37%: Hersha Hospitality Trust
SEC Filings
2019 Annual Report (debt discussed starting at page 83; line of credit discussion discussion can be found at page 44)
That price reflects a near 100 probability that HT will slash or eliminated its common share dividend which is currently at $.28 per share. At $5.32, the dividend yield would be about 21.05%. That yield reflects the consensus opinion about its sustainability. At 21.05%, money will double in about 3.63 years. The Rule of 72 (with calculator) - Estimate Compound Interest
Hersha has declared its regular quarterly dividend of $.28 per share which goes ex dividend on 3/30/20. Hersha Hospitality Trust Announces Quarterly Dividends That announcement includes the dividend payable on HT's preferred stocks.
Hersha recently sold some hotels, pursuant to "binding sales contracts", that will raise approximately $140M and HT will reduce its debt by about $97M. Hersha Hospitality Trust Announces the Disposition of Mature Hotels The transactions are expected to close before the end of the second quarter.
Hotel REITs have been smashed in response to coronavirus epidemic. The first quarter results will be a disaster for this sector. The question is whether a recovery in bookings will occur during the Spring or early summer.
HT 2019 Dividend Classification:
Last Earnings Report (Q/E 12/31/2019):
Hersha Hospitality Trust Announces Full Year and Fourth Quarter 2019 Results or SEC Filed Press Release
In this release, HT notes that the pending hotel sales will result in a net gain of approximately $31M.
As of 12/31/19, HT stated it had "significant financial flexibility with approximately $27.0 million of cash and cash equivalents and ample capacity on the Company’s $250 million senior unsecured revolving line of credit." Of course, it is currently paying cash dividends to common and preferred shareholders.
HT's 2020 guidance does not take into account the negative economic impacts from the COVID-19 pandemic.
I would reasonably anticipate a negative FFO number for the first quarter. I would not hazard a guess about how large the cash flow deficit will be.
Hersha Hospitality Trust (HT) CEO Jay Shah on Q4 2019 Results - Earnings Call Transcript | Seeking Alpha
Current Position This Account: 86+ shares
Average Cost Per Share this Account: $12.56
Dividend Yield at $12.56: 8.92% (assumes no change in the current penny rate which is not an assumption the Stock Jocks are making)
Dividend Reinvestment: Yes, hoping for a rebound that will enable the disposition of shares bought with dividends at a profit.
Highest Cost Lot in current chain: 50 shares with a taxable cost basis of $14.06 on 11/20. There was no ROC adjustment to the tax cost basis since no dividend were paid on that lot last year. This lot will be sold when and if it becomes profitable to do so. This is not going to happen anytime soon.
Maximum Position this Account: 100 shares + share purchased with dividends (15 shares remaining)
Purchase Restriction: Small Ball Rule
Last Sell Discussions: Item # 2.B. Sold 50 HT at $19.02-In a Roth IRA Account (4/23/18 Post); Item # 2.C. Sold 10 HT at $19.11-Used Commission Free Trade (4/23/18 Post); Item # 2.B. Sold 50 HT at $18.58-Used Commission Free Trade (2/8/18 Post)
H. Restarted SCM-Bought 10 at $11.94; 10 at 10.85; 10 at $10.4 and 10 at $8.59:
Quote: Stellus Capital Investment Corp. (SCM)
All BDCs were in free fall last week until last Friday. And the explanation is not hard to understand. Their loans are made entirely or almost so to highly leveraged private companies that would be rated well in junk territory if a rating service was ever paid to rate one. Default rates will soar during a recession.
The other well understood issue is that Libor rates are coming down and floating rate BDC loans are tied to a spread over the Libor rate.
Consequently, net investment income will be trending down, though partially offset for many BDCs by declines in their interest costs.
The Libor floors will stop the decline in the floating rate loan coupon rates when they exceed the applicable Libor rate being used. The current Libor floors are generally around 1%, with some higher, so the spread to Libor can not go below the floor number for the loan even if Libor went to zero. Loan investors ask for higher minimum returns as Libor falls - Reuters (August 2019 article); A Guide to Understanding Floating Rate Securities - Fixed Income Strategies | Raymond James
The BDC prices last week reflected a consensus opinion that a recession was 100% probable and would be relatively deep.
The same forecast was embedded in regional bank stocks IMO.
I would just note here that a recession may certainly happen in the U.S. this year, but it is too early to know whether one will actually happen, nor is it possible to know know whether any recession will be short and relatively shallow due to the coronavirus pandemic or something similar to what happened in major recessions from the past. The BDC prices reflected a certain prediction on those issues that can not be certain now.
Closing Price 3/13: SCM $9.48 +$0.78 +8.97%
52 Week Range: $8.49 to $15.04
The new 52 week low was set intraday on 3/12/20.
At $9.48, the market cap is only around $180M. These mini cap BDCs can be jerked around pretty good when market volatility spikes.
Website: Stellus Capital
SEC Filings
2019 Annual Report (risk factor summary starts at page 31 and ends at page 59)
Current Position: 40 Shares
Average Cost Per Share = $10.44
5 Year Financial History (p. 62 Annual Report):
Last Elimination: Item # 3 Eliminated SCM - Sold 50 at $13.72 (9/21/19 Post)(noting again that I was displeased with the 2019 second quarter report, so selling at $13.72 and not buying back until the price fell below $12 was the right move)
Management: External
Net Asset Value Per Share History:
12/31/19: $14.14
12/31/18: $14.09
12/31/17: $13.81
12/31/16 $13.69
12/31/15: $13.19
12/31/14: $13.94
12/31/13: $14.54
November 2012: IPO at $15 ($14.46 after underwriters discount)
For an externally managed BDC, those numbers are good since net assets are not being destroyed yearly in a perpetual movement toward zero.
Dividend: Monthly at $.1133 ($1.36 annually rounded)
Stellus Capital Investment Corporation Declares First Quarter 2020 Regular Dividend of $0.34 Per Share
Next Ex Dividend Date: 3/30/20
Dividend Yield at $10.44: 13.03%
Last Earnings Report before purchase: Stellus Capital Investment Corporation Reports Results for its third fiscal quarter ended September 30, 2019
Last Earnings Report-Released after purchase (Q/E 12/31/19): Stellus Capital Investment Corporation Reports Results for its Fourth Fiscal Quarter and Year Ended December 31, 2019
CEO Robert Ladd on Q4 2019 Results - Earnings Call Transcript | Seeking Alpha
2 loans were on non-accrual as of 12/31/19 comprising just under 1% of the loan portfolio's marked fair value.
The BDC has floating rate loans with Libor floors which average about 1% (p.2). The decline in Libor rates will negatively impact net investment income going forward. The company realized a $1.3M gain in the first quarter and expects to an additional $4M of realized gains this year.
Other Trade Discussions:
Item # 1.B. Sold 32+ SCM at $14.22-Used Commission Free Trade (2/2/19 Post)(profit snapshot = $78.09); Item # 1.A. Sold Highest Cost Lot-50 Shares at $12.63 (5/3/18 Post)(profit snapshot = $34.24); Item 2.B. Sold 100 SCM at $14.23 (2/27/17 Post)(profit snapshot=$285.96); Item # 2 Sold 100 SCM at $13.02 (1/12/17 Post)(profit snapshot= $141.96)
Goal: Total Return in excess of the dividend payments which has been accomplished so far for this BDC stock
SCM Trading Profits to Date = $543.99
I. Restarted PFXF-Bought 10 at $19.38; 10 at $19.3; 10 at $18.8; 10 at $18.4 and 10 at $16.5:
Quote: VanEck Vectors Preferred Securities ex Financials ETF
Closing Price Last Friday: PFXF $17.10 +$0.70 +4.27%
Last week was a bad one for preferred stocks and exchange traded bonds. This ETF owns both categories of fixed coupon securities.
Last Elimination: Item # 1.B. Eliminated PFXF-Sold 110 at $20.51 (1/29/20 Post)
Buy Discussions: Item # 2.C. Added 10 PFXF at $19.8 (12/7/19 Post); Item # 1: Bought 100 PFXF at $20.06 (12/4/19 Post) I have nothing substantively to add to those recent discussions.
Sponsor's Website: VanEck Vectors Preferred Securities ex Financials ETF
Expense Ratio: .41% after a current .05% waiver
Number of Holdings: 141
Credit Quality:
Current Position: 50 shares
Average Cost Per Share: $18.48
Dividends: Monthly
Dividend Reinvestment: Turn on for now given the price slide
I prefer to own individual equity preferred stocks and exchange traded bonds. I will trade the "preferred" ETFs which own both categories of securities. I am more likely to gravitate toward the ETFs when interest rates are declining and the prices for the ETFs are nonetheless in free fall which was the case when I bought the PFXF lots.
I have bought and sold the following "preferred" stock ETFs: PFXF, PFF, PGX and VRP. I currently own only PFXF.
J. Added 5 SRET at $13.75; 5 at $12.81; 5 at $12.4; 5 at $11.9; 5 at 10.3; 5 at $9.95 and 5 at $9.73:
Closing Price 3/13/20: SRET $10.25 +$0.51 +5.24%
Quote: SRET | Global X SuperDividend REIT ETF Overview
Last Sell Discussion: Item # 1.A. Sold 10 SRET at $15.56 (2/19/20 Post)(eliminated all shares bought with dividends at a profit)
Prior Sell Discussions: Item # 1.D. Eliminated SRET in Vanguard Taxable Account: Sold 112 at $15.28 (10/30/19 Post); Item # 1. B. Sold 50 SRET at $14.79-In A Roth IRA Account-Commission Free for Vanguard customers (4/3/19 Post)
Prior Buy Discussions: Item # 2. Bought 100 SRET at $14.81 and 10 at $14.35 (8/7/19 Post); Item # 3.C. Bought 50 SRET at $13.88-In a Roth IRA Account-Commission Free (1/27/19 Post)
Sponsor's Website: SuperDividend® REIT ETF
Dividends: Monthly
Dividend Reinvestment: Yes
Goal: Total return in excess of the dividend which is not likely to happen anytime soon with my current position.
Current Position: 93+ shares
Average Cost Per Share: $ 13.53
Dividend Yield at $13.75 = 8.87 % (using current monthly penny rate which may change)
Current Morningstar Rating: 3 stars
Purchase Restriction: None (will not buy much given the exposure to MREITs which had a bad week)
Maximum Position: Undecided given the recent share price decline
I will receive a $.79 per share dividend that went ex on 3/9/20.
It is my understanding that this will be the last payment at that rate.
That dividend will be paid 4/15/20.
While the next dividend normally goes ex in June, it is normally paid in July.
For now I am interpreting OXY's July 2020 effective date for the reduced dividend to mean the payment date rather than the ex dividend date.
I may be wrong in that assumption, but it does not matter to me one way or the other given my 12 share position.
Dividend Yield using $.44 and $31.93 cost = 1.38%
Last Earnings Report (Q/E 12/31/19): Bad and will get worse
SEC Filed Press Release
Adjusted net loss of $239M or $.3 per share vs. an adjusted profit of $922M or $1.22 in the 2018 4th quarter.
Brokerage Reports: Brokers have turned negative.
Credit Suisse (3/10): Neutral with a $37 price target (the neutral rate makes little sense based on the current price and the the $37 PT)
S & P: 2 stars with a $13 PT
Morningstar (3/9/20): under review which may change the star rating
Argus (3/5/20): Hold
E. Added 5 SKT at $11.72; 5 at $11; and 5 at $10.67:
This one is another crash and burn.
Quote: Tanger Factory Outlet Centers Inc.
Closing Price 3/13/20: SKT $8.95 +0.27 +3.11%
I hit my maximum limit of 100 shares with the 5 share purchase at $10.67. I decided to increase my limit to accommodate 1 and 2 share purchases using the small ball purchase restriction. So far I have bought 1 share at $8.36, 1 share at $8.51, and 1 share at $9.26.
SEC Filings
2019 Annual Report
Investment Category: Equity REIT Common and Preferred Stock Basket Strategy
Last Purchase Discussion: Item # 1.E. Added 10 SKT at (2/22/20 Post)
Last Substantive Buy Discussion: Item # 1.D. Bought 10 SKT at $14.08 (1/11/20 Post)
Last Sell Discussions: Item # 1.C. Sold 10 SKT at $16.73 (1/29/20 Post); Item # 1.A. Sold 50 SKT at $16.85 (9/28/19 Post)
5 Year Chart: Major Bear Market-Widow Maker
Dividend: Quarterly at $.3575 per share ($1.43 annually)
Next Ex Dividend Date: 4/29/20
Current Position: 105+ shares
Average Cost Per Share This Account = $13.03
Dividend Yield at Average Cost = 10.97%
Dividend Reinvestment: Yes for this account and no for the 50 shares owned in my IB account.
Last Earnings Report (Q/E 12/31/19):
"Consolidated portfolio occupancy rate was 97.0% on December 31, 2019, compared to 95.9% on September 30, 2019 and 96.8% on December 31, 2018
Blended average rental rates increased 2.7% on a straight-line basis and decreased 1.3% on a cash basis for all renewals and re-tenanted leases that commenced during the trailing twelve months ended December 31, 2019
Same center net operating income (“Same Center NOI”) for the consolidated portfolio decreased 0.4% for the quarter and 0.7% for the full year due primarily to the impact of tenant bankruptcies, lease modifications and store closures
Tanger recaptured approximately 198,000 square feet within its consolidated portfolio during 2019 related to bankruptcies and brand-wide restructurings by retailers, including 3,000 square feet in the fourth quarter. During 2018, approximately 126,000 square feet were recaptured, including 3,000 square feet during the fourth quarter."
 |
| GAAP Net Income to FFO |
 |
| Reconciliation from FFO to FAD |
Full Year FAD Payout Ratio = 70%
Interest Coverage Ratio for 2019 = 4.3 times
Weighted Average Interest Rate: 3.5%
Approximately 94% of consolidated square footage unencumbered by mortgages
SEC Filed Press Release
Maximum Position This Account: 100 shares + shares purchased with dividends, amended to allow for 1 or 2 share purchases using the small ball purchase restriction.
Current Position This Account: 104+ shares
Purchase Restriction: Small Ball Rule
F. Restarted JRI-Bought 10 at $16.05; 10 at $15.62; 10 at $15.1; 10 at $14.5; 10 at $14.2; 10 at $11.9; 10 at $11.37; and 10 at $11:
Quote: JRI | Nuveen Real Asset Income & Growth Fund Overview-Leveraged CEF
Closing Price 3/13: JRI $11.97 d+$ 0.24 +2.05%
Sponsor's Website: JRI
SEC Filings
Current Position: 80 Shares
Average Cost Per Share = $13.7
This CEF's holdings include global equity REIT common stocks, U.S. equity REIT preferred stocks, energy infrastructure stocks, utility common stocks, and bonds issued by companies in those sectors.
REIT common and preferred stocks were trashed last week. The Vanguard Real Estate ETF (VNQ), which owns only common shares, closed at $91.55 on 3/3 and at $73.1 on 3/12, unadjusted for a quarterly dividend payment that wen ex during that period. Last Friday, VNQ closed at $79.48, up $6.38 but still well below its close 3/3 closing price.
Nuveen Real Asset Income & Growth Fund (last SEC filed shareholder report for the semi-annual period ending 6/30/19)
Holdings: 431 as of 1/31/20
Leveraged: Yes at near 29%
Dividends: Monthly at $.1170 (partial ROC support)
Dividend Yield at $13.7 = 10.25%
Last Sell Discussions: Item # 2.A. Sold 102+ JRI at $17.98 (12/22/19 Post)(profit snapshot = $140.67); Item # 4 Sold 100 JRI at $17.23 (10/2/19 Post)(profit snapshot $40.45)
Last Buy Discussions: Item # 5 Added 100 JRI at $16.83-Used Commission Free Trade (8/24/19 Post); Item # 4 Bought 100 JRI at $16.47 (IB Account) and 100 at $16.59-Used Fidelity Commission Free Trade Fidelity (6/26/19 Post)
Note that my prior buys were 100 share lots. I am now slowly building up to 100 shares with 10 lot buys. That kind of change results from a judgment that downside risks are higher now than when I bought the 100 share lots last year.
Note the Double Whammy in the following data series: As net asset value per share declines, the trend is for the discount to net asset value to expand with the carry over into Friday when net asset value per share went up and the discount hit its highest level.
Data Date 2/28/20 Trade:
Closing Net Asset Value Per Share = $18.4
Closing Market Price: $16.24
Discount: -11.74%
Data Date of 3/9/20 Trade:
Closing Net Asset Value Per Share = $16.67
Closing Market Price: $15.5
Discount: -8.22%
Data Date of 3/10/Trade:
Closing Net Asset Value Per Share = $16.8
Closing Market Price: $13.81
Discount: -10.89%
Data Date of 3/11/20 Trade:
Closing Net Asset Value Per Share: $15.89
Closing Market Price: $13.93
Discount: - 12.33%
Data Date of 3/12/20 Trade:
Closing Net Asset Value Per Share = $13.42
Closing Market Price: $11.73
Discount: - 12.59%
Data Date of 3/13/20 Trade:
Closing Net Asset Value Per Share = $14.14
Closing Market Price: $11.97
Discount: -15.35%
Average 1 Year Discount as of 3/23: -10.41%
Sourced: JRI: CEF Connect
Purchase Restriction: I will not be using the small ball purchase restriction. Instead, I am allowed to buy only when the purchase reduces my average cost per share.
Maximum Position: 200 shares
G. Added 10 HT at $11.6; 5 at $9.21;5 at $7.58 and 5 at $5.18:
Closing Price Last Friday: HT $5.32 -$0.02 -0.37%: Hersha Hospitality Trust
SEC Filings
2019 Annual Report (debt discussed starting at page 83; line of credit discussion discussion can be found at page 44)
That price reflects a near 100 probability that HT will slash or eliminated its common share dividend which is currently at $.28 per share. At $5.32, the dividend yield would be about 21.05%. That yield reflects the consensus opinion about its sustainability. At 21.05%, money will double in about 3.63 years. The Rule of 72 (with calculator) - Estimate Compound Interest
Hersha has declared its regular quarterly dividend of $.28 per share which goes ex dividend on 3/30/20. Hersha Hospitality Trust Announces Quarterly Dividends That announcement includes the dividend payable on HT's preferred stocks.
Hersha recently sold some hotels, pursuant to "binding sales contracts", that will raise approximately $140M and HT will reduce its debt by about $97M. Hersha Hospitality Trust Announces the Disposition of Mature Hotels The transactions are expected to close before the end of the second quarter.
Hotel REITs have been smashed in response to coronavirus epidemic. The first quarter results will be a disaster for this sector. The question is whether a recovery in bookings will occur during the Spring or early summer.
HT 2019 Dividend Classification:
Last Earnings Report (Q/E 12/31/2019):
Hersha Hospitality Trust Announces Full Year and Fourth Quarter 2019 Results or SEC Filed Press Release
As of 12/31/19, HT stated it had "significant financial flexibility with approximately $27.0 million of cash and cash equivalents and ample capacity on the Company’s $250 million senior unsecured revolving line of credit." Of course, it is currently paying cash dividends to common and preferred shareholders.
HT's 2020 guidance does not take into account the negative economic impacts from the COVID-19 pandemic.
I would reasonably anticipate a negative FFO number for the first quarter. I would not hazard a guess about how large the cash flow deficit will be.
Hersha Hospitality Trust (HT) CEO Jay Shah on Q4 2019 Results - Earnings Call Transcript | Seeking Alpha
Current Position This Account: 86+ shares
Average Cost Per Share this Account: $12.56
Dividend Yield at $12.56: 8.92% (assumes no change in the current penny rate which is not an assumption the Stock Jocks are making)
Dividend Reinvestment: Yes, hoping for a rebound that will enable the disposition of shares bought with dividends at a profit.
Highest Cost Lot in current chain: 50 shares with a taxable cost basis of $14.06 on 11/20. There was no ROC adjustment to the tax cost basis since no dividend were paid on that lot last year. This lot will be sold when and if it becomes profitable to do so. This is not going to happen anytime soon.
Maximum Position this Account: 100 shares + share purchased with dividends (15 shares remaining)
Purchase Restriction: Small Ball Rule
Last Sell Discussions: Item # 2.B. Sold 50 HT at $19.02-In a Roth IRA Account (4/23/18 Post); Item # 2.C. Sold 10 HT at $19.11-Used Commission Free Trade (4/23/18 Post); Item # 2.B. Sold 50 HT at $18.58-Used Commission Free Trade (2/8/18 Post)
H. Restarted SCM-Bought 10 at $11.94; 10 at 10.85; 10 at $10.4 and 10 at $8.59:
All BDCs were in free fall last week until last Friday. And the explanation is not hard to understand. Their loans are made entirely or almost so to highly leveraged private companies that would be rated well in junk territory if a rating service was ever paid to rate one. Default rates will soar during a recession.
The other well understood issue is that Libor rates are coming down and floating rate BDC loans are tied to a spread over the Libor rate.
Consequently, net investment income will be trending down, though partially offset for many BDCs by declines in their interest costs.
The Libor floors will stop the decline in the floating rate loan coupon rates when they exceed the applicable Libor rate being used. The current Libor floors are generally around 1%, with some higher, so the spread to Libor can not go below the floor number for the loan even if Libor went to zero. Loan investors ask for higher minimum returns as Libor falls - Reuters (August 2019 article); A Guide to Understanding Floating Rate Securities - Fixed Income Strategies | Raymond James
The BDC prices last week reflected a consensus opinion that a recession was 100% probable and would be relatively deep.
The same forecast was embedded in regional bank stocks IMO.
I would just note here that a recession may certainly happen in the U.S. this year, but it is too early to know whether one will actually happen, nor is it possible to know know whether any recession will be short and relatively shallow due to the coronavirus pandemic or something similar to what happened in major recessions from the past. The BDC prices reflected a certain prediction on those issues that can not be certain now.
Closing Price 3/13: SCM $9.48 +$0.78 +8.97%
52 Week Range: $8.49 to $15.04
The new 52 week low was set intraday on 3/12/20.
At $9.48, the market cap is only around $180M. These mini cap BDCs can be jerked around pretty good when market volatility spikes.
Website: Stellus Capital
SEC Filings
2019 Annual Report (risk factor summary starts at page 31 and ends at page 59)
Current Position: 40 Shares
Average Cost Per Share = $10.44
5 Year Financial History (p. 62 Annual Report):
Management: External
Net Asset Value Per Share History:
12/31/19: $14.14
12/31/18: $14.09
12/31/17: $13.81
12/31/16 $13.69
12/31/15: $13.19
12/31/14: $13.94
12/31/13: $14.54
November 2012: IPO at $15 ($14.46 after underwriters discount)
For an externally managed BDC, those numbers are good since net assets are not being destroyed yearly in a perpetual movement toward zero.
Dividend: Monthly at $.1133 ($1.36 annually rounded)
Stellus Capital Investment Corporation Declares First Quarter 2020 Regular Dividend of $0.34 Per Share
Next Ex Dividend Date: 3/30/20
Dividend Yield at $10.44: 13.03%
Last Earnings Report before purchase: Stellus Capital Investment Corporation Reports Results for its third fiscal quarter ended September 30, 2019
Last Earnings Report-Released after purchase (Q/E 12/31/19): Stellus Capital Investment Corporation Reports Results for its Fourth Fiscal Quarter and Year Ended December 31, 2019
2 loans were on non-accrual as of 12/31/19 comprising just under 1% of the loan portfolio's marked fair value.
The BDC has floating rate loans with Libor floors which average about 1% (p.2). The decline in Libor rates will negatively impact net investment income going forward. The company realized a $1.3M gain in the first quarter and expects to an additional $4M of realized gains this year.
Other Trade Discussions:
Item # 1.B. Sold 32+ SCM at $14.22-Used Commission Free Trade (2/2/19 Post)(profit snapshot = $78.09); Item # 1.A. Sold Highest Cost Lot-50 Shares at $12.63 (5/3/18 Post)(profit snapshot = $34.24); Item 2.B. Sold 100 SCM at $14.23 (2/27/17 Post)(profit snapshot=$285.96); Item # 2 Sold 100 SCM at $13.02 (1/12/17 Post)(profit snapshot= $141.96)
Goal: Total Return in excess of the dividend payments which has been accomplished so far for this BDC stock
SCM Trading Profits to Date = $543.99
I. Restarted PFXF-Bought 10 at $19.38; 10 at $19.3; 10 at $18.8; 10 at $18.4 and 10 at $16.5:
Quote: VanEck Vectors Preferred Securities ex Financials ETF
Closing Price Last Friday: PFXF $17.10 +$0.70 +4.27%
Last week was a bad one for preferred stocks and exchange traded bonds. This ETF owns both categories of fixed coupon securities.
Last Elimination: Item # 1.B. Eliminated PFXF-Sold 110 at $20.51 (1/29/20 Post)
Buy Discussions: Item # 2.C. Added 10 PFXF at $19.8 (12/7/19 Post); Item # 1: Bought 100 PFXF at $20.06 (12/4/19 Post) I have nothing substantively to add to those recent discussions.
Sponsor's Website: VanEck Vectors Preferred Securities ex Financials ETF
Expense Ratio: .41% after a current .05% waiver
Number of Holdings: 141
Credit Quality:
 |
| Many of the investment grade securities are actually exchange traded bonds |
Average Cost Per Share: $18.48
Dividends: Monthly
I prefer to own individual equity preferred stocks and exchange traded bonds. I will trade the "preferred" ETFs which own both categories of securities. I am more likely to gravitate toward the ETFs when interest rates are declining and the prices for the ETFs are nonetheless in free fall which was the case when I bought the PFXF lots.
I have bought and sold the following "preferred" stock ETFs: PFXF, PFF, PGX and VRP. I currently own only PFXF.
J. Added 5 SRET at $13.75; 5 at $12.81; 5 at $12.4; 5 at $11.9; 5 at 10.3; 5 at $9.95 and 5 at $9.73:
Closing Price 3/13/20: SRET $10.25 +$0.51 +5.24%
Quote: SRET | Global X SuperDividend REIT ETF Overview
Last Sell Discussion: Item # 1.A. Sold 10 SRET at $15.56 (2/19/20 Post)(eliminated all shares bought with dividends at a profit)
Prior Sell Discussions: Item # 1.D. Eliminated SRET in Vanguard Taxable Account: Sold 112 at $15.28 (10/30/19 Post); Item # 1. B. Sold 50 SRET at $14.79-In A Roth IRA Account-Commission Free for Vanguard customers (4/3/19 Post)
Prior Buy Discussions: Item # 2. Bought 100 SRET at $14.81 and 10 at $14.35 (8/7/19 Post); Item # 3.C. Bought 50 SRET at $13.88-In a Roth IRA Account-Commission Free (1/27/19 Post)
Sponsor's Website: SuperDividend® REIT ETF
Dividends: Monthly
Dividend Reinvestment: Yes
Goal: Total return in excess of the dividend which is not likely to happen anytime soon with my current position.
Current Position: 93+ shares
Average Cost Per Share: $ 13.53
Dividend Yield at $13.75 = 8.87 % (using current monthly penny rate which may change)
Current Morningstar Rating: 3 stars
Purchase Restriction: None (will not buy much given the exposure to MREITs which had a bad week)
Maximum Position: Undecided given the recent share price decline
2. Issuer Optional Redemption:
I lost 3 Liberty Property 3.375% SU bonds to an issuer early redemption. To exercise that right, a make whole payment of $51.52 was made for each $1K in principal amount.
Profit Snapshots: +$160.81
Item # 3.A. Bought 2 Liberty Property 3.375% SU Maturing on 6/15/23 in a Roth IRA Account at a Total Cost of 99.741 (3/17/19 Post)(cost includes a $4 commission)
Item # 1.E. Bought 1 Liberty SU Maturing on 6/15/23 at a Total Cost of 99.892 (4/8/17 Post)(cost includes a $1 commission)
3. Canadian Reset Equity Preferred Stocks:
A. Added 50 FTSPRM at C$16.28 (C$1 Commission):
Quote: FTS-PM.TO
I now own 100 shares.
The other 50 share lot was bought at $17.55: Item # 2. A. Bought 50 FTSPRM at C$17.55(11/23/19 Post)
Par Value: C$25
Dividends: Quarterly and Cumulative
I lost 3 Liberty Property 3.375% SU bonds to an issuer early redemption. To exercise that right, a make whole payment of $51.52 was made for each $1K in principal amount.
Profit Snapshots: +$160.81
Item # 1.E. Bought 1 Liberty SU Maturing on 6/15/23 at a Total Cost of 99.892 (4/8/17 Post)(cost includes a $1 commission)
3. Canadian Reset Equity Preferred Stocks:
A. Added 50 FTSPRM at C$16.28 (C$1 Commission):
Quote: FTS-PM.TO
Issuer: USD priced Fortis Inc (FTS)
Fortis Inc. Reports Third Quarter 2019 Earnings
Canadian preferred stocks have been mauled more than their U.S. counterparts. I am adding to my positions during the latest downdraft.
Closing Price Last Friday: FTS-PM.TO C$13.80 +C$0.37 +2.76%
Website: Home
The issuer is an electric and gas utility based in Canada that also has utility operations in the U.S. The U.S. operations consist of UNS Energy and Central Hudson.
The company also owns the ITC U.S. transmission network.
Canadian utilities include FortisBC, FortisAlberta, Newfoundland Power, Maritime Electric, and FortisOntario
Canadian preferred stocks have been mauled more than their U.S. counterparts. I am adding to my positions during the latest downdraft.
Closing Price Last Friday: FTS-PM.TO C$13.80 +C$0.37 +2.76%
Website: Home
The issuer is an electric and gas utility based in Canada that also has utility operations in the U.S. The U.S. operations consist of UNS Energy and Central Hudson.
The company also owns the ITC U.S. transmission network.
Canadian utilities include FortisBC, FortisAlberta, Newfoundland Power, Maritime Electric, and FortisOntario
I now own 100 shares.
The other 50 share lot was bought at $17.55: Item # 2. A. Bought 50 FTSPRM at C$17.55(11/23/19 Post)
Par Value: C$25
Dividends: Quarterly and Cumulative
Coupon: Resets Every 5 years at a 2.48% spread to the five year Canadian government bond
Last Reset: Effective starting on 12/1/19 to and excluding 12/1/2024
Fortis has an option to redeem at par value on the reset dates.
Fortis has an option to redeem at par value on the reset dates.
New Penny rate per share: C$.2445625 (C$.97825 annually)
At C$16.28, the yield is about 6%.
At C$16.28, the yield is about 6%.
The sole reason for buying more was the rapid decline in interest rates. This reset's coupon will last to 12/1/2024. Who knows what the reset rate will be then? For now, 6% from this issuer looks good compared to other alternatives.
4. Leveraged Bond CEFs:
A. Added 90 to BTZ at $13.75; 10 at $13.41; 5 at $12.95; 5 at $12.57; and 5 at $11.5:
Closing Price 3/13: BTZ $12.07 +$0.53 +$4.63%
Until yesterday, the corporate bond had been unsettled driven in part by a lack of liquidity which apparently caused unusual and unwarranted price swings. The investment grade bond ETF LQD settled down last Friday: $123.05 $5.11 +4.33%
The third party service used by Fidelity to price bonds that I own went bananas with the alleged fair value numbers from last Thursday's close. My thinking was that the service was using Chimps since the humans were in self quarantine. I would have bought every bond that I own at the price shown in my account this morning. The prices were just ridiculous. Would you buy municipal bonds rated AA+ that have 3% coupons, double tax free, at less than par value now, where the bond is likely to be called at par value within five years.
This leveraged bond CEF has become a falling knife. A normal position for me would be about 300 shares. I am now working my way up to that level with 5 share lot purchases.
Quote: BlackRock Credit Allocation Income Trust Overview
Sponsor's Website: BlackRock Credit Allocation Income Trust | BTZ
SEC Filings
I discussed this bond CEF in my last post. Item # 1.H. Bought 10 BTZ at $13.57 (3/7/20 Post)
Dividends: Monthly, currently at $.0839 per share (variable over time; assuming same penny rate for 1 year, the annual payment would be about $1.01 per share)
Average Cost Per Share: $ 13.5
Dividend Yield at $13.5 and $1.01 annual dividend = 7.48 %
Current position: 130 shares
Dividend Reinvestment: Turned on for now, may continue for as long as the discount remains above 5%.
Data Date of Trade (3/9/2020):
Closing Net Asset Value Per Share: 14.79
Closing Market Price: $13.79
Discount: -6.76%
Data Date of Trade (3/10/20)
Closing Net Asset Value Per Share: $14.67
Closing Market Price: $13.42
Discount: -8.52%
Data Date of Trade (3/11/20)
Closing Net Asset Value Per Share: $14.45
Closing Market Price: $12.63
Discount: -12.6%
Date Date of Trade (3/12/20)
Closing Net Asset Value Per Share: $13.85
Closing Market Price: $11.62
Discount: -16.1%
Average Discount 1 Year as of 3/12 = -8.97%
BTZ BlackRock Credit Allocation Income Trust-CEF Connect
On 3/9, the day that the DJIA declined by 2,013 points or 7.79%, the BTZ net asset value per share declined by 58 cents even though U.S. treasuries declined in yield and rose in price. The problem was that other bond sectors, including investment grade corporate bonds, declined significantly in price that day.
LQD $131.01 -$3.26 -2.43%: iShares Investment Grade Corporate Bonds
Even higher quality corporate bonds rated A or better declined in value on 3/9:
QLTA $56.78 -0.64 -1.12%: iShares Aaa A Rated Corporate Bond ETF
This kind of decoupling between U.S. treasuries higher quality corporate bonds has occurred in the past when fears about credit risk surge. The price of the corporate bonds reflect a credit risk component that is not present in treasury yields.
On a day like 3/9, the junk corporate bond sector will fare the worst:
JNK $100.72 -$4.92 -4.66%: SPDR Bloomberg Barclays High Yield Bond ETF
For novice bond investors, "high yield" is a pleasant description for junk.
The best performing sector among treasury ETFs that day was ZROZ:
ZROZ $189.98 +$9.91 +5.50%: PIMCO 25 Year Zero Coupon U.S. Treasury ETF
Zero coupon treasuries will be extremely sensitive to interest rate movements. The treasury strips increase the duration in years. As of 3/9/20, the duration was 27.31 years and the net asset value total return YTD was +40.87%. PIMCO 25+ Year Zero Coupon U.S. Treasury Index Exchange-Traded Fund - ZROZ - ETFs | PIMCO The 20+ year treasury ETF TLT, which owns treasuries that actually pay cash interest, has an effective duration of 19.02 years and was up +30.31% YTD through 3/9/20. Duration: Understanding the Relationship Between Bond Prices and Interest Rates - Fidelity
Maximum Position: 300 shares
Purchase Restriction: Each subsequent purchase must lower my average cost per share. I am not using the small ball restriction.
4. Leveraged Bond CEFs:
A. Added 90 to BTZ at $13.75; 10 at $13.41; 5 at $12.95; 5 at $12.57; and 5 at $11.5:
Closing Price 3/13: BTZ $12.07 +$0.53 +$4.63%
Until yesterday, the corporate bond had been unsettled driven in part by a lack of liquidity which apparently caused unusual and unwarranted price swings. The investment grade bond ETF LQD settled down last Friday: $123.05 $5.11 +4.33%
The third party service used by Fidelity to price bonds that I own went bananas with the alleged fair value numbers from last Thursday's close. My thinking was that the service was using Chimps since the humans were in self quarantine. I would have bought every bond that I own at the price shown in my account this morning. The prices were just ridiculous. Would you buy municipal bonds rated AA+ that have 3% coupons, double tax free, at less than par value now, where the bond is likely to be called at par value within five years.
This leveraged bond CEF has become a falling knife. A normal position for me would be about 300 shares. I am now working my way up to that level with 5 share lot purchases.
Quote: BlackRock Credit Allocation Income Trust Overview
Sponsor's Website: BlackRock Credit Allocation Income Trust | BTZ
SEC Filings
I discussed this bond CEF in my last post. Item # 1.H. Bought 10 BTZ at $13.57 (3/7/20 Post)
Dividends: Monthly, currently at $.0839 per share (variable over time; assuming same penny rate for 1 year, the annual payment would be about $1.01 per share)
Average Cost Per Share: $ 13.5
Dividend Yield at $13.5 and $1.01 annual dividend = 7.48 %
Current position: 130 shares
Dividend Reinvestment: Turned on for now, may continue for as long as the discount remains above 5%.
Data Date of Trade (3/9/2020):
Closing Net Asset Value Per Share: 14.79
Closing Market Price: $13.79
Discount: -6.76%
Data Date of Trade (3/10/20)
Closing Net Asset Value Per Share: $14.67
Closing Market Price: $13.42
Discount: -8.52%
Data Date of Trade (3/11/20)
Closing Net Asset Value Per Share: $14.45
Closing Market Price: $12.63
Discount: -12.6%
Date Date of Trade (3/12/20)
Closing Net Asset Value Per Share: $13.85
Closing Market Price: $11.62
Discount: -16.1%
Average Discount 1 Year as of 3/12 = -8.97%
BTZ BlackRock Credit Allocation Income Trust-CEF Connect
On 3/9, the day that the DJIA declined by 2,013 points or 7.79%, the BTZ net asset value per share declined by 58 cents even though U.S. treasuries declined in yield and rose in price. The problem was that other bond sectors, including investment grade corporate bonds, declined significantly in price that day.
LQD $131.01 -$3.26 -2.43%: iShares Investment Grade Corporate Bonds
Even higher quality corporate bonds rated A or better declined in value on 3/9:
QLTA $56.78 -0.64 -1.12%: iShares Aaa A Rated Corporate Bond ETF
This kind of decoupling between U.S. treasuries higher quality corporate bonds has occurred in the past when fears about credit risk surge. The price of the corporate bonds reflect a credit risk component that is not present in treasury yields.
On a day like 3/9, the junk corporate bond sector will fare the worst:
JNK $100.72 -$4.92 -4.66%: SPDR Bloomberg Barclays High Yield Bond ETF
For novice bond investors, "high yield" is a pleasant description for junk.
The best performing sector among treasury ETFs that day was ZROZ:
ZROZ $189.98 +$9.91 +5.50%: PIMCO 25 Year Zero Coupon U.S. Treasury ETF
Zero coupon treasuries will be extremely sensitive to interest rate movements. The treasury strips increase the duration in years. As of 3/9/20, the duration was 27.31 years and the net asset value total return YTD was +40.87%. PIMCO 25+ Year Zero Coupon U.S. Treasury Index Exchange-Traded Fund - ZROZ - ETFs | PIMCO The 20+ year treasury ETF TLT, which owns treasuries that actually pay cash interest, has an effective duration of 19.02 years and was up +30.31% YTD through 3/9/20. Duration: Understanding the Relationship Between Bond Prices and Interest Rates - Fidelity
Maximum Position: 300 shares
Purchase Restriction: Each subsequent purchase must lower my average cost per share. I am not using the small ball restriction.
Disclaimer: I am not a financial advisor but simply an individual investor who has been managing my own money since I was a teenager. In this post, I am acting solely as a financial journalist focusing on my own investments. The information contained in this post is not intended to be a complete description or summary of all available data relevant to making an investment decision. Instead, I am merely expressing some of the reasons underlying the purchase or sell of securities. Nothing in this post is intended to constitute investment or legal advice or a recommendation to buy or to sell. All investors need to perform their own due diligence before making any financial decision which requires at a minimum reading original source material available at the SEC and elsewhere. A failure to perform due diligence only increases what I call "error creep". Stocks, Bonds & Politics: ERROR CREEP and the INVESTING PROCESS Each investor needs to assess a potential investment taking into account their personal risk tolerances, goals and situational risks. I can only make that kind of assessment for myself and family members.
