Economy:
The government reported earlier today that the economy added 194K jobs last month. The consensus was for 366K. The unemployment rate fell .4 to 4.8%. Average hourly earnings rose by 19 cents to $30.85, following large increases in the prior 5 months. The job increases for July and August were revised up by 169,000. The average work week increased by .02 to 34.8 hours which is a big deal considering the size of the labor force. Employment Situation Summary The U-6 number declined to 8.5% from 8.8% on a seasonally adjusted basis and to 8.1% from 8.9% on a non-seasonally adjusted basis. Table A-15. Alternative measures of labor underutilization The revised numbers for July and August take away the sting from the September miss IMO, which will be revised anyway next month.
ADP reported that private sector employment increased by 568,000 last month with the consensus estimate at 425K. ADP National Employment Report
Key inflation gauge watched by the Federal Reserve (core PCE Prices) hits another 30-year high
Pfizer Covid-19 Vaccine Loses Effectiveness Against Infection Over Time | Barron's (effectiveness at preventing infections dropped to 47% after 5 months)
As mortgage rates shoot even higher, refinance demand plummets 10%
The September ISM services index was reported at 61.9. The new orders index was 63.5. Both numbers are solid and are close to unchanged from the August report. The Price index is troubling at 77.5, up from 75.4 in August.
In its earnings report released yesterday, Conagra estimated that its impute costs would rise 11% this year. SEC Filed Earnings Press Release Price hikes can not keep pace with the percentage increases in cost, pressuring margins and profits.
The FED will do nothing to restrain inflation. The problem will have to fix itself, if possible.
The same is true for the ECB. Euro zone inflation jumps to 13-year high, worsening ECB headache | Reuters
+++++
Markets and Market Commentary:
The DJIA rallied 500+ decline last Wednesday, retracing a 400+ decline to close up over 100 points, when McConnell made the following statement: “To protect the American people from a near-term Democrat-created crisis, we will also allow Democrats to use normal procedures to pass an emergency debt limit extension at a fixed dollar amount to cover current spending levels into December." It is the Democrats fault in TrumpWorld that all Republican senators voted for a default by filibustering a bill to increase the debt limit, preventing it from even coming to a vote until yesterday.
Yesterday, only 11 Republican Senators voted to end their filibuster. After barely breaking the Republican filibuster, the vote to temporarily increase the debt limit passed 50 to 48. All 50 Democrats voted to increase the debt ceiling. The 48 no votes were, of course, cast by Republican Senators. Senate Approves Bill to Raise Debt Ceiling and Avert Default, for Now - The New York Times; Short-term debt limit increase passes Senate, heads to House - Roll Call Democrats joined with Republicans to raise the debt limit three times when Trump was President. Senate Raises the Debt Limit. Default Could Loom Again in Early December. | Barron's
Market is unprepared for inflation fallout: Wharton's Jeremy Siegel
Stocks are at a 70-year high as a share of household financial wealth
Small-Bank Stocks See Insider Buying on the Rise | Barron's
Buy the dip has failed. Here’s what investors need to do next, says Morgan Stanley. - MarketWatch The MS recommends buying the financial, healthcare and consumer staples sectors.
Why Merck's Celebrated Covid Pill Could Be Riskier Than People Think | Barron's The drug Molnupiravir enters the virus and causes mutations. The issue is whether it will cause other potentially harmful mutations. After reading this article, I have reservations about the FDA giving emergency authorization now, requiring instead more comprehensive trials to study potential harmful side effects. I sold a few MRK shares in response. I will discuss that trade in about a month.
++++
Kari Lake, Trump's Pick for Arizona Governor, Says She Wouldn't Have Certified Biden's Win; Trump's Arizona Gov. Pick Says She Would Not Have Certified 2020 Election She also said that Donald should be added to Mount Rushmore. It does not matter that Biden won the state according to the initial vote count that was confirmed by multiple audits. Ms. Lake is stating what I would now call the Republican position regarding elections. The certified tabulations from the counties can be cancelled by republican officials when they do not like the result.
Fact check: Arizona voter fraud not proven in viral canvassing report: USA Today
Warning: Jan. 6 was not a one-time event - Los Angeles Times
Trump lawyer tells former aides not to cooperate with Jan. 6 committee - The Washington Post
Trump campaign loses NDA case against Omarosa for tell-all book
Executive Privilege and the Jan. 6 Investigation - Lawfare
‘One day in January’: Mike Pence decries media focus on Capitol attack -The Guardian; Mike Pence just said something absolutely ridiculous about January 6 Sure, Republicans will always try to minimize the 1/6 attack, even when they recognize that the attack was carried out by Trump supporters attempting to prevent the constitutionally required vote count occurring then, the last perfunctory step prior to Biden becoming President. Most IMO will not even admit that it was Republicans who attempted the insurrection.
New Details of Trump Pressure on Justice Department Over Election - The New York Times; Interim Staff Report FINAL.pdf
Jeffrey Burnham killed pharmacist brother over COVID vaccine shots he thought government was using to poison people, court documents say - CBS News I have heard Republicans claim that the vaccine will cause Covid. A recent poll showed that the unvaccinated blame the vaccinated for the recent rise in infections. Unvaccinated Americans Blame Everyone But Themselves For Covid Surge, Poll Finds; KFF COVID-19 Vaccine Monitor: September 2021 | KFF
For the first time in U.S. history, a political party used the filibuster rule to prevent the majority party from raising the debt limit. PolitiFact | Fact-checking Biden’s claim that raising debt limit is usually bipartisan Many Trumpster Republican Senators were openly hostile to Mitch McConnell relenting on using the filibuster to prevent a vote, preferring instead to cause a government debt default, U.S. credit downgrades, and a recession and then blaming Biden for the results. Trump's party has become aggressively irresponsible IMO.
++++
1. Added 1,000 GNL at $16.15:
Quote: Global Net Lease Inc.
As of June 30, 2021, GNL "owned 311 properties consisting of 38.2 million rentable square feet, which were 99.7% leased, with a weighted-average remaining lease term of 8.5 years. Based on the percentage of annualized rental income on a straight-line basis, as of June 30, 2021, 60% of our properties were located in the United States (“U.S.”) and Canada and 40% of our properties were located in Europe, and our portfolio was comprised of 52% industrial/distribution properties, 43% office properties and 5% retail properties. These percentages as of June 30, 2021 are calculated using annualized straight-line rent converted from local currency into the U.S. Dollar (“USD”) as of June 30, 2021 for the in-place lease on the property on a straight-line basis, which includes tenant concessions such as free rent, as applicable." GNL 10-Q for the Q/E 6/30/21 at page 38
10-Q for the Q/E 6/30/21 (property list starts at page 40)
GNL is classified as a diversified net lease REIT. I view equity REITs as bond substitutes and the net lease REITs as the most bond like in that stock sector. Why Income Investors Should Consider a Net Lease REITs ETF; Why to Get Caught in a Net Lease REIT | ETF Trends
GNL Website: Overview | GNL
Investment Category: Equity REIT Common and Preferred Stock Basket Strategy
I mentioned this purchase in a 10/1/21 comment.
I recently discussed this REIT in two posts published last month:
Item # 1.M. Added to GNL in Fidelity Taxable-Bought 3 at $16.49 and 4 at $16.12 (9/24/21 Post) I noted in that post that GNL was held in disfavor by investors that count, as evidenced by the dividend yield and 5 year chart.
This post is my last substantive discussion. Item # 2.G. Added to GNL in Fidelity Taxable-Bought 3 at $17.12; 2 at $16.57 (9/17/21 Post) I discussed the 2021 second quarter report in this post. SEC Filing; Global Net Lease, inc (GNL) Q2 2021 Earnings Call Transcript | The Motley Fool ("year-to-date closed and forward pipeline acquisitions exceed $380 million of contract purchase price at a weighted average cap rate of 9.7% and a weighted average remaining lease term of 16.9 years.")
New AC per share this account: $15.98 (1,110+ plus shares)
 |
| Snapshot Intraday 10/1/21 after 1,000 share add |
When that snapshot was taken, GNL had a 2.25% weighting in this account which is 1 of 5 taxable accounts that I have. I mention the overall portfolio weighting to emphasize that the position is still insignificant. The add does reflect my willingness to take slightly more risks in exchange for more income. The recent price decline improved somewhat the risk/reward balance in favor of reward.
Dividend: Quarterly at $.40
Global Net Lease, Inc. Announces Common Stock Dividend for Fourth Quarter 2021
I am going to reinvest the next dividend and then decide later whether or not to continue doing so.
Yield at New AC this account: 10.01%
Next Ex Dividend: Today, 10/8/21
Global Net Lease (GNL) Dividend History | Nasdaq
5 Year Chart: Indicates Strong Disfavored Status IMO
5 Year Annual Average Total Return through 10/7/21 = only 3.19%
Sourced: DRIP Returns Calculator | Dividend Channel
The 3.19% annual average total return (dividends reinvested) strongly indicates the need IMO for a trading strategy since the dividend's value has been mostly destroyed by price depreciation.
It is my opinion that GNL is undervalued at its current price and its disfavored status is overdone.
Goal: Any total return in excess of the dividends paid before any ROC adjustments to the tax cost basis, a necessary calculation to avoid double counting both the dividend and the ROC adjustment which increases the profit.
Currently, I plan to eliminate all shares bought at prices greater than $16.15 when and if the price returns to a $17.5-$18.5 range. Only 16+ shares qualify.
Last Sell Discussions: Item # 2.E Sold Highest Cost 10+ Shares in Fidelity Account at $19.91 (6/25/21 Post); Item # 1.J. Pared GNL in Fidelity Taxable- Sold 20 GNL at $19.49 (5/16/21 Post)
Price Volatility: This buy discussion shows just how fast and low the price can fall: Item # 4.A. Added 5 GNL at $17.65; 5 at $16.87, 5 at $16.3; 5 at $14.6; 5 at $14; 10 at $13.5; 5 at $12.94; 2 at $12.66; 2 at $12.1; 2 at $11; 1 at 10.1; 4 at $11.48 and 2 at $10.8 (4/4/20 Post)
2. Small Ball Sells-ETF Eliminations in Schwab Taxable Account:
I am continuing to dump small ball stock ETF positions, all with negligible dividends. I am redirecting proceeds into individual dividend stock selections such as GNL discussed above. I am more focused on income generation than capital appreciation in stock prices.
Proceeds = $2,097.28
Profit = $677.38
A. Sold 5 FIVG at $38.83:
Quote: FIVG | Defiance Next Gen Connectivity ETF Overview
Sponsor's Website: The First 5G ETF - FIVG
Expense Ratio: .3%
Defiance 5G Next Gen Connectivity ETF-Morningstar (unrated)
Profit Snapshot: $56.16
Item # 2.A. Started FIVG in Schwab Taxable Account- Bought 5 at $27.6 (8/15/20 Post)
Top 10 Holdings as of 10/1/21:
Of those stocks, I currently own AT & T (T), Ericsson (ERIC), and Verizon (VZ). As previously discussed, I have pared my AT & T position for the reasons discussed here: Item # 3.F.(6/12/21 Post)
I still own the FIVG shares bought in my Vanguard Taxable account (13 shares with an average cost per share of $28.86) and in my Fidelity Account (5 shares with an AC of $28.74)
Dividends: Negligible, paid Quarterly at a variable rate
Last 4 Dividend Payments: $.25 per share rounded .
Yield at $38.83 = .6%
Last Ex Dividend: 9/22/21
B. Sold 5 SCHV at $70.87:
Quote: SCHV | Schwab U.S. Large-Cap Value ETF Overview
Expense Ratio = .04%
Sponsor's Website: Schwab U.S. Large-Cap Value ETF
Schwab US Large-Cap Value ETF™ (SCHV)-Morningstar (4 stars as of 10/4)
Profit Snapshot: $94.53
Last Discussed: Item # 1.A. Bought 4 SCHV at $51.97 (9/5/20 Post)
Dividends: Quarterly at a variable rate
Last 4 Dividend Payments: $1.38 per share rounded
Yield at $70.87 = 1.95% rounded
Last Ex Dividend: 9/22/21
Some Top Holdings as of 9/30/21:
C. Sold 1 MGK at $249.81:
Quote: MGK | Vanguard Mega Cap Growth ETF Overview
Profit Snapshot: +$87.49
Last Discussed: Item #1.B. Bought 1 MGK at $162.32 (7/25/20 Post)
Dividends: Quarterly at a variable rate
Last 4 dividend payments = $1.25 per share rounded
Yield at $249.81 = .5%
D. Sold 5 AIQ at $32.15:
Quote: Global X Artificial Intelligence & Technology ETF
Sponsor's Website: Artificial Intelligence & Technology ETF
Expense Ratio: .68%
Global X Artificial Intelligence & Tech ETF-Morningstar (3 stars as of 10/4)
Profit Snapshot: $47.3
Last Buy Discussion: Item # 1.L. Started AIQ in Vanguard Taxable Account- Bought 5 at $24.13; 2 at $23.34; 2 at $22.8 and Item # 1.M. Bought AIQ in Schwab Taxable- 2 at $22.9, 3 at $22.55 (9/26/20 Post)
Last Sell Discussion: Item # 1.F. Eliminated AIQ in Vanguard Taxable-Sold 9 at $27.8 (2/6/21 Post)(profit snapshot = $37.27)
Dividends: Immaterial, paid Semi-Annually
YIeld at $32.15 = .28%
The only justification for owning this ETF is for capital appreciation.
Top 10 Holdings as of 9/30/21:
E. Sold 5 MILN at $45.12:
Quote: MILN | Global X Millennials Thematic ETF Overview
Sponsor's Website: Millennials Thematic ETF
Global X Millennials Consumer ETF (MILN)-Morningstar (3 stars as of 10/4)
Profit Snapshot: +$79.77
Last Discussed: Item # 4.C. Bought 5 MILN at $29.7 (8/29/20 Post); Item # 1.L. Bought 2 MILN at $28.09 (7/11/20 Post)
Dividends: Semi-Annually, either zero or an immaterial amount
Dividends Paid Over the Last 52 weeks: $.06 per share rounded
Yield at $45.12 = .1%
Top 10 Holdings as of 10/1/21:
F. Sold 4 VONV at $71.77:
Sponsor's Website: VONV - Vanguard Russell 1000 Value ETF
G. Sold 1 VTI at $234.34:
Quote: VTI | Vanguard U.S. Total Stock Market ETF Overview
Sponsor's Website: VTI - Vanguard Total U.S. Stock Market ETF | Vanguard
Expense Ratio: .03%
Holding as of 8/31/20: 3,980 stocks
Vanguard Total U.S. Stock Market ETF (VTI)-Morningstar (4 stars as of 10/4)
Profit Snapshot: $85.49:
Last Discussed: Item # 1.D. Bought 1 VTI at $148.85 (7/3/20 Post)
Dividends: Quarterly at a variable rate
Last 4 Payments: $2.85 rounded
Yield at $234.34 = 1.2%
Some Top Holdings as of 8/31/21:
H. Sold 5 SCHK at $45.03:
Quote: SCHK | Schwab 1000 Index ETF Overview
Sponsor's Website: Schwab 1000 Index® ETF | Schwab Funds
Expense Ratio = .05%
Profit Snapshot: +$116.3
Last Discussed: Item # 1.A. Bought 5 SCHK at $21.77 (5/23/20 Post)
Dividends: Quarterly at a variable rate
Last 4 payments: $.52 per share
Yield at $45.03 = 1.15%
Last Ex Dividend: 9/22/21
Some Top Holdings: Capitalization Weighted Index
I. Sold 1 SCHD at $77.79:
Quote: SCHD $51.49 +$1.12 +2.22%
Sponsor's Website: Schwab U.S. Dividend Equity ETF
I currently own about 1/3 of the 105 holdings. The ETF is classified as having a "value" orientation.
Expense Ratio: .06%
Schwab US Dividend Equity ETF™ (SCHD)-Morningstar (5 stars as of 10/3)
Profit Snapshot: +$25.15
Last Discussed: Item # 1.C. Started SCHD as a Placeholder-Bought 1 at $52.65 (7/11/20 Post) Needless to say, I needed to be a lot more aggressive. When and if the price sinks below $60, I will consider then being more aggressive.
Dividends: Quarterly at a variable rate
Last 4 dividend payments: $2.23 per share
Yield at $77.79 = 2.87%
Yield at $52.65 Cost = 4.24%
Top 10 Holdings as of 10/5/21:
J. Sold 2 SCHC at $44.11:
Quote: Schwab International Small-Cap Equity ETF Overview
Sponsor's website: Schwab International Small-Cap Equity ETF
Expense Ratio: .11%
Holdings: 2,332 stocks as of 10/6/21
Profit Snapshot: $7.12
Last Discussed: Item # 2.I. (4/24/2021 Post)
Dividends: Semi-Annually
Last 2 Dividends = $.82
Yield at $44.21 = 1.85% rounded
I may buy back this lot just to have some exposure to an asset class where I would be unlikely to buy a single stock owned by this fund.
3. MORE SMALL BALL:
A. Added 5 WMB at $24.2-Schwab Taxable:
Quote: Williams Cos.
SEC Filed Earnings Press Release for the Q/E 6/30/21
Last Discussed: I discussed the last earnings report in this post:Item # 2 Added 95 WMB at $24.98 and 5 at $23.8 (8/20/21 Post) I have nothing to add to that recent discussion. WMB is one of the stocks where I am at least contemplating taking the position up to 1000+ shares but want a lower price before making a decision.
Prior Discussion: Item # 1.L. Bought 5 WMB at $23.58-Fidelity Account (4/30/21 Post)
Average Cost per share this Account: $24.85 (111+ shares)
Dividend: Quarterly at $.41 per share ($1.64 annually)
Note the dividend cut in 2016. The quarterly penny rate was slashed from $.64 to $.20 per share effective for the third quarter payment. Williams Companies Inc.'s Dividend Reduction is Surprisingly Smart | The Motley Fool (8/4/16)(WMB wanted to shore up the finances of Williams Partners, an MLP whose publicly traded units were later acquired by WMB)
Yield at $24.85 = 6.6%
Last Ex Dividend: 9/9/21
I reinvested this dividend:
B. Added 5 DEA at $20.76 (Fidelity Taxable):
Quote: Easterly Government Properties Inc.
SEC Filed Earnings Press Release for the Q/E 6/30/21
Easterly Government Properties Inc Profile-Reuters
Investment Category: Equity REIT Common and Preferred Stock Basket Strategy
Last Buy Discussions: Item # 1.J. Started DEA in Vanguard Taxable-Bought 10 at $21.24 and Item # 1.K. Added to DEA in Fidelity Taxable-Bought 5 at $21.26 (9/3/21 Post); Item # 2.A. Bought 15 DEA at $20.61; 5 at $20.03 (5/23/21 Post); Item # 2.F. Bought 5 DEA at $20.94 (3/27/21 Post)
Last Sell Discussion: I discussed the second quarter earnings report in this post and have nothing substantively to add here: Item # 3.E. Pared DEA in Fidelity Taxable-Sold 10 at $22.92 (8/20/21 Post)
Average cost per share this account: $20.89 (62+ shares)
Dividend: Quarterly at $.265 per share ($1.06 annually)
Yield at AC this account: 5.07%
Last Ex Dividend: 8/11/21
Other Sell Discussions: Item # 1.A. Sold 21+ DEA at $28.81 (6/6/20 Post)(profit snapshot = $272.6); Item # 3.A. Sold 10 DEA at $22.39 (11/20/19 Post)(profit snapshot = $47.24); Items 1.A. and 1.B. Sold 10 DEA at $19.81 and Eliminated DEA in Schwab Account at $19.81 (8/24/19 Post)(profit snapshots $74.38); Sold 10 DEA at $21.44-Used Commission Free Trade (5/17/18 Post)(profit snapshot = $22.59); Item 5. A. Sold 50 DEA at $21.59-Used Commission Free Trade (12/11/17 Post)(profit snapshot = $97.85)
DEA Realized Gains to Date: $547.31
Goal: Dividend + 2% annualized return on the shares
C. Added 5 MCBC at $7.87; 5 at $7.74; 5 at $7.65; 5 at $7.41-Schwab Taxable:
Quote: Macatawa Bank Corporation
MCBC Analyst Estimates | MarketWatch
Macatawa Bank Key Metrics-Reuters
Investment Category: Regional Bank Basket Strategy
Last Buy Discussion: Item # 1.K. Started MCBC-Bought 10 at $8.27, 5 at $8.07; 10 at $7.95 (9/10/21 Post) I discussed the last earnings report in that recent post and have nothing further to add)
Average Cost Per Share this account: $7.88 (45 shares)
Dividend: Quarterly at $.08 per share, last raised from $.07 effective for the 2020 first quarter payment.
Yield at AC = 4.06%
Last Ex Dividend = 8/10/21
D. Sold Remaining Shares of RDSB Purchased with Dividends in Fidelity Account at $40.14:
 |
| .517 share |
Quote: RDS.B | Royal Dutch Shell PLC ADR B Overview
Last Buy Discussion: Item # 1.F. Added to RDSB-Bought 1 at $34.08; 1 at $28.9, 1 at $27.61; 1 at $24.88; 1 at $24.18- Schwab Taxable (5/23/20 Post)
Profit Snapshot: +$2.39
Average Cost per share this account after pare = $25.76 (14 shares)
 |
| Snapshot Intraday 9/14/21 after pare |
Dividend: Quarterly at $.48 per share ($1.92 annually). Royal Dutch slashed its dividend from $.94 to $.32 in the 2020 first quarter.
Yield at $25.76 AC Fidelity Account = 7.45%
Next Ex Dividend Date: 11/11/21 Dividend timetable | Shell Global
Chart 10 Year as of 10/6/21 Close:
This stock has been in what I would characterize as a long term bear market starting in 2014. With the recent recovery in energy prices, it is now in a cyclical short term bull market. It remains to be seen whether or not this recent uptrend will transition out of a long term bear market into a long term bull market. Either way, cyclical bull markets within long term bear markets can have powerful upsides off multi-year lows and can be traded.
Recent News:
Shell third quarter 2021 update note Shell announced on 10/7/21 that it will take a $400M hit from Hurricane IDA.
Shell signs agreement to sell Permian interest for $9.5 billion to ConocoPhillips (9/20/21)
Royal Dutch Shell Publishes Second Quarter Results (7/29/21)
E. Eliminated CXP in Schwab Taxable-Sold 10 at $19.07 and Eliminated CXP in Vanguard Taxable-Sold 10 at $19.09:
Quote: Columbia Property Trust Inc.
This REIT is in the process of being acquired for $19.3 in cash. Columbia Property Trust to Be Acquired by Funds Managed by Pacific Investment Management Company LLC in a $3.9 Billion Transaction No further dividends will paid. I received the last quarterly dividend of $.21 per share on 9/15/21 (ex date on 8/31/21).
Profit Snapshots = $ 116.15
 |
| Snapshot as of close 10/8/21 |
Last Buy Discussions: Item # 1.B. Added to CXP-Bought 10 at $12.12; 10 at $11.57; 5 at $11.27; 5 at $10.9; 5 at $10.5 (9/26/20 Post); Item #3.H. Started CXP in Fidelity Account-Bought 10 at $16 (8/20/21 Post)
Last Sell Discussions: Item # 3.I. Sold All CXP Shares purchased with dividends at $16.44-Fidelity Taxable (8/20/21 Post)(profit = $8.99); Item # 1.H. Pared CXP in Fidelity Taxable Account-Sold 5 at $14.96; 1.801 at $17.41 (3/20/21 Post)(profit snapshot = $19.11)
Disclaimer: I am not a financial advisor, but simply an individual investor who has been managing my own money since I was a teenager. In this post, I am acting solely as a financial journalist focusing on my own investments. The information contained in this post is not intended to be a complete description or summary of all available data relevant to making an investment decision. Instead, I am merely expressing some of the reasons underlying the purchase or sale of securities. Nothing in this post is intended to constitute investment or legal advice or a recommendation to buy or to sell. All investors need to perform their own due diligence before making any financial decision which requires at a minimum reading original source material available at the SEC and elsewhere. A failure to perform due diligence only increases what I call "error creep". Stocks, Bonds & Politics: ERROR CREEP and the INVESTING PROCESS Each investor needs to assess a potential investment taking into account their personal risk tolerances, goals, and situational risks. I can only make that kind of assessment for myself and my family members.
