Showing posts with label XEG:CA. Show all posts
Showing posts with label XEG:CA. Show all posts

Sunday, January 5, 2020

FENY, IVZ, NRBAY, ORKLY, XEG:CA

Economy:

Calculated Risk: Lawler: US Population Growth Slowed Again in 2019 (slowest in percentage growth since 1918 and slowest numerically since 1942). Slower population growth will negatively impact GDP growth. 

 The U.S. economy is now deeply dependent on deficit government spending. 

 Reducing the annual budget deficit from an anticipated $1 trillion to $500B in 2020 would result in either negative GDP growth or barely positive growth. No deficit spending would result in a severe recession. 

 There will not be the political will to materially reduce deficit spending. Instead, there is political consensus to put on a blindfold and push the pedal to the metal. 

 Car sales hit the skids in 2019 - MarketWatch

 China cuts banks' reserve ratios again, frees up $115 billion to spur economy - Reuters Lower bank reserves decreases the cushion for bad loans and makes the banks more susceptible to failure during an economic downturn. 

 Recent surveys show sharp decline in retirement wealth for typical household - MarketWatch

 Seattle passed a $15 minimum wage law in 2014. Here's how it's turned out so far


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Markets and Market Commentary:

 Top Iranian Major General Qassim Suleimani Is Killed on Trump’s Orders, Officials Say I do not expect a major military escalation unless Iran miscalculates in its response. It would be reasonable to expect a response but possibly in the more distant future that can not easily be traced back to Iran.  

 The market's reaction was subdued and was consistent with nothing major happening in response. 

 There is no question that General Suleimani was an enemy combatant. 

 Trump claimed that Suleimani needed to be killed a long time ago. 

 Both the Bush and Obama administrations passed on taking that action, viewing the potential dangers as outweighing the potential benefits flowing from his death. 

 On the benefit side, killing this guy will not stop Iran from attacking its enemies including the U.S. through proxies. Iran’s new Quds Force commander brings continuity to the post held by his slain predecessor - The Washington Post Trump claimed that his maximum pressure campaign was working with Iran, which is clearly not the case.   



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Trump:



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All trades are commission free unless otherwise noted. 
1. Added 65 FENY at $16.11: 

Quote: Fidelity MSCI Energy Index ETF

 Last Discussed: Item # 1.B. Added 10 FENY at $16.03 (12/28/19 Post)

 Sponsor's Website: FENY | ETF Snapshot - Fidelity

 Expense Ratio: .084%

 This was in response to recent Middle East developments. This purchase just brings me up to 100+ shares. 

 Cushing, OK WTI Spot Price FOB (Dollars per Barrel)

 Last Elimination Discussions:  Item # 4.A. Eliminated FENY-Sold 60 shares at $18.83 (10/26/17 Post)(profit snapshot=$127.78); Item #1.A. Bought 50 FENY at $17.85 (7/19/17 Post); Item # 5 Sold 50 FENY at $27.81 (8/6/14)(profit snapshot $115.96)-Item # 2 Bought 50 FENY at $25.49 (3/10/14 Post)

 2. Bought 100 XEG:CA at C$9.37 (C$1 Commission):

Quote: iShares S&P/TSX Capped Energy Index ETF Overview

 This buy was also in response to a possible conflagration that disrupts crude shipments from the Middle East.

 Sponsor's Website: iShares S&P/TSX Capped Energy Index ETF | XEG

 Expense Ratio: .61% (high)

 Holdings: 23

 Top 10 Holdings as of 1/2/2020:

Dividends: Quarterly at a variable rate

Goal: Viewed as a hedge against a major conflagration in the Middle East that drives crude oil to $100+ per barrel. If that does not happen, then a 6% to 10% realized total return within 12 months would be viewed as a victory.

3. Bought 50 IVZ at $17.91 (Fidelity Account) and 10 at $17.81 (Schwab Account): 

Quote: INVESCO Ltd. 
Website: Invesco | Home

 This is my first purchase of the common shares.

 IVZ is a large investment manager with approximately $1.2T of assets under management ("AUM") as of 9/30/19. Invesco offers a wide variety of  mutual funds, money market fund, CEFs, unit trusts and ETFs.  

 The company acquired Oppenheimer Funds, an affiliate of MassMutual in May 2019. Invesco announces Combination with OppenheimerFunds, $1.2 Billion Common Stock Buyback Program and Reports Results for the Three Months Ended September 30, 2018 ("Under the terms of the agreement, Invesco will acquire OppenheimerFunds with consideration to MassMutual and OppenheimerFunds employees consisting of 81.9 million shares of Invesco common equity and $4 billion in perpetual, non-cumulative preferred shares with a 21-year non-call period and a fixed rate of 5.9%. The 81.9 million shares include approximately 6.6 million shares to be issued as a part of the post-closing conversion of unvested restricted stock awards, currently held by OppenheimerFunds employees, into Invesco restricted stock awards.")

 Invesco Monthly AUM Press releases

 IVZ Analyst Estimates | MarketWatch (as of 12/26/19)
2019: $2.59
2020: $2.66
P/E at $ using $2.66 estimate=

 The E.P.S. estimates are ex items (non-GAPP)

 10 Year Chart: Bear Market Trend Since 2015, possible double bottom
The underlying problem revealed by this chart is that low cost passive investment vehicles are garnering an increasing share of investor dollars at the expense of active managers. A related issue is the competitive pressure to reduce fees. There is no reason to expect that these trends will reverse.

 For the past decade, assets under management have been positively impacted by the bull markets in stocks and bonds. That tailwind of course may reverse.

Dividend: Quarterly at $.31 per share ($1.24 annually)

 Invesco-Dividend information 

 Since 2015, IVZ has increased the dividend annually by raising the quarterly penny rate by 1 cent. 

 Dividend Yield at  $17.91 = 6.92%

 Last Ex Dividend Date: 11/8/19 



Reconciliation of GAAP and Non-GAAP: 
The primary add back to GAAP net income relates to the Oppenheimer Funds acquisition.

 10-Q for the Q/E 9/30/19 (debt listed at page 15)

 Quotes from page 15 of 10-Q: 

 "Our revenues are directly influenced by the level and composition of our AUM. As a significant proportion of our AUM is based outside of the U.S., changes in foreign exchange rates result in a change to the mix of U.S. Dollar denominated AUM with AUM denominated in other currencies. 

 Invesco has made significant progress toward the integration of the two firms through the combination of middle- and back-office, location strategy and leveraging the scale of the global operating platform. To date, Invesco has achieved $501 million in annualized net expense synergies related to integration of the OppenheimerFunds business, which is in excess of our $475 million target and ahead of schedule. Transaction, integration, and restructuring costs related to the acquisition are expected to increase from the original projection as a result of expenses related to fund mergers that were not contemplated at close, as well as incremental severance costs related to achieving increased net expense synergies. The company also will continue to incur incremental non-cash transaction, integration, and restructuring charges related to accelerated vesting of share-based awards for terminated employees and acceleration of depreciation for software and leasehold improvement assets as well as $120 million related to compensation payments to certain OppenheimerFunds employees, which were granted and funded by MassMutual under the terms of the acquisition.

 During the third quarter, the company purchased $314.8 million of its common shares. This amount reflects $300.0 million through a forward contract ($16.0 million shares) and $14.8 million (0.8 million shares) relating to purchases of shares from employees to satisfy tax withholding requirements at the time of share vesting." (emphasis added)

Brokerage Reports: 

 Argus (10/24/19): Buy with a $26 PT

 Morningstar (10/23/19): 4 stars with a FV of $21

 Credit Suisse (10/23/19):  Neutral with a $18 PT

 S & P (10/29/17): 4 Stars with a 12 month PT of $19 

 Subsequent to my purchases, RBC downgraded from outperform to market perform and reduced its PT to $19 from $22. WFC downgraded from equal weight to underperform, with a $17 PT. I do not have access to those reports.  

 Goal: 8+% annual average total return, mostly from the dividend. I have low expectations for stock appreciation. 

 Maximum Position This Account: 100 shares + shares purchased with dividends. I will average down at some point with a 50 share purchase. 

 I also started a small ball "buying program" in my Schwab account with a 10 share purchase at $17.81. 
The maximum position in that account will be 50 shares, bought in 10 share lots using the small ball purchase restriction.   

4. Pares and Eliminations: 

A. Eliminated NRBAY-Sold 50 at $8.11:

Quote: Nordea Bank AB ADR

 Profit Snapshot: Net of $32.14

Item # 1.C. Bought 30 at $6.11 (9/7/19 Post) 

 Category: Lottery Ticket Basket

 Nordea's stock has proved to be a difficult trade due to several headwinds. I decided to back off given those issues which includes the self inflicted Russian money laundering problems that has negatively impacted several European banks particularly those with branches in Estonia. 

 The other major headwind for European bank in general is the extremely abnormal monetary policies of the ECB.  

 Prior Trades: 

 Item # 4 Sold Nordea Bank (NRBAY) at $12.39 (2/1/18 Post)(profit snapshot $74.97)(noting that the last earnings report was awful IMO)-Bought Back 100 NRBAY at $11.54 (12/11/17 Post); Item # 2.A. Sold 100 NRBAY on Ex Dividend Date (4/1/17 Post)(profit snapshot $72.17).

I was harvesting then the annual dividend payment and then selling the shares for a profit. That has become too time consuming given the difficulty in exiting the position at a profit. 

Dividends: Annually

 Dividend | nordea.com

 Last Ex Dividend: 3/22/19 

 B. Pared ORKLY-Sold 100 Shares at $10.1 (highest cost lot): 
Quotes: 

 NOK Priced Ordinary Shares: ORK.OL
USD Priced ADR Pink Sheet Exchange: ORKLY

 Investor Relations - Orkla.com
About Orkla - Orkla.com

Orkla Foods - Orkla.com
Orkla Confectionery & Snacks - Orkla.com
Orkla Care - Orkla.com
Orkla Food Ingredients - Orkla.com

 Profit Snapshot: +$4.97

Item # 5 Bought Back 100 ORKLY at $10.05 (9/21/17 Post)
Average Cost Per Share Before Pare = $9.41

Average Cost Per Share After Pare = $8.35
Snapshot at the Close on 12/26/19 
Currently Owned Shares Item # 1.C. Added 20 ORKLY at $7.76 (1/23/19 Post); Item # 1.B Added 20 ORKLY at $8.15  (7/22/18 Post); Item # 1.A. Bought 10 ORKLY at $9.22 and 10 at $9.09 (5/7/18 Post)

Agreement regarding sale of Orkla’s interest in Sapa to Hydro completed - Orkla.com; Orkla ASA: Orkla to sell its interest in Sapa to Hydro That transaction resulted in a special dividend on my 100 share lot paid in 2017:
Norway Withheld 15%/ADR Custodian Fee $2.5
The price was negatively impacted about two years ago after this development: Mars Norge terminates "Wrigley contract"; Orkla's (ORKLY) CEO Peter Ruzicka on Q1 2018 Results - Earnings Call Transcript | Seeking Alpha (see page 1: "Orkla had approximately NOK250 million in sales from the regular distribution agreement."). 

 Another problem occurring at about the same time was Norway increasing its sugar tax by 83%. Norwegian sugar tax sends sweet-lovers over border to Sweden-The Guardian So some negative developments caused the 100 share lot to lose value which was finally recovered after the recent positive earnings reports.

 Prior Round-Trips:

Sold 100 ORKLY-Update On Portfolio Positioning And Management - South Gent | Seeking Alpha August 2015 (+$51.08)- Bought Back 100 Orkla (ORKLY) At $7.285 - South Gent | Seeking Alpha December 2014

Item # 4  Sold 100 ORKLY at $9 (9/6/14 Post)(profit snapshot $122.48)-Item # 2. Bought 100 ORKLY at $7.61 (1/13/14 Post) 

 Total ORKLY Trading Profits: $243.98

 2018 Regular Dividend on 100 Shares: 
100 Shares: ADR Custodian Fee = $2.5/Norway withheld 15%
Note that there was an adjustment on the foreign tax. The foreign tax of $8.13 or 25% of the dividend amount was deleted. The 25% rate is probably what Norway charges when the broker fails to claim the 15% tax treaty rate which Fidelity apparently did for this payment and the previous one referenced in the previous snapshot as well as all prior dividends that I have received from Orkla prior to 2019. .   

 2019 Regular Dividend on 160 Shares: 
160 Shares/Norway withholds 25%; $3.2 paid to ADR Custodian 
For this last dividend, Fidelity apparently failed to claim my tax treaty rights at the source. 

 While I have only viewed U.S. tax treaties with a few foreign countries, the general limitation is a maximum 15% withholding tax on dividends paid to U.S. citizens. The broker needs to assert tax treaty rights at the source. Otherwise, the foreign country will tax the dividend at its highest rate applied to any country which does not have a tax treaty imposing limits.  The highest rate will generally be between 25% to 35%. 

Recent Earnings Report: Orkla 2019 3rd Quarter.Pdf

5. Canadian Reset Equity Preferred Stock Dividends:

 The following Canadian preferred stock dividends were paid on 12/31/19:
I will be leaning more on Canadian reset preferred stocks this year for CAD income generation.

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.
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Wednesday, July 18, 2018

Observations and Sample of Recent Trades: GJP, SIR, XEG:CA

Economy: 

Dollar gains buoyancy after Powell’s upbeat comments about the U.S. economy - MarketWatch

 Powell's testimony indicates that the FED remains on track to increase the federal funds rate gradually. Fed's Powell: Years of strong jobs, low inflation still ahead | Reuters (“With appropriate monetary policy, the job market will remain strong and inflation will stay near 2 percent over the next several years.”)

 Retail sales increased by .5% in June. Advance Monthly Sales.pdf


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Markets and Market Commentary: 

Vanguard: You'll make less money in the market over the next 10 years (estimated annual return at 3% to 5% unadjusted for inflation) Mario Gabelli has a more bullish estimate of 6% to 8% annual return in the S & P 500 index, which I view as optimistic. Mario Gabelli on Tariffs, Treasuries, Taxes and Technology-Barron's Both estimates could be wildly optimistic with the onset of a long term secular bear market covering most of that period when  total returns, unadjusted for inflation and taxes, could be negative. 

 The period between 1/1/1966 through 7/31/1982, which is longer than my current life expectancy using the mortality tables, produced a total annual average return of -1.798% adjusted for inflation and before taxes. S&P 500 Return Calculator, with Dividend Reinvestment The total return number includes reinvestment of the dividends. 

 Another bad period started in August 2000 and lasted through February 2009, when the annual average total return adjusted return was -7.59%. During long term bear markets, there are a lot of up and downs but the end result is that the stock index investment has lost ground with dividends reinvested and adjusted for inflation and before taxes, over a significant period of time. The worst period started before I was born so I missed that one.  

 The most recent longer term bear markets have had their origins in too much debt. That was certainly the case in the 2008 Near Depression period. The solution to the world having too much debt was to increase the total (government and consumer) over the next ten years by about $70 trillion which is bad enough before you take into account the return of normalized interest rates. 

 I am estimating that number. It is probably larger. McKinsey came up with a $57 trillion number through the 2014 second quarter or over 4 years ago. Debt and (not much) deleveraging | McKinsey & Company

 U.S. government debt can be serviced only by issuing more debt to pay the interest on maturing securities. The annual budget deficit for the current fiscal year is probably going to exceed $800 billion and $1 trillion by 2010. The Budget and Economic Outlook: 2018 to 2028 | Congressional Budget Office

 Whatever the number turns out to be, the deficit can only be financed with new debt growing in a parabolic fashion. At some point, the world refuses to belly up to the bar. It is not a question of whether this will happen but when. 

 The U.S. Treasury through the Federal Reserve has been a major buyer of U.S. debt issued by the U.S. treasury starting with the first QE program in 2009. That pile is being allowed to wind down now. By November 2018, the Fed will be allowing $50B a month to mature that will have to be financed by the treasury with new paper.   

 High yield could be the next pillar in the market to crack, warns technician: CNBC In my opinion, the yield spread between junk bonds and investment grade bonds is sufficiently low that it makes no sense to me to take on the extra credit risk. 

For example, look at the YTMs for this Ashland 4.75% SU bond maturing in 2022 rated Ba3/BB- and this 2.5% TransCanada SU bond maturing in 2022 rated at A3. I own the TransCanada 2022 bond. I still own one bond, originally issued by Hercules, that is now an Ashland obligation, that was bought in 2011. Item # 2 Bought 1 Hercules 6.5% Junior Bond Maturing on 6/30/29 at 86 (6/24/11 Post); Bond Detail. 

P&G says Canada denies tariff exemptions, many products hit | Reuters

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Trump and Russia: 

 Dear Comrades: 

 Я расчищаюсь на своем русском языке в рамках подготовки к слиянию Соединенных Штатов в Российской Федерации. Когда республиканцам удается создавать Соединенные Штаты России, мне интересно, станет ли Путин или Дональд нашим Великим лидером на всю жизнь. Моя идея в этом отношении заключается в том, что они должны бороться за титул. Мои деньги на Влада, чтобы победить. Мой альтернативный метод разрешения заставил их показать их (слово, снятое российскими цензорами or a phrase rumored to be "Mr. Winky"), и тот, у кого самый большой, является победителем. 

 I meant to say arm wrestle, but I had trouble coming up with the right words in Russian. 

 My Russian is a little rusty so please excuse anything that failed to make perfect sense in the prior sentences.  

 Just prior to his two hour one-on-one meeting with Putin, Trump tweeted that the Mueller witch hunt, which just produced twelve indictments against Russian GRU agents for U.S. election interference, and foolish U.S. policies, had resulted in the worse relations with Russia ever. 

Of course, in Trump's Alternate Reality Universe inhabited by tens of millions, Russia had nothing to do with the rocky current relationship. 

 71% of republicans approved of Donald's performance. POLL

 The Russian Ministry of Foreign Affairs quickly agreed with Trump's assessment:  "We agree"  At least our two nations can agree on something. 

 Yes, all of our leaders prior to the Duck were just stupid, but now we have a stable genius leading us. 

 Praise the Duck and his Trumpsters for saving us from generations of inexcusably stupid leaders who have simply failed the nation in their inability to even recognize that it is all our fault and Russia is just blameless. 

 Dana Milbank summed up just how stupid we have been: "We brainlessly criticized Russia when it invaded Georgia and Ukraine. We idiotically protested when Russia poisoned people in Britain. Like dunces, we punished Russians for killing human rights activists. Morons that we are, we complained when Russia shot down a passenger jet. And then, revealing ourselves to be truly daft and inane, we blamed Russia for interfering in our election."
  
After all, Russia was not responsible for the Crimea Annexation, the U.S. election interference, and their efforts to destabilize Ukraine and countless other democracies. Obama was responsible for all of that. Trump found a way to blame Obama for Putin invading Crimea - CNN; Trump blames Obama for Russian election meddling - POLITICO 

 ‘Shameful,’ ‘disturbing,’ and an 'embarrassment’ — Congress reacts to Trump’s press conference with Putin - MarketWatch

Donald also used the meeting with Vlad to reiterate his contention that "Much of our news media is indeed the enemy of the people". The Trumpsters could not agree more; and no poll is needed to verify that opinion.  

 The Russian news media outlets, firmly under Vlad's control, were effusive in their praise for Trump who, in their consensus view, has been unfairly maligned in the U.S. by our Fake News Media. Trump wins sympathy from Russian media ahead of summit {The easiest way to control Donald, besides having dirt on him, is to praise him in an embarrassing effusive manner and to never correct or criticize anything that he says or does.} 

Donald Trump just can't stop saying nice things about Vladimir Putin - CNN 

Donald called the probe into Russia's election interference, which Putin denied, a "disaster for our country".   

 Putin did admit that he wanted Donald to win the election however, which comes as no surprise, allegedly "because he talked about normalizing relations”. Putin again denies Russian interference in the 2016 U.S. election; Trump calls probe a ‘disaster for our country’  

 In response to a question, Trump said he was not convinced Russia even meddled in the 2016 election. Shock as Trump backs Putin on election meddling at summit | Reuters (hardly a shock); Trump, at Putin’s Side, Questions U.S. Intelligence on 2016 Election - The New York Times; President says Putin denial of election interference was ‘powerful’ - MarketWatch 

Transcript: Trump And Putin's Joint Press Conference : NPR

Donald Trump's 'missing' server comments get all of the details wrong | PolitiFact (just more lies from a pathological liar); Fact check: Trump promoted conspiracy theories. Here's the truth.

 What can you say other than we need to find that that Uncle Sam fellow and give him a good whipping. 

 A reference to some indictments of Russian intelligence operatives contains a lot of detail that the Duck will not acknowledge, preferring instead to accept the KGB's version of events. 

 Donald even thought it was an unbelievable idea for Mueller to cooperate with the KGB in investigating Russia's election interference. Why not just direct Mueller to sit down with Russian intelligence officers and tell them about all of our intelligence sources and methods.

 Indictment (7/13/18).pdf; Internet Research Agency Indictment (2/16/18)

 Donald was really pleased by his performance:

Trump says summit with Putin was ‘even better’ than NATO meeting as growing number of Republicans criticize his Helsinki comments (NATO countries did not agree to increase their defense spending beyond the promises previously given four years ago during Obama's administration: Trump Nato spending claims in dispute - BBC News)

 I understand what the Trumpsters are saying now. 

 I see the light finally. It has been an admittedly long and difficult road for me. Praise the Lord. 

 All of the hard evidence provided in those two indictments against Russian operatives and entities, which is probably just the tip of iceberg, is part of the Deep State Conspiracy against the Duck hatched out of the same pizza parlor in D.C. where Hillary ran her child trafficking ring. Yea man, Lock Her Up and where is that DNC server and those Hillary emails anyhoo. I can't wait for Devin Nunes (R-CA), Mark Meadows (R-NC) and Jim Jordan (R-OH) to launch an investigation into this latest nefarious Hillary scheme disclosed by Vlad himself. (note: the DNC server is not missing. The FBI did accept a forensic analysis by a third party firm)

 Trump attacks Mueller at joint news conference with Putin, advances conspiracy theories; Fact check: Trump promoted conspiracy theories. Here's the truth.

 Trump walks into a 'Russian trap' before Putin meeting: Ex-ambassador

Outrage at Trump performance with Putin: Former CIA Director Calls it "nothing short of treasonous". 

That tweet is over the top IMO. There is no hard proof that Trump has been compromised by Russia or that he is Russia's Manchurian candidate. That is not equivalent to being an exoneration of any kind. We may never know one way or the other. It is reasonable now to be at least deeply suspicious. Analysis: The growing Trump-Putin kompromat question I am unaware of a single example where a large number of American citizens believed that a U.S. President had been coopted by a hostile foreign power. You would have to go back to the treason charges made in 1807 against a former Vice President, Aaron Burr, the guy who killed Alexander Hamilton in a duel, to find such traitor and treason rumblings about either a President or a Vice-President, either currently in office or out of office. Aaron Burr’s Notorious Treason Case - HISTORY 

 There is evidence that Trump has been saying a lot of things about our traditional western allies that Putin would want a U.S. President to say. 

 A number of Trump remarks could have just as easily been spoken by Putin; and both men share a common contempt for the free press and other institutions essential to a properly functioning democracy. 

 Is Donald Putin's "poodle" as some have claimed? I do not want to offend poodles so I would prefer to insert "lap dog". At a minimum, I would characterize Trump's most recent foreign country excursion to be without question the worst performance by a U.S. President in my lifetime, but then that is what I expect from Donald. 

 CNN's Cooper calls Trump's summit performance 'disgraceful' - StarTribune.com We can now all rest and relax. Vlad denied that Russia had any compromising information on the Duck, calling such allegations "utter nonsense". It only looks like the Duck is carrying Putin's water. 

 McCain continued to be one of the few republican politicians willing to criticize Donald in any meaningful way, calling the Duck's performance in Russia “one of the most disgraceful performances by an American president in memory” and "pathetic" adding that no "prior president has ever abased himself more abjectly before a tyrant. John McCain says Trump abased himself before Putin at summit

 Senator Rand Paul (R-KY) agrees with Donald that U.S. intelligence agencies have it all wrong and the KGB is right. Rand Paul sides with Trump over US intel - CNN Video

 Only a handful of republican politicians will stand up to Trump. You can count them on the fingers of one hand and have several left over when excluding those that are retiring this year rather than losing to a Trumpster in a primary challenge. You could probably play the clarinet with the left over fingers. 

 There is zero daylight between Trump and virtually all republican politicians. 

 90% of republicans approve of Trump: Trump Job Approval at 90% among republicans The Trumpsters are in absolute and unquestionable control of the GOP which represents Trump's values and policies, both domestic and international. 

 Republicans dismiss criticisms of Trump by calling them collectively the Trump Derangement Syndrome, which is the Trump way of deflecting factual criticism by attacking the critic. It is far easier to go through life dismissing facts as untrue and to accept reality creations and demonstrably false statements as true. It makes everything much more simple.

 The man who has seen Trump's tax returns says that we need to see them now. A New Reason for Trump to Release His Tax Returns: Helsinki - Bloomberg  

Trump Sheds All Notions of How a President Should Conduct Himself Abroad.

 Why Russian officials were gleeful at Trump's diplomatic train wreck

 George Will's take: Trump is a sad, embarrassing wreck of a man - The Washington Post

Even if one accepts that he meant to say "wouldn't" rather than "would" (see transcript above), the Duck needs to be judged by the totality of what he said in foreign countries over the past week or so. Ex-CIA chief Michael Hayden: I'm laughing at Trump (the statement as revised is now a double negative)

 In doing his mea culpa yesterday, he could not resist saying that it could have been a lot of people who interfered with the election besides Russia {Trump Quote from Yesterday: "I accept our intelligence community’s conclusion that Russia’s meddling in the 2016 election took place. It could be other people also. There’s a lot of people out there. There was no collusion at all, and people have seen that and they’ve seen that strongly." emphasis added} I would call that as saying it could have been Russia or it could have been just about anybody other than Russia which is what he has been saying for over a year now. 

 (e.g.  July 2017: “I think it was Russia, and I think it could have been other people in other countries. Could have been a lot of people interfered.” He then attacks the news media and Obama and comes back to say the following:  “I think it was Russia, but I think it was probably other people and/or countries. I see nothing wrong with that statement. Nobody really knows. Nobody really knows for sure.” (emphasis added) Trump Downplays Russian Election Meddling Yet Again)

 Amanda Carpenter, a conservative Never Trump republican, demonstrates an understanding of the Trump creature in her book Gaslighting America: Why We Love It When Trump Lies to Us.

 I’m a Republican. Why Is My Party Gaslighting America? - POLITICO Magazine (my reply to this author, who is Ms. Carpenter, is that the GOP has been moving toward Know Nothing Trumpism for years, where reality creations are the norm and facts that contradict those creations are Fake News. While I am not that familiar with Ms Carpenter's beliefs, the fact that she worked for Senator Ted Cruz and the former tea party Senator Jim Demint suggests that we would find almost no other common ground on many other important issues, which is fine. DeMint is the kind of guy who wants to privatize Social Security; take a dump on Medicare and Medicaid and is to the far right on all social issues.) 

 11 Warning Signs of Gaslighting | Psychology Today

 Gaslight (1944) - IMDb (use of the gaslighting process)

 None of this or anything else will have any negative impact on Trump's approval rating among republicans. His approval rating did tick up t0 43% in the week ending 6/15 from 41% in the prior week, based on Gallups weekly poll. 
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 Trump and the EU: 

 Trump: The European Union is our ‘foe’ - MarketWatch;

 Trump, in interview with CBS News, says "I think the European Union is a foe" ahead of Putin meeting in Helsinki - CBS News 

 When ask about who were the U.S. foes, the Duck did not hesitate to mention the EU first and foremost. Apparently, this has something to do with Donald's understanding of trade relationships.  

 The EU imposes a trade weighted average 3% tariff on U.S. exports according to the WTO, which is viewed by Trump as tantamount to an act of war against the U.S. Is the European Union a 'protectionist racket'? - BBC News

 Sure the EU imposes a 10% tariff on U.S. automobile exports compared to the U.S. at 2.5%. 

 What Trump never says when talking about that difference is that the U.S. has a 25% tariff on pickup imports. 

 The U.S. has a 14% tariff on train carriages whereas the EU has a 1.7% tariff on that product. Then the U.S. has a 350% tariff on tobacco, 9% on chocolate, 20% on key milk products, and 130% on peanuts. Factsheet on Trade in goods and customs duties in TTIP; EU tariffs Europe has a 17% tariff on apples and 20% on grapes. 

 The situation is more complex than Trump will ever convey to the American people, which is just a small part of his tireless efforts to mislead the public with demonstrably false information. All countries have tariff barriers to varying decrees. 

 Trump is transparently attemptiong to condition the easily manipulated True Believers to be pro-Russia, anti-EU and anti-NATO. Trump’s NATO summit antics were great for Putin - Vox; Trump is Training His Base to Hate NATO and Like Putin 

 Putin is about as trustworthy as Trump, which is to say that both have zero credibility, and both do think alike in important ways that are inconsistent with the primary principles of western democracies. So I at least understand that the Duck has a natural affinity for Putin and finds leaders of western democracies and a free press annoying and worthy of his disdain. 
++ 

 Trump and the U.K: 

Trump rips Theresa May, says ‘soft’ Brexit would ‘kill’ any future U.S.-U.K trade deal - MarketWatch

 Trump blasts Prime Minister Theresa May in interview published during his first official visit to Britain - The Washington Post (Donald like Boris Johnson much better than May since Boris is effusive in his praise for Donald: “I have a lot of respect for Boris. He obviously likes me and says very good things about me.” Donald also claimed to be a "stable genius" again, which I suppose is better than an unstable one. He needs to submit to an IQ test. The easiest way for a foreign leader to manipulate the Duck is through effusive praise coupled with zero criticism); I’m A Very Stable Genius,’ President Donald Trump Says As NATO Summit Ends | NBC News - YouTube 

 President Trump denies he criticized British prime minister after criticizing her - CNN Perhaps, Donald needs to say something and then wait longer before he denies saying it. When the statement and denial are in the same sentence or close together in time, even the True Believers may start to question whether Donald is such an honest straight shooter who tells it like it is. Maybe some will even start to question Donald as a role model for their young children. 

I told May how to do Brexit but she wrecked it — the US trade deal is off, says Donald Trump; Even May's UK opponents are backing her against Trump: CNBC The opposition party said that Trump was  "extraordinarily rude". It is hardly surprising to anyone that Donald enjoys being mean and rude, a predilection which, according to the Trumpsters, express his "authenticity" rather than the Duck just being a jerk and a wind bag full of B.S.) Donald had to walk back that comment within 24 hours. It was outrageous even by his standards. 

Donald claims that he told the U.K PM Theresa May how to handle to the Brexit plan without providing any details of his advice. The P.M. has now disclosed what Donald told her. Donald's advice was to sue the EU rather than to negotiate which is idiotic advice. Theresa May: Donald Trump told me to sue the EU

 I will not bother to count the number of times the uncouth and quintessential Ugly American insulted Queen Elizabeth. Twitter counts ways President Trump 'insulted' Queen Elizabeth Just about any dunce knows better to walk in front of the Queen while reviewing the honor guard. Trump breaks royal etiquette, walks in front of Queen - YouTube

 After repeatedly insulting his U.K. hosts, Donald traveled to Scotland to promote his money losing golf course at Turnberry. In Trump’s U.K. Visit, Some See ‘Infomercial’ for Money-Losing Golf Resort - The New York Times; CREW: Trump using visit to Scotland as ‘infomercial’ for golf club | TheHill

 Donald is using the Presidency to enrich himself. In this particular case, the taxpayers are footing about a $6.6 million dollar bill so that the Duck can waddle along the Turnberry links for one round. Trump is set for a $6.6 million round of golf: CNBC 

 The Trumpsters were up in arms when Obama took the afternoon off to play at the Congressional Country Club in Bethesda, MD. just a short motorcade drive from the White House. Trump was livid at the times Obama played golf telling his supporters that he would not have time to play golf including at Turnberry. 

Trump won't play golf as President. Believe me... - YouTube (just a big fat bag harboring nothing more than a bountiful supply of self generating Bull Shit, yet republicans view him to be a straight shooter who tells it like it is) 

 Donald is on pace to 650 rounds of golf if he is re-elected to another four year term. President Donald Trump on pace for 650-plus rounds of golf as Commander-in-Chief

He is of course playing for more golf than Obama and his excursions have cost the taxpayers over $69M so far, Trump Golf Count, but that is okay since it is Donald rather than a democrat. The Democrat can be booed by the Trumpsters while they applaud Donald's promise to work so hard at being President that he will not have any time to play at all.  

 Trump Spent Almost One-Third Of His Presidency At His Own Properties, Golfed More Than Obama (12/27/17 Newsweek);  

 And, besides, Donald said that playing golf was his only exercise which explains I suppose why Melania sleeps in an different room.  

 More Trump Lies and Prevarications: 

 It is a full time occupation to keep up with Donald's false statements. The only reasonable assumption to make is that he is lying until proven beyond a reasonable doubt that he managed to tell the truth.  

 Just more Donald lies:  John Kerry rebuts Trump, says NATO spending was up, not down | PolitiFact ("Total defense spending by the European members rose 8 percent or $20 billion dollars from 2014 to 2017."); Trump falsely claims NATO countries owe United States money for defense spending | PolitiFact The U.S. does spend a higher percentage of GDP, but that money would be spent irrespective of spending by other Nato members. Ask a republican whether they want to cut the defense budget to 2% of GDP.  

 Most of Donald's rhetoric about NATO could be coming from Putin's mouth. 

 The U.S. is the only country to invoke the NATO mutual defense Article 5 to date, and that was done in response to 9/11. NATO countries sent troops and other personnel to aid the U.S. in the War in Afghanistan (2001–present). At its height, NATO allies provided 130K personnel with troops from 50 NATO countries. NATO and Afghanistan The largest contributor of combat troops was the U.K who the Duck just insulted several times. 

+++++

1. Equity REIT Common and Preferred Stock Basket Strategy:

 A. Sold 83+ SIR at $23.2-Used Commission Free Trade:


Profit Snapshot: $101.78

Closing Price Yesterday: SIR $22.31 -$0.13 -0.58% 

 The problem is shown in the snapshot. 

 I started this small lot buying program by buying 50 shares at $23.1, which, in retrospect, was a poor entry point for this decidedly out-of-favor, though high yielding, REIT. Bought Back 50 SIR at $23.1-Used Commission Free Trade (1/21/18 Post) The lowest purchase price was at $18.5 made less than two months after the 50 share purchase. 

 I also own 20+ shares in my Fidelity account where I have an average cost per share of $19.17. The dividend yield at that average cost number is about 10.64%. 

 Purchases are subject to the small ball purchase restrictions. The next purchase would have to be below $18.61. Item # 1.D. Bought 10 SIR at $18.96 and 5 at $18.61 (3/8/18 Post)

Last Round-Trips: Item 6.A. Sold 50 SIR at $25.28 (11/20/17 Post)-Item # 6.A. Bought 50 SIR at $22.95  (9/11/17 Post); Item # 5 Sold 50 SIR at $25.17 (8/4/12 Post)-Item # 2 Bought 50 SIR at $21.86 (5/29/12 Post)

 I have been increasing my exposure to SIR's senior unsecured bonds. My last purchase was 2 SIR 3.6% SU bonds maturing on 2/1/20: Item # 3.D. (6/15/18 Post) 

 Management: External

 Dividend: Quarterly at $.51 per share

 Trading Profits to Date: +$377.84

 Trading Goal: Collect the dividend and sell at whatever profit is available

 Website: Select Income REIT - Home
Select Income REIT - Properties

 Last Earnings Report: Q/E 3/31/18

 Select Income REIT Announces First Quarter 2018 Results 

 2. Sold 100 XEG:CA at C$13.27 (C$ IB Commission): 


Quote: iShares S&P/TSX Capped Energy Index ETF Overview 

 Sponsor's website: iShares S&P/TSX Capped Energy Index ETF | XEG

 TOP Ten Holdings: 

Cash Distribution History: 

This was not a successful trade. I at least managed to avoid a loss and had a positive total return. If I am going to end up with a lackluster return, it is better than the investment is insignificant which was the case with this Canadian ETF.  

 I decided to go with the  higher yielding Invesco Canadian Energy Income ETF (ENY) for exposure to the Canadian energy sector. I recently added to that position and currently own 362+ shares.  Item # 1.D. Added 20 ENY at $7.87 Used Commission Free Trade (6/21/18 Post) I am reinvesting the dividend. 

 There are two main differences between the two ETFs. ENY is priced in USDs and traded in the U.S. whereas XEG:CA is an Canadian ETF that is priced in USDs. Unlike XEG:CA, which owns only E & P stocks, ENY also owns the higher yielding energy infrastructure stocks. 

 Profit Snapshot: +C$27


In the energy sector fund category, I also own 193+ shares of the CEF PEO, last discussed in this post: 

 3. Eliminated the Synthetic Floater GJP: 

 A. Sold 100 GJP at $23.06-Used Commission Free Trade: 

 2 Year History This Account: 

Closing Price Yesterday: GJP $22.57 -$0.10 -0.44% 
Profit Snapshot:   +$108.29

Item # 2.A. Bought 50 GJP at $21.35 (4/26/17 Post)

 Item # 2.C. Added 50 GJP at $22.6 (3/29/18)(detailed description can be found here) 

Quote: Synthetic Fixed-Income Securities Inc. for Dominion Resources Inc. Securities Series 2005-6 Floating Rate STRATS

 GJP is a Synthetic Floater in the Trust Certificate legal form of ownership. It is an Exchange Traded Bond.

The owners of GJP are entitled to receive monthly interest payments at the greater of 3% or 1.15% over the U.S. 3 month T Bill rate on a $25 par value. This security has a maximum coupon of 8%. Prospectus The underlying security is a senior unsecured bond issued by Dominion Resources that matures in June 2035.  Bond Detail

Interest payments are made monthly.  

The 3% minimum coupon is increased when the three month T. Bill rate exceeds 1.85%. 

 Since the synthetic floaters are in the trust certificate form of legal ownership, I include round trip snapshots in this post: Stocks, Bonds & Politics: Trust Certificates: New Gateway Post
B. Sold 50 GJP at $23 ($1 Commission at IB): 


Profit Snapshot: +$147.98


Item # 4 Bought 50 Back Back 50 GJP at $20-Update For Exchange Traded Bond And Preferred Stock Basket Strategy As Of April 1, 2016 - South Gent | Seeking Alpha 

 Other Discussions: 



GJP Realized Gains To Date: $1,080.27  ($824 prior trades)

Trust Certificates Profit to Date: $31,500.89

 Trust Certificates are largely extant now due to redemptions by the call warrant owners who created the Grantor Trusts. 

4. Short Term Bond/CD Ladder Basket Strategy: 

A. Bought 2 Healthcare Trust of America Holdings LP 3.375% SU Bonds Maturing on 7/15/21-In a Roth IRA Account: 


FINRA PAGE: Bond Detail (Prospectus linked)

Issuer: Operating Entity for Healthcare Trust of America Inc. (HTA) who guarantees the notes: 


HTA 2017 Annual Report (debt discussed starting at page 92)


The last bond offering was in June 2017: Prospectus 


Credit Ratings: 


Bought at a Total Cost of 99.853 (with $ 4 brokerage commission) 
YTM at TC Then at 3.427%
Current Yield at TC at 3.38%

On the day of my purchase the three year treasury yield closed at a 2.625% yield.  2018 Daily Treasury Yield Curve Rates

On a tax free basis, and before inflation, a 3.43% yield will double in about 20.55 years. Estimate Compound Interest That  rate of return, which is before inflation and after taxes, will be insufficient for most households to meet their financial needs. 

Realistic estimates of what will be needed will drive in significant part the risks that will be necessary to take over a lifetime. 

At some point, some households will reach an age and a financial condition where preservation of capital and reliable income generation become far more important than capital appreciation. Then, this kind of investment that produces tax free income in a Roth IRA starts to make more sense. 

 B. Bought 1 Dominion Energy 2.579% Junior Unsecured Bond Maturing on 7/1/20: 

FINRA Page: Bond Detail (prospectus not linked)

 Prospectus

 Issuer: Dominion Energy Inc. (D)
D Analyst Estimates

 Press Release: Earnings for the Q/E 3/31/18 
10-Q for the Q/E 3/31/18 

 Dominion SEC Filings 

 Credit Ratings: 

Fitch Rates Dominion Energy's Senior Notes 'BBB+' (5/30/18); Fitch Upgrades Dominion Energy's Remarketed Junior Sub Notes Rating to 'BBB' (5/12/17)

 Bought at a Total Cost of 98.825
YTM at TC Then at 3.198%
Current Yield at TC = 2.6097%

C. Bought 2 AON 2.8% SU Bonds Maturing on 3/15/21: 

I now own 4. 

 Finra Page: Bond Detail (prospectus not linked)

 Prospectus

 Issuer: Aon PLC  (AON)
AON Analyst Estimates

 Aon Reports First Quarter 2018 Results
AON SEC Filings

 AON 2017 Annual Report (debt discussed and listed starting at page 71)

 Credit Ratings:

Fitch Affirms Aon's SU Rating at BBB+; Outlook Stable (5/4/18)

 Bought at a Total Cost of 98.67 (with $4 Vanguard Commission)
YTM at TC Then at 3.322%
Current Yield at TC =  2.8377%

 D. Bought 1 Wells Fargo 3% CD (monthly interest payments) Maturing on  7/31/21 (3 year CD): 


E. Bought 1 Treasury 1.5% Coupon Maturing on 1/31/19: 
YTM: 2.125%
I now own 4.

 This treasury had a slightly higher YTM than CDs maturing in January 2019: 
Snapshot as of 7/10/18
When the treasury provides a higher YTM than a CD, I will generally go with the treasury which is liquid. The treasury yield advantage is more likely to occur when the term is less than 1 year.   

5. Tennessee Municipal Bonds:

 A. Bought 5 Metropolitan Nashville 2.5% GO Bonds Maturing on 1/1/29:

Emma Page

 This is what a Vanguard confirmation looks like: 

Since this bond just paid its semi-annual interest payment, I only had to pay the seller $3.13 in accrued interest. When the issuer makes its next payment, I will receive the entire payment including that $3.13. If this was an exchange traded bond (one that trades on the stock exchange like a common stock), which trades flat, I would not have paid any accrued interest to the seller.  

 I now own 10 bonds. This last 5 bond purchase was an average down.  

 The Metropolitan Government of Nashville includes all of Davidson County Tennessee. Davidson County - Google Maps

 Forbes: Nashville, TN

 Security:

Credit Ratings:
Moody's at Aa2
S & P at AA

 Issuer's Optional Redemption: On or after 7/1/26 at par value plus accrued and unpaid interest

 Bought at a Total Cost of 95.419 (includes $10 Vanguard Brokerage Commission)
YTM at Total Cost Then at 3.013%
Tax Free Current Yield at Total Cost = 2.62%

 Current Tennessee Municipal Bond Positions:

 Par Value = $280K
Total Cost = $277.03K 
Weighted Average Tax Free Yield at TC = 2.99%
Annual Tax Free Income =  $8,274

My long bond exposure is primarily in high quality Tennessee municipal bonds.  

 I will probably wait until 2019 before buying another municipal bond. The general idea is to gradually increase the position until I hit $10K in annual tax free income. I can buy almost $10K in principal amount per year now with the annual interest paid on the current positions. 

 The municipal bonds that I am buying are far more difficult to sell than the corporate bonds. I would call the Tennessee tax free bonds that I have bought illiquid. I am not saying that they are impossible to sell.  

 The most likely course of action will be that all of them will be held to maturity. Due to the absence of an active market, I am not devoting any cash to their purchase that may be needed prior to their respective maturities. The first batch matures in 2026-2029. 

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. 
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