Economy:
Historic decline in U.S. GDP in the second quarter 31.4% annual pace - MarketWatch That is the first estimate. Gross Domestic Product | U.S. Bureau of Economic Analysis (BEA)
U.S. economy adds 661,000 jobs in September and unemployment rate falls to 7.9% - MarketWatch The consensus forecast was was for 800K. Private sector job growth was at 877K. The decline to 661,000 was a result of government layoffs largely linked to fewer 2020 temporary Census jobs.
ADP private sector jobs September 2020 (+749K private jobs; estimate was for 600K)
The Conference Board's consumer confidence index rose to 100.8 last month, up from 86.3 in August. The consensus estimate was for 90.1. This index was reported at 132.6 last February.
August Personal Income and Expenditures Report.pdf
Consumer spending rose in August; economy on track for record Q3 growth (the growth is after a record plunge in the second quarter)
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Markets and Market Commentary:
The market reacted negatively yesterday to news that Donald had become infected with the coronavirus.
10/2/20 Closing Prices:
S & P 500 P/E Ratios as of 10/2/20: P/E & Yields
Trailing 12 Month GAAP: 34.94
Estimated Forward 12 Months Non-GAAP: 24.82
Shiller P/E = 30.75 Shiller PE Ratio
Market Cap to GDP : 130.9% Market Cap to GDP: An Updated Look at the Buffett Valuation Indicator - dshort - Advisor Perspectives
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Trump:
The "Debate":
I did not watch the debate.
They are not informative and overflow with misinformation and lies.
I knew that Trump would lie throughout since he is the most dishonest person alive today who is well known. 'Almost every single thing Trump said during last segment of debate was inaccurate' - YouTube
I did read some fact check articles.
With Cross Talk, Lies and Mockery, Trump Tramples Decorum in Debate With Biden - The New York Times; republished at MSN: Trump Tramples Decorum in Presidential Debate With Biden
Trump faces criticism for refusing to condemn white supremacists - CBS News; Trump says he doesn't know right-wing group he name-checked at debate There is a reason why he refused to do so. It would have been easy for him to say "I denounce white supremacists".Proud Boys Celebrate Trump's Call For The Hate Group To 'Stand By'; Donald Trump Tries to Court Black Voters After Refusing to Denounce White Supremacy
In TrumpWorld, Donald won big time:
I doubt that anyone in Trump's orbit will tell him what undecided voters had to say about his performance: Focus Group-YouTube Sure, Donald's cult members found it entertaining.
Maybe Biden won just by staying awake. And, Biden supporters can thank Donald for that result. The loser was the American people. The best option now for the American people would be to cancel the remaining two "debates".
Dangerous Don:
In his most recent opinion column, Thomas Friedman wrote that our "democracy is in terrible danger — more danger than it has been since 1861, more danger than after Pearl Harbor, more danger than during the Cuban missile crisis and more danger than during Watergate. "
While many will disagree or view that statement as hyperbole, I view it as a fair assessment.
Republicans and others, totalling over 62 million U.S. voters are going to support, in Friedman's words, the "most dishonest, dangerous, meanspirited, divisive and corrupt person to ever occupy the Oval Office." Opinion | Trump Sent a Warning. Let’s Take It Seriously. - The New York Times That is extremely unsettling. I would add a lying, authoritarian demagogue who will govern using fear and will continue to do whatever he can do undermine the institutions required for a democracy.
It is imperative that everyone supporting Biden cast their votes in person, as I previously mentioned given what Trump will clearly claim about mail-in ballots, and so does Friedman in that column.
Trump is already a permanent stain on the U.S., made far deeper by the fact that tens of millions, including almost all republican politicians, support, cuddle and protect a meanspirited, ignorant asshole who is a psychopath and malignant narcissist, who governs by lying, fanning flames of division and non-stop demagoguery and who is doing everything that he can to undermine the institutions necessary for a properly functioning democracy.
Don the Con's Tax Returns:
The main takeaway from the NYT's investigation involving Trump's tax returns is that Donald has shamelessly engaged in creating a false image of his business acumen.
Donald would be selling used overpriced used cars to desparate poor people without Fred Trump's money.
New York Times' Trump Tax Returns Investigation: 18 Revelations - The New York Times; republished for a brief period at MSN: 18 Revelations From a Trove of Trump Tax Records
Donald was paid $427.4M for pretending to be a genius businessman on the Apprentice Reality show and its associated licensing deals. Tax Records Reveal How Fame Gave Trump a $427 Million Lifeline - The New York Times ("Mr. Trump’s genius, it turned out, wasn’t running a company. It was making himself famous — Trump-scale famous — and monetizing that fame.")
Blame Mark Burnett for revitalizing a false image that has had disastrous results for the U.S.
When one of Burnett's producers walked through Trump's offices, where the show would be televised, he saw "chipped furniture" and a "crumbling empire at every turn. Our job was to make it seem otherwise," adding that their job was to turn the "court jester ( into) the king" It was all Fake News. How Mark Burnett Resurrected Donald Trump as an Icon of American Success | The New Yorker
According to the NYT, Doofus Don has "largely' lost that sum by investing in unprofitable businesses.
"In 2018, for example, Mr. Trump announced in his disclosure that he had made at least $434.9 million. The tax records deliver a very different portrait of his bottom line: $47.4 million in losses."
The NYT disclosures about tax matters relating to Seven Springs comes closest IMO to tax fraud. I need to see more facts before forming a conclusion. The NY grand jury is reportedly looking into that issue now.
Donald also largely squandered the $413M in today's dollars that Daddy Trump gave him starting when he was a toddler. Trump Engaged in Suspect Tax Schemes as He Reaped Riches From His Father - The New York Times; Trump lost more than $1 billion in a decade, tax returns show: New York Times
Donald's successful businesses largely involve licensing his name to others who take the business risks, the big con Apprentice TV show and its related sponsorship deals.
When the Duck tried to run businesses, he managed to bankrupt six of them. Fact Check: Has Trump companies declared bankruptcy four or six times? - The Washington Post (Answer: 6 times); Donald Trump’s Business Failures Were Very Real | The New Yorker Only the ignorant, stupid, and/or gullible accept Donald's reality creations about his business acumen. Decade in the Red: Trump Tax Figures Show Over $1 Billion in Business Losses - The New York Times
More bankruptcies will come soon based on the facts disclosed in the NYT investigation.
Don the Con has personally guaranteed over $420M in debt that will have to refinanced by 2022-2023, now secured in part by failing businesses like the Washington International Hotel and the Doral country club in Florida. And, importantly, major IRS penalties may soon be imposed that will exceed $100M.
American banks learned a long time ago to avoid lending meaningful amounts to Donald. Deutsche Bank will soon find out why. Trump Tax Avoidance Scandal Exposes Poor Risk Management And Double Standards At Deutsche And Professional Banks: Forbes; Donald Trump's Tax Returns Raise Deutsche Bank Loan Questions Only a fool would loan large sums to the Duck based on his past history.
Ask yourself why someone who was actually rich would become involved in a scam like Trump University unless they needed the money?
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The Republican War on Voting:
Trump's GOP will do whatever is necessary to stay in power.
Jacob Wohl, Jack Burkman Charged In Michigan Over Alleged Voter Suppression Robocalls Wohl and Burkman are pure 100% Trumpsters. Predominantly black voting areas were targeted with a robocall claiming that the CDC would use voting information to compel Covid-19 vaccinations, creditors will come after the voters for unpaid debts and police will arrest those with outstanding warrants. Trump won Michigan in 2016 with 2,279,543 votes to Clinton's 2,268,839. Black voter turnout was significantly less in cities like Detroit compared to 2012. In Detroit, signs of increased interest among Black voters, but concerns remain (8/3/2020)
Jack Burkman and Jacob Wohl share IMO many traits common to Trumpsters. In Trump's America, they are called "conservatives".
The voting in Texas may be going the wrong way for the republican governor Greg Abbott, so he ordered on 10/1/20 that all but one ballot boxes be removed from large population Democrat strongholds on 10/2/20. Abbott orders counties to close multiple ballot drop-off sites
Fareed Zakaria: This is how Republicans keep their power - YouTube (Donald is shown being fully aware of what I am about to say about the elector's vote for President) On 1/6/20 at 1:00 P.M., a joint session of Congress will convene to open the electoral votes cast by each state. One senator and 1 House member are needed to object to the tally. 3 U.S. Code § 15 - Counting electoral votes in Congress | U.S. Code
If the two chambers disagree on the correct tally, then "the votes of the electors whose appointment shall have been certified by the executive of the State under the seal thereof, shall be counted."
If neither candidate has the necessary 270 votes to win, possibly due to successful court challenge that throws out a particular state's popular vote tally altogether (e.g. where Trumpsters control the state Supreme Court), then the President is selected by the House of Representatives with each state casting one vote.
While the Democrats would have a significant majority in the House when that vote occurs before inauguration day, the republicans would win, as Trump has previously noted, since there would be more states casting their vote for Donald than for Biden.
It is of course the republicans, not the Democrats, who are trying to steal the election, with their non-stop voter suppression and intimidation tactics just as starters. How the GOP Plans to Suppress the Vote and Sabotage the 2020 Election. The republican Supreme Court Justices made that suppression easier by joining together in a 5 to 4 decisions in Shelby County v. Holder, 570 U.S. 529 (SupCt 2013) that struck down part of the Voting Rights Act. Justice Roberts wrote the decision. Roberts engaged in reality creations to justify his holding. It’s a Fact: Supreme Court Errors Aren’t Hard to Find — ProPublica; On Voting Rights, a Decision as Lamentable as Plessy or Dred Scott
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Former Republican Pa. Gov. Tom Ridge: I'm voting for Joe Biden | Opinion Ridge was also the first Secretary of Homeland Security, assuming that position in January 2002 after being appointed by President George Bush.
Trump’s ex-national security adviser says president is ‘aiding and abetting’ Putin - POLITICO Isn't that obvious except to Trumpsters of course.
How the new Supreme Court could stymie a Biden presidency - POLITICO The recent trend has been to restrict the scope of Congresses power to legislate through the Commerce Clause and to broaden the scope of the 10th Amendment. I anticipate that the reactionary Supreme Court majority will increasingly rule that legislation passed by Congress and signed into law by the President is unconstitutional, either as an improper extension of those two branches power under the Commerce Clause or as an improper usurpation of power reserve to the states under an expanded interpretation of the 10th Amendment. The general approach will be to roll back the progress made over the past century or so.
(see generally, Interpretation: The Commerce Clause | The National Constitution Center; Interpretation: The Tenth Amendment | The National Constitution Center)
I'm Smart - YouTube Donald is an Extremely Stable Genius in TrumpWorld.
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Temp worker tossed Pennsylvania ballots Trump complained about, official says; PA county official: DOJ identified discarded ballots as being for Trump - POLITICO
In a highly unusual move, the Trump appointed U.S. Attorney for the Middle District of Pennsylvania, the Trumpster David Freed, publicly announced that he was going to launch an investigation after the facts were already known and the few inadvertently tossed ballots were recovered.
Freed claimed that 7 of the 9 ballots were cast for Trump, a clearly improper statement that proved IMO that his announcement was purely political
Immediately after Freed's public announcement, the RNC claimed this error as proof that the Democrats were trying to steal the election and Trump suggested it was part of the Democrats effort to steal the election.
It is clear that Trump's DOJ, Donald and the RNC were coordinating their response. If Biden wins, David Freed needs to be fired immediately after the inauguration. Justice Dept. statement on mail-in ballot investigation appalls election law experts - The Washington Post; Barr briefed Trump on investigation into discarded Pennsylvania ballots - ABC News
The issue is not that the FBI has launched an investigation, which is appropriate, but that Trump's DOJ publicly announced the investigation for political purposes. The DOJ policy is to refrain from publicly announcing ongoing investigations.
White House again criticizes FBI director for voting remarks - ABC News
Donald probably did not hear about the numerous vehicular assaults on peaceful protesters, which explains why they are neither included in his campaign videos nor mentioned in his tweets:
Woman Joanna Gollnau charged with felony in Breonna Taylor protest hit-and-run - ABC News (9/26/20)
Cars hit Black Lives Matter protesters 104 times since George Floyd (7/8/20)
Protester hit by car on I-5 in Seattle dies, another remains in serious condition - YouTube
Brad Parscale, Senior Adviser To Trump Campaign, Is Hospitalized After Call To Police : NPR Parscale was Donald's campaign manager for two years until Donald demoted him after being embarrassed by the low turnout at his Tulsa Mass Infection Event. Trump Campaign Manager Out In Last-Minute Shakeup : NPR; Suicide threat by former Trump campaign manager reveals allegation of domestic abuse - The Washington Post Donald hires only the best people. Prior campaign managers include Paul Manafort and Steve Bannon. Why Steve Bannon Was Arrested - The Atlantic; Manafort convicted on 8 counts
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Covid-19 Updates:
 |
| As of 10/2/20 |
Donald was in close contact with Hope Hicks who tested positive for the virus and was symptomatic.
Notwithstanding that fact, Donald attended on 10/1 a closed door meeting with donors at his country club at Bedminster. White House officials knew Hicks tested positive -- but Trump still traveled for a fundraiser
A timeline of Trump's movements highlight his lack of precautions. Tracking Trump’s movements and contacts before he tested positive for coronavirus - Washington Post
On Wednesday 9/30/20, Donald held a Mass Infection Event in Duluth, Minnesota and a private fundraiser. Of course, most of the Trumpsters refused to wear masks or to socially distance.
Hope Hicks, who was traveling with Donald, reported symptoms Wednesday during the Mass Infection Event in Duluth. She quarantined on the flight back to Washington Wednesday evening. Hope Hicks Tests Positive for Coronavirus, Trump Begins 'Quarantine' - The New York Times
How did Trump get COVID and who has he infected?
It will probably never be known for certain who gave Donald the virus or how many people he infected before going into quarantine.
It is possible that Donald become infected at the Mass Infection Event announcing the selection of Judge Amy Barrett as the republican's Supreme Court nominee. See photos at Where Trump went (and who he was with) leading up to his coronavirus diagnosis - POLITICO
The Trumpster Senator Mike Lee (R-Utah) attended that event, refusing to wear a mask or to socially distance, and was caught on tape hugging other people who were refusing to follow simple precautions. Lee announced yesterday that he tested positive for Covid. Lee did have a mask in his hand. White House SCOTUS announcement is suspected as Covid super-spreader event as video shows infected senator hugging attendees | The Independent; Sen. Mike Lee attends events without mask, tests positive for COVID-19 - Business Insider
Lee was also photographed indoors with Barrett, neither wearing a mask or socially distancing. If this was a super spreader event, it is possible that the spread occurred inside before and/or after the outdoor ceremony.
Senator Tom Tillis (R-NC) also announced yesterday that he had Covid-19. He attended the ceremony. Tillis is also a member of the Senate Judiciary committee along with Senator Lee. Tillis met with Amy Barrett last Wednesday. Tillis Meets with Judge Amy Coney Barrett (neither wore a mask as shown in the photos); COVID-19: Mike Lee tests positive as GOP seeks Barrett confirmation; Tillis: 'I fell short' on mask wearing at RNC - POLITICO Tillis debated his democrat opponent Cal Cunningham, who is leading in the polls, last Thursday. US Sen Thom Tillis tests positive for COVID-19, will isolate | Raleigh News & Observer
Melania, who has tested positive, was sitting next to Barrett's husband and their children. None of those people were wearing masks or socially distancing.
Other people attending this event have tested positive including Kellyanne Conway who refused to wear a mask. Trump tests positive: With the President hospitalized, more Covid cases emerge in White House and campaign
RNC chair Ronna McDaniel tested positive for coronavirus - Axios (she was with Trump a week ago) Trump's new campaign manager Bill Stepien has also been infected with the coronavirus. Trump's campaign manager tests positive for Covid-19
How the coronavirus spread in Trump's White House - The Washington Post
And it turns out that Amy Barrett tested positive sometime this summer.
However, if Donald was at all concerned about others, he would have self-quarantined after being in close contact with Ms. Hicks until he received the results of a test. Instead, he proceeded to Bedminster even though he knew before leaving D.C. that Ms. Hicks had tested positive.
I have heard many Trumpsters defend their refusal to wear masks and socially distance as part of their freedom and a risk that they are willing to take. What is always missing in their calculation, since it is of no real concern to them, is their refusal to take simple precautions may lead to them infecting others and possibly killing them.
The White House downplayed Trump's illness yesterday before he was transported to Walter Reed. He received an infusion of Regeneron's experimental antibody cocktail REGN-COV2 and Gilead's Remdesivir. The REGN-COV2 drug just completed a Phase 1 2/3 trial. Regeneron's REGN-COV2 Antibody Cocktail Reduced Viral Levels and Improved Symptoms in Non-Hospitalized COVID-19 Patients | Regeneron Pharmaceuticals Inc.
What we know about Regeneron antibody drug Trump took to combat coronavirus
President Trump given experimental COVID-19 drug remdesivir
The CDC Director Robert Redfield voices alarm over influence of Trump's new coronavirus task force adviser Scott Atlas (Redfield was overheard saying that "everything" that Atlas says "is false". Atlas fits right into TrumpWorld.)
Behind the White House Effort to Pressure the C.D.C. on School Openings - The New York Times ("Top White House officials pressured the Centers for Disease Control and Prevention this summer to downplay the risk of sending children back to school, a strikingly political intervention in one of the most sensitive public health debates of the pandemic, according to documents and interviews with current and former government officials.")
Mike Pence predicted the pandemic would be 'behind us' by Memorial Day - Business Insider That is by Memorial day 2020, not 2021. So I am really glad the pandemic is gone now. These figures on deaths and infections that I publish each week are Fake News in TrumpWorld.
This article summarizes some of the misrepresentations made by Fox "news" about the pandemic: Fox News’ COVID Denial Hasn’t Aged Well | Vanity Fair
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All trades are commission free.
For some purchases, I scrap (1) above and substitute a purchase restriction that permits purchases when the price lowers my existing cost per share.
The overreaching goal is to reduce risk through a controlled trading strategy that realizes gains particularly through selling the highest cost lots that reduce my average cost per share which increases my dividend yield. When this works, I end up with less at risk money producing income at or near the highest yield.
Risks are controlled by a variety of techniques including the limitations on dollar exposures to each stock and on each purchase. The strategy is primarily one for bear markets that will be characterized by strong cyclical rallies and declines.
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.
Dividends: Quarterly
Prior Trades: None
Stock Information as of 10/2/20:
Investment Strategy: Regional Bank Basket Strategy
Dividend: Quarterly at $.18 per share ($.72 annually)
Last Ex Dividend: 9/14/20 (owned as of)
Last Earnings Report (Q/E 9/30/20): SEC Filed Press Releases
"United delivered net income of $25.1 million and pre-tax pre-provision income of $65.6 million and built its allowance for credit losses with a $33.5 million provision for credit losses. Due largely to the continued reserve build anticipating potential future loan losses driven by COVID-19 effects on the economy, diluted earnings per share of $0.32 represented a decrease of $0.23 or 42%, from a year ago. Excluding merger-related and other charges, diluted operating earnings per share were also $0.32, also down 46% from last year"
Net Interest Margin: 3.42%
Charge off, efficiency and NPA ratios are good:
E.P.S., ROE and ROA hit by build up in reserves driven by Covid 19 impacts on the economy.
Tangible Book Value Per Share: $16.97
In June, United raised raised $200M through issuing $100M in equity preferred stock with a 6.875% coupon and another $100M in fixed-to-floating rate senior notes with a 5% coupon. Bond Prospectus; Equity Preferred Stock Prospectus
Prior Trades: None
D. Added 2 FIVG at $28.16; 2 at $27.8-Vanguard Taxable:
Quote: Trustco Bank Corp.
Investment Category: Regional Bank Basket Strategy
Tangible Book Value Per Share: $19.71, up from $19.5 as of 5/30/19
Securities Owned:
That book value number is calculated by dividing shareholder equity of $253.995M by 14.673257M shares outstanding. To arrive at tangible book value, I subtracted $52.533M in goodwill and intangibles shown on the balance sheet from the $253.995M in shareholder equity, arriving at $201.462M. That adjustment gave me a tangible book value per share of $13.73.
2020 Guidance:
Maximum Position: 50 shares
All trades are commission free.
Small Ball Rules:
(1) Each purchase has to be at the lowest price in the chain;
(2) Purchases are made in small lots, using commission free trades;
(3) On price pops, I will consider selling my highest cost shares at a profit, no matter how small;
(4) Some positions will be eliminated altogether on price pops when the goal is achieved:
(1) Each purchase has to be at the lowest price in the chain;
(2) Purchases are made in small lots, using commission free trades;
(3) On price pops, I will consider selling my highest cost shares at a profit, no matter how small;
(4) Some positions will be eliminated altogether on price pops when the goal is achieved:
For some purchases, I scrap (1) above and substitute a purchase restriction that permits purchases when the price lowers my existing cost per share.
The overreaching goal is to reduce risk through a controlled trading strategy that realizes gains particularly through selling the highest cost lots that reduce my average cost per share which increases my dividend yield. When this works, I end up with less at risk money producing income at or near the highest yield.
Risks are controlled by a variety of techniques including the limitations on dollar exposures to each stock and on each purchase. The strategy is primarily one for bear markets that will be characterized by strong cyclical rallies and declines.
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.
1. Small Ball:
A. Started MGV-Bought 2 at $79.17; 1 at $78.69 1 at $77.5; 1 at $75.77; 1 at $74.35; :
Expense Ratio: .07%
Holdings: 151 stocks
Some Top Holdings as of 8/31/20:
Dividends: Quarterly
Last Ex Dividend: 9/11/20
Current Position: 6 shares
Average Cost Per Share: $77.44
Prior Trades: None
B. Started FFNW (Schwab Taxable)-Bought 10 at $9.55; 5 at $9.05
Quote: First Financial Northwest Inc. (FFNW)
Quote: First Financial Northwest Inc. (FFNW)
Closing Price 10/2: FFNW $9.15 +$0.13 +1.44%
Stock Information as of 10/2/20:
"First Financial Northwest, Inc. is the parent company of First Financial Northwest Bank; an FDIC insured Washington State-chartered commercial bank headquartered in Renton, Washington, serving the Puget Sound Region through 13 full-service banking offices."
Offices:
FFNW Analyst Estimates
Investment Strategy: Regional Bank Basket Strategy
FFNW SEC Filings
Dividend: Quarterly at $.10 per share
Last Ex Dividend: 9/3/20 (bought 10 shares day before; 5 after)
Investment Strategy: Regional Bank Basket Strategy
FFNW SEC Filings
Dividend: Quarterly at $.10 per share
Last Ex Dividend: 9/3/20 (bought 10 shares day before; 5 after)
Average Cost Per Share: $9.38 (15 shares)
Dividend Yield at $9.38 = 4.26%
Tangible Book Value Per Share: $15.14 as of 6/30/20
Dividend Yield at $9.38 = 4.26%
Tangible Book Value Per Share: $15.14 as of 6/30/20
5 Year Financials:
5 Year Chart:
NIM: 3.12%
Efficiency Ratio: 73.18% (too high)
NPL Ratio: .19%
NPA Ratio: .19%
Charge Offs: net recovery
Average Shares Outstanding: 9.819+M
PPP Loans: $51.7M
"Company repurchased 135,450 shares during the quarter at an average price of $9.42 per share under a stock repurchase plan that expired on July 27, 2020"
"Company repurchased 135,450 shares during the quarter at an average price of $9.42 per share under a stock repurchase plan that expired on July 27, 2020"
"Company’s Board of Directors authorized a new stock repurchase plan to repurchase up to 5% of its outstanding shares of common stock effective July 30, 2020, for a period of up to six months."
Loan Modifications:
"As of July 16, 2020, $16.6 million in loans included in the table above for which the deferral period had expired had resumed their scheduled payments. Extension requests were approved on eight loans with a total balance of $17.6 million which were previously modified."
Capital Ratios: Okay as of 6/30/20
C. Started UCBI- Bought 5 at $18.06; 5 at $17.6; 2 at $17.19; 1 at $16.29; 1 at $16.18:
Closing Price 10/2: UCBI $17.42 +$0.39 +2.29%
"United Community Banks, Inc. (NASDAQ: UCBI) (United) is a bank holding company headquartered in Blairsville, Georgia, with executive offices in Greenville, South Carolina. United is one of the largest full-service financial institutions in the Southeast, with $15.0 billion in assets, and 149 offices in Georgia, North Carolina, South Carolina and Tennessee at June 30, 2020. Through its July 1st acquisition of Three Shores Bancorporation and its wholly-owned banking subsidiary, Seaside National Bank & Trust, United added approximately $2.1 billion in assets and 14 banking offices in key metropolitan markets throughout Florida."
"United Community Banks, Inc. (NASDAQ: UCBI) (United) is a bank holding company headquartered in Blairsville, Georgia, with executive offices in Greenville, South Carolina. United is one of the largest full-service financial institutions in the Southeast, with $15.0 billion in assets, and 149 offices in Georgia, North Carolina, South Carolina and Tennessee at June 30, 2020. Through its July 1st acquisition of Three Shores Bancorporation and its wholly-owned banking subsidiary, Seaside National Bank & Trust, United added approximately $2.1 billion in assets and 14 banking offices in key metropolitan markets throughout Florida."
Investment Strategy: Regional Bank Basket Strategy
Dividend: Quarterly at $.18 per share ($.72 annually)
Average Cost Per Share: $17.51 (14 shares)
Dividend Yield at AC = 4.11%
Last Ex Dividend: 9/14/20 (owned as of)
5 Year Financials:
5 Year Chart as of 10/2/20:
Last Earnings Report (Q/E 9/30/20): SEC Filed Press Releases
"United delivered net income of $25.1 million and pre-tax pre-provision income of $65.6 million and built its allowance for credit losses with a $33.5 million provision for credit losses. Due largely to the continued reserve build anticipating potential future loan losses driven by COVID-19 effects on the economy, diluted earnings per share of $0.32 represented a decrease of $0.23 or 42%, from a year ago. Excluding merger-related and other charges, diluted operating earnings per share were also $0.32, also down 46% from last year"
Net Interest Margin: 3.42%
Charge off, efficiency and NPA ratios are good:
E.P.S., ROE and ROA hit by build up in reserves driven by Covid 19 impacts on the economy.
Tangible Book Value Per Share: $16.97
In June, United raised raised $200M through issuing $100M in equity preferred stock with a 6.875% coupon and another $100M in fixed-to-floating rate senior notes with a 5% coupon. Bond Prospectus; Equity Preferred Stock Prospectus
The preferred stock trades under the UCBIO symbol and is currently trading over its $25 par value.
Prior Trades: None
D. Added 2 FIVG at $28.16; 2 at $27.8-Vanguard Taxable:
Last Discussed: Item # 1.L (9/12/20 Post); Item #3.D. Started FIVG in Vanguard Account-Bought 8 shares at an average cost of $29.44 (7/29/20 Post); Item # 2.A. Started FIVG in Schwab Taxable Account- Bought 5 at $27.6 (8/15/20 Post)
Sponsor's Website: The First 5G ETF - FIVG
Sponsor's Website: The First 5G ETF - FIVG
Expense Ratio: .3%
E. Added to TRST-Bought 5 at $5.69; 10 at $5.6; 5 at $5.15; 15 at $5.23:
E. Added to TRST-Bought 5 at $5.69; 10 at $5.6; 5 at $5.15; 15 at $5.23:
Closing Price 10/2: TRST $5.37 +$0.07 +1.32%
Stock Information as of 10/2/20:
Last Discussed: Item # 4.B. Item # 4.B. Restarted TRST- Bought 10 at $5.95; 5 at $5.83 (8/29/20 Post) I discussed the last earnings report in that post and have nothing to add.
Old Average Cost Per Share: $5.91
New Average Cost Per Share: $5.54 (50 shares)
Tangible Book Value Per Share as of 6/30/20: $5.73
Dividend: Quarterly at $.0681 per share ($.2724 annually)
Last Ex Dividend: 9/3/20
Yield at New AC = 4.92%
Sell Discussions: Item # 2.B. Sold 125 TRST at $8.6 (11/2/19 Post); Item # 1.B. Sold 161+ TRST at $9.2+ (7/2/18 Post); Item # 2 Sold 100 TRST at $6.69 Update For Regional Bank Basket Strategy As Of 7/26/16-South Gent | Seeking Alpha; Item # 1 Sold 315+ TRST at $6.92 (1/11/15 Post); Sold 50 TRST at $7.29 (11/25/13 Post); Sold 308 TRST at $6.64 (10/28/13 Post)(largest gain at $549.47)
Purchase Restriction: Each subsequent purchase, other than through dividend reinvestment, must reduce my average cost per share.
TRST Realized Gains to Date: $1,067.40
F. Restarted FFIC-Bought 10 at $12.25; 5 at $10.6; 2 at $10.7; 3 at $10.3: 10 at $10.2 :
Closing Price 10/2/20: FFIC $11.13 +$0.41 +3.82%
Investment Category: Regional Bank Basket Strategy
Stock Information as of 10/2:
Recent News: Flushing will soon complete the acquisition of Empire Bancorp. Flushing Financial Corporation Announces Receipt of Remaining Regulatory Approvals for Acquisition of Empire Bancorp, Inc. (FFIC expects "earnings accretion of 20% in 2021.") Empire has 4 full-service banking offices in Long Island. Flushing Financial Corporation and Empire Bancorp Inc. Agree to Complete Their Merger Under Extended Time Frame (8/17/20 Press Release)
Dividend: Quarterly at $.21 per share
Average Cost Per Share:
Yield at AC =
Last Ex Dividend:
5 Year Financials:
The annual dividend penny rate was $.64 in 2015 and at $.84 in 2019.
5 Year Chart: Certainly Ugly enough for me
Last Earnings Report (6/30/20): Flushing Financial Corporation Reports Record Net Interest Income; Net Interest Margin Expansion Driven by Ability to Significantly Reduce Funding Costs
The relevant number is Non-GAAP earnings or what the company refers to as "core". The GAAP earnings were increased by $10.3M or 27 cents per share due to a "non-cash fair value adjustment on our junior subordinated debt ".
Tangible Book Value Per Share: $19.71, up from $19.5 as of 5/30/19
NPA Ratio: .29%
NPL Ratio: .34%
Coverage Ratio: 181.8%
CORE ROA: .57%
CORE ROE: 7.39%
CORE E.P.S. $.36, up from $.19 1st Q 2020, and down from $.42 in the 2019 2nd Q (less interest income largely due to loan modifications, see below)
"At the height of the request period, April and May 2020, COVID-19 forbearances peaked at $1.5 billion. By June 30, 2020, we reduced that number to $1.3 billion comprised of 82% real estate loans. Through July 10th, 63% of the $146 million in loans scheduled to return to regularly scheduled payments have done so."
Loan Modifications as of 6/30/20:
"799 active COVID-19 forbearances outstanding at July 10th for loans with a combined principal balance of $1.3 billion at the time of forbearance; total combined deferment of $36.4 million in principal, interest and escrow"
"over 88% of our gross loans are collateralized by real estate"
"loan-to-value ratio on our portfolio of real estate dependent loans as of June 30, 2020 totaled 38.1%"
Capital Ratios: Okay as of 6/30/2020
Prior Sells: +$297.3; Item # 2 Sold 50 FFIC at $14.51 (5/2/11 Post); Item # 4 Sold 50 FFIC at $13.53 (10/31/11 Post)
G. Started STX as a Placeholder-Bought 1 at $45.92:
Closing Price 10/2: STX $48.74 -$0.32 -0.65%
Stock Information as of 10/2/20:
Dividend: Quarterly at $.65 per share
Last Ex Dividend: 9/22/20
Dividend Yield at $45.92:
5 Year Financials: Debt heavy with erratic GAAP earnings
5 Year Chart:
Last Earnings Report (Q/E 7/30/20):
Prior Trades: None
H. Started PFBI-Bought 10 at $12; 5 at $11.85; 5 at $11.4; 5 at $11.2:
Closing Price 10/2: PFBI $10.85 +$0.17 +1.59%
PFBI is a bank holding company whose operating subsidiary, Premier Bank, has 31 banking offices in West Virginia, Virginia and the Washington, D.C. metropolitan area.
Investment Category: Regional Bank Basket Strategy
Stock Information as of 10/2:
Dividend: Quarterly at $.15 per share ($.6 annually)
Average Cost Per Share: $11.53
Dividend Yield at AC = 5.2%
Last Ex Dividend: 9/14/20 (owned as of)
5 Year Financials:
Tangible Book Value Per Share as of 12/31/19: $12.77
5 Year Chart:
Last Earnings Report (Q/E 6/30/20): Premier Financial Bancorp, Inc. Reports Second Quarter 2020 Earnings
E.P.S. $.37, down from $.40 in 2nd Q 2019
NIM: 3.83%
NPL Ratio: 1.33% Elevated
NPA Raio: 1.52% Elevated
Shares Outstanding: 14,637,257
Book Value Per Share: $17.31:
"The provision for loan losses increased by $700,000, or 78.7%, in the first six months of 2020, largely to provide for the $1,650,000 of estimated additional credit risk in the loan portfolio related to consequences of the national economic shutdown aimed to moderate the spread of COVID-19. The annualized returns on average common shareholders' equity and average assets were approximately 8.72% and 1.19% for the six months ended June 30, 2020, compared to 10.70% and 1.41% for the same period in 2019."
Maximum Position: 50 Shares (limited due to elevated NPL and NPA ratios)
Prior Trades: None
I. Sold 100 JQC at $6.19:
Closing Price 10/2: JQC $6.03 +$0.05 +0.84%
Profit Snapshot: +$37.49
Sponsor's Website: JQC - Nuveen Credit Strategies Income Fund
Dividend: Monthly at $.081 per share (significant ROC support); $.972 per share annual rate
Last Ex Dividend: 9/14/20
Leveraged: Yes, substantial
The largest JQC position was eliminated in 2012: Item # 5 Sold 804+ JQC at $9.35 (5/16/12) (profit snapshot = $1,060.29)
I have pared a JQC position in my Fidelity taxable account and current own less than 100 shares with an average cost per share at $5.85. Assuming a continuation of the current dividend penny rate, which is not an assumption that I would make given the history of cuts, the yield at that price is 16.62%. I sold the highest cost lot (20 shares) from that position at a $.45 profit.
The goal with high credit risk positions is to harvest the dividend and escape with whatever profit may be available.
J. Restarted KR-Bought 5 at $32.95; 2 at $32.52; 2 KR at $32.03:
Closing Price 10/2: KR $34.07 +$0.05 +0.15%
For the most part, I have owned only Kroger's senior unsecured bonds. Most of those bonds matured in 2019 or earlier this year. My last purchase was in March 2020, when investment grade SU bonds were tanking in price. Item # 4.A. Bought 2 KR 3.3% SU Maturing on 1/15/21 at a Total Cost of 99.6 (5/16/20 Post); Bonds Detail and Prospectus (rated Baa1 by Moody's) I own 4 of those bonds. I also own 2 of the 2.6% KR SU bonds maturing on 2/1/21. Bonds Detail
Kroger has been a beneficiary of the pandemic, as more people dine at home. Earnings have been favorable for the last two quarters. Many analysts believe that Kroger will not be able to continue that earnings momentum with more restaurants reopening and attracting more patrons. That is reflected in the current E.P.S. estimates for 2020 and 2021.
Consensus E.P.S. Estimates:
2020 $3.26
2021 $2.71
Dividend: Quarterly at $.18 per share ($.72 annually), raised from $.16 effective for the 2020 first quarter.
Last Ex Dividend: 8/13/20
Average Cost Per Share: $32.65
Dividend Yield at AC = 2.21%
In the past, the KR bonds have provided me with higher yields which explains my lack of interest in the common shares. That is no longer the case. For example, the KR 2.8% bond maturing in August 2022 has a YTM close to .5%. Bonds Detail The 2.6% SU maturing in 2026 is currently trading with a YTM near 1%. Bonds Detail
Last Earnings Report (F/Q Ending 8/15/20):
Identical Sales without fuel grew 14.6%
Digital sales grew 127%
Digital sales grew 127%
EPS of $1.03; Adjusted EPS of $0.73, up 66% compared to prior year
Operating Profit of $820 million; Adjusted FIFO Operating Profit of $894 million, up 43% compared to prior year
Digital sales mostly refer to customers ordering online and picking up curbside at a store.
Prior Round-Trip Snapshots:
 |
| 2009 KR 150 Shares +$173.17 |
 |
| 2008 KR 100 Shares +$116.97 |
K. Started REYN-Bought 1 at $32.3; 2 at $31.9; 1 at $31.75; 1 at $31.49; 2 at $31.3; 2 at $30.8:
Closing Price 10/2: REYN $30.99 +$0.04 +0.13%
Brands | Reynolds Consumer Products The two main brands are Hefty and Reynolds Wrap.
Dividend: Quarterly at $.22 per share
Average Cost Per Share: $31.34 (11 shares)
Yield at AC = 2.81%
Last Ex Dividend: 8/13/20
Last Earnings Report (Q/E 6/30/20)
"Cash and cash equivalents was $392 million as of June 30, 2020.
Subsequent to June 30, 2020, the Company made a $100 million voluntary payment on its $2,475 million senior secured term loan facility."
2020 Guidance:
Purchase Restriction: Each subsequent purchase, other than through dividend reinvestment, must lower my average cost per share.
L. Added to BK-Bought 3 at $34.81:
Closing Price 10/2/20: BK $34.74 +$0.57 +1.67%
Investment Category: Regional Bank Basket Strategy
Last Discussed: Item # 1.G. (9/12/20 Post) I have nothing to add to that discussion.
Average Cost Per Share This Account: $36.07 (10 shares)
Dividend Yield at AC: 3.44%
Last Ex Dividend: 7/24/20
M. Added to CATY-Bought 1 at $23.75; 1 at $21.38; 1 at $21.13:
Closing Price 10/2: CATY $22.20 +$0.50 +2.33%
Investment Category: Regional Bank Basket Strategy
Last Discussed: Item # 1.D. (9/19/20 Post) I discussed the last earnings report in that post. I have nothing further to add.
Old Average Cost per share: $23.76
New Average Cost Per Share: $23.39
Dividend Yield at AC = 5.3% (quarterly at $.31 per share; $1.24 annually)
N. Started FFNW (Fidelity Taxable)-Bought 10 at $9.64; 5 at $9.1:
See Item # 1.B. above.
Investment Category: Regional Bank Basket Strategy
Average Cost Per Share: $9.46
Dividend Yield at AC = 4.23%
O. Started CXP (Vanguard Taxable Account)-Bought 10 at $10.55:
Quote: Columbia Property Trust Inc
Closing Price 10/2: CXP $11.33 +$ 0.13 +1.16%
I discussed this office REIT in my last post and have nothing to add here. Item # 1.B. (9/26/20 Post)
My average cost per share will be lower in the Vanguard account since the initial purchase was made at a lower price. Using the small ball trading restriction, each subsequent purchase must be at the lowest price in the chain. I will not be reinvesting dividends in this account.
Yield at $10.55 = 7.96%
2. Aegon Hybrids:
A. Sold 5 AEB at $24.99:
History this Account:
Investment Category: Aegon Hybrids,
AEB is not a traditional equity preferred. It combines equity and bond characteristics as explained in the Aegon Hybrids post linked above.
It is a hybrid (equity/bond) that pays quarterly "dividends" for a U.S. taxpayer at the greater of 4% or .875% above the 3 month Libor rate on a $25 par value. The Libor rate will soon be phased out. There is an alternate rate mechanism provided for in the prospectus. Since I have owned this security, it has paid the minimum 4% coupon since that rate was always higher than the 3 month Libor +.875%.
Profit Snapshot: +$58.27
Item # 4.A. Bought 5 AEB at $13.34 (4/18/29 Post) This purchase was made on 3/18/20. AEB does have a tendency to have a meltdown when common stocks tank and the VIX spikes to high levels. AEB is not a common stock. Maybe I will be able to buy more when and if the price plunges again.
AEB Realized Gains to Date: $3,641.61 (prior trades = $3,583.34; snapshots in Aegon Hybrids post)
I started to trade this security in 2008 when the price collapsed into the single digits. The lowest price paid was $4.8. Buy of 50 AEB at $4.8 (2/23/2009)
Links to posts discussing the 3 largest gains:
Item # 2 Sold 100 AEB at $18.42 (10/4/11 Post)(profit snapshot = $1,142.51)
Item # 3 Sold 100 AEB at $18.2635 ROTH IRA-Average Total Cost $6.05 (9/19/11 Post)(profit Snapshot = $1,213.76)
Item # 2 SOLD 100 of 300 AEB at 19.72 (8/16/2010 Post)(profit snapshot 150 Shares at $772.04)
Over the past few years, I have lost interest in this security anywhere near its par value.
The main reason is that it is highly unlikely that the floating rate will exceed the 4% minimum coupon anytime soon, and there is no difficulty finding higher yield preferred stocks that are similarly rated.
The other reason, less material but important, is that it is unclear what the alternative to Libor will be. While that is irrelevant now, it may become an issue later in the decade when and if there is a non-temporary spike in short term rates.
While I may elect to buy during a price crater event, I will sell when the price moves back close to par. (e.g. Item # 2 Sold 50 AEB at $25.23 (9/7/17 Post)(profit snapshot = $166.46)-Bought at $21.9 and discussed here)
3. Dividend and Interest Payments Received 9/29-30/2020 in Fidelity Taxable Account:
These snapshots highlight various aspects of my investment strategy.
The focus is on generating income while controlling risk as much as possible through a variety of techniques.
Except for Tennessee Municipal bonds, the monetary exposure to a single security is small.
Municipal bonds only trade in five $1k par value lots.
The Williamson County GO bonds are rated AAA. Two cities located in that county have AAA ratings as well: Brentwood and Franklin. The Montgomery and Maury county bonds are rated AA (S & P) and Aa2 (Moody's) respectively. An emphasis is placed on credit quality.
The corporate bonds shown below are either 1 or 2 bonds lots. I am more likely to revert to my mile wide, inch deep approach for those bonds.
Three of the corporate bonds are leftovers from my now defunct "junk bond ladder strategy": First American (now known as CoreLogic) (2); Hercules (1); and BBVA Birmingham (1). Of those only BBVA has improved its credit rating since my purchase and is now rated at BBB/Baa2. Bonds Detail (formerly known as Compass). Item # 2 Bought 1 Compass Bank 5.9% Subordinated Note Maturing in 2026 at 76.75(1/11/12 Post), Bonds Detail; Bought 1 CoreLogic 7.55% Senior Bond Maturing 4/1/2028 at 84.95 (2/22/12 Post),Bonds Detail; Item # 3 Bought 1 7.55% CoreLogic Senior Bond Maturing 4/1/2028 at 94.975 (4/29/11 Post); Item # 2 Bought 1 Hercules 6.5% Junior Bond Maturing on 6/30/29 at 86 (6/24/11 Post), Bonds Detail.
The main reason that I still own those bonds is that they are too difficult to sell. The other reasons is that I currently lack any incentive to try given their yields.
I am currently reinvesting the dividends in beaten up common stocks which would be the case for virtually all regional bank and BDC stocks. I will generally cease reinvestment when I would not make an open market purchase at the likely reinvestment price.
I turned off the reinvestment option for the bond CEF PPT when the discount to net asset value disappeared and turned it back on when the discount expanded which included the September dividend payment. The discount to NAV per share was -5.92% as of 9/30/20. PPT-CEF Connect The average one year discount was then at -1.47%. For CEFs, turning on and off the dividend reinvestment option depends in part on historical average discounts.
Another typical strategy would be own the same security in two accounts, where I reinvest the dividend in one account and take it in cash in another.
4. Tennessee Municipal Bond Interest Payments Made on 10/1/20-Schwab Taxable Account:
Over the next few years, my main source for interest income will be my Tennessee municipal bonds which I own in 3 taxable accounts.
On 10/1/20, I received in my Schwab account $540.63 in tax free interest payments.
The largest payment was $200 made by a Wilson County GO, rated at AA+ (10 bond lot):
That bond was bought in 2017: Tennessee Municipal Bonds Item # C. Bought 10 Wilson County 4% General Obligation Bonds Maturing on 4/1/39 (5/2/17 Post); Municipal Securities-Emma The issuer may redeem at par value on or after 4/1/2026. The reasons for the current price is that time restraint on the optional redemption, the coupon rate, credit quality and the currently abnormally low interest rate environment that is likely to continue for all or most of the remaining time to the optional call date.
Other municipal bond payments (5 bond lots):
The Metropolitan Government of Nashville bond is an obligation of Vanderbilt University, but is issued by an agency of that government. Municipal Securities -Emma (rated AA+/Aa1). I own 10, with 5 of those owned in my Vanguard taxable account. Item # 1.F (6/12/17 Post) The 5 bonds in my Schwab account were bought at a total cost of 99.5, with a YTM then at 3.27%.
The YTM for the last trade was near .25%. The bond can be called on 10/1/22 at par so it will be called then.
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.
