5/7/2024
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In an attempt to get some data and commenting in a central location I have added a ‘Illiquid Security’ page–you can find it in the right hand menu.
As always it is nice to have particular topic that is being discussed ‘here and there’ in one spot–thereby having a place for folks looking for that info to go to and additionally it moves it from other commenting areas thus making them a little easier to wade through.
Those that are interested in my sortable spreadsheet should always check here for the latest versions with updates.
This is updated constantly—as it has to be. I remove redeemed issues, add new issues etc probably every 48 hours. At this moment I have all but a couple issues that I follow in the spreadsheet.
Lately I have been chasing my tail around as the various quote sources are not very reliable. Some quotes work one day and then not the next. At this moment quotes seem to be working fine.
I put the date of update in the link description so one knows if they have the latest copy.
Well the 10 year treasury has popped today to .75% which takes it to a level we haven’t seen since May.
Thus far a 5 or 6 basis point move has not been detrimental to pricing in income securities–and likely won’t be unless the ‘pop’ is more like .125 to .25% in a single day–then you are going to create some ‘nervous nellies’.
On a historical basis it has taken a jump of at least 1/8% for anyone to even notice–and more like 1/4% to start to see a bit of damage to preferred and baby bond pricing–numerous days with movements in yields a few basis points higher will be generally well tolerated.
On the other hand with these super low coupon issues being sold lately the reaction to rates moving higher could surprise us in these particular issues. No one wants to be holding a coupon of 3.875% when rates move higher.
So we will see what happens in the next few days–I suspect this is a very temporary move higher in yields–simply based on stimulus possibilities.
The S&P500 traded in a weekly range of 3323 to 3397 before closing the week at 3348 which is a gain of just under 2% on the week after closing at 3298 the Friday before.
The 10 year treasury traded in a range of .64% to .72% before closing at just under .70%.
The Fed balance sheet fell by $37 billion last week–continuing a sawtooth pattern of weekly changes as the overall balance marches higher.
Last week the average $25/share preferred and baby bond gained 19 cents. Banks were the winners on the week with gains of 1%. Utility and CEF preferreds/baby bonds were near flat. Investment grade issues were up 15 cents.
Last week we had only 1 new income issues as Public Storage (PSA) priced a new low coupon preferred.
The issue is trading on the OTC grey market under ticker PSADL and closed last Friday at $24.80.
I have pondered recently whether I want to move into the domain of GridBird and try to snag some long term holdings of some $50 and $100 preferreds (illiquids).
While I already hold the Tricontinental 5% preferred (TY-P) which I consider the most solid preferred outstanding, the AMG Capital Trust 5.15% convertible (AATRL) and more recently the Bunge 4.875% convertible preferred (BGEPF) maybe I should try to chase down some true ‘illiquids’.
With coupons falling certainly these become more attractive–whether I want the frustration of trying to secure some of these with the low volume is another story.
Anyway–I do maintain an incomplete list of these $50 and $100 issues here. While data is incomplete clicking the ticker will get you a chart and what little information I have dredged up–it is just a start for folks, but it gives a flavor for volumes etc.
Long time publisher Doug Le Du is shutting down his various preferred stock and baby bond services. No particular reason was given for shutting them down.
This, of course, will reduce options for folks to research and discover income issues.
At this time Doug is offering his book “Preferred Stock Investing” 5th edition for free in ebook format. It is a basic book–for me not too helpful, but for some newer investors maybe it would be helpful–plus the price is right.