Wow, I see triple net lease REIT Store Capital (STOR) is being acquired for $14 billion at a premium to yesterdays closing price of about 20%. Press release is here.
I was pleasantly pleased to find the platform for bond buying on both eTrade and Fidelity is pretty straightforward to use. It has been years since I had bought any bonds except exchange trade debt (baby bonds) so a easy interface is welcome. As mentioned yesterday I was looking at some short maturity treasury’s and I did buy some 3 month, 1 year and 2 year notes at 3.6% to 3.92% yield to maturities–just a taste with some dry powder.
Economic news this morning is not showing any real weakness in the economy–jobless claims fell and retail sales were up–both better than expectations. The 10 year treasury hanging around 3.44%. S&P500 futures just off a tiny amount (1/5%)–looks to be a relatively quiet day.
We love to complain about the government and the Fed, but when it comes to crunch time, most run to treasuries. Plenty of irony there.
While we all have our risk tolerance and investing goals, seeing large-scale movement into short-term treasuries paying 15~30% less YTM than quality corporates is puzzling.
Undoubtedly there are “unknown unknowns” out there, big uglies hiding in plain sight, but it’s nowhere near a 2008 at this point. And even through that crisis I never had a single corporate default – not one.
I’m perplexed you are baffled why folks are moving into short term treasuries. Of course longer term corporate debt / preferreds are potentially higher YTM, but I’m not planning on keeping my cash in treasuries for the long haul. I wanted a shorter YTM so that later this year when interest rates will be higher (which is fairly easy to predict), I can switch over to thinking about longer term debt / preferreds to move into. Also, every time I’ve looked at yields in corporate debt, I’m shocked at how little they are paying above treasuries. I really don’t want to buy into 5-7 years at 5%. Now, maybe I’m looking in the wrong place, but where are you seeing 6%+ yields on even BBB+ or better? The highest I’ve seen is really more like 5 years out, maybe 5%.
I’m with you alpha. I heard all the talk about low coupon IG over the last several years and i stayed in my lane nothing less than bbb+ looks pretty good now, adding where and when I can getting my bases down.
It is interesting to read that some are selling a % of what they have invested and going to cash or treasuries. I continue to buy investment grade 6%+. We each have our own timelines and requirements. But, I can’t sit and watch an investment earn 3% with high inflation, especially when my investments should not be going bankrupt that are today rated as IG.
Mr. C, Agree. We all need to stay in our own lane though observing this also happened in late 2018, March 2020, April/May 2022, and September 2022.
Knowing nothing about the future and with the best prices in years…buying middle/high IG incrementally near every day.
Sorry to see STOR bought out as I have held it a long time but I will happily take that premium
didn’t surprise me that STOR was bought out I was suspecting it would be Buffet, he made a bundle, small stash in my Roth sock drawer. (9 1/2 % annualized for 3.5 years sorry to see it go. I’ve been on the 1year treasury ladder building since March.
mike, we’re pulling on the same oar here – sorry to see it go. Been building a position since mid-April based on overall value and just added another slug yesterday afternoon. A winner for sure though would have preferred the longer-term hold.