The average $25 preferred and baby bond fell by $1.09 (4% more or less) in the big downdraft yesterday–but we got a little relief today. Today the average share went up around 25 cents (1% more or less).
Weakness continued in a number of preferreds issued by lodging REITs (i.e. Ashford, Hersha, Sotherly and Summit) where there were a number of 50 cent and $1 moves lower–with Sotherly issues moving lower by $1.70, $1.82 and $2.48 respectively–ouch. The SOHO issues are around 11% in current yield.
I did absolutely no buying or selling today–with the news of various schools shutting down, the price of crude oil remaining low and airlines cutting schedules it is leading me to pause. I just can’t help but think we will have plenty of opportunities to buy bargains—and shares that look like bargains today, may be much cheaper tomorrow or next week.
We know from past experience that the higher yield issues bounce back best from very low panic prices–but right now I am NOT certain we have seen those panic lows--they may remain to be seen as economic dislocation takes place.
So I will continue to watch–if I do anything it is just more nibbling, but maybe not even that. I will probably sell the ill fated Golar LNG 8.75% perpetual (GMLPP) shares tomorrow. Obviously it was a poor decision to make this small purchase–for which I now have a $6/share loss–I hate losses (I guess I could change my thought process to ‘you only have a loss if you sell’–what balony).
Well let’s see what kind of wild trading will occur tomorrow.