A Nice Calm Day with Bounce

There must not be any catalyst in the markets today to make the computer trading worthwhile as this is as quiet as we have seen the various markets for weeks.  Of course there are a few hours left and we all know that the action can heat up fast and furiously.

It is interesting to note that only 85 issues of 635 issues on our “Near New Low” master page are within 1% of their 52 week low–this would indicate that the majority of issues are bouncing–at least 25 cents.

Preferred stocks and baby bonds are holding some decent gains today-finally.  Gladstone Capital 6.125% notes (GLADD) are up $1.15 to $23.85.  Shippers Dynagas LNG 9% preferred(DNLG-A) and various Costamare issues (CMRE-E and CMRE-D) are all up more than a dollar. The various GasLog Partners preferreds are all up 50 or 75 cents (GLOP-A, GLOP-B and GLOP-C).  Also the hated Spark Energy preferred (SPKEP) is up a buck.

With some bounces today and with a heavy dividend collection on Monday we should see most of our accounts near break even for the year (now in a range of +1% to -2%)–assuming we don’t see more crazy action prior to Tuesday.

We have stayed away from temptation to buy this week and will not buy on Monday–but come Wednesday we will probably by 1 issue of some sort (there is plenty to choose from).



21 thoughts on “A Nice Calm Day with Bounce”

  1. I was able to pick up 400 shares of GLADD this morning right on the low of $22.41 and then watched it climb over a buck. I had forgotten what that feeling was like!

    1. Gary–what fortunate timing you had. I already have a fairly full position and have had my finger on the trigger for a couple days to begin adding, but am trying to control my urges–of course it is bouncing nicely without me.

    2. I’m with you Gary, as I snatched hard on 2 lots of GLADD at $22.50. Up $1.35 in a single day and if held for the next few years, we’ll also collect the difference between now and par, plus all the divvies.


      Also went into ALL-E ex-div, right near par. It’s a dual IG rated, QDI pfd.

      1. I’ve been picking up ALL-D and ALL-E for last couple of weeks on the rare moments whenever it took a slight dip towards par. Expect one or both to be called in April so grabbing this and next div just above par will give around 8% annual return if called. If not, I’m happily stuck with a IG 6.625% pfd.

  2. Still not liking the 10 year Treasury Bill. A falling knife from a high of about 3.25% on 11-7 to today’s rate of 2.72% despite a short term rate hike in December.

    On 1-1-2018. 10 year was 2.48%

    It has moved 25 basis points despite 100 basis point move in the short rates. We were okay until 11-7 : falling knife since then

    1. SteveA–you and I both know that interest rates are going to come home to roost regardless of what the economy does. Trillion dollar deficits can’t go on forever–when the global community decides the borrower is not credit worthy any longer watch out. If the economy goes soft next year how is that going to get jump started? Someday this debt is going to get ‘monitized’ and that is when you will need a wheelbarrow for money for a loaf of bread.

          1. ANy thoughts on how to position for this? Dry powder for quality pfds at higher yields? Oil and commodities? Gold?

          2. We might all agree that ultimately the US Government over spending/ increasing cumulative debt will lead to higher inflation. The question is will any of us still be alive to see it? Everyone, me included, that has been forecasting increased inflation for the last X years has been 100% wrong to date. All of the investors that heavily allocated to gold expecting higher inflation have been crushed. If your investing horizon is say 1 to 10 years, I would not allocate much to a high inflation expectant portfolio. Maybe you have a low allocation to it, but you do not want to be the next gold bug, squished by the low inflation train.

          3. Tim, unloaded the hated SPKEP for a loss. Just couldn’t stand it anymore and could use the write off.. Only way I can view it right now..

            1. Rich, I lost a little money (on last trade, but it had been good over the years) on NSS last week when I sold. Probably should have held on, but the lesson was more important than the gain or loss. I was starting to trade a drift a bit closer into issues like a SPKEP. I was getting away from my core strategy of good quality holds and illiquid quality holds and flips.
              If I ever see a preferred I own drop quickly in price, I want to know its just a buy/sell imbalance….Not a possible lower repricing risk from credit quality issues. I made about 10% this year and it wasnt from holding high yield credit dump issues. My last remaining indulging sin is ALLY-A. But I am sure I will succumb again on some boderline issues, lol.

              1. Grid.. You’re sooo right on “the lesson was more important than the gain or loss”.. i’ve learned more in 2018 than in 2017 and 2016 re preferred investing for income. That learning is allowing me to migrate out of the likes of SPKEP and more into those “quality holds and illiquid quality holds”. No regrets.. I will be able to manage with the generated income from the lower yielding higher quality securities. However, I too have urges on borderline issues and will likely fulfill that urge now and then with any mad money I have in my back pocket..
                aka blueclaw

                1. Hey Blue! Your above post in reference to 2016 is what made people think certain paid site hawkers were some investing genius’s on SA.
                  Literally every hot turd of an income issue jumped and made money and they were knee deep in them, as everybody was chasing yield.
                  They then think they actually know something when in reality any blind monkey throwing darts at preferreds made money that year. It went to their heads, but quickly found out realities of cap stack, coverage ratios and leverage matters. Some literally had picks that had dividend slashes days after recos…Ya those 15% yields didnt last long. And we havent even hit a recession or any material credit lock up yet. Guess what those issues would do then? The recent price volitility in the upper high yield was just a warning shot and look how they moved. If something actually of material value happens they will really get rocked…
                  I suspect some of these will recover and the band will play on until something really of consequence happens. But it always happens too quickly for me to get out, so I will do my best to avoid.

  3. Still trying to add some quality. Picked up 650 more shares of HE-U this afternoon for 25.31 Kinda nice to have a calm day but you never know yesterday we went from down 600 on the down to up 260 in just about three hours. It has been like playing a slot machine in Vegas down one minute back up next minute.

    1. Nice buy of HE-U. Once the next divy is paid in March, your effective cost basis is below par and you can ride the gravy train all the way to whenever they decide to call the issue.

      They did not call during the 2008-2009 recession, and for many years of zero rates after that, so no reason to expect a call any time soon.

      I also own HE-U, but cost basis is way higher, around $26.32. But have enjoyed about 3-4 years of dividends, so just riding the train now. Maybe I will add a few more to average down cost basis.

      1. Inspbudget looks like Twinjet is an official member of the HE-U club with us now. Now we need to see if he can really step up his game and join the elite status FIISO club with us, also. 🙂

        1. Well Gridbird you never know the third moon of Saturn is in full eclipse this June. Doesn’t happen very often. You just have to have your finger on the button if the right opportunity presents itself.I do like the HE-U holds it value real well.

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