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If I Owned This Term Preferred I’d Sell It!!

Actually I did own this term preferred when it had a yield to maturity in the 8% area, but sold it all for $24.98 on 11/24/2024. The issue I am talking about is the Gladstone Lane 5% Term Preferred (LANDM) issue. Currently slated to be redeemed on 1/31/2026 and trading at $24.80–a less than 6% (more or less) yield to maturity is simply too little from a pretty marginal REIT.

Gladstone Land reported earnings for the quarter ending 9/30/2024 that were poor–a net loss of almost $6 million, although funds from operations of around $3 million. While the company is likely safe the reward of the term preferred is simply inferior to many other term preferred that are available.

If I was going to own a term preferred it would be at a current yield of around 7.75% to 8% of which there are a number available which are likely as safe as Gladstone Land. I do understand some of the attraction of the LAND issue–it is easy to understand versus a CLO owner like Eagle Point Credit Company (ECC). Maybe folks want to hold it as a ‘cash equivalent’?

Headlines of Interest to Holders of Preferred Stocks and Baby Bonds

Below are press releases from companies with preferred stock and baby bonds outstanding. Additionally, news of a more macro economic importance may be posted. 

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XAI Octagon Floating Rate & Alternative Income Trust Declares its Monthly Common Shares Distribution of $0.077 per Share

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Capital Southwest Announces Financial Results for Third Fiscal Quarter Ended December 31, 2024 and Announces Increase in Total Dividends to $0.64 per share for the Quarter Ending March 31, 2025

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Alta Equipment Group Announces Common Stock Dividend

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KKR Real Estate Finance Trust Inc. Reports Fourth Quarter 2024 Results

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NCV, NCZ Announces Date of Reverse Stock Splits

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SITE Centers’ Fourth Quarter 2024 Earnings to Be Released Thursday, February 27, 2025

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CION Investment Corporation Schedules 2024 Fourth Quarter and Year-End Earnings Release and Conference Call

Big Bounce in Stocks Off the Bottom

As I suspected might happen tariffs on Mexico have been ‘paused’ for at least a month. When the word got out at about 9:30 a.m. central the S&P500 went straight up 1.50% in about 20-30 minutes. Nothing has changed for Canada and China–although I highly suspect Canada may fall into line with Trumps wishes and have the tariffs also paused–we’ll see.

The uncertainty of what comes next is going to live with the markets pretty much all week long. One just can’t predict what this administration will do next–and markets hate uncertainty. We are going to be doing a lot of guessing for months to come.

I was rather shocked to see all of our accounts up–even in the depths of the equity sell-off. Fortunately markets didn’t drive interest rates higher on inflation possibilities—I thought they might and that could have been painful.

While it is a dangerous time to be investing in anything–one has to keep hunting for things to buy–or do you want to settle on a 4.2% return from CDs and money markets? 4.2% isn’t terrible for sure–but one can do a bit better without going crazy–of course that is assuming that we have seen the peak in interest rates (the 10 year high was around 4.8%) and this is impossible to predict.

Working on Website Menus

As most of you have no doubt noticed by now I am doing some work on the website menus right now—nothing final, but trying out some options and seeing if they are beneficial.

The reason I have been working on menus is because many time I have read comments such as ‘thanks for the link–never knew that spreadsheet existed’. The current drop downs are not really visible.

After I decide something on menus I will be putting more efforts on the ‘search’ performance–we need more accuracy and understandability from that tool.

Will Just Be Riding This Out

The overnight equity sell off isn’t as bad as I imagined it might get—and interest rates are falling by 3-4 basis points.

I suspect over the course of the day we will see a lot of up moves and then down moves in stocks, while it would appear that maybe bonds will kind of tread water.

I would expect that in spite of interest rates moving a bit lower we will see some red in income issues as the baby gets tossed out with the bath water–I know for sure I won’t be tossing any bath water out. Sometimes one thinks they can either buy or sell during the course of one of these days and gain some type of advantage–seldom, if ever, is that the case–you sell at the wrong time and also try to time a buy only to see the issue move sharply lower. On the other hand if solid quality issues get slammed hard and you simply are focused on locking in a great yield that is safe maybe legging in to some shares is in order.

One needs to watch for quick reversals in markets–remember that we could get an announcement at any minute that tariffs are now off–or more tariffs are on the way–one never knows.

I will now just watch.