Author: Innovative Income Investor

The 10 year treasury is holding right at the 4.30% level today–plus or minus a basis point. No doubt traders are awaiting the personal consumption expenditures (PCE) on Friday–then we could see some fireworks one way or the other.

Today housing numbers were released–soft, soft, soft! New house sales were down over 10% month over month and about the same year over year. Mortgage rates just are not following enough to stimulate any kind of demand.

In the last few days B Riley finally filed their 10Q for the period ending 9/30/2024—what a disaster!! If Bryant Riley didn’t control the company there clowns would have been canned a long time ago. A loss of $286 million for the quarter and $771 million for the 9 month period. It is a very long filing and more than ever I question whether they can survive.

Yesterday I did some more nibbling by adding back some shares of the RiverNorth Opportunities Fund 6% perpetual preferred (RIV-A) for $23.55. This is about 3% below where I sold most of my position in October so I gained a bit there (although I lost maybe 10-20 cents on the lower yield on money market). I am looking for a 3% capital gain on these shares in the next year–we’ll see.

Well let’s see where we go now. With Nvidia reporting tonight who knows where that will drive tech shares and thus the S&P500.

The Conference Board announced consumer confidence is skidding–and equities are not taking kindly to the news with the S&P500 off about 1% right now. The index was at 98.3 in February versus forecast of 102.4 and 105.3 last month.

On the other hand the 10 year treasury yield has dropped by 8 basis points giving income investors a portfolio lift–all those perpetual holders out there should have some respectable gains in the last week.

Yesterday I did double up my position on the GAMCO Global Gold and Natural Resources (GGN-B) 5% perpetual. With hindsight I should have gone ‘all in’–but since that will never happen I have to be satisfied with more modest gains. All of our portfolios are at record highs right now (we are not drawing any funds from out IRAs), although it is a slow push higher with the limited perpetuals we hold.

So as I see it now investors are anticipating a slower economy (how slow?) and have now accepted the premise that DOGE will actually reduce spending. We are seeing the effects of these beliefs. This would seem to be the time to buy quality perpetuals at bargain prices. They have moved 1-2% higher in many cases but my work shows that if rates (10 year treasury) would move to 3.75% we would see a 4% gain in perpetuals so plenty of time for a little repositioning yet.