Category: General Commentary

Last week was a trying week for pretty much all investors—only if you were in all cash did you escape the severe losses of Thursday and Friday. I know my losses were pretty minimal on a relative basis much less than 1%–BUT what lies ahead is a total unknown. So I needed to put together of spots I might ‘shop’ depending what occurs in the coming week.

Below are all investment grade issues which have been somewhat beaten down. They are not yielding huge amounts–yet. If markets go into a tailspin and these get beaten down further I may buy–I can’t even define what that means on Sunday afternoon until we see markets open up and trade.

The purpose of this is to identify high quality issues that could have lots of capital gains potential if they get beaten down dramatically in the weeks ahead. This means if there IS panic selling these quality issues may bounce back nicely when the selling is over.

The spreadsheet below IS NOT LIVE—but go to this page for the live chart.

Are we getting the flush I have been looking for today? Volume on the S&P500 just passed the average daily volume after 90 minutes of trading and we are getting a pretty good bounce at this moment. Well who knows whether the volume is meaningful.

I did step in and nibble on the GAMCO Global Gold and Natural Resources 5% perpetual (GGN-B). I mentioned I wanted it 25 or 50 cents lower than yesterdays close and it moved lower by almost 25 cents early today so I bought some at $20.82. I almost bought the Wintrust 6.875% Fixed Rate Reset (WTFCP) issue as it sold down 15-20 cents (24.80), but I was not quick enough and now it is back to $24.91—this is on the hiding spot list with a highly likely redemption in July.

Last I looked my portfolios were taking more pain than yesterday. Amazingly I had 1 portfolio up 64 cents yesterday while the others were down .15% or so. Today markets are getting a little revenge on me as I am off 1/4% overall.

Note that if some of the ‘hiding spot’ issues get sold off further they may be attractive for a purchase.

Maybe we see the big ‘flush’ today. The DJIA is off 1,200 points and the S&P500 is off 165 points at 6 a.m. Friday. Interest rates are plunging–the 10 year Treasury yield is now trading at 3.89% which is down about 15 basis points.

China has just announced 34% tariffs which should have been expected but obviously it wasn’t given the market reaction. We should expect that the agricultural sector will get slammed with this announcement. CHS which had announced a rare loss on Wednesday which I had posted in ‘headlines’ earlier is going to take a hit in earnings going forward–for how long we don’t know.

I may be looking to buy today–just would be a nibble to start and would likely be one of the Gabelli CEF preferreds. I was working on my potential buy list last night, but didn’t get it completed, but I had at least 2 Gabelli issues on it. I need to see the share price move lower by 25 or 50 cents to get ‘my’ price.

On top of the trade news we have employment numbers being released in an hour or so–so lots of news there.

So lets see how this day shakes out.

Well we have seen 4 hours of trading and we are not seeing much bounce in any equity index. Bitcoin is also way off. Interest rates are sitting right around 4.04%. But you never know what the last few hours will bring.

Our accounts have a little damage–but it is very minor–down around .13% last I looked. Minor damage makes sense since I have a pretty big chunk of securities off the ‘hiding spot’ list and they really are not moving much.

As I said I am not buying or selling today–just watching.

It is interesting that we really know nothing at all about what will happen over the course of the next week or two–lots of moving parts on a global basis. Will there be severe tariff retaliation? Will consumer demand fall sharply causing a global recession? The list of potential issues that could occur is as long as my arm (and I have a long arm).

Hopefully in the next couple of days I can get my list of potential buys ready (the low coupon, high quality perpetuals). Don’t know when I might need it, but it is something I want to have available when I want pull the trigger.

Last night I wrote a short note at 8:30 pm on indexes dropping in reaction to the administration announcing tariffs yesterday afternoon.

Not much can be said at this point as there has been no bounce in indexes overnight and at this moment all indexes are off fairly sharply with the DJIA off 1200 points.

Interest rates (the 10 year Treasury) are trading at 4.08%–near where they have traded all night long.

How will preferreds and baby bonds react to this turmoil? Of course no one knows for sure, but I think all prices will fall in the early going today–and the baby will go out with the bath water in spite of interest rates falling. How much is anyone’s guess.

The only thing I know for a fact is I WON’T be selling anything. Selling at this point in time is pretty fruitless. If one wants to ‘rearrange the deck chairs’ don’t do it today–just give markets a little time to play out–decisions made on days like today are likely bad decisions.

Let’s see if markets bounce today or at least stabilize. There are a few days before many of these tariffs kick in–maybe some will be delayed further. We just don’t know.

I’m looking for potential buys today–where? Everywhere. Won’t be buying today, but tomorrow is another day and I may be buying—I can’t predict at this moment.