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Coin in My Pocket and Ready to Go!

As previously noted I had 8% of my total portfolio value in CDs and treasuries which matured in June–well the coin came in and I immediately locked down some CDs in the 5.25-5.5% area (9 month to 1 year) with 1/2 the proceeds. It is very difficult to pass up these yields so I didn’t, but left plenty of dry powder in the accounts to do a little bit of nibbling once again.

I am targeting the community bankers for some nibbling–mainly adding to issues that are already in the portfolio. Nervous nellies continue to give us opportunities–my favorite continues to be Bridgewater Bank 5.875% Preferred (BWBBP) which is a small $4 billion community banker. Right now I find this the most enticing risk/reward issue–obviously I will not get carried away because of the macro economic issues. BWP will report earning later this month which will add clarity–but if one waits for the clarity the largest share of potential capital gains will be behind us. The issue is now trading at $16.60 for a current yield of just under 9%–I will place a good til cancelled order in at a level 3-4% under current levels, but will nibble a little right here as certainly 8.92% is a great yield.

Today we have the release of the FOMC minutes from June – obviously old news being released, but markets almost always react to these releases. Equities are soft this morning with prices off about 1/2%, but still near 52 week highs as markets have climbed the ‘wall of worry’. Interest rates are relatively flat at levels from Monday in the 3.85% area.

Looking over our holdings this weekend it looks like we are up around 5% YTD–this is off about 1.5% from the highs for the year. With my goals now at 7.5% I should easily hit the goal–BUT we all know that markets can change in a nanosecond and gains can go to losses so we will count gains after they are made–not speculate on the future. Of course one could go to all CDs and treasury’s and lock in coupons of 5 – 5.50% in, but those rates will go away sooner or later and locking in 8-9% in on some perpetual preferreds can last for a number of years.

11 thoughts on “Coin in My Pocket and Ready to Go!”

    1. That does happen Gary–I should have nibbled before posting instead of posting and then not getting my shares.

    1. Citadel–yes I had heard about this talk–no doubt we will see a lot of these smaller community banks snapped up when the time is right.

  1. Tim, Hard to know how to play this market but as someone else pointed out to me over the holiday we have the fiscal budget battle coming up when Congress gets back from vacation. I knew about this, but had forgotten. We just had the fight over extending the treasury’s ability to borrow.
    The next battle will be over the fiscal budget for next year that starts Oct. 1st to Sept 30th 2024

    We saw some indications of what the next fight will be like from the last one and the implied threats by a few congress people to shut the government down so I think it’s going to be more drawn out and harder fought especially with representatives from states who have elections coming up in Nov. and with the more radical members.
    This could be a nothing burger or a batten down the hatches storm.

    1. Chuck P – not closely–but just taking a glance it is a nice current yield and I will check the financials in the next couple days to see if it is worth a nibble for me.

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