Down, Down It Goes Where It Stops No One Knows

But really the selloff of common shares is really quite orderly and certainly is not a panic selloff. We all know common shares have been near la la land–so a 800 Dow point drop is not frightening or unexpected.

Of course I care about baby bonds and preferreds and the damage there is not dramatic. Right now the average share is off 14 cents, but there are over 150 issues down by over 1%. This is a larger reaction than we have seen in recent months to common share selloffs–but still minor.

Interesting to see quite a few utility issues off 1/2%- 2% or so–but given the levels they have been trading at being down 1/2% to 2% doesn’t make them a bargain–but worth watching.

Investors should keep an eye on the S&P500 and DJIA and see if something more serious develops later in the day. If we were to see the 3% drop turn into 5% later today we would start to see some ‘baby going out with the bath water’–maybe a chance to deploy a couple percent of dry powder in quality issues.

6 thoughts on “Down, Down It Goes Where It Stops No One Knows”

  1. I topped off my holdings in FRC-PK now that its finally dropped below par but for my third and final time I’m taking a detour and looking to generate income through dividend paying common stock….though this time I’m using ETFs to do the heavy lifting instead my own stock picking.
    I heard one of the taking heads comment.;…that its unusual times when investors are buying bonds for capital gains and equities for income. But that’s exactly what I find myself doing

  2. ZH called it the Supreme Court Selloff. The kerfuffle over the swing Judge is as good of an excuse as any.

  3. A correction is needed. Air has gotten a bit too rare up there. Have a couple of common limit orders in at ridiculously low strike prices. Also watching my preferreds to add more under $25.

    1. There are still a lot of stocks that trade below the half way point between the 52 week high and low. Why do cyclicals need to go lower to correct for the excesses of tech stocks? This is no capital market sell off as the market for preferred stock is pretty steady. Some of my junkier preferred is up for the day. It just seems like the market is afraid of the virus again as the “quarantine stocks” are back up again.

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