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Economic Damage Sinking In

This week finally looks like the week where investors start to realize that the economic damage done to the global economy will not be quickly repaired. For anyone watching Fed Chair Powell this morning he was in a somber mood–and trying to tamp down expectations without spooking the markets.

I have expected this to happen, but didn’t know it would take this long for all the ‘dip buyers’ to begin to get burned. Fortunately, for all of us, the sell offs have been orderly allowing investors to shift their dollars around slowly.

I haven’t even considered doing any buying this week as last weekend the more I read the more I was convinced that having lots of dry powder is the best way to ride out the next few weeks–or maybe months.

Lodging REIT preferred are getting paddled good today–off 2-5%. I had previously held a couple minor positions in these, but took some ‘steak dinner’ profits (small profits) a number of days ago. It’s going to be a long, long process to get these REITs back in the black.

mREIT preferreds are getting the same shellacking as the lodging REITs–down 1-6%.

I feel good having the largest chunk of money in the utility and closed end fund (CEF) preferreds and baby bonds–not too much movement in this arena. Won’t be buying more of this stuff now, but wouldn’t hesitate to add to positions if we get a downdraft.

Everyone should have lots of patience right now waiting for bargains on decent quality issues—many of the ‘bargains’ are likely traps–this will be realized more and more in the next few weeks.

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