Everyday–Get Up and Plan

Yesterday was a most restful market day for investors–and while common shares were up our holdings were up just a small amount–a very small amount.

Each day I get up, earlier than I normally get up, around 5 a.m.–it takes me a couple large coffees and an hour to get overnight news reviewed.

Yesterday I did no buying or selling–in some ways being out of the office and not fixating on news was refreshing.

My plan today. We know markets will open weak so I will simply watch. Odds are that an early weak bounce will come, but if trends are to be followed we could see a close down 10% again by the end of the day.

If we get a bounce of any magnitude I will sell a little more in the perpetual arena–I don’t hold much, but I may convert more to cash awaiting the bottom (I have no idea when this will happen). Nothing pisses me off more than selling losers–but a loss is a loss and I am not holding to watch a 25% loss go to a 50% loss.

I don’t think I will do any buying–I have so little visibility in anything regarding the economy it is getting harder and harder to pull the trigger BUT I will–sometime in the future.

As I have said many times–if you can not sleep you need to sell a little more. If the money you have is essential to your retirement or lifestyle you need to keep more dry powder. The time will come when this can be redeployed in a very profitable way, but that time is not now and no one can predict whether that time will occur tomorrow, next week, next month or even further out.


61 thoughts on “Everyday–Get Up and Plan”

  1. Bigger Fool Story – picked up 100 CEQP/R yesterday @ c 3.80. Forgot I’d left a GTC buy order hanging @ 2.90 or so. It filled.

    “the best things in life are free.”

  2. The only thing I am doing is adding to my Berkshire. It has sat on cash and underperformed S&P during the past years. I trust Warren and management to understand and react.

    I wouldn’t be surprised if we learn he now owns the USA energy market at a great value.

    I lived through the crashes and somehow came through. Sometimes, denial and avoidance can pay off! (I never sold.)

    We are the USA and the strongest nation on the globe.

    My WhatsApp is full of international partners and friends expressing their wish to be in the USA.

    Take a breath and be kind with bravery.

  3. Tim,
    “but a loss is a loss and I am not holding to watch a 25% loss go to a 50% loss.”

    What about selling NOW to avoid watching a 50% loss go to a 75% loss?

    Or just stop watching?

  4. Ignorance is bliss, so i stopped watching the the screen.
    The only Green on the screen was the reflection of my face.

    1. Good for you.
      Should ask the wife to disconnect the internet and the cell service, not to be tempted to watch?

      1. Dan, I need a wife to do that. Instead I have a working GF who is unable to monitor my actions… Bloodied and battered and not a better man for it I just bought me some EAB debt. It this goes under, they will be mailing me part of a coal plant from the proceeds being its mortgage backed bonds, lol

  5. This has devloved into full fledged panic where everything is getting liquidated and although I have a very level of cash, what do hold has just gotten smashed beyond recognition so it does hurt. It’s not about the individual equity or company it’s about fear that the whole system is about to fall turning a health problem into an economic problem that bleeds into a financical system problem. Thus the en masse liquidation of assets just to get cash liquidity. I’ts gotten to the point where I’m down so much on my holdings to where it looks like all these companies are going to go bankrupt. They are not. Many issues are down 30 and 40%. Are we going to go without medications and health insurance, utilities, oil, and even burgers in the coming years? Granted, the market was priced to perfection but many companies are being priced as if armagedon is around the corner. I hope not lol.

    Not adding to my positions, but the prices have dropped so much that it makes no sense to me to sell at this point. I’m willing to hold until we get some clarity and then it may be time to add. Your situation may be different so each person has to make that decision based on their own circumstances.

  6. Even the Nuveen High Income fund that comes due later this year is down 15%. They must be expecting a lot of defaults on bonds to justify that price because it holds issues which mature this year and they should redeem at par!

  7. AT&T April $20 puts going for .50 !!!! 30 days and $12 away vix to the moon.
    Anyone see the telecoms going bankrupt anytime soon? I mean the option contracts are on steroids right now.

  8. At first I thought it’s a problem of leveraged cyclical companies, after I thought it’s the illiquidity of preferred stocks, then I guessed it’s the demise of oil and energy related companies, but now looking at CEFs and mREITS literally killed I realized all of the above instruments are held by RETAIL investors. Probably the same going crazy and rushing to get toilet paper like the world is ending. As we have seen in China, the world is not ending, is just having a bad time that’s going to end. I don’t add but at current prices I don’t sell.

    1. I want to add, but being shell shocked and seeing preferred stocks go from 29 to 8, my brain is thinking who is going to implode and who is going to recover? If I could only see the future. I think I will stick with tech stocks to repair my portfolio, and some cheap utility prefs.

    2. F. C went from 15 to 10 in seconds. Many mortgage reits 15 to 7 in seconds. Even highest quality pfds down huge.

      And what’s scary is Fridays triple witching hour.

  9. Bill S: I don’t disagree with you. The safest assets are cash or cash equivalents. If you can’t liquidate those then we are all screwed and nothing matters

  10. WOW, in reading thru the comments I can sure tell that the entire mood of the site has changed 180 degrees. I find my portfolio extremely “interesting” as I always viewed it as a “Very Conservative Portfolio”. I was only 18% in equities and 82% in Corp. Bonds, Preferreds, and Nebraska Muni’s. I live in Omaha so hence the Nebraska paper. Now here’s where it gets very interesting. Not counting todays huge hit I was down 9.4% even with a Very Conservatively built portfolio. So after today I don’t know I would guess it will be 11% down. I read almost everything I can get my hands on about investing and whats going on in the world but just want to say “How Come No One Saw This Huge ShitStorm Coming”????? 35 to 45 days ago we were all talking about trying to grab some 5% coupon and thinking what a good deal it was as rates continued to go Lower and Lower. Now, of course I can buy high quality companies that have 6 1/2 and even 6 7/8 coupons at two to three dollars below par. Just F—-ing Unbelievable. Now back to my true question for all the experts out there. How come no one saw or even had an inkling of this shit coming down the tracks???? If we could have gotten some kind of small warning I think most of us old timers would have taken some caution and moved to cash or atleast something that preserves capital. Its just a “Perfect Example” as to at the end of the F—-ing Day we really “ARE ALL ON OUR OWN”. My paper losses now are well over $1 million dollars. Thank GOD though that he did bless me with a great job for over 45 years and I will be fine. Sorry for my long speech today but I just needed to vent.

    1. Hi Chuck,
      Please vent. This “Bull Market” is a farce/sham perpetrated by Bernanke et al.
      The fed’s trying to save the Market over the last 10 yrs has led to this.
      Thom Hartmann was warning about this weeks ago.

    2. Chuck, I suspect most, if not all, of the posters/lurkers on Tim’s board are hurting as you are.

      My daughter & son-in-law were just laid off this morning. They have a huge mortgage, and not a lot of savings. Their 401Ks have been shredded.

      My portfolio, similar to yours, was a very conservative one. I’m down over 30% since this thing started. Been selling off the weakest holdings, today I sold off another 4 positions ( all somewhat lower since the sell ).

      I will wait for signs of a breakthrough in vaccines or cure, to buy back.

      At times like, this, take strength from family, love and friends. If you are religious ( which I am ), draw strength and hope from your faith.

      1. inspbudget: That’s good solid advice … I’m in the same boat – off about 25-30 percent in a very conservative portfolio. Even investment grade preferreds are being taken out back and shot today. Volume feels higher than usual so maybe we’ll get some type of short-term selling climax.

        I keep telling myself that this too shall pass and to chill.

    3. Hello, Chuck P, been thinking about your puzzlement or a variety of it for the past four years or so, not exclusively regarding fixed income or the markets, but that as well.

      Last few days or week I have actually come up with a one word description of the condition – Americanitis.

      God bless the republic and God bless us all.

      Your friend,

      Josephus of Jacksonville

    4. Chuck, we did see this coming, but decided to disregard the facts in front of us. China was going through this worse than we are now, but we just did not want to accept the truth. Call this arrogance, or American elitism, whatever you like. Funny thing is, things are so bad that the news of an Asteroid coming close to hitting Earth tomorrow, March 19, is getting almost no coverage. These days not sure if I would rather have this virus or an asteroid hit. You decide.

  11. I had sold everything except Dx-B and Two-A. Thinking ok only 2 in the account I can sleep well. Lol aghhhh

  12. We have just witnessed liquidation across all asset classes. Even treasury bonds and gold have now sold off. No where to hide except cash. The Vix is diverging and soon we will see a huge oversold bear market bounce similar to ‘08. This will be everybody’s second chance to rebalance. ATB

  13. KTBA – have been watching this “sock drawer” guy forever in the low $30s. Picked up shares in the low $26s this morning.

  14. Things may be slowly changing here. I have green stocks on a very dark day. My best performer is WMT trading above $126 – I bought it a few days ago at $103s!! I wish I had bought a ton more of it! Others of mine green are VZ, MMM, UPS, and CSCO. Maybe folks are stepping in to buy bargains finally but they are sticking to blue chips.

  15. The previous 2 recessions saw the overall stock market drop about 50% peak to trough.

    My plan is to keep buying on the way down and have some cash available to buy at Dow 14,500 or lower should we make it that far.

  16. I’m at THAT place… the place where I had a plan and then had Mike Tyson punch me in the face.

    ARR/C @ $10. That’s a 17.5% yield, monthly, for the next 4.5 years… and trading like ARR is going completely under. This was at 18 just 48hrs ago. And that doesn’t include the 150% capital gain if it gets back to liquidation value. Another binomial outcome… either it’s worth zero or there’s a lot of money to be made. Any opinions on which?

    1. NYMT-M was trading at $20 just 48 hours ago, now trading at $6. Thought I would never see this. Says a lot that NYMT is not buying their own preferred shares back at this price.

    2. Is the market pricing these as if borrowers won’t be able to repay a mortgage? Bought some NlY-D yesterday and may consider some T, but mainly just sitting on the sidelines. I agree with whoever said once we see the light at the end of the tunnel there will be a major bounce.

    3. ARR/C now down to about 8 … unreal. Seems all prefs, even investment grade ones, and baby bonds being taken out back and shot. Almost beginning to feel like a selling climax …or at least a temporary one. Volume is high on most I’ve looked at.

      Very painful!

  17. I am not a big fan of untended limit buys in this market. Unless I am a seller. Last night I put 11 sell limit orders at small losses (for this market). At the open 9 of them hit over my ask, 1 hit at ask, 1 went unfilled. More cash for later think I got plenty now. The beatings on those ones is over for me and I hope the other guy makes a killing on them but I got enough left in the market for now. I still have painful memories of 08. Imma head out now.

  18. I own 75 different securities for fixed income that includes preferreds, ETDs, common stocks in BDCs, mREITs, marines shippers, and stock and bond funds. My PF is down 30%. I will not sell anything for a loss but will ride it out because it is my experience the markets will come back. Loss of divs and company BKs are my only worry. I know I put my crystal ball somewhere, dang it! Stay cool and hang tough.

    1. Jeff; Exactly the same here. I have 130 positions. All income securities, bonds, baby bonds, prefs, muni funds, etc. Have not sold a single one. Have nibbled on the way down to increase average monthly income. This is painful to watch.

  19. I mainly have holdings from the 2 provided portfolios. Are there any holdings in those 2 portfolios I should be worried about and possibly sell? I am pretty new to this. I have much to learn and appreciate all the comments. Thank you, Ann

  20. Thinking about some T for the dividend, but that’s it for now. Keeping powder dry and sitting on the sidelines.

  21. Thought I had missed the absolute bottom yesterday, so hustled and bought some EFC (the cef itself-not the preferred) <$8, and added to my NNNPRF position @$21.88

    Looks like have to get going today as market seems to be tanking again. On my radar is new position in PFG, also adding to MAIN & EPD.
    Busy, busy, busy!

    1. Ron – had to take a small nibble of the ECF-A preferred today–didn’t plan to but it fell again and I couldn’t resist.

  22. Tim are you still comfortable with your term dated issues, especially baby bonds? I’ve followed you since the previous site and like the concept of a maturity.

    1. Niantican–I am goosy on everything. I have concerns with the BDC related issues (term preferreds)–I had a little taste of Priority income (PRIF-F) that I took a loss on today. Others I am continuing to watch.

      1. MCG, I do not think these will get busted. There were 31 separate trades under 2 cents at the open. The bid was “sub penny” @ 0.0033 for most of them. The first “high” bid 13.45 showed up @ 9:42, 12 minutes after the open. These look like legitimate trades to me, all done on dark pools.

        1. of course they will and they did 🙂 Everything sub 12 and change. Legitimate meaning yes they actually transacted at those prices, but clearly erroneous.

  23. I remember buying MER-K at under $10 back when.
    Yes, they can go single digits. This lasted only a week before recovering.
    Not to scare anyone out. As many have said here, Sell what you have to so you can sleep bitter at night.
    Stay healthy

    1. Right Newman–investment grade issues were available under $10 in 2009, but a person needs the cash–and the will to buy down there.

  24. I may be rearranging deck chairs again today. As the price of higher yield IG comes close to lower yield, I have been swapping them, harvesting losses if in my taxable account. I will ride this out, however long it takes, adding new money when available.

  25. I need some help from everyone. I need to try to wrap my head around worst case scenarios. Since there is no vaccine for COVID-19 for at least a year (unless something radically changes), we will all be living in this warped reality of hunkering down in your house and social distancing. Even if there is medicine to alleviate symptoms, reduce hospital admissions and mortality, we are still going to be locked down. If we are not it means that everyone will get it and a lot of people will pass away, and this is socially unacceptable. This means no travel, no hotels, no events, no retail, no restaurants. If businesses shut down, how do the accountants make money? Eventually this trickles down to everyone. Maybe after a few months some things start to come back as more protective gear is available and you can do a little bit. But the economy comes to a grinding halt. A mere shell of what it is right now. Companies right and left going bankrupt. And on and on and on. We have a depression. So it seems to me that there is so much downside risk. I think most of us on here just talk about retirement savings. So isn’t it better just to cash out and sit this out until you see solid, positive evidence that we are past this? What do you have to lose? A few percent of dividends/interest versus the risk of your capital melting down in front of your eyes? Isn’t it better to just wait for a year and things start to come back and then put your money back in? I am not sure that markets are pricing in these worst case scenarios (which I think are plausible). I apologize in advance if this topic has already been discussed. I have been an ostrich with my head in the sand for the past few weeks. Thanks for any thoughts and stay safe!

      1. Hi Tim – I have been following treatments closely and there are many drugs that are looking promising or who have proven effective. There is no doubt in my mind that we will have treatment soon, and that is great because it will save lives and suffering. I am all in on that. But I think even if we have treatment, we will still be in isolation, as treatment itself does not stop someone from getting the disease. We will still want to use containmnent strategies to minimize the effects of the disease unless the treatment is so good that we can test everyone everyday and if you test positive you just pop a pill. So therefore I think we are all in our houses for at least a year (in one way shape or form) and we have this unheard of economic contraction. So as long as people stay in their houses the economy is in the total sh***er, and what I outlined above comes to be.

      2. TIM
        in looking for medical products to deal with the virus there are probably three main stages
        l. formulating a product that you think works.
        2.then there has to be testing to establish if it works and also what if any unexpected side effects may take place. This testing can be longer than the development stage.
        we have one or more vaccines which have been developed but they are now in stage two. First try it on healthy people , then try it on sick people. This is a prolonged process. In a serious state of emergency The FDA could wave part if not all of the review process but that is quite serious in that you do not know if there are any side effects or not.
        Drugs to be used
        l. Regn has one which is already fda approved. This means that under normal conditions there are no side effects. It also means that the drug could potentially be used now as docs can prescribe off label. It is legal. This means that the regen product or one or two others can be used now.
        3.GILD has a new drug not approved for any other use which is getting tested in China now. The FDA could wave prolonged testing to see the long term impact of the drug if they get reports that the drug has worked well in China. The GILD drug seems to work best during the early stages of the disease which really means that we need the test process to be totally operation which it is not in the U.S. Th major issue in the U.S. has been how week our efforts have been to provide widespread testing so we know who will need drugs. I’m not a doc and I have no idea what docs are using to treat people now. But I do understand that the formal process for new drug approval is quite time consuming. Three stages of clinical testing. These are all designed to protect users from side effects and to establish the most effective dosing. With a pandemic some of these rules will be waved.
        I do not think GILD or Regn are likely to make much on these drugs as they will probably have to distribute them at low cost if not for free. That said, both of these firms are large, well financed and with a wide range of other products both on the market and under development. SC

    1. xwords59,
      Finally… I’m glad you posted this. Many fantastic points about the pain we’ve not even begun to realize. I’m no doomsday prepper, but I think it’s ‘unsmart’ to compare this crisis to 9/11 or 2008’s period or to add them both together and say that’s where we are at. Big difference between losing your car or house and losing your life. I think the key is to see how the markets react to Congress getting off its — and putting this stimulus into place. If we crash after that goes into effect like we’ve done EACH time the Fed has taken major action over the past 2 weeks to stabilize things, I fear the worst.

      1. Even with stimulus, how does that help if we are in our houses all the time. People get money and pay rent for a month or so, but then what? For an economy to function people need to have jobs. Otherwise it just does not work. And there are no jobs (or very few relatively speaking) if we are all in our houses.

        1. I agree with you, trust me. I’m just saying that the ‘tell’ for me on what to do, whether to liquidate or stay the course – will depend on how the reaction goes to this trillion $ + stimulus. All it will do is ‘try’ to buy some time.

          I’ll be trimming on the bounce if there is one, and then re-evaluating.

          1. Very bad news and bad idea from the talking heads of CNBC. Putin continue to wage price war against the Saudis. WTI down 10%. COVID-17 policy seems destined to follow Italy instead of South Korea. Energy Transfer (ET) heading to bankruptcy of some sort.

            https://seekingalpha.com/news/3552750-ep-energys-apollo-backed-financing-collapses-wsj?app=1&ifp=0&utm_medium=email&utm_source=seeking_alpha&mail_subject=pre-market-summary-on-your-portfolio-portfolio-1&utm_campaign=nl-portfolio&utm_content=link-11

            All energy names follow in sympathy, renewables also follow. Best to get the 1.6% so far from FDIC deposit, Ally bank or perhaps a little more from obscure internet banks as long as it is insured by FDIC. Forget about Bauer or whatever the rating. USO-P trading below $23, call proetected until October $23. USO-O, lower and more recent coupon even lower. I have quite a few shares of ETP-D and E plus a few shares of the common ET. Stupid CEO determined to spend and now APO seems to reneged. Even the relatively less drawdown illiquid, SLMNP too a 14% dive. I will hold but NOT buy, save the money to pay taxes galore plus property tax due April. My suggestion: ignore all the the talking heads on CNBC except Guy Adami, leader of FAST MONEY, who did feel the black swan as correctly opined by Tim. Good luck to all of us and be safe. No more restaurant, got all my food from Costco with shortages of many empty shelves and no Brocoli. LOL.

            5.

            1. I have a little ET-c myself. Any good reads on the financial condition I should look at?

              It is hard to see how all of the pipeline companies could go bankrupt at once. Someone has to pump the stuff where it needs to go. But they all seem to be way down.

              Mortgage REITS might be the next to get hit if people can’t pay their mortgages while stuck at home and not working. But I think they only have a lockdown for a couple of weeks and by then it has either worked or it will make no difference.

        2. X, IMO you hit the recovery nail on the head…”stimulus” to increase unearned cash In hand to spend and improve/expand the economy doesn’t work if it does not create jobs to continue the cash flow, nor if the malls are closed, bars/restaurants are closed, wellness facilities are closed, many other retailers and businesses are closed, thus very few benefiting downstream from the “stimulus”.

    2. I think the issue is the elderly from 60-70 up have a 15-20% mortality rate. Then if someone needs a ventilator because of the virus and none of them are available then the patient could die. If we can stop the spread of the virus then it is a matter of weeks till its died down and back to normal. A 1% mortality rate of 50 million people is still 500k dead. Apparently young kids are asymptomatic meaning they show no symptoms and spread it around. I saw a article claiming a confirmed 3 asymptomatic people at a Biogen company meeting spread it to 75 people.

      If we let the virus run its course with herd immunity are we prepared for a possible 6-7 digit total deaths with potential healthcare facilities overwhelmed. Hopefully i am not fearmongering.

    3. xwords59 : Just curious, where would you put your money even if it is in a “cash” form ? Most of my retirement money is in CD’s as they are FDIC insured, so if the bank that issued them goes bust you might be able to get your money back someday from the government. However, most of it is in 2.4% CD’s that mature later this year:( I suppose Treasuries are the safest vehicle now. Money market accounts worry me a bit as do SPIC insured cash sweep accounts. Maybe MM’s backed by government assets ? I think we may in the “return of the money” phase rather than return on the money.

      1. Bill S: I don’t disagree with you. The safest assets are cash or cash equivalents. If you can’t liquidate those then we are all screwed and nothing matters

    4. Americans are not going to sit in their houses for months on end. I am 63, take no medications, and have no underlying conditions. I will take my chances with the virus before watching the economy be literally destroyed. We can take extra precautions with the elderly, (i have two parents in their 80’s). I will play along for the short term, then something has to give. I think i am in the majority opinion.

Leave a Reply

Your email address will not be published. Required fields are marked *