Although the futures are up quite a bit this morning (700-800 Dow points) I am under no illusion that we have seen the end of the sell offs as announcements of capacity reductions from the major airlines serve to remind one that there will be fundamental pain ahead. Of course no one knows when Covid 19 will peak–I suspect it will be awhile–a month or two.
Yesterday was pretty painful for our personal accounts with losses of 1 – 1.5%—virtually all in the perpetual preferreds that we own. The ‘sock drawer’ issues we own did well–barely moving. As we mentioned we snagged 1 CEF preferred yesterday at $24.99-the Gabelli Multimedia Fund 5.125% (GGT-E)–the issue closed the day at $25.46.
Today we will continue to study and watch the CEF preferred–and some short dated maturities in the baby bonds, although I have concerned with some of the BDC baby bonds as they may incur sizable losses if we do fall into recessions later this year. If I make so buys they will be small positions–no use burning up dry powder as there likely will be plenty of time to find and buy bargains.
As tiring as these markets are everyone needs to stay vigilant. We will reach a point–maybe in a week or 2 where we tamp down the wild trading and instead only move higher or lower by 1% each day–I would be quite happy with moves this small.