I’ve just been looking at the numbers–the economic releases for this morning.
Consumer sentiment continues to crater–I expected this as I am sure most folks also expected it. Inflation expectations jumped up to 4.4% for the 5 year period, although near term expectations shot up to 6.7%. On the other hand looking in the rear view mirror producer prices for March came in pretty soft–much better than expected.
The equity markets are dead flat, but the 10 year treasury shot higher by 16 basis points to now trade at 4.55%.
Our accounts are the tiniest amounts red–I would have guessed they would be more red–but not yet. One can not predict the next 15 minutes let alone further out.
So what am I doing?? Nothing–just thinking. Am I positioned right? Are these rates going to keep moving higher? Are there some perpetuals I need to hold my nose and buy? So many questions and so few good answers.
Most likely I will do nothing at all. Definitely not selling, but more buying I doubt–at least not today.
Very informative site here. Would some kind soul confirm some of my assumptions after having discovered these so-called Baby Bonds, or Junior Notes …
I’m drawn to utilities, shipping, infrastructure, insurance … defensive sectors, and I found listed Notes (e.g. SREA or DUKB) are marginable. I would like to use them in a margin account for two reasons. The first is so I can leave GTC orders to buy at stink bids that impact my cash to margin balance. I also sell cash-secured puts, which leaves a proportionally smaller borrowing capacity and higher cash sitting in a brokerage account. I can’t withdraw much elsewhere without taking the margin negative and paying interest. It does appear I can borrow vs some of these and put more cash to work for me earning 6-7% vs for Morgan Stanley, who otherwise pays .01 per month in the e-trade sweep … if that makes sense.
I understand that the bond-like instruments especially are going to move with interest rates, and future expectations of interest rates. Which end of the curve? Does it vary?
Like if a Note has a maturity date 20-years in the future, will it correlate (however loosely) with 20-yr rates? At least go up & down in tandem with say TLT?
Presumably, after first call date, notes/preferreds will be redeemed by an issuer, if interest rates have dropped sufficiently enough that redeeming and issuing a new series is net cash positive. So that’s one risk on the longer term, into a declining rate environment, where I think we’re headed once this recession hits and the Fed gets off pause.
For me, another risk would be delisting to the pinks, which would kill my margin strategy. How likely are utilities like Sempra or Duke Power to pull that? It seems to happen often enough that it came up in my research. That odd little VIASP is sort of appealing, except that de-listing risk is too high for me.
Comparing SREA and DUKB specifically, is it safe to say there is some measure of company-specific and geographic risk? I assume part of why Sempra’s are trading at over 7% and Duke’s just under 6% is because of a California premium vs Blue Chip discount. Is that accurate?
Lastly, it looks like DTW and the CMS Energy also give me similar borrowing capacity. So comparing those Michigan-based utilities, what is dictating the price differences between DTW, CMSA,CMSC,CMSD? Is it just the coupon and simple market fluctuations?
TIA
Great questions, and welcome to the site! I’m also fairly new to baby bonds, so I’ll let others with more experience try to answer most of your questions. I will mention something about the likelihood of calls, though. I’ve been surprised by how infrequent they actually are. I had assumed that everything would automatically be called as soon as possible if current rates were lower than the outstanding issue. It turns out not to be nearly as automatic as I’d imagined.
There’s a variety of reasons for this. One is that the “friction” of reissuing is probably higher than I’d thought, so the rate needs to be significantly lower rather than just fractionally. Then additionally the company needs to to think that there’s not going to be a better opportunity to “refinance” coming up. If companies think rates are going to drop, they don’t want to lock themselves in for another 5 years if waiting 6 months or a year would get them an even better rate. The result is that callable issues with surprisingly high rates sometimes remain outstanding longer than I (or you) might have guessed.
I’m eager to see how others answer the rest of your questions.
Thanks Nathan. Brother. lol
Maybe I should ask those questions in a different thread? From now observing a few days, it would appear my other assumptions are mostly accurate, but I appreciate the note about calling the bonds. Makes sense.
More tariff reductions are headed our way.
The administration has decided to exempt smartphones, laptop computers, hard drives, computer processors, and memory chips from reciprocal tariffs. I may have lost track but I believe the only country still getting these tariffs is China. Good news for Apple. Does the 10% baseline tariff apply? I would think so but you have to decide for yourself.
https://www.bloomberg.com/news/articles/2025-04-12/trump-exempts-phones-computers-chips-from-reciprocal-tariffs?srnd=homepage-americas
Also being floated is the idea of exempting some items from the 10% baseline tariffs.
https://www.bloomberg.com/news/articles/2025-04-12/trump-floats-possible-exceptions-to-10-baseline-tariff
Good news for inflation.
Will it positively impact Investor confidence, particularly overseas, in buying our T-Bills?
We will all find out when we find out.
The good news for inflation was already announced in the March PPI (-.5%) and CPI (-.2%) numbers, as were increases in non-farm employment (+228k), industrial production (+.7%), and manufacturing output (+.9%).
While DC gets downsized and Wall St. panics, the rest of America is rolling up its sleeves and getting to work.
All that’s needed now is for the Fed to get off the couch and provide some much needed lubrication in the form of rate cuts.
Citadel—better not hold your breath waiting for a Fed rate cut—IMHO
Well, some may think I am mistaken.
Eliminating 145% tariffs on these items and floating ideas to reduce 10% base tariffs is not going to help reduce future inflation pressures.
We are all entitled to believe what we want.
https://www.cnbc.com/2025/04/12/trump-exempts-phones-computers-chips-tariffs-apple-dell.html
Apparently the exempt items will also apply to the base 10% tariff, so it will tariff free worldwide (except perhaps for 25% fetanol tariffs applied to Mexica and Canada). But if these items are include in rhe USMCA, they never got them. But wait, we have the 20% base tariff applied to China when he did the fetanol tariffs in North America It looks like they still apply to these exempt items also.
So easy to understand (in a pigs eye)
From the CNBC article above.
“The White House said on Saturday the exemptions were made because Trump wants to ensure that companies have time to move production to the U.S.”
Perhaps they will soon realize that companies that build cars, home appliances, and even clothing cannot build factories overnight either. Maybe they will become the next exemption to the 10% base tariffs. But then again, maybe they will not since they did not exempt them and they would have the same issues as the electronics companies.
Read through a conference call transcript the other day, where the CEO basically said he would give guidance for how things stand as of that day in their worldwide operations, but they’re one tweet away from having to drastically revise what is made where and when. I would bet that many more calls will echo this. Not exactly a productive investing environment.
it’s a temporary exemption so I don’t think it does anything other than add to the uncertainty we already have – futures open in 2 hours so we’ll get a feel then for what the markets think.
Yeah, yesterday the white house was saying 2 year exemption to build factories. Now, there is a one or two-month exemption to figure out a new tariff category. Fentanyl tariffs, Base tariffs, Retaliatory, and Consumer electronic(? or whatever name they give them) with specific exemptions from all (at least I think so) if covered by the USMCA agreement.
Markets rallying on the good news of the exemption just being temporary and not knowing what the new Consumer electronic tariff (?) will be. I will stand down and keep my cash.
https://www.cnbc.com/2025/04/13/trump-commerce-chief-says-not-like-a-permanent-sort-of-exemption-for-phones-computers.html
I guess the good news they see is the new tariff class will be less than 145% that was on China. It will however, be more than the 10% baseline for everybody else. Glad that the market can figure out that this is good news. I cannot, so I will stand down. Let them play with other people’s money. 4% in money markets is where I will stay.
There’s a pretty good rate (4.317%) right now on a new 3 month Treasury bill but Monday is the last day to get it.
Thanks to whoever recommended MTBJ ….I bought a bunch….CHS preferreds are on sale…probably related to the famer and tariffs…
Craig, That was Chuck P who mentioned the MTB-PJ seems pretty safe but hard to tell these days. Chuck has even been questioning himself.
I think it’s a safe hold but what do I know. Two years ago bank stocks crashed because of some failures. I have been reading if we get problems in the bond market banks could get shaky again. This is a perpetual preferred and they can suspend dividends and not make them up. This does have a first call in 2029 and this bank does have a history of calling its preferred.
Take a look at Tim’s list for banks and insurance. You will see a lot of red even after Friday’s market recovery.
https://innovativeincomeinvestor.com/bankinsurancepreferreds-listing/
Chuck thanks for the response…you present a situation that could be scary for preferreds in general…I try and keep the faith this will all get worked out to a satisfactory end point..If something changes, I will probably head to cash…to preserve my capital
Craig, lots of sayings we can refer to. Just make a plan and carry on, Stay the course and be vigilant. Change plans if warranted but that’s the hard part.
Being sure you need to change and if it’s the right change LOL
Over on that other site there are bloggers ( can them influencers) with large followings. When they write about something have you ever noticed how the stock recommended jumps in price?
This site has its own group of followers. Notice on Tim’s bank list the MTB-PJ was one of the few green stocks? I think it’s great that people here share.
After the Great financial crisis banks were told not to issue cumulative preferred stock. There are a few still in existence that were issued before the crisis. Doesn’t mean much if a bank goes belly up, but if they survive without going out of business they have to pay you all the dividends they suspended.
One I learned about on here was NYCB PU I owned it until it went on Santa’s naughty list. They wanted to grow the bank and I don’t know if they didn’t plan for the capital requirements when assets reach a certain threshold when they bought Flag Star bank or bad luck when we had another bank crisis 2 yrs ago.
It’s tempting to get back in but I think with what’s happening in US right now chances are a better price is coming.
CRAIG; First of all you are welcome. I have some “Words of Wisdom” for ALL on this site. If you have a large position in something & you are just “somewhat worried or concerned” there are 3 things that you can do that will help you absolutely immensely. 1. Sign up on the companies website for all their “PRESS RELEASES”. 2. Read all of their quarterly reports. 3. Listen in on their quarterly conference calls with their analysts. I guarantee you that will HELP you feel much better for sure. You can also call their I R MGR with any questions but I will alert you they are always very “guarded” with their answers for obvious reasons. If you do all of the above you will get a telegraphed signal if there are problems. Numbers don’t lie unless there is Enron Fraud going on.
Cramer takes a lot of (well deserved) heat for stock pronouncements but he is on target with one of his regular comments.
Buy and Hold has been replaced with Buy and Homework.
Thanks Chuck P…MT eps out this morning..mild miss but looked ok to me…will read the conf call later…I was interested in the reserves and write-off numbers ..they actually were better than estimated…no signs of recession there at the moment…but that could change….thanks again for your help
CRAIG; Good morning to YOU. I just also read thru all the numbers on MTB. I certainly am NO BANKER but will just say in the text they said they have a CET1 Capital Ratio of 11.50% which according to BASEL 3 would be considered very Financially Strong as they say a bank needs a minimum of 4.50%. So MTB has a strong capital buffer in my humble opinion. I too took a very large position last week during the stock pukefest. Thats the time to buy in my opinion.
I favored investing in banks until SVB, which was a wake up moment for me that regulators can zero out investors in common and preferred shares. Too much risk for me that a financial crisis can permanently wipe out your investment
https://www.fdic.gov/resources/resolutions/bank-failures/in-brief/index#:~:text=There%20were%20569%20bank%20failures,See%20Summary%20by%20Year%20below.
The GFC really did a number on banks back then and we have a few regulations in place which make them safer then the recent past. The most recent big failures was quite interesting and confined to specific banks who either dabbled in crypto or were ran in a way that did not consider certain risk scenarios. Like “a lot” of uninsured deposits from very large clients who could pull it all in a moments notice and failing to realize interest rates could indeed go up quickly.
You have to go with more conservatively ran banks or too big to fail ones. The lesson is to avoid the banks who are dabbling into things with higher risk profiles or operating in a way that leads to bigger profits for the short term while taking on more risk. It should set off some alarm bells why those higher profits exist and not for other banks.
The amount of failures after we settled down from the GFC is pretty darn low. Recent events are great stress tests on banks and watching how they handled all of this tells a lot about mgmt.
Even though there was some red, there were some decent deals out there. I am trying to move up in credit quality as much as possible. It’s hard to sell winners sometimes. I don’t want to fall in love with anything right now. I will most likely buy them again below par though. The more I can anchor the meat of the portfolio now in credit quality makes it easier to go for a little spicy too.
BOT
ECC-D – The Rodney Dangerfield of Eagle. CY>9%
GL-D – Flashed crashed to $14.55, but I wasn’t aggressive enough. Doh. CY>7%
KBWY – CY 10.5% Per FIDO – I have bought and sold this one several times. just have to buy cheap.
RIV-A – Over 6.5% CY in this one now. Trying to build a lt position over 6.5% as possible.
SLD all at profit
CCIA – Second time on this one.
EIDP
CSWCZ
MFICL
As always DYODD YMMV
NWGG, not sure about trading and what you see as quality. But I agree there are times right now if you can get higher yields on quality stocks.
The KWBY equity ETF
low volume which can be hard to trade. Also is this a good time for equities? Generally people like equities in good times for their growth opportunities but right now after bidding equity stocks to ridiculous P/E people are fleeing to safety.
EIPD the preferred’s CTA-PA & PB are low volume and hard to trade in and out of. Best to buy at a low and sell at a high if trading or just hold for the income and ride out the storm.
CSWCZ is just 3 yrs from call. Yes you can trade in these panic drops but as I need the income I think it’s a decent company so I will hold for the duration unless quality deteriorates.
To each his own. Traders and Holders
@CM
GL-D & RIV-A are IG. RIV-A is where I am trying to build a larger position. RIV-A is rated A1 according to the III database. Granted RIV-A is not fun to trade, it will be a LT holding.
KBWY is the spicy for now. Best not too go too crazy on the spicy? It pays the CY-10% and maybe sneak a 2%-4% gain in somewhere too. If it goes down, I’ll take the yield and be patient. Position limits help with these riskier choices to not torpedo the ship should she hits the rocks.
GL-D will be sold on any move higher. I like to trade the interest rate moves on some of these LT bonds, but only with IG paper. If I get stuck with it, I’ll take the CY and be happy. Win Win for me.
You are right about the trader holder thing. Most people don’t understand is the suitability and investment objective of an individual differs. That is what makes a market? Usually that is what people disagree on the most in the site is differences in investment objectives. IMHO
NWGG , That is why I was looking at what you posted to see if there was something of interest to me.
I like to think out loud and appreciate the response.
Been in and out of the EIPD preferreds myself. Mainly based off if the sun is shining or stormy weather and where we thought interest rates were headed.
Right now I think you were right in selling. My best guess is prices are headed lower with all the uncertainty we have been seeing.
Bought some TLT and such. Not normally my thing. Unless I can sell for a profit, or be content with 4.5% if the carnage continues.
Been keeping my eye on TLT as well – where is the bottom. Might look to sell some ITM puts…nothing yet.
I bought two senior bonds this morning issued by Berkshire subsidiaries: Burlington Northern SantaFe and Pacificorp due to the sharp rise in the treasury yields. I’m already heavy into financials and insurances so need something to balance my bonds/fixed income portfolio. Reckon that these bonds are implicitly backed by Uncle Warren, fingers crossed.
what is the cusip for burlington northern?
https://www.finra.org/finra-data/fixed-income/bond?cusip=12189LBL4&bondType=CA
Not high yield like the 6-8% regularly posted here but something with higher credit quality in uncertain market. Also, the bond price hasn’t been that low since Jun 2024. At least I know that the dividend/interest is unlikely to be suspended unlike the preferred stocks.
Thanks. I brought Berkshire Hathaway also a few months ago.
Similar to Pacificorp. A different Berkshire Hathaway Energy(BHE). Nevada Power. Cusip 641423CH9. Preferred with a long expiration of 2055. Pays 6.25 fixed for 5 years. Resets for the next 5 years at 5YR TBILL + 1.936% (a pitiful reset rate). On longer-duration issue that trades by CUSIP, my investing bias is to only buy fixed rate resets. This issue has held up well. The last Finra trade of Friday was 99.8. I did see it trading down at 98.50ish range last week if memory serves me correctly.
I passed on the New Pacificorp issue because utility companies can defer interest payments for up to 10 years. I am ultra-conservative, so to me, the risk is at a holding company also (may not be true).
Would be willing to buy other Berkshire company bonds, other than BHE companies, if you run across any that are 5-year fixed rate reset.
I own some Burlington Northern debt but instead of Pacific Corp I own debt of another Berkshire owned utility: Mid-American Energy. I don’t go out the maturity curve as far as you’ve done with BN. I just don’t see the value in something out past my life expectancy. I try to limit duration to 15 years max and my entire bond portfolio has an average duration of 8 years.
I like Mid-American for its service area. Mostly flat midwest land. Pacific Corp has a lot of forested territory prone to big fires caused by faulty utility equipment and utility lines. Their liabilities in Oregon recently being a prime example. Just one less thing to worry about.
You might take a look at NV Energy, the Las Vegas power provider, a Berkshire holding. I did not check what these bonds did as I’m traveling…. I traded for 10 hours on an Aer Lingus flight, something to pass the time from a rock hard biz clsss seat, horrible food and atrocious service.i guess i can’t complain too much for 69,000 points.
Anyone know what is going on with AFFILIATED MANAGERS 4.75% 09/30/2060 PFD Callable MGRB
Down nearly 6% today.
On the Macro side I think China is dumping its Treasury portfolio in response to sanctions. The basis trade blow out is a second order effect of that. My plan is to just let this all run its course before making any positioning changes.
Dan-
All four of the MGR BBs have CYs in the 7s, it’s not just MGRB. What’s the going rate for a very long-dated IG junior note with little likelihood of being called?
I’ll take a guess. Longer maturity issues are more sensitive to the interest rate environment. Treasury rates moved significantly again today. 2060 is a very long duration. Duration not in favor of late. Just a guess, as I said.
Iam going to list a few preferreds that just a few short months were selling at quite the premiums. Well NOT NOW!!!!! Feel free to tell me what you think of the following list as they can all be bought now at much lower prices and some even seem to be bargain basement prices. I deem them as all very financially strong companies. Here goes: SOJF; ATHS; RZC; RF+F; & CHSCL. Also I own a decent amount of a Goldman Sachs very long bond that has come way down in price. Not that long ago it was $109 and now $103. I hear all the same Talking Heads as everybody else but what am I missing here??? Iam not going to be “political” but I gotta believe that within the next 3 to 4 weeks we are going to hear many “deals being made” regarding the tariffs.
i bought some sojf this morning.
going to look at the other one you mentioned
some decent deals out there unless the economy really falls off a cliff
I saw their 2031 South Jersey debt over 9 pct. No financials?
Do you own the GS bonds that pay monthly on the 15th?
They are around par and have decent yields. BAC has monthly ones too.
Just wondering. 10y at 4.5%. No hurry
To KingCash; No the one I own is their 6.75% long bond out to 2037. Just literally added another $100K of that GS bond at $103. Pretty darn solid company in my humble opinion.
I think you’re right, but I’m too old to want to be subject to being continually jerked around. I’ve moved even more into short duration baby bonds and short term treasuries for now.
Sorry to be a downer. I am a Boomer. We have brought this mess upon ourselves with the deficit and debt. Our international systems are broken (UN, WTO, WHO, NATO) and our budgetary system is non existent. It’s wonder that the current volatility is unusual.
I also marvel that the average American now expects inflation this year of 6.7% when the first quarter was around 3%. I guess all those experts on tariffs who appear on TV (the same ones that were experts on Covid) have done a good job of educating the public on what is reasonable to expect even though the tariff program is constantly changing and just getting started.
A well-respected, experienced bond trader I have known for 27 years says the move in rates is a massive unwind of “long yen, long treasury.” Honestly I don’t think he really knows for sure, but he may. I see other things going on, which Tim points out very well.
I don’t see any Texas school munis over 5 % anymore, and I haven’t looked to see what else is available.
The only thing I bought the past few days, which has an historical precedent, is TIPS , which were in the 2.88-2.90 premium over inflation.
Small quantities.
I keep trimming my MUB and PFF shorts and then they go lower, so I decided to buy puts two days ago. Time will tell if these become valuable.
I’m thinking “things” are broken in general, so I started looking at OTM index puts for December , and they are crazy expensive
lt- There’s definitely unwinding of the basis trade in Japan. But since some of the EU bond rates are dropping, it’s more than just Japan.
Since the dollar is our biggest export via trade surpluses, I knew in the back of my mind that policies trying to eliminate trade surpluses will come to bite the dollar in the ass. It’s just the speed of it all. I thought I would have some more reaction time thinking treasuries were a slower moving beast. I sold off some of my 20 year treasuries while they still are in the green. They were such juicy rates when I got them…
Gary- The U.S. consumers may or may not be able to absorb the tariff. But for the business owner that has to pay the tariff not knowing whether or not they consumer will pay, a lot of small business owners on local tv channels said they could not gamble their profits on that.
Saw an article today where China’s Xi said the high tariffs imposed by the US will eliminate sales of US goods in China– think about that if it comes about. in the next 90days.
I think he has a point, and that it will hurt us more than China. Perhaps US shoppers can continue to afford the tariffs on their purchases, but a breaking point could happen pretty quickly.
We have one leader who has to ‘save face’ and one who would like to have one that doesn’t get slapped on the world stage.
BAC recommends shorting the S&P …You don’t want to know my recommendation
Craig–does it involve a bunker in the back yard?
We can hide but our ability to sprint may be impaired . . .
Thank you very much for the hideout and potential post-panic buy lists, Tim. MGRB closed at 16.21. I am resisting the impulse to buy in, for now.
I like Harley Bassman and I know he’s a blowhard but his commentary about the MOVE index is funny…’human minds cannot fathom this kind of volatility ‘
True…Bonobos rule!
Yields up, US dollar down. That’s a sign that assets are leaving. Trade wars are becoming capital wars. The US had attracted a ton of capital post GFC, and particularly post-COVID… and the world has decided to bring some of that back home. This is something that I have no playbook for, and I’m not sure that the damage is repairable. The shining city on the hill is in doubt.
Trade wars are becoming capital wars.
—————————-
That is interesting. I think the whole situation in the last 5 – 10 years has shown that the USA can’t be trusted:
– unilateral economic sanctions (will denmark be next over Greenland?)
– stealing other govt’s funds/gold held at US Banks including Central Bank Reserves (Venezuela, Afghanistan, Russia – will EU be next if they retaliate over Greenland? China over Taiwan?)
If the US can do this to other Governments then if you are a foreign investor in the USA, they can do this to your shareholdings.
In addition to the over-valued US market + certain fall in profitability with 25% average import tariffs + likely fall in demand for goods and services because of higher prices.
Things are very very cloudy.
Some German officials want Germany to take its gold reserves out of US storage because Germany views the US as untrustworthy. The Germans also want to audit the gold held in US storage. (It would not surprise me if the US abruptly decided to hold foreign gold reserves stored here as “reparations” for something or other. ) There is a lot of uncertainty about the US out there. This is all part of the bull case for gold – its not just the nervous old guys hoarding 1 ounce gold Eagles — its the central banks and governments taking physical delivery. JMO. DYODD.
“Germany considers withdrawing 1,200-ton gold stockpile from US in riposte to Trump. Berlin may remove bullion from New York because of concerns Washington is no longer a reliable partner, according to reports.”
https://www.telegraph.co.uk/world-news/2025/04/04/germany-considers-withdrawing-gold-stockpile-from-us-trump/
mrin –
Lots of doom and gloom in your post. We just had the largest increase in yields on the long bond in a single week since 2008. Part of this is almost certainly unwinding from leveraged hedge funds.
My understanding is that as of January, China holds about $800B of our debt, already down from $1.3 Trillion at the highs way back in 2013.
My guess is that if that the US Treasury market continues to be treated like the debt from an emerging market country, the Fed will step in to buy trillions of bonds – but not sure when that pain threshold is reached. We might be getting close.
On a different note, PFF is close to hitting a 5 year low and is now down nearly 6.5% YTD. But my guess is that everyone who follows this website and who has an income-oriented portfolio owns a portfolio of securities and cash that is still within 5% of their all-time high valuations – so we all owe a big debt of gratitude to Tim for running this wonderful website.
Thanks Papa
I thought it was time to buy equities that paid a dividend with the hope the dividend would be safe and position myself for future growth.
Wrong.
Just sold a few at small profits. I have too many holdings to be trading for bounces in the prices with this market so I will go back to buying preferred and ETD for a good price and hope for capital gains and just collect the dividends.
I did similar – I still own UPS at about 94.80 basis – if it holds, they pay a 6.6-ish% divvy. Have puts sold on CVX (Jun 135s) and TGT (Jun 85s). I had puts on AAPL, GOOGL, MAIN, NVDA but the profits on them shot way up so covered and re-invested in some preferreds and bonds and kept some dry powder in SGOV.
Unfortunately, I am in UPS at around 110, but I did sneak in early today and add at 94.90 to loser my average cost some.
New to this, I have averaged down a lot on stocks I have confidence in including holding more than I want so I can sell and balance my holdings.
Here’s the problem and what is difficult. I started out about 1980 with an advisor but then sold out to buy my first house. After that it was just being with the company 401k and a very short span of trying my hand from 2020 to 2022 and was the worst possible time and I got my head handed to me. Then after I was laid off and my company went BK I decided I could do as well the fund advisor at TD I converted it to a IRA and never looked back. I found SA and Tim and school of hard knocks I’m where I’m at now.
This crazy market is different than anything I have seen. Always before I had a feel for being close to the bottom and felt comfortable enough to average in. This market even outside the tech sector became so over bought that the price to earnings were unbelievable. This makes it hard to judge what the bottom is. So many factors at play from inflation, employment, interest rates, how long it takes for the market to recover for American goods and services. China just cancelled a order with Boeing that maybe they don’t even need if their economy is down.
What I think is a reasonable bottom for the different equity stocks I have been watching may be a lot lower than I think.
Yeah I bought it at 98, sold a Jun 90 put and an Apr 11 100 call. Just rolled the Apr 11 call out to the May 110 strike. All that premium collected lowered my basis down below 95. If their divvy is secure, that’s 6.8%+ yield. I actually wouldn’t mind adding at $90 if the Jun put hits.
Charles M….. Everything I have bought for 15 years pays a dividend….. Preferreds, baby bonds, and notes along with a very few common stocks (several utilities, ARCC, and NLY) that also pay dividends make up my portfolio. I seldom sell anything unless they start going south such as Riley. Bailed on them before it hit the fan.
Dj, I have rarely sold something that I thought I had bought at a good price and dividend but there have been times like now I can see the opportunity to add at a lower price then sell the higher cost.
For example:
I have missed a few dividends since I sold the FLG-PU formally NYCB-PU but I don’t regret booking the capital gains. Even though the price is tempting right now I am holding off on buying back in.
I have some others I bought with a solid 6.5% yield over the past couple years that are looking like in this market they may fall into a 7% yield if we have another market shock. I would probably buy more then decide if I should keep the original purchase if the price recovers to break even or keep. This will depend on this market that keeps changing from one day to the next.
I’ll post if I get that 7%
Our accounts are down about 3.5% from the high of this year, but income is up about 12% from new purchases.
So its a give and take situation.
I agree. I gladly sold my FLGpA similarly a week or so ago, though the future reset has seemed appealing. I’ll stay on the sidelines for that for the time being.