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Keeping Cool in a Rocky Market

Even though we have seen the DJIA off over 1000 points there is no reason to lose your cool. With the website down for 5 hours I lost my cool about the downtime, but I haven’t been excited at all about the DJIA fall. Like all security moves the ‘fear of the unknown’ is a big factor–and that is what we have now–lots of unknowns–about growth and about the progress of the corona virus.

I don’t like to see “red” in my accounts, but thus far today no significant damage has been done–down maybe a few 1/10’s%–but I hold almost no common stocks which is where I see some real damage being done. Cruise lines, shippers, container owners, oil and gas–real damage with many 8-10% losers.

I mentioned container owners Triton International (TRTN) and CAI International (CAI) last week and that if I owned those shares I would be studying my options. CAI is off around 8% today and Triton around 3-4%. TRTN preferreds are off 1-2% today, but the CAI preferred are hanging tough.

I am concerned with interest rates–the Fed has no real dry powder to help the economy (if it needs help–not sure it does). Today’s overnight REPO was normal at around $40 billion so no special overnight liquidity being announced–I suspect the Fed is watching closely, but resisting any extra REPOs–or maybe it is just that the primary dealers have not requested liquidity.

Today I did buy some of the new Priority Income Fund 6.625% term preferred (PRIFF) as it tumbled down into the low $24.30’s. I bought a full position and will see where we go from here–this would be a flip only as I already own the 7% PRIF-D issue.

Buckle up for the close today–if the markets fall into the close look for a weak open again tomorrow. If we get a bounce of a couple hundred points into the close we could see a bounce tomorrow morning. We need to watch for overnight news on any corona virus outbreaks in Africa where it would be a true disaster.

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