Equity markets are partying today with the S&P500 up 1.12% and the DJIA up 1.51%—not sure if this is a dead cat bounce or if the markets are relieved that the FOMC meeting time is almost here and we can get the ‘decision’ out of the way or maybe it is that we now have deals with all 3 automakers apparently agreed upon–who knows? No one. I only care because common equities will help income issues from getting hammered so bad.
The 10 year treasury is trading at 4.89% up 4 basis points. Just a quick review of preferreds and baby bonds looks pretty much flattish overall–1/2 issues up and 1/2 down.
Of course the star of the day is the Spirit Realty Capital 6% preferred (SRC-A) which is trading up $1.91 to $21.65 on the Realty Income (O) buyout of Spirit Realty. The issue will remain outstanding for now as I understand details of the deal–but when rates fall a bit I suspect that O will call the issue. Yield to that call may be a super deal–assuming rates don’t keep climbing from here–and not one of us knows if they will climb or not.
I see Brad T is touting his prediction of this deal – of course he recommended SRC many, many times – but most of the time at prices above the deal price – just glancing over his buy articles most were $40 (plus or minus a buck or two). Owners of SRC the last year or two maybe are going to be break even (counting dividends) depending on your buy price. No windfall profits in this deal.
Just glancing at my accounts they are plus a little or minus a little – hardly any movement overall. CD rates are down – at least at Fido 5.65% is the best available.
Let’s see how the last 90 minutes of the day workout!!
I for one have made alot of money listening to Brad Thomas’ reasoning and know how. Bad time for REITs now so anyone with an over abundance of them is hating life this yr.
Moron and Pendragon shouldn’t have a platform to spread their nonsense though
BT has been to the school of hard knocks and has an eye for how shopping mall reits work when it comes to building them , but I suspect one or two others are doing the hard work of reading the financials and presenting the work. I don’t follow him as much as I used to a couple years ago because he kept bringing in his politics and hooking up with Laurel and Hardy.
With the market up today I wasn’t expecting it but I had a partial hit on some ETD I had set to get an 8% yield on. Guess someone was unloading too bad it didn’t fill completely.
Like Tim said, some accounts were down and others were up.
1) Can anyone explain why the yield on ETFs like BND and AGG is so low (3.1-3.2%)? How does a fund like BND, 76% invested in U.S. Treasuries and that has such a low expense ratio, sport a dividend that’s 250 bp or so lower than the securites it holds??? I called Vanguard, and so far, they have no explanation, either.
2) Can anyone recommend a successful law firm or attorney who files class action suits against mutual fund companies?
Robert what is the duration of the funds? They could have low yields but be well under par. And then you make it up on the maturity of the bonds via cap gain, or recovery to par at maturity. Of course that depends on what the fund manager does with the bonds before they mature.
I just checked BND and its an intermediate bond fund. Its been a tough year for intermediate and long term bonds held from beginning of year. FWIW, I see BND’s 30 day SEC yield as 5.05%.
https://advisors.vanguard.com/investments/products/bnd/vanguard-total-bond-market-etf
Robert. Hold your horses!
I can guarantee you that yield is not correct, or it doesn’t represent YTM or YTC or YTW which is what you care about.
Took a quick look at the fact sheet for AGG, it lists a SEC yield of 4.82%, which is based on the yield over the last 30 days.
Actually, it shows a trailing 12 month yield of 3.18%.
The yield you care about (YTW) is probably a little less than 6%.
https://www.ishares.com/us/products/239458/ishares-core-total-us-bond-market-etf?cid=ppc:ish_us:ish_us_nb_core_product_exact:google:nonbrand_prod:ei&gad_source=1&gclid=Cj0KCQjwqP2pBhDMARIsAJQ0CzrgUkJXGE3BaN3tj7AwInD7G6lzoVaVBE9-sFgtScqz-ojfCntIPBgaAgKEEALw_wcB&gclsrc=aw.ds
2) Attorneys decide what class action suits to file based on their profit not an investor complaint. Don’t expect to recover more than a pittance if it is filed. The proliferation of lawsuits, some worthy and some nuisance, benefits lawyers and probably hurts stockholders more than it helps them since legal concerns and expenses affect a companies bottom line.
As others have mentioned: coupon yield may be low, but yield to maturity is going to be higher.
When a person makes predictions non stop it becomes a self fulfilling prophecy that they will be right on some calls. One would need a part time job tracking these SA authors and all their “calls”. I thought all of those articles were pretty much for entertainment purposes only.
fc–that is how I have to take them–‘for entertainment only’ since I don’t buy common shares (or at least seldom do).
I dont know fc. This argumentative winner named Long Player on SA has recommended MPW 15 times in the past year or so…Been wrong big time every single time, lol..But I suspect this capital crusher will surely get one call right….Then take a victory lap like they love to do, lol. How do these people even get permission to have an investing sub service anyways? He wants to deny Ba and B credit arent junk rated. Only C rated. Not the sharpest investing tool in the shed.
Grid–Don’t know that author—guess I will have to look it up – looks like good entertainment.
Tim, he is a pill. Read the comments section on his last couple MPWs, lol. Oh and he used to write for Moron. Gee, Im surprised!
Grid – I see he and Pendy are buddys—probably says it all.
Grid–I see him and Pendy are of like minds – says about all I need to know.
Tim, I have never seen two people enjoy losing money like they do.
@Gridbird ,
A lady from Prague once told me a proverb:
Jeder Tierchen hat sein Plaisirchen .
I hope I’ve spelt it right.
@Gridbird Sadly, only their picks and their subscribers lose money while they rake in subscription fees.
Good point, Eric.
David, “Every little animal has its pleasure.” Is that it?
To be fair to Long Player, he used to work in the oil and gas business and does pretty well on those recommendations and analysis. But in my experience, when he strays from that field to write about others things (and he seems to spread himself around quite a bit), he does not do very well. He also seems to get his politics involved a bit too much for my taste in some articles and his comments. Some guys can do well in one sub-sector but as they spread their wings to get more article views or subscribers, they move outside any semblance of competence. I do in fact read his oil, gas and midstream articles and although I don’t buy anyone’s picks without applying my own analysis, he has been a good idea generator for oil, gas and midstream. For what it is worth.
RJZ, I will certainly defer to your experience there. But anyone with the tiniest bit of investing knowledge knows by definition any debt rated below BBB- is considered “junk rated”. Why he has climbed up on the hill to die and deny this basic fact is most confounding. Insisting only C rated debt is junk. That is 100% wrong. He must be related to PennYless because 2WhiteRoses and I had to beat him down a few years ago when he defined B rated debt as “high quality”.
Yeah, I remember that fun…. Don’t remember which particular issue they were touting (again and again) but I imagine the headline said something like “Be Like Buffett And Buy This Quality Issue We’re Buying Hand Over Fist,” of course implying that The Oracle, if only he knew about this one, would approve…. ha! yeah, right..
Sold the “star of the day” for a 9% profit in less than a month…
Alex–probably a good move–no reason for it to move higher (but who knows).