Are we getting the flush I have been looking for today? Volume on the S&P500 just passed the average daily volume after 90 minutes of trading and we are getting a pretty good bounce at this moment. Well who knows whether the volume is meaningful.
I did step in and nibble on the GAMCO Global Gold and Natural Resources 5% perpetual (GGN-B). I mentioned I wanted it 25 or 50 cents lower than yesterdays close and it moved lower by almost 25 cents early today so I bought some at $20.82. I almost bought the Wintrust 6.875% Fixed Rate Reset (WTFCP) issue as it sold down 15-20 cents (24.80), but I was not quick enough and now it is back to $24.91—this is on the hiding spot list with a highly likely redemption in July.
Last I looked my portfolios were taking more pain than yesterday. Amazingly I had 1 portfolio up 64 cents yesterday while the others were down .15% or so. Today markets are getting a little revenge on me as I am off 1/4% overall.
Note that if some of the ‘hiding spot’ issues get sold off further they may be attractive for a purchase.
I never checked the value of my bond portfolio until I decided to reduce muni holdings in fear of elimination of the exemption.
Honestly, i never cared. The securities are all AA/AAA , so the value doesn’t affect the income. I take the same approach with my house, never checking the value because the square footage remains the same.
I suppose when I’m ready to sell, I will be keenly aware of the value. I do look for smaller homes, so I may be checking sooner than I expect.
Lower. I said Lower!
Here is a post many will find interesting because it is a history of the several-day 1987 crash from John Phelan, who was NYSE chair at the time.
What it does not mention is the OTC market, Nasdaq, where dealers stopped answering the phones. As a result of that action , we ended up with SOES, the small order execution system , and “SOES bandits,” retail traders who could take advantage of an incredible opportunity: crossed markets–where one dealer’s bid was above another’s offer. Dealers could not trade with each other on the system, and retail was limited to 1000 shares per trade. Only a broker could enter the order, so a room full of traders would call out orders to a broker, who would execute against the purest direct arbitrage in existence.
The take-away from the linked article , as far as my portfolio, is “What happens to my CEF preferreds if we fall 33% again in a few days?.”
Anyway, here’s the link, a great read, though Phelan blows his own horn and does not mention CME almost failed, which is unthinkable today:
https://www.sechistorical.org/collection/papers/2000/2007_0802_Phelan1987.pdf
I was entering orders for about 4-5 hrs this morning. FWIW here’s the action below for the Apr 3th & 4th;
BOT:
SPNT-B
IIPR-A
LFT-A
FGBIP
JAAA – Tiny amount on this one
JEPI- Tiny amount on this one
SPYI- Tiny amount on this one
FGN
RZC
PSLV – I trade in/out on this.
XOP- I trade in/out on this.
FSM- I trade in/out on this.
PHYS- I trade in/out on this.
ABLLL
SLD:
NEWTZ
TRINI
METCZ
ABLLL
OXSQZ
American Assets Trust – 6.15%
GRZZX – MF
BEARX – MF
As always DYODD YMMV
Good trading day. Lots of swaps between issues that both fell but not in tandem. Of course those trading profits did not keep up with falling prices but I’m confident it’s a good strategy in the long run. Happened during previous mini-crashes there’s always more opportunity during fast drops.
Scott Bessent must watch on all of this:
https://x.com/TuckerCarlson/status/1908204378613248067?ref_src=twsrc%5Etfw%7Ctwcamp%5Etweetembed%7Ctwterm%5E1908204378613248067%7Ctwgr%5E4c504e7c37d4b2e99e23a04a147f22771506fd0d%7Ctwcon%5Es1_c10&ref_url=https%3A%2F%2Fwww.wsj.com%2Flivecoverage%2Fstock-market-tariffs-trade-war-04-04-2025%2Fcard%2Fbessent-says-tariff-revenue-could-reach-600-billion-annually-QJfDGCPYDY1C72Ljg1pt
My opinion is that you did not get the flush. Naturally, I could be wrong.
But both yesterday and today, the “buy the dip crowd” did not start buying at the end of the day. They sold into the close. That may mean nothing, but they did not have an appetite to buy at these reduced prices. They seem to be betting on further declines. But as I said, I could be wrong.
My view of the flush being over is when the market is not making new lows for the day at the close. I know a rather conservative view.
I am who I am.
SteveA—I look at it the same way—I thought we had the bottom and move higher twice today, but it couldn’t hold and right back to the bottom. Makes me concerned for Monday.
Tim, things still have to settle down. The weekend gives influential people time to talk to Bessent and Trump to ask them to revise some of the tariffs. Also Trump to save face has been known to say he won the concessions he was looking for when in reality there were minor concessions.
My point is, if we hear on Truth Social that there is encouraging news on deals or people convince Trump he has to say something to calm the markets and his supporters then you will see a rebound Monday.
On the other hand If Trump decides to double down then expect more downside Monday.
Yes this is talking about politics but it is affecting the markets and my investments. Also don’t forget Lt’s story about his boss and the butter knife. This could be to distract people from the other issue in the room of Congress needing to pass a budget
Well we certainly got liberated and set free from our money today lol.
Martin Mull’s joke:
Mr. Market: Which will it be, death or roo roo?
Investor: I choose death.
Mr. Market: OK, then death it is — but first roo roo.
Today was fun.
My portfolio was off “only” 1.51% today by far its biggest single day move ever.
I also stuck to my guns today. I bought for cash flow not speculative bounces. At one point I had bought some SPY and XLU but then sold them on an intra-day bounce for better deals based on CASH FLOW and this keeps me out of trouble. The reason the market is down 6% today is because it doesn’t yield hardly anything. It has no yield to support it in a sell off. I’ll take a somewhat certain 10% than a who-knows-what yielding 2%.
Did lots of buying and selling all day long.
Good for you Dan–you know what you want/need and are positioning for it.
Great Dan, I did the same thing—I felt like a kid in a candy store! I picked up over 15 preferreds and baby bonds that have dropped several dollars below par, all of them investment grade. I also sold many that were pinned to par. Hopefully, I can hold on to them for the long term. But if history is any guide, after past big drops, they tend to rebound right back to where they were. Why? FOMO. And when that happens, the elevator rises fast.
Will do some more work this weekend, but my guess is the fear mongers talk over the weekend and more people will be selling on Monday. Next week will be the “buy and hold” investors that have had enough and capitulate. I need to be ready for my next list of buys and sells.
https://www.cnbc.com/2025/04/04/trumps-tariff-rates-for-other-countries-larger-than-word-trade-data.html
“I was always very good at mathematics,” Mr. Trump told John Micklethwait, the editor in chief of Bloomberg News, in an interview at the Economic Club of Chicago.
He’s good as long as he gets to make up the rules and numbers!
Tim, today was the highest volume day EVER according to Goldman.
Dan I just watch my think or swim platform for the etf ‘spy’ and it was near 3 times average.
I had sold off about half my CTA-B back in the mid-70s – re-purchased that tranche at avg $70.13 today.
Yazzer,
I sat on the sofa reading your comment andit took me a few minutes to realize you were talking about price, not the decade of the ’70’s.
I decided to dip my toes into an M&A arbitrage after warning everyone against doing so earlier today.
I now have fewer toes.
Rocket is acquiring both Refin and Mr. Cooper. My opening-only orders immediately went to a profit of several $1000, but the securities ere too difficult to trade out of in the first 1/2 hour….so I waited , and these positions moved dramatically against me. I’d be willing to bet some leveraged players were forced to exit, but I cannot explain the late day arb spread expansions
other than natural selling overcame the arb desks still willing to play in this sandbox.
I turned a profit into a $13k loss and am still holding.
It seems I am actually hoping for something positive to happen to create a big rally, and that means it won’t happen anytime soon. There IS a max pain point on this .
Lt you know what I said about you do post both the good and bad of your trades. No interest in picking up nickels and dimes in front of the steamroller, but I did look at ESGR & BECN just to see how they were doing yesterday and was surprised to see ESGR up a few pennies and BECN not down that much at the end of the day. The BECN is an interesting one. I felt they overpaid to get the deal done as they had to show their investors they could. Now they have to still wait for approval on the shareholder vote on April 14th I would say there is going to be an overwhelming vote to take the offer otherwise where the economy is going that stock is going to tank. Not sure QXO wrote a clause into their bid that would allow them an out. It’s going to be interesting times in the building and building materials business over the next 6 months. Not to mention borrowing for construction loans and penciling out going forward on building trying to determine demand and mortgage rates. Oh don’t forget the cost of materials and trying to do a cost budget analysis on projects not even ready for approval. June 2007 when the phones quit ringing and the crickets were chirping and banks started calling equity loans…..
I played in that sandbox when it was first announced and still hold positions, but I basically bought Redfin and a put, while selling a call and locking in a certain profit if the deal closes and breaking even if it doesn’t.
I will check what the volatility is doing tomorrow and see if any other strategies makes sense now. The stock is still sitting above my purchase price.
I have both ET and EPD in my IRA but I don’t have to pay UBTI since it is less than $1000 in earnings. I sold both of them recently just before the tariff announcement. Not much other than some capital gains.
Retiredputu
If you sold MLPs in an IRA, you will get hit with recapture, which is also UBTI.
Essentially, all the tax deferred distributions you have ever received while you owned those MLPs (meaning all of them) suddenly come back as UBTI – and you get to pay tax on it (or your broker actually pays for you).
If you have some risk money, you can deploy future cash for a potential nice nice return. Lightly entering, I sold the NVDA Jun 20 25 $75 cash-secured puts for $370/contract. If I get put the stock, I’ll own it at $71.30. If not, I collect the premium and move on. A quick calc shows this to be an annualized 23% return with $370 in 77 days on your $7500. Of course, if this really gets ugly, I have to face the music that I’ll own the stock for $7130/contract. I like the R/R however.
I deployed cash today. Not necessarily because I think this is over (maybe the first leg) but because it feels like forced liquidation, and better to be buying when others are being forced to sell.
For those of you that understand MLP’s & the tax consequences they have right now MPLX is a true bargain. Its trading right now at $48.22 which gives you a “Yield of 7.92%”. But I can’t “emphasize enough ” you need to understand MLP’s, how they work, the K-1, the UBTI, & the tax consequences of owning one. I will just add that MPLX has never suspended, cut, or missed a payment. It needs to be owned in a taxable account.
Chuck, I actually own a bunch of MLP’s in my IRA at Scwhab. I understand the distributions will be taxed at the current corporate rate (21%?) and Schwab will handle the filing. Is that the only downside? I know its not ideal but I bought a bunch of them years ago and I still like them (maybe a little less after today’s drumming).
Dan; I owned a bunch of EPD about 3 years ago (pretty large position) in my IRA. I received a letter from Schwab that they were taking out of my Schwab account a shit pot of money to pay for my UBTI taxes that I incurred. It was a sizeable amount of money. My CPA told me if I had owned it in a taxable account that would not have happened. Its was a shock to me and of course now I own both EPD & MPLX in taxable accounts.
Have you sold EPD in your IRA yet? I have a lot of it in taxable and some in Roth. After Magellan was converted in 2023 (held in both Roth and taxable) and suffered the tax consequences, I started selling some EPD in Roth; my plan is sell all of it in the Roth over years.
RetiredPUTA – It depends on how long you held them, but just because their earnings doesn’t Total $1K you may still be on the hook for taxes. I hope not.
Barb – I held it for several years already. I did get letter from brokerage recently but they mentioned that these were exempted from UBTI because the business income/earnings is less than $1000 per year. I’ve to go back and find that letter.
The letter only applies to income payments.
The recapture at disposition likely is NOT covered unless you sold in 2024 and they specifically said that they are not calculating the tax due on recapture
I hope Mr. Putu does not know Spanish because there is a rather unfortunate misspelling of his name in that post that made me chuckle.
And I just got through doing 14 K-1s for this year’s taxes so I needed it!
Damn it.
I’ve been battening down the hatches for months. Half in mm. Equities in value. Thru yesterday doing very well. Today was a beat down of epic proposition. Client accounts too!
SP down like 13.7 ytd. Expect -25 before some bounce. I hate bear markets!
IYP–what is ‘SP’? Stock portfolio?
SP 500
Here’s what I remember from Friday pm…..
Dow -9.9
SP – 13.7
Nasdaq -17.7
Anything that was a safe harbor Thursday was SOLD Friday.. And selling begets selling. When WS is in liquidity squeeze we are forced to sell even our best positions.
Trust rates and brackets not C-corp rates.
Dan,
You get hit with UBTI two main ways when you hold MLPs in an IRA:
1. You get to pay UBTI tax on “real” ubti from the MLP as shown in the K-1. There is a $1000 per account exemption. Your broker has to file and to pay the tax from your IRA.
Some brokers charge for this (several were between $300-500 when this was discussed a while back). some don’t charge. If they file a return for you, I suggest you have them send the work papers and check them. You may have carryforward UBTI losses that weren’t taken, and sometimes they just screw the return up. They have very little incentive to get it right (they are spending your money).
2. when you sell an MLP (in any account), all the distributions you have ever received get “recaptured” and you get to pay tax on them. In an IRA, all of that recapture amount is UBTI, so you get the tax hit with UBTI tax on that too.
(there is a third kind of UBTI on financing but I have never actually dealt with it).
I had a few MLP units in an inherited IRA. I sold it off slowly (keeping my total UBTI from operations and recapture under $1K/year) so I didn’t pay UBTI tax on it. took me a decade to sell it off.
The shame of paying UBTI in an IRA is that it is just a loss. no way to recover/offset it.
I bought some MLPs so cheap I will be forced to buy more just to raise my cost basis and avoid the total distributions being more then I paid for the stock. A nice problem to have I suppose.