Maybe Too Far Too Fast

It is great to have a market bounce this morning–just wish it was a bit more restrained (can’t please me I guess).

I have 4 buy orders in now, but am not going to chase hard–all of the stuff I identified over the weekend moved higher quickly–so I will just adjust orders as necessary and hopefully pick up a few sock drawer utilities baby bonds.

I also have an order in for one CEF preferred (GGZ-A) 5.45% Gabelli Small and Midcap Value preferred.

I note that some folks did some buying last Friday and in some cases have already sold. I did sell one issue just now for a tidy $1/share profit, but it was the common shares of BGS Foods (BGS) which I bought last week–purely speculative, and since I don’t often hold common shares I was out with my $1.

As we look ahead this afternoon and tomorrow I suspect we could see some giveback in these markets–but who knows for sure. Some up and down seesaw action would actually please me–maybe would allow me to execute some buys.

20 thoughts on “Maybe Too Far Too Fast”

  1. Wow – that’s about all I can say. Had a few buy orders that didn’t fill, managed to offload GLP/A. Expect prices to fall, but what do I know? Placing day orders, but hard to track on the job. Don’t think seas will calm for a while.

  2. I have been reading over the weekend and listening to the talking heads. They speculated because Powell said Friday the Feds are ready to step in that It would happen as soon as Monday. I think even Tim here said the same thing. I think this is what started the Rally but I think it boiled over because the shorts had to cover. The rubberband got stretched too far, but in snapping back I think it also went too far.
    I got ahead of myself last week and because I had cash I bought quite a few stocks. By the end of the week my holdings were down 6% and by the end of today it was only 4% My worse investment was GSL-PB I took a whipping on it.. All it takes is one or two to do the most damage to your portfolio

  3. Today shows why predictions are unpredictable. Thursday and Friday I was selling some winners and buying losers….Then watched the losers drop more, so I bought more…Then fret all weekend about chasing, only to see the bobber cork pop above water today and suddenly the portfolio doesnt even look like last week ever happened.
    Crazy stuff. Even though I was chasing, I was chasing issues that either had previously been priced out of my zone or flipped previously and could never get back in. I never strayed from my personal comfort level of issues to be held. Tomorrow? Well it could all be given back who knows, but I dont ever sit out of the market. There is always something to buy and sell. 🙂

      1. I bought a small position of EP-C today just under par. If it dips below $49.50, I will load up on more.

      2. Pickle, I had scrap change left in account and bought 15 shares more of EP-C at $49.80. I bought about 1000 at $49.75 ish blend last week. Back out interest payment which comes in 2 weeks, your really looking at a 5% YTM for BBB- paper of 8 year duration. That is pretty good. Plus several times in past year or so I have bought under $50 and sold for more than $2 a share quick flip profit, and this last time I still got back in time to collect interest payment without missing it either. I have a lot of possible perpetuals, its nice for me to have some with shorter max duration limits.

    1. Amen Grid. Always something to buy. Was happy to finish getting fully invested Friday. Friday was a dumping ground and got things i have been waiting for.

  4. I was trying to buy GGZ-A as well. That 24.86 last trade on Fri grabbed my attention. It was a dark pool trade though. But even among today’s activity there’s a big difference between paying say $25.57 and $25.95. The latter gets you only 2.79% yield to call, the former 4.23%.

  5. Markets hate uncertainty.

    Combine that with a risk that is hard to estimate (but which would have significant effects were the worst case to pan out), a press that is frantic to create a crisis, and algorithms which kick in and out, and you have the recipe for a wild ride. You can’t just read a balance sheet and get a feel for what a virus might do.

    I am glad I bought a little yesterday and today. But that was only maybe 10% of my available cash that was put to work. We will see what tomorrow brings I guess. I got UTG at a really good price, and purchased some more utility preferreds for the sock drawer so I am fairly well satisfied for the moment.

    1. Scott–there is plenty of uncertainty ahead I am afraid. I got a taste today of high quality, but I think we are going to get a numboer of opportunities in the days (or weeks) ahead.

  6. SOCGP has an ask out there for $31.95, which yields just under 4.7%. Maybe not a bad place to hide as interest rates get lowered further.

  7. Hello Tim; I personally think this market is crazy. Very little has actually changed from Friday when everything was being sold off to today when everybody is buying like a crazy man. It just shows you how emotional the crowd has gotten.

    1. Actually, it probably has nothing to do with emotions, but just programmed trading following the latest very short term trend.

    2. No doubt Chuck P that folks are emotional and not much has changed, but as randy noted we have these damned computers pushing things around which makes it hard to get a true feel for pricing.

      1. Mr Leon Cooperman has writtn the SEC suggesting the Uptick rule be reinstated in order to stabilize trading. Of course the supercomputer traders will stand on their heads to avoid that occurring.
        They prefer to trade in milliseconds rather than the time it takes humans to trade.

        1. Howard–I am all for it—but no one in power cares what I think. Leon has been pushing this for years.

        2. The markets broadly do not work like Leon thinks any more. The markets that Leon grew up with had a “specialist” aka human physically on the floor of the NYSE. He, and it was always a he, was in charge of ALL trading for a given stock. If prices started gyrating too wildly, the specialist had the power to “halt” all trading, no questions asked.

          Fast forward to today, the “specialist” has been replaced with a computer server situated in Rahway, New Jersey. The computer program is called a “Designated Market Maker” and is run by a specific company. In addition to this, stocks can be transacted on literally about 50 different exchanges, dark pools or ECN’s. It is much harder to control 50 venues instead of one venue.

          Also note that designated market makers can “naked short” to their hearts content. The uptick rule never applied to them. Many suspect that other electronic traders do naked shorting all of the time and nothing happens. Maybe the naked short is held for 1 or 2 seconds. The SEC is hard pressed to detect this and do anything about it.

          Toto, we are NOT in Kansas anymore and we ain’t going there any time soon. . .

Leave a Reply

Your email address will not be published.