Mid Day Rambling

Well the 10 year treasury breached 3% this morning for the 1st time in over 4 years, but has set back to 2.98% since that time.

Yesterday the 10 year was in the high 2.90’s and preferred stocks and baby bonds fell by 6 cents/share.  Today they have fallen by another 6 cents/share.  It has been a long, long time since they have reached an average price in the $24.80’s which is where they are at this time.  This means that in the last 18 months shares of the average $25 preferred or baby bond has fallen about $1.25/share.

As we write the DJIA is off 280 points as inflation scares continue in the market.  Oil prices remain high and all building materials are off the charts high–as anyone trying to build a custom built house knows.

Consumer confidence remains extremely high–much higher than we think it should be, but ignorance is bliss and most folks don’t walk around all day long worrying about interest rates and the national debt like we do–some days we wish we were ignorant of the underlying fundamentals of the these items.

We did notice today that Rick Santelli on CNBC was talking about the next resistance on the 10 year treasury yield is 3.37%.  That is a scary number that we would hope wouldn’t show up until next year.

We keep our seat belt fastened as these markets present more scary times.

11 thoughts on “Mid Day Rambling”

    1. A wild day Leonard, but my accounts barely moved with the shorter maturity issues I mainly hold.

      Hope the ride was kind to you.

      1. If I didnt know 10 year broached 3%, my preferreds wouldnt have told me. 6 went up in price, 1 went down, and 6 didnt trade. Did buy 500 shares of MLP DM. Hope to collect the 9% and growing divi, and then D rolling it back up in a few years after the tax break loss dings them.
        Oh, and I had to get this out of my system. …Yesterday I bought 200 shares of PCG-A at $24.85…Yes I almost paid par for a preferred that already is 2 suspended divis in arrears and maybe several years more. Now I can toss it in the sock drawer and be done with it.

        1. Yes Grid–but you are a “special” case. I like to look at the average price–but it doesn’t mean much to any given issue. My total holdings were up 50 bucks yesterday–I was more than happy, but over time the perpetuals will fall–sometimes it is just a few cents a week, but at the end of a quarter they will be off a quarter—but the investor may still be up a dime or so on the quarter with 1 dividend collected. All in all it will be tough to be above 5% in TR this year.

          1. I inched up again today, mostly because BGCA and WFC-J keep grinding higher. The 5% wasnt 3 months of income, lol…A lot of flipping and small ball cap gain trading. Plus buying one preferred at $140 and flipping couple months later at over $180 didnt hurt either, lol. I dont have any rabbits left in my hat to pull that out again though. But CTWSO is supposed to be called before years end. That would take my chunk of these from $15 to $21 at call which will be nice if it occurs.

        2. Grid! What? If this gets bad, PCG could find themselves in bankruptcy unless they have an army of lawyers and very good insurance for ‘acts of god’, which is questionable. Not questioning what you did, just trying to understand. Why tie up that $ when you can get a decent return elsewhere, even if it’s just a KYN-PF type small return?

          1. GW–because he is Grid you known he will do the unpredictable–ultra conservative for the sock drawer and then risky the next day–got to keep things exciting.

          2. Tim is below is correct… This was not to be a reco. PG&E is a total sad sack of an outfit. They went bankrupt 15 years ago, and managed to build a nuke on a fault line for crying out. And their rates? I would rip out my furnance and A/C if I had to pay what they do per KWH.
            I just bought 200 to end my obsession with it. PCG-A has been around almost a 100 years, survived that bankruptcy and was made whole in a couple years.
            They are saving a billion dollars a year in cash not distributing dividends to commons and preferreds. However the total value of preferreds being 245 million, less than $15 million of that billion is being saved deferring preferreds. If they get out of this trouble or a “state protected bankruptcy” like they did last time, this thing will trade like a rock star again. Heck it barely broke par for a tiny bit of time in 08-09 crisis when most preferreds cratered 50-90%. This is just a fun trade to watch…As I find it amazing a preferred with 2 dividends suspended already and no end in sight can trade near par.

          3. GW, PCG-A was a fun trade, the regret I bet I will have is DM, I bought yesterday as I suspect this is going down more. But I am determined to own it through the divi increases that are coming and hope D throws in the towel because of the tax law ruling, and rolls this back up and give me a little cap gain in 2020.
            The company looks decent, but it will probably be my personal version of the KIM trade people have been losing on since it was $25. Except, I will not buy more and just sit on the small 500 share purchase at $15. There is a reason I dont buy commons…And it isnt because I make too much money buying them! 🙂

  1. Just found your new website.

    Like finding an old friend.
    Thanks for your insight.

    1. Hi Richard–welcome. I launched the site a few months ago, but have a ways to go yet so haven’t promoted the site yet.

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