Mid Day Report

12:15 pm CST

Well we have an orderly pounding of stocks going on with the DJIA down 600 as I write.  To look at the bright side of things the drop in stocks is supporting lower interest rates as the 10 year is off a few basis points from this mornings high.  I guess it is at this time we are happy we are not common stock holders–off course we have endured the pain of watching common stocks fly higher the last few years as we have had to be happy with our 7% coupon issues.

In spite of interest rates falling a bit midday preferreds, baby bonds and other interest rate sensitive securities are falling by a dime.  This is simply the weak hands tossing the baby out with the bath water.  Most seasoned income investors will ignore this ‘noise’ at this point in time.  Falling by a dime is not meaningful.

REITs are hanging tough and are flat on the day–given the hammering they have received in recent months being flat is a victory.

Utilities remain at a point just above their 52 week lows.  We recently updated the dividends for utilities on the dividendinvestor.com site and as we updated we noted what low current yields most issues still had given the share price depreciation lately.  We aren’t going to incur the market risk for just a 3% dividend.

MLPs are off more than 1% today, but these are not too sensitive to interest rate wiggles, but crude oil is off a buck and this is what is driving MLPs.  We note that the Alerian MLP ETF (NYSE:AMLP) is now at a current yield of about 7.5%.  We may have an interest in a small position if it becomes slightly more attractive.

We could have a very interesting end to the market day today–way up (from current lower levels) or maybe a plunge of a few hundred more Dow points.

We didn’t get our 2nd portfolio launched yesterday as we hoped – simply a case of running out of time.

2 thoughts on “Mid Day Report”

  1. Hi Leonard–I had looked at JE and they had quite a poor quarter the last reported quarter–lot of ‘churn’ in the customer base.

    I am going to wait for the next report before I strongly consider wading in on the preferred.

    Good luck


  2. I bought JE-A this morning as it and its common popped nicely today, apparently due to some upgrades JE received. I had sold it a while back at $24.60 and was happy to get back in at $22.10. It should go ex-div in March and pays $0.53125 quarterly. Also nibbled at FMO and REM, both high div payers and beaten down badly (at least REM).

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