One of my favorite holdings over the last year or two has been the Affilated Managers 5.875% baby bond (MGR). For me it is a sock drawer issue (as I define sock drawer–high quality with a reasonable coupon). This issue is rated BBB- by S&P, but is rated a much higher Baa1 by Moody’s. This issue has a maturity date way out in 2059, but will be callable in March, 2024.
Affiliated Managers Group (AMG) is a asset manager and their common stock trades at $151.00–a market cap of just over $5 billion. A very solid company.
In October I made a add to my holdings @ $20.59/share. That brought my overall cost down to $22.35/share. Finally the issue is green by 3% @23.03—so with interest payments I am nicely green on the shares.
My point is that if you have high conviction in a quality issue don’t just willy nilly sell it because it isn’t performing for a few months. In this case it is helpful that interest rates are falling AND the optional call date is approaching–putting a whiff of ‘yield to call’ out there for investors (which would be quite lucrative). For me it is in the ‘sock drawer’ with a nice yield on cost–it is not going anywhere in the foreseeable future.