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Patience Pays – Sock Drawer Issue Finally Green

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.

15 thoughts on “Patience Pays – Sock Drawer Issue Finally Green”

    1. lukkyseven—are you talking MGR – never been able to pick it up with GoogleFinance.

      Are you using Google Sheets? Try this work around for this one.


  1. MGR is one that I have added to very incrementally over the past year or so…literally 10 shares here, 8 there, 15 there as small amounts of $$$ have hit my accounts. My avg price is somewhere around $21.50 and I have accumulated 349 shares to date – probably about half of what my overall target was/is. With it now trading in the $23s, not sure if I’ll add at these levels but may back, say, in the mid-$22s I agree that it seems very solid to me as well. It goes ex-div next week too (12/28).

    1. yazzer–the beauty of no commissions is one can do anything they want share wise–much better than the older days and ’round lots’.

      1. However at Schwab (i got Schwabified recently), I get charged 6.95 for OTC trades. I have had a couple of investors play some fun by giving me 1 share. Ugh. So now I click the button to say “all or none.” Merrill doesnt charge me for OTC buys.

        So, I am assuming others pay the OTC fees with Schwab? Its not chump change, but I do have about 13% of my total assets with Schwab.

        1. I set up an account at fidelity just to buy otc. I’m very impressed with their executions. Lots of price improvement.

          1. I agree with Irish. Fidelity gets excellent price improvement. Much better than Merrill. And no charges, OTC or otherwise.

        2. ET charges $4.95 sometimes…weird – I have to look at my proposed order before hitting send on the small stuff to see if a commission is happening.

        3. 2 points – remembering back to the commission for everything days, TDA at least was willing to waive the commission when something like getting whacked by a 1 share execution happened….. you might want to try calling to see if Schwab will do the same…

          Second, my experience has been that placing an “aon” condition on a trade essentially gets your order passed over all together on most trades. You might find trading happening below your outstanding order and for amounts that you might think ought to have tripped off your buy…. Personally, I’ve given up using them.

          1. re:AON.
            I agree. I watched what you described several times, then quit using the AON. I am not trading otc.

        4. Mr C—-if you call Schwab and ask for a supervisor, the fees will be waived. I recently had all fees waived for December. About $120

        5. I got them down to $4.95 for OTC trades. I try to buy the whole amount at once so I don’t get whacked.

        6. Also keep in mind that commissions are negotiable at schwab.

          I haven’t paid any commissions in years.

          When I transferred some accounts in years ago, they agreed to waive all commissions for something like 20 years (and that was when they still charged for regular trades).

          I get charged the $6.95 for some OTC trades when they execute, but they are automatically reversed before settlement.

          I have a lot of little trades execute every month, so it would add up if I had to pay them.

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