Personal Portfolio Update

I added a few more shares of the Highland Income Fund 5.375% preferred (HFRO-A) just now at $24.73–this brings me overweight on the issue.

See the article below for further news.

This is not a recommendation to follow me–if these types of things make you too nervous you should not add to any holdings you have and should evaluate current news and act according to your risk tolerance.

9 thoughts on “Personal Portfolio Update”

  1. So, I will stay out of the fund. It never moved up like the other preferreds paying 5.375% which is why I only had a 25% position. What this perhaps part of the reason?

    I exited today minus a couple of steak dinners for the family. Although it is old news, it to me speaks as to now trustworthy this management team is. It may have been a hedge fund which have a much greater risk profile.
    However, it is still not great that they cannot repay their investors.

    So yes, it looks like it only impacts sediment for the CEF preferred. It’s is probably a very good opportunity for those willing to take some risk. I am generally pretty risk-averse and conservative. It is who I am.

    One lesson learned for me is to do a goggle search on the name of the firm and lawsuit. My bad. Will not make the same mistake in the future

    1. I hear you SteveA—it was just starting to move higher. I just posted another news item.

      I held Atlas Financial baby bonds and learned a good lesson on that loss–this one I am much more confident in.

      1. Yes, I posted it because I wanted others to consider adding this to their due diligence (searching for lawsuits) before they invest. This seems to be a non-event (other than trusting the management team) which is really subjective when you have GREAT credit ratings.

        1. Yes Steve—in the end that is why I like the Gladstone issues–they are well seasoned and the ‘name’ is well known and followed. I was just going through the Highland prospectus and I don’t find (yet) anything on this issue, so I guess one is going to have to dig deeper on Google etc. To some degree I have allowed Moodys and S&P to do some of my homework—I think that is being a bit too lazy.

    2. Yep Steve, that is a reason I got out a few weeks ago. It never moved up like the other preferreds paying 5.375%

      When I sold a few weeks ago, I moved the money into the Digital Realty new issue DLR-L when it came out – slightly lower yield but better sentiment

    3. Yes, Steve, its always good to search these outfits. About a week ago I was doing my monthly perusal of OTC issues and came across a Highland Capital trust preferred issue that hadnt traded in a long while so I got curious…Well for about 30 seconds until I saw these and quickly discarded exploring any further. This outfit has been on life support for quite some time.
      Highland Capital Management said it doesn’t have the cash on hand to make a payment of $175 million if that amount is eventually awarded to investors in its shuttered hedge fund by an arbitration panel.
      https://www.pionline.com/article/20190417/ONLINE/190419856/highland-capital-management-says-it-lacks-cash-to-pay-clients-175-million-now

      Im too old to worry about dilrod investment outfits, or what kind of possible foolish investment one of these outfits is currently involved in.

      1. I accept the losses in 2011 and their inability to pay back until 2016. These were tough times in the market. So it’s a hedge fund that has risk and needs until 2016. But it is now 2019. That 2 swings and misses. They may have reasons but they are not going to have my money. Once okay. Twice not okay even if it is explainable

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