Plenty Ugly Again – This is Getting to be Routine

The S&P500 is off 2.07% at this moment–seemingly routine after a big up day yesterday. All I know for sure is I am glad that I don’t hold any NASDAQ stocks–that would be painful–my conservative income issues provide enough pain. So off 13% or so from all time highs–probably a ways to go to the downside–really I have no idea–I gave up trying to predict market moves years ago.

I think overall I am off about 3% this year–fortunately I hold bucketsful of term preferreds which have hung on well relatively speaking–plus I still have plenty of dry powder.

Yesterday I went ahead and took a nibble on the Hennessy Advisors short maturity (2026) 4.875% notes. I already had a full position of this one–but the price fell to $24.70 – $24.80 area yesterday so added another measly 50 shares. I had been adding investment grade issues in the high 5’s to 6% and already have a bucketful of perpetuals now yielding over 7%.

Still have not sold anything for months. I want to buy the new RiverNorth Opportunities 6% (now RIVOP) which has been sold down to as low as the $23.25 area–now at $24.00. Unfortunately Fidelity won’t let you buy pink sheet issues–and now that eTrade is owned by Morgan Stanley they have now gone the same ‘nanny state’ route and won’t let me buy there either. This issue has been trading pink sheets for 14 days–what the hell is that about–I’m thinking that since potential buyer can’t buy it is taking this long to unload the shares–if true it serves them right.

So next Tuesday we have the FOMC meeting and will no doubt get a 50 basis point rate hike on Wednesday (although every day we hear more talk of 75 basis points). So once again we will have another wild week—up and down and all around.

14 thoughts on “Plenty Ugly Again – This is Getting to be Routine”

  1. Though I don’t own PSB I do own Apollo, Blackstone and Blackrock and am
    becoming increasingly uncomfortable with their opportunistic forays into
    into all aspects of Real Estate and REITS.
    I don’t question their voracious appetite for finding great deals and extracting value out of them. That’s why I own these Hedge Funds.
    But I wonder about how well suited they are to be managing these types of businesses, even if its a hands off type of management and the problems that are typically encountered

  2. I know this is a long-shot, but I thought I would ask this anyway.

    Many brokerage houses will not let you buy pink sheet issues, even if they are preferred stocks that will eventually and unquestionably be listed on an exchange.

    But those preferred shares would still have a Cusip number – has anyone tried to buy those issues through a bond desk using the Cusip number? Surely every big brokerage has a bond desk, and bonds trade OTC. I do not think the brokerages stop someone from buying junk bonds. Why would the bond desk care if you bought junky (or not) preferred stocks?

  3. Merrill edge shows RIVOP ticker but does not show any bid / ask prices

    This is a down draft I’ve been waiting for…….
    By Monday I will start picking up the high 5%- low 6% IG issues in a taxable account and the IG notes in a tax differed account. Not full positions but will chunk them out.

    I sold some energy equity positions for profit to free up money. Its a boom bust industry so I cut bait and moved on.
    As a buy and hold type of guy this opportunity has not happened since 2018.
    I’ll be a man and admit to the enjoyment of taking advantage of a slow train wreck.

  4. Anyone tempted by the PS Business Park preferreds? They have been dropping like a stone, since Blackstone agreed to buy them.
    Puns aside, I don’t get why the purchase would send the preferreds down; Blackstone is a solid financial company.

    Nontheless, they get hammered every day, and I would love to see them settle down before I buy them. Anyone buying now?

    1. from another website…
      New York, April 27, 2022 — Moody’s Investors Service (“Moody’s”) has placed on review for downgrade the ratings of PS Business Parks, Inc. (PSB), including its Baa2 preferred stock rating and the (P)Baa1 senior unsecured shelf rating of its main operating subsidiary, PS Business Parks, L.P. The review for downgrade follows the announcement that the REIT, which owns a portfolio primarily comprised of multi-tenant industrial and flex properties, has entered into a definitive agreement by which affiliates of Blackstone Real Estate will acquire all of PSB’s outstanding shares in a transaction valued at about $7.6 billion. The review for downgrade reflects the likelihood that PSB’s credit profile will deteriorate under Blackstone’s ownership, with the potential for meaningfully higher leverage and secured debt levels that could result in a multi-notch downgrade of the REIT’s ratings, including crossing over to non-investment grade territory, upon transaction close. This transaction has been approved by PSB’s Board of Directors and is expected to close in third quarter of 2022, subject to final approval by the REIT’s shareholders and other customary closing conditions.

      1. In addition to the potential rating down grade, I saw on another site that investors are worried that BX will eventually move the Preferreds to the BlackHole of the Expert/Grey markets of the OTC.

  5. I was also wondering why RIVOP is still on the OTC. Very strange. I was interested in it but taking too long to become buyable for a mere peasant like me.

    Finally an opportunity to make a few bucks appeared with the oddball trust preferred BANFP. Sold it for a couple dollars more then I paid which is a year worth of interest and swapped into a different preferred which is split IG/QDI (while non-cumulative) pays .5% more per year at the price paid. So a raise in income. It was always a risk holding BANFP bought way over par. I dabbled in them in the past and not really understanding why it was bid up more today then a year ago. Now if I can just watch C-N pop close to 30 I can do something like that again.

    1. I bought RIVOP way too early in the gray market, paying $6.8 or fee to Schwab. My so called Advisor assigned by Schwab actually lied to me. “If I move $100,000 from Vanguard brokerage to Schwab, they would waive the fee for 5 years.” Then I was told that he meant Option trade, which I have not learned. I end up with 370 shares at $24.36 in my taxable account plus another 109 shares in IRA account @ $24.91. Not sure this unloved Swan would trade par anytime soon. With Safe Bulkers flush with money, making partial call on C share and D shares trading way above par, I bought some ATCO-H (recalling someone at this website made mention) and DSX-B and CRME-B. There was an article in SA penned by Preferred Stock Tradeer, who earned nod by Gridbird and two of his small brokerage senior unsecured bond, resulted in very nice juicy interest and capital gain. The Preferred Stock trader suggested RILYO and GLSD. I bought several lots of GLSD in various accounts, mostly IRA’s. Some got called. I bought a few shares of RILYO. These shipping preferreds should work UNTIL trade war resurfaces with possible change of leader in the administrations and/or congress. There was news that one of the ATCO ships carrying some goods to one of Asian seaports, was rejected because the final destination was Russia. The old seaspan have been number in container ship biz for decades with many change of hands. DSX-B, CMRE-B all have theoretical risks of getting called losing capital. Loaded up some with TDS-U. Maybe too early before the next Ex Div date. Many including me believe that TDS is heck of safer than LUMN, the old CTL with its lazy CEO having problem on total sales. Disclosure: I have lots of LUMN, some bought at ridiculous prices following Morningstar analysts who continue to rate LUMN at ridiculous price. The SA writers are neutral on this high yield communication stock. Whether the dark fiber would be extremely valuable and sought after by the likes of Microsoft is still debatable. LUMN has been buying its own stock back after selling lots of old biz sector, ironically losing even more revenue. They claim they lose money dealing with the old biz. TDS and its subsidiary USM have been selling rock bottom cell phone and communication devices for decades. LOL. BTW, I have oversized position in ATLCP. Company miscalculated dividend in last Q. Most preferred stock investors including Gridbird gave a nod. Last Friday, it close with CY of 7.52 % or more depending whether you bought early (not good) or closer to market close. IMHO this is a much better deal with TDS-U. BTW, I have lots of SWANS all paid way too much bought in the pink sheet market. I do not want to bet on returning to normalcy because I have no clue the inflection point. Obviously the Feds will stop once they see how the market reacts. CNBC and the big biz will all urge Feds to moderate. The St. Louis Fed would probably came down earth at least to the level of the lady Fed. LOL. The biz world can’t stand seeing the 6 or so “best tech stocks” going down to the sewer. Just MHO.

      1. I should have checked before I made the post. ATLC down 4% on Insider selling plus B. Riley Lowers Atlanticus Holdings’ Price Target to $75 from $91, Keeps Buy Rating. No change in Schwab.com. Yahoo finance got only 2 analysts. Wasted tons of time trying to get the financials from SEC Edgar. Bombed out in Mozilla Firefox. Google chrom. Tried to enter the Filing number. It used to work 3 years ago. I still do not believe that the Company would have problem paying the dividends to the preferreds. Disclosure: ATLPC has been my oversized allocation. In analyzing in depth. No net loss, unrealized loss except for first lot off set by generous dividends. I certainly will not buy more. Neither will I sell even if there is more drawdown following the Commons. For a non shipping stock preferred or non mREIT preferred, ATLCP seem to be a relatively decent play. With lots of cash from SB-C, I will enjoy the money and stay in cash, waiting for market action. This is unusual for me. Then this is unusual time. There is so much uncertainly, I will follow Tim’s advice. Either buy tiny amount OR sit tight.

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