Riding the Storm Out

No, I am not talking about the REO Speedwagon song from the 1970’s, but referring to yesterdays stock market and interest rate action.

Long time preferred stock and baby bond investors know that when we have common shares taking a fairly substantial hit on a day like yesterday that the best action is to simply watch–no buying or selling.

Yesterday as I watched markets I was primarily watching interest rates. The 10 year treasury was down around 1.30% which indicated to me that the equity selloff likely was not going to last too long–a day or two. If the 10 year treasury would have fallen to 1.20% with stocks off over 1000 Dow points I would have more concern that we would see a deeper market follow through as it might have indicated a massive ‘rush to safety’.

Of course I didn’t do anything in our accounts yesterday—everything was ‘red’, but not harmful in a major sort of way. With a fall in equities of a couple percent we didn’t see the ‘throw the baby out with the bath water’ stage.

So for now I am waiting for the Fed statement and press conference tomorrow. We’ll have to see if we get an interest rate reaction–can’t imagine anything more that a few basis points movement.

9 thoughts on “Riding the Storm Out”

  1. I had some low ball bids on some common and preferred that hit Monday and finished the day off a whole $67.00 up, Whoopee
    Picking up the pennies. As Tim said, a few preferred in the red but others made up for it.

  2. No trades?? I’m buying and selling most every day. While yes some issue dropped 50+ cents in last few days….. issues tend to move with some correlation. My trigger has been YTC under 3 is probably worthy of consideration (to sell)

  3. Can’t Fight This Feeling, Time For Me To Fly, Take It On The Run, and Roll With The Changes are The Wagon’s songs that I’ve been thinking about.

    1. How about the old Don Covay soul song, “Take This Hurt Off Me?” or variations like SteelDrivers, “You Put The Hurt On Me?”

  4. I’m hoping for another pullback, to present some buying opportunities. I was last an active buyer 3/20.

    1. Evangrade will likely be missing a payment on Thursday that will be pretty significant. If the Chinese government lets them fail, we’ll have some opportunities later in the week.

      1. So the Chinese government will allow a default on foreign owned bonds but not debt owned by Chinese creditors? I don’t know anything about Chinese bankruptcy but in most other countries, that would be a distinction without a difference: same result.

        I fear the Chinese government’s stoic ability to wreck its own capitalist system. What’s next? Squeezing Apple and Nike for their contributions to the general welfare?

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