I will be adding a new link titled “Sandbox” in the right hand menu.
That link will get you to this page.
I had originally set up the “Reader Initiated Alert” page for ‘alerts’. I was thinking this, for instance, might be when a preferred stock is undergoing a temporary selloff and someone wants to let the population know about it quickly. Of course we all (including me) use the ‘alert’ page for general messaging.
I am requesting that we start using the Sandbox page for all general talk, and try to preserve the ‘alerts’ page for ‘alerts’.
I have had a screen up on one of my monitors all week where I see all comments – no matter where they are posted–it is a great page and I wish everyone had a page like that–believe me we all benefit from all the knowledge being shared. I don’t want to stifle any of the exchange of knowledge, but hope to get things a bit better organized by adding the Sandbox page.
PFF down 8 days in a row. The trend is not your friend.
I’m certain all of you want in on this new issue, but tough nuggies as its subject to rule 144 so you’re outta luck
$2 billion MSTR 0% 2027 convert, convertible to stock at a 55% premium to closing avg price.
What a deal!!!!
I might point out the last convert at 0% made a ton of money. Levered bet on BTC and if BTC drops you can put it at par in a few years…hopefully
I might point out at T-4.35 bps, I can’t find a better deal for a company.
Another article describing how overpriced today’s term preferreds are in relation to similar maturitiy Treasuries.
Forget the trade recommendation.
Read carefully the portion describing how new issues are priced at normal risk spreads while existing issues of the same company yield sharply lower spreads.
https://seekingalpha.com/article/4738391-another-round-in-the-tlt-vs-pgx-pair-trade?mailingid=37532806&messageid=2850&serial=37532806.6676&source=email_2850&utm_campaign=rta-author-article&utm_medium=email&utm_source=seeking_alpha&utm_term=37532806.6676
Just curious for BBB- range or better, what yields are folks looking to lock in today if they have to put new money to work say for perpetual preferred or a long term multi decade baby bond ?
It’s pretty cool to see now for over a week on a daily basis, yields consistently and slowly rising. As of the close today, there are a bunch now trading between 5.65%-6%.
Theta,
On my cash pile I have GTC limit orders with at least 7% YOC hoping to pick up something if someone panics. These are for only one tranch, not full in.
If I miss a bottom so be it. If I have enough conviction and it continues to fall I will buy another tranch.
Think NYCB-U or REXR-B as examples.
If it’s a buy&hold think of it more like a bond or an annuity. You’re getting the dividend you paid for no matter what the underlying price does.
I am currently window shopping for MA muni of some duration of at least a yield to worst of 4.75. Preferably 5% but I am not sure I can make that happen in the A or better rating. That would be a tax equivalent yield of 6.175-6.3% assuming a state/fed tax rate of at least 30%. In the research stage but have an itchy trigger finger to try some out.
I would like to buy the usual illiquid UTEs we talk about around here for at least 6.25%, cum of course, and qualified. Leaning towards Ameren choices due to a lack of them compared to others.
Patiently waiting for any new preferred issues that are IG but they seem so rare. Like All State did in the recent past with ALL-J. Buying that close to par felt like a very good deal and I bought quite a bit.
LBRDP being bought out by Charter makes for an interesting choice. I wonder what it would be rated once the buy out is completed. Makes for an interesting fixed duration of 15 years. Could it be BBB-?
Otherwise it is kind of slim pickings. We need the market to hiccup to give us some blue light specials.
Bea just dumped HOVNP but I bought a wee bit to start tracking it. This is high risk bucket material. Pretty good chance I will never buy more though unless it goes on sale. So not really what you are asking for.
Fc, I like the ma housing munis, despite prepay risk. Otherwise, you have to go lower quality like Boston, Medical Center or Lesley or Suffolk university.
https://x.com/yenoms/status/1856765090483081347?s=46
Maine,
I saw those new offerings when using fidelity for research. My ally account, muni wise, is connected to Bondpoint. I think the window might be closed to get them during the initial offer though? I was not exactly prepared enough to jump in right then. Either way there are plenty right in that range in the secondary market.
From what I have read hospital is one area that, historically, has had more defaults. I should probably avoid those being a rookie. I want an A rating or better with a spread that is better then AAA for the same duration. Still investigating and getting a feel of things. But yea… in general not a bad time to buy. Not as good as the recent past but quite acceptable from what I can tell.
Too bad about the de minimis rules for munis… I am still trying to figure out if that could possibly work out for me getting that pay out once redeemed as regular income way down the road. Otherwise I am looking for premium bonds or a higher coupon very close to par.
FC, yes the window is closed. I keep a close eye on this site (https://www.munios.com/) and then I sign up for alerts from fidelity for new issues. I have also called schwab to place new issue orders when fidelity doesn’t have them. I prefer Fido as I don’t need to call. I have scored some decent bargains via the secondary market; they tend to happen on down-market days, when people are panicking, and “just want out.”
If you are looking at hospital debt /hospital investing, I would put the spreads and A ratings in 2d place behind a close look at the quality of principals involved. Management integrity and PE-shark avoidance are my new investment mantras.
A local hospital group just went under, oddly one known for charging patients the highest ER fees. Anybody here would recognize the classic PE playbook. The hospital’s real estate was sold to a REIT, saddling the hospital with big rent payments. The principals wrote themselves a lucrative “management contract.” With pinched finances, staff was laid off and medical supplies were tight.
The hospital just filed for bankruptcy. Nobody seemed too surprised, perhaps because of prior warnings. (E,g,. The State Investigation Commission had reported $157+ million of management fees paid to related shell companies 5 years ago.) The hospital blamed its failure on Covid 19 and “insufficient state funding.” The largest creditor was…an affiliated company.
— Along the same lines, the MPW-Steward Hospital saga / debacle is required reading.
— Cutbacks to programs like Medicaid or trimming Medicare Advantage reimbursements will tend to increase the number of uninsured people. This hits hospital bottom lines since the uninsured seek care at emergency rooms. This was a serious cost issue for hospitals in the past. (FWIW, a firm specializing in hospital restructurings cites Medicaid cutbacks / more uninsureds as a financial problem for hospitals. )
Sentiment: currently looking to trim health related stocks. JMO. DYODD
Bear, just saw on Yahoo a Bloomberg article.
MPW is having more problems. Threatening to take over 3 Hospitals that Prospect Medical properties has a subsidiary Alta hospital systems they bought in 2007 has defaulted on its debt.
Prospect Medical is partly owned by LGP Leonard Green a P.E.
What a tangled web Private Equity weaves. The more I read the more I worry. Prospect health is also involved with Charter Health.
I read yesterday that Dr Oz and his wife own large amount of shares in United healthcare and he is advocating to do away with Medicare and make it all advantage care run by insurance health providers instead of the government.
Thank you Bear
I got out of pretty much everything medical a couple of years ago.
I sometimes invest in some pretty risky things, but most of medical is just too crazy for me. Too many externalities that simply aren’t openly visible to investors.
PE certainly isn’t helping, but it just seems to me that too many hospital groups, etc. are more interested in finding ways to siphon out cash than in running solid businesses.
The government certainly isn’t helping with the whipsawing reimbursement schemes.
Suggest GREAT caution on buying any muni’s backed by private universities. Many of them, maybe 100 IIRC, have closed their doors from 2020 on. Some amount of them then defaulted on their munis. Check out Birmingham Southern for example. Founded 168 years ago and closed the doors this year with munis defaulting.
BLACK BOX WARNING: some muni’s are issued by seemingly unrelated entities. For example, Arizona is famous for issuing bonds for projects in many other states. So you see Arizona XYZ and on the surface it looks good, then find out it is for a nursing home in Texas. These are called “conduit” bonds, but that wording is NEVER included in names you see. YOU MUST read the prospectus, regardless of what the ratings are.
Agree, Tex. Many universities will go “el busto,” simply too many of them. The only university I own is issued by Boston University, a school that absurdly high tuition, yet applications continue to grow.
I think we need to hear for 2whiteroses, our resident expert… what are your top tips for retail muni investors??
Thanks for your misplaced trust, Maine…. Although my 25 year Wall St career was in the muni institutional bond trading area, that ended in 1995 and quite honestly, I’ve not kept up with the area much at all since then….. Personally, my tax bracket has been kept low by having a large percentage of my investment portfolio in IRAs, but with ever increasing RMDs over the years, that’s been changing recently to the degree I need to get more involved in munis again…. Like everyone else, to this day, I find it so much easier to stay current on corporate issues than on any munis, so it’s been easy for me to ignore them. So expert I’m not…. Muni dinosaur, I am….
If I had to give one tip to retail investors, it’d probably be to make sure you get familiar with EMMA – https://emma.msrb.org/.
The EMMA website is funded and operated by the Municipal Securities Rulemaking Board (MSRB), the self-regulatory organization charged by Congress with promoting a fair and efficient municipal securities market. EMMA is designated by the U. S. Securities and Exchange Commission as the official source for municipal securities data and disclosure documents. The website provides free public access to objective municipal market information and interactive tools for investors, municipal entities and others. EMMA supports municipal market transparency but is not a platform for buying or selling bonds.
Maine, I should have been more specific. It is small, liberal arts universities that are in trouble. Large ones like the the Ivies, Boston College, Stanford, Duke, etc are booming with low odds of getting accepted. The small ones that have declining enrollment post Covid struggle keeping the doors open. . . Even Sweet Briar, a famous all female school, was on its deathbed but got resuscitated with the paddles to keep the doors open.
BTW, at least a few in Massachusetts have closed or merged IIRC.
Maine,
I went with 10K worth of the 4.70% due 2059. One of the options in the pic you shared. Bought closer to par. Unclear why some people were paying 101-102 today. Cusip 57586VDQ3. I need to get my feet wet and start figuring this stuff out. That is about all the duration I can handle. Yes I realize it can be called early.
Muni seems to be the last area of Wall St that is really disorganized. Besides sitting around in front of a PC all day I need to figure out how to set some alerts for good deals. Who has the time for this stuff when trying to build out a ladder or what not?
FC said: “Unclear why some people were paying 101-102 today.”
FC, it is important to understand that $1k face bond issues do NOT have NBBO’s (National Best Bid and Offer) like stocks/preferreds/babys do. On exchange traded baby bonds, everybody sees the exact same bid and ask prices, regardless of which brokerage/platform is being used. This is regulated by the SEC. Trading commissions add or subtract at the discretion of the brokerage, but if a trade goes through, that is shown as an adder to the trade.
Bonds, be they munis or corporates, can have different bid/ask prices from brokerage to brokerage. So a bond you see offered at 100, might have an offer of 102 on a different brokerage. And these can be for the exact same lot that is being offered. The brokerage showing the 102 is NOT obligated to show you the 100 price.
Second reason is some advisors add a markup themselves. If an advisor manages your account, they can buy them for 100 and sell them to you for 102. The end customer likely does not understand they are paying this markup, but it happens all of the time.
The bible for transaction pricing is EMMA like 2WR pointed out. It is a remarkably good, FREE, tool for understanding pricing after the fact. 2WR traded before EMMA existed and it was darned hard to figure out what trade prices were. I am sure that was part of why 2WR was so valuable. He had to determine the right price for trades, otherwise his firm might lose on the trade.
You routinely see this on some of the $1k preferreds discussed here on III. They will be showing 99.5/100.00 at one brokerage and you see a trade go through at 101.5.
There are a few firms that have large models to set the “correct” prices for ALL muni’s. It is a daunting task. So you have an issue that literally has one trade per year. Your brokerage still is responsible for assigning a price to it every day. It used to be called “matrix pricing” but the newer approaches use AI. Everything uses AI these days! Your brokerage uses one of these services to report current values.
Just to add a little bit to Tex’s post, if you have Fido, you can use the CUSIP # to view trading history on bonds if they have a recent history of trades…. What’s interesting is they define what each trade is, whether it’s a “Customer (aka retail) Buy,” a Dealer to Dealer trade or a Customer Sale. By following the path of trades, you can clearly see when those pesky retail advisors mark the c**p out of a sale to a retail buyer and you can also see trades that happen thru brokers like Fido who work for Customers for a set fee of $1/bond. That kind of visibility would most likely prove Tex’s theory of why some of these traded today in the 101-102 range….
And you’re right Tex, had EMMA been in existence back in my day, I’d still be working to this day….. lol… There was an art to knowing or discovering where the esoteric bonds that hardly ever traded traded previously and also an art to understanding when they had been trading at an inappropriately low (or high) price….. We’re not talking NSEXP low, but there sure were some remarkable stories I could tell about uncovering info thru making phone calls to trustees, etc., that proved that what the market thought were correct prices were way off. Of course, that worked both ways too, so sometimes I had to give my salesforce bids on items their customers were asking us to bid on that were far below what the market was paying… They never liked that…….. but loved it when we were able to pay “too much.”
Without Ally showing EMMA MSRB data I would have very little clue what trades were going for. Well I mean in such a convenient location being my broker. Yes, I could have went to the EMMA website directly. I would just have to stare and compare among many similar offerings to figure out when a price was bad, fair, or good.
I went to EMMA to view my trade and I do have one question. Does the final price sold to a retail customer include the juice of 1 dollar per 1000? My 10K buy of bonds cost me 10 dollars in fees. Thus my trade would show up as 100.70? I see two inter-dealer trades with the same time stamp at 100.60.
Ally uses Bondpoint for their “exchange” for clients to purchase muni if that helps. Ally does not appear to have their own muni “stable” for clients to purchase. Appears they run very light compared to other brokers. Meaning not a mature old school broker.
Never mind! 2wr answered my question. Trade fees are tacked into the info shown at EMMA MSRB whatever it is supposed to be called. EMMA data.
FC, another important point. Say you are looking to buy CUSIP XYZ and look at the trades on EMMA. Further assume you see many “buys” at 100.00 and decide that is the correct price you will pay. Then you go back to your brokerage and see their best ask price is 100.50. Some brokerages let you do a “bid back” which is to offer a lower price, say 100.00. Other brokerages do NOT let you make a counteroffer. I00.5 is the price, take it or leave it. At that point, your only option to get the lower price is through a different brokerage.
If your brokerage does allow bid backs, your odds of getting the bonds for 100.00 with a listed ask of 100.5, is in the 0.1% range(1 out of 1,000 chance). Stated differently, 99.9% chance they will NOT lower the price to 100.00. So don’t waste your time if the price difference is that large. I have seen many cases where they would not fill an order at 100.499, it is 100.500 or nothing!
Tex,
Funny you mentioned that. I tried like 6 times to put in lower bids which they allow but each time it came back as NOPE. “Price is not available”. I tried with a total of 3 different muni CUSIPs. I cannot help but keep trying though! Only takes a few minutes to get an answer. One though disappeared after I tried. Meaning it was not there to try to place another bid. I found that interesting. It was a decent deal so who knows. I did not bother track it down via EMMA yet though but I should to see what happened to it. Edited to add: It did not trade. I guess it was pulled or mistaken data.
In a lot of cases those lower prices I did see were on larger lots. I figured money talks, poorer walks.
Thank you again for all the advice!
fc-
Where/when did Bea say she dumped HOVNP?
Either here on or SA. I think here. I clearly recall reading it. I could probably dig it up but most likely Bea can confirm it if she wants. I imagine it was posted in one of the Tim posts that fade away as time passes versus sandbox/reader alerts. I remember she was not totally against the idea of HOVNP but she just felt it was not working out for however she makes judgements on holdings. Not super negative against it.. just not her cup of tea any longer.
Fc I remember reading the same thing. Her reasoning is was that there’s pressure on rental housing in some markets from being over built and some areas are seeing renters moving out. The push already in Florida and Texas with immigration policies in those states . I had read something similar maybe happening in the Western Canadian rental market.
I found it in on the Illiquid discussion. She slipped it in sideways.
rock,
I cannot find the post. It is possible I am not remembering correctly. So take my comment with a grain of salt. I just swear I read that she sold a bit under 18 and with divs.. she was fine with the result. My fault if I am incorrect. Sorry.
edited to add: ah, you found it. Good. thanks.
HOVNP is famous because they stiffed the investors for a decade because it isn’t cumulative, and I wouldn’t trust them to not do it again.
Justin,
It is definitely one a person has to keep an eye on. They have paid down debt, seem to be a better ran company now days, and are doing pretty well. Things can change. Thus high risk bucket. I am not saying rush and go out and buy 50k-100K worth… but for those who want more risk for some money it is simply an idea. My idea of a monitoring amount is 50-100 shares to pay a bit more attention to it.
fc,
New issue housing bonds are pricing 4.65 to 4.7 on the long end. Wait a little while and there will be a Mass issue. Those bonds typically are holding MBS backed by Fnma , GNMA, Freddie.
There’s call risk.
If I had any in Mass I’d sell them to you just to reduce holdings.
Please be aware that if you buy a bond below par, the difference is taxable income at maturity or sale, subject to the de minimus rule. So, it’s either taxable cap gains or ordinary income. Now, if you put it in a tax deferred account… I don’t know what happens because I don’t have any tax -deferred accounts….. because trading income (trading as a business) was never subject to SE tax! That’s a great deal, since you can deduct biz expenses and otherwise operate as a business but no SE tax is due. Someone will chime in on what happens and clue me in.
Downside for me is I’m getting social security based on working at Pizza Hut for $1.60 per hour when I was 14.
theta-
I think the CY of WFC-L is a good indication of current sentiment for long-term perpetual IG yield, 6.12% today. The best yields on illiquids are about the same. Both are close to the highest yields for new issue agencies. These purely respond to treasury yields, as I see it.
Some well-regarded, highly-rated preferreds, like the PSAs, are running 5.6x% with yields rising of late. I can’t explain the difference in yield between this category and the above, except to say that sentiment for the parent company is a probably a factor. The yields are not too far above new issue IG corporate bonds.
So the SA author recommends buying TLT and selling or shorting PFF?
Given TLT doesn’t seem to want to rally, if I believed in technicals, which I don’t although I sometime trade like I do, I’d rather do the opposite of what’s known variously as a “Texas Hedge” or “Ohare trade.” I’d say sell BOTH. Very few people are short bonds.
The joke on those is a Texas hedge is “long stock, long call, short put”
The “O’hare trade” variation is known as such to pit traders in Chicago because after putting on the Texas Hedge, the trader flees to O’hare to await the result, and if it doesn’t go his way, he flies out of the country leaving his clearing firm holding the bag.
I like the “Texas hedge” term because it reminds me of wildcatters.
I think I’m going to do both because although I’ve been worried about rates going up a lot and preferreds falling, I’ve done nothing to limit my risk except to sell 4% of munis. Daily I come here and see people touting 6% preferred yields. They may be right but I fear not.
Sorry there’s no value in this whole comment; rather I’m thinking by typing my intentions
gmlpf is up 1.95 anybody now why?
3130B3T94 FHLB 5.50% 5 yr offered at par net by Schwab. Monthly call.
I’m guessing if rates don’t move much it won’t be called immediately, but they do refund these things for a few bps. just the one day where you maybe lose interest can significantly affect yield. I’d suggest moving the bonds to Fido
I think that that 5-year FHLB 5.5 is callable 1/6/2025. A call that short doesn’t work for me. If you want to trade off a lower coupon for longer (1-year) call protection, FHLB also has an upcoming 4-year 4.83% coupon new bond offering with a 12/4/25 call date. 3130B3T52
Trading off a bit more coupon for even longer call protection, there’s a 5-year FHLB 4.625% with 2-year call protection to 11/20/26. 3130B3SZ7
Just a few of the many alternatives out there. JMO. DYODD.
Bear,
Thanks, but
I’m not interested in anything under 5. Otherwise I’ll do an SPX box at 4.70 and get cap gains treatment.
I can get a 5 yr annuity from Mass Mutual at 5%. Best A++
It – Just curious what width and strikes have you found to get the best ROR on $SPX. That cap gains treatment is a big potential positive variable, especially for folks with carry forward losses. Essentially tax free then.
Theta,
I use a proprietary method for entering box spread orders. I’m prohibited by an airtight nda from disclosing details but I can tell you the name of the method was once called GUESSING.
I’ve already disclosed too much and am worried now about being sued.
Have owned and traded preferreds for a while but typically never bought into these Mortgage Backed securities such as from FHLB.
Could someone please elaborate how these compare with a decent IG preferred or debenture ? e.g ATHS with a 7.25% coupon from APO and first call in 2029 and then it floats.
Or should these FHLB bonds be compared with similar maturity treasury where you get a bit more yield for a bit more risk>
mSquare-
The credit risk for agency bonds is tiny IMO. There’s the risk of the price falling if yields rise, but that’s true of everything except MMFs. The risk is you don’t know how long you will hold them. To the first or later call? To maturity? Expect to find a wide spread if you want to sell.
I like agencies and assume I will HTM, so I better like the coupon. Anything above 6% with a one-year call is very good. I still hold a 6.3% agency with six months to the call. My 6.95% coupon was called.
Msquare,
If agencies develop credit risk…again…the entire financial system is going to crash. They are BIG holdings of credit unions, just one of many holders that could crash the financial system.
I have zero faith this version of Congress would be intelligent enough to save the system. Heck, many btc holders WANT it to crash
Msquare,
The offerings we are talking about are not MBS. They are oversecured debt of FHLB members. Those members include banks, credit unions, insurers, private credit union insurers and some other members you might not expect.
The securities pledged may, of course include MBS
FIDO – Direct Market Access
I went through the call-in drill this morning.
Contact agreed everyone is being driven crazy.
PCGPRC approval took 14 minutes (wasted time for all)
Interestingly, they would only approve 35 shares at Market; OK’d 100 Limit at any price.
Logic?
Westie,
I already own a gold trust stock in several accounts ( don’t want to say) no problem with prior purchases. Today Fido blocked the purchase and said I had to sign up for a penny stock trade account for anything under 5.00. No problem with opening it, although I admit I didn’t read all the disclosure. Gold is highly volatile, I don’t recommend it to others, unless you just want to see how the market and world events affect the price. DYODD
Just for now I feel the unknowns outweigh the risk of holding a gold ETF at least over the next year.
Be very aware of the unrest and government corruption in Africa and the South Pacific. Russia just held their BRIC’s conference and a few of these countries attended. Both Russia and China are looking to dominate commodities in these areas and looking for opportunities to push out or take over Western companies interests in these areas. You don’t want to lose any investments with companies in these areas.
Charles
I’ve previously described my portfolio division between short-term bonds/BB’s, pref’s maturing before 2030
and
Longer prefs and commons
Have a third account – total speculation with funds I am willing (planning?) to lose:
GLD, GDX (gold) and IBIT (Bitcoin ETF)
Their holding periods are different, but to date +12.8%; +7.2% and +6% (2 days) respectively
A reflection of today’s investing environment
Westie – Not one of your three in your spec fund is doing what you planned on them doing….. I knew you were a lousy investor….. lol My spec fund holdings similar to yours, OTOH, are all doing exactly as planned……..
Westie, not sure if you’re buying or selling. The PCG are perpetual and maybe non callable so I can see with a 6.28% yield and what others consider a risky utility and you were talking lately about reducing some of your higher risk assets that only pay 1-1/2 to 2% above Treasury this may have been a sell.
In my position, I know the fire season is over so the risk is considerably lower. Also these are some of the holdings I am having a tough decision selling because of the income they produce from the yield I bought them at.
Oh, one last comment on FIdo. I tried to buy some Canadian preferred on the OTC and on one they said they wouldn’t trade and for all of them they wanted to charge a $50.00 commission. I went Schwab, and placed trades on 3 with only a $6.95 commission each.
Amazing posts over past several wks re FIDO.
I have been at Schwab forever, and really very comfortable / constant user of the StreetSmart product. Aware of the transfer over to TOS, now delayed to mid 2025.
In mid summer have been considering a switch over to FIDO.
Due to the interesting comments re that other firm ….. I am a pass on an acct. move. Not ment as a rant, but a THANKS for the heads-up.
You made a good decision to pass on Fido. Fido has a lot of good points but the new maximum trading caps are not one of them. I think its bizarre that I can not enter a sell order for #100 shares when the bid number is #500 shares and the asked # is #1000 shares.
FYI- Fido’s restrictions extend beyond illiquid preferreds. I encountered limits with a small niche ETF and a small utility. (I am not a high roller. ) I like to make buy/sell decisions based on price not a rolling floating average of trading volume that surprises you like a scratch-off lottery ticket.
Rant warning on Fido: Like The Black Flag Roach Motel – “You can check in, but you can’t check out.” JMO. DYODD.
i had intended to transfer most of my Preferred/BB trading over to Fido from Schwab, but stopped when I was not allowed to sell 500 shares of ET-I.
I am now moving back to Schwab, and will reduce my account to a minimal amount and use it to trade only stocks/ETFs that are obviously non illiquid.
Charles
PCG absolutely on the bubble of my spread issue
Buy? Sell?
Only reason I am selling small pieces is I have a LARGE position and feel threatened by its illiquidity
Charles,
Practically speaking, PCG preferreds seem to be incredibly safe.
PCG has violated the law repeatedly (the company was convicted!), killed hundreds of people, burned down entire neighborhoods and even whole towns and been through bankruptcy twice – yet their preferreds have done just fine throughout.
Yes, utilities in CA are liable for fires caused by their equipment – but in PCG’s case, it doesn’t seem to matter to their bottom line. They always seem to find creative ways to pass the cost on to the rate payers, on a cost – plus basis.
They have the state Public Utility Commission and our current governor firmly in their pocket (its in public records, but nothing is done about it).
When PCG burned down the town of Paradise, the governor forced the victim compensation fund to be primarily funded with PCG common stock – so the victims won’t get paid much unless PCG does well.
Yes, the preferreds only pay in the low 6%s today, but the company is guaranteed a fat return on every dollar they spend (and has had 4 power rate increases this year already, IIRC).
Disclosure: I am a PCG customer. I hate the company, but I hold some of their preferreds.
Private I have PCG as a utility and actually prefer them. I don’t think they want me as I am part of a group isolated on a island surrounded by a rural utility district. But with PCG I get a better deal for my well meter and if I want to skate and let the bill go for 3 months I don’t get hassled. While the town utility will shut you off. The local utility is so profitable they sweep money into the general fund for other uses. I much prefer a regulated utility. So even though rates have climbed I wouldn’t complain, especially since I am getting a discount for power outages and I collect a dividend. 😉
Private, related to PCG causing fires, HE (Hawaiian Electric) has admitted partial responsibility for the Lahaina Maui fire last year. They have agreed to pay $2 billion of the $4 billion proposed, but it is not a finalized agreement. This would keep them out of bankruptcy and remove the uncertainty around their bonds and preferreds. BTW, the 150 year old banyan tree appears to have survived.
What is changed is that they have installed many high fire risk detectors, which factor in wind and humidity. HE is routinely using them to cutoff power to places with ZERO notice. IIRC, I am seeing several of these per week. We all agree starting fires is not good, but I do wonder if everybody is OK with having their power turned off without notice and for an indeterminate amount of time? By definition, most of the time, no fires would have been started, interesting risk/reward dynamics.
We own HE bonds in a few accounts, so have a vested interest in them NOT going BK. Even though the PCG precedent is that the bonds survived BK intact.
Westie, I tried TBC, which traded 6 figures Friday in volume and couldn’t do 3000
70213bac5.
Partner RE subordinated debt BBB 4.5 coupon
due in 2050 but resets 10/1/2030 to 5 yr T +3.81.
Callable by my read at par on 4/1/30.
YTC 6.10
n September 2020, PartnerRe Finance B LLC issued $500 million aggregate principal amount of 4.500% fixed-rate reset junior subordinated notes at par. The net proceeds of the issuance, after consideration of the underwriting expenses, commissions and other expenses, totaled $494 million. Commencing on April 1, 2021, interest on these notes is payable semi-annually at an annual fixed rate of 4.500% until the first reset date on October 1, 2030. From the first reset date, and resetting every five years thereafter, the notes will bear interest at an annual rate equal to the five-year treasury rate plus 3.815%. These junior subordinated notes may be redeemed at the option of the issuer, in whole or in part, at any time, with early redemption outside of a par call period requiring the payment of a make-whole premium. Par call periods occur between April 1 and October 1 in each year in which the interest rate resets. Early redemption prior to October 1, 2025 is subject to the Bermuda Monetary Authority’s approval. Unless previously redeemed, the notes mature on October 1, 2050. These notes are ranked as unsecured junior subordinated obligations, and will rank junior in right of payment to all outstanding and future senior indebtedness of PartnerRe Finance B LLC. PartnerRe Ltd. has fully and unconditionally guaranteed all obligations of PartnerRe Finance B LLC related to these junior subordinated notes. PartnerRe Ltd.’s obligations under this guarantee are unsecured junior subordinated obligations and rank junior in right of payment to all its outstanding and future senior indebtedness, and equally in right of payment with all outstanding and future unsecured indebtedness that is by its terms equal in right of payment to the junior subordinated notes.
LT, interesting. I like the nuggets you dig up.
I looked it up on Fido and retail shows more sales than buys. Looks like Friday retail buy for 3,000 shares got it down to 92.6
I’m not in that ball league. More like in the rec’s and park league!
At 8:40 listen to Wang compare the public and private sectors from personal experience including time at the Fed.
https://www.youtube.com/watch?v=_f4hfGXmhvc
Ed Yardeni weekly video. Even more bullish SPX with corporate tax cuts a possibility.
https://www.youtube.com/watch?v=k1pVtPT_hCI
I’m wondering if anyone can guide me to financial info on the 3 PSB expert market preferreds . Is anything published separately since the buyout?
I note one of the yields is near 10% and these are all cumulative, I believe
lt,
I think when it comes to PSB there is no public financial info that I am aware of that is recent. I am not even sure how you would buy these expert market preferred. Does a certain broker allow it or perhaps you are an accredited investor with boutique like broker resources?
Expert market (dark) kind of describes it really well…. unless you can contact Link Parks and ask for any information. I doubt they will share.
fc,
Thanks, I suspected as much.
I can buy these through my broker at Stifel, and I did buy them hoping they would do another tender for them. It’s a case of shoot first, ask questions later. I’m going to say I made a mistake buying something at only a 9.8 yield when I have no clue how much they’ve levered this up now, but I could dump them for a tiny loss right now if I change my mind.
I often change my mind.
Someone is bidding 13.45 for all three…at least I’m assuming it’s one person/firm with the same bid.
I decided to download 3 books on municipal bonds for some light reading over the next few weeks. If anyone would like to know where I got these books for free please go to https://annas-archive.org/ .
The one thing I was considering is my tax bracket and if munis even make sense because that is one of the first questions you need to answer. My wife and I (married filing jointly) can have income that is kind of lumpy from year to year so I should pick the lowest tax bracket that I think our last dollar of income would be taxed at for the average year. I think that federal tax bracket would be 24%. Yet some years it could be 32%. Rarely higher. But for the sake of conversation lets go with 24% for federal.
The state I live in we get taxed at 5%. So the total is 29%.
My question for those who currently buy munis would you even buy them with your current last dollar of income being taxed at 29%? Yes I know how to convert a muni yield to a comparable taxable yield based on my tax rate but I wonder if there is already a common sense consensus among professionals that it might be pointless at 29% total tax rate. It might only make sense at 37% and up total tax rate.
Thanks!
FC, if you and/or your spouse are on Medicare, there is a potential issue with muni income. Muni income counts as regular income for purposes of calculating the Medicare Part B premium. In the most extreme case, you can go from paying $174/month up to $594/month per person. We have seen many people that thought “All of my income is from muni bonds” and I will not owe any taxes, only to be surprised at their increased premiums.
Strongly suggest doing a hypothetical tax return assuming the maximum potential muni income in addition to doing the Medicare Calc.
The other aspect we increasingly see are people that own TAXABLE muni bonds and thought that all muni’s were tax free.
None of this is a case for or against muni’s, just caveats.
Tex,
Both of us are not even 50 years old yet. So no worries there for a while.
Yes. Even in my brief research I have noticed some muni are taxable as well as AMT (alternative minimum tax) being a label on some.
Essentially the first book I am reading which was written in 1991 (talk about a blast from the past) has you asking yourself these 3 questions.
1. Do you have enough cash in reserve. Muni are not exactly super liquid.
2. In your income high enough?
3. Do you really want to buy muni if you know of better likely returns via other investment strategies.
Questions 1 and 3 are not terribly hard to figure out. I am trying to decide on question 2 right now. I have a feeling one of the first things an advisor would want to know about someone before buying municipal bonds is their income and thus tax bracket. I am trying to figure out what a professional advisor would have for a cut off saying do not even bother. You do not make enough income without even asking any further questions. Obviously if your last dollar is in the 15% tax bracket there is very little point to buying muni. Just buy taxable bonds.
If I happen to not make enough money I can simply read the books for enjoyment to learn and not worry about digging into actual purchases. Just skip that stage and maybe down the road things could change.
Good Luck getting a CPA to do any projections. The new breed of independents can’t really do much more than I can do on my own.
I’ve gone through three since retiring, stayed on the soft pedal with delivering immaculate data and this last one is really just a professional procrastinator. I don’t believe many people really MASTER their field anymore.
God knows we need real, trained talent…OR a massive simplification of what we THINK is a jiggered tax system.
Amen…and Hallelujah…there’ll be a tax at the Pearly Gates!
LOL Joel. Nothing is going to change direction. We went from a slide rule with having to know how to use it to hand held calculators to know just googling for the answer without knowing how that answer was arrived at.
Best I can do is I pickup hints here about not holding MLP’s in an IRA. I have one, but I am not adding. Holding Canadian preferred’s, it’s better to find ones that are issued in the US and pay in the US dollar so there is no foreign exchange to deal with. There is a trade treaty that allows the 15% tax withholding by Canada to be claimed back unless it’s a Canadian REIT then they consider it pass through income and you can’t claim the 15% for a refund.
It’s a CREDIT that is filed on the Form 1116. There are permutations regarding that moving other “details” around on other worksheets.
I remember one of my first clients Clyde, about 60 in 1981, who lived in a mobile home. He asked me why he would possibly go with my advise and NOT lock in govt bond rates for 30 years.
That was easy! Who will buy American Bonds? I would like to believe that my moment, at my age 67, is coming for me too. So fire Powell, abolish the Fed, give me a shot at the American Bond on a free floating market-set rate!
RIIIGGGHHHHT!
Joel, was definitely a different time. My parents bought US savings bonds in the 70’s and 80’s 30 years later I inherited them and cashed them out.
True sock drawer investment if you don’t take inflation into account.
FC,
I think you are not also considering the 3.8% Net investment income tax . If you’re in the 32% bracket, then you’re likely paying 35.8% plus state income tax.
Personally, I am selling munis now out of concern the TCJA’s full implementation will abandon the muni exemption , even on existing bonds. I know that’s not a consensus position, but I am so heavily weighted in munis I have to assume what was going to happen in 2016 is definitively going to happen in 2025.
If you ignore the possible loss of the exemption, I would own munis even in the 24% bracket.
I’d first look to munis subject to AMT because they will have higher yields by about .30 to .5 %. It’s unlikely you’ll be subject to AMT unless TCJA indeed expires. I consider that a low probability event. I believe the plan is also to eliminate the AMT.
AMT paper is about 30% of my holdings. Some is ports, some airports, even some amt housing bonds.
I’d also look at unrated bonds issued in your state, because most funds won’t buy these. If you have a reasonable capability to read financials, you should be able to figure out which are worth an investment. In Nevada, most of the unrated paper is on residential infrastructure, the backbone of master-planned communities, and it’s a much less risky investment once the neighborhood is parcelled out and at least partially built out, because the debt is backed by the land and structures.
In the end you have to do the math. I’ve never had to worry about any of my muni debt going bad. It’s all A or better, mostly AA and AAA. much of it having a govt guarantee, or it’s unrated infrastructure I can buy in the secondary market.
I’m single, and I would be paying nearly the highest Medicare premium anyway, so that is not a factor in my calcs.
lt,
You are absolutely correct on NIIT. Yes we get hit by that. I tend to focus on our business taxes a lot more then our personal. I guess I am just thankful our accountant is pretty good so I can let him handle personal which seems simple compared to the c-corp. It is the business where I have to watch every dime spent, earned, receipts, tax docs, blah blah. More complex when it comes to providing the accountant all the data. I feel silly for not realizing NIIT was hitting us year after year. Thank you!
So my base case just went up. 24% fed + 5% state + 3.8% NIIT. Also after reviewing our taxes for the last two years… our last dollar earned is hitting 32% more then I recalled from memory. So 32%+5%+3.8%= 40.8% is a more reasonable assumption then I recalled.
So it appears with your guys help making me think and double check my data that municipal bonds are appropriate for us.
——————————–
Now the rest of your comment is a lot to chew on. The guy who wrote this book back in 1991 was even warning about what you said back then. That muni rules can change but he seemed more confident that existing munis would be grand fathered at the very least. I feel I need to read a book or two to really have a conversation with you. I need to catch up.
If the rules changed and existing bonds were grand fathered that would be very bullish for those bonds right? It would make them very desirable if the maturity is further out and some call protection is possible. With interest rates going up on the long end I feel, timing wise, we might get some more good deals coming up.
Either way thank you for the post. I have some reading to do here to help digest the finer points of your comments and I think I got the answer to my initial question. If your taxes, fed/state, go above 30% municipal bonds can be considered.
FC, I suggest you read “Adventures in Muniland: A Guide to Municipal Bond Investing in the Post-Crisis Era” by my friends at Cumberland Advisors. It is the most recent book on muni bonds that I am aware of. They also manage a lot of muni bond accounts for individual investors. The head guy, David Kotok, is famous for running “Camp Kotok” every year in Maine. It is kind of like the unofficial Federal Reserve meeting with a lot of big names. I think CNBC and Bloomberg broadcast live from there. The Cumberland team is very good on muni’s IMO . . .
Tex,
Will do. Thanks for the advice.
“If the rules changed and existing bonds were grand fathered that would be very bullish for those bonds right?”
I have quite a bit of concern that if the exemption is eliminated, this would affect the credit metrics of the issuers. Quite a few issuers are constitutionally limited to a maximum tax rate increase. For example, In Nevada property taxes can only increase 3% annually. I have not studied this at length, but I consider it a risk . I may be overly concerned.
LT, I didn’t know NV has a similar law to Calif. regarding property taxes. That is interesting to know. Been reading on the internet about seniors in certain states being challenged with keeping up with property tax increases on a fixed budget.
Charles,
To move off topic a bit more:
you already know this, but for others – that is precisely why Californians passed Prop. 13 almost 50 years ago and put it in the state constitution.
People (mostly seniors) were getting taxed right out of their homes because their property taxes just kept going at huge rates up every year.
So, since 1978, property taxes in CA have been limited to 1% of initial purchase price, with a 2% max. annual escalator.
Without prop 13, my property taxes would be about 5X what they were when I bought my house. Great for me – but creates some huge disparities.
– The guy who is buying a home down the street with a market value similar to mine will pay about 4-5X what I pay.
-Oh, and the guy next door to me who bought his house decades before me for about 1/4 what I paid? he is paying about 1/4 what I do, or about 1/20th what our new neighbor does.
So, what does the government do to counter this horrible limit taxpayers put on their ability to raise property taxes? they
(1) put in parcel taxes (which aren’t limited). I pay parcel taxes equal to about 30% of my property tax (and new ones get proposed every year), and
(2) they raise taxes on every thing else.
Our sales tax is almost 10%, and our top income tax bracket is 12.3%. Of course, that doesn’t generate enough to pay for all the crazy things our legislature wants, so they have started instituting special taxes on all kinds of things. Need to buy a 2×4? pay the special lumber tax. Need to buy a gallon of paint? pay the special paint tax. the list just keeps growing.
And, separate from taxes, the CA gov bans hundreds of products every year for various reasons (quietly – no public announcement, things just disappear from store shelves). Can’t buy denatured alcohol any more (air pollution rules), or granite sealer (potential health concerns, even though the Fed. Gov says its fine), or fiberglass cleaner (gel gloss), the list is huge. Of course, you can buy these things in 49 other states, but the government of the people’s republic of CA knows better.
Personally, I spend a lot of time in other neighboring states so I buy a lot of banned/taxed stuff there and bring them home. My kids set up a google spreadsheet where we keep the “smuggling list” of things we need to buy out of state.
I don’t buy individual muni bonds any more – too illiquid for me and I lost my talented young bond broker a long time ago. I do own some legacy tax-exempts CEFs with mixed results. I am looking at some ETFs, CEFs and MMfs not so much to avoid taxes as to reduce my gross income. I triggered a state tax bracket last year and it was painful.
Beyond munis, I suggest you look at your overall tax situation as well as looking for a one-off tax break on a muni. There are some CEFs and ETFs that have advantageous tax structures using covered calls and/or distributions offering tax deferrals, capital gains or return of capital that can be useful as part of a tax plan if it fits your circumstances.
Some savings can be as simple as switching from a broker’s default “Government” MMF to something like SGOV or similar or direct-purchased T-bills to save state taxes. My state counts only US Treasuries and select agencies as state tax exempt and doesn’t allow pass throughs on MMFs.
BOXX mimics SGOV and the like for Treasury returns but defers income taxes by only rarely making distributions, which could allow you to defer tax from your 32% to 24% year and perhaps convert income into a capital gain. ( Boxx is somewhat controversial. ) Some commodity stocks disties can be capital gains of return capital. Weyerhauser was 100% LTCG in 2023. There are a lot of alternatives out there now. JMO. DYODD.
Going forward, with the possibilities of up or down on Fed rates and effects / reactions on CEF munis, is CEF muni purchase advisable, or wait and see?
I might be wrong, but if rates go up, the munis are likely to drop?
In a falling environment, doesn’t the locked in portfolio bonds increase in market value for the CEF?
any insight appreciated
Since most munis are highly leveraged, it’s the short term rates that matter most.
is it state tax exempt also when it distributes? Treasuries themselves are? I don’t think SGOV is.
Robert asked about average trading volume so this is a snapshot. It illustrates that many preferreds/babys/terms are correctly classified as “illiquid.” Here are the summary stats based on the average 90 day trading volume. NOTE that if you check multiple sources, you WILL get different numbers for the average volume.
Less than 2,500 shares/day= 189
Between 2,501 and 15,000= 304
Between 15,001 and 50,000= 203
Between 50,001 and 100,000= 67
Greater than 100,001______= 32
Total prefs/babys/term= 795 (Excluding the 80 issues that are not currently paying out.)
Here the 50 highest volume and 50 lowest volume issues. Format is ticker,type,90 day average volume
EMP,Baby,8297300
BA-A,Convert,2855316
NEE-T,Convert,958564
NEE-R,Pref,675359
ARES-B,Convert,671352
NEE-S,Convert,563197
HPE-C,Convert,519943
WFC-Z,Pref,204356
MFICL,Baby,201839
MSPRQ,Pref,201536
JPM-M,Pref,196701
RF-F,Pref,196344
APO-A,Convert,183460
ALB-A,Convert,180250
RILYZ,Baby,174510
MS-O,Pref,170516
JPM-L,Pref,169242
CTBB,Baby,154956
JPM-K,Pref,154822
RILYM,Baby,125829
JPM-C,Pref,123197
COF-I,Pref,116903
COF-J,Pref,114929
T-A,Pref,112152
SPMA,Baby,112080
ALL-H,Pref,110882
MTB-J,Pref,110522
BAC-M,Pref,109076
T-C,Pref,104536
BAC-Q,Pref,104472
WFC-D,Pref,103283
BAC-N,Pref,102087
JPM-D,Pref,98321
BAC-O,Pref,97963
SNV-E,Pref,97142
C-N,Baby,96682
ESGRP,Pref,92293
MS-K,Pref,91905
ATH-C,Pref,90906
GS-D,Pref,90484
WFC-C,Pref,90096
SOJD,Baby,88750
BANC-F,Pref,88632
WFC-A,Pref,88126
SCE-J,Pref,87107
USB-H,Pref,86341
BTSGU,Convert,84378
KEY-L,Pref,81070
RILYN,Baby,79498
MET-F,Pref,78358
Low volume:
AERGP,Convert,0
AWRY,Pref,0
BANGN,Pref,0
DMRRP,Pref,0
FIISO,Pref,0
MNESP,Pref,0
MPLXP,Pref,0
BACRP,Pref,1
CRLKP,Baby,3
BMYMP,Convert,4
CTGSP,Pref,4
VNORP,Pref,4
AILIO,Pref,9
HAWLN,Pref,10
INPAP,Pref,10
AILIN,Pref,14
SOCGM,Pref,15
UEPCN,Pref,15
SBNCM,Pref,16
MHGUP,Convert,18
UELMO,Pref,18
NMPWP,Pref,21
AILIM,Pref,23
MSSEL,Pref,23
NEWEN,Pref,25
PPWLO,Pref,26
UEPCO,Pref,29
HAWLM,Pref,31
AMBKP,Convert,40
AILIP,Pref,42
SLMNP,Pref,45
WELPM,Pref,45
FRFXF,Pref,46
AILLI,Pref,48
AILLM,Pref,50
NSARO,Pref,50
HAWEM,Pref,60
MSEXP,Convert,64
AILIH,Pref,65
UEPCP,Pref,67
PPWLM,Pref,79
HAWLI,Pref,89
FCELB,Convert,92
INVUP,Pref,100
PNMXO,Pref,109
AILLN,Pref,112
CNLHO,Pref,112
AILLP,Pref,117
NMKBP,Pref,118
HAWEN,Pref,120
Tex, thank you for the list. I don’t think I see TY-PR on here.
The very low volume ones can sit and do nothing for months then do large price moves up or down suddenly.
I hold a few as 6% ballast in the stock drawer to balance some higher yield / higher risk holdings. Recently I trimmed a few as I felt I had been too heavy in them.
I wouldn’t mind adding some back if I get a deal at some future point.
I can’t find a broker that will let me bid for AMBKP. Stifel refused an order as they didn’t see bids or offers but this is 1:1 convertible to common and most recently traded$ 5 below the common.
The one caveat with converting is you’ll have to deliver phyical certs to the company. They say they have no capability to do electronic conversions.
I’ve yet to call around and find a broker that will bid for it, but I’ll get around to it.
It’s sad, I just noticed myself yesterday in an article written as a commentary of what we “might” expect will happen to pharmacy stocks. At the bottom of the essay SA posted they created a forum and a click here button for people to go to if they want political discourse instead of discussing investing.
Lame attempt considering the article was mixing possible political agendas and stock investing.
Unfortunately it’s hard right now to not speculate.
This is just an observation, and I hope the people here will not let it spill over to this site.
On to talking about a possible investment.
I have been looking at PFE
My normal gut feeling here is a company with good cash flow that is using it to pivot to oncology to replace expiring patents while still doing its core business. I think the dividend is covered as long as they get new drugs in the pipeline. I wonder about the risk. I compare it to another stock I hold BMY and see the potential.
The question is what is the risk? I’m also looking at a 3rd stock but you will need to pay to get access to that article.
Currently a freelance writer for the Onion. No affiliation either in the past or planning in the future with a similar site formally known as Twitter.
Charles
PFE is a political risk.
Kennedy is trumpeting war against vaccines.
If he succeeds, PFE and other big pharmas will suffer.
If he does not prevail, it will be business – and stock prices – as usual.
The market is concerned he may succeed, hence the fall in price.
Westie, I know.
I must be doing a good job at trying to avoid being political.
I tend to avoid sectors that are heavily dependent on government policy. It can change with the wind,
Both major federal political parties have taken action, driven largely by public outrage. They have summoned the heads of pharmaceutical companies, insurance vendors, and drug distributors to court or congressional committees. Movies have documented the rampant bad behavior. not bad but ugly. Still nothing changes.
Let’s be honest. I’m not defending bad behavior, but the government bears responsibility for allowing hundreds of independent, competitive medical insurance providers to consolidate into four massive, nearly incomprehensible monopolies. This situation could become the modern-day equivalent of the AT&T breakup.
Like federal deficit spending there is hope under RFK, food and drug regulation will get a second look. Understandably we don’t want to delay life-saving medical treatments, if underfunding for oversight is so limited that agencies can barely afford rubber stamps and ink, we should rethink the system entirely. Instead of human agents as gatekeepers laws to hold makers fully accountable, including exposing them to unlimited liability, at least will save taxpayers.
You can all stop laughing. We all know any meaningful change will require strong men (women) which we don’t have in any supply.
All bad headlines, Are just buy the dip opportunities in my healthcare annuity. LLY, COR,SYK,ABT,TMO,CVS
MRK is over 100 yrs in business, located in Tx. I don’t see it on your list micahc.
Old pharma has too many patents rolling off for what is in the pipeline.
Only get involved with what I have previously owned.
DHR or ZTS on my mind.
I also was looking at PFE. Paused on it. I was also looking at KHC which I thought was safe. Decided to wait since processed foods may not be a desirable segment right now.
RIght now, I think that money market (including CLIP or SGOV), & high quality preferreds paying 6% plus are all I need.
Steve, I don’t necessarily follow the crowds but I watch what the crowds are doing. If the crowd is avoiding a trade in this case it means there are less buyers and more sellers which will cause the prices to continue to drop.
Kind of the opposite of what is normally meant by a crowded trade where it’s like a feeding frenzy with buyers bidding the prices higher and higher.
KHC is a thought, especially since tastes and habit are ingrained in the public. A friend and I were talking about the very same thing just yesterday. He was telling me studies showed it takes as long as 3 generations before a change that a family member made in habits takes hold and becomes permanent. But my problem with food companies is they don’t have a wide moat. They run on a mindset of trying to maintain a fixed margin which leaves openings for competition to move in. The recent bout of inflation caused size shrink and they increased pricing to maintain margin. The margin was maintained but at a cost of selling less product as consumers changed to cheaper brands.
Like you Steve I have been looking at common stocks in the food category to catch the dividend and possible future growth but I am finding a lot of hidden risks I didn’t think about before I looked. One risk I hadn’t thought about is related to energy and production, transportation and storage. The cost of energy and any disruption to a reliable source of electricity can be very disruptive to a food manufacturer that relies on refrigeration like CAG