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.
INN-F again–only 231 shares traded, but I sold 100 at 26.43 are I do not see reflected in the high/low for the day. Still wondering why this one suddenly showed strength this week.
FURCAL; I own a boatload of both the “INN+F” & their “INN+E”. The E is even worse regarding volume. Look thru it sometime. Many days not even 1,000 shares traded then a day or 2 with a nice jump in volume. Its a good thing I don’t need or want to get out because it would be a little challenge. Iam very comfortable with the company.
I noticed today that many – actually, most – of my Preferred issues and baby Bonds were down. Not huge drops, but larger than normal, across the board.
Does anyone have information for the reason that this happened?
Powell’s speech? Inflation jitters again? Evergrande fears? Whatever ??
Cuz the 10yr is up 5.54% today? Up 7.8% intraday since ~Monday.
Ah yes, that would certainly be a reasonable explanation. I do see a little bit of firming up near the close, so perhaps this is ( was ) a knee jerk reaction.
Along with others, I do feel that there will not a any dramatic spike in rates for the near future, so no problem in holding on to my income positions.
The next Fed meeting should be more “interesting”.
I think we’re in for a taper tantrum, no matter how the Fed bungles the wording. It surely will be interesting – I agree with you. Check this chart out… Interesting how we are relatively close to the same ballpark in rates now as we were in 2013 – roughly 1.7% then versus roughly 1.4% today:
The FRED® Blog
No taper tantrum this time?
Comparing bond market reactions in 2013 and 2021
https://fredblog.stlouisfed.org/2021/08/no-taper-tantrum-this-time/
Currently holding NRZ-B. I am looking to lower my overall risk profile and was considering going with ARR-C. I realize they are not “apples-to-apples” (maybe they are?). ARR-C is focused on mREITS where NRZ-B seems to focus on MSRs (Mortgage Servicing Rights). Not sure if moving to ARR-C would lower my risk or potentially be the same / increase it. BTW – I also own NLY-G which I am comfortable with. Thoughts?
Why not some of each. Risk is hard to evaluate for REITs and changes over time. ARR used to be risky until they righted the ship. NRZ has different strategies than most. NLY-G is probably safer but I don’t like it floating rate is low.
Tiny company but I nibbled a little on HCDIP. Harbor Custom Development, Inc 8.0% Series A Cumulative Convertible Prfd Stock…small homebuilder about to announce another preferred deal which may have taken this very thin pref down. I like the monthly pay and gave some a shot.
https://www.sec.gov/Archives/edgar/data/1784567/000149315221013953/form424b4.htm
I don’t really pay attention to the right side of the screen, beyond the recent comments or the search boxes, but when scrolling down on some pages, there is an “all news feed” with some recent headlines showing up. I noticed one is in French and another is in Russian.
@Tim, Is this a way for you to recoup some of the costs associated with running “the most awesome website in the world”, or is this spam that has found it’s way on to the site? It’s pretty non intrusive, but I do not recall seeing it there in the past. I, like many others, have offered to throw some dough your way….but maybe there are good reasons to not accept donations. Either way, just thought I’d make mention of it in case it’s not supposed to be there.
Any news on NEE-K being called?
Hi Kapil,
Nothing that I’ve seen indicates that they have announced a redemption.
Thanks A41.
Anyone receive distributions from NS-C or DCP-B?
Both were payable Sept 15 but have not shown in my IRA accounts at E-Trade. I have contacted both DCP and NS investor relations as well as E-Trade and am awaiting a response.
TDA came in on the 15th for DCP-B
Do you hold DCP-B in an IRA or brokerage account?
I hold DCP-B in an IRA with Fido, came in on the 15th.
IRA at TDA
I got paid on NS/B on 9/15 at Schwab. Its the same pay date as C
I have DCP-B in an IRA at ETrade and it was paid on 9/15. Sounds like something is wrong with your account.
Yes, ns-c, vanguard
I have about 15 preferred issues and a couple of CEF’s and a BCD, only thing in the green today was PBI-B 🙂 Never would have guessed that one.
Didn’t fall as much as the total market. And wild days tend to have more trading opportunities, prices aren’t as orderly.
Not much really happening today, Martin. I actually eked out a gain today. Mostly because of trading back in at lows on a couple, and a couple of my flea bags (Amtrust and LTS baby bonds) traded higher today for some reason.
I did snag a couple illiquids that fell to me that I have been chasing so all in all a good day.
Busy day for me. Several small swaps and lots of close monitoring. Panic sold a couple risky ones that didn’t fall. Our friends SB-C and D flipped prices but not by much.
I have got unbalanced now, owning way more D than C. I only like to switch instantly, so I didnt really look at them today. I think I permanently wrapped up a 3 week game with KSU- selling rest at 37.25 today. I made several thousand dollars since CN lost regulatory approval for the trust flipping them almost daily.
I could only get a few hundred at a time but somebody at market open every day would buy the shares at the opening bell. And by end of day I could buy them back considerably cheaper, rinse and repeat. But a few days after CP got the stranglehold on KSU, people started bidding it up and its not worth the risk anymore to play the game.
What ever happened to Hillman Preferred? was it called?
never mind…should have checked Quantum before I asked…
Called Aug 12 – https://innovativeincomeinvestor.com/security/hillman-group-capital-trust-11-6-trust-preferred-securities/
I may of missed this, but does anyone know if HTLF intends to do a partial call the HTLFP early?
Heartland Financial USA, Inc. (NASDAQ: HTLF) today announced that it has priced an underwritten public offering of $150,000,000 aggregate principal amount of its 2.75% Fixed-to-Floating Rate Subordinated Notes due 2031
HTLF may also retire certain trust preferred securities where the rates and terms make it advantageous to do so.
Charles – based on their intended Use Of Proceeds, they only wish they could call HTLFP. It’s not callable until the first reset date and that’s 7/15/25
2WR on another subject.
What do you think of BRG announcing exploring a sale of the company and if not possible, a recapitalization?
As you know, I own C under the expectation of a call happening soon… In theory exploring a sale or recapitalization only enhances that possibility imho, however, at the same time, if expectations are for an any day now call announcement, this process of exploration practically guarantees C will be outstanding longer than expected since you would think it practically freezes out the expectation until the exploration process has been completed. So bottom line, it’s all good – better yet, though, if I had owned the common…. lol
I apologize for attaching this to an existing topic but I couldn’t figure out how to start a new one in sandbox (computer challenged). I just received word from Fidelity that my NNN pr F will be called. I hate when that happens because the replacement is never as good in the current market. I was getting >5% from an investment grade preferred. Here’s what I plan to do with the funds as it’s in an IRA : I’m going to replace it with either BBN or NBB which are closed end funds holding taxable municipals. Minuscule premium and >5% from mostly investment grade holdings. I don’t expect to see huge interest rate changes in my lifetime and I’m more focused on income than capital appreciation. I’ll let my heirs deal with any capital events. Thoughts?
I would also be interested in opinions about BBN and NBB. Have not invested in munis at all, so this could be an avenue for replacement when my existing preferred/BB positions are called.
inspectbudget, I use cefconnect.com to get a quick feeling for any closed end fund I’m considering. And I own a bunch (BUI, UTF, UTG, BTO, BME HQH, RNP, )in my stock account which is different from my fixed income IRA. The site gives you premium/discount, yield, sources of funds being distributed, largest holdings and credit ratings if applicable. I find it very useful.
Thanks for the reply, JerseyVinny. I own BUI, UTF and UTG as well, so we have some common ground there.
And yes, I do have CEFconnect in bookmarks, but have not accessed that for some time. Will go and look.
Whatever you find on CEF Connect for any specific product, I suggest you go to the actual website to verify data, especially the holdings. Bring up a symbol, click on ‘fund basics’ upper menu on the left, click on ‘fund website’ on the menu on the right side. It links to the fund website. CEF Connect is not always up to date, but is is a very useful website for closed-end fund research.
vinny, you can start a new topic by scrolling to the bottom. That could be quick or it could take forever depending on your browser.
Martin G, Thanks, but I’m on an ipad and there is no bottom. It just seems to scroll down through old posts ad infinitum.
I’m on an iPhone and while it takes a while to scroll down you will eventually get there 🙂
JV, just looking at BBN to understand what it is. It is a 33% leveraged CEF that holds long term 20-30 year taxable muni bonds. A few points:
1) Current A rated 20 year taxable munis, which is the largest block that BBN holds, is yielding 2.97%. 20 year A rated corporates yield 3.24%, so you are giving up .27% of yield to own munis compared to corporates. Maybe you can argue that for the same rating, munis have lower default risk.
2) When you leverage up the 2.97% by 1.33X and then subtract the short term loan fee of say 0.5%, you get 3.45% and that is before you add in the additional expenses.
3) BBN has a fixed “distribution rate” of 5.32%, which likely means each payment has some about of “return of principal” yet they did NOT report any part of 2020 payouts as ROP.
4) BBN has benefitted like most other fixed income investments by falling interest rates. It will behave like many of our low coupon preferreds/babys if interest rates rise. If somehow the US ten year went back to even 3%, BBN would lose about 25% or close to 5 years of dividends.
5) If you plan to leave this to your heirs you are making a bet that long term rates do NOT materially rise before they sell BBN. Not really much different from owning a ~5% preferred that is NEVER called. And this is the bet that all of us taking if we are planning on holding preferreds ad infinitem.
I like your point #5, Tex. It meshes well with what I have been slowly moving towards for the past few months, trying to invest more in Preferred issues that have a low or close to non-existent chance of redemption.
Because of this, I have increased investments in WFC-L, BAC-L & RLJ-A.
I had more holdings previously, but decided to sell some thinly traded issues because of the SEC ruling ( just didn’t want to take the risk of being unable to sell them ).
I will continue to add to the above 3 issues upon meaningful dips, and trying to maintain a 5% yield to cost as best as I can.
Insp, do you have KTBA too?
Nhcoast, I owned KTBA for years, but recently sold when it spiked up to 31.70. It had been languishing around the $31.20 for quite a while IIRC.
So, at this moment, I’m out of KTBA. Looking to buy back my position if it dips to the low $31’s.
Since the next dividend is a few months away, I figure I have time.
It’s pretty much there now. Even at high 31’s, seems like a better rate than non-callable IGs these days.
Tex, I’m seeing different numbers from you. Or maybe I’m just misinterpreting them. With cefconnect.com as a source, I’m seeing ‘income only’ as a source of distribution and no mention of return of capital at least over the last year. Also, the face yields on the bonds mentioned in ‘top holdings’ seem to be over 5%. My conclusion, since the yield is 5% with about 30% leverage, and the funds are trading close to nav, is that the bonds they hold are priced at a premium even though the fund isn’t. But that’s just the opinion of a rank amateur (me). It doesn’t change your point #5.
JV, we are seeing the exact same numbers. When I quoted 20 year A rated taxable muni bonds @ 2.97% it was from a standardized lookup table. And you are correct that the top holdings of BBN all have higher coupon yields. Let me illustrate the difference by looking at the largest position:
New Jersey Turnpike 7.102% coupon, maturing 1/1/2041.
The 7.102@ yield would apply if the bond was trading at par, aka 100. However the most recent trade last Tuesday 9/14 was priced @ 163.464 for a yield to maturity = 2.815%. So if you bought the bond today for 163.464 you would only receive 100 when it matures on 1/1/2041. You would lose 63.464 of principal over the next 20 years. This is exactly the same as us having a 25 face value preferred that is currently trading @ 40.866!
Stated differently if BBN went out today and bought all of the bonds they hold, the new portfolio would yield about 2.97%. The returns you will get from bonds is simple math, no magic involved about guessing what a company will be worth 20 years in the future.
Tex2, Re: #5
Check all that except that CEF managers do not hold their portfolio like you may hold it. They will churn over the holdings…that’s what they are paid to do. It will not be the same portfolio at some point in the future. That is the ETERNAL problem with ALL managed funds, most of them slowly stairstep down in NAV.
Also, ” If you plan to leave this to your heirs “…does it really matter? E When we show up each of us gets a welcome note that says, ‘Welcome to a brave new world’. I am referring to Shakespeare not Huxley.
I’m attempting to open an account on coinbase, but I keep getting a reply that the site location has changed or the site might be temporarily down. Any advice as to the exact current website address? Thanks
Randy,
I was able to get to here just fine:
https://www.coinbase.com/
It does immediately come up with a CAPTCHA challenge, so if your browser has restrictions that block trash while you browse, you’ll need to enter an exclusion or take the appropriate action. It should then let you in, unless you are experiencing a transient connection issue, which may self-resolve if you check back in a few minutes or half-hour or so.
2 WR Thanks Yes I did., Neither my fingers or brain seem to be working this morning. Not enough ZZ’s last night I guess
i have a small coinbase account.
just be aware they are known for pretty crappy customer service. for example last week when bitcoin crashed i bought some of another crypto currency . it took 5 days for the crypto to actually show up in my account. their customer service kept giving me the run around (its all web and email based no actual people). i finally filed a complaint with the FTC and the CFPB. the coins showed up after i posted about the complaint on reddit.
How about JMP-E? Whatn happens to it?
Wendy – Do you mean JPM-E? That was called 9/1…..
“Change of Control” Is there a definitive legal answer to whether or not becoming a “wholly owned subsidiary” constitutes a “change of control” for a company or is it on a case by case basis? I’m thinking about JMP’s being acquired by CFG and the implications for JMPNZ. I see no definitive answer regarding what’s to happen to JMPNZ written into the documents regarding the acquisition itself. JMP will operate as a wholly owned sub and the language in the prospectus says, “The indenture provides that the Company may not directly or indirectly consolidate with or merge with or into, or sell, assign, transfer, lease, convey or otherwise dispose of all or substantially all of its assets and properties and the assets and properties of its subsidiaries (taken as a whole) to another person in one or more related transactions unless the successor person is a person organized under the laws of any domestic jurisdiction and assumes the Company’s obligations….”
Maybe I can go 3 for 3 and one of the legal beagles here can show me where I am overlooking something obvious again. I have asked JMP IR the question but have not yet heard anything.
Schwab just started showing WTREP as having a zero current market value. It was slightly over $25 prior to this evening. Does anyone have any updates on WTREP? Has it been called?
It was expected to be called on 9/15 with the next record date of the dividend.
Though I wouldn’t be surprised if it wasn’t paid out until Monday because of the delisting.
Justin,
Where did the info on the expected call date come from? I recently interracted multiple times w/their IR rep & he would do nothing but refer interested parties to the FAQ they released, which had no redemption date mentioned.
A4I:
I don’t think WTREP has been called, but even if it has, I would lay 2-to-1 odds that Schwab will screw up the redemption proceeds and we will all have to fight tooth-and-nail to get the money into our accounts.
I don’t want the issue to be redeemed, but if it stays outstanding I am already accepting that I will likely have to fight Schwab every 90 days to get the dividend posting correct!
Isn’t the payment date 9/30?
It should be. Should be the last day of the month for Mar, June, Sept, and Dec.
Watford stated the following: Holders of preference shares will receive dividends in the same manner as prior to the delisting.
Dick, Schwab is just catching up to other brokers: for example, E*TRADE started displaying WTREP as zero value about a month ago.
I have been buying JMPNZ at a very small premium figure that it should be gone soon after the purchase by CFG but might be around for a couple of months earning 6.875%.
I have been selling off some LANDO 25.87—25.90, a willing buyer today.
Tim, when time permits could you update the master list to reflect updated call date next June?
Will check it out furcal–thanks
I sold awhile ago around 26 and bought some back when it fell to 25.42. Didn;t notice today’s action,just put in a high sell order. This is why low YTC issues can be worth owning.
Got it updated in 6 different spots–I would have never caught that change.
Furcal, with the 6/1/22 call date, I show a YTFC = 1.68%, breakeven sell would be 26.12.
We own it in several accounts and have not sold yet.
With the date extended to June, it is probably still a decent hold–I was overweight and reducing on spikes. Above 26 and the rest may go.
I missed this info if you’re talking about LANDO – where’s the link to info about the call being extended to 6/1??? Does this have anything to do with the continuing issuance of Ser B thru myipo?
if you allow me to cheat and copy from quantum online and not the original document: Notes: Note the terms were ammended to: The Company may not redeem the new Series B Preferred Stock prior to the later of (i) the first anniversary of the Termination Date (as defined in the Articles Supplementary) and (ii) June 1, 2022 (except in limited circumstances relating to the Company’s continuing qualification as a real estate investment trust). On and after the later of (x) the first anniversary of the Termination Date and (y) June 1, 2022, the Company may, at its option, redeem the new Series B Preferred Stock, in whole or in part, at any time or from time to time, by payment of the Liquidation Preference, plus any accumulated and unpaid dividends up to but excluding the date of redemption. The offering of Series B Preferred Stock terminated on March 9, 2020, the date on which last remaining shares were sold to investors.
Thanks for the clarification, furcal… but here’s the thing – The ongoing myipo offering of LAND preferreds is also called Series B. The document says, “This prospectus supplement supersedes and replaces the prospectus supplement dated January 10, 2018.” It also says, “Except in limited circumstances to preserve our status as a real estate investment trust (“REIT”), we, at our option, may not redeem shares of the Series B Preferred Stock prior to the later of (1) the one year anniversary of the Termination Date and (2) June 1, 2022.” So, given that the offering is currently ongoing now, doesn’t that imply that the call date for Series B will actually change once again to a date later than even 6/1/22? Am I missing something deeper in the docs?
https://assets.myipo.com/offers/bcbb65d7-a77a-43c4-abe3-25b8d6f4c44b/6fc0bd00-7cca-4fce-88c6-8dc972727e28/offer-document-GD1.pdf
The one currently on myipo is series C.
“Company is offering up to 20,000,000 shares of Series C Cumulative Redeemable Preferred Stock (“Shares”) in Gladstone Land”
Oh my! I’m getting worse and worse it seems…. Right again! What came up when I whipped to the site was the CLOSED ISSUES…. I skipped right over the current offering…it might be time for me to change investment managers……. ha.
Does anyone own KREF+A???? They missed their SEPT. 15th payment in my Schwab account. Just wondering if others are experiencing the same thing?
Odd.
But it pays September 27 for this cycle.
https://www.kkrreit.com/for-investors/news-and-events/press-releases/2021/09-08-2021-213016232
Chuck P–have to check it out as my etrade shows it ex today with payment on the 27th–which is contrary to the prospectus and pricing term sheet.
THANK YOU TIM & JUSTIN; I appreciate it very much.
Chuck P–went and found this press release–I think they failed to get it declared in time for the 15th.
https://www.kkrreit.com/for-investors/news-and-events/press-releases/2021/09-08-2021-213016232
I bought into the new Gladstone Land preferred (non traded) through My IPO. I want to participate in the dividend reinvestment plan to receive the discount.
My IPO says they cannot do this…shares must be transferred to the transfer agent which is Computershare. OK, I say, do that (I have transferred some stock to Computershare via voice authorization at Fidelity). Ah, but My IPO says that is now done online. I guess things have changed since I was in the business.
Apparently, NO.
I spent some time on the phone with Computershare…transfer must be initiated at the holding firm…as it has always been the case. I asked again that this be done. A week goes by…nothing happens. Apologies from myipo. It seems no one there really knows how to do this. Now it seems they require a written request….but have no form to do this. So they want me to sign a form to transfer assets TO myipio with some language changed.
Surely someone else here has done this??
Last I heard from folks on this board, it was impossible to participate in the DRIP via. MyIPO. So, if you’re successful, please let us know!
MyIPO has ignored my emails to them concerning this very issue.
Ignored mine too.
I would say they did not anticipate this problem. Since the discount on reinvested amounts was a chief selling point on their site, and they did not indicate anywhere that they did not intend to allow investors to receive it for holdings purchased through their company, I would say they have a big problem on their hands and are burying their heads and hoping it will go away.
Not sure if there is a class action suit in it, but I am not sure there isn’t either. I wonder if this is the sort of thing you can complain to the SEC about? I know next to nothing about how these companies are regulated.
Scott,
Didn’t see any class action suits in progress. One separate legal proceeding is pending from this year, though. There is some interesting info beginning on or about page 21 of this report:
https://files.brokercheck.finra.org/firm/firm_133760.pdf
You can also check here for more info on the group behind the scenes:
https://brokercheck.finra.org/firm/summary/133760
More odd stuff:
https://blog.stoltmannlaw.com/robert-h-potter-and-cambria-capital-recovery-of-losses/
Also,
https://www.securitieslawyer.com/cambria-capital-llc/
MyIPO is on a not ready for prime time platform, and this looks like one of the kinks that need to be worked out.
Anybody stuffing any coins in IBonds? One can put 10k in before Nov. 1 and will likely get close to 5% or more for 12 months. One then can put 10k more in post Jan. 1 and get 6 more months and net probably over 3% (annualized 6%).
I have an old treasury direct account I may reopen. About 10-15 years ago when inflation was high I used it and even added the extra $5k tax refund purchase a couple times for the paper bond issue. I may consider, doing this again.
Couples can double the purchases. You take a 3 month interest penalty if you dont hold 5 years, but you can buy at end of month and get credited entire months interest, so that mitigates it closer to a 2 month penalty. Even then the guaranteed return bets anything else in terms of 100% safety short term.
More info here…
https://seekingalpha.com/article/4454872-i-bonds-have-it-all-safety-flexibility-current-4-8-percent-yield-30-year-inflation-hedge
Geez! how dumb of me! I’m not sure whether I’ve never heard about IBonds or just knew about them but never thought about them….. Guess it’s no surprise to you that this is right up my overly conservative alley. An easy decision particularly given the limited amount you can buy…..Even if you end up needing the money after 4 months you’re still beating money market rates… Thanks for bringing up the idea…
It does look like a great deal. But not if you need the money before 12 months-it says it’s not able to be cashed out for 1 year.
I’m understanding this right, though, that you’re not doing anything except beating inflation on cash?
Yes, They must be held a minimum of a year. Actually I consider it maximizing cash investing for short term. Its actually less than inflation factoring in an early withdraw penalty. The penalty is captured “upfront”.
Say you deposit Sept. 25, your penalty is the first 3 months (technically its just a bit over 2 months as govt pays you entire monthly interest). On your 4th month holding (if memory serves) you will start receiving the interest. After your 5th year holding, you get the other three months credited back to you.
If nothing else a good place to impound money and collect above market interest at above market safety, and revisit in a year to see if other income opportunities are better then without losing capital on say 4% perpetuals now.
Grid, the 3-month penalty is taken off the back end, not the front. Per https://www.treasurydirect.gov/indiv/research/indepth/ibonds/res_ibonds_iratesandterms.htm: “You can redeem the bond after 12 months. However, if you redeem the bond before it is five years old, you lose the last three months of interest.”
Irish: yes, we are purchasing these Savings Bonds as a very low risk* method of beating inflation. We assume we will be holding 5+ years, so the 3-month penalty doesn’t enter the equation for us (if we have to touch these funds before that, something has gone seriously wrong, or some other low-risk option has to look seriously better).
*Re “very low risk”, I admit I am assuming the US Treasury won’t default on its obligations in my lifetime…
Bur, yes, sorry if I implied they were witholding the first three months and impounding that specific lot on early redemption.
Learned about I Bonds from this 8 may WSJ article–https://www.wsj.com/articles/i-bonds-the-safe-high-return-trade-hiding-in-plain-sight-11622213324?st=b6sjgzrgcx6hpiu&reflink=desktopwebshare_permalink–and immediately opened accounts for both of us.
Grid, you write “one can put 10k in before Nov. 1….. One then can put 10k more in post Jan. 1.”
Yes, that is true, but then you can’t put in another $10k until 01 jan 2023. Per https://www.treasurydirect.gov/indiv/research/indepth/ibonds/res_ibonds.htm, each person can only contribute $10k per calendar year.
Not sure why you say one “will likely get close to 5% or more for 12 months.” The annual composite rate on bonds we bought in June (which also applies to bonds bought before 01 Nov) is 3.54%. That composite rate comprises a) a fixed rate of 0% + b) a semiannual “inflation rate” of 1.77% (x 2 = 3.54%). Since the Inflation rate gets reset on 01 Nov, and since Inflation is going up, that 1.77% semiannual rate will likely go up, but I’d be surprised if it goes from a semiannual 1.77% to a semiannual 3.27%. What am I missing?
(The rate info I’m quoting is posted at https://www.treasurydirect.gov/indiv/research/indepth/ibonds/res_ibonds_iratesandterms.htm#infl)
a) The WSJ article I cited as from 28 may, not 8 may.
b) Just read the SA article, which is forecasting that the semiannual Inflation component of the composite rate will move to 3.07%. Guess we’ll see on November 1st…
Bur, Ok, I see you understand what I meant, so I will save the rehash. But if one was interested in this endeavor, you really need to buy before end of Oct. and bang out the 1.77% cycle also, before snagging the 3% ish one next cycle.
I used to buy them when you could use a credit card! We wanted a few free rounds trips so I bought a handful. Needless to say they don’t let you do that any more.
One nice perk is depending on income level you can use them for college without having to pay taxes. It’s been a while since I looked at the tax rules though.
That was one of the two “safest investments” to make easy money compliments of the government. The other was monthly max purchase of dollar coins via credit card which included free shipping. Collect your free 2% cash back from CC, and dump the coins off at the bank and rinse and repeat. The beauty of that one is the bank then sent them right back where they were ordered from. So they could be sent and returned again.
That is what they call “circulation of money”. I wish I had gotten in on those deals.
One thing I would add. If one may need to withdraw a smaller portion than invested, consider buying some in smaller lots so you can keep the other amount invested. As you cant withdraw a specific amount of money, but much redeem the actual bond.
Grid, thanks for suggesting buying in lots. Does anyone know if lots can be spread throughout calendar year (up to a total of $10K) ?
Thank you and best regards, No. 4 (just for this week)
Brett Favre, You can buy in $25 minimum increments and even buy a $25.04 amount if you wanted. And yes, you could buy $25 a day until you max out if you so desired. You can even set up in TD automatic purchase amounts weekly, bi monthly, quarterly, etc.
Btw, You didnt cost the Vikes, the NFC Championship game versus Saints. It was Adrian Petersons fault as he fumbled away the game.
Am I wrong, or are these not guaranteed to lose money after inflation and taxes? The rates will look comparatively good when inflation gusts up, but with the fixed rate part being either zero, or less than the federal tax rate times the inflation part, then there doesn’t appear to be any way to come out ahead.
I guess a constant small loss is OK if other investments are all producing larger losses, but it is hard to predict when those times will occur, and the stock market produces inflation adjusted gains over time. I haven’t looked, but I think the bond market does as well.
Since you can get out of them at any time for a small penalty I guess they can be a safe-harbor for a short period where the alternatives are poor, like things may be now in some respects.
From Jim Sloans article, and fwiw, he has a blog that is very good:
I Bonds produce returns with two components. The first is a fixed rate which provides the “real” return – real meaning inflation-adjusted. For new purchases this rate resets semiannually on May 1 and November 1, or the next business day if the first day of the month happens to fall on a holiday. Once you purchase an I Bond the real rate in force at that time continues for 30 years until the bond matures or until the owner chooses to redeem it. The second component of I Bond return is the inflation rate as represented by the Urban Consumer Price Index (CPI-U). One can argue about the defects of the Urban CPI but it’s what is used for all important measures such as resets of Social Security payments. The inflation rate used for I Bonds is reset semiannually at the same time the fixed rate is reset, on May 1 and November 1, and the accrued value of your I Bond is updated so that the return compounds semiannually. I’ll repeat for the purpose of clarity that the fixed rate doesn’t change for bonds you already own. The inflation rate is updated every six months starting from the date of purchase.
https://tipswatch.com/
That is what I was getting at. When the fixed rate is as low as it has been (0.0-0.3%) then you are well off what you will have to pay in federal taxes on the 5-6% you will make with inflation gusting up now if you can’t shelter it somehow.
I can understand parking some cash there under certain conditions, but it looks like it is designed to at best hold you steady, and in all likelihood be a long term losing proposition. Inflation eats the inflation adjustment and the government eats more than it gives you in the fixed rate.
I bonds fill a spot for us. They are tax deferred until you cash them in, unlike TIPS, and they pay more than a money market or CD. The inflation issue is not a major concern, since the variable rate will reset every six months.
Furcal, they are also state income exempt if that is applicable.
Scott, The purchase of these (if one desires or deems it appropriate to buy), is an alternative to short term guaranteed investments, intermediate cash hideout, or CDs. Not as a comparison to say beat out Microsoft common stock.
If deposited at close to end of a month, and allowing for penalty at one year withdrawal, there is still no govt bond that yields that or 1 year CDs. It would be pretty close to 4% even with penalty. A 30 year US bond doesnt even pay 2%. The 1 yr treasury pays 0.07%. So that is where the relative value is.
If one has goals that doesnt have this need, then the value of this purchase is largely negated.
Grid, we have maxed out the last two years. Limited downside, beats corporate bonds.
Thanks for the info on the I-Bonds. You learn something everyday. 🙂
I have a couple of parking lots that I use when necessary.
Pen Fed CU has an online savings that pays .45%.
OVM – This thing hardly goes down since I have owned it. It makes it impossible so far to add to the position because it hasn’t gone down below my initial position.
BKSB – Definitely the riskiest of the three, but not much price movement either way.
On the I bonds, If you put in now isn’t the rate 3.54% .. On November 1 they reset for next 6 month period at new rate. The rate you buy them at stays fixed forever, correct ?
For a deeper dive you can check out the tips watch blog, but here is an excerpt from that site, full credit:
An I Bond earns interest based on combining a fixed rate and an inflation rate.
The fixed rate will never change. So, if you bought an I Bond in 2014 with a fixed rate of 0.2%, it will continue to have a 0.2% fixed rate for the life of the bond. Purchases through October 31, 2021, will have a fixed rate of 0.0%. This fixed rate is the “real yield” – meaning after inflation – of an I Bond. The fixed rate will reset on November 1, and is highly likely to remain at 0.0%.
The inflation-adjusted rate changes each six months to reflect the running rate of inflation. That rate is currently set at 3.54% annualized. It will adjust again on November 1, 2021, for all I Bonds, no matter when they were purchased, and is likely to soar to 6.0% or higher, based on inflation from March to September 2021.
To get the I Bond’s actual rate of interest (the composite rate), the Treasury combines the fixed rate and the inflation rate. The combined rate will never be less than 0.0%, so I Bonds are protected against deflation. The current, inflation-adjusted value of an I Bond can never decrease, even in times of severe deflation.
Changes to the inflation adjusted part of the I-bond rate are announced on May 1 and Nov 1. However, a particular bond’s rate changes every six months after its date of issue. Using the inflation-based rate of 3.54% announced on May 1 for bonds with the current fixed rate of 0:
Example 1: A bond bought during May has an issue date of May 1. It earns 3.54% annualized for 6 months, and its rate will change on Nov 1 to the new rate published on Nov 1.
Example 2: A bond bought during September has an issue date of Sep 1. It earns 3.54% annualized for 6 months, and its rate will change on March 1 to the new rate published on Nov 1.
The Nov 1 rate will be known on Oct 13 when the CPI is published. The CPI-U published in April was 264.877. The CPI published on Tuesday was 273.567. That’s a 3.28% increase from April, and it is already the highest 6-month jump in the history of I-bonds back to 1998. And there is one month left in the 6-month cycle. (Hypothetically, if next month’s CPI is flat to this month then the Nov. 1 I-bond inflation-based rate will be 6.56%.)
I already put $10K into I-bonds back in late May. If I hadn’t already done that, I’d be waiting until after Nov 1.
Another thought, but please verify before you proceed: if you buy an I bond any day of the month, including the last day of the month, you are credited with the full months interest. Probably the last of the ‘free money’ gifts available (since they took away the option to buy by credit card as Grid mentioned).
Furcal, that is 100% correct. However, if you wait too close, it may not be officially credited until following month. I have read some complaints on that. So I dont take any chances and in past bought at least 5 days prior.
Im not a real anus head on these things, so I bought mine yesterday. Im going to be out of state all next week, and didnt want to push it too close to end of month when I returned and deposit. Plus the cash was dead sitting doing nothing now anyways.
Larry…as I understand it, no need to wait. A bond purchased now or November or December will earn the rate set on November 1 for a six month period.
Retired, this is not correct. A bond purchased NOW WILL NOT receive the rate set Nov. 1. It will run the 6 month cycle of the current yield, and THEN at 6 months will receive the November adjustment.
Example, Yesterday I opened up a new account (as my previous one was closed from inactivity) and bought my Ibonds. I will now collect 1.77% (3.54% annualized) for 6 months (Sept-Feb). Starting March 1, I will collect the next 6 month interest payment yield that was set on Nov. 1.
Gridbird, we are both correct. I said a bond purchased now will earn the November first rate for a six month period. I did not say the six month period would start now, or on November 1. As you say, the six month period in your example would start March 1.
Retired, Good deal! I read your post a couple times and wasnt sure if you meant what I was thinking. Your comment on misconceptions leaned me to you meaning something else as Larry and I were correct. But I now see George’s post which is probably your reference point.
Personally if one is interested my opinion is you snag the 1.77% now and then collect the ~ 3% range after. If you wait, you are betting the following May reset is higher than 3.54% annualized. Which may or may not be. And if yields stay this way and inflation hot, one would want to capture all three cycles anyways. As no comparison investment vehicle would beat it anyways. I dont see a 1 yr Tbill of CD hitting 3.54% in the next year.
Grid are these like Zero bonds where they don’t pay interest until you sell or they mature?
Thank you
Yes, JB, they are considered as a “special type” of zero coupons, and you do not have to pay interest until redeemed. You can choose to use the accrual method and pay yearly if you desire, but I doubt many do.
Thank you
JB, it’s worth noting in addition that interest on I Bonds compounds semiannually.
From https://www.treasurydirect.gov/indiv/research/indepth/ibonds/res_ibonds_iratesandterms.htm:
“The interest is compounded semiannually. Every six months from the bond’s issue date, all interest the bond has earned in previous months is in the bond’s new principal value. Interest is earned on the new principal for the next six months. For example, in month seven, interest is earned on the original price plus six months of interest. In month 13, interest is earned on the original price plus 12 months of interest.”
I see some misconceptions here regarding when I bonds reset rates. Here is a chart from the treasury. Note rates will change each six months from your month of purchase. As I understand it, today’s rate is 3.54%. Bonds bought this month will earn that for six months. After that, you would earn the rate set on November 1 for the next six months.
When does my bond change rates?
Issue month of your bond New rates take effect
January January 1 and July 1
February February 1 and August 1
March March 1 and September 1
April April 1 and October 1
May May 1 and November 1
June June 1 and December 1
July July 1 and January 1
August August 1 and February 1
September September 1 and March 1
October October 1 and April 1
November November 1 and May 1
December December 1 and June 1
Does anyone expect the funds to reposition their holdings at quarters end?
Some of you have noticed some dumping of issues already last week.
I am interested in the issues that they want to buy.
I have shares of TDSPRV and think this may be one they buy.
Any one have other quality candidates?
If so, please explain.
I would love to stock up on thousands of shares in various issues and put in a 1-2% higher price GTC sell order.
For those newer to trading preferreds, here’s a good example of arbitrage opportunities that are available:
PSA-P: 4% coupon, currently trading at $25.29
PSA-O: 3.9% coupon, currently trading at $26.10
Same company, very similar call protection and coupons.
How does arbitrage work exactly? I would have to currently own PSA-O, correct? I would sell the O series and buy the P series instead?
If I own neither one, or just the P series, then the arbitrage opportunity doesn’t exist? Am I understanding this correctly? And then if I do own P, then I would have to wait for it to rise above one of the other similar series?
I see a fair bit of commentary on here about people trading between issues of the same company, but have never fully grasped the concept.
That’s the idea. You would expect issues of the same company to move in tandem but there are fluctuations especially with lower volume issues. Sell the higher one and buy the lower one, then swap back hen the prices flipflop. The gains are small but there’s practically no risk except execution risk (price changes before you finish). The small profits are in additio to the dividends you are earning. Do it enough times and it adds up.
If you don’t any you could try to get fancy with shorts or something but that’s nit easy to do with preferreds.
PSA-O is callable 11/17/2025 and PSA-P is callable 6/26/2026. Crazy to see PSA-O trading higher than PSA-P.
Same-same for PSA-P vs. PSA-N. I’m guessing this will eventually correct, one way or the other. We’ll see.
OTRKP’s 9.5% coupon is currently trading at $16.35 after OTRK evidently lost another customer. Does anyone clearly understand this paragraph taken from the prospectus:
“As detailed on page S-26 of the prospectus, OTRKP holders have the option to exchange their preferred shares for $25 worth of common stock in the event of a privatization. These exchange rights are subject to a share cap of 0.7653 shares of OTRK for each OTRKP share. This ensures that OTRKP holders can elect to redeem their shares at par plus accrued dividends as long as OTRK is acquired for at least $32.67 per share”.
I guess my question is whether this provides some protection for preferred holders in case of a buyout.
Take the OTRK common price times 0.7653, but capped at $25. That is how much you would get if you acted on such an exchange. So no, it doesn’t help a preferred holder for the foreseeable future because OTRK is well below $32.67.
dlcnws,
In July, they were able to redeem NYMTO (7.875%) with NYMTL (6.875%). A 1% lower coupon.
NYMTP is a 7.75% coupon, so if they can issue a new one at 6.75% to 7%, then it seems reasonable to think they may do it. I’ve heard that a company has to be able to issue a new one for at least a 0.75% lower coupon than the current one to offset the costs of issuance.
Perhaps they can redeem it with cash on hand. I’ve no idea about that, though.
I’m typically more of a long term investor unless I see the light at the end of the tunnel. I’m starting to see that now in NYMTP. I goes ex-div the end of the month and has shot up well past the quarterly dividend. The last one called was in July and I’m thinking this one is not far off. Any thoughts?
On the fence for a call. They can issue something a little lower but barely enough to justify the exchange. Sometimes a company will wait and see if they can get a lower rate in the near future.
I own a few shares. I almost always prefer the higher yield to the longer call protection. If it’s called just buy something else.
dlcnws,
With their financials, I don’t see a call coming w/o them issuing a new pfd to pay for the redemption. Their piggy bank just isn’t kept very full. I chose to play this awhile back by going into NYMTL, which is in the speculative part of the portfolio with an undersized position. I’d rather bank on the call protection than play chicken with such a high yielder – in this case.
They are one of the few, who suspended the divvies for a time last year – which again, affirms that this is a much riskier company to do business with.
BROOKFIELD PROPERTY PARTRS LP Preferred shares: N, M, O, P
All down sharply in the last 3-5 trading days. I was thinking about dumping the P shares as it flirted with $26 handle just nearly a week ago and now in a blink it’s down to $24 and change and been gradually hitting lower lows daily. Same trend with the others.
Anyone have context here?
Be interested in hearing, not that I own any. Quite a loss in capitol or potential profit
I took a closer look and it appears there were a couple of giant volume days on the uptick moves. So someone was putting on a decent position.
And basically overnight that volume plummeted so the price has been shifting accordingly. Previously it was trading in this current range consistently.
LTSA may be testing it’s support level in the $13’s. I don’t have a lot of LTSA anymore, but I am at $16.49 right now. I knew that the new OTC rule was going to be tough on LTSA. I also knew that I was going to play “Mexican Standoff” with them as I own their bonds as well (in much greater quantity).
My question is will LTSA break that support of $13 and if so, where might the bottom be before the last holdout firms stop the buying?
I am not talking in an operating sense or credit rating sense just the trading aspect. It may not even matter once Schwab flips the switch to a CUSIP with a zero value.
NW, I just dont have the stones for that trade. But on the positive side, the equal standing Advisor bond to the old LTS bonds just traded above $111 today.
LTSA hasn’t gone below $14.50 today, so not sure why you’re talking about the $13’s…but anyway, no one knows how low it will trade. If you still have the ability to buy it somewhere, you just have to decide if you like the price and potentially live with it forever.
Not sure why you are assuming anything will change at Schwab. It is not being delisted, trading will just be heavily restricted. If there is still someone out there trading it, then presumably Schwab and other brokers will report those values. If there is no trading for a while, then perhaps they will mark them at $0. But you understand that doesn’t mean they’re actually worth $0, right?
“not sure why you’re talking about the $13’s”
I bought it in the $13’s already this year.
“LTSA hasn’t gone below $14.50 today, so not sure why you’re talking about the $13’s”
It already went there this year.
“but anyway, no one knows how low it will trade”
That was the reason for my question. I am looking for a “best guess” from others that have traded or trade LTS issues.
“Not sure why you are assuming anything will change at Schwab.”
It already has changed, because I cannot buy more.
Speaking of great coffee, sometime ago I found Ruta Maya at my supermarket, the best I ever had to grind myself and pour over. $18.52 for a kilo of beans. Give it a try if you can find it at your neighborhood grocer.
https://www.heb.com/search/?q=Ruta%20Maya
camroc-
Roasting my own green beans… tasty and costs less than other ways to get my brew.
Clarification for commenter/s who were asking about the dividend for POWWP. I am unable to find the actual comment/s.
As per POWWP I>R>
The first dividend was paid through June 30 and was a partial pay.
The next dividend pays for the quarter ending Sept. 30.
(The data on ‘Quantum Online’ regarding distribution dates is
incorrect.)
Hope this helps any interested reader here
Howard
Howard – Doesn’t the data on QOL regarding distribution dates match the information in the prospectus they link to? Are you saying that that prospectus is the incorrect one? “Dividends on the Series A Preferred Stock offered hereby are cumulative from May 21, 2021 and will be payable on a quarterly basis on the fifteenth day of each of March, June, September, and December, when, as and if declared by our board of directors”
https://www.sec.gov/Archives/edgar/data/0001015383/000149315221012425/form424b5.htm
Hmmmmmm, I’m getting way too involved on an issue I don’t care about…. Apologies
I never went into the prospectus. The I>R> rep told me that the quarterly periods end 3/31, 6/30, 9/30 and 12/31 , so the pay dates on Q.O. cannot be accurate. and POWWP did pay for the period ending 6/30. Perhaps someone else here knows better than I. thanks. ( I do not currently hold any shares ).
Howard–the prospectus says the 15th.
https://innovativeincomeinvestor.com/security/ammo-inc-8-75-series-a-cumulative-redeemable-perpetual-preferred-stock/
Howard:
The POWWP prospectus omitted one point that nearly all of the REIT preferred prospectus’ include:
When the first dividend will be paid and whether it will be a partial or “extra days” payment. Many of the REITs give you an exact month/date and dividend amount of the first payment in the preferred prospectus.
So given how poorly they have treated common shareholders in the past, I’m not surprised that AMMO is taking advantage of the lack of language in their prospectus by deferring dividends for 90 days.
I’m hoping this thing eventually trades below $25 on the Rita downgrade, since many will likely act/trade first and ask questions later.
I have been gone for several days with my Dad to the coast and had not checked in to the website. Read all the retirement stories and they were great! Since I am 2 months away from my second retirement (and final!) thought I would add mine…… A little background first. I have had a great career in the world of Engineering. While I am a licensed Professional Engineer I have worked my entire career in manufacturing facilities, first as head of maintenance for 20 years, and then A self employed contract engineer for 30+ years. In the latter I could be considered a project engineer I guess. My specialties include automation software development on large industrial control systems, three-phase power distribution, and installation of the various instruments required for automating industrial equipment. The last 20 years I have principally managed the contracts / personnel doing these disciplines, developing bid packages to solicit proposals and then managing the day to day activates. I work closely with the Engineering designers and the client in this position. Here are my thoughts on retirement:
1. It is imperative that you have a financial plan for retirement. Since you are using this great website that tells me you are actively managing an income type portfolio providing a nice supplement to Social Security, pensions, etc. I made a detailed budget using Excel and then Google Docs for expenses and income. It took a while and repeated conversations with the wife, but you got to do this, else you are flying blind.
2. Put some time into thinking about what you are going to do when suddenly your time at work goes away. You probably have spent more time at work than you have at home. You need some hobbies etc. I have worked into to this by gradually reducing my hours at work. I am down to 16 hours a week over two days. My hobbies and passions have filled that vacuum nicely for me. I am a life long bicyclist with multiple bikes that rides 75+ miles per week both outdoors and on my indoor hi tech cycling center. I also play golf (err.. walk in the woods mostly!) once a week or more. I love to go hiking and camping also. Another thing you can do is play (or attempt to!) a musical instrument. I have taken up classical guitar and am taking lessons from an instructor in the university’s music department. It is a great hobby. I also do most of my yard work on my 2 acre lot with a half acre of yard to mow. Maintaining the house is also something else I do. This is not so bad as I designed the house for low maintenance. The house is all brick with aluminum-clad windows etc. Very little outside painting. With my engineering background there is nothing I can’t do with the various systems if I choose to do so.
3. Some folks downsize the house or move to a retirement community at the beach or mountains. Look real hard at this if you are thinking about it. It is not all roses. You can be away from family. I could never give up having our grandkids come over once or twice a week for the day. They are 30 minutes away. A lot of places don’t have great medical care either. Here in the Southeast we have hurricanes and you may get evacuated a couple of times a year. If you stay no power etc. for days plus hurricanes are no fun to go through. Personally we designed our house 25 years ago to retire in place. It has one step to get into from the garage, first floor primary bedroom, etc. We also built next to a great medium sized college town with a great medical school and teaching hospital for medical care. As we get old medical care is a big deal. The university has some much to offer in terms of athletic events, drama plays, concerts, etc. Got a great golf course too!
4. If you have elderly parents you may need to manage care for them and you will definitely need to budget time with them. My wife’s mother is 93 and we just moved her from the house she lived in 2 hours away to an independent living facility 10 minutes from us. My wife spends an hour or so most days with her or she comes to our house. My Dad is 102 and lives with my sister 30 minutes away. He too is in great shape and all here mindwise. He and I go to his intracoastal waterway cottage on the coast about every five or six weeks for a few days.
5. You can volunteer. Many charities and non profits need help desperately. You can meet some fine folks and get a lot of satisfaction from volunteering. A great way to use time you may have available.
6. Take of your personnel health. Nobody else will! As we get older it is imperative to maintain fitness and flexibility. You will feel better and age gracefully, looking great while doing it. Lots of options here. We have great senior centers that offer many fitness activities tailored for older folks. Me, I just ride my bike. I can ride 17 miles in one hour easily. That burns lots of calories and keeps me in shape.
Well, that is about it for my thoughts. I have found I am busier than ever as I have wound done to my two days a week. It is wonderful to go do things on a weekday and not try to cram it all in on the weekend. The golf courses are not so full among other things. Long posts folks, so I am going to sign off.
Occasionally, I look at the Sortable Spreadsheet during trading hours and sort it on the “Change” column. As of a few days ago, it won’t sort. Could I have inadvertently clicked on something that disabled this feature? Would appreciate any suggestions. Thx.
– Sell in May? Was that the correction? My overall dipped 6.05% beginning June 10 to Aug 19. No Buy Limits were hit, still waiting with cash. Now back up half of that from Aug 19. Do not really want more commons, but options selling on them has been good and surely limited some of that downturn %, but I do not cut that out as an impact.
Canadians have held even with a pile of long gains over there, but only two below par. Not a problem! Decent cash build up from divs. too. Only bot a thin sliver of AX-E at 5.8% with a reset just after the midterm elections and some RSI/RSGUF in the ex-div swoon at about 6.5% yield. That’s it. That was diggin’ work.
All in all, I have no complaints. I like to believe I will be rewarded for all this diligence , but that can be popped. I think that is part of our religious syntax…possible Hell!
– Regarding retirement comments recently: Seems the way forward is management and waiting. I can see that there never was a certain time to just peel out and watch the work years disappear in the rear view mirror like all the “financial independence” mutual fund ads in Money Magazine used to portray. The only exception may have been all in the 14% , 1981 30 year Treasuries!
We have been doing a calendar year of trial retirement and just living as normal as possible and posting it on balance against our real portfolios. Seems we generate about a grand a month after spending and taxes that can be shoveled back into the principal/inflation pool to build a bit. I want to try a real annuitization approach after we both hit late sixties, which would include whacking principal like a piñata for candy regularly, but the wife just don’t like that idea. I think that is exactly why “kids” get an inheritance from conservative parents…it’s fear based clutching. Personally, I do not want a golden burial mask.
correction: Only two CNs above par…JA
Joel,
Enjoyed your post. Certainly investors that have stayed the course have benefited from the continued rise in equities. I believe the constant supply of new money – US listed ETFs raked in an additional $75 billion in Aug – will probably persist, at least for a while longer. As of right now I see no heavy selling in any asset class; yes, there is rotation, but that is normal in any market.
For me, fixed income is a little different. I do not buy the argument that inflation is transitory – for one, I see signs that wage inflation is real and that it will become the new normal. Surely, there is a huge difference between the Fed tapering and a rate rise, but if there is a need to raise rates long duration bonds and perpetual preferreds will be in for some pain. Things may look OK right now, but for me this is no time to be complacent.
I have a jaundiced view of Seeking Alpha. There’s a lot of useful general information but you have to take much of the author opinions with a grain of salt. Many of them have no clue.
Seeking Alpha’s agenda is to get you to subscribe to their newsletters ($$$). What’s concerning is that they defend their authors even when they offer misinformation and they are abjectly wrong to the point of censuring readers who correct author misstatements. Read the articles and then do your due diligence.
Sorry, accidentally posted this reply twice. No delete function?
Anyone have an opinion on the 3 preferred issues of DBRG. Used to be called Colony Capital but now called Digitalbridge. DBRG -I -G -H Thanks
wait
I own the H shares at $24.89. I bought at the time because of the following;
1. Yield
2. Under Par
3. Hated Company
4. Changing business model from hated old business model
5. The kicker was that an article on SA I (believe) mentioned that this preferred had some clause in it that if management screwed around with the divvys that the PS could vote in Directors (not all). In a sucky company better to hold current management’s feet to the fire? I didn’t look at the prospectus to verify this since it was more of a spicer and not the meat. I am sure someone better at legaleze can better verify this than me.
I am now looking to sell and have sold some of my shares (not all) when they ran up to $24.96. I am simply looking to sell and or collect divvys for the short term. I usually try to buy issues under par, collect the divvys, then sell them for over par if possible. Sometimes I’ll just keep the divvys and sell a penny over my cost.
Sorry, I meant to say…….
I did a combo div flip, hold partial for cap gain + div and continue to hold for more capital gains but now have substantially less shares. Whew
Here are the sell prices from Fidelity;
25.94
25.93
24.95
24.84
24.85
PS Maybe I shouldn’t post after a margarita on football night?
I have a habit of buying them shortly before they are called. Several analysts pointed out the risks so I want I higher yield in return.
Yup buy them cheap and let them be called. Don’t really care if I am at par or below. A4l just posted Priority E getting called. I don’t know how many of those Priority issues I had called or I sell ’em at a gain before going back to par (Thank you Tim and the III crew!).
I have learned A LOT from you Martin G. Thank you as well.
You have helped me develop a “love ’em leave mentality”. Right now I am moving away from the really hot issues to ones that just get ‘err dun. Too many people chasing yields and very crowded. I have lately been starting to trade the higher quality issues with the lower coupons. Much easier to collect somewhere in the 5% range and pick up 1%-2% in cap gains right now.
I really like the way you look at “pairs” or “relationships” in a single issuer. I haven’t quite grasped it yet, because that is not how I was trained to “invest”. I have applied it directly to trading CEFs though. It works really well with munis in particular. Lots of mis-pricing in that CEF market within the same issuer and with little default risk and enough volatility.
I usually don’t drink, but my neighbor gave me a pre-made margarita that is actually pretty good. It’s called Cayman Jack. Never heard of it.
I too prefer higher quality issues with the lower coupons, particularly new issues that trade below par before they move from the grey market to the big board. If they drop a bit, I don’t mind holding on and collecting the dividend while waiting for a recovery. OTOH, if they pop quickly, I’ll take a cap gain equal to or more than the dividend.
Single issuer pairs in was a great way to boost yield when we had an interest rate cycle. With rates so low and so many issues above par and callable, it’s a tough game now. Also, the population of investment grade issues has been shrinking as well. This strategy is much more viable during periods of market volatility.
I’ve never traded munis. Fund a niche not many people are doing. Most investors still say “You trade preferred stocks? That’s not what they’re for”.
Arbitrage between issues is the closest thing there is to a sure profit, if only a small one. Need to be paying attention to catch the occasional opportunities, only worth it for me because I’m watching many things at once.
Ok Randy, I found the clause. The Cayman Jack margarita gave me inspiration.
“If and whenever six quarterly dividends (whether or not consecutive) payable on our Series C Preferred Stock are in arrears, whether or not earned or declared, the number of members then constituting our Board of Directors will be increased by two and the holders of Series C Preferred Stock, voting together as a class with the holders of our Series A Preferred Stock, Series B Preferred Stock and any other series of Parity Stock upon which like voting rights have been conferred and are exercisable (any such other series, the “Voting Preferred Stock”), will have the right to elect two additional directors of the Company (the “Preferred Stock Directors”) at an annual meeting of stockholders or a properly called special meeting of the holders of our Series C Preferred Stock and such Voting Preferred Stock and at each subsequent annual meeting of stockholders until all such dividends and dividends for the then current quarterly period on our Series C Preferred Stock and such other Voting Preferred Stock have been paid or declared and set aside for payment.”
https://www.sec.gov/Archives/edgar/data/1467076/000119312515124420/d905807d424b5.htm#rom905807_7
The G shares were called in July–which I interpret as them managing their cost of funds. I bought the J shares at the initial offering and still hold them. They deferred the preferred dividends in May of this year, but paid the dividends one month later. Business model is not very good, but they are taking steps to change the model. The REIT is losing money and I am not sure I would buy them today at the current price.
Powwp seems to be coming down out of the stratosphere to a more reasonable price for the first time since offering. I don’t see any particular reason except they paid their first partial dividend. Any thoughts?
Irish:
Likely just the air being released from the balloon after the Rida “bump” to $30+ in late June (when it was way overvalued). Company is doing fine.
The prospectus for POWWP made it very difficult to determine when and how much the first dividend would be – and I think some investors may be disappointed at only a partial payment, considering that the security started trading on 5/21/21.
Looks like last quote on Terra Inc. -TFSA is for 9/3? Just slow or a change?
Went spelunking in Tim’s master spreadsheet. Lots of scary yield-to-worst securities abound. Rediscovered SBBA, 7% coupon, below par ($24.90), senior unsecured baby bond due 6/2025 from Scorpio Tankers. Goes ex-dividend next week. First call on 6/30/2022 but at $25.50. I realize that tankers, Mreits, and CLO baby bonds are riskier than many like, but few good nuggets out there right now.
Anyone here have experience with farmland investments like Farm together or Acre Trader? Comments?
I have no experience with the two you listed, but I did make an investment in Iroquois Valley Farmland REIT. This is a non-traded REIT that invests in farmland and ranches as well as some related businesses.
Thanks for the response. Iroquois concept looks interesting. Share price looks flat for past few years. I cannot find if they have made any cash distributions?
In the 2021 REIT Equity Share Guide PDF I did find a graph that showed the annual dividends: 2016 = $4.00, 2017 = $5.50, 2018 = $5.70, 2019 = $0.13, 2020 = $3.67. The dividends are not much considering the share price.
No experience. I don’t like investments whose value depends on the whims of government policy. I suppose everything does but some more than others.
RB, a few additional comments on farmland investments:
1) We do not currently have any, but have looked at many of the deals.
2) We do think having hard assets like land and buildings is a good long term inflation hedge, and we own(ed) raw land and private rental real estate.
3) The “cap rate” on all of the farm deals is generally very low, in the 2% to 4% range. They all depend on long term capital gains to achieve the numbers they quote. Maybe it occurs or maybe it is greater fool theory.
4) A good friend of mine owns several thousand acres in the midwest that are planted with row crops, so he understands the real world. He also shakes his head at the deals I have showed him and says he would not buy any of them.
5) One of the main issues for all properties is water rights. Would you buy any farm land in California now or in the future? My bias is no.
6) If you have not already done so, I would strongly suggest you listen to Meb Faber podcasts. He has interviewed the CEO’s of Acre Trader, Farmland Together and Ceres Partners.
Thanks Tex the 2nd. I have also been looking for farmland opportunities and not found anything I am willing to pull the trigger on. I suspect that, like good used cars, those get snapped up by folks nearby who get advance warning. I hope if you do come across anything worthwhile that you’ll share it here. I own LAND common but am not crazy about their tendency to issue secondaries. Also own LAND and FPI preferreds but of course those don’t have the same potential for capital appreciation.
Mike,
Not sure if you already saw it mentioned or not, but Gladstone Land still has a ‘private’ offering available here: https://www.myipo.com/offers/50f81083-6e89-4e31-a66f-757fadd0ee06
We wish they’d just offer it up on the regular market.
Tex, some good things here in Calif and some bad. The government realizes the value of water, but also realizes it s not the eternal fountain. Major ground water studies are being done to see which aquifers are connected and where they go. Farmers have had reduced water allotments by the federal government in the Great San Joaquin valley in turn they have drilled wells which in turn has caused the land to sink from collapsing aquifers which may never return. This has been going on for a hundred years. The central valley was never really large tracks of farmland until people built canals and started moving water around. In the early 1800’s more of California was like Texas mostly used for cattle ranching.
The drought is so bad the state told ranches that had deeded water rights for 150 yrs they could no longer pump water here north of San Francisco.
Facebook pitches me an “Invest in Farmland” deal every week! Lol. My tax clients that own farmland do pretty well, but it’s invariably family properties that are passed down to them vs. purchased as an investment. I think if you know the right people or are buying at scale you have a chance at doing alright. My odds of stumbling upon a good deal – not so great.
Right now the major investments are commercial greenhouses and not just for the pot growers. With disease and insects coming from foreign countries its getting harder to grow in the open. With controlled climate, water, and ability to control the pests and diseases you can get blemish free crops, two or 3 crops all year around
Wonder if there is a REIT investing in greenhouse ownership?
Charles,
We don’t know jack about these folks, but maybe this REIT is of interest?
https://www.growersreit.com/about/
Good responses. Thanks Tex, Mike, Tim, KAK and Charles.
I have an aversion to investing in California as well. I’m not on Facebook…it is astounding to me the number of firms that advertise there exclusively.
On SA, there was a recent article on PSEC.PA, which is down sharply from its IPO with a 5.35% coupon. Anyone have an opinion (good or bad) on this new preferred stock? Thanks.
wait until its 8%.
I bought some at $23.70 and would buy a little bit more if it went lower. I have owned their bonds in the past and they have all paid on time. I am looking to trade this issue as the low coupon/perp/sub IG rating should make it volatile to changes in rates.
Here is an article I found regarding the common shares I found interesting.
https://www.incomeinvestors.com/prospect-capital-corporation-monthly-dividend-stock-2/62147/
I bought some at $23.70 and would buy a little bit more if it went lower. I have owned their bonds in the past and they have all paid on time. I am looking to trade this issue as the low coupon/perp/sub IG rating should make it volatile to changes in rates.
Here is an article I found regarding the common shares I found interesting.
https://www.incomeinvestors.com/prospect-capital-corporation-monthly-dividend-stock-2/62147/
PSEC-A doesn’t excite me. Rated Ba2 (non-IG) and 5.35%? Doesn’t add up. If I were to roll $$$ into PSEC I’d rather dump my money into the common which is yielding over 9%, has consistently paid the monthly div on it’s common. They have a tender offer to convert up $60M of 4.95% Senior Notes, offer expires Sept 24, so could see further downward movement in stock.
Mixed Signals
Where are US equities headed? Today Bloomberg has this: “Strategists at Goldman Sachs Group Inc., Morgan Stanley and Citigroup Inc. issued fresh missives on the potential for negative shocks to upend a streak of gains. The spreading delta virus strain, a flagging global growth recovery or moves by central banks to exit pandemic-era stimulus programs all pose risks.” And IBD reports that “The IBD/TIPP Economic Optimism Index, an early monthly read on consumer confidence, fell into pessimistic territory for the first time since December, sliding 5.1 points to a 12-month-low 48.5”.
On the other hand, the major indexes (SPY, DIA, QQQ) all continue to remain comfortably above their respective 50-day moving averages and the never-ending supply of new money continues to gusher. Consider this: “While there was no way today’s 10Y auction could surpass last month’s stunning, blowout, record 10Y auction, today’s sale of $38BN in ten-year paper (down from $41BN last month) was not that much worse. The auction priced at a remarkable 1.338%…”.
Another point: a quick glance at Tim’s New Issues tab shows that since 07/01/2021 there have been 30 new Preferred/Baby Bonds come to market with coupons as low as 3.95 (PSA-Q) and as high as 10.5 (AUVIP) and, if my count is correct, only 6 of these new issues are trading below par. So I see no sign of heavy selling in this area either.
So what to do? I don’t know about you, but the weight of the evidence makes me stay in the trading room. For now. But I’m keeping the exit door open and tied down so a gust of wind won’t blow it shut. I invite your comments.
WS has been caught ‘out’ of market all year. They were collectively warning about flat year end targets……after 10% pull backs. Now the markets up 21% they still warn 10% pull back in cards. So if you got out/didn’t get in you missed a huge move. Some 30% since Nov election. Inflation is clearly also occurring in (stock) assets too!
More important than WS predictions is what is Blackrock doing. At 9 trillion they move the market. I’d say market action indicates clearly that they are still buying. But as all know a correction of 10 leading to a bear market can happen at anytime without any real ’cause’
I have learned much from this site. The following questions are general and a bit off topic, but are the things that I need your help with. For those that are now retired, I have two questions.
1. How did you know it was time/ok to retire? I’m thinking less about the $’s, but more about identity, career, travel, health, parents/kids, etc. I can do the math on the $’s, but less sure about the qualitatives.
2. Now that you’ve been retired, what’s the one thing you’ve learned (positive/negative) that has surprised you about being retired? (e.g. need more friends, spent less than I thought, miss career, should have done it sooner, etc.).
Thanks to you all.
mr in prophet
I would suggest you visit https://www.early-retirement.org/
All your questions have been discussed on the early retirement forum some time in the last.
MrInProphet – i retired 3 years ago at age 57. To answer your questions:
1. First when work became more frustrating than fun. I did not like the direction some things were moving in (my last 15 years I was CFO of a well respected independent school and the Head, who had always been liberal, was now taking the school in a very liberal direction which I disagreed with and which had negative financial impacts that I argued for several years and just got tired of dealing with it). So did the calculation, said I have enough money to do this and decided I would retire
2. Even though I am retired, I keep busy so it is not all sipping Margaritas by the pool. Different projects around the house, vacations to plan and go on, etc. Obviously covid through a monkey wrench into things but you will find things to keep you busy.. Only thing I miss is a few friends from work, but one retired a year after me and moved to NC. The other planned to retire but is still working because he is getting divorced. So we text on occasion but it is not the same as daily interactions. But definitely no regrets – glad I retired when I did. I recommend it !
Thanks Maverick
Mr. Inprophet, are you an extrovert or introvert? Like to stay busy? Identity and self worth tied to job? Have any hobbies? All of these will tie into your retirement satisfaction. You may need to evaluate if you are retiring away from something, or towards something. Ive been at this retirement gig for over a decade. I have mastered the art of pissing away a day.
Got lady with me at home, select group of core friends (they still work), and a group of activity friends that are a bit older, but got the time and cash to do things with. I like down time too. After I go workout, its downtime the rest of the day!
Today was an easy day, drove across the river to lay my NHL season point total bets, and hit a driving range on way home to sharpen up for tomorrows match.
Always doing some short or longer trips like Maverick. Fla in a couple weeks, and NFL bet/beer fest weekend at an Indiana sportsbook with some friends early next month. Vegas if out this year as I aint going through the misery of another mask fest trip on a plane right after Fla.
You are welcome. I should add I always had a goal to retire early, sometime in my 50’s. So I planned for that
And I don’t recall where I read it – may have even been some message board – but this quote always stuck with m “if you don’t spend your money, someone else will”. I have always been a saver – and that was perhaps the hardest mindshift for me, going from the accumulation of funds to now spending them. But it also helped, even though with my background I could run all my own numbers and scenarios using my own tools and those Fideiity provides – to run it by someone else (thanks to the 403b plan we had at the school via TIAA CREF every employee had access to free consultations with a financial advisor) and they had their own group run Monte Carlo simulations which assured me not only would I be fine, but I could leave a nice stash for my daughter
I started a few years before I retired spending a few days in Florida after a family vacation for Spring Training. But once I retired, have loved being able to go down for 3-4 weeks in the spring. Again, Covid through a monkey wrench into it a bit but having the freedom to do this is great
Good luck with your decision making
1. Was not married and loved what I did obsessively. In 1999 after the death of my father made the discovery I could easily retire. Found Henderson Point, MS which provided low cost living with multiple golf courses relatively close with a modest retirement community. Mostly from Wi, Illinois, Indiana, and Michigan.
Discoveries:
-Career defines your identity as its the first question people will ask you even though it does not matter.
-From West Coast originally. Normal area for retirement is Palm Springs or Nevada. Different retirement areas exist with different sub-cultures of America. Be aware if you like social activities, politics, religion, oddities exist.
-Traveled extensively before retirement. Kept my primary residence and just lease up a location for 3-5 mths fully furnished. If you don’t like something push on.
-Decided I needed something more got married and had 3 kids. Oldest just graduated from college this year. Went back to work every other week for the kids and to get out of mamas hair.
-Remember to respect your spouses space. They will not be used to you being around all the time. Trust they will want to kill you after a week.
-See above – Start early to develop interests/hobbies outside of work before retirement even if its praying on Mon/Wed/Sun.
2. Figure out what makes you feel good even if its pulling weeds. Even better if mama/kids find the activity fun at the same time. Haven’t figured out how to make others enjoy golf (yet).
Covid has been a crusher for traveling. Cruises being a sore spot. Has started me thinking about leasing overseas properties in countries for 3-4mths (Philippines, Indonesia, Vietnam, or Malaysia) as coastal condos are extremely reasonable. Also puts me in a better position for mama to visit her family as well.
Hopefully not to much.
This is a great discussion. micahc — one of my best friends just bought some land in Pass Christian and is building a house there to retire on, he’s been trying to talk me into buying. However I worry about 1) the inevitability of another big hurricane hitting, 2) the whole area still looks a little bombed out from Katrina, lots of empty lots still with just foundations, etc.
How do you like it there? Are you there pretty much full time? How was the recent hurricane IDA? I’m very curious to get some real life feedback on what its like to be there from somebody who is actually living it there. Appreciate any comments you can make on your experience there. Thanks!
For me Pass Christian is a little slice of heaven but I would not personally own real estate below I-10 in this area. Coastal Highway 90 never gets old driving back and forth on.
Neighboring communities Waveland has Beach Blvd / Blaize Ave with restaurants and bars. Long beach public library is great to read the daily newspaper and get a hair cut across the street. You will need to talk with the locals as there are many excellent off the beaten path restaurants that do not advertise. Mardis Gras is something to behold as you have to watch the throws as potatoes and cabbages come your way. Getting invited to a craw daddy cook out is another part of the culture I enjoyed.
Prevalent within this area are casinos. You can join up with senior groups to get complimentary or discounted meals/shows. Golf has its clique especially at the more formal clubs but lots of informal places once you get to like a course would suggest getting a monthly subscription.
Prior to Katrina the entire golf coast was amazing and since then areas have been slow to recover. Long beach received a lot of Katrina funds and BP payout funds and took the opportunity to revitalize a large portion of main street. Its was disheartening to see the slabs and broken 100yr old trees.
I’m not an owner but would lease from https://www.innbytheseacondos.com/ which is on Henderson Point. Got to know the owner who lived in Louisiana and would suggest making your deal directly instead of through condo management.
Would come down in October and by Mid-March it was way too hot. Could not imaging living year round.
After Katrina it took 3 years for the insurance claims to go through to rebuild in Mississippi so I changed locations finding Port Isabel just outside of Brownville,TX.
Thanks for the color! Very good insight my friend! My buddy got a great deal on beachfront property in Pass Christian, he’s gonna build a house there. He’s been trying to get me to buy next door, but I just cannot get over the 100% probability that this area gets hit with another bad hurricane sometime in the next 10-15-20 years. Pass Christian was like 90% destroyed by Katrina and as you say the recovery has been slow. Leasing for decent stretches may be the way to go.
I’m in Texas and am familiar with South Padre and actually own a piece of a partnership that owns beachfront property in Port Aransas a little to the north. Not familiar with Port Isabel but I am guessing its similar. Sleepy underdeveloped beachy resort area, not too fancy, but laid back and fun. I’m amazed at the slowness of development along the south Texas gulf coast down there. But now with Austin becoming such a boomtown and magnate for former Californians, maybe the TX gulf will undergo development. Only thing missing is the blue waters that Florida gulf beaches have….oh and the dunes are a little different also.
1. Work as long as you enjoy it and the people you interact with, or as long as you have to. I enjoyed working and the structure it provided. I’ve found as I’ve gotten older this no longer needs to be full time to give me what I”m looking for. I was paid to retire and given changes at my company, it was the right thing at the time even if it wasn’t completely optional.
2. You might need to replace the structures work provided with something else. I still enjoy getting up and leaving the house for the morning, to the health club, or to coffee with a friend, or to work (during tax season). Staying at home with my lovely wife all day every day, pre-Covid included, was a bit much.
3. It has been more difficult to maintain relationships with work friends, who constituted most of my relationships, than I expected. I miss being around people – but the office life I knew is pretty much toast anyway. Don’t expect to get a lot of phone calls after the first 3-6 months.
4. I was involved with non-profit boards and volunteering before retiring and have stayed active since then. It’s a great way to be around like-minded people and contribute.
5. I have great kids and grandkids, but they are busy people and even going to every game, concert and science fair, it doesn’t fill that much time.
6. Travel has been great fun, active travel especially, and I recommend it highly.
7. I took back most of our money from our investment advisor and have been managing it myself with similar results, ex the management fees. Left my wife’s IRA with them so that if I get hit by a bus they can just start managing it again. I have greatly enjoyed this activity and have been pleased with the results.
Just a few thoughts.
I just plain quit my job 9 years ago because I hated it. Got more active with these stock trades and never had to get another job. I don’t know whether to say I’m retired, or say this is my job.
One surprising thing is don’t expect to have an extra 40 hours a week, the time gets sucked into a vacuum. You’ll find little things to do, and also you’ll do everything slower.
I like the comment from Martin G. I too just plain quit my job. I always planned to retire at 50 and did. Not having children makes that easier. I would want to set a positive example for any children, but that does not apply to me.
If you are wondering if you might like or dislike retirement, I suggest a week or two “staycation.” Are you bored or happy? That will help answer your question.
I love travel and have visited most states and I’m guessing 70 or so foreign countries. Travel is so much more enjoyable when not worrying about your job.
But I like home life as well. as others have stated…life slows down. For me that’s a good thing.
One last thought regarding your “miss career” question. That really depends on you. I had clients who could not stand retirement and went back to work. They needed to be needed. On the other hand, I had a a co-worker who said before his retirement: “I’m worried about losing my identity…for most of my life I’ve been a financial consultant at Merrill Lynch. It’s who I am.” I had lunch with him a month later. He looked so tanned and relaxed. I asked him about losing his identity. He took only a millisecond to reply: “F*** That!”
Mr. Inprophet
For me, retiring was more of a mental issue. All I did was work and worry about work. In 2008 at age 54 I had the opportunity to sell my company so I took it. No more 6 day, 60 hour weeks worrying about everything. My blood pressure dropped and no more alarm clock at 0-dark-thiry every morning. Then, the roles reversed. I did the shopping and babysat the granddaughter. Wow, what a change. Took me a year to work through my honey-do list on two properties and then took up two hobbies, shooting sports and golf. Took me three years to achieve status as a handgun marksman but on the golf course….not so much. Ha. Simply put, do what brings you joy.
Best of luck.
I’m much older than most of your guys. I was making a lot of money selling real estate in the San Francisco Bay Area. My single brother-in-law came for Christmas one year and, driving home from the airport, told me he had been in bed for two days and barely made it for Christmas. I took him to the Stanford Hospital ER and told him to call me when he was finished. Three hours later I picked him up and he immediately said he had stage 4 cancer, which is terminal. He lived with us and died six months later.
Right after he died, my wife woke me up and said she was in severe abdominal pain. I took her to the hospital and she had emergency surgery because of a a blockage in a major organ. A week later she came home and thankfully recovered quickly.
It got me to thinking about my life. I wasn’t rich, but had plenty of money so continuing to work was not required. One never knows when health becomes an issue. It just happens out of the blue. That was eight years ago and I’m very glad I retired. My work associates could not understand why I was retiring when the real estate market was so good. I’m so glad I did retire.
I’m sort of a loner so I truly enjoy just spending time by myself and with my wife. We get together for breakfast and then for cocktails and dinner. The rest of the time she does her thing and I do mine. I go to the gym 4x a week, putter around in my yard and do a little fishing/crabbing.
I own two homes—one in the Bay Area and one on an island northwest of Seattle. All my kids live in the Bay Area so we see them when we’re in California. They usually visit us on the island during the summer. I suspect part of the reason is to make sure we are consistently fogging the mirror, bathe at least twice a week and actually have food in the refrigerator.
It took me about a year to get use to retirement. I’m sooooo glad I did. It’s just the next stage of ones life experience before passing through the door.
Thanks for sharing randy. I relate to your story–lost a brother 2 months ago to long term alzheimers and lost mom in February. Got us thinking more as well–more seriously about the future.
Sorry to hear about your brother. I feel for you. My wife(56 years old) is suffering from head injury from 20 years ago. She had so many different brain tests the last 5 years I lost track, bottom line they think it was the head injury, neurologist still isn’t ruling out alzheimers. I own a replacement window business which helps pay for health insurance that we no longer get from my wife’s company because she had to quit. We are not rich, but have money to live comfortably. Thanks to III, if I have to retire I sure have more income coming in, which definitely helps to makes me feel more comfortable as I’m not sure what type of expenses I may be dealing with as my wife’s condition worsens. I sure am grateful to have been following since the dividend yield hunter days.
qxjm76940–thanks for the thoughts–glad to have you here of course (forever I guess). Seems like we all have some sort of cross to bare.
Thanks to everyone that provided feedback. I’m in the investment field and had always said i’d retire when i hit my number. Well, at 48, I hit it… but i still have an 8th and 11th grader at home, and really there’s no point because I can’t travel. I found myself so focused on *the number* that I’m not quite sure what to do now. The number was the easy part in some ways… I could plan/invest/forecast etc all those things. I’m probably resigned to work 5 more years until the youngest goes off to college. The feedback helps me shape my expectations and how I can use these 5 years to be better prepared. Thanks again.
I’m in the same boat as you. I’m 52, but have 3 kids and one step-daughter. Two oldest in college, and youngest are junior and senior in high school. Also in investment field. Its good to have a job with income to pay for college and for health insurance. Have thought about retiring when my youngest is out of high school in roughly 2 years. The problem I have is: When I’m not working, like when I’m on vacation or even on the weekends….with my free time I tend to….look for interesting investment ideas. So, if I’m going to keep doing doing investment stuff for my personal portfolio and also because its just fun to find ideas that give good risk-adjusted returns, why would I quit working and getting paid? Might as well keep getting paid by employer that covers health insurance and pays well to keep doing what I would probably spend most of my time doing anyway. Also….going to the office is great to get away from just sitting at home. (and getting irritated at wife). What would I do if I fully stopped working?
Then you are not really working, are you? What a lucky man, getting paid well to do what you would do for free. Not many of us can say that about our careers, I bet.
In my case, I felt I was born to be retired and did so as soon as I could. I’ve never looked back and don’t miss work at all, even though I did a lot of different things and enjoyed much of it.
I was lucky enough to retire early and have been been at it for decades, with great satisfaction.
“It’s been quite a party, ain’t it.” –Augustus McCrae
JD, That is certainly a personal decision. My Dad retired and then went on to work for free at my brothers barbershop. He had his barbers license so he cut hair and just give my brother all the money. The Protestant work ethic was deeply ingrained in him. He wasnt happy unless he was working. I am more like Camroc, in terms of retiring. Health insurance is a drain though. I was cruising there in retirement with a nice underwritten private plan. After HSA deduction I literally was getting paid to have insurance because it was so cheap. Then Obamacare came and ended that party. Insurance is bigger than my house payment or my car payment now. But its about to become dirt cheap again being I will be eligible to get on my GF’s plan. I will ride that until Medicare 7-8 years from now.
I’ll take a crack at answering your question, JD, “if I’m going to keep doing investment stuff for my personal portfolio and also because its just fun to find ideas that give good risk-adjusted returns, why would I quit working and getting paid?” For me it was because of the freedom you are given by doing so as opposed to the overburdening obligation to have to do so for somebody else every day from 9 to 5 and well beyond. I too was in this same boat of having a career in the financial world, having been an institutional muni bond trader specializing in finding story bonds for my salesforce to sell. By now, though, I’ve been retired for 1/3 of my life and married to the same woman for 3/4 of my life and though I loved my job while employed (until I was moved to sales which I hated), once I figured out I had nearly achieved a financial position to do essentially the same thing for myself on my own timetable from my own house wherever that house ended up being, I decided to take the plunge. My wife and I, and our kids every other year, traveled extensively mainly through the Caribbean over the years and we had already chosen which island we hoped to retire to 10 years prior. Our timetable ended up being moved up a tad when our house on LI burned to the ground a year before our target date and we had to decide whether to re-up on the big mortgage or just chuck it in and take our chances on having planned in enough contingencies to be able to make it through retirement. So at 49, with our 3 kids already out of the house, we took the plunge and moved to the Caribbean… Typical of our luck we chose Montserrat, an island with a dormant volcano that just happened to decide it wasn’t going to be dormant any longer the year we arrived in 1995. Thus, we began our retirement with a bit of a hiccup but still thoroughly enjoyed island living. But after 12 years of living with ash, our plans changed as the volcano destroyed 2/3 of our island and made our back yard the border of the evacuation zone. We ended up moving to Tennessee in ’07, a state we had never visited before and we’ve been here ever since.. TN’s never felt like home the way Montserrat did, but still it’s a great place to have to be hanging out.
People often asked us, “What do you do on a tiny 39 sq mile island with a population of 4500 (post volcano – 12k prior)?” We discovered the people doing the asking hadn’t mastered the skills needed to do nothing and still experience a productive and wonderful day, day after day after day. We didn’t have any trouble adjusting to retirement and as much as I loved my work days as a trader, I enjoy even more being released from the obligation of having to do it while still being able to use my learned skills doing for myself no longer saddled with having to do it every day whether I wanted to or not. No more ‘hi ho, hi ho, it’s off to work we go.” was a wondrous feeling to embrace for us.. But as has been said by many III’ers chiming in, it’s different for everyone.
so true Randy & Tim, have to keep life in perspective.
Lost my mother in law and a precious granddaughter (13 days old) last September and now this week my older brother (only 71) is in pallative care and likely won’t last much longer. Retired early (2016) from a bank financial planning role & could never understand clients who could easily retire and enjoy a full new retired life but chose to keep working. Investing is my hobby to keep my brain active but many other things to do as well.
Canuck–sorry for your losses–my brother was a day short of 69–just 15 months older than me.
Thanks for the great stories guys, good to share. I retired two years ago and am enjoying it. I was a manager for Social Security and enjoyed my job for the most part. I did some limited state wide travel, some public speaking, and had a good chunk of responsibility. As those duties got consolidated to our state office, I chose not to relocate but to retire. I lost a brother two years ago to pancreatic cancer and then had a minor stroke, despite running and swimming several times a week and eating a pretty good diet. So when I started hating my job and realized I could retire, I did. Now I manage most of my retirement funds, volunteer 3 days a week at a local pantry/clothing facility for the homeless, and try to keep up with the exercise. I am glad I retired when I did, fortunate enough to spend a month in Naples, FL each winter, and enjoying my days. Good luck to all!
Mrinprophet, the comments so far seem skewed to the pro retirement side, so I will offer up the opposite view just for consideration. In finance, we have two strong examples of “Never retire, work forever” in Warren and Charlie. Warren is 91 and still goes to work every day. Same job he has had for decades. Obviously he does not need any additional income, so why does he keep working? Must be that he has made the decision he enjoys his current lifestyle more than any other one he could choose.
I know several folks whose net worth is a little shy of Warren’s but have made the same decision. Many years ago I pointedly asked a friend of mine why he still worked. In today’s dollars he was worth >>$100 million at the time and had a modest cost of living. His answer was simple: “I enjoy what I do, I enjoy the people I work with and I cannot think of anything else I would rather do each day.”
Bottom line is that one size does not fit all. There is a wide spectrum of retirement decisions people choose, and it often is not about finances.
Decades ago, there was a study of IBM executives that retired. The results were the life expectancy was lower than folks that did NOT retire.
Good luck in your decision.
Thank you everyone for sharing. Definitely not in same circumstances as most of you, but enjoy what you have shared. I enjoy my sales job and talking and helping customers. Its phone sales and I cover most of the Western US Can’t wait to travel again, I have invites to dinner with my customers from Hawaii to Washington to Montana and Utah. Will miss that part of the job. I belong to groups outside of work and wish I could do more so look forward to retiring. I married a older gal and we have been together for 31 yrs and in 3 days she is retiring from Costco after 31yrs. She could of retired 3yrs ago but like a few people here she kept going mainly for the insurance. My worry is exactly what have been stated here, I hope her health lasts long enough to enjoy it.
I asked her if I could retire 2yrs early and she said nope I have to stick it out like she did. Besides I am going to be a proud owner of a new truck and I need to pay it off first !
I retired at age 62, when my employment stress out weighed the enjoyment from working. And, my financial situation was such that I did not need the income from employment.
Biggest concern is that you need to have a plan on how you are going to spend all of your new found free time. Hobbies, travel, etc. can be expensive. Make sure that you have a plan that keeps you occupied and fits within your budget.
I AM NEW TO THIS IS THIS THE RIGHT LINK TO ASK ABOUT -MEDLEY LLC TO VOTE ON CLASS 3 AND CLASS 4 FOR CLAIM HOLDERS ON CHAPTER 11 BANKRUPTCY WHAT DO ALL YOU THINK WILL HAPPEN THANKS JOHN S
Probably eventually get 2 or 3% of $25 bond so sadly 75 cents for bond.
RiLY up over 5% today- not seeing news. Although, they have been beaten down recently. Not seeing news.
CBB-B
Looks like redemption will be on 9/22 with a pay date of 10/1. Anyone understand how they can do this when they promised a 75 day redemption notice?
“Redemption of 6 3/4% Preferred Shares
On September 7, 2021, Cincinnati Bell will mail notices of redemption to holders of Depositary Shares specifying the terms, conditions and procedures for the redemption.
The Depositary Shares will be redeemed simultaneously with the redemption of the 6 3/4% Preferred Shares on September 22, 2021, at a redemption price of $50 per Depositary Share (equivalent to $1,000 per 6 3/4% Preferred Share).
As a result of the redemption, holders of Depositary Shares as of September 15, 2021 will receive a prorated quarterly cash dividend on the Depositary Shares for the third quarter of 2021 on October 1, 2021.”
From a prior filing
“What will happen to the 6 3/4% preferred shares and the depositary shares representing interests in such 6 3/4% preferred shares in the
merger?
A: If the merger is completed, each 6 3/4% preferred share and depositary share representing one-twentieth of a 6 3/4% preferred share issued and
outstanding immediately prior to the effective time of the merger will remain issued and outstanding immediately following the effective time of the
merger.
After the effective time of the merger, the Company will be required either to (i) offer to repurchase the 6 3/4% preferred shares on the date that is 75
days after the Company gives notice of the merger for their liquidation preference of $1,000 per share (or $50 per depositary share) plus any accrued
and unpaid dividends or, if such offer is not made, (ii) modify the conversion ratio applicable to the 6 3/4% preferred shares so that upon conversion
the holders of the 6 3/4% preferred shares will have the right to receive an amount in cash equal to the liquidation preference of $1,000 per share (or
$50 per depositary share) plus any accrued and unpaid dividends.”
PIMCO on sale: pty, pfn, pfl etc…
Because they cut the dividends?
Yes but the divs are fairly good.
Libero:
Below is a great read on Seeking Alpha (published last Friday) from one of the BEST authors on that site.
When you own a closed end fund trading at a 40% premium to NAV, you are looking for trouble. Sadly, PTY has been a big-time recommendation from a certain Seeking Alpha crew that shall not be named.
“PTY, PFL And PFN: It Is Only A Flesh Wound, So Far”
https://seekingalpha.com/article/4453385-pty-pfl-pfn-funds-distribution-cuts-avoid
Speaking of SA, I signed up for a SA newsletter and it turned out to be a scam.
Is there a good reputable ‘income’ SA newsletter that anyone can recommend?
Thanks.
I have a jaundiced view of Seeking Alpha. There’s a lot of useful general information but you have to take much of the author opinions with a grain of salt. Many of them have no clue.
Seeking Alpha’s agenda is to get you to subscribe to their newsletters ($$$). What’s concerning is that they defend their authors even when they offer misinformation and they are abjectly wrong to the point of censuring readers who correct author misstatements. Read the articles and then do your due diligence.
Amen to that, Theo, about SA defending their authors even when they offer misinformation and are abjectly wrong…. not to start the ranting all over again, but I am totally gobsmacked by the degree of censuring I have experienced just this week in trying to correct an author’s misstatements on what will happen to HFRO-A should their attempt to convert from a CEF to a diversified holding company go through.. It’s unbelievable – far worse than I’ve ever experienced in the past. Not even the simplest, impersonal statement of fact, is being accepted….
On the income side, I have found these SA services to be quite good for what they cover and no integrity issues / funny business on comments, etc.
Panick High Yield – lower liquidity, high yields, good timely coverage of news or trouble looming. Good chat and timely trade recommendations.
https://seekingalpha.com/author/richard-lejeune#regular_articles
BDC Reporter – this guy reads all the BDC filings and press releases so you can feel better about owning them and not doing it yourself. Good highlights and appropriately cautious of management claims. Not really investment picks but information (you can see what he holds but he doesn’t post trades).
https://seekingalpha.com/author/nicholas-marshi#regular_articles
Systematic Income – higher yield asset classes like CEFs, preferreds, bonds, ETFs. Good analysis of relative values, not as frequent trading.
https://seekingalpha.com/author/ads-analytics#regular_articles
I subscribe to a few other more stock oriented ones, but these are the income side.
xerty – it’s kind of hard to get a good feel of the extent of Nicholas Marsi’s BDEReporter work from SA because he hardly ever posts, but he’s the only subscription I pay for… His work is very detailed yet his approach to reporting is pretty down to earth and you sure can get more inside a particular BDC thry his work than you ever could on your own… If you want to feel comfortable with BDCs, BDCReporter is the way to go….. and don’t anyone confuse him with BDCBuzz….. far different approach. And as you mentioned, it’s comforting to be able to know what he owns, and if he’s only willing to own the baby bonds but not the common.
2WR, I like reading Stanford Chemist on closed end funds. He is not a licensed financial adviser, but he does seem to do a good job. Not saying I would subscribe.
Lejeune had kinda fallen off my radar, and I used to read him. So thank you xerty for bringing him to my attention. So I may subscribe and see what he offers. Thanks to all for the feedback.
R Schmidt, he kinda worries me a bit in terms of understanding things or not explaining clearly. Take this from his Amtrust baby bond reco. First sentence…
AmTrust recently went private.
AmTrust is rated A- by A.M. Best.
The balance sheet remains strong.
….AmTrust has NEVER had a A- rating. Here he was conflating the claims paying ability of the actual subsidiary companies. The holding company AmTrust from where the actual debt issues reside has never sniffed anywhere close to that.
At that time in 2019 here is how A.M. Best rated them…
— “bb+” on $150 million 7.25% subordinated notes, due 2055
— “bb+” on $125 million 7.5% subordinated notes, due 2055
— “bb” on $120 million 6.75% preferred stock
— “bb” on $250 million 6.95% non-cumulative preferred stock
— “bb” on $100 million 7.25% preferred stock
That represents a “fair ability” to pay.
https://www.ambest.com/ratings/debtguide.pdf
However, then at the very end of article he does finally vaguely state the corporate debt is “slightly” lower than the A- rating… Most had no idea what that even means.
…In my book “excellent” down to “fair” is not “slightly” lower.
That doesnt mean they are not bad investments, as I personally trade them, and own a small amount presently. But I am not confused thinking I am buying some “A-“ rated credit when its clearly not.
Plus I had to correct him once when he thought trust preferreds could not ever be “QDI”, when clearly they can as I cited him EIX preferreds as a classic example of a QDI “trust preferred”.
So I will read him, but have to dig deeper, as he sometimes doesnt portray risk in its proper context. But, in fairness, he focuses on high yield credit, so he may tend to view them a bit more cavalier than I do when buying in this sector.
I read Colorado Wealth Fund Management, very knowledgable about REITs, preferreds and shorter term trades. Used to read Arbitrage Trader but he hasn’t been very active lately.
Never subscribed to their pay sites.
I also read CWFM from time to time. I’ve been tempted to pay for their service but never pulled the trigger.
Martin I agree about Both of your suggestions, I liked it when Arbitrage trader did his monthly updates on Fixed income, Bonds and fixed to floating.
If you noticed, he updated his bio and you can understand maybe a reluctance to post new articles. He has gathered a group of people to research and do trade recommendations among themselves, doesn’t seem smart to share with the public.
Too bad Jeff Miller passed on I enjoyed reading his week in review every weekend to get a overall view of the market and economy. Now that I think about it he reminded me of Louis Rukeyser on PBS years ago
distributions cut
more to come
high expense ratios
stay away, IMO
Pimco always had high expenses. Get a reputation as the Bond King. Fire your bond guru because he was going nuts. Drive out his replacement because the board is business people not bond experts. Now just a mediocre bond company making money on past reputation alone.
News of PIMCO’s aggressive acquisition seems unpopular:
https://ir.columbia.reit/overview-news-and-events/newsroom/newsroom-details/2021/Columbia-Property-Trust-to-Be-Acquired-by-Funds-Managed-by-Pacific-Investment-Management-Company-LLC-in-a-3.9-Billion-Transaction/default.aspx
PSA-Q now at 25.30 and PSA-P at 25.45 with a 9/14 ex-div date. We’re on the path of Q exceeding P in price!
Landlord:
And with no 3.95% PSA+Q dividend until December, while 4% PSA+P pays an “extra days” dividend of $.2917 (instead of the usual $.25) at the end of this month.
PSA+P continues to remain under-priced compared to the more recent PSA preferred offerings. Go figure.
Agreed PSA-P price is still low. Wow, long wait. It should be a hair above $26, yet it flounders around $25.50. Either it will go up (eventually), or the others will come down…
Seems logical. For example, both PSA-O and PSA-N both have lower coupons and less call protection, and yet trade at higher prices. Doesn’t make a lot of sense to me. Just need to be patient.
Maybe someone can help me?
I have a preferred (DDT) with a 7.5% coupon. It is a Trust Preferred , with a call date of 2003. I am thinking of selling this due to the possibility? the co. will soon call this PR, since they are making tons of $$ during the Covid Pandemic.
If I were the CEO, I would call this immediately, but what do I know?
Does anyone see any reason(that I don’t) why they may NOT call this PR?, other than it has been callable for 18 yr and they have not touched it. I thank you in advance.
Sam – DDT looks like one of those that probably needs some thinking to figure out exactly the probability of call possibilities, however, the stated call date of 2003 is not a plain old flat out I can call if I want to call date for Dillard… It looks as though it’s only callable after 2003 in the event of a “Tax Event” as defined….. The definition is in legalese, but bottom line is that callability is limited…. But keep in mind there are other complicated wrinkles of the capital trust structure that theoretically can provide a way to call I think, but certainly there’s some solace in knowing that nobody’s been able to figure out a way to do that yet for this one….
Here’s the definition of a “Tax Event:”
The term “Tax Event” means the receipt by the Issuer Trust of an opinion of
tax counsel to the Company experienced in such matters, who shall not be an
officer or employee of the Company or any of its affiliates, to the effect
that, as a result of any amendment to, or change (including any announced
prospective change) in, the laws (or any regulations thereunder) of the United
States or any political subdivision or taxing authority thereof or therein, or
as a result of any official or administrative pronouncement or action or
judicial decision interpreting or applying such laws or regulations, which
amendment or change is effective or which pronouncement, action or decision is
announced on or after the date of issuance of the Capital Securities, there is
more than an insubstantial risk that (i) the Issuer Trust is, or will be
within 90 days of the delivery of such opinion, subject to United States
federal income tax with respect to income received or accrued on the
Subordinated Debentures, (ii) interest payable by the Company on the
Subordinated Debentures is not, or within 90 days of the delivery of such
opinion will not be, deductible by the Company, in whole or in part, for
United States federal income tax purposes or (iii) the Issuer Trust is, or
will be within 90 days of the delivery of the opinion, subject to more than a
de minimis amount of other taxes, duties or other governmental charges.
Thank you. I appreciate it. I did try reading the prospectus, until I was dizzy, trying to figure out what you state, without success. But, on the other hard, I thought that if they haven’t called it by now, they may never? But, that’s not a good reason to invest in it.
I also note that in column (c) in the Master List here, it is listed as a TP, and it is shaded in a “Pink Color” and I have no idea what that means. I have noticed some others(but not all TPs) are shaded in pink. Do you know what the “pink shading” means?
“Does anyone see any reason(that I don’t) why they may NOT call this PR?”
I once heard from someone that DDT was issued to Dillard employees when they transitioned from a defined-benefit to defined-contribution retirement plan. Basically, employees could buy DDT with their contributions and sort of get a defined-benefit in the form of interest payments for a very long time. If true, then this may explain why they have never called it.
DDT was definitely offered to retail investors as a new offering. maybe it was offered to employees as well, but I remember the offering when i was in the business.
Amazingly, I was able to find the comment that my vague recollection was based on.
“Here’s the history of DDT provided by a former employee:
“originally an employee capital preservation trust for dillards employees – was spun off into preferred stock status in 2005….”
This language from the prospectus is another clue about the original intention of the security:
” If the purchaser is using for its purchase of the Capital Securities the
assets of an Employee Benefit Plan subject to Title I of the Employee
Retirement Income Security Act of 1974, as amended (“ERISA”) or of a plan or
individual retirement account subject to section 4975 of the Internal Revenue
Code of 1986, as amended (the “Code”), the purchase shall constitute a
representation by such person that its purchase and holding of the Capital
Securities will not result in a non-exempt prohibited transaction under ERISA
or the Code. See “Certain ERISA Considerations” in this Prospectus Supplement.”
What has happened to xomao that it’s gone from 25 to 27 in the last 2 weeks? Last I see they still operate at a loss.
Hmm…at 27 this trades at a negative YTC by my reckoning….
RB – I don’t think you’re taking the premium call price into account… ’22 call is at 26. and declining annually…. all positive ytc’s I think
Let’s see…$1.57 in potential dividends…yep 2WR…you are correct.
But I’m not finding this attractive.
And- what’s with the common XOMA? – dropped $3.05 today, still down 2.42
Not finding any news.
I think anything can largely happen with XOMA. It is still 65% above the low, and its volatility is also high in the 60% range. I think if it drops -$5 -$6 I would figure out why.
Guess we found out today. Somebody might have gotten a heads-up.
With RPT-D breaking 60 today, I reviewed the conversion terms to refresh my memory. Still safe for now.
The preferred shares are convertible any time at the holder’s option into 3.4699 common shares of Ramco-Gershenson Properties Trust (NYSE: RPT), an initial conversion price of $14.41 per common share. On or after 4/20/2018, if the price of the common stock exceeds 130% of the conversion price for 20 of any 30 consecutive trading days, the company may, at their option, cause the preferred shares to be converted into common shares at the then prevailing conversion price.
When do you know when it is time to sell a preferred?? I’ve been selling most of my longer hold preferreds when the YTC goes neg and the rate they are paying would most likely to be called. Ex. today looked at my Saul (BFS-E and D) and they are both neg and are 6%+ preferreds callable in ’23/’24. ..so my rational mind says sell…am I missing anything??? Thanks
Atlas Financial is in default on payments for AFHBL. Payment was due July 26th, and the one month grace period is expired.
https://finance.yahoo.com/news/atlas-financial-holdings-enters-agreement-211500095.html
Any opinions if this is worth exchanging for new notes, selling, buying ….
6.6mm in largely forgiven PPP loans and they are still hanging on by their fingernails? The common stock price is less than a dollar and has traded as low or lower than 7c a share. Negative earnings in each of the last 4 years, at least. My opinion is if it were me, I’d be out of the first exit available after what I just saw in their latest filings. This isn’t a knock on you. Just my opinion, since you asked. Good luck and I hope it works out and they can turn it around.
Atlas is requesting a 30 day extension beyond grace period and also a note exchange to a note with a 5 yr maturity. Price of AFHBL is up so some think it’s a good thing. They have a plan that may work out to be profitable. I sold a few months ago since I didn’t want to deal with the high risk.
AFHBL has been in default for some time, last div payment was April 2020. Not looking promising, IMHO.
FL_Guy
They have paid interest on this note up to and including the payment May 26, 2021.
I believe this Aug 26 is their first missed payment.
The ICE Exchange-Listed Preferred & Hybrid Securities Index (Bloomberg ticker PHGY) released its September, 2021 constituent list an hour ago:
https://drive.google.com/file/d/1UgPgxhWLtSAn_FbmypdzBxE0r_oRDtMY/view?usp=sharing
PHGY is the benchmark index for PFF. Other than confirming issues that have been removed from the ICE index (GLOG-A late last September, GMLPF in late May of this year) and thus likely to face downward selling pressure from PFF, I haven’t figured out a good way to make use of the file. Perhaps I need to pay more attention to the weighting % figures they publish in the file – these may indicate potential buying or selling pressure on any given name. I’m hoping you bright people will find a good use for it.
Do they post the constituent montly ? I cant seem to find it anywhere.
@Someone Yes, it is posted monthly, late in the day on the first calendar day of the month. It’s posted behind the ICE paywall.
And to LI’s remark, yes, PFF gets a jump on the rebalancing, which is unfortunate, but as you know small fortunes have been made in tracking PFF’s slow divestitures into illiquid markets – LTSA and GLOG-A last year; GMLPF this year; Costamare, TGP (both flavors), and Tsakos in years past …
So i did what LI proposed and TGH/PB seems to be missing from the PFF holdings, but it is included in the holdings of PHGY, does that mean that it should be added to the PFF by the end of September ?
Look at the coupon rate in the PHGY file – it’s 7%, not 6.25%. At present, both PFF and the benchmark PHGY hold the 7% TGH-A. That could change, PHGY (and thus PFF) could add TGH-B, but we won’t know until the rebalancing at the end of the month.
I did look at the coupon and right bellow the 7% TGH-A there is a 6.250% with a weight of 0.06091% a.k.a TGH-B.
@Someone
You’re absolutely right. I am sorry, too many irons in the fire today – I must have been looking at August’s file. Yes, PHGY added TGH-B to the benchmark index / constituent list for September, 2021. From everything I have observed in the past, PFF should be adding it soon. Apologies for the oversight!
@Someone
PFF did in fact add the 6.25% TGH-B. As of yesterday they hold just under 25,000 shares.
A potential use for the list is to compare discrepancies between the list and PFF holdings. I recall last Sept when GLOG-A was dropped from ICE, it took a couple weeks before PFF finished selling off all of its GLOG-A. PFF doesn’t always complete its add/drops/re-weightings all on the last day of the month for less liquid securities.
Obviously, the list would be way more useful the day before re-balancing rather than the day after but I imagine that’s double super secret info until after PFF rebalances.
Several recent posters have noted the low yields currently available to income investors. III’ers talk about it every day here. Just in case you think it only applies to paper assets, along comes a record farm land sale in Iowa of $22,600/acre. If you are growing the typical corn and soybeans, there is ZERO chance you can make it cash flow positive with current crop yields and prices. So you are investing with a “greater fool theory” of long term capital gains. This will impact those doing direct farm land investment from one of the syndicators. Also, it might affect the cap rate for Farm Land Partners (FPI) since they have a lot of row crop farms. Gladstone Land (LAND) would be less affected since they concentrate on specialty crops.
From the announcement:
The bull-run on Iowa farmland sales continues to play out in August. Less than two weeks after a piece of farm ground in Iowa sold for $19,000 per acre, a new record sale was posted in Iowa Friday, cashing in at $22,600 per acre. That tops the previous record by $300 per acre.
The sale was on 80 acres of ground in Grundy County, Iowa, which is located west of Waterloo. The ground did include a wind turbine, which helped drive up the price as of the record sale.
“The farm did have a wind turbine on it,” says Jim Rothermich, of Iowa Appraisal and Research. “The buyer was an investor-buyer, and the runner-up was also an investor. So, the wind turbine income stream did help the purchase price reach that high, but most of that 80 acres, or the lion’s share, was all farmland.”
Iowa Appraisal and Research says there were 80 to 85 attendees of the sale, including online bidders.
https://www.agweb.com/news/business/farmland/once-twice-sold-80-acres-iowa-sold-22600-acre-sets-new-state-record
How many more wind turbines could they profitably put on that farm?
Wind Farm Turbine Spacing – from the source SCIENCING
Wind farms are arrays of large turbines designed to generate utility-scale electrical power. The large turbines in wind farms are no different than residential turbines in one respect: they work best with smooth flowing wind. If anything disturbs the air flow, it creates turbulence, making the turbine less efficient. Each wind turbine creates turbulence in the area behind and around it, so the turbines need to be spaced well apart from each other. The distances in this case are expressed in rotor diameters. The general rule-of-thumb for wind farm spacing is that turbines are about 7 rotor diameters away from each other. So an 80-meter (262-foot) rotor would need to be 560 meters — more than a third of a mile — from adjacent turbines. Researchers at Johns Hopkins University have proposed that twice as much spacing would increase overall efficiency.
Direct Land Use
Rules of thumb are just that: simplified expressions to get a rough idea of system requirements. To find out what’s happening in the real world, researchers at the National Renewable Energy Laboratory, NREL, surveyed 172 large-scale wind power projects to see how much land they’re really using. The direct land use is a measure of the area of such things as the concrete tower pad, the power substations and new access roads. In the United States, the direct land use for wind turbines comes in at three-quarters of an acre per megawatt of rated capacity. That is, a 2-megawatt wind turbine would require 1.5 acres of land.
Sounds like they could put a lot more turbines on the farm. If there’s enough wind for one turbine, there’s enough for many. That may be behind the high price sale of this property.
With all of the “incentives” available, it does make sense – especially with the war on fossil fuel energy that’s well underway:
https://windexchange.energy.gov/projects/incentives
Or, maybe they are after what’s underneath that topsoil – who knows, but that’s a pretty incredible price to pay for land unless one has already figured out the return for future uses/projects.
Tex:
During the Field of Dreams movie from 1989 the brother-in-law of Kevin Costner’s character asks him “Do you realize what this land is worth?” after Costner builds a baseball field over his Iowa corn crop.
Costner replied, “Yeah – $2,200 per acre”.
So it has been a 10X for Iowa farmland in 30+ years!
BITCOIN miners?
GOOD
Gladstone Commercial Provides A Business Update
https://www.gladstonecommercial.com/newsroom/press-releases/detail/419/gladstone-commercial-provides-a-business-update
Thanks A4I
Single Big trade of 33800 sh of AATRL -almost a buck below Ask, and about a buck above bid -@ 11:13 EDT
One of the stranger moves today was BPYPM, Brookfield Property 6.25% coupon yield. Today it was ex-dividend for 0.2734, yet it closed @ 25.82 up 0.34 from yesterday’s close of 25.48. So between the dividend and price gains, that is 2.4%. And this is on an issue that traded @ 24.50 on 8/12. Today’s volume was huge at 2.6 million shares, with a 1.97 million PFF style block trade at the NYSE close. Don’t know who or why, but seems like somebody is pushing this one. .
We own BPYPM in several account, bought when it was first available to the public on ~ 7/27.
PFF addition yday
Is this a leading indicator – or a trailing one?
———————————————————-
Americans Are Stocking Up on Toilet Paper Again
Dow Jones Newswires August 31, 2021 01:30:00 PM ET
Americans are back to buying up toilet paper.
Procter & Gamble Co., the biggest U.S. manufacturer of toilet paper and paper towels, said it is ramping up production as demand increases. The moves come as several retailers said P&G is limiting shipments of paper products to stores.
The maker of Charmin toilet paper and Bounty paper towels is speeding up production lines, running factories 24 hours a day, seven days a week and investing to increase shipping volumes, a company spokeswoman said. P&G declined to comment on limits to retailers.
These kinds of headlines are self fulfilling, as people see these and immediately do the same. Sometimes wonder if the manufacturers aren’t the one to start the stories to help sales. Let’s face it, you can only use so much of this stuff. I see no problems in getting paper products where I live. Anything for a headline now days
I gotcha William. My question in the beginning was one of those tongue-in-cheek moments…
But you do bring up a good point. We do live in a click-bait pervasive environment.
I wonder whether it is just a result of people starting to buy “normal” quantities again after they finally consumed all the hoarded stuff they bought last year. No data to back that up.
FWIW – We have seen a lot of paper goods go out of stock in the last few weeks in the SF bay area at costco. Only a few bundles of store brand TP, no paper towels at all (from my visit last Friday). I don’t know if that is indicative of a trend or just a problem at our local stores.
its just paper, try the local Grocery Outlet
Was tempted to buy stock when it IPO’d but looking at GO now seems like it hasn’t hit bottom
Out this morning:
Costco is bringing back temporary purchase limits on some items at its warehouse locations as the delta variant continues to sweep the U.S.
In a statement emailed to USA TODAY, Kimberly-Clark, which makes Cottonelle and Scott toilet tissue, and Kleenex, said it “is monitoring the situation closely.” Georgia-Pacific, which makes Angel Soft and Quilted Northern toilet paper as well as Brawny and Sparkle paper towels, said customers “may be experiencing small demand surges locally and we are responding.”
Tim-
Posted a few days ago- PMTCP is now PMT-C
Curious as to why it and the Bridgewater are ‘Grey’ ? Is that leftover from pre-trade? They are on the NYS & NAS
Gary–got them updated. Not enough days in the week (or hours in the day)–between my ‘day job’ and 3,000 pages here–kind of busy.
Understood- considered it might have just been missed–and thanks- also, I thought some readers might have had trouble tracking it down with all the changes.
No problem Gary–sometimes I need multiple ‘nudges’.
Hi…any update on Eagle Point Income new term preferred (temp tick symbol and /or rate expected?
Eyeman–not yet, but I will likely get some when it happens.
https://www.sec.gov/Archives/edgar/data/1754836/000110465921108770/tm2125655d2_424b3.htm
Is the language typical within the last sentence of this prospectus supplement?
Good catch. Not sure whether the delay is typical but clearly the SEC has to approve this before it can move forward:
“On August 23, 2021, we filed an initial registration statement on Form N-2 with the U.S. Securities and Exchange Commission (“SEC”) relating to our preferred stock. The SEC has not declared the registration statement effective and the securities subject to that registration statement may not be sold, nor may offers to buy the securities be accepted, prior to the time the registration statement becomes effective.”
Found this preferred summary at SA’s ADS Analytics lates article- doe not have notes, but shows gray and Expert Mkt also. Not sure how complete it is compared to the master list.
https://seekingalpha.com/attachments/download/28374?source=content_type%3Areact%7Csection%3Amain_content%7Cbutton%3Abody_link
Schwab emailed me (as a private investor) the 2nd qtr report for Watford Holdings. It included the fact that Watford’s sale to Arch (and some other firms) had been completed. I was kind of expecting (fearing) the email was announcing the call of the preferred stock, but it said nothing about that.
I received same report through Chase self-directed. I also didn’t notice anything about a call.
I received mine also this morning. This was part of “the deal” that owners would be able to stay abreast of financials. Next divi is basically in the bag now. It does remind one in case they forgot it does have a 2034 owner redemption clause so the perferreds are not part to the permanent equity structure most prefereds are slotted. I’m not holding my breath to have to execute that. I still think the smart money is a call before year end.
5:30 Saturday morning it showed up in the inbox interesting read. They still seem to be buying up other companies. Probably a good thing to spread the risk around being in insurance
I thought this was an interesting blog post by a pretty sharp guy.
https://alephblog.com/2021/08/27/the-best-simple-measure-for-evaluating-credit-risk-of-publicly-traded-firms-for-a-stock-investor/
Someone linked the following post over on SA about the limited OTC trading. I am not sure how accurate it is, but it seems to kind of cover a blow by blow of some brokers attempting to see how to handle complying with the new rules.
https://www.securitieslawyer101.com/2021/what-you-need-to-know-as-the-september-28-amended-rule-15c2-11-date-approaches/
Just some additional info to help you understand how this might all wash out.
8675309.xyz – Thanks for the link to that very informative article.
Tim—would it be (easily) workable to start a link that lists the pink-no current info issues that are frequently mentioned on your site—where we can post issues? I, for one, would probably sell most which fall into this category. I would probably hold my watford holdings preferred, if it remains uncalled, because of the huge yield. Others, with a good but not great yield, would not be worth keeping.
Randy you may or may not have a choice with WTREP for a while since its not tradeable. You can go to OTCMarkers and type in your tickers. Once the ticker page is pulled up, to the right it will show and describe if its pink current, pink limited, pink no info, grey, etc.
Randy, you can use the OTC screener:
https://www.otcmarkets.com/research/stock-screener
In “Markets” drop down menu, click on ALL to see the drop down menu. Then click on box next to “Pink. ” Click on black triangle to the right of “Pink” and choose the “Pink No Information” box only. I suggest making additional selections to reduce results. For instance, you may want to enter a minimum of $5 for “Price” Min; select Yes for Penny Stock Exempt, and select USA for “Country.”
Best regards, No. 12 (back at least for one more year)
@8675309.xyz – I join in thanking you for that informative article on 15c2-11 – but now I can’t get that 867-5309 song out of my head! What an earworm …
Here’s another article, written by securities attorney Laura Anthony, dated August 17, 2021. Among other things, it provides a good summary of the exceptions to the rule:
https://securities-law-blog.com/2021/08/17/sec-denies-expert-market-for-now/
One sentence in particular caught my eye:
“The rule also creates an exception for a company who has another security concurrently being quoted on a national securities exchange. “
“The rule also creates an exception for a company who has another security concurrently being quoted on a national securities exchange.”
I’m thinking here, of course, about NFE (NASDAQ listed) and its preferred shares GMLPF (OTC; Pink, Current, so currently not on any of the “lists”.) Obviously, I want it to stay that way.
From the same article:
“Information will be deemed publicly available if it is posted on: (i) the EDGAR database; (ii) the OTC Markets (or other qualified IDQS) website; (iii) a national securities association (i.e., FINRA) website; *(iv) the company’s website;* (v) a registered broker-dealer’s website; (vi) a state or federal agency’s website; or (vii) an electronic delivery system that is generally available to the public in the primary trading market of a foreign private issuer. The posted information must not be password-protected or otherwise user-restricted. A broker-dealer will have the requirement to either provide the information to an investor that requests it or direct them to the electronic publicly available information.” (Emphasis added by *asterisks*.)
So apparently, this type of disclosure should qualify:
https://ir.newfortressenergy.com/gmlp
Hoping someone will poke holes in this notion.
The hole is that technically, Golar and NFE are separate companies with separate financials. Same with Schulman/LYB. However, maybe this exception provides brokers enough cover.
“the Grey Market, an illiquid desert where penny stocks go to die….”
Oh noooo!
Who is shorting preferreds? Some brokerages allow you to short preferreds/babys and others do not as a blanket statement. For example, Fidelity, to no one’s surprise does NOT allow shorting. On brokerages that do allow shorting, you are still subject to shares being available to short. When you short a stock or preferred, you have to pay a “hard to borrow” aka HTB fee. The HTB fee is set by the market and varies depending on how many shares are available to short and demand. The fee is reported as an annualized interest rate. Common fees for widely traded SP500 stocks are typically in the range of 0.25%. HTB fees for preferreds typically are higher.
Today I pulled a sample of ~ 600 preferreds to study their HTB fees. Some of the numbers were outrageous. Topping the list is CORR-A with a HTB of 243%! If you short it, you will pay ~ $60.93 for a full year or ~ 17 cents/share/day! So you better be pretty darn convicted that it is going to drop a lot and soon. In addition, you will owe the 46 cents/quarter dividend if you have it short on the ex-dividend date.
But you say “nobody in their right mind would be short CORR-A” but be quite wrong. At last report someone(s) was short 2,560 shares which is not a lot of shares, but it ain’t zero either. There were 231,846 shares available to short at last report, so there is plenty of capacity to short more. There were 27 preferreds with HTB >100%, so CORR-A is not some freakish example. And people really do short these as sometimes instead of dividend payouts, I receive “payment in lieu of dividends.”
Here are the top 15 issues listed with HTB fee and number of shares that are shorted:
CORR-A 244% 2,560
GS-C 164% 2,380
RILYN 162% 31,000
BANC-E 155% 1,420
TSCBP 153% 936
RILYM 149% 3,630
KTN 142% 14
WBS-F 138% 1,800
ZIONL 136% 4,490
CMSA 135% 376
FGFPP 130% 61
FPI-B 123% 192
QVCD 123% 14,480
AGM-C 120% 95,190
RILYH 119% 147
In theory you can earn the HTB fee or a portion of if that is split with your brokerage. In practice, I am not aware of anyone that has earned enough for a steak dinner by offering up their shares. Somebody, somewhere is making good money, just hard to say who/where it is.
Caveat: The HTB and number of shares shorted can change every day, so these numbers might not be the same tomorrow.
Disclosure: We are NOT short any of these shares in any account. We own a few of them including CORR-A in some accounts. If somebody wants to pay us 242% to borrow our shares, please do so.
It’s crazy that people are shorting those preferreds. I think it can make sense to short preferreds if you’re trying to do some kind of relative value arbitrage trade AND the fee is reasonable. I can’t imagine what kind of trade someone would be doing on those shares with those fees.
Looking at the list, RILYH gets called on 9/4 – why indeed would anyone be short that at this time, especially with those kinds of fees?
Who do you use that allows you to short preferreds? I have been wanting to in a few specific cases, but I have Fidelity and TDA and neither seem to allow it.
Many have no idea of the rules regs and procedure of margin accounts. So somebody wants to short XYZ ? You have to do so in a margin account.
What rate do you borrow at? Are you going to owe interest paid on top of that? Do you know the margin clerk can sell you out/buy you in without even communicating with you? THIS is where there is the most misunderstanding. You can only borrow it if someone is long the position at the firm. And if they sell, clerk may decide to just cover you. Doesn’t matter if 10 milliseconds later it crashes 90% and you think hooray. You might already have been bought back in at a big loss!!
I’m not allowed to on bonds. Which also touches that you never want to be short against the box on a margin call/lottery event.
LI:
The only preferred I have tried to short is 9% IIPR+A. Trading for $37+ and is callable at $25 in October 2022. Highest negative yield-to-call I have ever seen on a straight cumulative preferred stock.
But Schwab makes the cost of shorting it prohibitive. 10% annual interest and a daily fee to be short it. You also have to pay one day’s interest even if the short is never executed.
The problem with IIPR+A is that there are only 600,000 shares outstanding. Anyone continuing to hold it into October 2022 is going to get annihilated.
The common IIPR trades at an all-time high of $243/share. Also likely way overvalued, but that is another story.
so high.
I think you need a better broker Tex. Spot checking the short rates for me:
Corr 57%
RILYH 1.5%
CMSA 2.9%
RILYM 2.59%
GS-C 90%
BANC-E 3%
Rates are highly dependent on the broker.
Might anyone know at this point if SLMNP is going to get dumped?
I haven’t gotten any answers from Schwab
I have also been watching SLMNP, having sold my entire position at around $1036 a couple weeks ago.
With no confirmation from the broker, I’m more reluctant to take the risk of it being frozen, despite the attractive dividend.
Im not sure either, I think you can still sell it if they dump it. Gridbird would be the one who knows about this.
SLMNP isn’t on “the list” with Schwab or TDA, so I am not sure it will be dumped. In fact, I got an update from Schwab yesterday about issues I owned that are on the list and SLMNP isn’t on it. Of course, the lists can change at any time.
It has been down for several weeks (probably because of fear by some people that it will get on the list), but who knows. I have been using the price volatility to sell a few of my higher priced shares and replace them with lower cost ones – but I am not running for the exit.
I could have sworn I read somewhere recently where LYB has just recently actually guaranteed SLMNP, but I’ve been unable to verify that today and don’t remember where I read it… If it’s fully guaranteed, wouldn’t that theoretically make SLMNP have no reason to be on any of these lists anyway?
2WR, You know I love you baby (in a brotherly way lets be clear, ha) but your memory sucks! 🙂 Too much QVC watching…Here is what LYB responded to me about it last month.
Btw, get your nickel stacking gear on and buy some ASRVP. I have been loading up in the 25.30-35 range. It pays almost 53 cents in about 5 weeks. It hasnt been officially redeemed. Plenty of nickel stacking meat on this bone!
Thank you for your ownership of the convertible shares. These shares are not guaranteed by LyondellBasell. But the issuer is a wholly-owned subsidiary of LyondellBasell.
Best regards –
David Kinney
Head of Investor Relations
LyondellBasell
LyondellBasell Tower, Suite 300
1221 McKinney Street
PO Box 3646 (77253-3646)
Houston, TX 77010 USA
Ha… you don’t have to tell me, grid… it’s getting to the point where I’ve bot stuff and couldn’t for the life of me tell you now why I own it.. sheesh….. I must be confusing this one with another issue because I’m pretty sure what I read was from one of the major rating agencies and it sure isn’t there now on SLMNP… oh well… Oh wait! Brain cloud just lifted! I’m confusing what I read about LMIBL, not SLMNP! LMIBL is called anyway so it’s all academic on that one.
RE: ASRVP Why did it fall from $28.02 open? Common is down 1.5%. Preferred is down 10.5%. A big drop like that makes me think it’s been called…. Nevertheless, I was able to snag a whole 20 shares at $25.4999 so I will make about 40 cents if indeed it’s been called.
While not exactly a call announcement, here is what their investor relations page says: “The Company intends to use approximately $20 million of the net proceeds to retire its existing subordinated debt and trust preferred securities that have a weighted average cost of 7.73%. This action alone will reduce the Company’s interest expense by approximately $500,000 annually. The remainder of the proceeds will be utilized to support the growth of its subsidiaries and other general corporate purposes.”
Mark, if they slap a redemption notice by Aug.30 or whatever, you will get $25.5281 on September 30 and that is it. If they delay official redemption notice (which I havent personally seen yet) you could get more. My bet was buying in the low 25.30s and snagging about 20 cents holding a month. It will go exD late in month and pay out on Sept. 30.
Hi Grid. That was my thinking too, although I could only get the 20 shares under redemption price. I’m trying a new tactic as well. I bought 50 more in my taxable account at $25.52. I’ll get $.52 in divvies and if they call it, I get to declare a loss of $26. If it stays outstanding, I still get a $26 loss and earn some extra divvies in the meantime.
As far as my OCESP, (I only have 25 shares) I’m just going to hold and see what happens.
A4I and others, thanks for the replies to my earlier questions.
Grid’s statement about SLMNP from corp. IR is dead on – its not guaranteed, but it is very nearly so.
Most big company debt is set up so that if the company or a wholly owned sub defaults, nasty thing happens to the parent’ s debt. Often there is some exception for some kinds of non-recourse debt (like some real estate deals), but bankers don’t like to lend to someone who lets debt go into default.
Hard for bankers to explain to their buddies on the back 9…
That said, I have not read through all the debentures for Lyondell – and I am not planning to. I am relying on bankers being bankers.
SLMNP is Pink Current Information, so there’s no reason to expect anything will change to trading next month. For example, I can still place bids for SLMNP right now, but LTS bonds were blocked yesterday.
No one here can tell you with 100% confidence whether SLMNP’s status will change at some later date, but as of now there is no problem.
I’ve been kind of wondering too. I have a couple Pink – No information and a couple Pink – Current Information. Only one is on the “banned” list – OCESP
What I am trying to understand is if the OTC market as a whole is going to dry up, then none of these will be tradable – whether on the list or not. Are we to assume if the security is not on the list, then there is ‘no problem’ and they will continue to trade?
I’ve seen comments about unloading shares and also people willing to take them to the grave. While I don’t really trade any of these, it does have me a bit nervous that I could get stuck with them. I’m basically planning to wait it out and see what happens. If divvies keep flowing, then I guess I really don’t care and my heirs can figure out how to handle the situation.
I’ve also seen comments to the effect of no longer being able to buy new issues on OTC before they get their permanent ticker. Again, seems as if OTC may not exist in a couple weeks?
Anyone have more clarity than my muddy glasses are allowing me to see? Disclosure: I did not read the entire SEC publication. If the answer is to go read it and understand for my self, then I guess I have my weekend already planned…..
Mark,
The OTC board/trading is absolutely not going away. Please don’t think that. What we’ve been saying is that only specific securities that trade on it – are going to be running into some trouble. What will happen with each affected security that’s been put on “the list”, will vary. There may be issues with getting accurate pricing quotes, placing orders, moving positions to other brokerages, etc. You may already know this stuff but I’m posting just in case others don’t, because it can be confusing.
That’s why it’s good if we all keep the info flowing and what we’re finding out from our varying brokerages.
well, if it any consolation, you will never get stuck with them…
You can get a certificate issued and sell it on here or Ebay…
Hopefully you make more than the $500 it costs to get a cert issued
3 options.
1. Transfer it to someone at the same broker if they have an account
2. Have direct registration shares issued at the transfer agent and transfer it on their books
3. Have a certificate issued if they are not eligible for Direct registration
Broker fees are 0 for the first 2 and 75 for the 3rd
Mark, The OTC isnt going anywhere. In fact they may extract more fees yet from this. There are thousands of OTC issues. We tend to just focus on a narrow slice, with some and potentially caught in the cross hairs. Ones that provide financial info are 100% unaffected.
As an example, take SOCGP. Its not ever going to be affected.
https://backend.otcmarkets.com/otcapi/company/financial-report/276984/content
Personally, If you are nervous about being stuck with something, I think you follow your conscious and stay away from those types. Its just not worth the worry.
IPWLG and IPWLO are included in TDA’s list of restricted securities. Some on this site may have positions in these securities. Strangely IPWLK is not on the list.
This is why the list cant be trusted, and will remain pliable long after brokerages clamp down. There is no way in hell IPWLG and IPWLO should be on the restricted list. It is equal standing with IPWLK and IPWLP and OTC has them listed correctly. Their financials are posted quarterly on SEC through IPALCO holding company and also AES (majority owner of IPALCO). The reason has been the former two have not had a sponsoring entity to give bid ask spreads. They have never as long as I have followed them and thus OTC computers are confused by that. I doubt the situation ever resolves itself though.