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Sandbox Page

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.

1,907 thoughts on “Sandbox Page”

  1. MSTR shareholders authorized up to 10 billion shares.
    Is Saylor trying to run a corner on Bitcoin?
    A very good trader I know posited this notion to me.

    1. The Hunt brothers attempted to corner the silver market. Causing a short term squeeze in price. For historians out there an event called Silver Thursday March 27, 1980 occurred. Silver from $50 -> $10.

      1. Some folks have floated the notion that if the United States places 25% tariffs on Mexico and Canada metal imports, that the price of silver could go back up to $50 in the near term. The gold-silver ratio is over 90 currently.

      2. Micah, mention of the hunt brothers brings back memories…

        We started buying up silver (and a little gold) while I was in college because of the Hunts. We would put an ad in the paper, rent a hotel space, and buy coins, etc., and we did some walk-up events too. Because we were woefully under capitalized, every few days one of us would make an overnight drive to the smelter co to sell our metals (they paid the best price and more importantly, paid cash).

        Pretty stupid, in hind sight because we put every nickel we had into it (next semester’s tuition, next month’s rent – everything) because we thought we were so smart.

        By pure dumb luck, we had spent every penny we had buying metals, so I drove overnight to sell it all the day before it all started to fall apart. Fortunately for us, by the time I got back with the money, prices were falling, so we shut down.

        Great learning experience, and we walked away with money in our pockets. For a kid who grew up dirt poor working agriculture, it really opened my eyes.

        1. Private, out of curiousity, what percentage of spot is paid by a smelter? I have heard numbers as high as mid 80’s %

      3. Is Lacy Hunt of Hoisington who is being talked about in this thread related to the Hunt Brothers who tried to corner the silver market? Or is this just a coincidence? They are all Texans, but a quick search didn’t tell me.

        1. Lacy Hunt is an economist. Hunt Brothers received a lucky inheritance they attempted to leverage.

  2. The Hoisington Quarterly Review is prepared by economist Dr Lacy Hunt, who can be seen in various online interviews. Hoisington, as I remember, runs bond funds. The topic of this letter is an odd departure from previous issues, including a reference to the much-maligned Sahm rule.

    The last paragraph of each Review discusses the direction of rates. In this issue, Hunt predicts a “surprising drop” in the 30-year t-bond yield in 2025, an event that would be bullish for long-dated bonds in general. Predictions are tricky. Maybe he’s right or will be later if not sooner.

    What I found more interesting is the idea that the current low level of world industrial capacity utilization will lead to falling inflation. Hunt states that “China’s goods deflation is being transmitted globally.” It’s my recently stated opinion that inflation is likely headed lower due to three factors, one of which is China. It certainly would be nice to know the direction of inflation.

    OTOH, it appeared that Hunt is trying to use the CAPU level as a leading recession indicator, whereas the chart makes it look like a trailing, after-the-fact indicator. Not clear to me what Hunt is saying.

    1. Slow downs in Chinese exports might push prices into deflation is a known risk. Of course we have multiple unknowns here. Reductions in out of control gov spending is definitely a concern.

      It’s fun to watch the economists/soothsayers pontificate about 2025-2026. Nobody has a clear view lol. Which has always been my point….they could be right they could be wrong. We need to be able to live thru whatever does happen. I’ve been protecting investors from higher rates for 40 years…

      https://www.ftportfolios.com/Commentary/EconomicResearch/2025/1/16/is-government-spending-inflationary

    2. Deflationistas have a framed poster of Lacy Hunt in their homes. He’s been forecasting lower rates for decades. He may be right or wrong.. but i tend to avoid the people that are perma.. anything. Hunt, Rosenberg, Schiff, Tom Lee, Dan Ives, etc.

      1. LOL…That’s the thing about Hunt, bonds are always going to do well. He’s still worth listening to.

  3. for your consideration: Enstar Finance fixed to floating junior sub debt BBB-:
    29360aaa8. 5.7 coupon..Priced at 99.397. Adjusts 9/1/25 to 5 year treasury plus 5.468.
    An obvious call . I own 50k of this.
    From my read the security is further guaranteed by the parent. from 10-k
    “The Junior Subordinated Notes are unsecured junior subordinated obligations of Enstar Finance LLC (“Enstar Finance”). The Junior Subordinated Notes are fully and unconditionally guaranteed by us on an unsecured and junior subordinated basis. These debt securities of Enstar Finance are effectively subordinated to the obligations of our other subsidiaries.
    The 2040 Junior Subordinated Notes bear interest (i) during the initial five-year period ending August 30, 2025, at a fixed rate per annum of 5.75% and (ii) during each five-year reset period thereafter beginning September 1, 2025, at a fixed rate per annum equal to the five-year U.S. treasury rate calculated as of two business days prior to the

    beginning of such five-year period plus 5.468%.

    1. LT—where can I actually find the terms of the Enstar 5.75% issue? Finra doesn’t show them. Thanks.

    1. Gee, on Bee Caves Rd …got me going because it’s right down the street from The County Line BBQ, which was THE place to go 45 years ago . Still there, but people would rather wait 2 hours in line for some other BBQ or even specialty pizza. Last time in Austin we got so fed up with standing in line for a different place that I ordered Uber Eats to deliver pizza to us in the line.
      These days I value BBQ higher than sex…(at least sex with other aarp members)

      1. lt….. Yes, BBQ is highly valued by some folks. When my son from NY comes home to go with me for a few days to see my father we always stop in Wilson NC at Parker’s BBQ, which dates back pre WWII. The waiters are almost all high school boys that wear white clothing and hats. They gave my son one a while ago. Ten dollars buys you a BBQ plate that hasn’t changed since the 1930s. According to my son the same plate in NYC is many times more. North Carolina is home to many little BBQ “joints” in it’s small towns. They can be fist fights over the western style versus the eastern style! Here is my favored one near one. they split the difference by offering both eastern and western style sauces. It is also the only BBQ I know of with a beautiful Oak bar!

        https://hillsboroughbbq.com/

        1. Man, you guys make me hungry.
          Use to go to County line in Austin, never ran into the Carolina places dj mentioned.

          My early career took me across the south for several years (TX, AR, TN, through to the Carolinas). Amazing BBQ all over the place. Most small towns have a joint (often attached to the local grocery store). Small menus, and when what they have made for the day is gone, they close up and go home. Styles differ, but I like em all.

          Unfortunately, not a lot of good BBQ in California, so we had to start doing our own – TX style beef, Memphis and Carolina style pork, turkeys, cabrito….

          1. Private, There have been a few that people opened then closed.
            Hard to get up at 1:00 in the morning to start the fires to slow cook for hours day after day and make any money doing it. Even before Covid, with the cost of meat and labor here in Calif. it was hard to make a living.
            Worse, was if they were successful they would end up in the media. Bon Appetit, Savor, Trip advisor, 6:00 news, after overwhelming crowds they would close up business.
            I had the pleasure of enjoying a local bakery with the locals then it was in the news as one of the 22 best bakeries in the nation.
            Now I have to go to my second best bakery to avoid the crowds.

            1. I hear you Charles
              I think there is also a tendency for bay area restaurants to sell the business if they become a big hit. Maybe not the “name” places, but lots of the mom-and-pop places.

              The new owners then start to cut corners and the places fall apart.

              Lots of little places we used to go for good food have changed hands and the quality has tanked. Hard to find a decent place any more.

              maybe its just hard to get people who know good food and can run an eatery to be happy just running a solid business.

              One example: Great young chef I know and his buddies opened a restaurant. they were doing great, cooking fresh, had a line out the door most days, etc. They brought in an “investor” to whom they gave too much control. He made them expand to new locations/franchise, then pushed them to stop preparing everything in the kitchen and to move to a “centralized” kitchen (so food was shipped to restaurants pre-cooked in big containers). Helped cut staff cost (didn’t need cooks, just people to re-heat and serve), but also drove away a lot of customers.
              Ultimately, the business got sold to one of the big restaurant chains, but then it failed. Corporate-think just wasn’t compatible with good food. The owners ended up making some money, but the business was gone.

      2. i live in austin. i refuse to wait in line for BBQ like the lines at franklins. its good but not worth a long wait.

    2. “Such considerations argue that lower inflation will lead to a surprising drop in thirty-year Treasury bond yields in 2025” Interesting prediction.

  4. For III’ers like me who bought the Pitney Bowes 6.70% note (I bought some PBI-B in 2020) you may have noticed a decent jump today. PBI announced today they are paying off the remainder ($97 million) of a Note to Oaktree Capital dues in 2028 early and also announced they expect their full year report in early February to be better than previously stated.

    https://www.investorrelations.pitneybowes.com/news-releases/news-release-details/pitney-bowes-announces-early-paydown-remaining-2028-oaktree

    The new CEO appointed last year has made significant improvements in this century old company and it is beginning to show in the financial reports. If this is sustained I may move PBI-B off my “troubled children” list. While PBI has never missed a quarterly payment the price took a hit partly because of poor financial performance and the rise in interest rates. PBI appears committed to reduction of debt. Who knows? They may even reduce PBI-B through partial calls or call it entirely. It is well past the first call in 2018, but isn’t due until 2043. I have a full position in it and would not mind if they call it.

    1. With PBI-B now @ 19.90 its ytm = 9.11%. If you’re thinking of jumping in now on this story keep in mind PITNEY BOWES 5.25 1/15/2037 CUSIP 72447XAB3. It’s not as liquid but it’s available now 10.42 YTM, 65.07 dollar price, meaning $650.70 / 1k . Make whole call which makes it less likely to be called but 6 years shorter than PBI-B. It’s also rated one notch lower than PBI-B because if I remember correctly B carries a double guarantee from PBI and a subsidiary and this one only a guarantee from PBI.

      1. At 65 the CY on 72447XAB3 is 8.1%, slightly less than the CY of 8.4% on PBI-B at 19.90. Odds are I’ll be pushing daisies before either matures.

      2. good comment.. pbi.prb/vclt pair has seen pbi.prb outperform since may 2023.. using a 3yr horizon it has gone from all time low and over 3 sigma cheap to its current level of 1 sigma rich …all time time high pair was november 2024

  5. throwing this out for comment;
    40% of my portfolio is munis.
    Given the real risk of elimination of the exemption, what do you think is the best way to hedge that risk?
    I’m willing to forgo interest for 3-6 months until things become clearer.
    Would you: 1) sell 25% of portfolio, focusing on non essential and private activity bonds?
    2) Short a muni ETF …my portfolio is largely callable so the bonds won’t rally as much as the etf if rates decline
    3) Sit on hands. Losing the exemption would cost 15% of pretax income (perhaps as much as 20%) not counting changes in credit profiles
    4) Something else
    Before year end I did sell 10 % of the portfolio

    I think there’s zero chance of TCJA extension without eliminating the muni exemption , inter-alia

    1. If you really believe there is real risk with respect to the elimination of the exemption, why wouldn’t you sell them all? Treasury securities have very competitive rates as do annuities. Personally, I just relax and roll 2 year T-Notes every 3 months. I’d rather pay income tax on interest than lose capital.

    2. Even if the laws are changed so that States and municipalities are no longer able to issue new tax-exempt bonds, or if their ability to do so is further limited, it is still going to be the case that existing already issued munis continue to be tax exempt, otherwise you get all kinds of legal issues with retroactive taxation I would think. In fact, in this scenario existing tax-exempt munis might benefit due to scarcity value (since no new ones can be issued)

    3. To be more precise, the way the federal govt controls tax-exempt issuance is they have a set of criteria that a municipal issuer must satisfy for a new issue to be classified as tax-exempt. If the issuer doesn’t satisfy the criteria then the bond will be treated as taxable. In the past the feds squeezed more money out of this by tightening the criteria to make it harder for issuer to qualify for exemption. They could further tighten the criteria in 2025 as part of TCJA extension or even make it impossible for all or most municipalities to issue new tax-exempt bonds, however this does not affect the tax classification of outstanding munis – their income continues to be tax exempt. To change the tax treatment of old munis they would have to change the tax code itself to make formerly tax exempt bonds to be now taxable income which brings a lot of legal headaches for them due to retroactive nature of the change.

      One thing to keep in mind is that there are also potentially big credit impacts of such changes since often these issuers need to refinance and roll their debt and having to issue new taxable debt at higher rates could really impact their credit worthiness and relevant credit ratios so this could especially affect the less credit worthy issuers. This also could create an economic shock wave as it would put many infrastructure projects on hold..

      1. BYG,
        As I understand it the only way they get to $200 billion over 10 years in tax “savings” is by simply axing the muni interest exemption.
        Not to be offensive, but do you have some special knowledge (such as tax counsel, etc) that indicates fed gov’t cannot just eliminate the exemption?

        Azure Blue thinks it cannot happen too. It would be interesting if we had a tax lawyer to opine here.
        I don’t think Congress gives a whit about balancing the federal budget on the backs of states and cities.

        1. No I don’t have any special expert knowledge on tax law and i am certainly not offering investment or tax advice here. There is a general principle in tax law that taxes should not be changed retroactively but I don’t have any special legal insight as to how this would apply to existing bonds. Perhaps it will be tracked by purchase date? So income from bonds bought before 2025 remains exempt, or perhaps bonds issued before 2025 remain exempt. Many ways they can do this and my guess is as good as yours.

          Bear in mind that most industry people who write articles about this stuff make their living from new issuance business, their primary concern is ability to issue new tax exempt munis so they tend to use the term “eliminate tax exemption” in that sense. None them really thinking about the issues relating to retroactively changing tax law on old bonds

          1. The Supreme Court has already ruled on this. Congress can change the tax code, even retroactively.
            See Carlton v. US
            https://supreme.justia.com/cases/federal/us/512/26/

            Would they?
            I doubt it, because the venn diagram of the people who give to political campaigns and political parties overlaps almost 100% with the people who own tax-exempt debt.
            Republicans would eliminate Social Security entirely first, or raise the retirement age to something like 75-80.

        2. In regards to your original question about hedging this tax risk, the only hedge I can think of is to short a muni etf . As you said this will leave you short call risk if your bonds have more call risk than the etf you are short. Call risk has to be hedged dynamically via delta hedging but this can be complex and requires professional grade models.

          The only other idea is to short a high yield muni etf if possible on the theory that weak issuers will suffer the most

          1. Byg,
            thanks for the replies!
            I agree on the ETF because shorting that would be easier than selling illiquid bonds and I might end up wanting to own them.
            On tax law:
            I’m distinguishing from what would be a bad idea, changing tax law retroactively , from what can legally happen. I know for a fact that civil law can 100% be changed retroactively. I recall the SCOTUS case where a estate tax attorney had sued over that issue because I believe he had planned his parents estate and the change cost $450,000. Scotus said they were sorry but tough luck.That’s from memory.
            Now I’m looking it up. I googled and here it is.

            US v Carlton .

            I know this decision was later extended further and not just to the limited cases described in that decision. Chat lists more cases but I have no idea if they are correct. I don’t rely on chat because no matter how many times I ask in what year Mich State defeated Illinois 59-19, it gets it wrong 30 or more times in a row. (I bet on the game in college in the 70’s at Mich state -19 and they were losing 19-11 late in the 3rd quarter then scored 48 straight points so that’s my ai test question, lol)

            I recall Congress making some tax law retroactive after that date.
            This is starkly opposed to criminal law.

        3. losingtrader,

          Yes, they can axe it for existing issues.

          It’s just conventional wisdom that they would not do that due to financial/economic/political consequences.

          But it’s legal.

    4. Anything can happen but I wouldn’t make knee jerk reactions on speculations about the markets. If the exemption eventually gets eliminated, I think they’ll be time to adjust or even grandfathering of existing bonds. Who knows?

      1. Yazzer,
        Thank you , sir. Arbitrageurs such as myself always have a habit of making knee-jerk (emphasis on “jerk” ) decisions.
        that being said, once it becomes clear, I’s likely be wanting to buy from others who sell.

        1. Lt, i’m one of your admirers. I read about what you and 2WR did for a living and wondered if I could have done these kind of jobs in the financial world. I had also read a lot of people in high stress financial world quit around 40.
          I lucked out and instead ended up in sales in the building distribution business so I lasted until my 60’s although my hair started streaking white in my 40’s
          My suggestion is take your own advice and go take in a late night movie and chill.
          Funny how these politicians who make the rules seem to end up doing well with investments. If we could somehow find out what they are invested in then we could do the same.
          But I think you are right. The investing adage of buy when others are selling probably will work for you as you are good at what you do.

  6. Trying to figure out what Abacus doing here- common shares, ABLLL shares- additional ABLLL shares or what? They are still ~ $27.50 after the ETF rebalance fiasco.

    Issuer Abacus Life, Inc., a Delaware corporation.
    Common Stock offered by the Selling Securityholders 9,213,735 Shares of Common Stock.
    Notes offered by the Selling Securityholders $72,727,075 Aggregate Principal Amount of 9.875% Fixed Rate Senior Notes
    due 2028.
    Use of proceeds We will not receive any of the proceeds from the sale of the Securities by the
    Selling Securityholders in this offering.
    Listing and trading symbol Shares of our Common Stock trade on NASDAQ under the symbol “ABL.
    ” The Existing Notes trade on NASDAQ under the symbol “ABLLL.
    ” We intend to apply to list the Offered Notes on NASDAQ under the same symbol as the Existing Notes. We expect trading of the Offered Notes to commence promptly following the sale of the Offered Notes.

    1. looks like it is related to their purchase of a Carlisle investment in December, whereby they acquired a competitor?
      I just skimmed it. I could be wrong. I want nothing to do with ABL

      1. What are your reasons for avoiding them? Because the “smoke” from the recent run-up on their baby bonds makes you suspicious, or because of other reasons?

        I sold some ABLLL at what turned out to be early in the run-up, and used some of the proceeds to be a small amount of ABL common. From my admittedly limited research, they seem to have a reasonable business plan. They buy life insurance policies for more than their surrender value but at a price that provides a statistically good return. They keep paying the policy until eventually the insured dies, and then they collect lots of money.

        The downside is that they are going to burn through lots of capital until they start getting much in payoffs. They came out of a SPAC a couple years ago, but they’ve been doing this for 20 years already, so they aren’t that far away from profitability. Other than the taint of the SPAC and the odd recent run-up on their BB’s, I haven’t seen anything that makes me that alarmed. Am I missing some obvious warning signs? My detectors may not be well tuned.

    2. lt looks to be correct. It’s described in the 1/16/25 SEC filing in the section titled “Selling Securityholders”:

      “On December 2, 2024, the Company completed the Carlisle Acquisition. As consideration for the Carlisle Acquisition, the Company issued to the Selling Securityholders, as applicable, (i) 9,213,735 Shares and (ii) $72,727,075 aggregate principal amount of the Offered Notes. Each of the Selling Securityholders (other than Manorhaven) have executed the Share Lockup and Standstill Agreement providing that each Selling Securityholder will not (subject to certain customary exceptions) transfer such Selling Securityholders’ Shares through July 3, 2025, and that each Selling Securityholder will not transfer more than 15% of the Shares held on the Acquisition Closing Date within any 30-day period. In addition, each Selling Securityholder agreed, for 12 months following the Acquisition Closing Date, not to initiate or participate in any acquisition of the Company’s securities that would result in (i) such Selling Securityholder and its affiliates and associates beneficially owning 10% or more of the Company’s voting securities or (ii) any group beneficially owning 20% or more of the Company’s voting securities.”

      https://seekingalpha.com/filings/pdf/18112864

      I think the idea is that the shares already exist and are owned by outsiders. This filing is to register them so they can be sold in accordance with the lockup restrictions. There’s a table that shows exactly who the “Securityholders” are and how many shares of common and amount debt they hold. The majority seem to be Carlisle executives, the exception is Manorhaven Capital.

  7. I have 17 utilities on my Google Spreadsheet page (I own four of them) and every one is showing red by a substantial amount today. One of those days when the market indexes are ripping right along………

    1. On Wed am, a interview either Bloomberg or CNBC, a guest mentioned the fact that UTL’s have done nothing for a while. Yet, with the bust at the seams
      AI power needs, felt that much better things are coming.
      FWIW.

      1. Maybe Jim, on the way home I heard on the news that one of the larger assets managers like Morgan Stanley said even with the rate cuts they expect overall rates to stay higher for longer. I think it was mentioned on here that they were tracking 17 Utes and they were flat or trending down.
        People buy utilities for safety and income and there has been a move to them driving up the prices. If rates stay high people will want a higher return on holding utility stocks. The market is forward looking, but how long for demand from AI really kicks in or are people buying on the rumor?

  8. Just reading now on Yahoo that famed short seller Hindenburg research shut down yesterday.

  9. Just an observation:
    Corebridge 5 year debt at 5.10
    Corebridge 5yr fixed annuity at 5.10
    The annuity is subject only to a market value adjustment based on rates,if the holder desires to exit,
    and has a lot less credit risk than unsecured debt.

      1. Yes. This is the reason I am not buying munis now.
        This was going to be axed with TCJA the last time around but it was avoided by limiting the tcja to 2025.
        I’ve brought this up repeatedly but Azure Blue assures us this would not be legal.
        I’m not at all sure, given nothing seems illegal these days.
        Screwing the states and cities to save the feds money to give to corps sounds about the speed of Congress

      2. I recently read some very old and somewhat older muni books. Some going back to the 1980s I think. It has been an ongoing concern for ages now. The authors of the books seem to think it is unlikely due to the relationship between the states and federal govt. It will open a can of worms nobody wants.

        1. For better or worse we have the most politically powerful President in my lifetime. He owns both branches of Congress and has made many tax cut promises. He has more of a history of at least trying to deliver on promises than any President I recall. Some may see this differently.

          The ONLY way to get to $3 trillion in tax cuts over 10 years is by many cuts elsewhere.
          This would be 8% of the amount needed. Pile up another 92% and I would bet Congress will do whatever it takes to get Trump his tax bill.
          This change does ignore that most muni bonds are held by individuals. That’s why unlike stock IPO’s , there’s usually a retail order period that takes precedence over institutional https://www.sec.gov/newsroom/press-releases/2020-159

          1. You have an interesting view of this presidency. Obama had 60 senators early on and control over the House. That is how Obamacare got passed. Once he dropped to 59 senators and was no longer Filibuster proof little got done. But the all-powerful DJT is going to get different results with 53 senators. That could have happened if they eliminated the filibuster but they did not. Sorry, I do not see the most powerful president of my lifetime as long as the filibuster remains

                1. Please guys, I know this is minor. But it’s all speculation and it’s shading into politics.
                  I’m guilty too, but I’m trying to think about investments, like should I watch KMI or Trane to buy or if I had the skill which I don’t, should I be watching to short them.

                  1. Ok, it’s not political.
                    I forgot about budget reconciliation. The only need a simple majority and tax law is squarely within budget reconciliation.

                    So filibuster is irrelevant

  10. Any one know of a good way to hedge a large MLP position? I’ve help EPD and ET for years,bought it when they collapsed and a lot more during covid. Dont want to sell due to the deferred income. Other than options/buying puts anyone have any suggestion on ways to hedge?

    1. something like managed futures (CTA, KMLM, RSBT) can help hedge a portfolio in general. Maybe something like gold/metals (tho not too much)

      1. Unless you’re adept at shorting equities as a hedge, your best bet is options. You can obtain partial protection for a much lower cost by buying put spreads. Using other sectors to hedge may be problematic because correlation may not hold up.

    2. I’d say the excellent dividend return on both is hedge enough. I’ve owned AMZA since March 2020. What a gift!

      1. rock,

        I will assume you know this.. but..

        I do not care for the managers of infracap. They blow up an ETF which loses favor with buyers and then just create new ones. Anyone who bought almost any MLP has done well since 2020. All I am saying is enjoy the ride and figure out your exit strategy. When the market turns AMZA might very well disintegrate before your eyes. This is the same ETF that did a reverse stock split of 10 for 1 back in 2020. Not what an investor would expect when you are buying MLPs.

        Also I would bet a nickel if you picked any component of AMZA and compared it directly to the stock itself.. AMZA under performed. Yes they pay ordinary income and maybe return of cap but it is not worth it to me.

        So if you plan to hold MLPs long term I would eventually sell that ETF and jump into your favorite names directly. Nobody needs ?20-30%? leverage when things turn against us. What you think would end up being safe and stable turns into a nightmare.

        I would never recommend infracap to a friend.

    3. I look at the option chain on them a lot and it’s not favorable. I’m overweight both of them. If a recession affects volumes, I think ltt or rfix are fine hedges. or maybe put spreads. considered managed futures too.

    4. You can buy high dividend countercyclical consumer defensive stocks, such as WMT and PG, with your MLP dividends. If you think the whole MLP sector is going to take a downturn and want to keep your individual MLP positions, you can short AMLP. Shorting individual MLPs is a tax nightmare.

    5. Probably not what you are actually asking BUT if you have a Huge Paper Gain and don’t want to risk giving it back why would you not put in a comfortable stop loss?

      1. I know I have harped on this before, but be sure you understand taxation of MLPs before you start to play with them:

        1. Don’t own MLPs in non-taxable accounts (like IRAs). UBTI can be a mess (both annual and recapture upon sale) that will cost you.

        2. With MLPs, you get to pay the big recapture tax on all the distributions you ever received when you sell. Think of it as all the distributions you receive as tax deferred (until you sell), not tax free. They really only become tax free if you hold until you die and your heirs get a step up in basis.

        I got spanked pretty good by the tax man a couple of years ago when MMP got bought, so it can happen even if you don’t *want* to sell. I still own a bunch of EPD, which I am betting will outlast me. However, if it gets bought, I will take another tax spanking….

        3. Even if you want to donate appreciated MLP units to charity, you will get hit with recapture when you calculate the value of your donation, reducing your deduction (potentially by a lot).

        To me, MLPs are either:
        – “buy and hold until you die” (to get the step up in basis for your heirs) like my EPD holdings, or

        -short term flips (sell before you build up a lot of recapture). I made a bundle flipping UAN a couple of times back in 2022 based on the dumb luck of having bought just before Russia invaded Ukraine.

        1. Private, I have a minimal number of shares and so far on the UBTI I haven’t went over $550. 00 in annual income. But after hearing your story and others I decided against adding to my share count.

    6. I bought the Sunoco Logistics IPO in February of 2002. After several mergers, it is now ET and I have never added or subtracted. My hedge for this and other similar situations is to have 67% of my assets in cash equivalents — taxes make selling ET not an option. And, at my age, I’m much more risk averse. As long as they don’t ZIRP me, I’m cool.

  11. New issue Dalhart ISD (Texas) school bonds 23 yr maturity due 2/2048.
    Offered at Schwab and other brokers.
    4.47 tax free top the call in 2035
    4.682 to maturity
    Taxable equivalent yield in the 32 % bracket with 3.8% NII
    is 7.29 %
    AAA Texas Permanent School Fund
    Texas PSF has $35 bill in net assets , can insure 5x it’s assets in school bonds.
    There has never been an insurance claim against the fund.
    i’m not a buyer until tax bill becomes clear

      1. This is a new issue. I do not know if the cusip has been assigned. If it has I have not seen it. This can be bought on Schwab’s new issue muni site

  12. I’m sort of thinking the National Energy Emergency declaration may have an opposite effect on the market for Oil&gas futures. They are both down but I’ll prolly short them on the declaration. I generally sell the news.
    No big bets. My biggest wins are usually lucky

    1. I meant buy them on the news. I was confusing myself.

      Meh, I guess I’m just looking for something to trade.

      1. Hey Lt, there is Trump and Melania meme coins you can trade. Don’t forget Doge coin and bit coin.

        1. Charles –

          Don’t forget FARTCoin and Peanut the Squirrel Coin (PNUT). Both with recent billion dollar valuations.

          Who needs yield?

          1. Well if you need yield you might want to look into DEFI. Being the decentralized bank is the next big thing. The concept is really interesting. You buy some bitcoin. Let say 1 to keep it simple. You lend it on AAVE and recieve 2% apr. Than you take a USDC loan against it 40%ltv (12% interest) and put that in a 10% Eth/usdc pool on vfat making 300% apr.

            That’s what my nephew told me.

            1. imagine some quant has algorithmically built a trading system on top of this alphabet soup of coins, credit products, and derivatives already.

              waiting for a fully managed cef wrapper holding all of this inside.

              which will be perfectly timed for it to blow up.

            2. I assume your nephew is a lot younger and doesn’t stand to lose a lot.
              My barber is in his 50’s and talks nothing but Bitcoin and how much he is making but he hasn’t quit working and cashed it in yet. Wish him the best of luck.

              1. My plumber owns XRP and is up a lot.
                One of my good friends is the quant type crypto programmer referenced in someone else’s message above. He gets paid mid six figures plus a bonus , but won’t put his own money up because “I’ve seen how much you can lose.”
                Sunday eve he texted me from his Singapore flight before departure, as they were delayed on the ground for 2 hours before departing on the World’s longest flight, SQ 23 , blocked at 18:45.
                In business class, the seat is 3 feet wide…literally 36 inches, but not long enough for a person to lie flat when it’s extended.

                Anyway, he’s investigating job offerings with crypto companies in Singapore,
                and was still texting me when I woke up the next day…and all the way until the beginning of the national championship yesterday. 21 hours + a little tax time into the gate.
                You could not pay me enough to make that flight.

                1. He LT
                  One of my kids is a c-suite executive in a crypto-related company. He won’t put in a penny either. He sees how fast it can drop, and how much money just disappears (hacks, scams, etc.)

                  Its tough traveling long distances like that for work. I had to make the US to SG flight too often – sometimes 15 R/Ts a year for a bunch of years. I lived most of the time in CA, but I did a lot of work from NY, so it was LONG.

                  For much of my career, there wasn’t a JFK nonstop, so if I was flying out of NY, I often had to fly to SFO then on to SG (via HK), or to LA and then to SG (on what was then the longest flight in the world). Multiple legs, longer total distances. Kind of like having the world’s longest commute.

                  couple of times I had to do two R/Ts in a week to get deals closed. Not as much fun as the posters advertise….

                  When I could, I would fly out of NY through Europe, then back across the pacific (jet stream at your back both ways).
                  When you fly that much, you get to know cabin crews by first names. Really got some nice “unofficial” perks.

                  Got millions and millions of FF miles (and lifetime status on several airlines). One of the hardest things was that when I got home for a few weeks, my wife would want to use those miles to travel somewhere (“lets go to Europe, or to Buenos Aires, or…”). Last thing I wanted to do was fly.

                  1. I understand. Your point about hacks, etc is , I believe the main reason he won’t invest.

                    I’ll only fly first class transiting a big ocean now because I can , and some places you cannot get to in first or have to transit Abu Dhabi or Dubai, which is pretty circuitous. I’m all about the seat and internet . Other stuff is nice but not necessary.
                    I’ve stopped accruing miles with credit cards unless it’s a smoking deal . I’d rather have 2.2 % or more in cash (AMEX to Schwab at 1.1 cpp is 2.2).
                    For now I can get seats on Lufthansa in first if I wait till the last minute, and that’s a benefit of being retired.
                    I have quite a few younger (30-40 yo) friends. The wealthiest one created a stablecoin nobody uses.
                    Thanks for your comments.

                2. I actually accumulated 10.5 BTC and 125 ETH back in 2017, The BTC was bought between 1250 and 1600/coin. The ETH, I paid 53 up to 150/coin. Rode it up to the Dec 2017 top around 20K/BTC then crash back to 6K. I ended up selling all 10.5 BTC between 6K and 9K each and the ETH at 250-300 each.

                  Made a nice profit but, man, had I kept them! I thought they were going to zero…

    2. Can you be more specific about which issues or indexes you’ll be trading, and are these short or long term trades?

        1. Lt old market reader and trader. Oil seemed to be going down even before the new admin announcements. Recent auctions for drilling rights in the Arctic didn’t attract a lot of bids, of course could be marginal areas for exploration. But factor in how shipping looks and China’s economy and demand isn’t there. I think Banks when it comes to loans to oil companies and the companies themselves are going to be practical when it comes to increasing production as more volume means less profit if prices fall from over producing.

          1. Charles M….. The cost of oil production in Alaska has a lot to do with the lack of interest in bidding on leases there. The oil companies are really interested in selling oil for less than it cost them to produce it. Alaskan oil cost somewhere between $75 and $80 per barrel to produce. Current pricing of $76 on the market and they aren’t interested, particularly when they can produce oil for far less in the lower 48 states.

            1. Dj, why I am not getting too excited about oil production going up. I went through this before several times. Most on shore wells are in legacy areas that have already had the cream skimmed off. Now it’s mainly fracking and the wells decline a lot faster than off shore wells kinda like running in place. The faster you run your still not getting anywhere.
              The money is in transporting the oil and gas.

    3. In other news…bond yields are sinking this evening. Could it be that the lack of day one tariff declarations have cooled, at least temporarily, the worries about expectations for tariff induced inflation?

    4. “…just looking for something to trade.” No shortage of choices these days.
      Short Panama
      Long Mexico, contrarian play

      — Tariff lottery tickets still being sold (until February?)
      Short corn
      Short soybeans, maybe
      Short Brown-Forman BF (Too obvious?)
      Short Harley-Davidson HOG (double whammy?)

      — Energy
      Short leveraged E&P producers (WTI prices: fall baby fall)
      Long Venture Global IPO VG
      Long Pizza chains ( a polar vortex play, seriously.) From The Other Website: “Data over the last ten years has shown that a significant portion of the population associates winter weather with comfort foods, and pizza is a top choice for many Americans.” (Disclaimer: IMHO, meat loaf (gravy and mashed) is a comfort food. Pizza is not a comfort food. I eat pizza when my inner pepperoni moves me, not because of vague emotional insecurities or sub-freezing temps.)

      Disclosure: I will look at the VG IPO. I suspect VG’s price will be too high for me. JMO. DYODD.

  13. Excerpt from John Mauldin’s weekly newsletter:
    “I had a long talk with my friend Barry Habib of MBS Highway yesterday on inflation and rates. Barry has won so many awards on his rates and inflation prediction prowess that there is really nobody else in second place.

    His firm does a very detailed prediction on various measures of inflation. He believes inflation will likely fall into the low 2 range by the end of the year because of the way housing prices are worked into the PCE model. They are not predicting 2% but close to it.”

    1. Partisan who ignored 7-10% inflation are now bragging out about future inflation that hasn’t happened yet. And opposite partisans argue the opposite side. Ignore anybody who doesn’t put their money where their mouth is and listen to unbiased investors.

  14. Regarding NextEra Energy, Inc. 6.926% Equity Units Due 09/01/2025 (NEE-R) Can someone explain, like I’m five, how the contract adjustment rate work?

    “The stock purchase contract requires the holder to purchase for $50 a variable number of shares of NextEra Energy, Inc. (NYSE: NEE) common stock no later than 9/1/2025 and pays a contract adjustment rate of 2.326% per annum. The stock purchase settlement rate will be 0.4500 shares per unit if the then current market price is equal to or greater than $111.10 and 0.5626 shares per unit …”

    1. You have to understand you are buying two things with NEE-R or NEE-T. A contract to buy a certain amount of shares and 1/20 of a 1000 dollar debenture (bond/whatever you want to call this debt instrument).

      Let me use NEE-T as the example since that is what I own.

      https://www.investor.nexteraenergy.com/~/media/Files/N/NEE-IR/fixed-income-investors/download-library/equity-units/nee-equity-pricing-term-sheet-october-2024.pdf

      Equity Units (initially consisting of Corporate Units).
      Each Corporate Unit will consist of (1) a stock purchase
      contract issued by NextEra Energy, Inc. (“NEE”) and
      (2) initially a 5% undivided beneficial ownership interest
      in a Series O Debenture due November 1, 2029 (“NEE
      Capital Debenture”) issued by NextEra Energy Capital
      Holdings, Inc. (“NEE Capital”).

      So how much does the debenture (bond) yield?

      NEE Capital Debenture Interest Rate: 4.635%

      Ok.. what about my contract adjustment rate? Otherwise I can just buy the bond and when it matures buy NEE. I want an advantage to get into this contract with you.

      Contract Adjustment Payment Rate: 2.599% per year of the Stated Amount per Equity Unit

      4.635% + 2.599% = 7.234%

      NEE-T at a par of 50.. pays 7.234%.

      When the bond matures they use the money to buy NEE and give it to me at the agreed upon contract amounts. Simple right? Now there is a little bit more going on with the debenture but this is the gist of what we are getting into.

        1. A 5 year old walks into a bar.

          “Watch this you’ll love it” says the bartender.

          He then calls the kid over and holds out both his hands. One hand has two quarters and the other hand has a one dollar bill. He says to the kid

          “Go ahead but take the bigger one”

          The kids grabs the two quarters and leaves the bar.

          “Every time, kid falls for it every single time, no matter how many times I do this”

          The patron finishes his beer, goes outside and sees the kid. He calls him over to him and says

          “Just so you know kid the dollar bill is worth more even though it’s just one”

          The kid calmly says:

          “Yeah but the day I take the dollar is the day the free money stops”

          1. When the tooth fairy first gave me 15 cents i was told to split it with my brother. I wanted the nickel because it was the bigger coin.

            1. I have a passing thought than when I pay a $2 charge with a $5 dollar bill that I’m walking away a winner because I now have three pieces of paper instead of just one….

    2. Hi James,

      I, like you, never fully understood the contract adjustment rate. Obviously, it’s an added kicker to the base rate, but the fact it can be reset (The Series M Debentures are subject to reset and remarketing on the fifth business day preceding 01/01/2025 and ending on 08/19/2025) always made me nervous because I didn’t understand the reset and remarketing portion.

      I held NEE-P for a while and I could never figure out the benefit. They always traded higher than their conversion equivalent, and while they paid a higher interest than NEE common dividend, I did not think the premium made up for the difference. I guess it all depends on your initial purchase price, whether you took a loss on the conversion or came out ahead. It always seemed a situation where it was better to be lucky than smart – subject to the whims of the market and the closing price of the common shares on the day of the mandatory conversion. I finally saw an opportunity to get out of NEE-P and just started a position in NEE. I also own NEP. Also, on the P series, it stated the interest would go to semi-annual on the adjustment portion.

      Other than my stranded convertible (RC-C) in my portfolio, I have avoided this particular subset of preferreds.

      I do own some EP-C, but it has a stated $50 redemption amount.

      Regarding NEE-R – Friday close of $40.94 and NEE close of $70.76 (x .5626) gives a conversion equivalent today of $39.8096.

      NEE pays a dividend of $0.51 qrtly (currently 2.91%)
      NEE-R pays 6.926% ($0.86 / qtr – currently 8.46%)

      The $.35 quarterly difference would take roughly 3 quarters to make up for the divergence in conversion amount based on Friday’s closing price. Obviously this will fluctuate daily based on the price of the common. At a purchase price of around $41 for NEE-R, NEE would have to be near $72.50 on the day of the mandatory conversion to be in break even territory (obviously I am omitting dividends / interest in this calculation – I am only going for a capital preservation calculation). If NEE common is trading above $72.50 on 9/1/25, then all good. If they issue bad earnings, or the market is down overall, or a natural disaster hits and their share price takes a hit, then……. To me, this is more like gambling. If you like NEE, then I would suggest just buying NEE.

      Not sure if I’ve helped the conversation here, or just confused everyone with my math gymnastics. If I’m wildly out of touch, then I am certainly open to an education as I would like a better understanding of these types of convertibles.

      1. The remarketing part is done when interest rates change enough where the bond can be sold for more than the face value.
        The issuer re-sells it, and then replaces the bond with a Treasury STRIP security that matures on the exchange date and is used for the issuer to receive the proceeds.
        from a tax perspective, unless the underlying bond produces phantom OID income, there is no real difference between interest and contract payments to a US investor. (but there is a big difference for a non-US investor)

        1. Hi Justin,

          Thank you for the explanation on the remarketing. Is there a way to track the original bond to gauge whether remarketing is likely?

          Isn’t OID a problem when in a taxable account? It seems the STRIPS aren’t a great fit for taxable either.

          How come no one on here ever talks about STRIPS? Investopedia says they are common among fixed income investors. This is the first I’ve heard of them. They sound a lot like a longer term t-bill.

          Anyway, I always appreciate the education I get on here.

  15. I’ve sometimes wondered about the possibility of hedging high yield preferred stock by buying OOM put options on the common. This would usually come up in the context of a FTF or FRR issue that one expects will either be called or go up to par in a few months.

    The expected return for the preferred might be a double digit percentage annualized, but the short term means the absolute return isn’t much. Buying enough to make much money would involve being more exposed to credit risk of the issuer than I want to be. But if there was a good way to hedge that risk…

    Does this strategy exist? Is there a name for it that I can search for? Does it work? A quick glance at pricing seems to suggest that the numbers are plausible. Is there a better way to hedge single-company credit risk that is available to small retail investors? Does it ever happen that a company can default on a preferred payment without seeing a sharp decline in the price of its common stock?

    1. Nathan,

      Can you share an example of a preferred stock you’ve considered this for? Generally I see the cost of puts eroding your profit down to almost nothing even if going quite deep OOM.

      1. “Considering” would overstate my confidence. At this point it’s just an idle musing. But for an example, let’s consider MFA-C.

        MFA-C closed Friday at 24.40, and resets 3/31 to 9.86%. YTC (ignoring accrued and ignoring caveats about ex-div versus pay date) is about 18% (.60 of gain, .41 of dividend). So about $1 per $25 share, which is 4% in 2.5 months. I don’t actually think it will be called, but based on the other MFA preferred issues I think it will probably reach par sometime soon in the quarter after.

        MFA common closed Friday at $10.10. 4/17/25 MFA puts @ 8 are asking .10. If we assume (complete guess) that the common would drop to 4 if things got rough enough they couldn’t pay their preferred dividends, we’d have a gain of just less than $4 per share. We probably don’t need to hedge it to zero, but how much of a hedge would we need to feel safe?

        Let’s guess (complete guess) that the preferred would drop to $12 in this case. So we’d be mostly covered if we bought 3 .10 puts per share of the preferred, which knocks our expected profit down to .70 per $25 share of MFA-C. A safe ~2.8% return in two and a half months would be pretty good if the hedging strategy actually works.

        Currently I’ve got a ~2% position in MFA-C with no hedge, and feel comfortable with that. But I wouldn’t want put too much more in it unless I could hedge in some way against a crash. So I started wondering what my hedging “options” were. It feels like the sort of thing that other people would have already explored, but searching the web I don’t find much.

        1. The put seems reasonable at 14% of expected returns, but as you know it doesn’t protect you in the same why it would if you were hedging the MFA common (in the extreme case of MFA going bankrupt the Put would have a positive return of $7.90 per share but MFA-C would go from 24.40 to 0 so you’re only covered about 1/3 of the total unless you buy 3x the contracts). Guys like us (presumably) aren’t going to buy CDSs, so holding an inversely correlated asset such as a put option might the most you can do. Best of luck.

          J

    1. Azure……. I took a quick look at that link, and well, not sure what adjective I can conjure up to describe it! I did bookmark to look at further. Right now it sounds like I did done in my twenties living close to the chest after I graduated from a major engineering university and suffering through a period nobody wanting to hire us recent grads. The big difference was I had no practically income to save! That period of my life is a bit hazy though……….

  16. For those who still like bank preferred for an investment BOH-B has finally come down to earth enough to make a purchase. 8% perpetual preferred, callable in 2029, and gives about 7.82% yield. After those fires it took a pounding common stock wise but has gradually recovered from that. I added today but my total position is just slightly over 300 shares. Not a huge amount.

    1. good comment.. boh.pra/vclt pair has seen boh.pra outperform since may 2023 ..on a 1yr horizon its trading near fair value.. was near 3 sigma rich in october and 2 sigma cheap in december

      1. Mjtroll,
        Question for you:
        If I’m looking at a preferred that may be called this year, and it went ex, say 25 days ago, with payment 10 days ago, do I start accruing the dividend from the ex date up to the date of call for purposes of YTM calc?

        1. courtesy of 2whiteroses I now use the quantwolf.com link to calculate accrued interest/dividend and then adjusting purchase price down to get stripped price which I then use in their calculator
          2whiterosessays:
          01/15/2025 at 11:21 am
          Right. It’s included in their price (not added) because unlike https://quantwolf.com/calculators/bondyieldcalc.html it does not automatically give you the option to automatically calculate a “dirty” yield… It’s included in both (meaning quantwolf’s “clean” yield) because bonds/preferreds like our quoted $25 par bonds are the exception, not the rule, to be trading without the accrued included. Practically all bonds trade with accrued interest included in the price you pay. So, theoretically, the majority of people using these calculators are using them to figure yield, and total price paid, on those bonds that trade “clean.” We who focus on baby bonds/preferreds need to understand the nuances involved and how to adjust for the world of exceptions that we deal in.to figure yield accurately. The accrued is included in what they show for information purposes which allows us to adjust it accurately. And also, one must remember that the calculators know nothing about x-div dates since the majority of bonds don’t have them, so we have to take that into account as well when they show the accrued… For example, if you buy a bond the day after the x-div date, the calculators will show the accrued anyway even though you won’t be entitled to any accrued until the next payment date passes.

          1. i quick estimate it myself. Various formulas give various answers and some are obviously flawed, such as not including accumulated dividends or using the wrong pay date. Lower priced issues have different ways of figuring in the rising imputed price. So I do what works for me.

          2. I’m still not clear. If the bond is randomly called after an ex date (which is now the same as record date), isn’t the issuer paying based on what is due since the last ex date, not payment date? Simple answer “yes” or “no” please like I’m 10. Ok, wait, maybe like I’m 5 since I understood stock options theta when I was 10.

            1. Always calculated from the last pay date. Ex-date only determines who gets paid not when the pay starts accumulating. If the redemption date is not the next normal pay date then its’s pro-rated. Maybe one day sooner. Prospectus and announcement should clarify though legalise can be hard to sift through.

              1. Thanks, Martin – In your example, LT you’re talking about buying a baby bond/preferred AFTER the x-date but before the pay date…. Since you bot after the x-date what amount of accrued to get on payment date???? Nada, right? you only start accruing on the payment date… So your answer is, as Martin wrote, you use payment date for start of accrued….. And please note, the calculators are ignorant of x-dividend dates.

                1. what is confusing is ; if this were a preferred stock , the accrued dividends
                  start on the day after ex date .

                  1. Ted,
                    That’s the opposite of what 2wr is saying. I actually have not owned a preferred when it was paid off between ex or payment dates, so I think 2wr is saying the opposite. I don’t know why a preferred would be different than a baby bond.
                    No?

                  2. wrong, Ted. Think about it – you get paid on the payment date right? Let’s say the x-dividend date is 15 days before the payment date. That 15 days even if it accrued from that date. would be accruing right up to the NEXT payment date, right? So if dividend accrued from the x-dividend date, how many days of accrued would you receive at the next payment date? Go ahead, start counting….. When you discover that your count goes beyond 90, isn’t that telling you something’s wrong? Payments accrue starting on payment date and thru to the day before the next payment date

                    1. 2WR,
                      How about the initial dividend payment? I was looking this week at this and read a couple prospectuses for the information. Is there a general rule that can be used for quick calculating the accrued dividend?

                  3. Voner – The only rule of thumb you can use for the situation you describe is “read the prospectus.” The answer will be there. And if that seems too daunting a task, another rule of thumb is you’ll usually find the answer on the very first page.

  17. Dang it! One of my good ones called today. (BC-A)Brunswick Corp., 6.50% Senior Notes due 10/15/2048.

    1. Got out of BC’s a couple years ago. Thought they were struggling, haven’t followed lately.

  18. Did anyone listen to the Jim Bianco interview on Thoughtful Money?
    My ears perked up when they discuss even if interest rates at the long end may leak higher, the pain will be a lot less going forward for the 30 year hovering near 5% b/c of the cushion. I was partly relieved he confirmed my thesis for recent buying.
    https://youtu.be/VIO5yBDdVYc?si=e3fBMZwshou9JA85&t=2650

  19. On the $25/Share Master List Income Securities webpage that lists the $25 preferreds/baby bonds there is a column in the table named ‘Bond?’. I see a “TP” code on some of the entries. Does that stand for “Term Perferred”? I also see a code “Term” in that column which I thought meant “Term Perferred” so I’m a little confused. Thank you.

    1. Tomo-
      Tim has done a great job creating the master list. Still, it’s best to confirm every item by reviewing the prospectus.

  20. Deal: $2500 limit per month
    per account
    zero coupon bond
    State of Israel 5 year bonds 6.15% BBB+/A
    If you buy these they will take your money on the date of purchase but the bond is not issued until the first of the following month

  21. Hindenburg shorting business is closing shop after 8 yrs– how will we manage… oh yes, Muddled H2O’s got it.

  22. The past few days I’ve been thinking about the entire model of wealth managers charging a percentage of assets as a fee.
    The closest comparison I can come up with is the Mafia taking over a union and skimming a small percentage of the union dues, running the pension fund for a %, etc.
    Does anyone charge a fixed fee regardless of asset amount?

    1. Yes. The IRS confiscates a fixed fee of 6.2% for social security and 1.45% for medicare. Double that if you’re in business for yourself. There’s a fixed rate for ya.

        1. And yet… my SS gross has increased 75% (prob due to compounding) since I started taking it– the BLS says it has increased 45%- win ( for a change)

    2. Lt, yes I was talking about this with Private and Tex about 4 or 5 months ago. There are money managers who charge a flat fee. Private had the best advice. He said let the person manage only one account and see how they do for a couple years.
      My experience in researching was the three I talked to wanted you to be all in,
      Wanted you to agree to investments that set a a certain return.
      They are like real estate brokers that just got sued for price fixing. They all want the same flat fee and all want the same percentage of any growth that the account has. Like they all agreed to fix the cost the same. The account has a loss they still get the flat fee but not the percentage.
      One I talked to their minimum growth and risk target was for 6% I could tell they wanted you to agree to more return of course they would make more.
      They all wanted to put you in ETF’s blended low and high risk and ETF’s that leveraged and supposedly did covered strategy. One advisor would have had me in 2or 3 ETF’ s that were only 1 to 2 years old and less than 100 or 50 million in Capital with all with the same ETF sponsor. That bothered me. The other thing was the return bracket they suggested I wasn’t comfortable with. If all our accounts were fully invested with no cash held back they should be able to do a 6% return with less risk and get the same income as what the 3/4 I have invested that I am getting a blended 7-1/2 to 8% taking a higher risk.
      Oh, one said that they would take me on but normally they want clients with assets above 10mill. Doesn’t mean they are better. It just means like Private said those clients don’t worry as much if the market is down.

      1. Thanks for the link, I’ve been thinking about handing over one account to a flat-fee advisor and then seeing how they do. It would be a longer-term strategy for possible future health issues, and a backup plan in case something sudden happened to me. My wife doesn’t have a clue on how to run this stuff.

  23. Like many here I’ve been frustrated with Fidelity’s trading size limit on many fixed income issues. Today was the straw that broke the camel’s back and I angrily called them threatening to change brokers. I tried to put a gtc sell order in for my 350 shares of CSWCZ:
    sell 350 @ 26.09: quantity exceeds limit
    sell 290 @ 26.09: quantity exceeds limit
    sell 270 @ 26.09: order accepted
    Two minutes later I tried to replace the order with just a change of price: quantity exceeds limit. I lowered the share amount gradually down to only 90 shs. and it still would not accept the price change! So I cancelled the order and tried to enter a new order and the max it allowed to sell was 55 shs. Unbelievable!
    I encourage everyone who has been running into this with FIDO to call and give them hell.

    1. It strikes me as super odd they would ever limit anything lower than 100 shares as that is often what is known as a “round lot”. It used to be critical to trade in round lots to lower your commission costs and actually show up on the bid/ask board. I mean seriously.. forcing people to enter orders as an odd lot is just plain breaking traditions they used to enforce in some ways.

      Are all the old school people retired now days at these joints? Are 30 year olds making these decisions?

      1. fc-

        I had 50 shares of a preferred left in my wife’s IRA at Fidelity. I could only sell 10 (and then 5) shares at a time without getting the “Quantity Exceeds Limit” error message. Still haven’t been able to sell the last 20 shares. It is beyond ridiculous.

        I have given up on Fido and at this point will never add an additional preferred or baby bond position with that firm.

        1. Doc, I had 250 shares to sell and a week ago I was able to place 2 100 share limit trades. No nibbles.
          I’m drying to clean up our accounts and raise money. Today someone sold 50 shares so I entered a limit order on my 50 shares and they sold under 2 cents last sale price. I tried to replace my 100 share limit orders and Fido wouldn’t let me do 100 shares so I had to split it up.
          This is a 6% perpetual preferred now yielding 7% issued last July.
          At this point I have no idea what is going to happen in the next several months and we have enough income that I want to free up some money and SPAXX is paying decent.
          So unless you want to hold long term
          Perpetuals and long term BB and Preferred and Illiquids seem to be out of favor.
          I understand Tim’s thinking and others with selling or collecting money from called holdings and rolling them over into new investments paying 3 to 4% above what you can get on a CD or MM but only into term preferred or BB’s that mature over 1 to 2 yrs.
          Even with buying more SCE Trust preferred I’m at about 18% and close to my goal of 20 % because I just feel better deals maybe coming up in the next several months.
          I’m wary of doing any flipping and yield goosing and I have several M/A stocks that should close in the next several months that seem stable so just sitting tight.
          I have several Illiquids I am comfortable holding but in the future anything that has low volume including BB, Term P, perpetual and common I’m going to stay away from for now until I see Fido change.

          1. Crazy, finally sold all 250 shares today at a loss including 1 divy. All at 50 share limit. Last 50 I was blocked so waited about an hour and re-entered it and it went through. PIA

    2. Who would you call, our advisors have no stroke. It’s frIghtening in the event of a major correction.

    3. It is hard to imagine what the rationale could be which is so important they will take on huge potential liability issues and losses to support it, but at the same time are willing to ignore it for the price of a phone call where the customer is read no disclaimer and agrees to nothing.

      That is absurd and contradictory. The only effect of this policy is to create vexation, inefficiency and ill will.

      They have seen all of the complaints and know they are destroying their brand name over it with a sophisticated segment of the investing public. And they must see that no competitor has followed suit. So that makes their reasoning all the more perplexing.

      I wonder if anyone here has good enough connections that they can ferret out the real reason for this? Who will be our champion?

    4. jahsky,
      This kind of restrictions makes it difficult for dividend flippers.
      The chart on the baby bond shows a .50 loss not counting interest since Sept 2024. If you have held like I have. But if you look at the whole year’s chart…
      It shows an interesting pattern in the chart of the BB, showing dividend flippers buying and selling around each qtrs. ex-dividend date. Normally a good way to juice your returns.
      The problem with flipping is you can get caught in a market event and have a loss if you hadn’t planned to hold. Now with what Fidelity is doing it makes it even harder to trade in and out, especially if you want to sell quickly.

    5. jshsky,

      Similar problem with Fido here. Trying to sell illiquids is frustrating. I tried to sell 30 shares of TY- and I got the same message. Went down to 20 shares and it took all day to sell, 2 shares, 1 share then the remaining 17 at the end of the day. So it depends on the volume for the day you are trying to sell.

      1. AJ,

        Is there any situation when that happens that you might get hit with multiple commission costs? Like if it does not all sell in a single day and you failed to use a GTC.. the next day another commission?

        TY- maybe not.. but others?

    6. I have accounts with Wells Fargo Advisors (and Schwab) -neither has any restrictions that i know of and
      Wells does not charge a commission on OCBB stocks (schwab does)

  24. Fido’s quote system is so messed-up. Cking FTAIN, volume is in agreement between ATPro quotes & time & sales and home page, but there is often a minutes long lag before prices agree- just now, the reg quotes on the home page were delayed almost 4 minutes before they agreed on price ! — it sat at 25.01 while time and sales was at 25.25, 25.23, then 25.30
    How do you bid or ask with that crap?
    Managed to grab some at 24.85 earlier– lucky timing I guess with that mess.
    Glad I’m calling e-trade & switching today.

    1. I do better with E*Trade… they have their problems though.. always recalculate the yield… based on the current price .. sometimes it lags…

      1. “sometimes it lags”….. heck, I’ve seen many times they don’t even show a yield at all. LANDO, AILLP and CNLHN are a few that comes to mind.

    2. I switched to e-trade online this afternoon- not too difficult.
      One caveat- the bonus money is for a taxable brokerage account only- no advantaged accts 🙁
      Tip: If transferring out of Fido, be sure to unlock the Money Transfer lockdown feature in security, if enabled. Hope e-trade has that.
      They seemed very non-commital on on getting the best sweep account fund- they seem to have two payin a bit over 4%, but the guy said it depends on the amount in the account & is automatically set-up (??) Another gu said I had to call– guess I’ll find out next week.
      Anyone know about the seep funds there?
      thx

      1. Looks like they’ll say anything to delay putting you into the true interest earning funds….. I was told, yes I’ll get you in it but it will take me a week or so . I’ll bet I’ll have to follow up before it gets done… In the meantime, when my account was finally approved and funded, I put everything into SGOV which I had never been in before….. Very interesting how persistent it is… Chart is truly lovable…….

  25. re OBDE ; OBDC merger
    i was underwater on my OBDE position ; but after the merger I now have a n overall gain of .31/sh on 488 OBDC (500 sh became 488)
    looks like ODDC holders took a hit and OBDE holders got a “windfall” albiet
    a small one !

    1. OBDC x .9779 exchange rate – they used 1/14 closing prices. Their formula with NAV and all was rather complicated.

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