Our site runs on donations to keep it running for free. Please consider donating if you enjoy your experience here!

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.

1,791 thoughts on “Sandbox Page”

  1. Question:
    If there is a thread on Reader Initiated Alerts and I want to post a reply comment on Sandbox because it would be more appropriate in the Sandbox how do I continue the thread without breaking and confusing the continuity?
    There have been some great threads that started from a post in RIA. But there is a certain point where maybe an ongoing thread is best continued on Sandbox. It would be unnecessarily confusing to have conversations and threads on the same topic between both pages. Is there a way to link a Sandbox post to a thread on RIA or vice versa? Or am I making this overly confusing?

  2. Dribs and Drabs,
    Be totally aware of the liquidity of your shares. This may provide an opp to pare or outright sell positions that you may not be willing to hold even if gaining comfort from unmeetable stops; I don’t care what your outlook is.
    This is a good time to really reexamine all the outlooks and speculations that you may be enlisting in your very own mind.
    Two constructive ideas:
    1) IBKR’s T bond trading is about as easy and low cost as it gets, easy to build out a ladder….to the month/year. Yes, there are term IG funds and ETF ladders, etc…but who can print and send you the coupon when it comes due, who is going to liquidate the next day upon maturity? Just askin’. Stress is stress and alot of risk is opaque right now.
    2) If this is the second wave (rates down) off a new long term rising interest rates shown by wave 1, then perps, junk, even intermediate <5 IG may be at risk.
    The time to ask yourself questions is when there is order and quiet, not when the animal instinct to act may not be the best for you or your dependants.
    Personally, I am taking actions in a watch maker's manner. I am seeing orders taken in partials…1, 69, 5, 3, 101…the cabbies are buying…

    1. Curious what the watch maker’s manner is. Having been there at one point.
      I know the watch maker’s prayer position 😉

    2. Joel, thanks for the advice. Didn’t mean to be frivolous on my remark. Actually been seeing indications of some of what you mention.
      MSN is always regurgitated news, but I just read Vanguard is cutting its fees for funds. The article was a subtle ad for their brokerage but they are trying to be relevant to investors. Not sure it will work. I hang around the groups with too many individual investors and what Vanguard is promoting is fund investing although ETF’s try to mimic purchasing individual stocks. Not sure if it was an error on their part, but they were just fined 100 million by the SEC for promoting target dated funds, In hindsight looking at 2001 crash, the GRC in 2009, the 2020 Covid crash how can any asset management group promise a set goal on a set date when some things are beyond their control?
      Some of the points Joel made makes you wonder
      Point #1, In another forum It was brought up by the group leader that the new Treasury Secretary Bessent wants to focus on bringing down the rate on 10yr treasuries as that most affects long term debt like mortgages , credit card etc. He admits controlling longer term debt is difficult. Bringing this down will also affect corporate long term debt. So we may see short term rates stay elevated for longer by the federal reserve but the Treasury is going to try to lower mid range rates lower? I’m not sure how you convince lenders to pay less for your debt, but then I don’t have lunches with the power brokers. You might notice the chorus coming from the bankers who are all saying the same thing. Joel could be right now is the time to ladder treasuries
      Point #2
      Is there risk building up in perps, junk, preferred’s and even intermediate <5yr IG that may be at risk. Is Fidelity rethinking being the brokerage for the individual investor. Certainly seems like it with all the rules they have been putting in place. They really tried to box me in yesterday saying I couldn't make an order over the 85 share average then saying I couldn't place an odd lot order for 50 shares.

  3. For those who own BHFAM you can sell it around 14.93ish.. which is a 7.7% yield and swap into BHFAN at 16.30ish which is a 8.25% yield.

    Seems like a wise move to me. I just did.

      1. I was making the assumption that the knowledgeable and really good looking readers here were aware of that situation. Going dark (expert market) does not worry me as much as it did a few years back.

        1. Depending on the companies involved, going dark can be OK.
          -a few I trust enough to own a preferred.
          -there are more where I will only own debt (must return principle at a fixed date).
          -There are a lot where I just won’t play. Don’t need the headache.

          1. Private, agreed. I hold some that is owned by Apollo. If Black Rock owned it Probably. Maybe I’m being irrational, but I don’t trust holding the bag for either Brookfield or Blackstone. Also I worked for a company bought by KKR and I wouldn’t feel good about something that went dark with them.
            If I heard APO was buying Brighthouse I’d hold. I believe Black Rock already holds some common. DYODD

  4. In keeping with my concern about the muni interest exemption, I trimmed off 3.7% of my holdings this morning . I looked at recent trades and new offerings for an indication of reasonableness on price. I’m not selling anything maturing before 2032, a random date more than 5 years in the future which was the cutoff for sale consideration. I’m also looking to sell private activity bonds but the quotes I received sucked on most of those.
    I think I sold 1 PAB.

    I’ve now unloaded 6% of holdings on my way to 25-33%.
    I haven’t decided where to redeploy so I’ll move to cash , but I’m considering closing out my SPX options borrowing transactions. Those were done for 5 years at rates 3.55 to 4.4 and the total exceeds my available cash…though I have a lot of maturities coming up.
    . I don’t think can use the capital losses generated by holding the synthetic borrowing transactions during the next 4 years.

    I don’t agree with some here who think any taxation of muni interest would only apply to future issuance. That would not save much money…negligible. In 2016 the muni exemption was on the chopping block and only survived because TCJA expired in 2025.

    I’ll still hope the exemption survives and I’ll need it to, but I had 44% of holdings in munis.
    The biggest purchasers of munis are retail customers and literally nobody I’ve asked knew the exemption elimination was a consideration.

    1. It’s funny Lt I knew individual investors bought the munis for the safety and while I thought they offered low returns I never took into the consideration of the boost to yield you get being tax free. I have been taking higher risks I thought buying preferred and BB’s and just lately toeing into bonds and very few common stocks for yield and possible growth. Never would have imagined there was unknown risk in the muni’s
      I just figured the tax man was going to get his cut one way or the other.

      1. Charles, I found it the best risk-adjusted return. I you take housing bonds as an example, there are brokerages and attorneys who do nothing but convert taxable MBS into tax free bonds through the housing agencies. It’s been the best tax “scam” going for years
        my average LT yield in the last 3 years has been 4-5.5 tax free AAA.
        if you work out the TEY , depending on your state, you’d have to get 7%-8% + on AAA bonds to equal this. You won’t find that anywhere.

    2. Re the Muni topic . . . snapshot of some data I track off Bloomberg site re …..
      High Grade 10yr Maty Munis …. and 10yr Tsy ylds on Fridays …. Muni / Tsys %age from Sept 27 to Jan 31 . . .
      Friday ….. 10yr Muni ….. 10yr Tsy ….. %age Muni to Tsy ….
      Jan 31 …… 3.06% …….. 4.52% ……. 67.7%
      Jan 17 …… 3.19% ……. 4.57% …… 69.8%
      Jan 03 ….. 3.09% ……. 4.54% …… 68.1%
      Dec 20 ….. 3.14% ……. 4.54% …… 69.2%
      Dec 06 ….. 2.78% …… . 4.18% …… 66.5%
      Nov 22 ….. 2.95% ……. 4.39% …… 67.2%
      Nov 08 ….. 2.99% ……. 4.30% …… 69.5%
      Oct 25 ….. 3.01% ……. 4.19% …… 71.8%
      Oct 11 ….. 2.75% ……. 4.10% …… 67.1%
      Sep 27 ….. 2.63% ……. 3.79% …… 69.4%
      10 period Avg Muni / Tsy ## = 69%
      Muni %-ages are per High Grade Muni Bds …. not Muni ETFs
      May be of some Big Picture use between the tax frees and Taxables …….

      1. Jim,

        That data is kind of what I have been seeing. A person really needs to go out in duration to get that almost 100% muni to bond ratio. So in the state I live in you can pick up AA muni paying about 4.6% but the maturity date is way out there and they still get the option to redeem early after 10 years or so.

        I did not find the shorter maturity muni that interesting at all. I want that 100% ratio or better and that is when I will buy some duration. I suppose a lower ratio is normal for shorter duration but that seems like slim pickings to me. 3%.. even when tax exempt… not very exciting at my income level.

        This is the advice a book gave back in 1991…. Amazing how much things can change.

        “83 is our third and last guideline number. In the usable past, when returns
        on long term, good quality (A-rated) municipal bonds are 83% or higher than the rates on long Treasuries, their holders have done well. When, for instance, long U.S. bonds are offered at 10%, and you can buy good grade municipals at 85% of that (8.50%), it’s a pretty favorable time to buy them. Why? Because higher percentages come from either temporary over-supply or under-demand for tax-frees, usually making them good buys. The higher the percentage, the better the deal. If municipal yields rise to 90% of Treasuries, their investors usually come out really well; under 80%, less well; under 70% of Treasuries, they have performed poorly. Again, the handiest tax-exempt yield gauge is the Bond Buyer 40 bond index which appears in most financially oriented newspapers.”

      2. Jim,
        Thanks for that.
        There’s an aspect of muni housing bonds I’ve mentioned b4 but which isn’t priced into the market. Most single family housing bonds are subject to IRC sec 143 provision which requires any prepayment of $250,000 or more to be used to pay down bonds more than 10 years since issuance. This provision tacks…meaning a new issue that refinances a higher rate issue is subject to the earlier 10 year period.
        If you look at the universe of low rate housing bonds trading in the high 60’s-70’s , you can find situations where you could end up receiving par because of section 143 . Obviously this isn’t too predictable as far as I can tell, but it’s a good reason to consider buying bonds that have lost liquidity because they are so far below par.

  5. For being a political free zone, there sure are a lot of political comments these days. If that’s the way it’s going to be, I’ll be happy to chime in.

    1. Post unbiased political analysis as it affects investments, not facebook crap stumping for a bias. It’s easy to tell the difference.

    2. Rocky, I’m not the nanny police, But see my comment to Jim. At this point I think it’s like a game of Chess. You move your pawn I move my knight. You move another pawn to cover and I move a pawn to cover the knight and give an opening for the Bishop. These are just hypothetical moves as I try to work out where this is all going and how it’s going to affect me.

    3. Amen Rocky Mountain Hiker. Between the continuous snide anti Trump comments from SteveA and the other TDS victim crowd members, to the rambling about USAID or the ‘I don’t mean to sound political’, yet the entire comment is intentionally political – it’s tiring. I guess we’ll get another ‘no more political grenades’ posting soon reminding folks to not do what they know they defiantly do anyway.

      1. Franklin-
        SteveA is a valuable contributor. As to political comments here, I find them to be rare and easy to ignore.

  6. Yesterday on the An Interesting Day – But Daily Confusion Reigns Supreme thread, owen powell wrote:
    “My guess on today, the Treasury Quarterly Refunding came out. After months of promoting the long end, Bessent kept Yellen’s policy of selling the short end in place, thus the bond repricing. ”
    I agree with owen’s guess.

    And there was this yesterday in the news:
    “Bessent says he, Trump are focusing on 10-Year yields, not Fed”
    https://finance.yahoo.com/news/bessent-says-trump-focusing-10-221751489.html
    Is there something Treasury can do to suppress the 10-year yield? Michael Powell believes it has been held down by 100bp and uses the difference between treasury and agency bond yields as proof. There is logic to expecting that restricting the supply of coupons in favor of bills would drive coupon yields lower. As to what actually is going on, I can only lean on other people’s guesses and watch market reactions.

    If you google “operation twist explained,” you will read how the Fed can try to influence rates. Even though the Fed is performing QT, it still needs to buy some replacements.

    For many years I’ve read complaints that Fed rate-setting policy distorts markets and interferes with market-based price/rate discovery. It would be quite a surprise to me if Bessent, a markets guy who criticized Yellen for increasing bill issuance, says anything that sounds like intentional manipulation. So far, he sounds vague.

    1. AI says you can “Generate stunning images from a text description” —
      A small child playing in a swimming pool pushing a large beach ball under water then being surprised when it pops up with a big splash.
      JMO. DYODD

    2. 51 % of treasuries mature in 1 year or less.
      98% mature in 10 years or less.
      Stats I picked up from a FRED release.
      I do not know how much is exactly 10 years, but it should be very easy to control the longer end outside of 10 years… instead of the oft-believed talking point that Fed can’t control the long end

      If you find other stats that make these look incorrect, I’d like to see them

  7. Non-farm payroll report on Friday. Here’s an explanation of the birth/death adjustment:
    “When formulating its monthly employment data, the BLS includes an adjustment for the net number of new jobs coming from new businesses and those lost by companies that have shut down. This adjustment is logical, as neither new nor closing firms are included in their surveys. While the so-called birth death adjustment is rational, the number of net jobs added due to the estimate can be incredibly flawed.”

    The estimates derived from surveys can also be off. BLS has no choice but to use surveys and estimates to produce near-to-real-time reports. I have no gripe with the methodology. It takes months to gather the actual data. JMO.

  8. In reinsurance news, Hanover RE sees wildfires exceeding large loss budget at 500 to 700 million Euros, but still expects profit for 2025 to exceed 2 billion…
    Cry me a river with your emergency rate rise State Farm!

  9. Any thoughts on closure/ reductions of staffing at government agencies having a broad negative effect on the economy?
    This line of thinking would, in my view, lead to lower interest rates.

    It sure looks like we are headed toward less government spending …and quickly

    1. That’s the hype they want you to believe. How much is real? Plus, what about the upcoming tax cuts?

      I will wait to see what is real.

      1. SteveA,
        Just who is “they?”
        jokingly,
        I used to answer this for people by saying my name is THEY and no, THEY didn’t do XXXX, because I am …THEY and I’d know if I did it.

        OK, I guess I will have to wait to see what happens but it seems the president is getting traction with almost anything he wants. I have to wonder what point there is in being in Congress. It was never a job I would want at any point…and less than never now.

        1. Let’s suppose you are correct that the President will get everything he wants. In that case, the deficit will significantly increase. The spending cuts will not be enough to pay for the tax cuts.

          But we shall see. To me, the reality is not today’s daily episode of “drama” but the budgets that Congress will approve.

          Unfortunately, as investors, we have become used to Wall Street being an “anticipation machine”. So, the early movers who spot the trend get the biggest rewards. Spotting trends for the next 4 years may not be a great idea.

    2. After interest on the debt, defense and mandated benefits expense, there is almost nothing left that would make a dent In the deficit. DOGE is just a charade.

      1. I’m only slightly worried a 19 year old genius coder temporarily sends a trillion dollars to a young lady just to impress her with his authority.
        I’m worried because it’s the type of fun I’d have engaged in at 19.

      2. Don’t forget about the deportation and housing costs (including food, health care etc) of immigrants to be held at Guantanamo and elsewhere throughout the country pending deportation. It is very expensive for the feds to house people in county facilities, not to mention for profit concerns. Also, add the cost of our “big beautiful wall.”

        1. The cost of deportation is a one time cost, compared to the long term cost of keeping the status quo, (incarceration, legal expenses, health care, food, the havoc caused by fentanyl and crime)

          1. I value III’s vow to remain apolitical – hard as it is these days! And I also value Charles M’s advice about nudging the rudder. So I hope David R’s post is deleted, and then mine is. Unless/until that happens, I must weigh in.

            My daughter is a manager (and not a desk-sitting one) at a refugee services agency. 98% of their heavily-vetted clients have full-time jobs within 90 days of arrival. Any costs expended over those 90 days are most than made up for by the efforts of these hard-working people. That’s the short answer.

          1. Please Jim, I realize that’s a joke but that is political.
            We can speculate how the goal is to reduce 10% of the Federal work force which would be the greatest amount of employees let go after IBM cut workers. So far it’s said 20,000 have taken the buyout offers which is only 1% of the goal, yet it’s unknown if even those costs are covered in the budget discussions. Then we can speculate how such a large reduction is going to affect the economy and the stock market.
            I’m not being sensitive, just nudging the rudder to stay on course.

      3. Whidbey you’re talking your bias. Cutting waste fraud and overspending may not be 100% effective but it’s certainly better than not cutting waste and overspending.

    3. lt
      re thoughts on closure/ reductions of staffing at government agencies having a broad negative effect on the economy?

      My hopefully non-political market view:
      – Think through the “taking the buyout” numbers. Maybe around 60,000 take the offer when the deadline comes.
      Normal retirements are 62,000 year.
      Anyone planning to retire in any month of 2025 can now get 7 months of pay with no work.
      My personal guess is the “retire by Feb 6” will only add to gov’t personnel costs in 2025

      – A large tax cut/cut extension bill is under consideration.
      Any “savings” will be used to subsidize those cuts.

      – Both bond and stock markets are in a state of no-risk bliss. Risk spreads over Treasuries are at historic lows. Any risk event – global, credit concern, earnings concern [think black swan] is likely to increase those spreads.

      I believe we are likely in a honeymoon period.
      After the honeymoon……. maybe not so good.

      (Don’t forget that I am “stormy weather” Westie)

      1. Westie, were you buying or selling those BHFC ? If buying I assume just a small speculative position.

    4. This could go either way. I react to what happens better than I can predict the future. Inflation and rates aren’t just about market forces it depends on how the Fed reacts to whatever problems happen.

    5. Budget observation: even if all the government headcount cuts we’re reading about were to materialize, savings would be quite small compared with the size of ongoing, already-budgeted entitlement and defense outlays.

      Now, if some staff of engineers who are unelected and have no connection with any federal departments were given direct access to the Federal Payment System by the Secretary of Treasury, just think how much money they could “save”.

    1. I read a comment saying spreads are tight because the market is not seeing credit risk as a problem. Made sense to me. In that case, I’ll buy more risky high-yield perps! 🙂

    2. Westie I’m not able to read this but I can guess where this article is going. BTY, I wonder if it’s a coincidence that a Mark Hulbert at one time wanted to be an analyst on SA. I plugged the name into search over there.

  10. The note I have on the USM acquisition by TMUS says “close mid-2025.” There might be more recent news.

    UZD (6.25% senior BB 2069, call 9/1/2025) has been climbing steadily higher since the Jan 13 low at 22.55. Is UZD headed to par due to the acquisition? If so, the YTC is 15.9% with today’s 23.99 close.

    I have no position because I don’t understand why UZD might do one thing or another. I’m curious to see what happens, not recommending the play.

    1. I have a full position in UZD (not a recommendation for anybody else). I keep track of USM common stock price. The common stock price tells me the merger is still baked into USM’s stock price. DYODD

      1. I can’t seem to get away from A+ CEF preferreds as being far superior to most other investments within 1/2-3/4 pct yield difference.
        Something with a broad range of securities backing it and 5x coverage yielding 5.7-6% just seems far superior to most preferreds and notes people mention.
        Where am I wrong with this opinion?

          1. Rock, just pull up the CEF preferreds list on III. Plenty of preferreds in the 5.5 -6% range. Unknowable the percentage of dividend treated as qualified or capital or return of capital, so tax effect can only be speculated upon.
            I bought the BCV preferred at 6%, and GAM-b at 5.95 among others

        1. In that yield range, I prefer agency bonds, TBTF bank preferreds, and utility preferreds.

          What I don’t like about CEF preferreds:
          1. poor liquidity/spreads
          2. hard to figure out past tax character, impossible to predict future tax character; often tax-disadvantaged
          3. hard to figure out what assets back them and how they were valued; or may not believe the valuation (HFRO-A)
          4. don’t know how management would handle a coverage breach
          5. general lack of trust in management (except GAM)

  11. Regarding the conversion of HTLFP to UMBFP:

    1. Does anyone know whether this was a taxable transaction? I assume not, but the reason I ask is the screwy way it shows up in Fido transaction history:

    a) ‘shares out’ transaction (valued as of market close on fri 31 jan I am guessing?) for HTLFP, followed by
    b) ‘shares in’ transaction (valued as of market close on mon 03 feb) for UMBFP

    That leads me to wonder whether Fido is logging a sale of HTLFP, then resetting the cost basis to the the 03 feb market close value of UMBFP?

    Makes no sense, but then attaching a value to each of the posted Fido transactions makes no sense either.

    2. Related question: are the terms of UMBFP identical with HTLFP (https://www.sec.gov/Archives/edgar/data/920112/000114036120014419/nt10012733x4_424b2.htm)?

    1. Yes the terms are identical…. sorry, too lazy to find the link but it’s in print

    2. Bur – have a look at the proxy statement.

      https://www.sec.gov/Archives/edgar/data/101382/000119312524175612/d771152d424b3.htm

      Your taxation question is addressed:

      We expect that the mergers, taken together, will qualify as a “reorganization” within the meaning of Section 368(a) of the Internal Revenue Code of 1986, as amended. Accordingly, holders of HTLF common stock and HTLF preferred stock generally will not recognize any gain or loss for federal income tax purposes on the exchange of shares of HTLF common stock for UMB common stock and shares of HTLF preferred stock for new UMB preferred stock in the mergers, except with respect to any cash received instead of fractional shares of UMB common stock.

      But you should also see the “Comparison of Shareholders’ Rights” section (https://www.sec.gov/Archives/edgar/data/101382/000119312524175612/d771152d424b3.htm#rom771152_113 ). Among other things, it says that:

      UMB is organized under the laws of the State of Missouri and HTLF is organized under the laws of the State of Delaware. The following is a summary of the material differences between (1) the current rights of holders of HTLF common stock under Delaware law and the HTLF certificate of incorporation and HTLF bylaws and (2) the current rights of holders of UMB common stock under Missouri law and the UMB articles of incorporation and UMB bylaws.

      Who knows – down the road, that difference may be important.
      +++++
      As a side note, I noticed today that PFF has dumped (divested, exchanged, you pick the description) all of its UMBFP shares (curiously, they now hold a negative number of shares – first time I’ve seen that) and now holds a similar number of HTLFP shares.

      1. … and of course I reversed the symbols in the final sentence of that post, after the “Edit” window had closed. I meant to write:

        As a side note, I noticed today that PFF has dumped (divested, exchanged, you pick the description) all of its HTLFP shares (curiously, they now hold a negative number of shares – first time I’ve seen that) and now holds a similar number of UMBFP shares.
        +++++
        HTLFP shares held by PFF today: -538
        HTLFP shares held by PFF yesterday: 414,230
        UMBFP shares held by PFF yesterday: 0
        UMBFP shares held by PFF today: 414,635

    3. These types of stock-for-stock transactions qualify under IRC sec 368 as tax free.

  12. From SA saw this Howmet Aerospace Inc. 3.75% Cum Red Pfd Stk Series A, and it seems like a bond to me at this coupon. Howmet seems 100% safe. At $66 price right now the ~5.7% seems like a good deal. Possible appreciation in future to go with good return. But will scale with rates, obviously.

    1. This is an illiquid preferred stock. Symbol HWM/PR on Schwab. Trades a couple of 100 shares per day.

      Schwab has the credit ratings as BB (SP) and BAA3 (Moodys) although I am not sure when these were updated. The original issue appears to be from a company acquired by Alcoa. This issue was 1st callable in 1987 according to the preferred stock channel.

      1. FYI, up to date info on ratings at both Moody’s and S&P is available at both their websites free of charge…. You need to establish a login to get to it, but it’s well worth the cost of entry…….

    2. In June of last year, I got some at 55.75/share for a 6.73% yield. Someone here mentioned them around that time, but I don’t know who is was.

    3. good comment.. HWMp/VCLT pair has gone from 2 sigma cheap in november 2023 to near 2 sigma rich today…all time ‘spike’ high was october 2022 ..would be a seller

        1. HWM- can be played with a little. Buy in mid to higher 50’s, sell in mid 60’s. I think I’ve been able to get away with this twice here in recent times

  13. National Rural is offering a new 5.75% 30-year bond with 5 year call protection. JMO. DYODD.

    1. National rural issued a 30 year bond at the end of 2024 call protected till Dec 15 2029 that is selling on the secondary market today at 99 for a yield of 5.82%.

      1. good comment..NRUC 5.5 5/2064 maturity 23.57 5.83 cy… nruc has outperformed since inception 5/2019… .on a 3yr horizon it’s trading near 2 sigma cheap ,,,was 2 sigma rich in april.. when going back to inception its 1 sigma cheap .. would be inclined to buy 1/2 position..immediately callable

    2. I own an NRUC floating bond issue (continually callable) that currently yields 7.42% at $100.5 Adjusted quarterly at 3 month sofr plus 26 BP plus 2.91%. It tends to trade around $100.5 after it adjusts as short term rates move slightly in either direction. A3/BBB cusip # 637432MT9

        1. Buying a long- term bond tied to short-term rates isn’t my style. If term premiums ‘normalize’ (whatever that happens to be but much wider than current) I’d end up with an underperfoming bond. Granted, this has been a wise ownership decision thus far.
          What do I know? I’m sorta thinking govt agencies closing hits somewhere unexpected ..

  14. Bought a junk bond issue today.
    Walgreens 931427AW8 8/2029 8.125% yield to worst 7.509%

    Walgreens has a lot of problems however the suspension of the dividend should be a positive in their turnaround effort. The issue is callable early 8/2026 at a premium. Only one other issue in the debt stack has an earlier maturity (6/2026) and it’s a big one at $1.7B. This issue is trading at a yield of 5.394%. Risk equals opportunity…or disaster. I feel this is an opportunity so I’ll take the risk that Walgreens is successful in the turnaround and the opioid lawsuits won’t sink it.

    I have plenty of safe bond issues but there is nothing really out there at the moment giving any yield in the investment grade category that is shorter duration.

  15. I added to lando at 20.45 (20.39 stripped) for a cy of 7.36..the lando/vclt pair has seen lando outperform since 12/23 ..on a 1yr horizon it has gone from 2 sigma richin november to sigma cheap now.. on a 3yr horizon we are trading near .5 sigma rich..all time high was october 2022 ..finally vclt seems to has a key reversal to upside confirmed by close above 75.74

      1. good comment..lando/landp pair has lando 1 sigma rich now (1yr horizon) ..bid/asked spreads make swapping challenging I suspect

      2. lando/landp spread analysis 1yr horizon
        mean .15 +1sd .56 +2sd 95
        -1sd -24 2sd -.6
        currently .15

    1. i bot a little landp at 20.20 today as well

      same terms as lando i believe

      this dividend also has historically had some return of cap and cap gain in it so better tax terms than straight ordinary income

  16. Wed Feb 05 Pre Open ( 7:20am NY ) + – Bond Ylds lower world wide ….
    2yr Tsy = 4.19%
    10Tsy = 4.47%
    10yr Canada = 2.96%
    10yr Bund = 2.35%
    10yr U.K. = 4.45%
    Overall ## lower ylds by 6 ~ 10bp
    all FWIW

    1. vclt seem so have had a key reversal.. it closed well below a double bottom near 73.8 but now seems poised to close above 75.74..

  17. For those that hold Osaic: https://tinyurl.com/3c8bmsm4 It seems Osaic has had two major advisory firms depart in the last few months. Plus, I know they lost a great firm in Memphis. I don’t hold the preferreds. I do hold the bonds but watch for news.

      1. Maine – agreed, it would be nice to see the Osaic -> LPL asset slippage slow down a bit. On the other hand, the Navy Federal arrangement brought in nearly $6.1 billion in assets under administration (in addition to the 69 advisors coming “on platform” mentioned in the article you quote) and was described as “a bit of a coup” for Osaic according to an industry insider quoted in Wealth Management (https://www.wealthmanagement.com/industry/osaic-adds-6b-navy-federal-investment-services-institutions-platform ).

        You mentioned Osaic completing a “massive consolidation” – I’m guessing you’re referring to Osaic’s acquisition of the Lincoln Financial wealth management business, which “brought Osaic 1,400 advisors overseeing approximately $115 billion in assets” according to Barron’s (https://www.barrons.com/advisor/articles/osaic-ceo-jamie-price-consolidation-eb904603). From what I’ve read that integration was due to be complete in early 2025; I expect Osaic will achieve the expected synergies of such an acquisition / integration, and that we’ll hear about it in due course. (Parenthetically, I thought this quote from Osaic’s CEO in the same Barron’s article was interesting: “There are additional factors spurring M&A activity among RIAs, Price adds. Both baby boomer RIA owners and private-equity firms that own stakes in RIAs will be seeking an exit in the years ahead. “It’s possible you’ll get some mega RIA mergers that will lead to an IPO,” he says.) Price has mentioned a “liquidity event” several times in the past; we’ll see!

        Finally, I’ve been meaning to thank you for posting the 4th Q., 2024 Alluvial Capital letter to its limited partners a week or so back. Dave Waters is an astute investor and a good man; thank you for connecting the dots regarding the Osaic bonds and the Höegh preferred shares in the Alluvial portfolio – neither firm was explicitly named in the letter, but reading between the lines I’m sure you’re dead on. The “Expert Market Updates” discussion in that section of the letter was very interesting – I was surprised to learn that 5% of Alluvial’s holdings trade on the EM. There’s a place for EM issues in everyone’s fixed income portfolio, I guess!

        Cheers.

    1. I hold the bonds also for the income and knowing they should be paid off at maturity. Would give me some capital gains.

      1. This is my Entergy holding. At the current price, it yields 6.18%. I do not yet have a full position, but I have 75% of my planned position. I am thinking of adding the final 25% shortly. The price is right. Right now, I am meeting all my financial goals so I am in no rush to add the remaining. So, my reason for not buying is not the specifics of this issue. I am keeping my powder dry due to external political events.

  18. I have decided to start buying some SCE-J. It will float 9/15/24. 3 month SOFR (previous called floater used some LIBOR replacement) + 3.132%.

    EIX/SCE has a habit of calling preferred when they can but the fire throws the wild card into this mix. But that is also the reason it trades at 22.60ish right now. So lets just say it will yield about 7.45% at a par of 25 or so after 9/15 if things stay the same. This puts it right in league with SCE-M but a slightly higher yield when bought at 22.60 versus SCE-M at 23.

    I am hoping even with the fire they will figure out a way to call this puppy and give a nice cap gain. If they do not and that has to wait it pays just as well as SCE-M. Gives a bit of a hedge in case rates go up and seems like a reasonable play if you don’t mind the fire risk stuff going on.

    1. SCE-J is the top holding of PFFA. It would be interesting to know if that was true before the fire or only after. EIX is down some more, and PCG is down a lot.

    2. fc – I’m with you in small quantities for the same reasons including 2 others:
      1. It’s qualified for a 15% tax rate, so it’s held in many taxable accounts. The sell off began immediately after the fire, so there was some tax-loss selling beginning Jan. 8. If the 30-day wash sale rule still applies, some buying will return beginning Feb. 10.
      2. EIX is asking the California Public Utilities Commission if they can raise rates to pay for past fires and debris flows (2017 Thomas Fire and the resulting 2018 Montecito Debris Flows), and they will do the same for the recent fires if they are found negligent. Given that this will take at least 5 to 10 years to litigate (don’t get me started on attorneys), the $21B insurance fund that Newsom started (and is about 80% rate-payer funded) should be mostly funded by then. Yeah, as a California resident, I would prefer that they issue common stock, bonds, baby bonds, or preferreds, or better still start taking it out of management’s bonuses, but nobody will listen to me, so i might as well play the game so I can help fund a problem that I didn’t create.

  19. For those that own Enstar: “Everest Group, the global insurer and reinsurer, has estimated its pre-tax net catastrophe losses from the California wildfires at between $350 million and $450 million”

    1. TNT—I own the Enstar 5.75% $1,000 bond issue (BBB-) that’s callable on 9/1/25. It’s a 5-year T-reset plus 5.468%. In your opinion, do you see any risk?

      1. Whidbey, I own this too and started looking at the Enstar Finance that resets in 2027. Its > 7.12% to the 2027 call. Otherwise 5 yr treasury + > 4.006%

          1. I think I found it— 29360AAB6 Question—When I search by cusip # in finra, it doesn’t show the reset add on. Is there another website I can find it?

            1. Whidbey, do you have Fidelity? I have been copying the CUSIP into their bond search and even though they don’t have to be in stock they let you look at details and it will tell you if it is a reset. Doesn’t give you greater details but you can at least find out if it’s a reset.

                1. One thing to consider is people are concerned about the EnStar Baby Bonds going to the expert market once Sixth St closes the deal to buy them. But the bonds would still be tradable for individual investors. I own some. But I forgot about P.E funds doing buyouts with short term borrowed money. Then after the sale closes they load up the company with debt to pay off the borrowed money. I might have to rethink my strategy.

            2. Whid, the adjustment terms are in the 10-k. Just search on the word “subordinated”

              The 2 preferreds have run up ahead of the last few ex dates and one is coming up on the 14th. I have not kept up with the merger. I’ll check HSR clearance and there would be numerous state approvals required.
              I used to subscribe to arbjournal.com but I think that is around $20k nowadays. You can get a free week by emailing them.

      2. WI, I took profits previously. The yield became too low. I bought upon announcement of the sale and watched it rise in price. Evaluating reinsurance companies is above my pay grade. I have read this year for the first time reinsurance companies expect to post a loss. That being said, I would think the bonds are good. I seldom buy or hold bonds yielding less than 9%.

        1. Everything I see coming out from reinsurers is a profit. Big profit. Ofc that represents last year. I receive a daily email from Reinsurance News.

          The fires will take their toll

  20. For cash balances: Openbank.com 4.75 apy
    It’s Santander.
    I’m hoping the term premium widens …and not from short rates declining.
    5.5 for 30 yrs doesn’t excite me

  21. Need direction. I’m looking at a corporate bond and it contains a conditional call provision (per fidelity). Because it’s currently trading above par, I’d like to know what that conditional call is. The bond is not callable otherwise until 2040. Where can I go to read the original offering prospectus from 2011?

    1. Richard,
      Fidelity can’t share it with you? (once in a while they are helpful)
      Have you tried investor relations dept. from issuer?

    2. Description? CUSIP #? Or if you’re looking to take on the challenge on our own, and that’d be a good thing!, take the company’s name and feed it into search @ https://www.sec.gov/search-filings. you should see the name of the company in a drop down….. When you click on it, with a little bit of practice you’ll figure out how to narrow a search down to the year 2011. If you know the month it was issued, that’ll allow you the ability to narrow the field a bit more…. Most likely you’ll see a whole lot of different forms listed and you’ll probably be looking for a 424 or 425 variation form…. OR maybe even an FWP but the FWP may not give you the details you’re looking for….. Give us the name of the company and/or CUSIP, and we’ll verify for you that it’s there or not – then you can get the satisfaction of tracking it down on your own anyway, knowing definitively it’s there……

    3. Richard,

      I second what 2WR has written. Look through the SEC’s EDGAR system to find the prospectus if it is not available on the corporate website which could be 50/50.

  22. Well, This has been a weird day starting with tariffs on, the futures really down, then the Mexican tariffs on hold (up went the markets) with a “friendly” call between the Mexican and American Presidents, and now the Canadian tariffs on hold also after the markets closed! In the meantime my portfolio of debt mostly held it’s owned and closed higher, within a hair of a record high. In reviewing the news I can’t figure out what each side gained, so let’s call it a “tie”. Guess we best get used to days like this becusae I suspect there are plenty more days like this to follow…….

    1. From Justin Trudeau’s Twitter account.

      I just had a good call with President Trump. Canada is implementing our $1.3 billion border plan — reinforcing the border with new choppers, technology and personnel, enhanced coordination with our American partners, and increased resources to stop the flow of fentanyl. Nearly 10,000 frontline personnel are and will be working on protecting the border.

      In addition, Canada is making new commitments to appoint a Fentanyl Czar, we will list cartels as terrorists, ensure 24/7 eyes on the border, launch a Canada- U.S. Joint Strike Force to combat organized crime, fentanyl and money laundering. I have also signed a new intelligence directive on organized crime and fentanyl and we will be backing it with $200 million.

      Proposed tariffs will be paused for at least 30 days while we work together.

  23. I have had OK success over the past year with small-company financial BBs with 2-5 year maturities. INBKZ, PMTU, and a couple of NewtekOne issues. I’m considering CUBB. It has a longer maturity (approx 10 years if not called.) It has a CY of 6.85, and the parent bank reported decent results. This would be a hold to maturity for me. Does anyone have any insights? Thanks.

    1. I’ve owned CUBI-F for a while and it has been a good holding. You might also consider DCOMP, but keep in mind it goes ex-div on 2/6.

      1. good comment..dcomp/vclt pair has seen DECOMP outperform since all time low in may 2023 … the pair is trading near 3 year high and multiple tops set between 8/22 – 2/23 …

  24. Any reason for Kimbell KRP to fall 10% since the election –and accelerating?
    Not connected to tariffs. Really odd payment schedule- 4 months, 2 months, and 3 months — like someone from the IRS business tax created it.

    1. Gary –

      Although KRP blipped up, then down, after the election, I would rate that price action as noise.

      I believe the sustained dip in KRP is related to the dilution caused by the 10MM common share offering on 01/07/25. Gross funds raised were ~ $ 149MM. On 01/08/25, volume spiked to 4.89MM shares, closing at $ 15.41 vs previous close of $ 16.31.

      Link here:

      https://kimbellrp.investorroom.com/2025-01-07-Kimbell-Royalty-Partners,-LP-Announces-Pricing-of-Upsized-Public-Offering-of-Common-Units

      I am an owner and have been buying, but could not get the $ 14.90 offering price.

    2. Gary—I own 4000 shares of KRP at $15.94. I think the recent weakness is due to the acquisition of the Midland Basin royalty interests which required an offering to partially pay for it. From what I have read, it should materially increase revenue. I’m comfortable with KRP.

    3. THANKS to all who replied- not too worried, was curious- not a big holder, but like to keep from going into the dumpster. Ave cost 15.78

  25. Fidelity seems to be having problems with entering orders before and after hours. No problem at Schwab.

  26. Is it possible for HTLFP/UMBPF to be called sooner than July based on a provision in the prospectus?

  27. Tighten that cinch for the ride on Mon- off 680 for the dow, 580 for Nas, 125 for S&P at this time. Dollar is climbing, 10 yr down, bitcoin sliding.
    Yeehaw! As Slim Pickens would shout as he straddles the nuke. Won’t be long prices will rise.

    1. I’ve been wondering if there is a preferred stock, baby bond, or senior note that has been around long enough to record numerous economic and interest rate events on it’s chart. Then I looked at JSM, which was issued in late 2003. It’s chart definitely shows the GFC starting in 2008, the Great Bond Sell-off in 2015, the stock sell-off in 2018, COVID in 2020, and higher rates to fight inflation beginning in Jan. 2022. Looking at some of the reasons for the sell-off in 2018 (JSM dropped about 30% in 4 months), various people surmised that the causes were:

      1. Interest rates were expected to continue rising, and a lot of companies loaded up on cheap credit.
      2. There was talk about firing Jay Powell, which would erode (the public’s perception of) the independence of the Fed.
      3. Concern over the trade wars that started earlier in the year with tariffs.
      4. Concern over rate hikes that started in Q4 2018 after stocks reached an all-time high. The rate hike was reversed about 4 months later.
      5. Many companies lowered guidance for 2019.

      Today there is an enormous amount of liquidity. But, we seem to be repeating at least 2 or 3 of the causes of the 2018 sell-off.

      Back to JSM, I’m not making a case to buy or sell it. I just find it’s reflection of 21 years of economic and rate history to be interesting. And I have to ask myself, “are we going to see a repeat of 2018 within the next 6 to 12 months?” Your thoughts are very welcome.

      1. check out all of the eversource preferreds with many coming out in the mid 1900s. i had compared them to 10 year rates before and it was quirky and i though appetite for preferreds might have been higher or lower or perhaps the originating companies (connecticut light and power + ?) may have had good and bad times… i didn’t dive deeper.

        if you go on quantum online you can sort by date of issuance i believe.

      2. JSMwas a Sallie mae security that was spun out to Navient, and traded along with OSM and ISM, which were called some time ago.
        This security was greatly affected by news on SLM/Navient over the years. I would not necessarily read into this all of the economic events you mentioned.
        I’d rather look at a AA $1000 bond than a junk rated note.
        Just my 2 cents.
        Many years ago I traded this against OSM and ISM

        1. Thanks, LT. Really not interested in JSM. Just thinking like one of my former geology professors: Is the recent past a key to predicting the near future? Do current tremors predicate future fault activity?

    2. Gary – The Ten year is up, not down. The 10 Year YIELD is down -.0510’ to 4.508, which ‘’should’’ be a good thing for bonds and preferreds tomorrow. HOWEVER, I have observed that on the last three Sunday nights, there has been strong buying in the 10 year sharply on Sunday nights, only to have most of the overnight gain to disappear during the Monday open. Very puzzling , and I won’t hold my breath this time.

Leave a Reply

Your email address will not be published. Required fields are marked *