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.
I am curious if we will get an MBINO redemption notice tonight. It starts floating after the Oct. 1 dividend payment.
imho I don’t think it will be called ; 6% is still cheap money
see MBINM and MBINN
floats at a higher rate starting 10/1. I loaded up for a short term gain if called and hopefully a price gain if not called and paying more.
Couldn’t take the negative pressure on RILY so had to sell. Did OK with 8% gain on RILYM and 4% on RILYZ but wanted so much more.
Still watching closely. Any good news will see large increase but don’t want to gamble at this time.
I was lucky to sell out before the drop and buy back in with just the Rilym shares. They have enough cash on the books to pay off the note….
Interesting tidbit on those CHS-M shares someone is borrowing short from my stash at Fidelity; They are paying me 7.25% on that borrow so I can’t imagine how much they are charging the entity borrowing them, assuming margin could be from 9.25-12.5ish annualized rate a day. This still strikes me as an odd trade by the other party. I don’t see any problems at CHS after reviewing the lastest reports Tim posts for us.
unrelated, July Core PCE comes at .2 as expected. Not much market reaction. Inflation is very low. . and falling in most categories, a site I use
https://truflation.com/dashboard?feed=us-inflation-rate
Is it just the M ?
One thought is that CHS has been in the market the past year looking for a partner to merge with. Perhaps talks have been revived or they found a new merger or takeover target and someone knows of this and is trading on when the news breaks that the stock may drop.
Another thought is commodities like corn. Six months ago there was talk of farmers not selling last year’s harvest hoping for better prices. During the winter it looked like prices might rise and they did but then the harvest turned out better than expected so it was short lived and all the farmers who didn’t sell were left with corn in storage. Now we have another harvest coming up. Is it possible we hear bad news coming out soon about prices dropping and this affecting CHS?
Just speculation from all the stuff I have read.
Is there another CHS preferred at a higher yield such that doing a rate arb between the two would be advantageous?
Thank you for the inflation link, nice and clear.
OT – I plan to print out the page and send it over to my insurance agent. 0.2 inflation looks good to me. Maybe the insurance carrier will retract 47.8% of the state-required notice of a 48% increase in my 2025 policy premiums that they sent last month. 48% is the actual number, not rhetorical, not AI. Looking forward to a 2025 Thin Letter telling me my 2026 increase will be zero.
I haven’t explored Truflation’s methodology, but they did not break out insurance as a specific subcategory on their main page. Insurance is included with housing. That leads me to wonder where they put auto insurance, a big consumer expense, which will also be a deep double digit increase for me in 2025.
Disclosure: I hedged gas for my Wrangler at 3.29 with variable divvy E&P’s but I have not specifically hedged personal insurance. I did not foresee such a huge premium jump. Sometimes it is better to be lucky than smart. The premium notices came a week after I paid my annual premiums. JMO. DYODD.
Some states froze insurance premiums or limited hikes during Covid. I think CA for instance is just now letting insurers catch up a little so it all comes at once. There are companies who simply gave up the CA market rather than take it in the shorts. I assume you live in NJ so I am not sure what happened there.
I didn’t check which was which, but the premium increase Thin Letters were 35 to 48%. The carrier said the letters were required by law. I never received any before, so I assumed they were sent because they exceeded limits. Of interest – I was overjoyed to receive a letter saying there was only a 7% increase on one policy! A few paragraphs down, “…which added to the increase we told you about last month brings us up to a 48% increase.”
Auto insurance – I don’t think auto rates were frozen by law in NJ, but the auto carrier said in their notice that they hadn’t increased rates much during the pandemic. Possibly true. I think they lowered one pandemic year. There was a 17% increase 2022 to 2023. Rates were steady in 2023 to 2024. I didn’t deep dive here because auto is 6 months here and is further split between property and liability.
Homeowners – rates have increased steadily every year, at an increasing pace in recent years. My rates are up 42% since 2019. So the ~48% increase is on top of the 42%. Tough on a senior budget. JMO
FWIW, glad at least to have insurance, many in Florida and California have had difficulties.
Think it depends on your state/city and policy.
For Home and Auto – Total Insurance Cost increase year over year.
2020
-4.38%
2021
-3.52%
2022
-1.53%
2023
4.76%
2024
2.43%
Bea—I am expecting a weak quarter from CHS–not that it matters relative to the preferreds much. I had run across an article on Cargill earnings which dabbles in all the markets that CHS does–although they play in other places as well.
https://www.ttnews.com/articles/cargill-earnings-decrease
Bea,
I think Losingtrader could be right. M is often overvalued relative to N. Should be a 5% difference in price to reflect the 7.1 vs 6.75 difference in yield but often trades with about 1% difference. Owning N takes care of the dividend payment and what remains is the borrowing cost. Perhaps someone can make a profit on that,
Depending on the liquidity of the stock shorted, the interest could be anywhere between 0 and 100%
Thanx Tim and folks, re CHS. Well, pfd arb seems like a logical reason. I am not concerned it was just so odd on this particular issue to see the L symbol and a loanout of my shares! interesting. B
Unrelated SA is going to Annual Marketplace Subscriptions only 9/15. Those on monthly wb ‘grandfathered’ in if they maintain the monthly. Apparently ‘annuals’ after that still can get a refund for unused subscription cost if they cancel. The ‘analysts’ are not happy..always something there.
My service alerted us the other day and of course Avi blogged on it, lol. Bea
Wonder Bea what will happen to the few of us that have been slipping through the cracks? I know you have at least one subscription with Taylor.
CHS-M was borrowed from my account also a few weeks back, but the amount on loan has fallen by 75% so it might be a short term thing. It does seem odd though. CHS-N has not been borrowed from my account.
Michael Howell discusses liquidity and markets in this new, high-clarity interview.
https://www.youtube.com/watch?v=mWU6B4q0LPY
I found this post on reddit quite interesting. I am not wealthy enough to implement it. Yet ;-). But when discussing taxes with people and what wealthy people do to try to avoid them it is quite interesting to attempt to understand the techniques.
“Buy, Borrow, Die – Explained”
https://www.reddit.com/r/BuyBorrowDieExplained/comments/1f26rsf/buy_borrow_die_explained/?share_id=Lzclmbprc5zuFOlQRZMFm&utm_content=2&utm_medium=ios_app&utm_name=ioscss&utm_source=share&utm_term=1
Choosing when to take capital gains is basic tax strategy. Holding big winners forever postpones the tax burden assuming you never need the money. Not applicable if you buy for the dividend like many of the issues discussed here.
“Choosing not to take capital gains” is precisely the tax strategy that is under fire by the “tax unrealized gains” crowd.
There have been several proposals floated over the last couple of years to start taxing unrealized gains (including one from Kamala Harris’ campaign, as I read the press reports).
As the tax-and-spend crowd stretches for new sources of tax revenue, all that unrealized gain sitting in peoples accounts is a juicy target. Of course, they say it will only hit the ultra wealthy – but if you go back and read the discussions about the income tax (from more than 100 years ago) the politicians said the same thing.
So, think of the nightmare these proposals could create – having to value your assets regularly (every year end? peak value every year?, ??) and pay tax on gains you have never realized with cash you never received – so you may be forced to borrow money to pay those taxes. Of course, there is little discussion of deductions/credits for unrealized losses, etc.
Just insanity.
how about we leave politics off this board?
didn’t we all agree to this?
BTW: The current proposal is for those who have a net worth of 100M.
For now. Wouldn’t be surprised if the limit gradually trickled down eventually to include the middle class. That’s what they wanted but first get it passed by stoking hatred for the super rich. Remember income tax was originally passed just for the wealthy look what happened to it.
lets not express political views or opinions on this board. twitter, facebook and lots of other places to do that
Politics for the sake of politics is … well politics. But, Martin, Private, FC bring up discussion items related to taxation of investments. These discussions are not about some party saving some unicorn in a forest. These are valid discussions to think about, such as, in the future, should i solely be invested with items that can generate cap gains, or if I am going to be taxed in a different way for an investment?
Sorry, I disagree particularly when it comes down to differences between 2 parties in a presidential election year.
I see the pretense for what it is. It just happened to come up and has nothing to do with one political parties view or another. It is all just a coincidence that it started after a political party included it in it’s platform. It is all just policy discussion. My view is take it to twitter, facebook, or whatever you want to discuss it.
Camel’s nose.
It is not politics.
It is not even economics.
It is insanity.
The group that popped into my head upon hearing this proposal was the major league sports owners. There would be some big people writing some mighty big checks if every NFL and MLB team got revalued every time another team changed hands.
Sorry if you read that as “politics”. It really wasn’t.
All taxation has a political component because it is passed by legislators who are politicians. Therefore, all taxation favors one group to the detriment of another – and can sound political.
My point was that there is a push to start this new type of taxation.
Of course, the proponents say it will only hit the very richest people – but if you look at the history of the income tax (prior to the passage of the 16th amendment), the exact same arguments were made (“the income tax will only affect the top 1%, and at a rate of no more than 1%”). We see how well that worked out.
So, it is reasonable to expect that taxing unrealized gains will trickle down to the middle class.
It has to.
Taxing the very rich sounds very progressive and it’s easy to get people behind the idea of taxing “someone else”. Unfortunately, there just isn’t enough money in taxing the top 1%. There are some fabulously wealthy people in the US, but there aren’t that many of them and once the initial tax impact hits them, there just won’t be enough “additional” revenue each year to feed the “spend” monster, so the politicians will have to start taxing more people (meaning the top 10%, then the top 50%…..) because that is where the revenue is. Governments have an unquenchable thirst for money.
The fact that one of the presidential candidates has jumped on the bandwagon is (to me) both worth noting and very disturbing.
FWIW, I don’t think this kind of tax is even constitutional (doesn’t fall within the 16th amendment), but I am sure there are smart people trying to craft a way to say it does, and there will be many more smart people preparing lawsuits to say it doesn’t. The litigation will be huge and expensive.
It’s also interesting that some of the policy people at the IRS are quietly pushing back against this kind of tax system because they have no idea how to implement it. It presents some massively complex issues – what to tax? how to value it? how to deal with changes in value? how to integrate the system with the “regular” income tax regime? the list goes on and on.
If you look back, the “alternative minimum tax” was an attempt to tax the wealthy and look at what a mess it has become.
Sorry, this is a bunch of hooey. You are bringing up this subject at this time because it is a difference between 2 political parties. THAT IS A POLITICAL POSTING ! This issue effects nobody on this board unless you happen to have a net worth of more than 100M. If you are, I doubt you are on this board.
I am not going to debate the merits, advantages or disadvantages of political positions on this board.
Play innocent all you want. The idea that this is a subject worth discussing now is just some random consequence is nonsense. You are fooling nobody in promoting policy issues of 1 candidate over another.
How do you know it doesn’t affect anyone on this board? Why does it matter if it only affects those with a net worth over 100M? (income tax only was required by those that made more than $500-600 in a year. We see how that changed). The increased capital gains tax would affect those in the highest tax bracket which could be possible for someone here. No one thought it would happen in Germany that they would tax unrealized gains but they have.
I thought I posted this previously but I’m not sure if it made its way to the site or got caught in spam or removed. But if you read through the prior 200+ page proposal, it never clearly defined what an asset even is. If I own Magic the Gathering cards (something that is both a game and something that some people just collect) – does the person now have the pay yearly unrealized gains on that? The proposal stated unrealized games for not easily traded assets would be the 5 year treasury + 2%. Some Magic cards have had an incredible return. Now you’re under taxing the unrealized gain. But what happens when Magic ends up like baseball cards in the late 80s and early 90s and the market collapses for them or Beanie Babies in the 90s? Now you’re stuck with a piece of cardboard that’s worthless but you will continue to be taxed at the 5 year + 2% until you sell it and then you can recoup a credit for over payment. What happens when there is no market to sell it? How would the IRS determine if it was a fraudulent sale and undervalued the cost of the item? What if you owned a card for sentimental reasons and never wanted to sell it? Now you’ll never be able to recoup the over payment. Moving beyond the taxation issue, but why would anyone ever want to have to report to the government every asset they own? Is there any reason the government should have to know if you own Magic cards? Artwork? rare books? model trains?
There are plenty of flaws with the idea. It would force sales of assets to be gains that are theoretical with would impact other investors and more importantly retirement accounts. What if the assets are put into a living trust. Would they avoid the tax?
It also requires the sale of the asset to recoup any over payment. If you own a stock like Cisco during the dotcom bubble and it goes way up and then collapses and you held on for 20 years thinking it would recover and decide to sell today. Now you’ve paid unrealized gains at 2000 prices, while getting your tax credit back in much less valuable 2024 dollars. Why should the government get the benefit of the weakening currency?
What if someone owned land that was used for logging. Land slowly goes up in value as the trees get larger and closer to being cut down. All those years you are paying unrealized gains on the property. Now you cut the trees down. You have to pay taxes on the sale of the trees. The property value is now less because it doesn’t have valuable trees on it anymore. Except the government will still be assuming the property value is increasing and that you will have unrealized gains on it and you won’t be able to recoup those unrealized gains until you sell (it’s possible you may be able to get it an appraisal and say it’s value went down but why should you have to expend additional money just to show you shouldn’t have to pay the government more. Burden should be on government to prove it is owed something). And good luck keeping records of everything to be able to show over payments over the years.
It’s an asinine idea that only benefits the wasteful government. At the very least they could have included unrealized losses so you wouldn’t have to sell to be entitled to the tax credit for an over payment.
In any case, it’s not a political discussion. It’s an investment and tax discussion. I’m not sure how you can invest without considering tax consequences.
fc…… I am not there either and will never ever get close enough to see the dust from that group! Since most of my portfolio is now in a Roth presently there are now tax implications either . I’ll let my children worry about that assuming I don’t party away too much! My nagging little fear is when our esteemed politicians finally get around to dealing with the debt they will eye all those bucks in Roth accounts and will tap them to help on the revenue side. I guess we will see what happens.
Thanks for this link, fc. Very well explained and clarified in the comments.
Second attempt:
Bond Smackdown: Baby Bonds & Term Preferreds versus Big Boy $1k face Bonds. Charles recently asked about comparisons between the two classes. I was tied up and could not reply at the time, but decided to take a look. The first question was to look at how many options investors have. I ran a screen that looked at all corporate $1K bonds that had either a bid or ask and matured in 2025. Here are the stats:
1565 total 2025 corporates denominated in US dollars
1163 trade via CUSIP
402 traded via ISIN, most often non-US based corporations
1506 are either Moody or SP or both rated
Ratings from AAA down to defaulted aka D
59 unrated
I attempt to track all baby bonds/term preferreds and have 233 TOTAL for ALL maturities in my database. Only 7 of these mature in 2025- 5 baby bonds and 2 term preferreds. GDL-C is $50 face and the other 6 are $25 face. All of them are unrated by Moody’s/SP. I do not track Egan-Jones or Kroll ratings.
Those are the facts ma’am! Now for my editorial, aka opinion, comments:
1) The sheer quantity of $1k bonds offered is shockingly large compared to baby. I was actually surprised the discrepancy was this large. And there are more that exist that did not have a bid or ask when I did the snapshot. Bottom line is: “You can have any bond you want at Alice’s restaurant.” Not so much so with baby’s.
2) 159/233 baby’s in my database are UNRATED.
3) Most institutional investors as a percentage of assets MUST hold rated issues. Yes, there are some junk bond funds, but the vast majority of the corporate bonds ARE rated.
4) This precludes many institutions from holding baby’s.
5) The logical conclusion is that baby issuers are either lower quality and/or are unwilling to pay to get rated. Why would you pay to get rated with a sub-investment grade rating?
6) Clearly baby issuers are catering to individual investors via direct investment or held inside a fund/ETF that will invest in unrated issues.
7) Understand the baby’s are higher in the debt stack than term preferreds, but it is not clear how historically significant this is. I have not researched the case history to see if/how different they have been treated in the past when a company gets into trouble.
8) Long maturity dated issues like BIPJ with its 2084 date are like lottery tickets. How confident are you that ANY company will survive and be in sound financial shape 60 years from now? I treat these are preferreds and assume they will NEVER pay off the principal.
BOTTOM LINE from an investment standpoint is that broadly speaking when you buy a baby/term you are taking a larger default risk compared to $1k bonds. We think we are smarter than the masses in assessing these will NOT default. And of course, we expect higher yields to maturity for taking this higher risk. Whether to have baby/terms in your portfolio comes does to the classic tradeoff of risk tolerance. I do not think there is a binary right/wrong answer from an asset class standpoint. We own baby’s/terms and $1k bonds in many accounts.
Post like this can be a reality check.
Thanks
(click like button)
be well
stay safe
Tex, thanks for the effort you put into this and of course posting where others are going to see it. The difference between the classical book section and the mystery shelves in the library, that a good analogy?
Probably why I was comparing the 1000k with 60 to 90 day CD’s that are now offering a safe 5% return and the 5.5 to 5.8 and the safety of locking in that return for 1 to 2 years on a bond.
Sometimes I have to say my thoughts out loud to see if I’m thinking right.
Example Baa3 95.66 YTM 5.89% due March 10th 2026
Sandbox probably needs a new page/pruned. This guy took 5 attempts to load and I have fiber to the house. All the other pages loaded fast.
This has 2,000+ posts.
Mr. Conservative–yes I generally prune things because of performance issues–you re right probably a good time now. Will get tonight.
SLMNP –
This post AI proves that I’m AI on top of Nvidia all the trendy AI topics in Nvidia the entire investment world AI. As you are probably aware AI, I participate Nvidia with abandon in AI all of them Nvidia
I had two AI standing odd lot Nvidia marker bids out on SLMNP AI above 845.5. There was Nvidia actually trades AI on SLMNP today and Nvidia they all were Nvidia below my AI standing bids…. Only one of my odd lot Nvidia bids executed AI at 841.10 but the other Nvidia one didn’t. It didn’t AI even execute late Nvidia in the day when a third AI trade happened on SLMNP at Nvidia 841.10. Just an Nvidia example of what goes AI on in the wild AI west Nvidia world of the “expert” market. AI
I am at a loss for words on your post 2whiteroses.
You must not be a trendsetter like I am, Mr. C……….
2wr-
You’ve been scraped.
r2s omg I went to a comedy club show last night and one of the comedians from San Francisco after every one of his one liners would say Hey Elon! occasionally he’d up it to Hey Elon Musk! 2WR’s monologue is much better.
I actually understood your post for a change 2WR!
You might want to check and see if your bid price was changed because I think one of mine was and none of my orders (of which I had two) filled.
Tim-
The list of stocks on the “Preferred Stock of Closed End Funds (CEFs)” page would be greatly enhanced by including the BB and TP designations and the due dates.
RE: Employment numbers, net negative national savings globally and its implications, and other matters.
If you own perpetual preferreds or long bonds you may find this interview interesting with Dr. Lacy Hunt, a highly respected economist and former senior economist with the Federal Reserve Bank of Dallas.
https://www.youtube.com/watch?v=GjU6dnvt_h4
– Dave
Did some more rearranging of the deck chairs today. Sold what I had left of my NYCB -U at 35.60 probably should have hung on as the ex dividend date isn’t here yet but I am raising cash and Sept and Oct make me uneasy. Funny thing though I am in some smaller regional banks that don’t bother me as much. I think they are righting the ship at NYCB but we have a market event in the next 60 days I can probably buy it back
I sold most of my NYCB U too.
Lt, that was my last lot. I’ll watch from the sidelines for now.
Does anyone have thoughts/info on Zion-L? BB yielding 8.7, matures in 4 years. Thanks.
Pickler……… Zion is a regional bank based in Utah. It is pretty good size as it has assets of something like 87 Billion on the it’s books. It’s been one of “those banks” mentioned in a lot of posts last year as one that is fine Friday, taken over over the weekend by the Feds, and disappears Monday into one of the big bank’s vaults with the common and all preferreds, etc. wiped out. Things have calmed down a lot since last year in the regional banks since some of the regional banks suddenly disappeared. The reason it was mentioned a lot is it is one of the regional banks with a high amount of CRE on it’s books. Zion has about 26 Billion of CRE loans against about 6 billion in total equity. That’s really high. Personally I have avoided the regional banks except for some CUBI-F I bought a few quarters ago thinking they would call it shortly. So far that hasn’t happened and with CUBI have troubles with the handling of Cryptocurrency I am getting gun shy. My thoughts are play with any of the regional banks with high CRE with extreme caution.
If you bought CUBI-E last week at the panic low you already made 4% in addition to the double digit divvy which doesn’t make sense. You might be able to continue adding trading profits along the way if volatility is strong enough. My strategy for justifying the risk.
Thank you DJ. Your points are well made and make me more hesitant.
Made a switch, Sold El Paso Energy Cap Trust (EP-C); picked up some additional O- (Realty Income). Upgraded rating for BB+ to BBB and O- yield is better than current yield and YTM of EP-C.
But don’t forget you’re also trading out of a 3 1/2 year “maturity” preferred for a perpetual that never matures…… Even with the better credit ratings, you should have to get more yield…. BTW, taking into account the accumulated dividend on EP-C you actually just slightly squeeze out a slightly higher (3 basis) YTM than O-:s current. Both do carry IG ratings at Moody’s with O- still topping EP-C.
I own a healthy amount of EP-C. I get a stripped YTM of around 6.3% at today’s closing price.
For several reasons, I’m not sure O- is comparable to EP-C. I’m also not sure O- really extends duration either so I’m not really sure I understand the strategy here.
If O- gets redeemed next month or anytime soon really, EP-C will turn out to be a much better investment from what I can tell. I own some of both but I wouldn’t give up EP-c to buy more O-.
It will be redeemed on 9/30/2024. Time for me to start looking for a replacement.
Dick/2WR, I had, what I would say, an unhealthy portion of EP-C. That is, too much of it. Have been unwinding the position since June. Also, needed to offload some 2028 maturities as that was building up too much. It’s been tough to sell watching it creep up every day, but just wasn’t going to wait any longer. I kept some in case they call the damn thing. As for O-, its not going to stay in that for very long, have other plans for it soon.
Understand in the context of portfolio concentration.
I think it could be argued that EP-C is still an attractive buy here.
Difference between a Utility and a REIT
It worked out fine. Realty Income had been giving smoke signals that they were going to redeem, 2 1/4% bump in a day ain’t bad.
Don’t you just hate it when you turn out to be wrong and make out like a bandit for being that way?
It’s never “wrong” to make a switch in the portfolio that fits one’s requirements. O- wasn’t a random pick, a call was coming and it was very underpriced. It’s even better when I was right and made out like a bandit, 😀
Why isn’t EP-C on Tim’s $50/$100 list? Ex-date 9/13
Anyone express an opinion on 649445ac7, NYCB jr sub debt :
11/28 maturity.Coupon should be 8.45 ish… I bought some without looking at the exact rate, at 89.5 , then 89, then 88.5. It’s offered down while NYCB A and U have been rallying and yield less.
“From and including the date of original issuance to, but excluding November 6, 2023, the Notes will bear interest at an initial rate of 5.90 percent per annum payable semi-annually. Unless redeemed, from and including November 6, 2023 to but excluding the maturity date, the interest rate will reset quarterly to an annual interest rate equal to the then-current three-month SOFR rate plus 304.16 basis points payable quarterly.
Love the hard maturity in ’28 vs pref A &U.
US dollar index DXY is a composite of USD against foreign currencies, primarily the euro and yen. It’s driven in large part by the trend in yield differentials between currency regions. Today, DXY has made a new low in the latest down leg and is below three other 2023 lows.
DXY weekly https://www.tradingview.com/x/15L9Y5M0/
The weakening, though still strong, dollar has had me wondering if money is going to flow away from dollar-denominated assets, such as Mag 7. In a recent article, the Chinese author theorized that Chinese investors who hold large amounts of US financial assets would sell them if/when the dollar fell far enough, causing the dollar to weaken further and the yuan to rise. Too much speculation for me with my limited understanding.
So far, I haven’t noticed stock price narratives developing around the falling dollar theme. Who benefits, who doesn’t? (I don’t want to hear about emerging markets, thank you very much. ) Time will tell.
Trying to predict fluctuations in stock prices from short term fluctuations in exchange rates — an esoteric issue for me, best left to those with big computers with NVDA AI chips and algorithms written by 25 year-old computer geeks. For the type of people who like to shave a sliver of a decimal of profit inside the bad-ask spread.
I would suspect that many companies with international operations hedge their currency exposures to mute profit volatility just like oil producers hedge crude.
On the other hand, I have been looking at foreign currencies as a way to hedge against a dollar / debt crisis. (I remember the 1920’s pictures of the wheelbarrows full of paper Deutschmarks.) Like it or not, the dollar is dominant. There aren’t too many places to hide. The Yen a weak choice (aging population and Beijing in the bathtub) China, too many currency restrictions and a “change the rules” mindset. The Euro? Tanks a lot. The Swiss franc, so World War II. There used to be foreign currency denominated US bank accounts, but they are hard to find and offer low or no interest. Might as well find an ETF.
Still thinking about a debt crisis hedge and not willing to add to my stock of dry pasta and canned tuna fish. JMO. DYODD.
“Still thinking about a debt crisis hedge”
One word: gold.
Ok, actually three words: gold and silver.
How much gold though?
I think everyone should have at least 2-5% in gold/silver for diversification purposes. Beyond that depends on your outlook for a crisis.
Reddit Gold
154,000 members
Reddit Bitcoin
7 million members
Reddit CryptoCurrency
8.5 million members
Demographics – recent reddit discussions
r/Gold – Old guys with coins
r/ Bitcoin – young guys with YOLO
Biggest Bitcoin Pro – There’s a Bitcoin ATM at the local convenience store
Biggest gold Pro – China
Biggest Bitcoin Fear – one hack away from vanishing
Biggest gold Fear – Fort Knox is empty
Demographics and increasing public acceptance favor bitcoin (strategic bitcoin reserve, financial advisers, Nasdaq index option proposal.) Not as keen on gold as I used to be. JMO. DYODD.
Bear, Gold has a storage problem, You pay rent to have a safety deposit box or to a exchange, Chance of theft, 2 way commissions to buy and sell. No dividends on the money invested. Been there, done that.
Now I just hold something like FRHLF
Charles, how do you know Freehold??? I am in Italy right now and almost jumped out of my seat at the coffee cafe I’m sitting in!! I have been long the energy company since we helped take them public in 2009. NO ONE ever mentions this great monthly income producer. The discussion above was about crypto (younger people) and gold 🥇 (old guys); I’m curious, how do you know Freehold?
Overview: Freehold Royalties Ltd. acquires and manages royalty interests in crude oil, natural gas, natural gas liquids, and potash properties in Western Canada and the United States, with a market cap of CA$2.09 billion.
Operations: Freehold Royalties Ltd. generates revenue primarily from its oil and gas exploration and production segment, amounting to CA$323.04 million. The company focuses on managing royalty interests across various energy resources in Western Canada and the United States.
Freehold Royalties, a small-cap Canadian entity, reported impressive Q2 2024 results with CAD 39.3 million in net income, up from CAD 24.26 million the previous year. Their production increased by 4% quarter-over-quarter to 15,221 boe/d and oil production rose by 7% to 7,899 bbls/d. The company trades at a significant discount (57.8%) below estimated fair value and has high-quality earnings with EBIT covering interest payments by 15.3 times. Net debt to equity ratio stands at a satisfactory level of 24.6%.
“ Gold is a treasure, and he who possesses it does all he wishes to in this world, and succeeds in helping souls into paradise”. – Christopher Columbus
I am Azure
The old cat lady LoL😃
I also know about them from a thread over on SA about gold royalty companies. The reason for the comment on the gold conversation. They have been getting into gold besides oil and gas.
my mistake, they are not into gold, but they should be. I was following posts over on SA about royalty companies and income.
Charles, thank you for the clarification. I emailed my contact at Freehold about any gold holdings or production (because I never hear that) and am awaiting response. It actually would make sense because their land holdings are in gold/metal production zones
Good morning AB, I recommend coffee always at the counter. You will pay € 1.20. If you sit at the tables, you do so at the risk of your wallet! Have a nice holiday.
Fabrizio – Milan, Italy-
Fabrib, what an incredible country with such amazing people you have. Truly, everything and everyone on this latest trip here has exceeded my expectations and sadly I’m leaving back to the States tomorrow for a wedding.
Adoro la magnifica Italia e non vedo l’ora di tornarci, Azure
Azure-
What is the tax treatment- in a Roth or traditional IRA ? Do they have the withholding you can’t get back at tax time? Noticed it is OTC Pink sheet too.
Also- the following doesn’t seem to jibe with the figures you have- or am I missing something? :
“Freehold Royalties paid out 109% of its earnings, which is more than we’re comfortable with, unless there are mitigating circumstances. Yet cash flows are even more important than profits for assessing a dividend, so we need to see if the company generated enough cash to pay its distribution. Over the past year it paid out 184% of its free cash flow as dividends, which is uncomfortably high.”
— 8/25/24 —
https://finance.yahoo.com/news/dont-race-buy-freehold-royalties-131308780.html
–Thanks-
Gary, thank you for the questions. I am heading to a hotel near the airport and my iPad is in my luggage. Please look on the Freehold web site and read/listen to their recent earnings statement, definitely will provide better and more accurate guidance/information. My flight out leaves in the afternoon so it may be tough for me to respond for a bit. Wishing you prosperity, peace and profitable investing, A
Azure
Thx- Safe travels. Will try again to locate their site.
Long Freehold Royalties; FRHLF, hold in my RothIRA, goes xd 8/30 and pays monthly C.09 about .065US or 7.65% or so yield currently. If held in IRAs no tax to US folks, my basis is about 9.64 it trades now at 10.20 or so fairly stable, royalties on CA/US o/ng. While OTC in US, it does not incur extra trading fees at Fidelity where I hold as they clear thru the DTC.
It is a PFIC w onerous forms to file but possibly not if held in very small amounts in taxable. No issues in IRAs, PFICs are ok there. Not tax advice. https://www.hg.org/legal-articles/form-8621-exception-25k-50k-regulation-vs-instructions-61305
Investment Doctor on Seeking Alpha writes on it often, possibly held and was a fav of Trapping Value not sure not in his service anymore. Since it is an old trade but still held, without talking out of class too much or giving ‘secrets’ to non subscribers, I can say being in Taylor Dart’s service he holds some w a very low basis in his CA portfolio, he likes some ‘ballast’ in his gold/silver/metals royalty holdings. Its o/ng roy’s not gold. I think I have written about this holding in Canadian chat here btw and others like Paramount Resources (not a royalty co.) that I hold.
Hope this helps ‘Robin’ DYODD, yours truly, Bea the Catwoman (actually I don’t have a cat now afraid Mom would trip over one, they are always underfoot!! lol.)
Bea, apologize for off topic question, wondering what your thoughts on PSTL at current price $14.40? I have seen some posts from you on this one; have actually had this one myself but sold a few yrs ago. Thinking about getting back in.
Gary,
Here’s some info on divs and taxes:
https://freeholdroyalties.com/investors/#dividends-and-tax
They say their divs are not QDI, and that they’re a PFIC:
U.S. Residents
The majority of Freehold’s revenue is derived from non-operated royalty interests. Based on the nature of our assets, our dividends are not “qualified dividends” for U.S. tax purposes.
In consultation with its U.S. tax advisors, Freehold believes that it should be classified as a passive foreign investment company (“PFIC”) under U.S. federal income tax principles. As such, dividends are subject to the provisions of U.S. federal income taxation applicable to PFICs.
Looks a bit complicating for this old brain – since I do my own taxes or use an online service.
Thanks-
G
Do US gold reserves ( if extant) really serve a purpose? It’s not like the $ is backed by anything except faith, etc. –Curious.
If anyone here is interested in the timber/wood industry these sites were recommended this morning by the people that manage my extensive raw land holdings and I believe are interesting to review:
https://www.tireurope.com/wp-content/uploads/2024/02/Timberland-Investments-A-Primer-2023-02-14.pdf
https://www.spglobal.com/spdji/en/indices/equity/sp-global-timber-and-forestry-index/?currency=USD&returntype=P-#overview
Our land is more valuable than your money. It will last forever. It will not even perish by the flames of fire. As long as the sun shines and the waters flow, this land will be here to give life to men and animals.”
– Chief of the Blackfeet
Chief of the Blackfeet probably didn’t have to deal with property taxes. So that has to be part of the equation. Fortunately usually only around 1% on land.
Danzeb, the property taxes on my raw land holdings in Kentucky and Alabama are extremely low. As an example, one of the properties that is 327+/- acres I am growing white oak (used to age bourbon) and have 4 advertising billboards on this land; my tax on the property is $1170 yearly (I get that from just one of the billboards per month). It really depends on the jurisdiction your property is in and what the property is zoned. In Florida property zoned agricultural, tax are very low and I don’t change the designation until I’m ready to build on the property. I owned the largest boat and RV storage facility in Ocala, Florida and my commercial property taxes were under $1500 per year. This is because there were no permanent structures on the land, just a parking lot with almost 600 spaces. The office on the property was an Airstream I had converted to an office and there were 30 storage shipping containers. I’m currently planning on taking another raw land property, taking all the trees down to be sold and just making it a container storage only property. I waiting for the price of hardwoods to rally and then the clear cutting will begin. I’d be glad to answer any questions anyone here has, Azure
Azureblue, thanks for the additional information showing property taxes on land are often insignificant.
as someone who dealt in “paper”assets (stocks and bonds” its interesing to hear anecdotes from those who invested in “real”ones
Or the dumping of toxic waste. Azure, I hope you’re holding your land in entities. I had a bad experience with land becoming subject to CERCLA (Comprehensive Environmental Response, Compensation and Liability Act) liability. I’m not sure if the rules still work this way, but everyone in the chain of title became liable for the cleanup cost, after the polluter went bankrupt.
In retrospect an EPA II might have discovered the problem, or maybe not.
Your mention of CERCLA reminded me of a situation we had several decades ago.
A town had opened a landfill next door to one of our properties. They wanted to buy some of our land, but we said declined. So, they “accidentally” knocked down the fences and used our land for landfill anyway (more than once).
Luckily, we had a very sympathetic judge. We got a good judgement the first time we sued. The town claimed it was an “accident”, but we put the bulldozer operator on the stand and he said his boss told him to do it. So, we put his boss on, who said the town manager told him to do it – and he still had the note from the manager. Hard to explain that… Town’s lawyer was terrible.
However, when they did it again, the judge seemed to take it personally. She awarded us VERY substantial damages, made them buy the land from us (at a pretty high price) and made them indemnify us in perpetuity for any environmental issues that ever arise from the land they took and for our neighboring property (!).
Everything we asked for and more. I was floored.
I think the town council was too embarrassed to appeal. If they had, I think a lot of the judgment would have been reversed, but I don’t think they wanted to defend the town’s actions to voters.
Given the financial destruction of the lumber industry, I assume timber sector has suffered also. Canadian and US SE mills have been closing. I am considering adding to exchange fund Wood or such. Hopefully, if home building can recover these will give returns. I have learned nothing increases overnight. I will wait until a positive trend develops.
TNTowanda, owning large tracts of raw land and growing trees has by far outperformed any investment I have ever been apart of, except Bitcoin (BTC). These are not overnight investments and you cannot look online to simple mark to market like the bond or equity markets. You have to get out of your comfort zone and do your own deep due diligence to be comfortable with tree 🌲 land. Most people here and in other forums treat their portfolio of asset holdings like they are going to a casino and are looking for instant gratification. The peak of the lumber price was May 2021 and the girl and her father that monitor my land holdings (they are Forestry People and I am not) advised to start cutting the beginning of 2021. That was the first cutting of any of the tracts of trees since I began buying tree 🌲 property in 2004/2005. The trees grow about 6-9 +/-% every year and with some of the properties there are ways to generate additional income (like billboards). Trees are not effected by world events, bad governments, the Federal debt, etc and I have no employees to sue me, no FICO, no Social Security to pay etc. My expenses are extremely low, my return has been exceptional and only I decide when to cut and take my revenue/profits. Thankfully, most of the properties that Azure has bought have been distressed (divorce, forced sale, at auction, bankruptcy, adjustable etc) and I have to make 20 offers to get 1 property at MY price. Finally, I will give you a little of the inside Azure (if you can keep a 🤫 ) during my due diligence period I get what is called a tree cruise. A timber cruise is an essential tool used by foresters to determine the value of a specific area of land, including the trees; most people do not do this, they are buying blindly. Afterwards, I will get a survey of the property, as 90% of the land has ever been professionally surveyed! I do not buy/invest in ANY property unless I am buying the trees at a step discount to the current spot value. Again, I’d be glad to answer any questions that anyone here may have….
Az: around here – SE Maryland, they buy the timberland bulk and then subdivide the sections along paved roads into building lots. Then try and sell those lots to pay for their timberland investment. My best bud from grade school has gotten rich in the mulch and wood pellet business and now has plants in 4 states from MD to TX. High School graduate probably worth $30 or $40M.
Hi neighbor….I’m in Chuck county; also have friend in timber biz – only commented cause of such a coincidence.
Azure, have you had anyone cut your trees without permission? I have a college roommate with 6500 acres on Lake of the Ozarks who experienced clear cutting of a big tract. It’s not high on law enforcement priority, but I’m betting they could have figured it out from sales to area mills.
I’m sorry to hear about your college roommate’s experience. I don’t believe I’ve ever had anyone cut trees that has not has permission. Every property has a gate(s) and I’ve done select cheap fencing with signs, cameras etc We have cut some dead trees off a few of the parcels (left the wood on the road side for free) and once did a fifth cut on a couple sections so the other trees could grow stronger and not have to fight for the resources (rain water/sun etc) to grow larger. Hoping I never have to deal with that issue my friend . Probably, as the economy gets worse illegal cutting will become a potential problem.
Very interesting- thanks Mr Costanza.
Azure,
FWIW, I have found these guys helpful as well.
Forest Economic Advisors
https://getfea.com/
Thank you so much for your post ⭐️
Is anyone aware of any caution on BAM(Brookfield Asset Management)? I’m looking at the preferred stock of Oaktree, OAK-A and OAK-B. It looks like BAM is acquiring approximately 5% of Oaktree per quarter and now owns approximately 73%. As far as I know, the preferred stocks still have a BBB rating.
It might be wrong on this but I get a feeling that people are incorrectly valuing MTB.PRJ. The first dividend seems to have the normal plus a partial for the initial period. I sold out and swapped for some old illiquids for the most part. Not a recommendation but the jump on that one has been interesting.
I don’t think they realize that is a combined yield—crazy folks.
yes agree I sold mine in the Roth IRA of the MTB J/ w basis 25.20 there and in taxable/ but I have too many short term cap gains in the taxable so will keep the small amt there for a while. I have no problem w the quality of the bank and yield is ok but really more booking to capital and looking for new things w that money in the Roth. it is at 26.94 now..wow.
I sold a chunk of mine at $27.00 today.
Several High GTC Sells hitting
Frenzied…..
Accrued Market Discount
Does it make sense to have Accrued Market Discount on a 1099B for a Baby Bond which in my case is for ATLCL, GAINZ, GAINN as short term sales?
Re: Private REIT investment, thanks to everyone for the comments and a little more info …I’m wondering if this changes anyone’s mind:
The REIT has existed since 2018. Prior to that, what are now shareholders invested with the developer / manager (CPA who was previously COO of a public REIT that was bought out) since 2003. Each deal stood on it’s own merits. None failed, but some took a long time to cash flow, I’m told.
The investors have generally known the developer/manager for several decades and the investors are largely sophisticated (among others, there’s an EVP of Trammel Crow, a principal of JLL (Jones Lang Lasalle) , others whom I know of but don’t know personally.
My dad has had years of good experience investing with the developer.
In 2018 the developer obtained approval of the limiteds in each deal to move the properties into a REIT. It originally paid 7% on a $10 value for operating partnership interests and new shares. valuation for the . The valuation is now a little over $15. The dividend has risen 20 % in 6 years. One quarter was omitted during Covid .
The REIT acquires centers for both cash and units in the operating partnership. It has also done mezzanine financing of development and then acquired some centers from the smaller developers for REIT units, has purchased a number of properties solely for units in the REIT.
There’s a small annual buyback offer of about 1% of units at a 5% discount to the price at which shares can be purchased, and I know of two people who have been able to sell their entire interest around the midpoint between the original $10 and the $15+ valuation on a forced sale .
Regarding the development deals, a REIT interest holder can chose to participate or not, and those are always oversubscribed.
To date, I don’t believe any of the deals have sought additional capital to stay afloat prior to being leased up .
I’m told that banks are no longer making good financing offers, rather insurers are financing most of the mortgages. Occupancy is about 90%, which seems low to me.
Since it was my dad that turned me onto this, and he’s been wrong only a few times in my life, I’m considering it. Sorry if I made it sound like some rando developer was trying to sucker me.
The question in my mind is what this security would be rated by a NRSRO given it’s one property type in one major geographic area.
The centers are all relatively new, not dumpy .
If it seems to good to be true, 99% of the time that is what comes to fruition (huge loss) unless you want to keep your screen name on here intact……i once
knew a developer who let me /promised me I would be 1st in on the condo conversion to buy condos……and every time 5 units were sold….they would raise price by $5k..,,,,so at completion.300 unit later..i should be way ahead..what could go wrong?..then the real estate condo crash came..NOT the same as what you are explaining BUT…anything can happen and usually does……Rating would be BBB- /BB+ at best
Hey LT – please note my suggestion would not change. Get the documents and have the reviewed by a qualifed real estate lawyer before you do anything. I would remain concerned about conflicts of interest between the entities controlling the development projects and the REIT. Good luck to you!
LT, take one look at the drama w Blackstone’s private REIT BREIT and investors in a time of concern having withdrawals suspended etc. It felt ‘Madoff-ian’ to me. https://www.businessinsider.com/blackstone-breit-commercial-real-estate-fund-misled-investors-private-equity-2024-5
WP Carey is another example of a company who has these private REITs and from time to time has ‘folded’ them into the public company which is nice for the private shareholder to monetize if necessary /be more liquid, but did the sub/private REIT perform?
Of course simple googling around can get you basic and complex info, ‘not having to comply w SEC regulations’ is one concern for me, another -like all companies- these are only as good as their managers https://www.fool.com/investing/stock-market/market-sectors/real-estate-investing/reit/private-reits/
side note to me this ‘private’ credit trend is a big red flag and mess waiting to happen, there is very little liquidity for these investors in a downturn and if like what happened at Blackstone’s BREIT when people wanted to cash out at the max allowable all at once, assets will get dumped on the market, cascading into firesale prices- we see/saw this in office already. If these strip malls/shopping centers see marginal leasing dry up and vacancy increase, the private REIT payouts will dry up for sure.
Guess bottom actionable line for me is quality REIT pfds w lots of coverage of the payouts and good balance sheets and tenants you can also research to insure what the glossy brochures and presentations are hyping is really what is driving the payments to you. or just buy CEF RFI on a pullback and get an 8% yield! Bea
Thanks. I’ll take a look at that.
HCDI- now HCDIQ developer just went BK
Little help to my friends, here is the article unlocked.
https://www.businessinsider.com/blackstone-breit-commercial-real-estate-fund-misled-investors-private-equity-2024-5
Why do I feel Calif. is like Illinois when the UC system put in funds to Blackstone and if they fail the state has to make up the loss.
Then the fund got what looked like a vote of confidence. In January 2023, BREIT announced that the University of California had decided to invest $4 billion in the fund, giving it a much-needed infusion of cash. Schwarzman called the investment a “validation” of BREIT’s strategy.
But it wasn’t. To entice the university to invest, Blackstone had offered it a special deal. BREIT agreed to award the university an additional $1 billion in stock in the event that the fund’s rate of return fell below 11.25%. The deal was so sweet that UC’s Board of Regents quickly agreed to invest another $500 million on the same terms.
Back in 2021 I think I remember just as the RE market was slowing down I seemed to have read of Several PE company’s touting raising so much cash they had to close out one fund and start another then a third as investors jumped on the boat to give them money.
In the future, If you own an investment and there is an offer to buy out the company you are invested in and it involves being offered stock in the buyout company consider carefully how liquid it is to sell that stock or you just might be getting magic beans for your cash cow.
On the private reit:
Thanks for all the comments.
Well, I had been considering putting 1/3rd of my assets into this, but I will go much smaller. I still feel very good about the investment , and one of the reasons is that the developer has 80% of his net worth in his own REIT, which BTW is now structured as a UPREIT. His original explanation to my dad in forming the reit was that the various partnerships would be more difficult to manage if he died –I think he’s late 60’s.. and the plan was either to sell the reit or take it public 5 years from inception. He’s about a year past his original projection for a liquidity event, and I know there was at least one public company that was rejected because it’s stock collapsed…
The various centers total about 1.5 million square feet across some 75 properties and they are on the books at $383 mill less accum depreciation of about 50 mill. Total mortgage debt is $150 mill and newer deals are being done more with cash and operating partnership units versus debt
Without directing everyone to the REIT website, which I don’t want to do, or posting financials which I’m not sure I haven’t agreed to keep confidential, I understand the advice is based on what I have disclosed and others’ experience.
I recall the Texas real estate debacle of the 80’s and that kept me from investing in the sector for many years. I’ve since bought into a relative’s offerings (40 years experience and he’s the EVP of Trammel and did not solicit my investment). Each of those 50k investments averaged 22% return. Those were all land purchases based on his knowledge.
However, my dad got me into an institutional offering from Adler in Florida, and I committed to fund quite a bit over 3 years. That is now 38% funded and each time I’m asked for a capital contribution I consider defaulting and taking a 50% cramdown because I think the developer is going to magically find enough properties to require full funding of the commitment before the 3 years is up…and thus far the properties appear to me to be underperforming as a whole.
As far as taxation on the reit, I think only 80% of the income is taxed (QBI ?).
As a side note, real estate is a big departure from what I did for 20 years in public markets. I started trading in 1998 and was able to retire in 2010. The GFC was my biggest profit period by far.
The best decision I could have made would have been to buy SPY in 2010 and not look back , but I wanted income , so I bought primarily munis and CD’s.
I’ve spent the past 14 years finding the best CD rates, which usually involved negotiating an off market deal with the CEO of a credit union, or otherwise finding a way to join a credit union that had a very restrictive field of membership. I’m finding the best rates now in multi year guaranteed annuities, which I know I’ve pointed out are sometimes yielding significantly more than the unsecured debt of the insurer.
I’ve always been about trying to get the best relative value in markets.
I’d never let anyone manage my money, but yes I’m doing that with real estate, and frankly perhaps any private reit investment would be too much since I’m likely to inherit shares of the reit as my dad is 95
Thanks again, and I will make sure I don’t put in so much that if it all goes to zero my living standard would be affected.
My backup plan for that would be to sell my big home (purchased for cash during the GFC at a good price) that only has me living in it and costs $150k annually to operate…along with 3 super intelligent cloned dogs. I had paid to have my beagle cloned 8 years ago, and 10 embryos were created to try to achieve one live birth. The result , however, was 10 identical dogs. One went to my CPA, several to other friends, several live on farms in Iowa, and I kept 3.
There’s a short piece about cloning Channel 8 in Las Vegas did (it’s on youtube) that has the beagles in it at the beginning and at the 2:50 mark. That piece has been useful for those that don’t believe cloning is real .
Sorry, I digest.
.
Hey LT
As I read your post it sounds like your decision is driven primarily by recommendations/experience form your Dad. Certainly respect that, and you should most certainly listen to this advice over posters on an chat forum.
However – I am sure your Dad would tell you to get a lawyer to look at that paperwork. Please take this step… It may put you into a positon to negotiate a better deal for your self with the sponsors.
Good luck to you!
hey Bea – agree that Private Credit trend is certainly a giant red flag. What we have learned is that there is a class of investors that are drawn to giant red flags like magnets.
For evidence look no further than recent mania for RILY junk bonds… Interestingly this fevorish mania for absolute garbage is exhibited by the same investors that compare Bitcoin and NVDA to Tulips…
My point is not that BTC and NVDA are not Tulips. My point is that if one does think they are Tulips one must also think that RILY junk bonds are Tulips.
Don’t buy Tulips bulbs with $ that you would not gamble at a craps table (craps table has higher chance of winning BTW…)
August,
Thanks for the advice to consult an attorney.. sorry i didn’t mention I did.
On the present subject:
I don’t think NVDA is a tulip but I do think BTC is nonsense. My thought is there will one day be a 1987 -type market event and there’s no underlying value to support it. The few market makers I know would all be forced out at successively lower prices.
I would love to have someone disabuse me of my belief it’s nonsense, with an argument that doesn’t resort to bitcoin maximalism or the statement that “you just don’t understand ” which then results in a long ecxplanation of everything I’ve heard before.
I have a good friend who sold everything he ever acquired, bought BTC at an average of 22k and moved to a “crypto community” in Portugal. Seems to be doing fine. Another friend invented a stablecoin he invited me to invest in, ReserveRights. The 100k he wanted me to invest became worth millions.
I rejected the idea when I read what I call a Silly White Paper. The deal was described as “like a bank.” The difference is that a bank keeps 15% in reserve and lends 85%, for example. Reserve Rights was to keep 15% in reserve and the sellers of the token would just keep the other 85%. In the end, Coinabse , Thiel and others invested . My friend made , I believe either 36 or 63 million from 0 invested.
One good speculation is worth an entire life of prudent and conservative investing. The problem is always finding that one incredible investment. I bought the vast majority of my Bitcoin around $3000/$3250 as one of my friends an institutional client I respected as he was Corporate Counsel for a Fortune 500 company, asked me to buy him Bitcoins and wanted to put a substantial amount of capital in at that time. I had only heard of cryptocurrencies being risky, but wanted to do my own research. I bought with him and sold my basis (a bit earlier this calendar year) there is NO WAY I will liquidate any more post my original cost basis. I have about 15%+\~ of my entire portfolio in Bitcoin. My son currently in his last year of Dental School and his friends all use and buy crypto daily and laugh at cash, credit cards etc. Have your own convictions as it is only YOU that can decide the risks and rewards you are willing to take. Be well, Azure
Super interesting. When you say your son’s friends “use” bitcoin, what are they using it for?
LT, thank you for your question, but I can’t answer that. Unless the friends I meet volunteer the information (they have not), I can only tell you what my son has and is using Bitcoin for. He transacts with his friends all the time where they move Bitcoin back and forth between them as payment. My son has traveled to Switzerland a couple times as there is a town called Lugano. Lugano is the largest city in the Italian-speaking region of southern Switzerland, has de-facto adopted BTC as legal tender. Renowned brands such as McDonalds, Rolex and Lamborghini and regular businesses like pharmacies, convenience stores and tobacco shops in the city accept BTC as payment. I gave my son 3 Bitcoin about 10 years or so ago and his expenses (except Dental School and his apartment ($175K per year), have been covered by the coins I have given him. When he graduates 🎓 mid next year he will be a dentist and he has told me that he and his friends are planning on going to El Salvador; the country primarily uses Bitcoin as well. Hope that helps, A
Azure –
What I will never understand about the true Bitcoin believers (like your son who so believe in it that they will actually move to a place like El Savador that makes it an integral part of their economy) – is why do they transact in it if for every day goods and services if they believe it will one day be worth $500K/coin?
The first soul that transacted in Bitcoin used 10K Bitcoin to buy two Papa John’s pizzas back in 2010. Hope they were tasty, since if he paid cash those Bitcoins would be worth $630M today. Is that guy still laughing at cash and credit cards?
I own it, but don’t ever plan to use it to purchase every day goods and services. The same way that I won’t use a gold coin to buy a washer and dryer at Home Depot. To me BTC is just a substitute for owning gold. A store of value and nothing more.
I will transact in Bitcoin when I sell it all. Are the true believers like your son using it in other countries to avoid capital gains?
I still think it’s a limited supply of nothingness.
When I go to the street corner to buy my illegal drugs, the dealer says “check out my new gold chain,” not “check out my new Bitcoin chain!”
Street -level drug dealers understand value. That’s who I rely on for stock tips too, especially preferreds.
So that’s what I’m doing wrong. I should value street drug dealers stock tips over my own?
So Coke doesn’t mean what I thought it did?
Papa, my son is going back with his Dental School friends after he’s a doctor to do humanitarian free dental work at the bequest of the government of El Salvador; he’s not moving there. He’s been there doing dental work during his schooling (I think that get credit for it) and while he was in El Salvador and Jamaica with his dental friends they made an agreement to go a different country each year (at least for a week) to give free dental care and surgeries to those that are too poor to afford it. My son was also in Israel during his schooling again working for free to give quality dental care to those that are unable to afford it. We are very proud of him, Azure
Wasn’t trying to turn this into a BTC discussion at all. My only point was that if you think BTC is a Tulip bulb then a RILY junk bond must also be a Tulip bulb. My secondary point is that you are better off at the craps table than in Tulip bulbs. As Bea I think Private Credit will probe to be a Tulip Bulb as well.
Good Luck LT.
Private REIT investments. Anyone have experience with this. I’ve got an opportunity to invest in one with highly experienced manager who has 80% of his personal net worth (he says) in the fund. It’s 150 mill in size, about 7 years old and buying or even developing non anchored retail primarily in Texas. Current yield is 5.5 %, but it seems the best part of the opportunity is the opportunity to invest in the development side when the raw land is bought , center is built and leased up . It then is appraised and goes into the REIT at (thus far) 2-5 times original investment, so the 5.5 % is then earned on the upgraded value.
Any tips?
It seems like the selling point is getting in on the development deals, but it’s illiquid except for a very small buyback offer yearly.
avoid. Period. Bea
Agree w Bea. 9 times out of 10, you are better off in a public REIT. There are many quality strip center REITS out there.. have a listen to the FRT conference calls if you haven’t already.
Agree with Bea. Avoid. Your ownership interest is not clear to me: part owner of a property to be sold to a REIT or investor in a private REIT. There is a difference.
I have trouble with the math of a REIT, even a private one, buying something for 2x to 5x what it costs. If the REIT goes bust who is gonna buy a non-anchored center for 5x cost of land and building unless there are some dandy leases in place. You might want to pencil in a pro-forma on rents, taxes and debt service, etc. to see if the property works.
If the appraised value is pumped up, it will requires more rent to carry the debt. IMHO, that increases the chances of the property going home to the lender if it loses a tenant or two.
Wouldn’t surprise me if the developer was a man in the middle on the land purchase, will collect a construction management fee, a broker’s commission on the lease up and a management fee on the operating property. Just sayin’
Don’t sign any personal guaranties. Google the principals and shell corps for prior litigation and proper licenses.
5.5% is pretty skinny for what sounds like ordinary income. JMO. DYODD
Run, run away fastttttt
lt,
This sounds like a classic setup. We’ve run many projects and have never made an offer like this to anyone.
If you want a private RE investment, make your own and have 100% control.
If you do not have the resources, time or management to go alone, then only engage a partner you’ve known for decades. We syndicated projects with partners, but they were all close friends and we knew every one of them for decades – and they agreed to 0% management control and simply received quarterly statements. Worked flawlessly for near 20 years when we liquidated.
At a “minimum” this sounds like mezzanine debt. No investor is going to share dollar-one returns with late investors – unless the project is distressed. The warning signs are all over your note here.
At worst, your investment is made and disappears into an abyss of red-tape, finger-pointing, project delays and low appraisals.
Rather see you in a low-yielding treasury with 100% certainty of payoff than someting like this. Low returns still preserve capital, though capital losses are gone forever. JMO, run.
Not knowing anything about it that type of sales pitch is highly suspect. Often a great exaggeration or outright scam but even if it isn’t buying unknown startups usually lose money but occasionally make multiple times your money. Not my type of investing go to Vegas if that’s what you want.
I live in Vegas!
You can buy quality public property REITS with 5.5% yields. There are lots of private REITs recenty that have done things like gate exits (BREIT and SREIT are examples). If these two large REITs will do this imagine what smaller private REITs will do.
It sounds like this person will want you to contribute additional and separate funds outside of the REIT for development deals and upon completion these will be dropped into the REIT. One is left to wonder how competitive such purchases would be and if REIT shareholders will get the best purchase price possible…. I would also wonder if there will be classes of investors in development deals that are Sr to your position (and who those parties might be). In short – I would wonder if there a conflict of interest here on behalf of the REIT sponsors?
I would be very concerned about conflicts of interest and would have any/all contracts reviewed a lawyer with expertise in real estate before I did anything. Not saying it’s a pass per se, but contracts must be reviewed by a lawyer before any investment (or deposit) is made IMO
FWIW and good luck!
Lt, I have a 100% different take on why you should RUN, not walk away from this “opportunity.” Any investment manager that has 80% of his net worth in one fund is either:
1) Lying out his posterior
2) So full of hubris to be considered incompetent
In the real world, all of us experienced investors have experienced downside surprises from time to time. Occasionally they are black or at least grey swans. The only investors that should IMO have 80% of their net worth in a single investment are ones with company stock options. Like Elan or Bezos all the way down to the $70k/year Nvidia graphic artist I discussed last week. And in every single one of the people that I run into that are that concentrated, I strongly encourage them to diversify ASAP.
One of the most famous Texas real estate investors was Trammel Crow. Billion’s of dollars in assets spread across the world. His company is head of the genealogy tree for many current real estate companies. One time in a big downturn, he had many properties underwater. They were earning less than the payments due. He had the power to convince all of the banks it was in their best interest to extend/pretend and let him keep the properties. The banks all agreed and the rest is a positive history. OTOH, I can tell you many stories where they mailed the keys in. A lot of my HNW friends got rich using real estate. Many of them that are ~ 60+ have declared personal and business bankruptcy at least once.
One of the best investment decisions I ever made was passing on a “can’t lose, 5X your money” real estate deal. A good friend, honest fellow, that I trusted a lot could not believe I would not go in. You can guess the rest, it well belly up, court cases, jail time, all kinds of fun.
Run, run as fast as you can, you can’t catch me the LT man . .
I worked for one (in what you could say was a supporting role) but looked at what it had and other offerings in the market via a CFP and realized how illiquid they can be. A lot of them celebrate their levels of assets under management and AUM don’t stay high if people are allowed to easily leave.
Super caveat emptor. I personally like the other comments here to create your own with known partners or buy public REITs. I am involved in the latter and all the actual properties I own have been by myself or with just 1 other partner. 5.5% is underwhelming IMO. Even Realty Income still pays over 5% and is super liquid. Private REITs should be giving 8-12% to be interesting from where I sit.
From Eric Basmajian (EPB Business Cycle Research) in an email report:
In the last two Business Cycle recessions, real corporate profits (currently down 3% from the cycle peak) declined 20% to 40% in total but declined at least 10% before sizable layoffs started.
Layoffs are a business’s final step. It’s extremely costly to obtain, train, and retain labor, so the decision to sharply reduce the workforce is not taken lightly or based on speculation.
There have been no material layoffs, but the pace of job creation is stalling and is well below the roughly 125,000 jobs needed to maintain a flat unemployment rate.
SQFTP a lesson learned?
Before the rate hikes were about to get started, yields were tight. I bought 1100 shares of SQFTP @ avg price of $24.72. Of course it went down to the 20’s fairly quickly right after I bought it. NI was sparse, but usually FFO was positive so I held tight.
It soon started crack the $20’s before settling in the high teens. Then the weirdness started. There was this whole SPAC and a pharmaceutical company that was bought with the proceeds. Some new owners were added to the roster with a board seat. I started getting antsy about what may come next.
Then the numnutz management team sold a slug of preferreds at a STEEP discount. That killed the price of SQFTP and put a cap on the upside to under $16!
I decided it was time to leave and began selling SQFTP in small lots around $15.50-$16.00 share. I took the proceeds on each lot sold and bought new lots at 15.53 avg of 1100 shares in a different perp. I give up some yield (less than 2%), but the new perp has qualified dividends. I don’t really want to say which perp I bought as that is another story.
SQFT just recently reported with a suckie quarter that had a negative FFO and NI. The moral of the story is that even when the chips are down, it is good to have a backup plan to get out of a bad position of need be. Plus all purchases were done in time for the next divvy on the new perp.
TTFN YMMV DYODD YADDA YADDA
Paging 2WR about a Milken Milken story. (2WR worked at the same Drexel office as Milken IIRC.) Today’s Wall Street Week on Bloomberg TV had an interview with a MIT professor. The premise of the story was a quote attributed to Milken something along the lines of “VisiCalc enabled LBO’s/junk bonds by making it easy to model companies.” I had never heard this before, but apparently there is some truth to it. (History lesson for young’un’s: VisiCalc led to Lotus 123 led to Excel. BTW, Excel blatantly copied the functionality of Lotus 123)
The question Bloomberg asked was along the lines of “Will AI be the new spreadsheet allowing better, faster analysis of companies.
Interesting that several III’ers have mentioned they do not use any spreadsheet(s) in their analysis of anything. My impression is that III’ers have a wide range of spreadsheet expertise, ranging from ~ zero to infinity (and beyond)!
WSW is repeated tonight and tomorrow on Bloomberg TV which you can see for free.
Link to MIT story on Milken and spreadsheets:
https://dspace.mit.edu/bitstream/handle/1721.1/126771/DERINGER%20Milkens%20Spreadsheets%20IEEE%20Annals%20vInitialSubmission%2011152019.pdf
You forgot Multiplan
Don’t forget Google Docs. Tim uses that for his spreadsheets. I use the spreadsheet there to track equities in my portfolio. Each sector has a different sheet with the first sheet being an overall summation. I know what each stock pays as a dividend and know the grand total of the portfolio income also. Part of it updates automatically, but I manually enter the dividend amount per share when I set up an new purchase. I also have my household / living budget on a sheet so I can keep track of spending versus income. I am way better than Congress as I always have a surplus!! By the way if you know about Multiplan you go way back. My first computer was a Mostek with no hard drive, but it did have two monster floppy drives. Those floppies were about the size of dinner plates I recall. Thought I had died and gone to heaven when I got an IBM PC with a Bernoulli box. Eventually I got an IBM PC with a 10MB! hard drive. I knew for sure I was in heaven then. God, those things cost thousands of dollars in the early 80s….. Let’s face it, we are getting old!!!!
All these youngsters that started with personal computers. Before that we had Teletype ASR-33’s with paper tape readers. Used a telephone receiver 128 baud modem. Not 128K, one hundred twenty eight! Sent your jobs to an IBM360. Next upgrade was to DEC (Digital Equipment Corporation) PDP-11 with a paper tape reader. Then IBM370/195, IBM 1130’s, PDP8’s, Cray1’s.
PC’s and spreadsheets really did revolutionize the world. You no longer needed to be a programmer to do any work. BTW, a friend of mine was one of the fathers of the IBM PC which was developed in Boca Raton, Florida. The VP over the whole PC project, Don Estridge, died when Delta 191 crashed in Dallas in 1985.
See the modem here:
https://www.pinterest.com/pin/457889487118199380/
Even further back in ancient history–My one-time programming effort: first semester physics- Fortran and punch card compiling to solve the optics of a rainbow. No further interest in programming!
Fortran punch cards was the last time I understood computers.
Tex, I cannot imagine not having a spreadsheet (I use Excel) to keep track of everything. I admit though I may have larger number of holdings to keep track of. It is a beautiful thing hitting a button and all is updated. I use to watch my grandfather update his prices on VisiCalc by scouring the newspaper on Saturday mornings for his quotes.
Pig,
Can excel handle all the odd tickers we buy around these parts? I recall setting it up years ago and some would simply not update. “INVALID” data would appear. I assume I was using the wrong ticker symbol (not sure where to find the correct one) or it could not load it.
I hate wasting my time on such things unless I know it can actually do 100% of the task. Instead I just avoid loading the current price and use it anyway.
Hell, my broker Ally already has a hard enough time with the obscure stuff we buy let alone a spreadsheet when displaying data correctly.
fc, Most of them yes, it can handle. There are a few it chokes on still; SBNCM (oddly SBNCN is fine), KIM-N, MTB-J, EP-C, HL-B are some examples. Its not a big list of problem stocks and to me its well worth the momentary hassle of updating the problem children by hand to get an accurate reading of my financial picture.
PP,
Can you help me out and advise what the excel formula is for stock prices?
Thanks much
Gumfighter, no formula, just type in stock symbol in a cell, then hit Data-Stocks, gets interesting with preferred stocks as they use different format; for instance GDV-K is recognized by excel as GDV PR K (spaces intentional). Just make sure you have open columns to the right of your stock symbol too add the data associated with each stock (identified by simply clicking on the cell you entered the stock symbol and further clicking the little button).
….the little button refers to the little box that appears to the upper right of a cell that has had a stock symbol inputted, sorry incomplete post above
Thx PP
You can also use =STOCKHISTORY(A255,TODAY(),,2,0,1)
Where you put the stock symbol in cell A255 depending on what exactly you’re trying to do and it helps with some OTC’S
I use =RTD(“tos.rtd”,,”LAST”,cell), which grabs stock prices from ToS.
For the record, Tex, I did not work in the Milken office…. I was recruited by them in LA, but I never left NYC because at the time I was long two houses, having just bot one and, yes, again, just like now, had trouble selling my previous primary…. He did fascinate me though in what he created.. never met the guy…
Funny story:
When I worked for a Texas S&L, I was sent to analyze it’s purchase of a $1 bill mortgage security from Drexel. At the time Milken had already left Drexel and they were nearing the end.
Drexel employees took us to the trading area and said “That’s where Michael Miken used to stand” as if he were God.
What was odd was they kept knowing what we were interested in looking at so we eventually checked the conference room ceiling for bugs. We weren’t exactly capable of knowing one if we found it.
I had no input on the purchase, only testing validity of the docs underlying mortgages.
In the end I found out the S&L failed because the person who bought the security didn’t understand prepayment speed was an input to the pricing model.
Ha, that’s a good one… Somewhat relevant funny story at least related to S&Ls and a learning the hard way lesson in naivete. Back in those days, my firm was invited to bid on a portfolio of muni bonds being offered by the Resolution Trust for an Oklahoma City bank that had failed… Unusual parameters set up for a muni bond trader was that the bid was to be AON for the entire portfolio, not a pick and choose bidding for items within it… Most people just paid it no mind and refused to bid, but as this was the kind of stuff I did, I was allowed by my firm to go ahead.. Bidders were invited out to Okla City to spend a few days doing due diligence and then bids were to be submitted by X time and day… So I went out and did the homework, discovered there were some hidden gems that I thought others wouldn’t realize how valuable they were and went back to NYC to decide what I wanted to bid… BAD MISTAKE…. Should have stayed there in Oklahoma City to protect my interests because as it turned out, what was supposed to be the bidding deadline where everyone’s bids were to be locked in turned out to be the mere starting point for an auction by the good ole boys…. My bid was the high bid at the deadline so I should have won the entire portfolio, but those who stayed around just took that as the opening bid and blindly bid higher figuring I knew something they didn’t…. So I lost out by being honest and naively playing by the rules…. Turns out, I got the last laugh because I was also right that they had no clue about the hidden gems so I managed to buy a lot of them at prices even below where I had evaluated them once the ultimate buyer of the portfolio started offering the individual issues within it. So I bot what I wanted to buy and wasn’t stuck with the rest… These were all totally unknown by practically everyone muni names in those days (have you ever heard of Silver Dollar City for example? – it’s better known as part of Branson, MO today, but Branson was not Branson back in those days), so it was a fun challenge but a sad lesson to be learned about how different minds are so easily swayed to the dark side in ways others wouldn’t ever think to employ…. I had a few lessons learned like that the hard way back then.
Apologies for reminiscing about irrelevant to most everyone stuff like this but your story brought it to mind….
2WR, there was a Silver Dollar City in Sevierville TN. I think it started out as Gold Rush Junction, then became Silver Dollar City, and then morphed into — Dollywood when the owners partnered with Dolly Parton.
Both Silver Dollar Cities were owned by the same family who seem to have been very good businessmen as they made deals which caused both locations to thrive.
I didn’t know that, Scott. But that’s the kind of fun it was back then, to be able to discover this kind of stuff by reading the prospectuses instead of having everything at your fingertips online… The joy of discovery… And as I remember, it was obvious from the prospectus just how financially successful this thing was as run by the family you mention. Silver Dollar City was a gold star credit…. In reality it was only masquerading as a municipal bond when it was more like an industrial revenue bond with all the revenues essentially coming from the single entity… Similarly I remember the lighbulb going off when I discovered some bonds issued by the Reedy Creek Improvement District in Florida… Nobody really knew it and they were unrated so most traders wouldn’t touch it… Then when reading the prospectus I remember saying to myself HOLY COW! This isn’t an unknown dinky improvement district, this is DISNEYWORLD! For all practical purposes this was a Disney credit and if I remember correctly AA credit at the time… That was an easy buy after discovering that that and an easy sell to clients too when I could prove to them what it was…. Of course, you can’t do that anymore unless you’re on III and the III community uncovers something like NSEXP, because everybody knows everything thanks to the web… lol
I’ve been looking at a part of my portfolio wondering what if I sold it and reinvested the proceeds. I would love some comments from the group on what you would do. Here is what I have. About 10% of my portfolio are several utility stocks that were part of my early purchases when I converted my portfolio from THE S&P 500 index fund after the great crisis. These date back to 2009 – 2012 period. Today the stocks are worth 2 1/2 times what I paid for them partially due to some DRIP and price increase. I converted them to send the dividends to cash several years ago. The dividends are a little over 3% of the current value. If I sold them and invest conservatively (something like the CHS preferreds?) I could easily get 7%, which would increase my monthly income several hundred dollars. Now, I don’t need the extra money as my portfolio income is more than I need nicely to supplement the SS checks from the government. These are also pretty solid utilities such as Duke Power. How I got into utilities was reading the column of Malcom Berko, who was big on utilities. I bought some more of his picks , including my first preferred (Santender Bank paying 10%) and an unheard of company that made snowplows of all things. All turned out really well and made me good money. I miss reading his columns as they were interesting like his background. So III’ers, what would you do? Sell them all, or part of them, or continue to hold them for a rainy day in the sock drawer?
Nobody could give you solid advice based on this information, but you sound happy with the utils. There are tax considerations and other factors to be considered when selling. Personally when I see a particular allocation approach 10% I look for options as I try to keep 20 5% positions, but this is arbitrary and only a personal preference.
One thing I would consider is reviewing how your utils performed against the sector ETF XLU (or similar) from say 2012 to today it just might be a good data point for you.
August……. No tax considerations as all are in my IRA and Roth. Also each of the four utilities is about 2 – 2 1/2% of total portfolio. I will look at the XLU ETF history and see how they stack up. Thanks!
my solution to this problem has been to just use UTG and UTF and accept the fee and enjoy the cash flow.
DJ, there is another approach that MIGHT justify keeping these utilities. Long story short, the long-term return of a dividend paying stock is simply the current dividend yield PLUS annual growth rate of the dividend. This is called the Gordon Dividend Growth model. I will skip the details, but let’s assume you have a utility common that is currently yielding 4.0% and has traditionally increased their dividend by 3.0%/year. Add these two and you get 7.0% long term which is the same as 7.0% yielding preferred which has 0% growth in the dividend. My guess is that you would be surprised if you went back to when you bought these utes and looked at the IRR compared to several preferreds that have traded that long. You would likely find that the UTE’s have outpfermed the preferreds. Can’t say with 100% certainty without running the numbers.
There are many investors that use a Gordon cutoff number of 10%, i.e. will only look at issues where yield plus growth >=10%. So, in those cases, highly likely they have outperformed preferreds. Of course, I am leaving out the income tax benefits of paying long term capital gains rates when selling the utes, compared to dividend payments. QDI helps but not clear that it levels the playing field with LTCG.
There is actually a better approach to look for these issues, but that is for another day.
This is the executive summary but could post a lot more about it. BTW, if I have time I will go back to my database on pull the 2009 info and run the numbers for all SP500 utes compared to some of the preferreds. That would hopefully eliminate any survivorship bias of backward looking data.
Comparing the Utility ETF XLU to the preferred ETF PFF, from 12/31/2008 close to today 8/23/24
XLU IRR= 10.11%
PFF IRR= 6.90%
Stated differently common ute stocks outperformed preferreds by 3.21% per year, which would buy a few steak dinners along the way. . .
Tex the 2nd…… Never heard of the Gordon Dividend Growth model, but I will definitely search it out in my spare time. That’s a pretty good case for keeping them in the sock drawer where they have been for a long time. I recall Old Berko making the case for the dull old utilities a long time ago that they belonged in everyone’s portfolio as a good base. I have even thought about adding a couple in 1/2 positions, specifically Dominion and Southern. Pretty familiar with Dominion, not as much with Southern, both I think are pretty good utilities. Thanks so much for your comments! Now back to classical guitar practice. Working on adding Paul Mccartney’s Yesterday to my repertoire to offset some of the traditional stuff by the dead guys from the previous centuries.
dj-
Try Blackbird for a McCartney song based on a classical riff.
It’s next after I become competent on Yesterday. Just finished Malaguena by Ernesto Lecuona. That one stretched me. Still miss a few notes at times.
In my limited mind, it’s hard to conceive anyone that does not like ice cream, pizza, or that song – Malaguen~a
Anybody remember Charo, the “cuchi cuchi” girl? She was actually an extraordinarily accomplished classical guitarist and was married to Xavier Cugat for five years….. Here’s her live version of Malguena – https://www.youtube.com/watch?v=jc5w9sTvykQ&ab_channel=MDATelethon
2whiteroses;
I do remember Charo, very talented and beautiful woman. Even though he has passed, I am a big Roy Clark fan, give this a listen sometime.
https://www.youtube.com/watch?v=Pz2hXI7Ny9I
Good one, Bill. I hope we’re forgiven if we take a break from investing and turn III into a music site for a moment or two.. What the heck, it’s the weekend… I’ve always thought of Roy Clark as one of those performers who’s never received anywhere near the credit they ought to for their musicianship due to their public personas… I’d put Glen Campbell and Jerry Reed in the same category, possibly along with Vince Gill all in the country field. I’d also put a lesser known female by the name of Molly Tuttle in there too but in her case, it seems more because she generally just doesn’t choose to showcase her guitar playing abilities as much as her singing. Yet she duets quite frequently with some big name guitarists.. Try https://www.youtube.com/watch?v=pM8rDroaz-E&ab_channel=TommyEmmanuel%2CCGP but dj, if you’re reading, try this one to get to see both her picking and fingering techniques from the view of the guitar itself – https://www.youtube.com/watch?v=awFeDMNiKX4&ab_channel=TroyGrady pretty cool… if you’re into country or bluegrass at all…
I thought I was old but you dudes are ancient.
I bet Tex the Justin Portfolio inventor and master of search engine lists could come up with a list of 10%+ Gordon Dividend Growth qualifiers, right? Probably could narrow it down to Utes for that matter too…. Ya think?
2WR, I think most brokerages have reasonable good stock screeners. Here is what Fido said when I put in Utes, min 3% yield, min 7% div growth rate, min market cap>$2.6 billion (which is pretty small these days). Easy for everybody to do their own screen and use whatever criteria they want:
It came back with:
Symbol Company Name Security Type Security Price Dividend Yield Dividend Growth Rate (5 Year Avg) Market Capitalization
AEE Ameren Corporation Common Stock 82.05 3.25677 7.1214 $21.96B
ELP Companhia Paranaense De Energia – Copel Depository Receipt 7.89 8.75524 75.94921 $3.19B
NJR New Jersey Resources Corp Common Stock 46.11 3.68018 7.50401 $4.53B
WEC WEC Energy Group Inc Common Stock 92.66 3.59294 7.19312 $29.38B
ENLAY Enel Ente Nazionale Per L’Energia Elettrica SPA, R Depository Receipt 7.48 6.37927 8.09674 $74.24B
CWEN Clearway Energy Inc Common Stock 29.16 5.81729 15.8356 $3.58B
Many thanks, Tex. Now I have an exact challenge placed right in front of me – to see if I can recreate your results exactly…. No hints, please…..This may seem simple and if I wasn’t ashamed to admit it, I’d let you know I never use their screeners – the screening I most frequently use is what can be done with QOL – naive on my part not to think Fido….. Is Schwab any good at this too? ……So now I’ve got a goal – to duplicate exactly what you’ve laid out in front of me! Way cool! Maybe I’ll give it a try the next time I wake up, probably an hour or so down the road…….
I done did it, Tex. Thanks for the push….To generalize though, with all the variables available to include or exclude from possibilities when using a screener like this, the real problem is deciding what you initially want in your equation in order to get the results you’re looking for…. It’s sort of similar to being successful with calculus – unless you can set up your equation right in the first place, you’re going to have trouble getting reliable results… And that’s where your (Tex 2’s) expertise comes in…. In a way, I’d also compare it to creating brilliant advertising slogans – when you hear one that works, you think to yourself, hey I could have done that that, anybody could come up with “just do it,” but it’s easier to say after the fact.
My search results also included “CIG/C” and “CWEN/A.” Did you exclude them because they’re foreign?
The Fido screener has a filter (option) for headquarters location. One can choose NA, then USA.
Mal Berko!! Malcom was a very very close friend, we worked together at 2 brokerage firms, traveled together, we use to play racquetball and I probably still have some old bruising on my back and legs from him beaning me with the ball. In fact, Mal is really responsible for encouraging me to accept an invitation to host my nationwide investment radio call in show. Mal bet me many years ago during us playing racquetball a specific pew pew and meal for he and his family at one of my friends restaurants named Pumpernicks to a signed 1st edition of a rare old book I had admired at his house as he was a huge collector of rare books and firearms. What a great man he was and an incredible legacy he left. Thank you for mentioning him and letting me go down great memory lane 💙
Well, well! So you knew him well. I really enjoyed reading his columns. I picked up a number of excellent equities from reading them. Would have been a real treat to have met him, had dinner maybe, and shared a conversation with him. Sounds like he was a real character Happy to bring those memories you had of him back from storage in your mind. See you were mentioning Italy recently. Just finished a couple of bicycle rides in the TyroI region of Italy. I ride mostly now in the virtual world. Some stunning scenery in my big screen 4k TV right in front of my bike. Enjoy Italy and don’t drink too much vino!
I guess PST on SA via Trapping Value’s blog has update what his ‘longer term’ holdings have done, I missed this post, no skin in the service itself personally anymore. I do know PST trades a lot and I guess?? ‘long term’ portfolio has turned into what we used to feel was short term..anyway some ‘transparency’ which we dont get from most services on their returns, which TV also posts on each article.
I saw a relatively conservative BB bond post too from the HDO group w 5-6% yielders for ‘ballast’ I guess? ‘co written’ of course..
Today’s trades are tomorrow’s memories for me anymore, the curse of 0 commissions I guess. But it is working for the most part. Bea https://seekingalpha.com/instablog/47392447-trapping-value/6051909-long-term-fixed-income-portfolio-performance#comment-98522845
Dipped my toe in and picked up some BP (British Petroleum). Continues a contrarian streak searching for the downtrodden.
wow BP made my hotlist today PP! seems ripe for an activist or shake up to bring out value.. Bea
BP CY 5.6% based on latest dividend.
I also have ongoing decent size position in BGR (Blackrock Energy & Resources Trust) that has in itself a sizable position in BP; maybe 6.5%+). They just tendered 20% of my position at 98% of NAV so that was a nice backdrop to putting that free money into more risk with added stake in BP.
In May 2023 I had a large bond portfolio and was looking around for other ideas when I discovered BB SFB. I couldn’t believe my eyes! A bond trading as a stock? I cautiously bought 3 shares at 20.24, which I still own.
In August 2023 I went crazy reckless again and bought 2 PCG-A at 20.68. I still own them too but with price at par, I will sell.
Before the end of the year, I stumbled on III and the angels trumpeted.
R2S I have enjoyed reading your comments. Glad you showed up to join the party
Thanks, Charles! I enjoy yours.
I hope everyone has had a great last couple of months, and especially today.
Buying the below par investments over the last couple of months has paid off bigly – Sea of green. up 6 figures in a month. Of course it is easy come, easy go. During covid i was down ~ 1.5 million and a sea of red. I just watched the red turn to green after many many months. Why panic? Just continue to avg down. Not sure what I will do, as my annual return is 7.2% in just dividends and interest. This is not counting the fun flipping that we all enjoy to juice 2-3% more. My thought is maybe trimming by end of year in the ones i am loaded up with, but will probably keep a chunk as they were well below par.
Going to celebrate this weekend and get some supervalu t-bones on sale for $9.99/lb
t-BONES??????? You need to get an entire tenderloin at Costco.
Better yest you sound like a luxury saver so here’s a deal: Go to Costco.com and buy Instacart gift cards in quantity at 20% off. Then use them to buy your tenderloin (7% markup for Costco delivery + tip).
Cheaper than shopping yourself.
I just did $2500 in Instacart. I was thinking we could have a club where all we do is buy a $1 item and then tip $999 and split the profit
Mr C sounds a lot like everyone’s elses experience with Covid. I have learned after 40 years not to panic when the market takes a dump and you follow the herd and sell. Except for the time of Covid.
I had what I thought was a plan for loading up on income stocks and quit chasing stocks for flipping. Who would have guessed everything took a fall. I had energy, hotel, REIT’s etc. I was deep in the red. Tim and others posted it was a opportunity to move up in quality and buy at a discount. Problem was I had no cash. I took a deep breath and sold at a loss and bought some of the best stocks I could with the money available. Six months to a year later I was back to even with even better holdings than I had bought pre Covid.
Lesson learned, don’t ever say that you’re not going to sell at a loss and keep some cash reserves.