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.
Question for anyone—today I received a return of principal payment equal to exactly 1/3 of my investment in FHLB 6% due 12/32 (3130AUB60). However, my Schwab account does not show a reduction in the size of the investment. Shouldn’t it be reduced by 1/3? Is it the kind of thing that takes a day or two for the accounting to catch up? Any ideas? Thanks.
What do you mean by “size of the investment”? The number of shares you own? I think what you will see is a change in your cost basis when the adjustment is made. At least that is what I have seen with the preferred shares I own that have had return of capital.
randy,
I’m seeing a similar situation at Fido. 5/6 of my position in FHLB 6.15% due 07/33 (3130AWMM9) showing as principal payment without reducing the size of my original position. It looks like a partial call, but we’ll have to see in a day or two if it comes out in the wash!
Delta Airlines Credit Union member? Here’s a niche offering for a rung on your CD ladder:
Available through February 29: 5.15% base, 12-month, no call with $100 bonus at $10,000 and $250 bonus at $25,000. Right at $10K and $25K, this translates to a yield a tad north of 6.15%. Bonus paid in 1st Q.
It is take day or two.
Today is a red letter day for me. I finally sold the last of my troublesome MLP shares from my inherited MLP.
Many years ago, I inherited some MLP shares in an IRA. I wasn’t really paying attention until years later when i wanted to sell, and realized I had a big recapture looming, which would have triggered big UBTI taxes. So, I embarked on a mission to sell just a few shares every year, which kept me under the $1K ubti threshhold (messed up one year and paid a few bucks).
Today I sold the last of those MLP shares. It isn’t a bad company, I just didn’t like the shares in an IRA.
I told a friend about it on the phone (while picking up some grandkids from school) and said I ought to throw a party to celebrate.
My 3 year old (eavesdropping) granddaughter said we should have a party with cookies and milk, and she volunteered to “help” me make the cookies (which usually entails her stirring a little, putting sprinkles on, and eating more cookie dough than her mother would like). Her older sister said she doesn’t want to help make them, but she will be happy to eat them. So, we are apparently going to make chocolate chip cookies with rainbow sprinkles.
Private, That’s a fabulous return on investment.
…the kids of course.
Good morning Private,
I believe it was you that posted some wonderful commentary on China. If so, any updates?
Best regards,
Put Heartland HTLFP a Tim holding on watch for possible add, 7% w a strong reset (5yr T) protection in 2025. Bea
Bea, Heartland was one of the regional banks I tested my theory on how the market viewed the bank by how the market prices their long term bonds.
For Heartlands 2031 bond CUSIP 42234QAE2 2.75% it is priced at 86.97 which if I am using Fidelity’s bond calculator correctly gives a YTM of 4.8%
That seems like to me the market is giving them a strong vote of confidence.
I did the same with Zions bank 2029 bond CUSIP 98971DAB6 3.25% and the market is telling me the price right now gives you a yield of 7.43% says the market thinks they are a higher risk and that’s with even a shorter time to maturity.
Charles – there’s a problem with your theory but I don’t think it changes your conclusion- that trade on Heartlands 42234QAE2 happened a year ago as confirmed both at Fido and FINRA (thnx again for the FINRA lesson)…. It was an 86.97 buy (after an near simultaneous sell at 86.75) on 1/27/23. So the actual YTM @ 86.97 was about 4.60% at the time, but how much have interest rates changed in a year? Using the 10yr Treas, it’s up 51 basis points, So this bond is probably truly worth no more than 5.11% YTM today…. . Still vs 7.43% for Zions bond today and your point most likely remains.. 98971DAB6 was trading at just under 6% YTM on Jan 26, 2023.
2WR, yes you really have to be on your toes with FINRA as sometimes no information is better than bad or old info. FINRA also is horrible about keeping redeemed bonds on their website and doesnt specify if they are active or not. Plus when looking at trading prices you have to mentally differentiate between the dealer trade pricing and retail purchases as those could easily be 5% or more difference in pricing.
Heartland looks plenty strong enough to reliably make HTLFP dividend payments. Will it be called in July 2025 when it floats at 5yy + 6.675%?
I do wonder why in June 2020 it was necessary for Heartland to pay so much. Maybe with Covid uncertainty high, it wasn’t a good time to raise money.
HTLFP “resets.” It doesn’t float….. So it will reset for a period of 5 years instead of floating every quarter after 7/15/25. What makes this important is that I think it’s also callable only on reset dates. So if it’s not called on 7/15/25, it will remain outstanding until at least 7/15/30….. That probably makes the likelihood of call even higher for 7/15/25 barring any strange happenings to interest rates in general by then…
2wr-
Thanks for clarifying the difference between floating and reset.
You are correct. HTLFP is callable only on reset dates. Implications abound.
2WR I noticed its actually easier on Fidelity to see dealer to dealer trades and customer to customer than on FINRA. Also the “spread”? is wider especially on smaller lots. I figured my crude observation was going to be just that. I thank you for saying it does have some usefulness. I do admit I didn’t think of the flaw in my idea that it’s old information but hopefully some of these banks have been working on cleaning up their houses.
So much has changed in rates that I think you’re right about HTLFP. Probably not going to last for years without being called but a good place to hang out while we are waiting. Even if rates fall and the reset is lower I think it’s been discussed before that if it’s not called it’s still going to be offering a higher rate at the time than the rest of the market. That will still keep it attractive to investors looking for yield and support it’s price. Just have to avoid owning it if the value is too high above call price.
The Goldilocks dilemma, on fixed to float and fixed to reset. Too low a yield and at some point the price of the holding drops, too high of a yield and the issuer calls it. How to find the right stock that the yield stays up to the market and it doesn’t get called.
i think we have had similar discussions about us passing our investments to our heirs. Everyone here is great, but the idea/theme is that our heirs are not like us. As the years go buy, the majority of investors want to interact with investments in a similar style as how they do it at their work with retirement/401k, etc accounts. They define an amount invested per month, and define what types and %’s of where that money gets deployed to.
The scenario is this. Our kids do not want to invest how I do it. They dont want to research, they are not driven by the deal of the day/week, they dont want to spend the time to figure out what investments right now are great to either buy or sell based on the various rules we all have. That is ok, but I just dont want them to have a disaster after I pass on.
Questions:
1) Is there a solution out there today (not a spreadsheet) that people are using where you define your primary investment categories. They could be by region (NA, EU, LA…) or by sector (energy, realestage, health care), or by whatever other preferences or combinations of them all (bonds, common, preferreds, etc). You define the %’s at each category, and new money is spent on the %’s that you want/category.
2) Is anyone else struggling with this with their heirs? I still have 12 years before retirement, but I want to get a jump on this, get stuff in place so that I am prepared in case something happens. The solution should work well for my kids that simply have no desire to do what I do which is managing a couple hundred investments. My fear is that if I dont have this in place, they will simply sell everything, and turn around to anyone and say, what should I do? If I have an easy to use investment plan in place, they can easily be trained on how to sell and take money out if needed, but keep the structure in place to continue to generate income.
I think in the next several years I will have more thoughts on this, but wanting to know if there are investment firms that offer this today. My kids are in their early 20’s, and my guess as time goes by, they start spending $$$ on a house, car, etc… they will be more in tune with discussions like this. Their college party days have ended, and a few have really started to mature and are asking good q’s, but in the end, I think what I do is not sustainable for my kids.
Mr. C, My boys are both finance guys. One has an IQ in the 150s and worked in IB. Neither are interested. The older already has his accounts with a group at MS and I’m sure that route would prevail.
My alternative advice to them would be to roll into an S&P index, set modest distributions and leave it alone.
Thx Alpha. It would be interesting to understand why we do what we do. Probably a combination of genes, psyc, soc, and education. I underestimated the impact of education. One of my sons went to an expensive private college that was $300,000 after 4 years. When he was done, he felt bad about who he was. It took a couple of years in the world and a few therapy sessions for him to recover and believe he controls his destiny vs being privileged. He was told that saving $$ money meant he is oppressing the rest of the world.
On the social front, I think the next generations truly get that life is short and trying to enjoy life before they hit their 50’s. My kids try to go on 2-4 trips per year. They lean towards spending the $$, making memories, and after a decade start working on retirement.
I have heard that you should just target some funds tied to S&P and set aside about $750/month for ~ 30 years and you will have about 1 mil which in 30 years is probably peanuts, but at least you wont be broke. I do have the kids pulling 20% out of their income and into 401k/roth each year, and i think that is a great start for them.
Mr. C, Your advice to your sons and that they are following it probably puts you and them in the top 1%.
Can’t help but feel for your son. We have to laud him for caring deeply, though the undercurrent of mis-information and shaming in society is out-of-control. Sounds like he’s back on track – so sounds like he listened to you again. Congrats.
As for why we do what we do..I have no idea. We could have entered the S&P March 2009 and netted a 13.6% CAGR without watching. For everyone here though – we like the challenge I guess. And of course you know if we all relented and through all the chips at the market it’d drop 50% that year. hahaha. But it is also entirely possible our kids are smarter than us – at least that’s the goal. 🙂
I have a couple of theories that are probably at least partially right.
1) Gamification. Myself included, I want to win at everything. I grew up in a rewards based system and the harder I worked the more I was rewarded financially. I knew what putting hours in meant for me. I think many folks here want to win/beat the market. You can see tangible results each year.
2) The next generations have been growing up with cell phones in their hands, lots of social media, and have a social presence. They are posting pics, chats, 12+ hours /day. Their time is limited and geared towards the social aspect of friends and peers. I didnt grow up with a cell phone and I dont have a vast social network. Hence I have a lot more time for me and my personal family. More time equates to more investment hunting. I have already maxed my career journey and not climbing the corp ladder.
Sure many here can relate with us on that Mr C!
Mr. C, Use their market inactivity and lack of attention to their advantage. As damn near every survey shows the average investor under performs S&P 500. So average is actually way above average. Since 7 companies are taking a rather huge chunk of the Index, maybe a slight tweaking with having some $ in an equal weighted S&P index.
Time in the market beats timing the market. Their willingness to contribute a nice chunk to their retirement accounts is most critical. Their main worry should be that they are not in some high cost fund. Expenses are the one thing they can truly control if there are options.
I invest in income for specific reasons. But income investing is no elixir and probably actually detrimental to LTR for people investing LT for retirement. Plus it keeps them out of the “fools gold” income that Moron and PennYlessY peddle in the income world that actually destroys capital.
You said it Grid. Rule #1: Don’t follow the fools gold of someone like Moron! And just because you read it on the internet, doesn’t mean it is good advice. 🙂
alpha
could u suggest one or two index funds that you think are suitable.? Understand we each do are own dd but this would provide a reasonable starting point. tia sc
One of the weird things is that index funds that follow the same index can have different returns in taxable accounts.
e.g. VOO is better than SPY because they made an election with the IRS that SPY didn’t
sc4, Here are a few of my favorites, but please due your own DD. Disclosure: I own all of them.
SCHD, VFH, VIG, VOO, VNQ, VYM, XLU
Through ETFs, appreciating the full market or industry exposure without the single party risk.
Mr. C
This is not really designed for my heirs but could be. I manage my daughters 401k retirement accounts. In her field, she has changed jobs often so I have been spending the past week rolling everything over into one account to make it easier to manage
I have a handful (about 10 totaling around $14k) of individual stocks from her first 401K plan I have left in place. The rest from the accounts I just rolled over into this account I am splitting up into mutual funds or ETFs. I have come up with overall %’s by category and went and picked the funds in each category. I probably have more than most people would but I am a big fan of diversification. To give you some sense, my overall parameters were
45% – S&P 500 / Extended market (4 funds – 2 of which are low cost index funds)
15% – International (2 funds)
15% – Dividend / income oriented (2 funds, 1 ETF (schd)
15% – Value stock -(3 funds)
5% – Real Estate (1 ETF (VNQ))
5% – Alternative (1 fund)
Plan is to rebalance between these annually. Will be easy for her husband to take over at some point and manage
I did not include a bond category as she is still young (30) and the one Dividend/Income fund has a heavy bond weighting
The individual funds are a matter of choice – I favored a mix of index funds, lower cost funds along with a few higher cost funds with strong performance histories. But if you want to keep it real simple, choose the best index fund in each category and be done with it
just one approach – I am sure there are endless others
Thx Mav for the suggestions. Right, I am thinking of some diversification into several funds spanning several categories. The work is finding out what those funds are! Ha.
mav
If you would be willing to share the symbols for the funds you are using, I’m sure several of us would value the suggestions.For international at this time I”m using IHDG while the cager is slightly lower than VHGEX, the yield is consistent and strong.
also not certain I understand what alternative means in this context so a fund name would help. TIA your thoughts. SC
sc
I will post what I am doing – but please do your own dd. Remember, these caveats with these selections I made for my daughter
1. She is 30
2. This is in a rollover IRA
3. I worked within what was available from Fidelity at No Transaction Fees (and load waived if the fund had one) – so you don’t see any Vanguard funds
4. They had a minimum investment amount of zero or a balance low enough to work for the overall plan
5. There are lots of alternatives -for instance I could have chosen the SPY ETF for the S&P 500 Index but I went with the Fidelity S&P foo Fund – as I preferred a fund in this case as I am not trading it, did not have to deal with any premium or discount to NAV and the difference in expense ratio is negligible
6. I do like diversification, perhaps more than most folks (so it could be some overkill), but each fund had certain attributes (so while I have 3 Income / Dividend funds / Etfs, they each fill a certain niche with what they hold)
7. This is much more focused on growth than income given her age
8. I am still in the process of completing her rollovers so I may still make a tweak here and there
SP 500 /Extended market
FXAIX Fidelity SP 500 Index 20% (very low fee)
FNILX Fidelity Zero Fee Large Cap Index 10% (no fee)
OAKMX Oakmark Fund 10% (reasonable fee / impressive performance)
FSCRX Fidelity Small Cap Discovery 5%
International
FOSFX Fidelity Overseas Fund 5%
IHDG Wisdomtree Int’l Hedged Dividend ETF 5%
MSMLX Matthews Emerging Mkt Small Cap 5%
Income / Dividend
FEQTX Fidelity Equity Dividend 5%
TIBAX Thornburg Investing Builder 5%
SCHD Schwab US Dividend Equity ETF 5%
Value
FSLSX Fidelity Value Strategies 5%
HFMDX Hennessy Cornerstone Mid Cap 5%
HWAAX Hotchkiss & Wiley Opportunities 5%
Alternative
QLENX AQR Long Short Equity 5%
Real Estate
VNR Vanguard Real Estate Index ETF 5%
mav
much appreciated. Will have to look over this a bit more and naturally understand that suitability depends on individual situations. thanks again for sharing. SC
As I began investing at an early age (before the ubiquity of index funds), I hold many individual stocks. The tax upon selling is burdensome. Upon my death and subsequent step up basis, my legacy trust is directed to sell and purchase low cost funds. The trustees and trust department will be responsible. My sons will serve as co-trustees. A 43 year old estate attorney will serve as the protector.
Both sons have ROTH and 401Ks. They understand the power of compounding. That being said, I observe impulse purchasing which is not productive for managing a portfolio.
For stocks/bonds that are illiquid I have written instructions (but not in the trust documents) to not sell until maturity.
Both sons manage their investment accounts. I gifted the allowed amount a few years ago and set it up in their own brokerage accounts. They both seem satisfied to let the S&P500 do its magic. During 2022 when the market declined, it was painful for them. Like all, they complained but never once did they speak of selling. I hope my mantra and examples to them of holding equities will serve them well. I actually showed them my Microsoft purchase and how for almost a decade it didn’t do much; now it is a mid 7 figure value.
Yes, I agree this generation lives for today. Mine are always traveling or attending functions (as are we). That doesn’t preclude good financial sense.
My concern now (as a Mother never stops worrying about her children) is their retirement accounts. The values are starting to matter and I worry about potential divorce! (even though neither are married) It is a bridge too far for me to advise them to think of a pre-nuptial. 🙂
My advice is to let your adult children manage a small amount for themselves.
What are the responsibilities of the estate attorney who serves as the protector? Does he oversee the trust department? TIA
The trust protector has the resources and authority to change trust companies. I wanted someone that is young enough to oversee the trust department and allow my sons the “right” to ask for a change. I have worked with him the last few years and feel very comfortable with his role
After reading all this? I’m really lucky. Never wanted children and don’t think they are worth all this trouble. Will they be there for you? Maybe.
I find it amazing how most people will spend 40 to 45 years grinding out a living but when it comes to their retirement investments, want nothing to do with it. They then depend on a financial planner to tell them when they can retire. When I was getting ready to retire, different people asked me “who was my guy”? I said I am my guy. I can not imagine relying on someone to tell me when I can retire.
YES! Me too – I have been investing since I was 24 in 1984 so know my way around – made practically every mistake in the book at times but also made a ton of good decisions. I just retired Friday from NASA but I began whole-heartedly planning for that day back in 2012 and really meticulous about it in 2017.
And I don’t mean the amount of $$$ I was putting away, I mean planning for cash flow income AFTER I retire. Began purchasing dividend payers and learning preferreds and baby bonds better and laddering to provide regular and staggered income. By the time last Friday showed up, I am well-versed in all this and can comfortably retire.
A divorce stuck me in the eye back in the early 2000s but I had time to recover from that. Plus, choosing NASA as a second career helped back in 2003 because that pension after 21 years adds nicely to the cash flow as well as SS, which I have paid maximum into every year since the early 90s. I decided to take SS at age 65 because my b/e is like when I turn 82 – I’d rather have that money now than gamble on it being much reduced in 18 years. Of course neither of these go to my heirs but they provide a very nice income which I can live easily on.
Then, my 401(k), Roth, taxable account and risk accounts pay my “fun money” and add to my stash for the future if needed. I’m not what you’d call filthy rich but I have way more than I need to live going into the future for both daily needs and leisure activities. This site has been invaluable for advice on the preferred and BB stuff which I have a lot.
BOTTOMLINE is, I don’t need and wouldn’t even trust a “wealth manager” or financial person to manage my money, knowing they would not put in half the effort I have done in the past or will do going forward – plus, who wants to pay those fees? Every time I see that Fisher Investment commercial on CNBC, I want to gag, it’s that bad – plus, everybody and their brother are sending me mail, email, social media invites, etc. so they can “help” me retire…
LOL. NO THANKS, I got this.
Worked for 28 yrs as a federal DoD employee, retired at 50. Was burnt out by decades of 12 on-12 off schedule. Been investing since my late teen yrs after a grandparent passed away and left me 2K to start an IRA account. I bought MSFT and AAPL with that money. Now 58, taking 72t IRA payments along with an ok, but not great pension with some spouse income for a little while longer. Have 4 kids, 2 still teenagers so lots of bills to pay. I am in the camp of doing my own investing as well. Was able to retire early due to some astute stock purchases and just generally paying attention, nothing fancy or complicated. I obtained wealth by hardly ever selling and I wasn’t really a trader until I got into the income world a little. I have a decent stash some would say, but I’m very retirement rich but otherwise poor. Most of my money pays for youth hockey and volleyball. When the last one leaves the nest, I will be in an entirely new income bracket. Not looking forward and looking forward to that at the same time.
Pig, you are definitely preaching to the choir with me. But I have been blessed with having great friends on both ends of the intelligent scale. I have one friend who doesnt have a lick of common sense and is impulsive. I have went to sports book 4 times in past 2 months and have won over $4k. I tell the dumbarse to stick with the plan like I do, but he goes nuts when he is over there and actually managed to lose several thousand because he couldnt stay disciplined. My point being he needs someone to help him when he retires because he will screw it up. He will retire in a couple years and wants me to get him “x” amount of income out of it. I told him hell no I am not getting involved in his money. As I dont see a path that will work to his over optimistic dream of income flow.
My answer is always no to family or friends who wants me to manage their finances. I have a devil of a time doing my own, I will never put myself in a situation where I can be blamed for their shenanigans. I give very high level advice, but that’t it. I’m no genius, but I do have an abundance of common sense.
Rest assured Grid, when the 4th one leaves the nest, my gambling addiction for betting NHL will be in full swing. I’m destined to die penniless, lol.
Pig, I love me some NHL season point totals. I took most of the recent profits and “reinvested it” into the Minnesota Wild not making playoffs, and Buffalo Sabres 81.5 over. I refuse to believe they will stay under fake .500 all year.
Crosby’s loyalty to Malkin/Letang shudda extended to Fleury who is still going strong in Minn! Pens languish w fits of wins..sad. Sid is so nice talks to people signs autographs here in his local town. Lottery the only extent of my ‘betting’..
re running money, used to help, no more. No ins advice either, I don’t have E&O anymore.. only running my and mom’s money (cd’s!) . I have a Janney and MS friend I trust and refer people to that I used to wholesale to.
Advisors used to have me structure their portfolio’s in variable and indexed ins products for their clients, hours long meetings and all the compliance, with limited choices in sub accounts. Oh the headaches!! always made me nervous and I caveat-ed the hell out of what I told them (in emails so I had a trail)..oh makes me tired just thinking of it!! lol. Bea
You guys are all heathens and will rot….
Plus, take the AVS or Knights this year. I’ve done well betting the over.
I have too many F&Fs that need the manager – they manage $$ like pennies in a wet bag, and don’t get it. Math professors that go deer in headlights with simple compound interest.
I have a 32yo male pain in the ass at times I’m thinking hire money manager at Fidelity take conservative approach until he puts a few more miles on
Mr. C,
I have talked about this before (and apologies to everyone who is tired of hearing it from me). I am a few years older than you, but still a few years from “retirement age”.
I started worrying about the same issues about 20 years ago and I went through a lot of iterations of plans that I decided wouldn’t work.
The approach I finally settled on is that rather than trying to set up “directions” for my heirs to follow, I spent the time to pick advisors they could let run things or who could help them if they want to run things themselves. i think I am in a better position to “sort out” finding those advisors today than my heirs will be in the days following my death.
Over the years, I have helped settle a lot of trusts/estates for friends/family, and the often the most difficult part is to see the look on a widow’s face when she realizes she now has to take on all the responsibilities that her husband managed for decades and for which she is totally unprepared. Almost terror, added to her grief (don’t mean that to sound sexist – but it seems to always be wives I deal with who take this very hard. just an artifact of dealing older generations where wives often had no involvement in finance). I don’t want that for my heirs.
My wife is very talented, but she has no interest in investing. Several of my kids are wealthy in their own right (one has made many millions in Silicon valley) but none has an interest in investing. Hopefully that will come, but I was only successful in recent years to get them to spread their money across multiple banks to stay under FDIC limits, and to at least ladder CDs and treasuries if they aren’t going to take the time to do more. I think they are just so caught up in their work (they are all engineers/programmers) that they don’t want to spend time on managing money.
Anyway, after trying a bunch of approaches to get my wife to follow my philosophy, set up directions to follow, etc., I finally realized that I can’t “manage from the grave”. No way to predict the world years after I am gone. I also realized that a reliable, experienced live person beats any set of outdated directions I might leave. I also wanted to have someone my heirs could turn to for help (or to let manage things they just don’t want to).
So, I spent several years finding a money manager. I went through a BUNCH of candidates (a group from Smith Barney, another recommended by a broker, etc. etc.). I finally stumbled onto someone I had known socially (and we had done a bunch of charity work wiith) who turned out to be a fiduciary money manager. Wonderful guy. My wife and several of my kids already knew him and like him. My wife is very comfortable talking to him and trusts him.
I went one more step and let him start managing a slice of my holdings today. Initially, it was to “try him out” – which I had done with some other candidates (before dropping them). Once we got past that “trial period”, I found I like having him around. Yes, it costs me a little money each year, but he is a great anchor for me and someone I can talk to about some of my financial issues – especially some of my crazy offshore stuff. He is more conservative than I am (not a bad thing, when I start taking too much risk). His portfolio usually underperforms mine but has less risk, so overall I am OK with his results. My guy leads a nice little firm, so he has some younger guys I have met who are also good – should he retire.
Best thing is that when I die, I have suggested to my wife that unless she wants to start managing money, she should just turn everything over to him to manage. Since he already manages some of our money (the fiduciary accounts are at schwab, as are most of the ones I manage), that transition consists of one signature and no fuss. Yes, it will cost her a little money to have him manage, but she won’t have to manage it or worry about it if she doesn’t want to.
This plan lets me sleep well at night.
I see from some of the discussion below that some folks plan to use bank trust departments. FWIW – I looked into some of bank trust departments, and I have had to work with a few trust departments when I have been helping settle estates over the years. Most are not very good (IMHO). They seem to be most interested in covering their backsides and driving fees rather than making intelligent decisions. Several I have worked with use really junior folks who don’t have enough experience to be helpful. Most have lots of “process” that takes time and wastes money. They are better than nothing, but not by much (Just my view). If anyone has worked with a really good trust dept, I would love to hear who they are.
My wife is the trustee for our trust, with my daughter and then one of my sons as successor trustees. They will do fine running/settling the trust – but I think they will all just let the money manager manage the investments – even after distributions.
For those who don’t have someone to manage their trust/estate, I suggest you look beyond a bank trust dept. (which tend to be expensive and inflexible) or their attorney (who can still provide oversight) and look for a professional fiduciary. They are the people courts appoint to manage/administer trusts, conservatorships, etc. – but you can pick one now before your need arises. I know a couple who have been great to work with. In California, they are licensed – and if you can’t find one, they usually have an association website like https://pfac-pro.org/ . Ask your trust/estate attorney for a reference – most know several and can help you find a good one. They tend to be much cheaper and easier to work with than having a bank trust dept or an attorney handle the day to day work of running a trust – especially if your trust will involve someone who has special needs (elderly, etc.).
Anyway, sorry to harp on this once again. I am just a “convert” to the idea of having trustworthy (fiduciary) people in place instead of trying to manage from the grave, and I tend to “evangelize” it.
Good post, P.. no apology necessary imho… You say, “So, I spent several years finding a money manager. I went through a BUNCH of candidates.” So how did you identify those candidates in the first place and what did you then do with each? Interview fact to face? Extended phone conversations or dare I say Zoom meetings? I feel like I’d have to pick up the yellow pages and start dialing given my lack of even starter contacts locally out here in the sticks… And my professional contacts such as attorneys, etc., might as well be strangers given the amount of contact I have had with any of them over the years TurboTax is my accountant so that doesn’t help as a starter point either..
Private – No apology necessary. Thanks for your detailed explanation about your financial planning. I’m struggling with this and all information is greatly appreciated.
Wonderful post. I agree about trust departments. In my situation the bank is a TN based (expanded now). The founder is a successful (Billionaire) and has merged his banks in the past with the big guys. This latest bank he declares is his last. He is known as a “tight-wad” and I have no fears about bloated administration or such. My fear is he receives another lucrative offer. That is why I have the trust protector as I have given him a letter that I do not want the trusts managed by any follow on successor of this bank.
I also have a great and trusted advisor I pay hourly. As TN has some of the best trust laws in the nation we have set up that at least half if not all of the assets upon the first spouse death will be sold on a stepped up basis. These sales will go into a low cost index fund. I don’t want stock pickers which is why I have left written instructions as such. My attorney and others advised me not to put this direction into the trust documents but rather a letter, as no one can predict the future and perhaps something better than index funds are created.
This is a complicated and time consuming effort. One does this out of the love for family. I will never understand those that leave their assets (regardless of size) in disarray.
Private. Many thanks for taking the time to write that and explain in detail. It was very good to hear what you have done, and the trials and tribulations you have gone through on this journey. I feel now that I would do a similar approach. First step as you say… start researching firms, start out small, gain trust, etc. I’ll see if there is a fiduciary group for Minnesota. Then when I approach retirement, I and everyone can sleep well 🙂
How do you let Tim know if there is an error in a listing? I’ve spotted two or three but didn’t make notes…d’oh.
I noticed that SFB (Stifel BB) is missing from the master list. I bought a little SFB in May 2023. I was so excited to find a bond trading as a stock and wanted to find more but didn’t know how. Now that I’ve stumbled into the hallowed precincts of III, my cup runneth over.
Tim does a fantastic job. Thanks, Tim! Here’s a suggestion: In the listings of Recent Comments, add a date. For example,
alpha on Sandbox Page 1/15/2024
Does anyone have thoughts about the Harrow Health BBs? I saw negative comments on this site from a few years back, but it looks like the company is in reasonable shape–paying interest and its bills. Thanks.
Pickler, I continue to hold the Harrow Health, Inc. 11.875% Senior Notes due 12/31/2027 that I bought shortly after the IPO. I am anticipating that they will definitely try and refi this debt on the 12/31/24 call later this year. I have had conversations with management, but they have kept their plans close to the vest and stated to me, “later this year we will have discussions on how just to deal with the upcoming call date”. Harrow has $189MM of debt and just around $74MM of cash that they are burning through each quarter. Harrow is an eyecare pharmaceutical company and if I was advising them, I would tell them to do a secondary on their stock and pay off this $35MM or so debt at first chance; but they have not hired me.
Other thoughts are welcome, Azure
Very helpful. Thanks so much.
AZB:
Does the senior secured term loan with Oaktree to payoff B. Riley complicate refinancing of HROWM on 12/31/2024?
Also, I notice management purchased 950K of HROWM at the time of the original offering. Do not know if they presently own.
– Dave
Hi Dave, I don’t believe management has sold any shares of HROWM as of when I spoke to them last week. Sorry, but I’m unsure about the terms of their deal with Oaktree. Have you looked into their filings? My belief is that HROW will probably initiate a secondary (could be a private placement) of their equity to generate some cash later this year; but that’s truly just my speculation and we need to see what transactions/filings happen in the next 6 months or so.
Stay tuned my friend, A
AZB, thank you for the response. Yes, I checked the filings. The Oaktree senior term loan of $112.5 M (SOFR term + 6.50% with 3.50% exit fee) is due in 24 months. I agree the sooner the better for a secondary. With a negative cash flow they are on borrowed time.
The audited 10-K should be filed prior to the next ex-interest date. We will watch the rate of cash burn during the 4th quarter.
BTW I love your maxims. I have been adding them to my commonplace book. Excellent advice. Hope you don’t mind.
Dave, I’m truly flattered and thank you for your kindness. Many of the maxims were from my father. I use to have a call in investment radio show on 550+ stations every Sunday evening for many years. After each show, my Dad would call me (or come to the studio to take me out to eat) and discuss/critique the show. He would always start out with a saying or something that would set the tone of what he was imparting on me. It’s a longer story about why I stopped hosting the show, but that’s for another time and place (don’t want to enervate anyone here).
One of the funny things about each stock market day is that every time one person buys, another sells, and both think they are of brilliant mind and idea (one of his favorites).
AB,
I am in a similar same place with HROWM. I suspect they will want to refi sooner than later – maybe in Dec.. Makes me wonder whether I should sell in late Oct or early Nov before a call notice pulls it down to redemption price.
For now, I am just holding my IPO-era shares, but I have added a second position a couple of times when it dropped into the $23s and resold those shares when it climbed above $26.
Private, I have on my calendar to call HROW again in early November and see if I can get some information that may be of interest. I also want to see their balance sheet the next couple of quarters and what development(s) they initiate/how much cash they are burning through. Grid will remember that I sold Ally preferred a bit too soon as I knew they would call the security, but Ally’s management lead me to believe the call was imminent and it took them about another 6 months. Another interesting issue right now is that Treasuries have been paying more than CD’s at Vanguard. Either the Vanguard banks they have agreements with do not need the cash or the banks are certain interest rates (in the short run) are heading lower and they don’t want to lock themselves into anything…
Successful investing is about managing risk, not avoiding it
It’s being reported on SA that ET will be redeeming their floaters C and D on the next dividend ex 1/31; and E when its callable ; why the noncallable PRI is running up ; and will be issuing new securities to replace them .
Whoever is saying that on SA is wrong
The call notice is already issued for C and D
Redemption date is Feb 9
I place a limit order yesterday for XFLT-A at $23.32. I see the stock traded in a range of 24.35 – 24.49. However I got a partial order filled at $23.32 for 108 shares. I usually get an email message that my order filled but didn’t this time so not sure of the exact time it executed but must have been close to the market closing. How come this trade went through when it doesn’t show the price ever hit the executed price?
I got my shares on Nov 13, 2023 AH for 21.16. Probably internal transaction at IBKR
Friday Jan 12, 2024 I got 1 share of PCG PRE @ 17.46
I don’t know this for a fact… But something like it has happened for me and I have seen many over time. I believe most brokers and charts only show share trades if units of 100 shares or more trade. So on many, especially low volume items … there are outliers … like maybe you are the beneficiary of a 60 and 48 share trade at 23.32 that does not show up. JG
I think these tiny trades are the broker selling stub lots that they aren’t sending through their order flow management partners.
Someone here who had more knowledge of brokers internal trading systems posted about it before.
I have set up small volume GTCs on a few stocks to pick these up before – and sometimes I can get things for a nice “discount”. Feels good to get the discount, but the volumes are so small that the total dollars are not huge (kind of like picking up pennies on the sidewalk).
What is interesting is that these trades are often not reported in the published trade data flow.
dividends and interest posted for Tues. 1/16/24
WTFCP
SOCGP
SITC-A
BFS-E
BFS-D partnership dist ? I’m going to have to call on that one
MS-E
KIM-M
HTLFP
AJXA
GLP5105470
ETI-PR
ALL-J
ALL-B
Charles M;
Thanks for posting those, I hold a full position of MS-E. A bit disappointed it didn’t reset, but it pays 7.1% and they haven’t pulled the plug on it (yet), so looks like there will be at least 1 more dividend payment in April if not more.
It will remain fixed (no assurance, though, that it won’t be called; been callable since 10/15/23).
Notes: April 28, 2023 — The Fixed-to-Floating Rate Non-Cumulative Preferred Stock, Series E (and related depositary shares) (and related depositary shares) is one of the preferred stock (and related depositary shares) and debt securities issued by Morgan Stanley that will not transition to the Replacement Rate by operation of law or otherwise. After the LIBOR Cessation Date, dividends or interest on these instruments will continue to accrue at the Initial fixed rate.
Don’t forget the KIM-N stub dividend.
David – When you say, “don’t forget about,” what are you getting at? Who’s to get what was locked in on Jan 5, wasn’t it? So u just reminding everyone who’s getting it that it should post Jan 16? Jus wonderin’ if there’s anything actionable in your reminder.
Sorry, I misunderstood the purpose of the Charles M’s list. Nothing actionable.
David, just a list of some payments on ones I own. The KIM-N isn’t one I own.
Don’t normally post this, as my list might not be up to the quality of some other III followers. Thought I would take the risk of being embarrassed.
The banks and REIT’s might not be exactly the right investments for some retirees. I bought them when the prices were lower and yields were higher.
Just my risky streak showing. Several people here have commented they booked their capitol gains on banks including Tim.
I haven’t because I am trying to maintain the income. It’s hard enough researching investments to replace something that’s been called or when fellow investors give us a heads up you need to bail on something that might be having problems.
I was flipping stocks 2yrs ago but it was work. I realized with market changes trying to research stocks to flip and keeping on top of 4 accounts that have different objectives was too much. I already spent too much time reading this morning and yesterday. After all that time, I reviewed 2 on my watch list, put in a buy order and one sell order on a couple others.
“Spent too much time…”
Charles, a few years back the time consideration became huge as I became self-offended at how much was being dedicated soley ot the investments. I’m now measuring ROI not just in $$, but in time invested.
Like you the income is paramount as I have no interest in being a flipper forever nor am I particularily concerned about fluctuations in account value. For these reasons, I became boringly conservative and risk-averse – valuing issues I could relentlessly average-down and that do not requiring babysitting, endless research, contacting IR, debating with TD or Fidelity, re-reading the prospectus, tea-leaf reading or sound resonance therapy. The surprise (or not surprise) has been that the accounts perform much better overall with reduced-risk holdings and reduced “handling.”
Income now continues to set new weekly/monthly highs and the accounts have passed the rubicon as the beast keeps feeding itself – with little to zero maintenance. The main problem now is with all that freed-up-time I have one less excuse for not engaging in the physical fitness program long-claimed I would do at retirement.
alpha-
I’m new to preferreds and BBs. I spent the last 1.5 years building a “boringly conservative and risk-averse” bond portfolio because (at my age), like you, I’m only interested in yield and dislike trading. If Treasury yields continue to fall, I will suffer the Curse of the Call. I’m doing a cram course in preferreds and BBs as replacements.
What are your criteria for making conservative, risk-averse choices?
r2s, Each of us our own criteria and I’d strongly suggest doing your own research and due diligence on all issues – though I’ll be happy to share my 2 cents with you – as I like to say, worth about 1 cent. This response is entirely too long – my apologies!
Safety Before Yield
My criteria begins with safety – finding greater ultimate total return via higher-rated issues. Yield is absolutely, positively always a second criteria to safety. S&P experience ratings bear out that the lower the rating the lower the ultimate return. Times time and across large data sets, that reality is inescapable – though most will not stop trying. Caveat: The III crowd has maybe three who can consistently trade through lower-rated issues for profit. I’m confident each of them would advise caution to others that lack the experience, insight, daily time-investment and deftness to make it work.
Don’t Lose Money
I never sell anything at a loss. Ever. I would rather it go to zero. I have exactly zero positions with a negative total-return. Safety before yield plus additional criteria below makes that possible. Caveat: I have arbitraged issues technically at a loss solely for the purpose of immediately replacing them with a sister issue (same company) though not employed a stop-loss on a position.
Nothing Noisy
No BDCs, no shippers, no unrated, no convertibles, no foreign, no K-1s. I just cannot nor want to assimilate nor justify the time to keep up with the changing dynamics of most of these issues. Maybe 90% of the “noise” we read about on III is in these issues.
Nothing Going Dark
A few percentage points on yield does not equate for me as a reasonable return for a loss of control and flexibility. Going dark means we trust management and the business until maturity – or forever.
Focus on Income
If adhering to high-rated safer issues, fluctuations in account balances is irrelevant – at least for my criteria. I find it mathematically impossible to be seeking ever-higher income and even care what the balance is. Ninety-nine of the time – I have no idea what the balance is – but I always know the income.
Ignore Predictions
This one is critical. We buy and build accounts based on the above (and below) criteria and ignore predictions and the news in general. Absolutely no one can predict what’s going to occur next year, next month next week much less ten minutes from now. We have no idea the course of rates or the news – and invest accordingly. It’s interesting in that I have friends that also espouse to this, though over and over they yield to thinking they know what’s going to happen or relent over a dropping account balance and act on that. Hubris notwithstanding, it rarely ends as predicted.
Apply Math
This is the most significant criteria – and this is the secret sauce for me. By staying in super-safe issues, you can average-down forever. You cannot do that with risky issues. When the bottom fell out, I was relentlessly buying A-rated issues ultimately yielding between 6.50% – 7.00% and just kept buying and buying and buying. This is not easy when you’re reading “we’re all doomed” and “rates are going higher” every day, but if you’re in the right issues, and “truly” ignoring predictions and the news – you can buy and buy and buy.
Employing the Criteria
One challenge was that because the Fed rate-rising cycle was so long, it took plenty of grit to keep going and plenty o’ loot, and the account values swelled to double of ideal. But the preferred income climbed and climbed and climbed. And we were only in super-safe issues. When the rates dropped, the cap gains were outsized and we took advantage one rung of the ladder at a time to cash in the proceeds. Thankfully most was in tax-advantaged accounts.
We’ve been through a few cycles over the past few years and today we are back in wait mode. Positions are intact waiting for the next event. It will come.
I should add preferreds are about 20% of holdings and with you we are also adequately laddered into treasuries. We may open new preferred positions with maturing proceeds though are also active in REITs and equity derivatives. In REITs we are missile-locked on rating and value which is better now than it has been in a while. You may find some daylight in this area.
We’d previously been in over 40 preferreds though materially pared that down when rates headed south, opting to right-size the accounts and lock in gains.
Current preferred holds: AEFC, EAI, ELC, EMP, MGR, NRUC, PRH, PRS, BCV-A, CKNQP, GAB-K, GDV-K, GNT-A, NTRSO, OPP-B, PSA-Q, REGCO, RIV-A, TY-, UEPEO, WELPM
Preferred-esqe: We’re holding a stack of FHLB bonds. The market adjusts the YTM for all of us of course – so we seek out the lowest coupons to lower call risk. We have 14 of them stretching out to 2034 – only one was called about a year ago.
REITs: Holding VNQ, ARE, AVB, CPT, ELS, EQR, MAA, and TRNO, average basis is 20%+ less than current, but there are still values.
Best wishes r2s.
alpha-
Thank you for your generous reply!
The mean current yield on your first list is 5.85%, the median is 5.79%, and the range 5.41%-6.58%. The coupons range from 3.9% to 6.2%. The CYs are right where you might expect relative to other fixed income products (which are likely to have calls dates at a year or less).
Your long-term patient, buy and hold, buy the dip strategy is definitely appealing. After looking at dozens of charts, the inevitability of dips is obvious.
I’ve lost money trading in the past. Haven’t lost a dime in bonds and don’t expect to. Now I have more confidence I can do the same with preferreds and BBs.
I noticed that you have several junior BBs. I assume this is a non-issue for you.
I’m interested in $1000 institutional preferred stocks. For instance, BAC series Z 6.5%, floats at 3m Libor + 4.174% after 10/23/24, and WFC series EE 7.625%, floats at 5yy + 3.066% after 9/15/28. My IRA is at Schwab. For these issues I have to ask a trader to get a bid, which (if obtained) will likely be overpriced.
I like the $1000s because there are some excellent issuers and good yields. This etf looks to have a useful list with CUSIPs.
https://www.ftportfolios.com/Retail/Etf/EtfHoldings.aspx?Ticker=FPEI
I don’t like the $1000s because I don’t have access to price history or current price. I’d love for III to have a thread to discuss these issues.
Alpha, I also appreciate your reply. Quality first. You can always see how that matters when the market drops and recovers. I did not add up what your holding is returning now like r2s did but I did notice you mention your buys were about 20 percent lower than the current cost so your yield is a little more than what it is if you bought now.
I own a few of what you have like the REGCO and UEPEP, CKNQP, NRUC for example. Patience and outstanding GTC orders. Grid is a lot better at grabbing deals than I am on these quality stocks.
As for the REITS, I own a different batch. I mentioned on that other site my rule that I use and I was laughed at. I still try to buy quality reits or any stock for that matter but I try not to pay more than $50.00. Occasionally I break the rule. I’m impressed by your list, but it is a little out of my playground.
Charles, Based on all your III posts I’m confident you’ll get the last laugh.
r2s – Obviously I can’t speak for all brokers, but I took a random cusip number from your ftportfolios list and did a search in Fidelity News&Research/Fixed Income and I could view at trading history back to at least June, with the promises I could go further….. Cusip I used to test was 0641598S8S8. What brokers do you use?
2wr-
When I entered that Cusip in the Schwab search, it returned “Enter a valid Cusip.” LOL
I tried the Cusip for the BAC series Z, which Schwab recognized with “This CUSIP is currently not available.”
From reading here it appears that Fido and IB are the best when it comes to obscure (to retail) issues. I’m kind of stuck at Schwab. I’m baffled that no one on the internet has made a project of following the $1000s.
Maybe I should open a Fido or IB account just to get access to the data.
Suggestions?
2wr-
Actually, it appears that Schwab does have info and a trade history chart for any cusip it recognizes.
There are those who might be able to help using FINRA but I still find that “new and improved” website impossible to use….. Maybe someone here can do the same thing of using CUSIP 0641598S8S8 in the right area of FINRA (whatever that might be these days) to test to see if you can bring up a description and trading history. For the record, the bond is BANK OF NOVA SCOTIA Variable rate, due 10/27/2082
I don’t know another way to replicate these capabilities as Fido and IBKR…. Maybe you can try opening an account at FIDO or IBKR and then trying to see if you can access their fixed income area prior to you funding the account… Don’t know if that will work, but theres not much to lose by trying. I’m sure you’ll at the very least have to give up a lot of personal info, so there’s the theoretical security risk theoretically, but if you’re willing see if that works to gain access
2WR, count the digits. You have 11 . Doesn’t cusip have a 9 digit number?
I took the S8 off and found it on FINRA
I’m getting used to the new system, but its cumbersome. Not as good as it used to be and not as much info.
Charles – I just copied and pasted and apparently as well as mysteriously duplicated the 2 last digits… thnx for pointing that out… 0641598S8
Use this as a starting point on FINRA
https://www.finra.org/finra-data/fixed-income/corp-and-agency
Don’t enter any information if you already have a CUSIP # !!
Next, on the lower left hand side pick any bond symbol in light blue and click on it. I choose the first one.
OPFP440969
This takes you to the page for that bond. On that page is the CUSIP lookup.
Check I agree and put in the CUSIP #
If you want to look at all 2250 bonds Bank Of Nova Scotia ever issued just type bank nova in first search page.
Excellent, Charles….. Isn’t that just as intuitive as it can be, right??? NOT. ha! I managed to replicate your procedure so finally maybe there’s some worth once again to the FINRA website… that is if I can remember to follow your instructions next time I have the need. Ha. My first problem was having to get behind the fixed income user agreement box that kept coming up.. I finally discovered just to X it, not look for a place to sign agreement. Then, once you put in the CUSIP you’re looking for, you have to wait for it to show up in a box below where you’re entering the numbers. Clicking on that brought me to the info I was looking for…. MANY THANKS.
Charles – thank you for the link, now I can go back to looking up all the bond issuances and their credit ratings for a particular company. Thanks also to all the folks here who harassed FINRA into returning this capability that we had before their “upgrade”.
Hi Alpha, I like your model of building a portfolio. I invest only in very safe names and own a lot of the same issues as you. Your point about focusing on the income made me realize that I always know the balance but not the income. IE I am too focused on short term capital gains/losses instead of long term portfolio growth through income generation. Do you have a set % on capital gains that trigger sales? Thanks
Hi Pete,
I’m sure others have equally or better thoughts on this but here’s what I do:
I generally say I’m “selling nothing” which is during the growing, buying or holding phase. Here are the cap-gains caveats:
1) When prices are falling and I am buying tranche after tranche, the last purchased tranche (only) is always for sale at purchase price plus 2.5%. If that tranche is sold then a new replacement buy order is entered at the prior purchase price. This process book-ends the bid/ask for the issue. I’m not a flipper, but you can get flipper-esqe results doing this. Importantly here – your base hold/income is still in place, meaning reinvestment risk is eliminated.
2) Broader portfolio cap gains occur after buying/building periods and then right-sizing (shrinking) the account back down. I never sell anything at a loss, so selling cannot occur unless prices are rising. Now here’s the thing – when market-wide reversals occur, they are usually violent so the gains during this phase can be outsized. No specific rules, but as an example in the most recent cycle IIRC we were pulling $1 – $3 gains/share and would sell a few thousand at a time as the market prices continued to move north. When the account was right-sized, we stopped selling and left the unrealized cap gains embedded in the account.
Also, a gain is a gain and we never worry about the impossible task of trying to maximize gains on each share – because that falls back on the “no predictions” criteria – and we have no idea where prices will go nor the inclination to worry about it.
Best to you Pete and good luck with your accounts.
Thanks for your thoughts. It helps a lot! I’ve gotten pretty good at waiting for the right opportunities and not forcing trades. MMF and FTF are pretty good hangouts until then!
Pete. I had a discussion recently with one of my kids around the question of: “What rules do you have when cap gains % is high and you should think/trigger a sell? Unfortunately the answer depends on each individual investment for me as it is not a simple across the board gain % rule.
One of the rules I have is that I wont sell a stock that i deem is in my sock drawer. No amount of cap gain increase will trigger a sell. I have several here, but an example is WFC-L. It has been on my list for many many years, and I finally bought 50 shares at $1,060 per share.
Another rule is is that even though an investment has created a huge gain in %, but if there is further gain to be achieved based on history (several $$ under par) and the future of lower rates than today, those will still climb in value. I will hang onto those. An example is buying COF-L at $14/share. Yes, it has gained a lot, but it is a low coupon in a future lower rate environment. Various predictions are showing it is a lot lower in 2-3 years. My investment timeline is more than a couple of years.
I have sold many that hit 20-30% gains and were approaching par. With 3 drops in 1 year, these to me were not worth trying to scrap out another $1/share to get to par. These have been sold to buy things that are pinned to par. Ex. CHSCL, ALL-B, MS-E, etc. Might not be the best method, but created a view of 52 week high – 52 week low and look at the ones with low volatility from a pricing perspective.
I am fully invested, collecting monthly checks, and waiting for the next irrational dumping based on fear and emotion.
Many thanks Mr. C. You are another poster that always gets my attention. I sold some high quality low coupon issues with nice gains that I should have kept. I have flipped but I am not a flipper and just want safe long term income. Like you I am waiting for the next buying period.
Pete, don’t kick yourself for playing Monday morning quarterback. The market is too fickle. 3 times in 1 year we have had some large dips. For me, it is nice to set aside 30% for cap gain buying/selling. That 30% is sitting in those pinned to par investments waiting for emotional selling to happen :-). It is like Grid said, “it is time in the market that matters.”
Character, Capacity, Collateral, Covenants
I spend most of my time assessing the Character of the management team and understanding this business strategy. This is subjective, but if they fell like slimeballs, they probably are. Frankly, this criterion eliminates most opportunities. That said, I do break this rule form time to time – for example I currently have some RILY May 2024 Baby Bonds, but that is part of a separate strategy.
Capacity – can they pay their dividend payments, interest payments out of existing cash flow and cash. Here I tend to look at ratios, ROE, dividend/interest coverage, leverage ratios etc.
Collateral – this generally means the quality of the collateral for a particular loan, but I tend to take a broad view of this and assess the assets of the firm more broadly. Particularly important for things like property and mortgage REITS, closed end funds, oil gas firms etc.
Covenants – I tend to include all items related to the terms of an issue. This could include call provisions, provisions included as a part of the 40 Act etc.
FWIW
Also – I always start with the most recent 10K or 10-Q go to the Management Discussion & Analysis of Operations section and read that.
Then go to the Balance Sheet then the Cash Flow statement. Then I look at the Income Statement. Most of the time is spend on the Balance sheet. Typically calculate ratios and compare to competitors in the space.
Then I will go to a recent investors presentation and review that while listening to the most recent conference call.
Thanks for the input August. Yes, the management is a big one. especially if they are exterior managed at least that matters to me most of the time. Then you look at management fees and performance awards, This can lead to a lot of churning and self serving. I am still learning and here you have outlined how to do your research!
rocks2stocks,
I have been trading preferred stocks for 20+ years but I have a fraction of the knowledge of preferreds that most of the posters here have. Therefore, for my income account, I stick to Big Board investment grade preferreds that have multiple issues – BML, ALL, BAC, GS, PSA, WFC, COF, JPM, MS, USB, Entergy, NEE along with some other utes. Sadly, the number of issuers and issues in my domain is far less than it was 15 years ago so this is more constrained now.
Most of my current issues are sub $20 because of the higher yield and the expectation that that inflation would subside – not that I knew rates would begin to ease this soon.
I swap issues frequently. If I can get the equivalent of 1-2 dividends in a few days to weeks, I’ll book the cap gain if I can find an appropriate replacement – though I do hold some issues longer. If I’ve DCA-ed at lower prices, I’ll sell these lowest cost shares if share price rallies the equivalent of 2-3 dividends. I have no problem swapping a loser for another from the same issuer if the replacement has become more attractive.
I short some of these as a hedge when preferreds are getting slammed. This reduces the account’s draw down (I nearly broke even on my holdings in 2022 and generated a 20% return in 2023). This also lowers the cash at risk of my long positions. I’ve pairs traded for almost 20 years and it has profitable in every major preferred issues downturn that we’ve experienced since then with 2008 and 2009 being wildly so. However, this one (2022 to now) has been very different. But that’s another story.
Yes, this is a lot of work but it’s worth the effort. Plus, there’s the added benefit that I need a major hobby in retirement and this is it :->)
Theo, as you long ago figured out, if you stick with quality IG companies you dont really have to pretend you know things that you may not be so adequately trained to do. The credit rating agencies largely can do the grunt work for you. So at that point is pretty much is just clinical trading.
Like you I largely keep a self imposed tightly roped circle of friendship preferreds in my stable. I typically say I have about 75-100 preferreds, its just at any given moment I typically only have real money in 15-25 of them.
Grid, Yes, my trading is purely mechanical, aka clinical. When friends and acquaintenances hear that I’m active in the market, if they ask for stock picks, I just tell them the truth – I’m a bookie playing both ends of price. I haven’t a clue what individual stocks will do at any given time.
I have a prime list of 74 stocks and a secondary list devoted to finding large price dislocations (eg RILY) and possible pairs. I find that owning maybe 15 preferred stocks is a comfort zone and more than 20 gets unwieldy in fast markets.
BTW, we chatted a bit about preferreds on SA maybe 8-10 years ago (different handle). I left SA because they were censoring most of my comments about the miserable misinformation posted by David Pinsen (options) and Pendragon (everything). I followed you here ( STALKER!!!! 🙂
welcome to the censored club, Theo…. we’re growing in numbers daily..
Thanks, Theo and Grid. You folks are crazy good. So much to learn. I was a short seller for a year or so before and after the 2000 peak. Wild times. Your short hedging is quite a trick. I hope we come back to the topic at the next downturn.
Rocks – The big picture is that you have to figure out what you understand as well as what you feel comfortable doing.
As for hedging with shorting, you need to work out your game plan before the next downturn because you don’t want to be the deer in the headlights trying to figure out what to do when it’s going wrong.
Alpha, that time of year again isn’t? I wonder how much gyms make off gym membership this time of year. I have put off my other hobbies of gardening and a garden club.
My New Year’s resolution is to get rid of a couple properties this year and next and invest the money and let the money do the work and produce income hopefully freeing up more of my time.
Also I know this is taking a lot of my time, but I have tried to not be in a hurry. When I have picked something I try to set a price I am willing to pay for the income and let it sit there until we get a drop in the market.
Charles, We sold the last of our properties in 2023. If I could use only one word to describe the experience it would be: liberating!
We were all residential and am happy to replace some of that with res REITs. The REIT values late 2023 were compelling. Nice to let someone else handle the management!
Good luck with your decision process.
Alpha, ones mans work is another mans pleasure, ha. Funny, like you, my stash has really grown, while income has reached all time high, despite having a lower yield than I had in ZIRP era. Its nice to have a large chunk on autopilot, but the urge to trade will keep a portion reserved for that if situation occurs.
Any more is just clinical adjustments from same type, quality, etc. just arbitraging the difference as it always pays off.
For me my worries are what will I do with my CDs that mature 6-18 months from now. A lot dont mature until 2027-28. Sure looks like reinvestment risk might be a problem with these collective lots maturing end of year. World class problems, especially if interests are lower…Because all that means is that my preferreds boughts at prices they last seen since turn of century have likely gone up considerably. That is a problem I can deal with!
Grid, You are of course, one of the three. 🙂
Regarding reinvestment rates who knows? We might just get some relief on those LT rates. At least intuitvely, it seems that even if inflation drops, at some point reduced foreign holdings of US Treasuries and forever higher domestic deficits would combine forces to pressure those 10-year+ rates northward.
Speaking of three, Alpha, that is basically how my pie is divided into. One slice shortish duration, one slice mid duration, and one slice long duration. As you inferred predicting the future is a bit unknowable. So hedging all angles seems appropriate for me. Or maybe Im just getting softer in my older age, ha.
I talked to T Rowe this morning and was told BFS-PRD was issued by the partnership and E by the company so one is a dividend and the other is a partnership dist. I guess I have to go by what they are telling me.
ATCOL Atlas Corp. 7.125% Senior Notes due 10/2027
Last = $23.76, just went X-DIV, YTM = 8.58%, even after taking into account the 2 weeks between now and Jan 30 that a new buyer will not receive nor be entitled to accrued:
I normally avoid shipping companies so am not really in a good position to weigh the risks on this one. Anyone follow it? Atlas is the corporate entity that owns Seaspan and this is a roll-up of an issue originally done under the Seaspan name….. Atlas is officially a private company but what got me interested is that Fairfax Financial [FRFHF], the huge and I believe conservatively run Canadian insurance co, owns 45% of it. Both Fitch (BB) and S&P (BB-) rate Seaspan but not Atlas, and Fitch has a pretty positive writeup on Seaspan which implies there would be no change in rating from Seaspan if they rated Atlas. Also, when compared to the BB rating category Fitch points out that Seaspan measures up conservatively on many important metrics – https://www.fitchratings.com/research/non-bank-financial-institutions/fitch-affirms-seaspan-corporation-idr-at-bb-outlook-stable-20-06-2023
So are there reasons to believe Atlas is at greater risk as a company from what’s going on in the Middle East than other container ship operations? Are the risks of Atlas being a private company making this one cheap or is it the ME situation? Who’s into shipping companies among us? I own a small chunk bot pre x-div at 23.90, so I’ve got a dividend capture, but it seems cheap again now on YTM basis…. Is this one fool’s gold?
2WH
Thanks for highlighting ATCOL. I have a position in security and had a position in the earlier Seaspan note. I like the current note for all of the reasons you’ve mentioned.
From a shipping investor’s perspective, the Middle East issues and the climate problems with the Panama Canal increase the demand for ships and increase shipping prices. I’m not worried about the finances of these companies.
I’m interested in hearing other viewpoints.
2wr-
Do you see any special risks because Atlas is private? It bugs me not having the parent’s stock chart…loved? unloved?
That’s an interesting question in this case, r2s…. Again, I should probably plead the fifth on this because I am far from expert in this field, but in general I would say yes because the financials are possibly more opaque in general and possibly difficult to get a hold of. In addition in Atlas’s case, it’s a Canadian company so there’s more difficulty in knowing how to track down everything that might be available say thru SEDAR. However, a quick search of EDGAR shows that the normal info you might need to do DD is there with copious 6k reports not only for Atlas but for Seaspan as well…. Couple that with knowing that Fitch and S&P continue to have sufficient info available for them to keep their ratings for Seaspan current AND for Fitch to imply they’d most likely rate Atlas equivalent to Seaspan if they rated it, and that tells me that for now at least, there probably is not an elevated risk involved because of Atlas being private… But again. DYOD. I am not an expert here nor have I done sufficient DD myself to feel overly comfortable with this… I do not plan to ever get up to a full position for me on this one…
Crossing my fingers ALL-B is good for yet another interest cycle. I understand that a call has to occur either by or on the last payment date which is this upcoming Tuesday.
I wish that were true, Nikko, but it’s not…. Unfortunately, “We may redeem the Debentures: in whole [AT ANY TIME] or in part from time to time on or after January 15, 2023 at a redemption price equal to their principal amount plus accrued and unpaid interest to, but excluding, the date of redemption…”
But on the plus side, any call has to done after giving no less than 30 day’s notice so we’ll always have an extra 30 days no matter when they announce a call – “Notice of any redemption will be mailed at least 30 days but not more than 60 days before the redemption date to each holder of Debentures to be redeemed at its registered address”
2WR, thank you for your post.
I was confused by Nikko’s post saying they had to issue any call on payment date 1/16, as I had not ever heard of that before with ALL-B; other stocks, yes, but not ALL-B.
So I went to the prospectus and read it through but found nothing – except for the usual 30 day notice at any time after Jan 15 2023, as you have pointed out.
Was going to ask Nikko for a link to this info when your post came in at a most appropriate time, again thanks for clearing that up.
Hats off to Tim for highlighting ET I. Trades today close to $11!
WEC is submitting a tender offer for it’s Series A floating rate subordinated debt. In light of the ET redemption earlier this week, I wonder if we’ll see more of this on floating rate issues.
I own a small position in the WEC Series A floating rate debt. My cost was $86.06. I’m undecided as to whether I will participate in the tender offer but I’m leaning towards not participating at this point. They can call them for $100 if they really want them retired that badly.
https://www.prnewswire.com/news-releases/wec-energy-group-commences-capped-tender-offer-for-2007-series-a-junior-subordinated-notes-due-2067-302030411.html
Thanks for this post, Dick – This tender for a 1k issue brings up a question I’d like IBKR fans to answer – Can you buy this bond right now at any price at IBKR? Constantly when there’s a tender or some other corporate event including Change of Control situations, etc., once the event is announced, FIDO seems to pull any offerings from their “inventory” and you can no longer have an opportunity to take advantage of the event…. Although I’m not sure, I think they also freeze what you own and you can’t even try to sell it in the open market either – although you can of course tender….. Is this another advantage IBKR has? Overall I’ve felt Fido has one of the better fixed income departments, but this policy has always irked me.
2WR,
Assuming I got the right CUSIP (976657AH9) I’m seeing it 93.88 bid / 94.50 ask on IBKR. Looks like about $3MM of it traded so far today. Doesn’t look like there’d be any problem trading it.
Thanks, O… That would make sense since the tender is at 94.375. I can see where trades have taken place on Fido’s trade history and that it jumped a couple of points on Jan 9 after the announcement, but they won’t accept orders… What I don’t know if if they did allow trades on this one prior to the announcement… I do have enough history with them though, to recognize the pattern, having owned issues that experienced tenders or calls or Change of Control scenarios and Fido just shut you out of either buying or selling after the announcement… So if an issue you own gets called on 30 days notice, you are then locked in until the call date. I realize that’s their old Nanny state mentality kicking in, but it is frustrating.
DW-
There’s no tender for your A preferred right? The $893.75 + 50 for early tender is for the $1000 note.
Confusing.
Gary – Best take a closer look at the link provided. No reason for confusion… DW does not mention a preferred nor does the link…. “Tender Offer, the “Maximum Acceptance Amount”) of its 2007 Series A Junior Subordinated Notes due 2067 (the “Notes”). DW, says “debt,” link says, “note.” tomato tomatto…
Re PPI # ….. The key takeaway from the report is that inflation at the wholesale level has been brought under control, with deflation appearing in several components, and is expected to translate into friendlier inflation readings for the PCE Price Index that is the Fed’s preferred inflation gauge.
CME Fed Watch re FF Mtg Probabailities Friday Jan 12 11am CT ….
March Mtg to 5.00% FF = 71% probablty
June Mtg to 4.50% FF = 58% probablty
Been using ToS for years. My main grievance is it does not display ex-dividend dates for ETFs, preferreds, BBs, and who knows what else. Very annoying. I look at the TradingView chart for that info.
Do you mean tradingview.com? It seems pretty spotty – doesn’t show ex-div dates for e.g. AJXA, ASBA, and LTSL 🙁
How could it show ex-dates for LTSL?
what am I missing?
LTSL is expert market, and therefore does not fall under the 2 day settlement period for trading.
I’m not sure what you are saying – I just bought some LTSL at Fidelity, and the settlement period was T+2 like anything else.
You’re right. What is different about AJXA, ASBA, and LTSL?
AJXA is due to be called in April. I would be lining up something to replace it with. Any suggestions?
AJXA not to be called in April – it will mature in April, April 30th.
Mis-spoke 2WR, better to be accurate for everyone here.
I need to go through Tim’s list to see what I can replace it with. I don’t remember, but I don’t think quantumonline list is as good. You know any other place I might look?
IIRC, AJXA is a convertible note, which means you may wind up with common shares instead of cash or some percentage thereof based on whatever formula the issuer decides. You should check the fine print on how that gets determined, especially since their merger with Ellington Financial. I generally avoid investing in convertible notes for this reason, but perhaps the merger has triggered a ‘material events’ clause which means you’ll get 100% cash. 🤔
Wasn’t the acquisition by Ellington called off?
Also, I understood the conversion right to be at the option of the note holder, not an option for Ajax to put common shares to the note holder in lieu of cash at maturity.
https://www.sec.gov/Archives/edgar/data/1614806/000157104917003794/t1701222-424b5.htm#tDN
Conversion upon notice of redemption
If we call any or all of the notes for redemption, holders may convert all or any portion of their notes at any time prior to the close of business on the trading day prior to the redemption date, even if the notes are not otherwise convertible at such time. After that time, the right to convert such notes on account of our delivery of the notice of redemption will expire, unless we default in the payment of the redemption price, in which case a holder of notes may convert all or any portion of its notes until the business day immediately preceding the date on which the redemption price has been paid or duly provided for. If a holder has already delivered a repurchase election with respect to a note as described under “— Holders May Require Us to Repurchase Their Notes Upon A Fundamental Change,” it may not surrender that note for conversion until it has withdrawn the repurchase election in accordance with the Indenture.
https://www.ellingtonfinancial.com/news-releases/news-release-details/ellington-financial-and-great-ajax-corp-announce-mutual
10/20/23 at 4:13 PM EDT
PDF Version
OLD GREENWICH, Conn. & NEW YORK–(BUSINESS WIRE)–Oct. 20, 2023– Ellington Financial Inc. (NYSE: EFC) (“Ellington Financial”), a real estate investment trust investing in a diverse array of financial assets including residential and commercial mortgage loans, and Great Ajax Corp. (NYSE: AJX) (“Great Ajax”), a real estate investment trust that invests primarily in residential mortgage loans, jointly announced today they have agreed to terminate the merger agreement announced on July 3, 2023, effective immediately.
Fidelity watchlist shows that
Thank you for that, the Fidelity watchlists do seem pretty good at showing dividend dates.
One thing I can’t figure out – is there a way to sort by symbol, or do you have to do that by hand?
Hmm, the 50 symbol limit is annoying.
If you click any column header, such as Symbol, it will prioritize in order – for Symbol, alphabetically, for other columns as you would expect from highest to lowest or vice versa
Investment Grade BDCs
Stemming from a conversation I had with BDCBuzz on an SA article about Saratoga today, I discovered thanks to him that there are far more Investment Grade BDCs than I thought. He identified 20 that carry an investment grade rating from Moody’s, S&P, Fitch, or Kroll. I thought there was only a handful…. So I’ve taken the symbols and filled in the blanks as best I could using Fido, and in one case, (NMFC), from QOL but verified by Moody’s. All of these ratings are for senior unsecured issues, NOT FOR PREFERREDS, and most are for 1k bonds, not necessarily baby bonds as many of these issuers have no baby bonds outstanding…. The 6 shown with no ratings either are rated only by Fitch and/or KRBA or Fido did not have any bonds from these companies in their offerings today. I did not try to add or cross-reference ratings from Fitch and/or KRBA.
ARCC Ares Capital Corp. NR/BBB-
TSLX Sixth Street Specialty Lending, Inc. Baa3/BBB-
FSK FS KKR Capital Corp Baa3/NR
OBDC Blue Owl Capital Corp Baa3/BBB-
BXSL Blackstone Secured Lending Fund Baa3/NR
PSEC Prospect Capital Corp. Baa3/BBB-
GBDC Golub Capital BDC, Inc. —
MAIN Main Street Capital Corp. NR/BBB-
GSBD Goldman Sachs BDC, Inc. Baa3/NR
HTGC Hercules Capital, Inc Baa3/NR
NMFC New Mountain Finance Corp. Baa3/NR
OCSL Oaktree Specialty Lending Corp. Baa3/NR
BBDC Barings BDC, Inc Baa3/NR
BCSF Bain Capital Specialty Finance, Inc. Baa3/NR
SLRC SLR Investment Corp [Solar Capital Ltd] —
MFIC MidCap Financial Investment Corp —
TCPC BlackRock TCP Capital Corp [formerly TCP Capital Corp.] Baa3/NR
CCAP Crescent Capital BDC, Inc —
PFLT PennantPark Floating Rate Capital Ltd —
PNNT PennantPark Investment Corp —
2WR
Great info – thanks
Hello 2WR, Last couple days on Fido search I see bonds all the time for Blue Owl. Sorry I don’t like PSEC personal preference. Getting a little more used to FINRA now.
I am interested in finding information on 144A securities ( Bonds ). When I try to locate on FINRA site I have no luck. If anyone knows how to obtain information on securities that are 144A, I would appreciate your assistance. Thank you in advance.
Look them up by CUSIP. Which firm are you working with that will allow you to buy/sell formerly restricted 144A bonds?
IB will. It sounds crazy but they create a new CUSIP. Usually slightly more expensive purchase.
Interesting. Can these bonds be subsequently resold by the buyer (i.e. they are freely tradable) irrespective of accredited status? My understanding is the holding period only applies to the seller. Then again, they were never registered to begin with.
I thought IBKR lets you buy the Reg-S flavor of an issue, as sometimes issuers have a combined Rule 144A/Regulation S offering, and each one has their own ISIN even though they are the same underlying security.
Like this for example:
Issuer: WEA Finance LLC
Debt Level: senior unsecured
Issue: USD 1 bln 3.75% bond/note 17-Sep-2024
20-Sep-2023
BBB+
Affirmed
Long Term Rating
RATING HISTORY
Country: United States
Sectors: Real Estate and Homebuilding; Corporate Finance
Disclosures: EU Issued, UK Endorsed; Unsolicited
senior unsecured; bond/note
ISIN: USU94299AC51 (Reg S)
ISIN: US92890HAC60 (144A)
CUSIP: 92890HAC6 (144A)
Maturity Date: 17-Sep-2024
Currency: USD
Amount: 1,000,000,000
Coupon Rate: 3.75%
Placement: 144A
Dave I saw one trading on Fido that they say not in their inventory but it looks like it only trades every 3 or 4 Days I suppose but the volume I see you have to call in.
Charles. I highly recommend interactive brokers. Much more fluid process than calling Fido bond desk. Plus the execution with Fido bond desk is below average at best, for bonds not in their inventory.
BTW, happy to show you the ropes if you get it set up.
Can US persons buy Reg-S bonds on the secondary market? Going back to my earlier question, are there any restrictions placed on selling?
OT for the preferred fans here, but may be of interest to for those who invest in income-producing common stocks. My utility ticker list is showing an unusually sharp drop today., off 2.6% I checked XLU. a big utility ETF, to see if the drop was random to my list. XLU is dropping today. It is off 2.52%. (recovered to 2.3% loss now) That’s over a year’s worth of dividend income.
I didn’t see a triggering event that would cause the drop, other than winter storms or perhaps interest rate/CPI jitters. However, I didn’t see a similar drop in sectors I consider interest-rate sensitive. like banks, insurance and REITS. Maybe time to go shopping for utes?
JMO. DYODD
Bear – could be the reaction to the unexpected but relatively small uptick in CPI. I have found utilities to be one of the most interest rate reactive issues out there. Maybe ???
MFAN, New Issue Notes, anyone seen recent trade levels ??
Antero Midstream Announces Launch of $500 Million Offering of Senior Notes
PR NEWSWIRE 9:15 AM ET 1/11/2024
Morning Westie,
Life in general.
Remember that car mechanic I told you about? Of all things, I had a guy call my work yesterday about him. Seems he went on Yelp to find a mechanic and found his shop and even went over and talked to him. He said he couldn’t believe all the reviews were so good and he said he had never met someone who was a one man shop and was willing to talk to the customer.
So this guy did a google search and found his old shop up here and saw a couple businesses next door so was calling around to find out what we knew about the business and would we recommend him.
Honestly, wished Mark had stayed up here. Hard to find a good car mechanic and honest too.
m
https://www.youtube.com/watch?v=vbQyBVCfTzc&ab_channel=LarryCordle-Topic
No job was too big on the planet for the world’s greatest shade tree mechanic
LoL,
These days you have to have a PhD in electronics.
See Hertz is apologizing to their investors and selling 1/3rd of their EV fleet world wide and taking like a 430 million dollar hit going to replace them with ICE vehicles. Said repair costs and insurance was more than regular cars.
My wife had to have the windshield replaced in her new plug-in hybrid last year. Cost over $2K – $1600 of which was to recalibrate all the sensors, etc. Just crazy. luckily covered by insurance, but still insane how complicated cars have become.
This sounds like a problem not specific to a hybrid or EV vehicle right? I keep hearing about all this kind of computer stuff crammed into ALL new vehicles making repair of practically anything ultra-expensive… Is that the case here? Of our two vehicles the youngest is 10 years … I’m proud of that..
Absolutely true, 2WR. Its a general problem. I tend to equate the new cars/problems with my wife’s new hybrid because it is the only newish car I own.
A lot of these new sensors and systems are mandated by the government, so they are becoming ubiquitous. They are driving up the cost of cars, but also increasing the cost of repairs hugely. Rich people don’t care too much – they just pay. Poor people are the ones who will suffer (as it always is and always has been) because the shade tree mechanics can’t afford the equipment to fix the electronics.
Lord save us from the gubment.
I still drive my 16 year old truck, but my wife bought her new one because she gave her 10 year old one to our youngest son. I actually feel bad about that – it is a real lemon (first year of a new design – has had more than 20 recalls). I have been trying to convince her to sell it for years. I may have to help my son sell it and pay to upgrade to something more reliable.
I wonder whether this was her plan all along?
EV’s are a political boondoggle not yet practical. Most non-investors opinion of them depends on their political bias moreso than reality. If you are an Investor you need to be unbiased before putting your money where your mouth is.
I agree, martin. If we really wanted to reduce emissions, we would focus on getting everybody on hybrids for now. Most bang for the buck. Of course, the gov. can’t justify throwing billions of dollars in incentives at it.
Interesting report I read said that most people who want an EV right now already have one, so demand is falling. Seems to be in line with production cuts/redirects at some of the manufacturers.
Also, there is a battery shortage looming, and EVs are the main market for them.
Just today Hertz announced that it’s selling 1/3 of its electric vehicle fleet (20,000 vehicles) due to the fact that there is low demand (consumers don’t like EV cars_ and high repair costs. They are going back to gas powered cars
Ford is cutting its EV truck production in half and is projecting a $4.5 billion loss for the EV division for the year
Mav, my town is part owner of a local shopping center. They just spent a chunk of change tearing up the parking lot and putting in charging stations. See a few cars using it, not enough to pay for the expense I suspect. Obvious modern society is in a mindset of they want gratification now. Amazon offers same day delivery, fast food, movies on demand, etc. Then you have EV’s that take 20 min to several hours to charge. Just doesn’t equate with reality the public expects.
Does not surprise me. Tried a hybrid on vacation last summer. First issue, did not want to waste vacation time sitting at a charging station while on vacation. Second, when we got back to the hotel each evening, the few charging stations provided were being used. Ended up using gas option the whole trip. Will stick with gas until infrastructure and charging times improve.
Not surprised at Hertz’ announcement. I *was* surprised the several times Hertz offered me an EV–thought they’d require an upcharge but didn’t–and finally took the opportunity to try one, knowing I was taking on the headache of finding and using charging stations during the rental. Figured an EV was somewhere in my future so why not take the opportunity to learn?
I calculated that the cost of charging was as much or more than gas (dollars per mile). I haven’t compared notes with any EV owners, so I don’t know whether that’s true in general.
As I say, not surprised at Hertz’ announcement: I am guessing that a large majority of their customers are first-time users like myself, and dealing with charging is just not acceptable. Quite apart from the cost of repair, etc.
Bur, When my dad died 10 or 12 yrs ago it was about this time of year. I flew into Pittsburg about 9:00 at night with it snowing and all they had was a hybrid for a rental. I hit the road and drove north to I 80. Once I got there, I followed a tractor trailer by following the tail lights until I got to Du Bois and my hotel. The whole time using that car for 3 days I was stressing out driving in the snow and not knowing what the dash lights meant regarding the electric power. The only good thing I could say is I got great mileage.
I might be interested in a hybrid and getting to learn how to use it under normal conditions but a full electric? no way. I read some of the Tesla’s with extended range Hertz is selling are as much as $50,000 with 60,000 miles on them.
2wr, thank you for turning me on to Larry Cordle! I had unaccountably (given the breadth of my musical knowledge and my age) never heard of him. Great stuff.
yes, but it’s a Private Placement; meaning that most of us won’t be able to buy any.
CODI-B – looks like someone is trying to liquidate a position today FYI
yield on cost at $24.65 is 8%, this floats in 2028, if not called, goes ex-divi in a few days
CODI also raised like $70m of equity recently from one investment firm
QUANTUMONLINE.COM SECURITY DESCRIPTION: Compass Diversified Holdings, 7.875% Series B Fixed-to-Floating Rate Cumulative Preferred Shares, liquidation preference $25 per share, redeemable at the issuer’s option on or after 4/30/2028 at $25 per share plus accrued and unpaid dividends, and with no stated maturity.
Cumulative distributions of 7.875% per annum ($1.96875 per annum or $0.4921875 per quarter) will be paid quarterly on 1/30, 4/30, 7/30, & 10/30 to holders of record on the record date that will be 1/15, 4/15, 7/15 & 10/15 respectively (NOTE: the ex-dividend date is one business day prior to the record date). From and including 4/30/2028, holders of the shares will be entitled to receive cumulative cash distributions at a floating rate equal to three-month LIBOR plus a spread of 4.985%.
CODI-B and -C ex-dividend today, Jan 11, and also these that I follow: ABR-D and -F, ATLCL, ATCOL, GAINL. I’m sure there were lots more.
I’m thinking about QVCC, and QVCD. Parent company may survive.
seems? like mmkt rates ticking down SPAXX the FIDO sweeper is down from 5.01 to 4.98; not sure that is a trend kinda small, but decided to move a slug into SGOV for the extra .30-.35% or -and tie my hands a little ala my Gridboo.. otherwise I am not seeing anything today so far to buy-or sell, guessing more volatility coming w the CPI/employment #, best to stay put. Bea
Hi Bea
How about JEPI for parked funds? Lotta liquidity.
My choice along with SGOV
Stupid question: SGOV and/or JEPI have one day settlement or two?
no JEPI for me it has been doing well tho for folks; When I last sold SGOV Fido made the funds available for immediate use; they do that for ALL my sales, I trade around core frequently and cash is available (I do not use margin. )
2WR, I looked at an old trade from last year when I was in SGOV and sold some; the sale was Wed 11/1 and it Settled Fri 11/3; fyi Bea
Thanks, Bea. That makes trying to play Schwab’s little game by managing cash to the day a little more tricky…. At least with the MM funds, if I do it correctly, I can move cash around to cover the day after buying because the buy settles in two days and the mm purchase sale settles in 1.
I think that’s a feature of margin accounts. If you make a purchase and cash is not available at settlement (typically 2 days, one for MMFs), you just took out a margin loan. An example: you sell stock and buy MMF.
Schwab Street Smart Edge Trdg Platform going over to
ThinkorSwim.
Any posters on the Schwab platform already make the move ?
Any heads up , alerts, issues, ect ??
Thanks in advance.
Jim
Customers who use Schwab StreetSmart Edge for futures trading will be transitioned in March; all others will transition from April.
I intend to use SSE until the last moment, but have begun trying out the simulated trading version of ThinkOr Swim, using the paperMoney setting.
It’s a little complex and frustrating, as some info I am used to seeing quickly, now needs to be displayed from other screens, etc.
They also do not have XD, Div Pay Date, and Div amount as watchlist column options, needs a different screen for that. Most of the Preferred Stock/Baby Bonds I follow have no div info, they just display N/A.
Not looking forward to having to change, but there’s no choice.
Thanks for reply.
WOW, strange that the Schwab organization is going forward with this switch.
May see some asset movement.
Thanks again.
update – was able to get Div/share on as a watchlist column option, but not the rest.
just found it a few seconds ago, 🙂
Inspy:
Are we going to be able to Import our StreetSmart Edge Watchlists over to Think or Swim? Schwab.com and the Schwab mobile app are more or less useless for trading.
I have 14 Watch Lists on SSE comprising over 2,000 securities that have been compiled over the last decade.
So these all have to be re-created? Good grief.
I recently bought some deep out of the money cheaper put options on SCHW common. I expect Schwab to lose enough customers over this for it to be painful when quarterly EPS is released during 2024.
Today’s Citi downgrade of SCHW seems to be on the right track here:
“Brokerage cites lower net interest income and net new assets for price target cut”
Kid, check out this:
I created new Watchlists in ToS, since I only had 20 or so names per list, and had only 5 lists.
But on the main page, click on the Setup icon ( gear wheel ) on top RH corner.
In the drop down list, look at the lower half, you might see your SSE watchlists. I can see only 1 in my case, even though I have 5 in SSE.
Haven’t tried clicking it, as I don’t want to screw up what I’m doing.
But try that and see what populates — you might just get all of them.
Let me know how it works out.
They didnlt lose enough customers in the td switchover? Now they want to drive more customers out. I don’t want think or swim I prefer simplicity and do my own work. if that’s my only choice then it isn’t my only choice for a broker.
Martin, you can still use Schwab.com website, ToS web-based platform, or Schwab Mobile. I find those restrictive and cumbersome, but as I play with ThinkOrSwim, it appears to get easier.
Hope to get familiar with this over time, but because we III folks focus on dividend date, amounts, yield, etc, it will be a more difficult goal to attain.
Martin, this platform transition is part of the overall TD transition. keeping ToS was part of the plan from the beginning, from what I hear.
Also, supposedly they are going to run ToS in-house, while SSE is run by a vendor (and isn’t well integrated).
Retention of ThinkOrSwim is the only reason I haven’t looked to move money out in anticipation of being Schwabbed and that’s not happening for me until May. Were it not for TOS, I’ve heard enough about Schwab to not want to stay around…. I guess it’s all dependent upon what one’s used to…. I use TOS and Fido’s Active Trader Pro and like TOS better but do get some info from either that I don’t know how to get from the other… and agree with Insbpy – it’s all about the learning curve and at my age, looking to avoid new ones. And it’s bad enough that TOS has adopted Schwab’s annoying and purposeful sweep account business that will not sweep your cash into a 5% money market fund…. If you don’t actively manage your cash, you earn next to nothing on it until you literally buy a money market fund with it. Then, if your account is not a margin account as the IRA isn’t then you have to enter a sell of the MM before you can bid for what you want to buy in the market
2wr… I have exactly the same situation… and use both TOS and FATP. they complement each other well. TOS is more a trader/option platform, where FATP I can see and do more with my account and info. Schwab does not offer the discount DRIPs , so I have migrated my (ECC) over to FIDO. But I don’t have a solution for bidding as I keep mm in SWVXX. Otherwise I like both
I think it’s been discussed here before but the solutions I know for the bidding sitch on non margin accounts both require some babysitting but work. For one, If you want to keep all funds in SWVXX in your IRA but still put out outstanding bids, you can enter a SELL for some SWVXX in the AM and cancel it at the end of the day, or even intraday and never have funds leave SWVXX… You can even technically go negative for the day (since stock settlements are 2 day but 1 day for SWVXX) if you buy something just as long as you sell in SWVXX the next day to cover you buy.
The second thing you can do is enter your bids in your marginable account that you want in your IRA and if they execute have TDA move them to the IRA once you’ve got the covering SWVXX sale in place. They have told me they don’t like that and may cut you off if you do it too often, but it can be done. I don’t do it often enough to really test their patience.
Hey, 2WR,
Talk to schwab. You can sign up to be able to place orders in an IRA backed by MM funds. Its called something like “limited margin” or similar (can’t recall – signed up many years ago). Its not “real” margin (not allowed for an IRA), but it makes day-to-day trading much easier. I did have to sign one form, but it may be electronic now.
Note that if you don’t sell the MM fund to cover executed buys, they can tag you with a trading violation and make you go back to “cash up front”, but I have managed to avoid that. The few times I missed selling MM shares on time, I could sell something else in the account and get “credit” for the sale proceeds to cover my shortfall.
I have been using this almost-margin for a lot of years. works fine and avoids all the silliness you describe.
I found it because I was mentoring a grad from my undergrad school who happened to be at schwab’s local office (since closed because of the TDA deal). He pointed me to several nice things like this program.
Thnx, Private… although I don’t officially go Schwab until May, I’m going to get in touch with my local rep (she’s already changed her email address from tdameritrade.com to schwab.com) to see what she knows of this…. once she comes back with her normal blank stare, I’ll try the people at Private Client Services.
Schwab client reps are sure a mixed bag, and finding a good one can be a challenge.
My mentee (who ended up at my local Schwab office) was excellent, but he got poached pretty quickly.
I had another guy I liked who had been there for MANY years (older than me!). He knew how everything worked, and how to work around things that didn’t work. Unfortunately, he pulled the pin during the pandemic.
Schwab solved this problem for me. They closed my local office.
One thought – since you are going to get Schwabbed anyway, you might want to see what you could get for opening a new Schwab account. When I opened mine (years ago), I got something like 20 years of free trades (not as valuable now, but includes OTC) and some nice cash bonuses. Don’t know whether you could transfer from TDA to cover it, but might be worth a try.
I really hated SSEdge when I started using it (after using something else at another broker that is now long gone). I like it well enough now. I haven’t started TOS, but I need to. Its all about learning curve.
I don’t know whether they still have this program, but when I transitioned to Schwab, I could schedule a one-on-one call with a specialist who talked me through setting up my SSE the way I liked it. Made a huge difference (esp. because he was familiar with the tool I had been using at my prior broker). Guess I will have to call.
They also have some videos- TOS sees pretty complicated, but should be able to learn it. But- as mentioned above- there is a legacy Schwab program too.
I don’t like most of Schwab’s changes on their web platform. It has become more cumbersome and harder to find relevant info. They keep cramming repetitive or low-value info into the center of the screen, and they seem to think it’s an art contest with multiple fonts and colors on basic information pages and useless pie-charts and performance graphs. They have also recently screwed up account history for any preferred stock with a backslash (ms/pre, etc.). They seem to be pushing out web site changes without beta testing them to make sure they work or understanding the needs of their users.
Two years ago, I was hooked on Schwab. Now I’m looking to change brokers to anyone that can efficiently present basic data (e.g., graphs with dates, ex-div dates, divs, PE, number of shares outstanding, etc.). I buy primarily preferred stocks, bonds (agency and corporate) Any suggestions? Thanks.
Another problem- I have been trying to look up some prices at which I sold a stock, and likely as not, there is no history– then I have to go hunting on statements.
Discover Bank has a 5.20% 1yr CD special , there was a flyer in my h/y savings stmt (that a/c is down to small bal relatively as I moved most of it for higher rates as noted here, last year. ) fyi.
Learned a valuable lesson today….
Saw PCGPRE (one of my holdings) was down 3.40% to $17.89.
FIDO Directed Trade showed 500 avail at $17.89.
Tried to snag another 5 cents by bidding $17.85.
Poof.
500 sold at $17.89 to three bidders and the asked jumped to $18.40.
Sigh….
.
I use odd bids dont know if it helps? I call it the Bea method (lol) which I shared when I was in Trapping Value’s service (as his guest)..anyway like 25.01 instead of 25, 16.76 instead of 16.75..you get it.. you can’t believe how many hits I get because so many folks use 5c round numbers or ‘no cents’..it really works I think. Probably in my head you can’t beat the dark pools but you can try. (I did sell my PCG A’s the other day for a 10% gain if it sits in cash till year end that’s another 5%, booked to capital locked in. Still conservative here for me. ) Bea
To think Grid and Bea were making me feel bad I hadn’t sold my PCG PRE That I had bought at $15.85 and earning 7-7/8%
Maybe I can sell to Westie for 18.25?
Largest Short Values of Stocks at IBKR
Rank Stock Description
1 XPEV XPENG INC – ADR
2 ABR ARBOR REALTY TRUST INC
3 GME GAMESTOP CORP-CLASS A
4 LCID LUCID GROUP INC
5 RILY B. RILEY FINANCIAL INC
ADC and ADC-A – I’ve never seen this before: The CEO of Agree Realty Corp, Joey Agree, is participating directly in the comments section of an article over there – https://seekingalpha.com/article/4661738-agree-realty-off-the-lows-but-still-a-long-term-buy-candidate
2WhiteRoses.
Wow!
On first glance, it seems fishy, but after poking around, I’ll give him the benefit of the doubt. I saw this quote from him in December on the same site. I always hate it when IR never calls me back.
“ As i have discussed before, the main reason I answer any questions on SA is because of the inequity of access for the retail shareholders in today’s market. We attend a dozen conference/roadshows where institutional investors are able to ask any questions they want! The world should be flat (to steal from Thomas Friedman).”
That is awesome that a CEO said that and is doing that. Major points in my book for being retail shareholder friendly!
Joey Agree has been doing that for years on ..SA does get attention from these companies of course, you dont see this often, in my 16yrs on there I have not seen it much tbh; nothing wrong as long as he doesnt violate disclosure/black out rules. I am not long but do watch their pfd ADC-PRA in my watch list, to me it like one of our great cash alternative names and w so much cash.
Maybe 17.50ish, thing is like all our names, when the watch and hot list names sell off there are a lot of things to choose from. He comes off as nice, respectful and knowledgeable to me in TV interviews. Bea
David Gladstone used to pop on SA with comments a few years back concerning some of his companies I remember. Dont know if he has done it recently though.
With the proliferation of online resources, I guess I see no problem with it, just depends on the manner.
When the old CEO of Nikola (yes, the one in jail) was spending an excessive amount of time on Twitter, it felt weird.
When Cliff Asness (AQR) or Boaz Weinstein (Saba) comment on Twitter, I enjoy it. It is also becoming more common to hear CEO’s on long form podcasts. i’ve been enjoying the podcast from the CEO of Norges bank recently. Unique perspective as they are $1.4T fund.
https://www.nbim.no/en/publications/podcast/
Used-Car Wholesale Prices Have Given Up 53% of their Crazy Pandemic Price Spike: Historic Plunge Continued in December
https://wolfstreet.com/2024/01/08/used-car-wholesale-prices-gave-up-53-of-their-crazy-pandemic-price-spike-historic-plunge-continued-in-december/