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.
People may find this interesting about the recently passed bill:
https://www.newsweek.com/hidden-provision-trump-bill-court-2075769
Bought a bit of SREA 5.75% today at $20.32, yields around 7%. I don’t have a lot of utilities, but think it is a good time to add a bit more. I was going to buy RF-F but I think financials may not be the best place to be right now.
good comment I also bot it at 20.37 as the srea/vclt pair is near 2 sigma cheap (3 year horizon) and VCLT seemed to have bottomed with close above 20.25 confirming
SREA $25 in Nov, had been ~ $28.50 in better times–steadily down- maybe further? Over 7% is appealing, I could use some.
Gary, Anything is possible. I bought the SREA in Nov 22 as a “safe” investment at 21.45 with a 6.7% yield on cost.
So am I crying, no. I’m still getting the income. Have I lost capital like Tim is worried about? Yes.
Is it possible to lose more in capital? Tex the 2nd’s post here in the sandbox suggests it’s likely over the next 12 months.
To follow up with my conviction to add higher yielding IG I bought 2 tranches over the past couple days of AFGB at 20.90 ( barely IG at BBB- still) for a 7% YOC
The parent company AFG is rated A- , If you want a little more safety their senior bonds are rated BBB+
I hope to collect for at least the next 24 yrs or as long as I am still around.
Thanks- AFG has been on my radar- but not hassle or $ of trading-desk bonds.
Curiously- R Moron is pushing the AFG BBs and KKRS today – watching that one too.
LOL, he’s just another Cramer. There should be an ETF that shorts his picks. Although I am not disagreeing with some of his picks, just wish when we are snipe hunting he wouldn’t barge in and cause the game to fly off.
Unless of course you already own it.
Eileen Dover and Houtex have good points in the comments section. If you believe rates are headed higher, then there is still time to buy at better prices. On the other hand you can go with short term BB with a 2yr call horizon, but I already own a lot of those.
Dipped my toe @ 20.36, it then immediately jumped 12¢ – usually it goes the other way.
SREA is a very interesting investment that I used to consider as sock drawer. I have a full position in my retirement account and am struggling with whether to go overweight. My average purchase price is $22.50.
As an IG rated preferred, it’s price has dropped significantly more than other similar utility preferreds (i.e, SR/A, SOJC, NEE-N, etc.). I am not aware of any potential liabilities as a result of wildfires or other acts of mother nature.
Anyone have thoughts on why the larger drop in price vs other similar utilities, or insights on why this should still be considered a sound investment.
Larry, my opinion, SREA a 54yr BBB- issue at this point. It’s actually trading at a lower yield than some other BBB- issues that have closer maturity dates (but still way out). Nothing more than a reflection of interest rates and maturity date and should still be considered a sock drawer issue. I have it, one of the ones I buy a little bit more of as price declines.
Thanks PP, I will keep buying if the price goes lower.
Dipped my toe @ 20.36, it then immediately jumped 12¢ – usually it goes the other way.
Per google’s AI info:
Yes, Sempra has been sued in connection with the LA fires recently. Specifically, lawsuits have been filed against Southern California Edison (SCE), a subsidiary of Sempra, alleging that SCE equipment ignited the Eaton Fire. Additionally, Sempra and its subsidiaries have been named in lawsuits related to the Port Arthur LNG facility accident.
Gary,
I was not aware of the Port Arthur LNG facility accident. Although tragic, it may be the type of construction accident that is covered by insurance.
Southern California Edison (SCE) is a division of Edison International. San Diego Gas & Electric is the division of Sempra. Both are members of and contribute to the Wildfire Insurance Fund that currently holds $12 bil in funds that can be used to mitigate lawsuits brought against SCE for the Eaton fire.
Thanks for the info. It is enough to give me pause about increasing my position in Sempra.
IG spread calm.
https://en.macromicro.me/collections/384/spreads/930/us-credit-spread
Video compares AAA corporates to downgraded treasuries.
https://www.youtube.com/watch?v=Nftmd1dGjy4
Nice video, thanks!
Looks like GMPLF is toast. No May dividend yet and the parent NFE is tanking (pun intended). Anyone know anything?
Sent two e-mails to NFE Investor Relations, no reply to either. Hiding in shame I surmise.
Bob,
Can you…or someone, enlighten me as to what happened here? It doesn’t look like NFE is toast from existing financials , but has delayed financials …
BHF price is performing very poorly, and the preferreds too. What is the issue with this company? Seem to remember some discussion on this site, but can’t recall…
John – BHF preferreds definitely should be mentally filed in a junk bucket for sure. Their coverage ratio is not great. I’d have to look again but a couple months ago I want to say in the 1.2-1.3 range. This is why I went with their baby bond instead. To at least be ahead of the proverbial line. You have to remember, it wasn’t by accident that MetLife spun this off to get “it” off their books, so to speak.
If yields really do sky rocket, these preferreds along with the various Brookfields are going to get clobbered.
If you are looking for a good gauge of sentiment, add JPM/PRC to your watch list. This is a QDI 6% coupon perpetual preferred. The deeper under par this trades is a very good indication of what’s ahead with respect to the interest rate cycle (to the down side that is.)
There were rumors earlier thia year that BHF was for sale followed by rumors about interested bidders, which bumped the stock up. I think that current price weakness reflects the increased cost of financing a deal or perhaps the bid price going down. Also, there is a loss of interest in annuity companies.
The preferreds went down on the takeover news because the PE sharks like to delist the preferreds and dump them into the Expert Market. (Some here like owning these illiquid preferreds. I don’t.) Also, as a rule of thumb, interest rates up, preferreds down.
Not one that I follow closely, just one that I look at from time to time. JMO, DYODD.
BearNJ – What are you buying these days? Good point on the buyout rumor pump. I fear we might be seeing a big leg down here soon on preferreds and bonds. I definitely put some money to work a bit early,
Not really looking for income now, looking to fix portfolio weak points. My portfolio has high common exposure, sector concentration and limited preferreds so its risk profile is likely vastly different than most here. With that in mind –
— Adding non-correlated assets to stabilize portfolio, maybe 4 to 10%
— Replacing E&P/royalty with pipelines or cash.
— Replacing non-QDI securities with QDI securities
— Monitoring tariff impacted positions closely
— Occasional yield-hogging of high coupon risky “Irish prayer”-type spec buys, like Medallion G 9%. (“May you be in heaven before the devil knows you are dead.”) JMO. DYODD.
Makes sense, I have little to no common stock exposure, looking to establish a position in JEPI at the right price.
Please note that no one officially said diddly squat is going dark. All speculation including a possible buyer.
I believe the original cause for plunge in price of the preferred was threat of delisting as result of a buyout offer
Brighthouse Financial (BHF) is reportedly exploring a sale2. The company, known for its life insurance and annuities, has hired Goldman Sachs and Wells Fargo to evaluate potential offers2. Some prominent private capital managers are said to be interested in bidding for the firm. However, there is no guarantee that a deal will be finalized, as the process is still in its early stages2.
Watching Bitcoin is entertaining- hit all time high near 110,000 then promply has dropped 3000, near where it started the day.
Day trading, indeed.
“To the moon Alice ! “
Gary – Still very early in this next price cycle for BTC. I’m sure you saw but the other day Jamie Dimon announced that they will now let clients buy BTC which is wild but shows how far BTC as a wealth store/adoption has come now.
It’s been under heavy accumulation for a week. All we need now is another tweet from Saylor saying MSTR bought another $2B worth of BTC at the new all-time highs.
Saylor’s quote of the day- “If you’re not buying Bitcoin at ATHs, you are leaving money on the table” Riiight… be sure to buy at the high. Wait a few min and save $3000, no thanks. Did not react well, along with the mkt to the poor treasury auction ( according to the news).
In the FOMO vein- the Japanese ETF: MTPLF holding all of 7800 coins ( and now has Eric Trump on their board- thumb in the pudding), was up 107.71 % TODAY.
Craziness.
Gary – lol. That MTPLF is a massive heads up. Added to my watch. I have never seen anything engineered quite like this. The implied outstanding shares are over an astounding 400mm shares giving this a giant cap BUT the actual tradable float is only 35mm shares. When you net out insiders/institutions you are left with maybe 20mm shares hence the move today. Wild times for sure.
@$110000 today and 7800 BTC = 858,000,000
CRBD (6.375% junior BB issued in Dec, CY 6.8%) broke support at 23.55 today. I would guess it’s going lower. When it was announced, some of us felt the coupon was too low for the sub debt of a financial firm. Based on comparisons, I wanted 7+%. Might see that.
CODI-B continues the hard fall, low 13.05, CY 15%. Is there any hope for this company? I own 4 shares from much higher and have yet to get serious about averaging down. Okay, that’s got to be a joke.
> Is there any hope for this company?
Hard to say. They’ve been pretty tight-lipped so far about what actually happened. The range of outcomes spans from “doesn’t matter at all” to “giant hole in the balance sheet.” Place your bets…
Rocks, I like hearing from you as you are a buy and hold type. Mjtroll , yourself and others have been watching the BB and bonds market and the comments seem to be the bond market is breaking down and we are going to see lower prices and higher yields. Just been looking at MGR which is now yielding over 7.2% can it go lower ?
I’m looking at being more of a buy and hold investor with some short term preferred’s and BB due to be called over the next 3 months to 2 years and plan on rolling over those holdings at that time.
But for long term holds and income some of these are starting to look interesting like the SREA mjtroll mentioned.
I woke up early with the idea stuck in my head of shorting QQQ (actually TQQQ). I dismissed it as nonsense. NQ futures looked fine. Now that the bond market broke, I’m wondering if I had a premonition. (I actually have legitimate, unexplainable premonitions from time to time.)
R2S – Fortunes have been made on premonitions. Go for it next time.
some of these jpm prefs going above 6%, with qdi
jpm-k for example >6%
hasnt happened often but these are potentially perpetual
i will start to scale into these if we dip further probably
It raises some interesting questions.
If the 30-year Treasury pays 5.02%, and a JPM perpetual preferred is at 6.00%, is that enough of a spread to make me want it? I’m not sure.
qdi matters for high income folks
6% equivalent to like a 7.5% or something in a taxable acct vs a treasury at ordinary inc (with no state tax)
but yeah in non-taxable accounts I would never be buying qdi securities like bank prefs, as the yields are always way lower than taxable bonds and taxes dont matter obviously
If you compare that 6% qdi to the 18-year treasury STRIP at 5.30%, do you still want that risk? QDI has been eliminated in the past…the distant past for many, but somewhere in the future there will be an attempt to reduce the deficit.
i mean i net 3.34% in a taxable account on a 5.3% strip at a 37% rate
I net maybe 4.8% with the jpm-k at 6% at a 20% qdi rate, and assume the credit risk of JPM (low)
sure if qdi guys away this is worse
these are the decisions investors have to make everyday but its not 6% vs 5.3% that is the question its the after tax that matters
JPM has 6 preferreds with coupons from 4.2%-6%, with C, D and J callable now and K, L and M call dates in 2026. The CYs on all are between 6.002%-6.132%.
If your premise is they will all be called some day, then JPM-M at 17.32 has a juicy YTC, whereas JPM-C at 24.81 and callable now doesn’t.
I usually favor the higher coupon because it performs better when prices are rising, but in this case that might not be true w.r.t CYs.
I like the jpm-c below par
fwiw..JPM-C/VCLT pair has seen JPM go from 2 sigma cheap in september to near 1 sigma rich now (3yr horizon)…VCLT close below 72.12 was ominous..comparable level on TLT is 85.29
Anyone familiar with CELFX fund. Seems like a good place to put some money but Merrill wont allow me to buy it’s shares. The other option is to buy directly from the company but i rather buy from a broker.
Bummer, the company requires a high number to buy from them.
$10,000,000
Etrade says “not found” …guess they meant my sufficient funds ;-))
Hey folks….. Anybody invest in long term treasuries like the 20 or 30 year ones? I’m wondering is it worth it and the best way to dabble in them. My settlement account pays around 4.2%, but the 30 year offers about a 1/2% more. I’ve looked at a couple of ETFs for long term treasuries, but the the price is volatile. Not sure if it’s worth it over my rock steady settlement account at 4.2%…… Any thoughts at there?
You can’t go wrong with ETF TLT below $86.00
Except, the price will keep falling, while the div climbs.
micahc – I see your point now. As a directional trade, this is a great risk reward here.
TLT has only traded at this level two times in the last near 20 years, one recently in 2023 during the fixed income hysteria meltdown and then all the way back to 2007.
Also going to take a look at options chains here as well as 0DTE are available on TLT!
Bigcharts.com goes back 2002 IPO- total of 6 before this drop. ~80 is the lowest
I’m thinking about long term stuff as something like an annuity in Roth.
I may have to increase my full position size to make it worth it and compete with IG stuff that pays 6%.
The fees are a little high but you may want to look at US Benchmark Series such as UTHY – 30 year.
They have everything from 6 months to 30 year increments depending how you want to play the yield curve.
But to avoid avoid volatility you may want to go with resets like ATHS but it is linked to the 5 year with a spread.
Dj – If it’s in a retirement account, just go with a 0 Treasury STRIP.
Right now the 20 years are yielding nearly 5.25% and the 25 years yielding 5.20%.
Couple other tidbits, respectfully.
Regarding ETFs such as TLT. I will never touch these. Just in the last 12 month period alone, the trading range on TLT price is 17%. Can you imagine buying this over a $100 and now it trades at $85 handle? You would have been better off buying BTC for that kind of downside risk.
Additionally, if you have a bucket for a very conservative goal, say a 5% yield, then what inflation does or doesn’t do is a moot point to that specific investment choice allocation unless you have exposure to say an ETF. Of course there will always be other options available but you have to figure out what’s best for you and how much interest rate/credit risk you can live with.
If you are looking at a fixed guaranteed annuity that will be loaded with fees vs. a 20 year STRIP @ 5.25%, I would take the STRIP. It wasn’t long ago when you couldn’t even get 4% for this time horizon on Treasuries. Yields are presently, definitely not near their historic lows.
I would not mess with long term treasuries at these rates, too low historically. There are many other ways to get 4-5% returns over the next 20 years, with much less inflation risk. If the US fiscal situation was improving, it might be a different discussion, but that is not the track we are on. Think of it this way, is loaning money to the US government for the 20 years(!) your best option, when you could loan it to Walmart, Microsoft, Apple or several other AA companies at slightly better rates?
Ray Dalio’s recent take on this is also helpful, he is one of the largest money managers in the world.
https://www.cnbc.com/2025/05/19/ray-dalio-says-risk-to-us-treasuries-greater-than-what-moodys-says.html
Also of note, Warren Buffett almost always buys US T-bills for his “safe” money, he has not bought any longer terms US bonds in a long time that I am aware of.
I have both T-bills and T-bonds but zero T-notes. My T-bills investment to T-bonds is almost 8:1 ratio. For the past year, the Treasury yield curve has been in “U-shaped” and not the usual inverted curve (when T-bills were yielding like 5.5%) nor the usual normalized curve that we used to see. Here is a good opinion/commentary about U-shaped yield curve: https://www.linkedin.com/pulse/why-yield-curve-us-treasuries-u-shaped-very-rare-situation-ron-surz-8uzfc
TLT’s dividend falls as the price rises. The only reason to buy TLT is cap gains, which means you are predicting the direction of long rates.
The CY on (essentially) uncallable 7.5% perpetual WFCpL is 6.38%. Unlike TLT, you will receive the same YOC for as long as you own it. The price is subject to possible large swings over time, so it’s not a good choice for money you might need.
I’m happy owning it for the YOC and the chance that one day the price will rise substantially. If the price falls a lot, I’ll buy more. I rarely trade, and I don’t sweat MtM losses with low credit risk.
rocks2stocks – Great way to look at it. TLT is a pure directional trade (not investment.) That’s probably what micahc was alluding to where you can’t go wrong at this moment. BTW nice grab on UNH at the bottom.
I don’t sweat it either. I offset about 1/3 of today’s loss via shorting preferred stocks. I then bought more long shares at today’s lower prices with those gains.
While it’s not a winning formula long term, it softens the blow and if/when price turns, recovery is faster. It’s somewhat akin to reinvesting dividends.
MSFT bonds AAA. Safer than treasuries.
Yield over 5% too. I have lots of them.
KingCash – I concur. Personally, corps is where historically I always lean to go overweight. It sounded as if the OP was only looking at Treasuries. But take also for instance JPMorgan; there have been several new issues recently with 6-6.25% yields.
Not to sure that MSFT AAA is safer (i.e. based on probability of a default) than Treasury even though there is a recent downgrade from Moody. Public finance debt rating is evaluated differently that corporate debts at least according to this https://www.youtube.com/watch?v=Nftmd1dGjy4
The S&P reports that were referenced show the probability of default over time for both public and corporate debts in which corporate debt on average has higher default rate over time with the similar debt rating as public debt.
If I have to worry about MSFT defaulting then we are in big trouble.
What’s the CUSIP for that MSFT bond?
The longer dated maturity MSFT bonds are currently traded well above 5%, if you want to hold that long. This one is “quite” liquid
https://www.finra.org/finra-data/fixed-income/bond?cusip=594918BM5&bondType=CA
I have the 8/8/46 3.7% yields 5.5% @ 77.31
Will I live that long? I don’t care. AAA
Question about the Wintrust Financial 7.875% recently issued preferred stock. In my Schwab account, 2000 shares show up under fixed income and 1000 shares show up as an equity holding. Anyone else having this problem or have any suggestions as to why it happened or how to correct it? Thanks.
amazing, but unfortunately not all that amazing…. please do post how this works out and how much work it takes for you to get them to work this out…. I did not buy this issue.
Did you buy some under temp ticker, then buy more under permanent ticker? Could be the reason, and hopefully all appear as one once all shares shift to permanent ticker? Just a guess…
I am having a similar issue. All shares are listed as fixed income.
NYSE D Orders:
A few days ago someone asked me about participating in the closing auction with MOC orders, and I thought this explanation of NYSE D orders would enlighten those who have never traded an MOC…or update those who have, as to a better method of participation. I don’t think this is available via Schwab , Fidelity or most retail brokers, but you should be aware this is how money is often printed by floor brokers at the close.
https://databento.com/microstructure/d-quote
I’m curious what percentage of the people on III check to make sure they have received every div or int payment. I never check…I might look at the YE statement and if I notice a missing payment I’d call, but I did not do that last year.
The percentage is likely the same % as the people who budget for expenses or balance their bank account? Just guessing.
As an accounting major, I should have realized I’d make a terrible accountant.
Public accounting was the worst job I ever had, other than working in a laundry in Vegas alongside inmates on day work-release
LT–I do check for whether the payment is listed as a qualified dividend or bond interest. I own a bunch of $1000 preferred stock issues which Schwab frequently assumes, because it’s a $1000 issue, it must be a bond. This happened recently with two Cobank and Citicorp quarterly payments. It was hell getting Schwab to change the category. I had to email Schwab proof from both corporate websites, constantly berate them and finally got Schwab to change the status. No one there wanted to take responsibility for doing the research, which would have taken fifteen minutes after I emailed them proof.
I keep a page with all my distributions listed by date. I then put a check next
to each one as I receive it. If one is at least three days late, I will call my
broker and ask about it. I mainly do this though to know when and how much
I can reinvest or withdraw.
Out of curiosity, how often do you get late payments? No payments?
Other than suspensions, or oddball stuff like CRLKP, GMLPF, I would think there’s a pretty low percentage of stuff that even comes in late when there’s not a weekend or holiday that causes a delay.
Mark asked: “Out of curiosity, how often do you get late payments? No payments?”
We get late or NO payments on a regular basis. I have posted before about the importance of tracking ALL of the payments you expect to receive. You and you alone are responsible for tracking these. Your brokerage does not track them and/or notify you when one does not arrive and does NOT take any action. Unfortunately, I am not aware of any software offering that will track all of them and automatically notify you when one does not arrive.
Muni bond payments have the highest MIA, followed by corporates. We don’t even flinch until a payment is over one week late. After that we ask the brokerage to have their back office look into it. Since we do not let if stretch past one week, it is not clear if the payments would ever show up without intervention. In the more extreme cases, we have to contact the payer and their agent directly to help get it resolved, because the brokerage back office can’t seem to get it straightened out.
A few years ago, Jamie Dimon decided to stiff us on a JPM corporate bond payout at maturity. The back office was able to get Jamie to send over the funds after that. Since we were not the only holders of that issues, not clear to me what went wrong and whether other holders were also stiffed.
If the payout is complicated, the back office might throw up their hands and ignore you. We have had a few that stretched out about one year to get resolved.
Understand this applies to a low percentage of payouts, but it is NOT zero percent.
Thanks Tex
Relative to tracking divvy, does anyone have any experience with this?
https://contrarianoutlook.com/income-calendar-free-launch/WEB9
Thanks Tex 2.
How many different holdings have you had ? I’m asking because you say it occurs regularly, so if you have 1000 I could understand.
I’m trying to get a fix on a %.
I have not b4 done this, but I can see on a year end statement the payments by security
I had never thought about making sure payments come in from preferreds until I read this. Thanks. I am on Fidelity. I put the account in dividend view, and downloaded the file into spreadsheet. It shows payment date and amount for each preferred for the ‘next’ payment. So that made it easy to set up check list. I learn a lot here. thanks to all.
Mark: I get late payments every once in a while. There are a few preferreds
I have that seem to always pay a few days late. With those I just wait a bit. Every 3 or 4 months I have to call Fidelity and ask them about a different one. Right after I call them the distribution magically appears in my account.
Hi, lt and Mark in CO. I list my holdings on a spreadsheet and depend on it. Among other values, it shows the ex-div date, the pay date and the amount and then I update each to the next date after receipt. It helps me plan when to reinvest and with how much and, with the ex-div date, time adds to holdings of baby bonds and such. It also shows monthly and annual tallies and helps a bit with the darned estimated taxes.
Having said this, I’ve only once in many years and with too many holdings had a red flag about the lack of receipt. That was with the first payment of CSWCZ. I emailed Capital Southwest and heard back from Bowen Diehl himself after hours and he took care of it the next day. Good guy and sorry he’s retired.
Adding the amount must be fun with variable payouts, SOFR, etc.
I keep a loose eye on dividend payments, if a smallish one gets skipped I may or may not notice. No lists I do it by memory or by looking things up again it keeps me in the game. I’m more interested in ex-div date than pay date because it has a direct effect on my trading.
From the WSJ Bankruptcy Newsletter this morning: Ratings that grade private-credit products and are used by investors to categorize debt issued by lending firms are increasingly being called into question by industry decision makers.
Credit firms that bundle packages of loans to back securities like collateralized loan obligations, or CLOs, are often able to choose the ratings provider for such issues. Critics say this can lead to conflicts of interest, as the issuer pays fees to the ratings provider while the resulting grades can significantly affect the marketability of the rated securities.
Last month, when there was an unexplained price wobble in one of the top AAA CLO ETFs (touted as being as safe as a MMF but pays better) , there was talk among commenters on The Other Website that the ETF might be holding some CLOs in the lower end of the AAA band and market jitters were trickling up instead of down. I had not thought of ratings being a wide band before that. JMO. DYODD.
912834md7
Treasury 18 year Interest Only Strip , bought at a 5.28 yield.
I won’t worry about payment on this one…am adding to my TIPS and treasuries
today.
I see long dated TIPS traded overnight at 2.73 +inflation, which is getting close to the levels in the treasury freak out last month (or was it 2 months ago?)
GAINL 8.0% and CSWC 7.75% are both callable on 8/1/2025. It appears as though the market doesn’t seem to think a call is likely for either. GAINL is at 25.57 which is 7 cents more than par plus the next dividend payment and CSWC is at 25.50 which is about 1.5 cents above par plus the next dividend payment. As a holder of both of these near par value, I hope the market is correct. Any thoughts out there?
New- Given that GAINL and CSWCZ were both above $26 in late 2024, I think the market is behaving like they could be called. I personally don’t believe they can refinance at lower rates, so they won’t be called. I plan to hold mine to maturity, and I’ll add more when the opportunity arises. Just my two cents.
Maybe so. I am looking at it from a perspective that questions why anyone would pay more than par plus one dividend for something so close to the call date unless they felt it wouldn’t be called any time soon.
Thinly traded issues. For Friday, Schwab shows 1200 shares traded for GAINL and 179 shares traded for CSWCZ. Can’t draw any conclusions about the market’s plans for these preferreds from decisions by a small number of individuals over a short period of time. Four years ago, the phrase “pinned to par” was used frequently and could fit nicely for these two preferreds, but someone much wiser than me pointed out that PTP is dead. Otherwise, I would buy much more that I have.
For pinned to par list, i take all these investments, and take the 52 week hi-lo and sort. You can see the ones I like to call “pinned to par.” I rotate into these when the market is greedy. When the market dipped, i exited almost all pinned to par into the ones that sold off $3-5 /share. Now am up ~ 3% and sitting on them.
It’s just a bet, some folks think they won’t be called and worth the bet. I hold them both and I do not think they will be called, but I always have something in mind to replace them if they are.
It’s clear that Wesco will redeem WCC-A (per https://investors.wesco.com/news-releases/news-release-details/wesco-international-reports-first-quarter-2025-results, “Preferred stock will be redeemed in June, using proceeds of financing completed during the first quarter”), but when is ex-div?
In the past, ex-div has been mid-month for an end-of-month payment (e.g. 15 mar for 31 mar). But with redemption on 22 jun (per the prospectus at https://www.sec.gov/Archives/edgar/data/929008/000114036120014472/ex3_1.htm), I don’t know when the Record Date (and therefore ex-div) will be. The prospectus says the Record Date will be “not more than 35 [n]or fewer than 10 days prior to the applicable Dividend Payment Date.” So does that mean Record Date potentially is today (35 days prior to 22 jun)? Or is the Record Date only when the company officially announces it?
WCC-A will not trade ex-div prior to redemption, if that’s what you’re asking. The redemption price will include dividends.
From their 8-K:
> The Series A Preferred Stock and corresponding Depositary Shares will be redeemed at a redemption price of $25,597.65625 per share of Series A Preferred Stock, or $25.59765625 per Depositary Share (the “Redemption Price”) (i.e., the sum of $25,000 per share of Series A Preferred Stock plus accrued and unpaid dividends of $597.65625 per share of Series A Preferred Stock to, but excluding, the Redemption Date, or $25.00 per Depositary Share plus accrued and unpaid dividends of $0.59765625 per Depositary Share to, but excluding, the Redemption Date).
I am asking whether there is a date (i.e. Record Date) by which one must purchase WCC-A in order to to be paid dividends at redemption for that purchase?
For example, if I had purchased WCC-A prior to 15 mar, I would have been paid dividends on 31 mar. If I had purchased WCC-A on 16 mar, I would not have been paid dividends on 31 mar for that 16 mar purchase.
Similarly, is there a date by which I must have purchased WCC-A in order to be paid dividends at redemption on 22 jun?
For example, if I purchase WCC-A on, say, 19 jun, would I still be paid dividends at redemption (for the final payment period, 01 apr through 22 jun)?
yes. There is no record date for this.
Buy it on the 21st, and you get paid the full amount on the 22nd.
But broker’s normally freeze trading before this date.
I’m also thinking about the tax bill under scrutiny in House committee.
If the tax bill is expected to boost deficit spending to a new level, how will markets react? My guess…
– Rates at the long end will rise/stay elevated.
– Stock indexes will rally on the lower corporate rate and increase in liquidity until the long-end yield rises high enough to cap the rally.
I’ve said as much previously. The Moody’s downgrade fits this narrative, which seems to be in play already. The administration may have some tricks up its sleeve that will complicate relying on a simple narrative. Simple is as far as I get.
10 year Tresury hit 4.5 and may surprise the market if this very irresponsible budget passes….Fed may be the only buyers…Lovin GOLD more every day!
I’m thinking about broad money and base money dollars after listening to a new Lyn Alden interview.
Base money:
Base money (reserves) is created by the central bank, the Fed.
In size, it’s the liability side of the Fed’s balance sheet (Lyn).
Broad money:
Includes base money.
Broad money is created by banks when they make loans (fractional reserve banking).
Broad money is created when the Fed monetizes Treasury debt.
There is roughly 20x the amount of broad money as base money dollars worldwide (Lyn).
With so little base money in the system and so much debt needing servicing, Lyn said it’s important that base money can move around quickly to be where it’s needed. Sometimes, like the Covid crisis, the Fed creates a lot of new base money to prevent the collapse of the financial system. With the amount of debt ever growing, the Fed must watch for signs of stress in interbank liquidity and be prepared to act.
I hope I got that right.
I often check on the holdings of certain pref funds, especially PFFA which is dynamic and tends to traffic in higher income names.
Anyways, I found it interesting to see they already have an 800k position in BUSEV, good for a 1.3% allocation, or ~10% of the float! They also have a similar position in the new WTFPV.
Other interesting tidbits:
They own both ATCO-D and ATCO-H, but the H position is larger… which makes me feel good about my recent purchase, thanks to folks from this board..
They list the PMT B divvy as if it were floating at 10.547%, prob just a data error, or maybe they know something! See this SA comment section for updates:
https://seekingalpha.com/article/4716587-pennymac-preferred-shares-and-the-obvious-lawsuit
They clearly believe SCE won’t be impaired to the pref level w wildfire litigation.. it’s their top holding, and they hold others.
They continue to hold 47k shares of GMLPF, marked at $6. Lots of action there lately..
They still hold 5k shares in the old SJIJ, marked at $16. Wondering if this is just a stub position from the last render, or a new position and reflects their goal to slowly build it back up.
https://www.virtus.com/assets/files/1xx/positions_pffa.xls
Maine, Thank you for the post. It is concerning that GMLPF is still held. Any cognizant financial person should have known this security will not be paid. Same for a few others that are held for losses.
To be fair, 47k shares is a tiny position for them, even if valued at $25.
GMLPF is a great example of things that can go wrong for a pref investor: it gets delisted to expert AND (most importantly) its assets get stripped!
Thank you, that’s an interesting list of holdings. In addition to SCE and PMT, I was interested to see they still seem to have faith in CODI. And they are quite heavy in CIM.
It’s a wide ranging enough list that the more interesting question might be which things they are _not_ holding. Here’s a few that I might have expected to see but did not: no ENB, no PRIF, no NLY, and (almost) no AGNC.
Did you notice anything else that gets talked about often here that they conspicuously do not have?
Ha, that’s a tough task as there are really so many prefs out there.. for PFFA, my main observation is they tend to own less of the safe / IG issues often discussed here.
Another factor is liquidity, what they transact on for any given day. For instance, not owning EFC-B may not signal they don’t like it, but rather that they can’t source it in size at a price they like. I don’t blame them for not owning the NLY and AGNC prefs, too rich for much blood.
PRIF issues are very thinly traded. I have small positions in PRIF-L and K, and have tried to buy some of the others, but they are very difficult to accumulate, so I gave up. I don’t see how a fund can own them.
Maine,
I only recently became aware of PFFA and have taken a 1/2 position in the etf. It appears that they mainly buy below investment grade preferreds at less than their original offering price with the anticipation that the stock will continue to pay dividends. Example FLG-A cost $19.59 current $22.70; BHFAN cost $16.05 current $14.37; all of the CIM holdings are currently at a value that is higher than their costs.
The website spreadsheet shows 1) quantity of shares, 2) current valuation, and 3) costs. So, the calculation is straight forward. Their cost for SJIJ is $24.43, so they obviously have held it for a very long time.
It is a high risk / high reward etf. But, they appear to have learned how to play the game and pay a consistent 9+% dividend. Caveat emptor.
Larry-
Recently, I posted my list of pros (long) and cons (short) for owning PFFA (to which no one replied). I think of it as a levered, uncallable perpetual monthly payer with little credit risk. Compared to an individual fixed preferred, there is the possibility that the dividend will be increased or cut.
I own plenty of “safe” preferreds and BBs and a chunk with higher yields. I like adding PFFA to this mix when the price drops. I rarely trade.
This tweet has a great chart breaking down debt maturities for large-, mid- and small-caps. Large caps (as a group) are 72% fixed with maturities in 2028+.
https://x.com/MikeZaccardi/status/1923505929128943868
Others were likely aware of this but I did not know that as of 7/1, gold is considered a Tier 1 asset for banks under Basel 3. There had previously been a 50% haircut.
I’m waiting for the Tier 1 treatment of Bitcoin to predict the demise of the banking system.
There seems to be a lot of confusion on this topic (gold & Basel), depending on which website you visit, which gold ETF promo you read, which YouTube video you watch or which AI Chat you talk to. Another viewpoint –
Gold and HQLA: Correcting Misleading Online Information
https://www.lbma.org.uk/articles/gold-and-hqla-correcting-misleading-online-information
“There have been inaccurate reports online that gold will be reclassified as Tier 1 HQLA (High Quality Liquid Asset) under Basel III as of July 1, 2025. This information is not correct; no official announcement has been made or is expected on gold gaining HQLA status. ….
“Tier 1 refers to capital rules that were written in the original Basel Accord in July 1988 which became known as Basel 1. HQLA is a function within the liquidity rules of LCR and NSFR which were first written into Basel 3 and implemented by Basel on January 1, 2019. People are getting mixed up between capital rules and liquidity rules.
“Gold is already a Tier 1 asset under the Basel Capital Accords meaning that it has a 0% risk weight. This is true for all three Basel Accords. The rule states that gold held in a bank’s own vault is deemed as a Tier 1 asset with a zero-risk weighting. Nothing has changed since the original Basel I Accord was created in 1988. ”
JMO. DYODD.
Thank you very much for this info. I sit corrected.
The post I made was based on this link in an IBKR newsletter dated 5/16/25:
https://www.interactivebrokers.com/campus/traders-insight/securities/commodities/gold-goes-full-reserve-asset-as-basel-iii-elevates-it-to-tier-1-status/
COIN jumped $6 in a 5-second period as the 5 million share buy imbalance was posted ahead of the stock being added to the S&P 500.
COF/DFS closed their merger, with a big buy imbalance of COF and a huge sell imbalance on DFS into the close. The arb spread finished at just under a FREE $1 per share.
As I’ve said b4, the closest thing to free money is trading mergers in the closing print using MOC orders. The deal had already closed earlier today and the target stock keeps trading to allow funds to sell their positions at the close.
If you think , for example ,that you are only paying a very small fee to hold an index fund, you are not accounting for the slippage in trades like this every time a merger closes.
Lt,
First off, thank you for your contributions to this forum. I am learning a lot from reading your war stories and how you off-set risks in positions you take.
In the DFS/ COF trade example, are you entering a sell MOC order on COF and a second order to buy DFS MOC to capture the spread?
Are there tools that you can suggest to identify late day order imbalances? I previously used TD Ameritrade’s order book to get a quick snapshot.
Larry L,
Yes, I enter an MOC buy against a DFS sell imbalance, and an MOC sell against the COF buy imbalance.
Imbalances are published at various times prior to the close. The times have changed over the years, and I’m going from memory of my last conversation with someone who still trades full-time believe Nasdaq begins publication 1 hour prior to the close. NYSE/ Amex at 3:50 ET, although very large imbalances can be published earlier.
https://www.nyse.com/market-data/real-time/imbalances
Here’s the rub:
IBKR does a poor job of showing all the imbalances in a market screener field. For some reason unknown to me many do not show up. Maybe someone can opine.
I don’t know of any other retail platform that publishes the imbalance feed, but there are many I have not ever trialed.
Many professional trading systems have robust publication, which also shows the number of shares that have been paired off against the imbalance. They update constantly as MOC orders come in.
A true pro trader–and I haven’t been in 15 years, has full access to the imbalance feed, plus subscribes to an “early look” service that reports imbalances at least 1 hour before the close on NYSE and updates regularly.
As you likely know, you can only enter an MOC order that offsets the imbalance after the info is published to the market. However, the true pro trader has a hot key mapped to a floor trader …meaning he can send an order to a floor trader, and that floor trader can actually increase the imbalance after the publication…and generally this can be done right up to the close or 30 secs b4 to ensure the order goes to a trading post in time.
My understanding of NASDAQ handling of closing orders is there is time priority over price priority, unlike NYSE. I could be wrong on this but was told it several times by a trader. What this means is a better priced order may lose out on a fill to a poorer-priced order based on time of entry.
https://www.nasdaqtrader.com/content/productsservices/Trading/ClosingCrossfaq.pdf
The opening cross /auction is also of perhaps greater value than the closing cross when there will be a big move because you can often trade against what is in the book and the opening indicated price is often manipulated by entry of large market orders that are then cancelled once a pre-market price has been achieved by someone who is hoping people trade against the indicated auction price.
I’ve tried years ago to get SEC to take action against manipulation of the opening indicated price and gave up more than 15 years ago
Larry,
I wanted to add that almost all of the big money a pro trader makes is from informational and platform advantages over retail/ institutional trading. It’s not from special abilities or taking big risks. When NYSE had the Specialist system, the NYSE Specialist made a great living having structural advantages of seeing order flow. among others. Nobody would take on an obligation to make a market against all comers who want to buy or sell without a structural advantage of significant size.
Once might argue that understanding the advantages is a skill, but I think not. Those advantages would disappear i,f everyone knew about them
Medallion Financial’s MFIN new Medallion Bank series G preferred MBNKO has priced at 9.0%, at the low end of the indicated 9.0-9.25% range. MBNKO resets in 5 years at 5 Year Treasury rate plus 4.94%. 3 million shares. IMHO, this new issue increases the likelihood that the series F preferred MBKNP will be called. As I previously mentioned, I consider this one speculative, so DYODD. JMO.
Does anyone know if it’s possible to reverse the order of comments to old -> new instead of new -> old under the articles?
Jos,
The only way I know how to read messages from old to new is by getting them into an RSS reader. There are several of them. I use Feedbro. It takes some effort with Feedbro. It does take some work to set it up.
I use the “find” function to search the date…like”05/16″. If I miss a day or two I start at 5/14 or so. It works good jumping me around to recent responses.
The Pink Sheets are getting an upgrade in July. (The Pink Sheets aren’t the Pink Sheets anymore. Officially, they are the Pink Current Market or the Pink Open Market. ) In July, 2025, OTC Markets will replace / upgrade The Pink Sheets with the new memorably named OTCID. The OTCID will be a better neighborhood and require more disclosures.
OTC Markets sums up the impact of the change like this: “Companies that do not meet the requirements for OTCQX, OTCQB or OTCID will be downgraded to Pink Limited or Expert Markets on July 1, 2025.” On the plus side OTC Markets is looking to attract more foreign companies with the OTCID being the new entry level option.
Observation: The five OTC Market tiers work roughly like the nine rings in Dante’s Inferno: the bigger your reporting sins, the farther down you drop, until you hit rock bottom, the Expert Market. (“Abandon all hope, ye who enter here.” – Dante) JMO. DYODD.
3 Things You Need to Know About the Launch of OTCID
https://blog.otcmarkets.com/2025/04/23/3-things-you-need-to-know-about-the-launch-of-otcid/
Eric Basmajian
“The (Cyclical) Economy Leads Earnings”
https://epbresearch.substack.com/p/the-cyclical-economy-leads-earnings
Rates:
Treasuries 1-year 4.15%, 10-year 4.54%, 30-year 4.98%
CDs (one year) 4.1%
Bank bonds (new, IG, at least one year) 6-6.25%
Agencies (new, at least one year) 6.01%
CPI is above 2% primarily due to housing (lagging) and car insurance, according to Eric Basmajian. Will tariffs add? Hotly debated.
Fed policy rate 4.25-4.5% with no cuts expected near term
The mix feels odd.
R2S just asking, because I am holding some fixed to resets that reset off of the 5yr treasuries
Getting tired of the uncertainty to the point of just wanting to park my money in something with a good return and what I consider ave risk.
I have been looking at long term hold on 20+ year corp. Bonds BBB- to BBB+ with a 6.9 to 7.1 return.
But there has been a problem with Fidelity bond search the last few days. The system shows a bond available but when you click on it and go to the next screen to place a order it shows the cusip shaded out. Normally that means it’s not available and if you try placing a order it shows a message not available.
In the last few days placed orders have went through, but about an hour later on open trades it shows open than a second transaction showing cancelled
Just a little frustrated with Fidelity
What’s odd? IMO, CDs should be at least 4.5%, agencies, 6.5%. The current spreads are anomalous compared to recent history.
TLT and the investment grade perpetual preferreds (new rock band?) act awful.
TLT moves around enough to trade. And if you get caught leaning the wrong way you still get the 4.5% or so. Not as profitable as the high yielders but safer.