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.
MUB is up decently, PFF and HYG look like crap. Citi prfds adjusting 12/25 and 2/26 are still; offered at 7.5% YTC, with adj to 5 yr plus ~ 3.50 being what I think an unlikely occurrence
Correction: Previously I said I had lost money trading SPy and QQQ in 27 out of 28 years, but I discovered this morning I have a small profit this year on both. It’s an indication this year will be like 2008!
Lt, Don’t say that!
Another crazy day. Just holding on. Did sell DVN a few days ago and it is up 15% today! Still hasn’t reached my sell price.
Bought KRP a few days ago it’s up 6% today. Big big swings based on who the majority of investors are listening to. It’s psychology now not a science. Don’t even know where prices will be at closing.
I am going to watch a page of battery powered floor vacuums at amazon to see if there is an increase in prices in the coming days- pretty sure they are all made in China. Should be quick unless they decide to sell remaining stock, and then decide if they want to try selling them at twice the price.
I hope everyone enjoyed the stress test of their portfolio ;o)
Seriously, this is a never before seen chance to get advantageous trade deals. I don’t like tariffs for raising money or protectionism so much, but as leverage they work a treat when you are the largest market.
Not sure what got stress tested……. Me or my portfolio! I have been riding this out so far. No sells, and no buys. Standing pat with my hand.
As of 1415:
2 Yr now 4.03%, huge move since the Trump put/flinch or what I like to call it the ‘Trump Short Squeeze’
Spread (2 & 10) now 39 basis pts
Surge- 90 day pause on some tariffs- ha! Already off 25% of the pop to over 2400 on the dow- but coming back at 2200
Tim- it is taking 20-40 sec to load a comment- is that from too much stuff or what?
AAA taxable housing bonds offered at 6.37% in the secondary market. I’d be short preferred etf , hyg
AAA tax free texas school ,unis at 5.05%
Do a search
Prospect Capital Corp — no one’s favorite, I presume — has put out a $990 tender offer for their 3.706% notes due early 2026. (there’s 342m of outstanding principle and the bond currently trade for about 960 (per thousand). So question: What to make of this? Are they having liquidity issues that is going to spill over into their preferreds? Why pay a premium over current cost to redeem such a low interest bond? (Disclosure: I hold a small amount of the bond, bought at a discount.)
Given Prospect is the same people running Priority Income, this is consistent with their apparent strategy of extending their short term scheduled debt. PRIF-H was just called and that was due 12/31/26. Fido shows 91 issues visible right now for Prospect and the one they are tendering for is their shortest maturity listed…. They’re coming up with the cash to make this tender for any or all from somewhere so I wouldn’t think there’s an immediate liquidity issue, but their overall strategy does seem to indicate a feeling that they are concerned about markets potentially seizing up in the neat future so let’s get out of the way of that possibility by extending our outstanding debt structure now….just my theory – nothing more…. BTW, Fido shows 50 being available at 98.5 right now..
Maybe with today’s surge PRIF-M will be up for purchase.
In Nov 2026 RITM-D (CY 7.7%) will reset at 5yy+6.223%, The YTC is 14.6% and for all I know will go much higher. I’d like to buy some when there’s some clarity.
There must be others like this.
RITM-D is my largest holding. Among the best REITs and I rate D better than the others. Lower price more than compensates for the lower dividend for 7 cycles, then higher float. Too many investors overfocus on current dividend.
NLY-F AGNCO and MFA-B(fixed) may be similar issues. There are others with a bit more risk.
No telling if prices wont drop further before bottoming out.
yes RITM-c is already floating as of 2/15/25 but div not paid till 5/15
expect a pop in price then
Plant, grow and harvest
Compost and patiently wait
with Warren Buffett
RBOB gasoline futures, now $1.90, have fallen fast and almost caught up with crude. Gas prices in most states (CA #*%@!) will follow, providing some relief from high prices on everything.
Cheap gas will be cold comfort to someone who loses a job.
CHS has two businesses: refining and ag. Is that right? Both might be threatened.
Forward guidance from some companies is bound to be bad when earnings are reported this month.
We may not get much. We may get “we cannot provide guidance right now”.
I initially thought companies would lower guidance.
They can get away with “punting” until next quarter.
Treasury market collapses overnight: the 10 year hit 4.49% before coming off a bit as there’s a massive unwind of the “basis trade”
I see the possibility of oil going much lower. Not being discussed. Would be a shock.
Rocks I check in with Bea the Magnificent and her Tarot cards said sell everything oil, even the pipelines. Too much oil everywhere, Russia is flooding the market, Iran is flooding the market , the Saudi’s and not enough demand. We hit $55 in the futures market overnight and I don’t feel like it’s going to hold.
Charles-
I feel like I’ve been waiting forever for a chance to buy oil stocks cheap. Might be coming. I will be looking for dividend payers.
I’ve been waiting for this pullback too. Yesterday I sold the VLO atm Apr 11 105 put for 95 vol. Today the CXV & XOM are mid-80s vol. Those are the 3 I frequently trade for dividends.
Bea the Magnificent must have little or no tax liability. Those selling MLPs best to determine the recapture taxes.
Oh, but oil below $70-65 allows new rigs for drill, drill, drill… so we have more of the stuff.
I see Trump has ordered gov’t bolstering ($) of the US coal industry ( more energy for AI etc)– many Cos up double digits- and metallurgical coal – like METC ~ 14% and 5% after hrs– some climbing the same in overnight amts. Old is new again.
Peabody (BTU) up 9% today and 15% after hrs.
cough…cough
Head spinner of a day- was up a little over 1% this am- at close off all of $39 – crazy. Sat on my hands.
Futures down, 10 yr up 2.28%, oil down, gold up a little
The big fish don’t invest to support political agendas. They’re all about making money whatever they think it takes.
Excellent!
“The Economic Reality of Tariffs”
https://epbresearch.substack.com/p/the-economic-reality-of-tariffs
I’m not a major fan of tariffs myself, but I thought that article was a little too one-sided.
Good luck finding a single article on tariffs that isn’t biased in some way. Unfortunately juicy bias sells better than boring nonbias.
Basmajian is one of the most neutral observers you will find.
The only thing unusual about the stock index correction is the speed. Moves that should take weeks are happening in days or a day. The price action yesterday and today hit my marks. If this continues, there will be a lower low. I said recently that things happen fast these days, but this fast? Can’t say what will happen next because there are people involved and things can change.
I’m calling Liberation Day the Lehman moment for this bear. Rallies in a bear are vicious. They are accompanied by feel good “reasons” from the news. Ignore. What I pay attention to is rumors of leveraged financial firms in trouble. Sooner or later…
The surprise to me is the selling of long-end treasuries. Does that smack of raising cash to fill giant sinkholes in balance sheets?
I’m looking for 10% and better yields to buy, except for special conditions, like YTM/YTC. Good luck.
Both Cobank and Citicorp, upon issuing their quarterly $1,000 preferred stock dividends to me at Schwab, incorrectly characterized them as bond interest. I contacted Schwab, but was told that no correction would be made unless the institutions send Schwab amended instructions. Schwab also said this was a common error and frequently corrected by the issuing institution.
I just contacted the IR departments at both Cobank and Citicorp by email with specifics. Who knows if anything will happen?
same. I just told tax preparer to change it. audit me if they want.
After a couple phone calls to Schwab and sending them ‘proof’ as in Prospectus excerpts and such they did correct one of the Citi (Cusip 172967PM7 ) as QDI and not interest. Others I had were already reported as QDI.
Schwab just issued just me a corrected 1099-INT & 1099-DIV. It took about 3 weeks or so after I uploaded my ‘Proofs’ to them.
Msq—-did u speak with any particular person or department at Schwab?
No – just spoke to whoever they sent me to by customer service. After 1st agent refused to consider changing this to QDI, I spoke to a 2nd agent and told him I need to open a ‘reconsider decision’ ticket – after some resistance saying low chance of reconsider, he opened a ticket. I spent some time compiling different ‘proofs’ with URL links to publicly available docs and replied to message with the ticket.
I had given up and was ready to file my taxes but suddenly noticed they revised the 1099-DIV & INT and treated this bond as QDI.
the same Preferred is in another account at IBKR and wondering if one should pursue it with them and file an amended return
That is Schwab being lazy because their legacy back office payment system is a complete mess and they don’t have the staffing to fix it.
So they make you jump through hoops to lessen their workload.
Found this helpful article on credit spreads & the different GDPs:
https://www.cmegroup.com/insights/economic-research/2025/are-extremely-tight-us-credit-spreads-underpricing-risk.html
Also- Bitcoin is off almost 30% from high.
I can’t wait until my big fat dividends from WTFCP/M arrive on April 15.
I just realized I’m getting paid on tax day! LMAO
Rocks, I added to UMBFP yesterday.
Charles, didn’t want to sell UMBFP back in January but couldn’t pass up 25.50 with a possible call. Now happy to buy again at 24.85. We’ll see if it’s a call or float in July.
Dan my buy-in was 24.78 safe place to hide out. Be interesting to see how they handle calling this. Could be they bring to market a fixed rate preferred.
Charles-
I looked at UMBFP and said no because the time period to call is so short. I’d rather have the cash. I’ve got plenty of UMBFP already plus WTFCP/M for July 15, call or no call.
I’ve asked this before but what is a tolerably high max allocation to preferreds as a portion of a relatively conservative portfolio and what max percentage is prudent for any single sector such as banking/utility/finacial/reit? Can I treat preferreds as the bond proxy and crank it up to 50%? There are so many juicy yields currently. After decades of starvation, 6% yield on investment grade perpetuals makes me want to go in bigger than I normally would.
I currently have 20% perpetuals with 15% in GSIP banking. I see 6% on US Bankcorp which has higher credit rating than JPM/BOA/WFC. I know there could be steeper sell offs in the coming year and the interest rate on the long end could spike even higher with credit spread widening but I’m perfectly happy to collect 6% for decades.
you’ll be less happy if they yield 8% due to credit spread widening
mjtroll- If I can get 8% on investment grade, I’ll be even happier even if I am bleeding holding lower coupons. This is exactly what I am doing right now, still holding onto my 5.5% IGs. I’m still 70% powder and I guess I’ll just ride the beast down one painful day at a time. Some day the ship will right itself and push the long term rates lower. I will wait about 20 years before I’ll give up on this thesis. Considering I held 4.5% coupons for decades, 6% feels downright luxurious. As long as the big banks don’t crash, I won’t cry.
martin- I’m beginning to follow preferreds everyday. I’m extremely grateful for Tim and everyone on this board that I feel very comfortable investing preferreds.
It depends. I’m heavily into preferreds but I follow them every day and trade them. If you buy and forget it then a more modest holding is appropriate. Good income payers.
See my bank portfolio.
Safety in numbers.
You can have a 100% portfolio in 1 sector as long as it is comprised of 50-100 different ISSUERS (not issues) so that any issuer that goes bust is only a small hit to the portfolio. Usually the limiting factor is the number of issues available, as one sector doesn’t have enough securities outstanding.
So you have to blend 2 different sectors.
And be willing to sell winners in order to capitalize on throw the baby out with the bath water situations or a big ETF sells an illiquid and tanks the price
Also, the composition would differ if held in an IRA versus a taxable account.
Look what JNK did today. Huge upper wick. Junk bond spread widening.
https://www.tradingview.com/x/fSZyLWai/
My target guessy guess is 79. I would buy that.
It looks as though $79 would be an all time low for JNK. I imaging there would be a lot of buyers at that level and probably a lot of buyers before it gets down that far.
all time low was 76.65 on 3/9/2009… its currently trading at 91.61
Really appreciate SWKHL being mentioned here. After my DD I bought a full position. It’s a hidden gem with a 1/31/2027 YTM of over 9%. They invest in the health sciences which is relatively recession resistant. SWKHL outstanding amount is $31MM and is their only debt. SWKH has book equity of $288MM and strong profitability – what a deal!
One nice feature of SWKH is that its callable in Sept. 2025. This means the company has a nice window in which to shop for refinancing. On the downside for investors it also means it might get redeemed early as J Powell is likely to start cutting rates again sooner than later. I’m long and will add on weakness that doesn’t match the company’s risk profile.
Not impressed with financials thru the end of ’24 — maybe improved?
I’ve gotten into several medical related issues over the decades- nearly all failed to deliver – will pass.
good luck
Gary maybe good, maybe bad. I bought it then jumped out of it after I read more about it. The original investors in SWK want out, I don’t think they want to wait long term. That to me seems high risk. Ok probably to add a small holding but DYODD
Wow…. Up, Down, Up, Down goes the market as our two four year olds trade threats over tariffs and other things. Get in my foxhole and stay for the time being……
I did the trade I said I’d do yesterday: sell vix calls into the margin liquidation after the open. Covered all of them at .05.
RKT/COOP merger deal narrowed
We looked at quite a few merger docs this weekend and they have carve-outs for tariffs… lbo deals like JWN.
It’s in this environment you do not want to trade merger deals and I have violated my rule.
sorry I posted that twice. It wasn’t so good a trade it deserved to be posted twice> MY browser locked and I was doing something else. That’s my excuse and I’m sticking to it unless Tim agrees to stop his illegal trade practices in violation of WTO rules…oh, wait….that’s someone else.
Tangentially the economist Navarro quotes in his books doesn’t exist. He made up the name and quoted the guy. My lawyer neighbor and my best friend trader are all-in on the tariffs. I’m waiting for tariffs on services!
Lt Wake Up from that dream! Either that put down the coffee and take the dogs for a walk. Don’t you remember they are working on a budget to give service workers no taxes on tips?
Just kidding, sounds like you are having a good morning.
I did what I said I’d do: sell vix calls into the 15-20 min period after the open as margin selling got processed. Covering those in the next 60 mins . Nice profit.
Nothing big will happen for a few hours now. I’m looking to buy some ODTE puts in about 90 mins
I’m hearing from futures floor trader the early indication on stock futures is LIMIT DOWN.
He could just be looking at the indication posted from traders that I get on IBKR’s site, which often bears 0 resemblance to where the futures actually open. For all I know they could open UP, but I can assure everyone they will not open up down, as many people might opine. They can either open UP or open DOWN, but cannot open” UP DOWN ” as that’s a logical impossibility!
I just wanted to interject some humor with that last line because I hear “open up down” used all the time!
I’m have hundreds of bids if we are going to open limit down. The halt is 15 minutes, then 13% is the next stop…..
— These days, Nothing is true and everything is possible. It is possible, though forbidden, to go “up the down staircase” in public schools. There was a 1964 book on this topic. Late night riders on the A-train are often warned: “Downtown trains will stop on the Uptown track overnight.” (That warning sign always makes me nervous.)
— I understand options traders have a way to be both long and short — effectively both up and down — when they can foresee magnitude but not direction, say for an upcoming earnings report. I am not options smart. My high school math teacher called that an “absolute value” or an | absolute value |.
— Just sayin’
Crypto and Gold:
I don’t want to jinx anyone here and I actually couldn’t care less except it would be nice to be proven right by markets, but I think both gold and crypto are in for a HUGE fall.
Let’s see where gold opens. I just sold all my gold eagle proof sets on Friday.
I could not get more than spot from a dealer. The guy was very honest, telling me at one point they were paying $600 per oz over spot . That was actually close to the high quote I received when gold was $1700.
I kept a few sets , but I can use the gain to offset the capital losses from the SPX interest rate borrowing transaction I set up in the past 2 years, and if TLT goes higher , I can get another 5 year borrow under 4%.
Unlike practically all crashes this crash is purposely driven and solely caused by the new tariff policies which I think will be reversed if the desired effects are not achieved shortly or the (stock market) pain becomes too great. The recovery from The Great Recession and Covid crashes was a big unknown as investors had an “end of the world” mindset. The current crash is far different as recovery is most likely in the short-term per above. There’s a good chance of stagflation setting in because global increases in tariffs cause price increases. I am cutting back on the few “steady up until now” perpetuals I have. Friday saw panic selling in these. My buying watchlist are issues that mature no later than 2028 and ridiculously high floater spreads. On Friday I added to FITBI, SPNT-B, LANDM, EICB and RITM-A. By Friday’s close I felt like I had been in a warzone all day. My port dropped .17% on Thursday and .55% on Friday for a combined two day drop of .72%. I feel panicked by this drop as my sensitivity to losses is much greater than when I was younger. Still up 2.1% ytd and comfort myself knowing that I’m beating the pants off the S&P.
I have recently retired and rolled my 401k into an IRA and am 1/3 of the way in completing the fixed income portion of my portfolio. I would appreciate second opinions on my assumptions of relative risks of various classes of baby bonds and term preferreds. I am assuming the greatest safety is in baby bonds of CEFs and BDCs. Followed in order by baby bonds of mREITs > term preferreds of CLO CEFs > preferreds of mREITs> preferreds of REITs . Where does the relative risk of ladders of corporate IG bonds (eg, IBDS, IBDT, etc) and ladders of corporate high yield (eg, IBHF, IBHG, etc) fall? Thank you in advance
LG, long time contributor who we haven’t heard from in a while, Gridbird went with utility preferred and was an expert at reading the reports. You might find it hard to snag any right now because few are willing to sell and if your account is at Fidelity they restrict the amount you can buy on volume.
I’ve been retired going on ten years and consider myself an income investor and invest in baby bonds, preferreds, etc. I have had a few investments go south on me and unfortunately now consider myself experienced with what happens to various asset classes when a company goes under. From my perspective being higher up in the capital stack (in bonds, baby bonds over the common stock) doesn’t really offer that much benefit/safety because when a company gets into trouble and is heading into bankruptcy, you are going to get hurt no matter what type of asset you own in that company. The goal should always be to buy into well run, quality companies and then it really doesn’t matter what type of asset you buy as the “safety” comes from that core company itself. Just my two cents…
I believe the same. I have not seen companies default on junior subordinated debt while still paying their senior debt. I am referring to Investment grade debt. I generally do not buy non-investment grade unless the company is being acquired by an investment grade organization.