I will be adding a new link titled “Sandbox” in the right hand menu.
That link will get you to this page.
I had originally set up the “Reader Initiated Alert” page for ‘alerts’. I was thinking this, for instance, might be when a preferred stock is undergoing a temporary selloff and someone wants to let the population know about it quickly. Of course we all (including me) use the ‘alert’ page for general messaging.
I am requesting that we start using the Sandbox page for all general talk, and try to preserve the ‘alerts’ page for ‘alerts’.
I have had a screen up on one of my monitors all week where I see all comments – no matter where they are posted–it is a great page and I wish everyone had a page like that–believe me we all benefit from all the knowledge being shared. I don’t want to stifle any of the exchange of knowledge, but hope to get things a bit better organized by adding the Sandbox page.
I find the parallel between:
– Steadily rising 10T (4.0%+) and 20T (4.5%+) rates
and
– Steadily rising politician promises of decreasing taxes and increasing benefits
Most interesting.
And totally not commented upon in the media
Batten your hatches
Westie, there is no spread in bonds either. Just looking this morning at a Portland General Elec bond and the 1% difference on a A1 rated bond with 17yrs to maturity to 20 yr Treasury seems ridiculous. Not that I am buying any bonds right now, just pulling stuff up to get a feel.
I thought this Inflation Calculator was an interesting little thing I ran across in the interwebs today…gives you a rough idea I guess of things of course there have been adjustments along the way to the calculations.
https://www.halfhill.com/inflation_js.html
in the stream here re advisors, I probably ran across 3 or so in the years I wholesaled to them I’d let have some of my money. My friend is retiring next year after a very successful law career and she asked me to go with her for an advisor meeting w Morgan Stanley who has had success w their firms 401k plan. I was very impressed- she is very conservative and he listened and the plan was very much in tune w her needs and risk tolerance. No industry-isms spouted, no rote sales pitches or replies. He gave her a good plan to get from 60 to 65 w low risk and other ideas to ponder.
My favorite advisor story is in all the years of wholesaling to them including variable life/annuity products, not one ever asked me who managed my money or could they meet w me to discuss my plan! Do people know how to sell anymore!! Always ask, all it costs is a ‘No’. And then don’t give up either. Wild.
((btw I am on ‘moderation’ at SA for ‘promotional posts’ ..when I posted a link as a reply kindly to someone who was wondering where they could sell their Costco gold bars!! unreal that mess over there. I will posting minimally or not at all there. fyi. Bea))
Sorry to hear that Bea, I saw your post and thought it was a nice gesture. I have learned a lot from you.
Where can I sell some gold eagle proof sets other than the jewelers and pawn shops in town?
There are coin shows everywhere.
That’s where I’ve been buying Gold $40-$50 above spot
They buy gold too, usually deducting $50 less than spot
Imma waiting for $3,000 @ OZ before I sell a few items.
Eagle proofs should sell at a premium to spot. OFC then I have taxable income
I answered this previously losingtrader.. SD Bullion, Apmex, JM Bullion.. top honest sites will pay for them you could ask for a quote from them w no obligations..I think you had a 2005 set or something…I was a coin dealer in my youth..lol..I prefer miners now for all my precious metal dealings. Bea here is SD https://sdbullion.com/2005-w-american-gold-eagle-proof-4-coin-set
here is JM https://www.jmbullion.com/2007-w-4-coin-proof-american-gold-eagle-set/
AMRK is a public company that has a lot of these dealer sites.
people speak highly about this FL dealer Gainsville Coins, Jan N. on SA contributes to his site a noted gold bug.. https://www.gainesvillecoins.com/?msclkid=ef91e045ee41169c7cb98753993d748f&utm_source=bing&utm_medium=cpc&utm_campaign=Gainesville%20Coins%20Brand%20Defense%20Campaign%20Sep%202022%20Microsoft&utm_term=gainesville%20coins&utm_content=Sept%202022
not a recommendation DYODD. These are ‘heirloom’ sets not related to the price of gold and trade on their numismatic (collector) value mostly w limited editions etc. Bea
I sold a few batches of silver earlier this year. JM Bullion and APMEX are both fine. JM was a little quicker in paying out if that’s important to anyone.
I sold some through JM Bullion a couple years ago. Everything went smoothly. They show you on their site what their buy price is for just about every imaginable item.
They send you the shipping label, and deduct the shipping from your proceeds. The only small issue I had was that they just estimate the weight. I think they estimated 20 pounds on my label, but the actual weight was less than half that. So the insured UPS shipping was almost $100 when it would’ve been less if I could’ve told them the actual weight before they sent the label.
I’m holding NYCB-A. It’s doing OK so far. A major layoff of 1900 employees has started to cut expenses.
https://www.bankingdive.com/news/nycb-flagstar-cuts-700-1200-1900-mr-cooper-otting-signature/730251/?utm_campaign=Yahoo-Licensed-Content&utm_source=yahoo&utm_medium=referral
danzeb, thanks for the post. It explains why Flagstar just advised me that they are moving my 2.25% mortgage to mr cooper.
37th anniversary of THE day, 10/19/87! The day that couldn’t happen until it did. Dow down -22%. Couldn’t possibly happen again, markets are all infinitely smarter and better equipped now.
Tex, on my 3rd interview of financial advisors.
Last one was Fisher. Sent me 3 PDF files with color charts. Wanted a Zoom call, but glad I didn’t do that, easier to just talk and not watch and listen to a sales pitch.
For a change I wasn’t the one who was 15 minutes late for an appointment. We had a good talk without the charts. I want to look at the literature undisturbed.
Out of all the people I talked to this company isn’t pitching ETF’s. Patrick actually mentioned having a mix of dividend paying stocks and bonds.
He was very astute. He said it sounded like I enjoy handling our accounts. So bluntly asked why I wanted to turn over management. Simple question, simple answer. It’s taking too much of my time and life is too short. Also my wife doesn’t understand any of this and there will come a time I can’t or will not be able to do this.
In the talk He mentioned the advantages of his company, having been around since the 70’s seeing in the 90’s 401k and mutual funds were becoming popular they pivoted from being pension fund advisors to wealth management. Patrick said they did well during the 2020 and 2022 drops in the market. I asked how well? did the literature and charts he sent show that? Told me no, basically I need to look at what he has already sent but I think it will show 3yr, 5yr etc performance. So of course I asked if he could pull his company’s performance for those 2 yrs to show me.
His final to the point question, Am I ready to sign up and could he schedule another appointment.
My answer probably wasn’t what he wanted to hear. I think this market is too exuberant and I am not so sure of changing horses in the middle of the race. My purpose is doing research right now. His answer was I can’t time the market.
Maybe you can’t time the market, but I know a lot of astute people on this site feel the same way, so I feel like I am in good company. I am going to take my time on a big decision like this.
Hey Charles. That sounds like a great idea, take your time. FWIW, I have come across a few advisors that specialize in prefs and isntl bonds, all the stuff discussed here. Happy to chat if that sort of style would be of interest. Don’t worry, I am not an advisor nor have incentives for referrals. I just like seeing people treated fairly.
Maine, you read my mind. After your suggestion of ARGO pA I was wondering how to PM you.
Are you over on SA?
Yes, BearMarket2025
Maine appropriate handle. I just read If you prefer comments about the market and JPM post. The markets are heating up. I watched the JPM 3 minute video and 3 months / 1 qtr being forward looking is about the best anyone’s crystal ball can do with all the factors that can affect the market.
Didn’t find you over there. What is interesting is I found Pig earlier in the week and now I can’t find his profile. Lucky I bookmarked him. Wonder if SA is blocking profile searches. I just commented on the T.G I Friday’s under today’s trending news. Heard on the radio yesterday that traffic at I HOP and Applebee’s is up with consumers in the 100k income bracket as they are still going out to eat but with costs higher are frequenting less expensive dining. Same news said Mickey D’s sales are down 15%.
Charles – yeah, I dunno. That was a recent handle I created but it should work. SA has gone from bad to horrible. All depends on your objectives, I have very little equity risk now, I don’t need it, the extra return or risk.
LT – I would not normally reach out to speak offline, but I absolutely hate Fischer, lol.
Maine, have you posted anything under that handle? If so, what was the article?
I just posted a comment here:
https://seekingalpha.com/instablog/14527192-colorado-wealth-management-fund/6070313-blue-orca-fumbles-incompetent-attack-on-sun-communities
How does one access the ‘blog posts’ on S>A>, which is what your link led to ? Thanks
Howard, Pick any writer on S-A and under their name is a task bar that starts out bio/analysis/investing groups/ comments/ blogs/ likes/ followers/ following
Just click on blogs
Fisher nonsense of “we do better when you do better” versus just saying they charge a fixed percentage… 1.25 or 1.5 when I spoke with them, bothered me.
I came up with a new slogan for them that ends, “..and when you don’t do well, we still do just fine…”
Doublespeak. If you do well they get their standing high percentage of an even higher balance. So Yes, they do better.
Maine, It would be very helpful if you could point me in the direction of any financial advisors that specialize in preferreds–I have searched without success.
I am setting up my wife’s retirement portfolio with “sock drawer” investments with a heavy focus of preferreds. Given my age and that I am 12 years older than her, I am concerned about her ability and willingness to manage the portfolio once I am no longer capable of managing it.
Hopefully such info can be shared via III. I do not subscribe to SA. Thanks in advance.
Larry, my situation is reversed with my wife being older than me. My wife will probably outlive me as my wife’s family seems to have averaged at least 10 years more than my family. I think a focus on preferreds giving a steady income makes sense. Finding someone who understands that is out there.
I left instructions for my wife to sell most of my preferreds and buy total market etf’s and fixed income. They don’t need to be monitored.
Larry, I can share some info with you offiline if you would like. My email is jeff.meekins@yahoo.com
Had the same mentality over 10years ago. Consolidated my 10 credit cards, 4 bank accounts, 2 brokerages, and 3 insurance providers. Shoving all of it under a single institution for the simple fact that it gives my wife one throat to choke in the event of my death.
Do they offer the best customer service. NO
Do they offer the best price for each individual service. NO
Do they perform what I need automatically or are willing to provide a person that will automate it. YES
Structure – 70% of the money is under management. Managing a CD ladder and a couple of ETFs which provide broad based equity exposure. (60/40). Automatic output of our living expenses every month is deposited into the joint account.
Credit cards – automatically pay themselves off on the 15th of the month.
Any bill that can not be automatically payed through credit card is automatically paid.
Automating everything was a boon to my personal finance existence.
Brokerage side charged $15/trade which was annoying. Initially they reduced it to $10 after some crying. Now they just provide me 150 free trades per year. Can buy/sell anything and more than enough trades for what I am doing.
Recently after crying about forex fees charged on ATM withdraws or usage of VISA/Mastercard in South Africa. They provided me a new VISA/Mastercard that does not have any forex fees and told me not to use ATM machines. So I will try it out on our next adventure overseas.
micahc, Thanks for the post. Funny you mention two things that I can relate to. I am still trading one or two stocks and finally one of the advisors said I could spin off 30 to 40 k into a separate account and they wouldn’t charge their commission against. Second, I want to travel more to see how the rest of the world lives while I still can. A little difficult but not impossible to find someone to take care of the sheep and the two cats.
Not so sure about the automatic bill pay unless there is strong security in place.
Kinda fell into a solution to this problem.
Wife has had a helper around the house that we pay through an agency. A few years roll by and the helper says she has to move due to housing costs.
At this point the helper is like a daughter to my wife. So she can’t part with her. Helper moves in with no rent charged.
Thinking about it. We had a detached 3 car garage w/ shop. Honestly at my age it was underutilized. Everything to the auction. With a little more money added created a little apartment out of the garage bay + shop.
We cut out the agency by making a side deal and helper moves into the apartment paying rent with the bonus when we are away the dogs and house are automatically taken care.
Good on you looking after a good person.
I went thru all that “Maze of Confusion” about a thousand years ago. After tons of DD/RESEARCH I came to the conclusion that most of them (not all) will end up putting you into somewhere between 6 & 9 mutual funds of different types. I finally said to myself “Well Hell I’m going to pay somebody on average of 1%” when I can just do this myself. I never looked back and that was many many decades ago. I might add that I have no regrets.
I had a Fisher account back around 2001 after the market had gone down a bit. I went to a few of the pitches. He had avoided the beginning of the bear market, but he ended up getting in too early and I lost about 25% of my account promptly, so I pulled my portfolio. The dividend paying stocks did come back as the rest of the market did. The management fee was not worth the price imo at the time. I was better off just buying lowest cost ETFs and keeping the dividends instead of paying them to Fisher as a management fee.
J trader, that was what bothered me with Fisher and the local advisor.
Both asked me to turn over everything to them. Fisher said they would go through my holdings to see what they would keep and the other wanted to convert everything to ETF’s. Both sounded like a radical change from what I was doing and I expressed my concern about the market feeling like it is starting to be peaking. Then they told me you can’t time the market. I have made buys and income and unrealized capital gains the last 3yrs by being patient and waiting with buy limit orders. I don’t have faith that they know any better than me or Goldman what the market is going to do tomorrow or the next 3 months.
” Then they told me you can’t time the market”
I told them , “No. YOU can’t time the market. I can.”
Will it work? Beats me, but I’m not paying them a high fee when they don’t even have good-looking people for me to gawk over at meetings.
If I become disabled or demented , all the bills that can be auto-paid are on autopay, except the few I have to manually pay by cc to get frequent flyer points. The AMEX points can always be turned into cash via my Schwab AMEX platinum at 1.1 cents per point. I’m flying LAX to Munich in first class on Lufthansa tomorrow using points. I’d never pay the first class fare (I don’t have the flight back yet so hoping they don’t ask me to prove it at immigration…they did that in Fiji)
This is the stage of life where having at least one much younger trusted friend can be extremely helpful. I have a friend who is now 46, but who worked for me when he was 16. He followed me into trading after college and has never had to work for anyone else.
One thing about trading for a living as a mark- to -market trader in securities is that your income is not subject to self-employment tax but you can deduct business expenses. You can also fully deduct net losses.Most CPA’s are stunned by this and don’t believe it until I point to the code sections.
I can also have investment accounts as long as I segregate things.
Why would you wish to segregate? Can you not have all trades in the trading account? What is the IRS code? Learn something new every day.
26 USC 475
https://www.law.cornell.edu/uscode/text/26/475
Why would you wish to segregate?
Because there’s no long term capital gains treatment for stuff I hold for the long term.
https://www.irs.gov/taxtopics/tc429
IRC475(f) is where you the mark to market election I made 25 years ago as a full-time trader. It requires you to file the election , change your accounting method. You have to meet certain tests as a full-time trader
Just catching up on recent ” advisor ” related posts….. excellent.
Retired, entire career in the institutional financial sales sector.
Self managed family accts, with Schwab. Mixed focus on Preferred’s & quality Common’s . . . and now at the 8th decade.
The above postings are a great assist in the “turn over” process & pro’s advice/ thoughts . . . as well as daily sector & specific ideas.
Recent adds . . . CIM-C ….. KMPB . . .KTN . . . F ( arnd $10.50 ).
Again, thanks for posts from real pros. Jim
Jim, I would think your’re being modest. Retired from financial sales. I would think your Spidey senses would tell you if it walks like a duck and quacks like a duck it is a duck. On the other hand, if it smells like a skunk you would know it is a skunk.
Jim, There is a lot of uncertainty in the market right now. See Tim’s post today about the possibility of 10 yr T-bills moving higher as people expect more to hold the US debt long term.
But then again who knows. Preferred’s may be setting up for a drop and a better entry point.
I bot CODI/PRB 7.875 fixed to floating (4/30/2028 3 mo libor +4.98) at 24.29 8.12 current yield.. the CODI.PB/SJNK pair has gone from near 4 sigma rich in july 2022 to near 2 sigma cheap last week.. assuming no credit issues should be pull to par as we approaching floating date..several articles on S/A on CODI
Charles
ASML
Another high quality falling knife
Monopoly position re machines that make AI chips
$870 on 10/15
Unexpected early release of sales below lowest analyst forecast and forward guidance down
Dropped to $730 immediately – biggest % drop in 38 years
Kept falling
Bought more as it fell – ended up with 25 shares @ $692
Today $726
Sock drawer next to ADM and PFE
Westie, Two things.
You see the lawsuit announced against ADM ? OSHA is involved. May be an opportunity to buy again at a lower price. History of accidents with failure of safety equipment.
ASML is galaxy’s away from one of my core rules I have held for years.
I have had this discussion before. Not a hard and fast rule. I don’t invest in stocks over $50.00 price. Lately I have bent my rule buying WHR and a few others.
Why do I have this rule? the same as with Gold or Silver. I can buy say, one oz of gold at 2,600.00 or 100oz of silver at 26.00
At the price today you would have about $725.00 paper profit.
Sock drawer aside , I bought 5,000 shares of IBRX at 3.26 and sold at 3.75 about a 2,400.00 profit.
I’ve been trading ADM since the first drop from the accounting bit. Been adjacent to their safety department for work – it’s a little bit of a clown show. They used to call the company ‘another dead man’ ….
Happy to trade, wouldn’t want to work there.
At 10x revenue and 15x book, what’s not to love? 🙂
Rock, I detect a little sarcasm. I am watching as a possible trade and flip. People on here used the term where there is smoke there could be fire. This was in regards to RILY. Which is no comparison to ADM. But still a better comparison is PCG I would like to see them get their act together with a government entity involved like OSHA now that I am hearing this stuff before I would think about a long term hold. The excuse we didn’t know what that division was doing isn’t going to fly with OSHA
Hey Charles. Was referring to ASML. I’m old school and don’t get the valuations companies get today. Yes, they (tech companies) make great profits, but when the music stops watch out. ADM is more my style with the valuation. But there have definitely been some missteps and that is all about management. Will they get things straightened out?
Rock,
ADM I think needs to be shaken, not stirred. Pacific Gas & Electric had a management problem but looking like they have gotten their act together. Mobile alerts power may be shut down due to high wind conditions, heavy cutback of trees that interfere with power lines, under grounding lines etc. I feel like I don’t need to worry about my dividends.
I got ADM at a good price and flipped it a couple times but am out and watching for a good entry point.
FWIW..I bot CODI/PRB 7.875 fixed to floating (4/30/2028 3 mo libor +4.98) at 24.29 8.12 current yield.. the CODI.PB/SJNK pair has gone from near 4 sigma rich in july 2022 to near 2 sigma cheap last week.. assuming no credit issues should be pull to par as we approaching floating date..several articles on S/A on CODI
MJTroll,
Can you explain the idea behind looking at a preferred relative to an ETF and then saying it’s XX Sigma rich (or the opposite)? Do you trade this as a long/ short or just use it for comparison?
Nice, i sold this week’s 640 put for $85 each. Expired worthless. More than one way to skin a cat!
State of Israel 9 year , 5 month bond due 3/34
46514brl3
ytm between 5.775 and 5.929 bid/ask
Min size 200k
Israel WAS AA- and now is Baa1/A
Never missed a payment on it’s debt in it’s existence.
30 year is around 6.30
I do not own any of this
Any AGNC preferred owners? AGNCL is now priced higher than AGNCO which is bizarre. Lower dividend now because O floats and in a few years L floats at at a lower rate. Is this just a massive mispricing or is something else going on? All I can think of is an imminent call which hasn’t been announced and doesn’t seem likely, still not a good reason to bid up L so much.
Yes, I think it’s the fear of a call that’s keeping the O pinned closer to par.
a new preferred was just issued; “Eagle Point Institutional 8.125% pfd”
does anyone know who is the parent Company ? no info on Quantum
is it possibly EIC or ECC ?
Hi Ted,
It’s been discussed here quite bit recently. Check these two posts: https://innovativeincomeinvestor.com/eagle-point-institutional-income-fund-to-sell-term-preferred-shares/, https://innovativeincomeinvestor.com/eagle-point-institutional-income-fund-prices-term-preferred/.
Short answer: It’s issued by https://www.epiif.com, which is a sister company of EIC and ECC that does not have a listed stock. Their holdings are closer to ECC than EIC. It was trading first as EGLPV, is currently EGLPP, and will soon become EIIA. This is the only debt they have outstanding.
While big bank earnings have been impressing the market since last Friday, a couple of small banks (WBS and PNFP) whose preferreds I own have done the same.
I seem to remember that strong bank earnings are a harbinger of good earnings in general. We’ll see. Two clunkers of note so far: ASML and ELV.
This morning, 30-year treasury futures reversed their recent small rally and are near the recent low, probably on the ECB rate cute announcement. The 10- and 30-year yields moved higher. The DXY rally continues. Awhile back, one commentor suggested that foreign central banks will be forced to out-dove the Fed.
On the technical front, the charts of TNX (10yy) and TYX (30yy) project to targets of 4.3% and 4.7% respectively, near to the 50% retraces of the rate selloff. Projections are not predictions, and my rate projections are mostly wrong. I have no idea where rates are going, but I’m sure there will be a solid narrative to explain whatever happens.
I mention the projections as possibilities. With that in mind I will keep cash available for the better investment yields that will surely accompany a rise in long-end yields.
Atlanta Fed nowcast of real GDP growth in Q3 2024 is 3.4% (see chart in tweet).
https://x.com/AtlantaFed/status/1846946022603280651
Some people think that real GDP at 3.4% and inflation at 2-2.5% means that the 10-year treasury yield at 4.1% is too low by historical standards.
“He said the Fed’s half-point cut in September was a mistake, and that his firm, Duquesne Family Office, shorted bonds after the announcement.
The market needs to temper its expectations about the pace and extent of central-bank easing, according to Druckenmiller.”
https://www.bloomberg.com/news/articles/2024-10-16/druckenmiller-says-market-is-very-convinced-trump-will-win
From yesterday’s FHLB issuances:3130B3CN1
5 year 5.25% with Bermudan call option (that’s discrete calls, in this case monthly). Not a bad “do, ” but I dunno, as most of my agencies have been called and if it’s called quickly you end up losing a day or two interest depending how Schwab credits it and whether they notify you of the call (which must be done 5 days in advance). I had some 5%’ers called the other day.
Schwab does tend to get large pieces of new issue FHLB deals and offers them with $0 fee.
My cloned dogs like this deal, but they have never been good at understanding MY calls, much less bond calls.
Check them out on the face of this story and at the 2:50 mark:
https://www.youtube.com/watch?v=RRU5XBgUh34
PKE
Something must have happened (GE?)
Up 9% today
Just heard the Druckenmuller interview on Bloomberg. The last one minute of a 22 minute interview:
“..if Powell ends up being wrong here and inflation accelerates next year, bonds could go up a lot a lot of basis points, hundreds. Whereas if he’s right, you might lose 25 or 30 basis points short. The golden rule I’ve always had is is the ten year should trade around where nominal GDP is, which is five and a half percent. So the risk reward to me is being short bonds.”
I’ve been debating this over and over inside my head all year. Any thoughts?
H-That’s why I own a lot of F2F issues—most of them $1000 issues. In the fixed category, I am hoping that a lot of the non-IG issues I have owned for quite a while will continue to improve enough for me to get out even or close to even ignoring dividends. (I know that ‘hope’ is not a plan.) Preferreds such as FBRT-E, RC-E, RC-C, TDS-U,TDS-V. Also, in the fixed category, I own a lot of the CHS issues with an average yield over 7%. I feel very comfortable with them. All in all, I think the future direction of the 10 year T note is up in the air, which makes me very nervous and wary.
good comment.. the tds/pru and prv/pff pairs have gone from all time low in may 2023 to near 2 sigma rich (3yr horizon) this nearly 5 sigma move when combined with the narrow spreads in the credit market would also make me “nervous and wary”
Whidbey Islander- I remember in a Jim Bianco interview that you want to own optionality for the next year. I don’t really understand the deep ins and outs of a FF enough nor am I nimble enough to make it a core position, I guess I don’t mind just sleeping in the safety of SPAXX. I regrettably dumped last of my MS-I.
MJtroll- I’ve been wrongly “nervous and wary” for years now. I’m listening Galbraith’s Great Crash 1929 and think it’s no good constantly hammering down one’s own biases.
Rocky- The problem with hedging is always the sizing when your portfolio is so deep in bonds. I don’t mind holding for decades as long as I’m getting better than bank interest rates…
H-ster, Can I add to the conversation? I always learn a lot from people on here. Too late for this old mind to learn hedging with options. Also like gambling I played a little 21 and poker and learned you have to play (and lose) to learn how to be good at it. I don’t have the time left to make up any losses trying to learn a new strategy. I understand the concern with FF holdings as you might need to make changes to investment decisions on what you hold. But consider looking at looking at a few term fixed to reset. If you make a mistake and are willing to hold you will or may depending on the financial health of the company get the par value back at term. In the long run less to worry about and if rates change more time to make a decision if you want to sell.
Charles- You are very right. Interest rates on the long end will swing around wildly. I just read the T.Rowe Price chief investment officer of fixed income predict 10 year treasuries going to 5% as gov’t debt is flooding the market. If that is the case, then all my banking preferreds probably will bottom. I used to own some Eaton Vance closed end funds EFT/EFR way back in the day and I like the idea of dipping a toe without a full DIY effort. How large of a floating position do you maintain? I would only feel comfortable up to 5% but then it won’t make that much of a difference.
H-ster, Just for you I tallied it up. I have 4-1/2% fixed to floating is what I hold in my wife’s account.
But I also have 11-1/2% in fixed rate 5 yr resets. laddered out about 1 to 5 yrs.
Hedge with TBT??
It looks like NTRSO, SCHW-J and JPM-J now have current yields BELOW 5.0%. Does this feel like a euphoria phase to anyone else?
…and a long list of names (likely to be called) with YTC below 5%.
With that said, this is not a surprise considering IG spreads at 30 year lows, or something like that.
I’m seeing the same with listed paper. TBB and TBC ,BBB-rated T debt due in the 2060’s are at a YTM around 5.4%. That’s T +1 %. Crazy narrow.
I actually am short a little of this against a much bigger position in the Bell South Corts, now debt of T, which have a YTM (2095)of approx 7.7.
LT – did you score any other “expert” names?
And any other illiquid off the run names you like?
It’s getting tough out there!
New Eagle Point Institutional 8.125% symbol is now EGLPP. As usual, Schwab recognizes, but does not allow trades.
I was able to buy at Schwab a few days ago, fwiw.
Yes, as EGLPV, I did the same….I am saying today the symbol changed just today
I bought it on Schwab as EGLPV. But, it doesn’t show in my holdings and the money was not taken from my account. It does show as a completed trade. I guess I’ll wait a few days and see what happens.
Yes, Jack, on the shares already purchased, they, should settle soon to EIIA
Crazy process at schwab.
if you buy a “V” share, they will transact it, deduct the money from your account, then put the money back as it moves toward the symbol change.
So, for a few days, it will look like you have more cash in the account than you actually have.
Then, when the symbol changes, they will pull the cash (again) – so watch out that you don’t “double spend” that cash.
Also, sometimes they are really slow to show the symbol change in your account. So, your account may show V shares for days after the symbol has changed to “P” – which makes your V shares untradeable.
If you are trying to flip the shares, you usually have to call schwab and raise hell to get them to let you talk to trade support so they can update your shares. sometimes have the same problem when the shares change to the permanent ticker.
fan – i just bot it on EDGE
Concerning MBNKP: This preferred floats beginning 4/01/25 @ 6.46% plus 3 month SOFR. Unless the SOFR goes way down, this will probably be called. Right now it is at $25.55. I say sell and take my capital gain and invest elsewhere.
Help, please. Do you have a reliable go-to news source for the reasons a stock is moving during the trading day? BEP is up over 8% today, but I cannot find any info. The Fly, Googling, SA, etc. – nothing. It’s not the first time I’ve waited until after hours or the next day to know the news. Thx.
Hi Wilson, BEP owns in conjunction w CA uranium powerhouse Cameco CCJ Westinghouse which is nuclear reactors and servicing. My cousin works for them they used to be based in Pittsburgh. Nuke Craze… Bea.. https://info.westinghousenuclear.com/news/westinghouse-acquisition-by-brookfield-and-cameco-complete
Thanks, Bea – I wasn’t following what you were saying so found clarification at WIKI – https://en.wikipedia.org/wiki/Westinghouse_Electric_Company..
I’ve owned BEPC for 4 years now and its one of those things I’ve not kept track of very closely (shame shame) so I was unaware of this. being the loyal Pittsburgh person you are, I’m glad you do!
“Westinghouse Electric Company LLC is an American nuclear power company formed in 1999 from the nuclear power division of the original Westinghouse Electric Corporation.[3] It offers nuclear products and services to utilities internationally, including nuclear fuel, service and maintenance, instrumentation, control and design of nuclear power plants. Westinghouse’s world headquarters are located in the Pittsburgh suburb of Cranberry Township, Pennsylvania.
The company’s main product is the AP1000, a modern pressurized water reactor (PWR) design with many passive safety features and modular construction intended to lower construction time and cost. Twelve AP1000 reactors are currently in operation with a further nineteen in various stages of planning.
The company was initially formed as CBS Corporation spun off the remaining pieces of Westinghouse’s industrial concerns, as part of Westinghouse’s re-creation as a media company. Portions of their nuclear business were initially purchased by Siemens in 1998 before the remaining parts were purchased by British Nuclear Fuels Limited (BNFL) in 1999 and formed up as Westinghouse Electric. In 2005, BNFL sold the company to Toshiba. The company went bankrupt in 2017 primarily due to ongoing cost overruns at the Vogtle Electric Generating Plant expansion, the first US build of the company’s AP1000 design. It emerged from bankruptcy after being purchased by Brookfield Business Partners, a Canadian private equity fund. They sold it to a consortium of Brookfield Renewable Partners and Cameco, a Canadian nuclear fuel and services company. Renewable Partners is the current majority owner of Westinghouse. “
Perhaps some of the comments in Y community can shed light. Sort by newest.
finance dot yahoo dot com/quote/BEP/community/
Get url by replacing “dot” with a period
Hi Wilson,
Please check attached link from bep and note section under “BEPC REORGANIZATION” for press release and presentation.
https://bep.brookfield.com/bepc
Does this help?
– Dave
I am wondering how much any one preferred stock, note, or baby bond should be of my total portfolio. I have held any one of the above to around 3% of my total portfolio but I am wondering if I have been too conservative. I am thinking that fixed income equities are generally more stable than common stock and you can go towards a higher percentage, say 5%? Googling this question yields a variety of 2 to 10%. So what do you think out there fellow IIIer’s… I know there are far better / experienced investors than me out there!
I have fewer preferreds/BBs than probably a lot of folks here, my theory being I’d rather have somewhat concentrated positions that I’m comfortable with than buying smaller quantities and being more diverse. To me, it’s easier to follow what is going on with each company. With that said, a couple positions are about 3%. I consider the account with the preferreds my risk account. 😉
DJ- Grappling with this same issue, albeit at one level out, i.e. how much of one sector or institution should be a prudent maximum. I’ve been making my determination based on default risk and how good of a deal I can get.
As I am very heavy on G-SIB bank preferreds, I’m willing to go as high as 10% on any one of JPM/BOA/WFC. Everything else I have under 2%.
Given the inexorable march of currency devaluation due to our enormous growing federal debt, sometimes I wonder if collecting my nickles and dimes will be too paltry in decades going forward. We planted 8 fruit trees and they’re probably the best investments we’ve made in the last 10 years.
H-ster…. I didn’t mention it but I too wonder about sector percent allocation. Because, as Willie Sutton the bank robber once stated, “That’s where the money is” the MREIT preferred stock section has tended to be heavy in my portfolio. Not so the MREIT common stock section as I have avoided them. Utility common stock is running about 10%, which I have been looking at since the dividends are so paltry, but I have a lot of capital gain. Utility common stocks that I own are all near or at their 52 week highs also. I am also heavy on LNG shippers preferred stock. Again, these have been excellent over the last few years. I need to look more closely at section allocation I guess. Thanks for pointing sector allocation out.
I typically hold myself to a 2%-3% position in any one issue. I may double that for high conviction, short-term play though. Importantly, I limit myself to no more than 10% in any one sector.
I’m no expert and tend to be around 3%, but 5% seems reasonable if you have a rock-solid holding. I currently have two at that level.
You have to define what you mean by risk. Do you care about your portfolio value or the credit risk of issuers? I’m in the latter camp, others are more in the former. Both matter to everyone to some extent. I’m willing to ride out a slump as long as I get paid. If there’s a major credit event or recession, stocks of all kinds take the hit. Just look at the long-term charts of preferreds and BBs that go back a decade or two. You can’t pretend that careful DD is going to protect you (although I’m intrigued by the idea that a maturity might).
Along with Buffett, many here love a big drawdown so they can load up on super-high yield IGs. Better have some cash reserves. When? Oh, brother! Let me know when you’re sure.
Hi DJ, fwiw, I have 5% in WTFCP and 3% in HOVNP; usually I limit 3% . 3% in SR-A, 3% in MS-E; been trimming into the big rally, for example I was up to 5% in BFS D and E down to 2% now. About 45% in cash/SGOV. The rest of the pfd bb’s about 1-2%. I have no problem booking to capital especially in the RothIRA.
So overall except for ‘trading shares’ I’d say 3%. We’ve had two good pfd/bb opportunities the last few years- when the banks were having problems and before the anticipation of rates falling. I find these come along every so often, hold nose, due the diligence, dive in, and then I will go to 5% w a scale down or sell completely. Nothing wrong with ‘ballast’ names like SR-A and GAM-B as big holdings for me too! Bea
Bea, these are times you wished you had bought more on a few of these positions.
dj
How much to hold?
What is the amount of loss you can reasonably tolerate and what is the risk of the holding?
As in (for me)
My largest holdings are ENB, CKNQP, RIVPRA, PFE, ABBV, AND CPRN.
I am comfortable with all five , think of them all as IG and would not hesitate to add if I thought the opportunity arose.
On the other hand, among my smallest are: PKE, BCSF, MOS, and RITMPRD.
I am also comfortable with these as diversification higher risk, but would not add (other than a small amount) regardless of opportunity.
I had PKE on a watch list and listened to the replay last night. Are the GE engines they seem to expect an order for at some point in the future connected to Boeing at all? Trying to make sense of the risk/reward.
PKE
Something must have happened (GE?)
Up 9% today
“My largest holdings are ENB, CKNQP, RIVPRA, PFE, ABBV, AND CPRN.”
Who/’what is CPRN?
JP C for Citigroup Preferred N
Try C.PR.N
how to find out if a muni bond is insured-thanks for any reply
james,
When looking at the bonds there is usually a column for “attributes”, such as GO, SFP, TE etc. There will be an I for insured. On the bond detail page the insurer will be listed or that space will be blank if not insured. Look around, it’s not hard to find out. This is based on my experience with Fidelity. Good luck. There are plenty of bond experts here who will probably chime in.
James,
The name of the insurer is also important. There have been insurer defaults so I don’t assign much value to an Ambac insurance wrapper. They defaulted on paying for Las Vegas Monorail bonds. The bond had been AAA. I don’t recall the amount of the recovery .
I’m not sure how well ambac and its various insurance subs are capitalized today.
MBIA I don’t assign much value either.
They used to get a AAA rating assigned despite insuring 100x their capital.
I recall my dad….. in commercial insurance for 70 years, saying well before the GFC that the bond insurers had never been tested.
What happens when the economy goes South is something to consider: the weakest insured bonds default and get paid first. It’s quite counterintuitive . There’s nothing left when the bonds with a high underlying rating go bad!
There are many state insurance funds for bonds like school districts–Texas, for one has the Permanent University Fund, and that’s extremely solid. No claim has ever been made against it. Each state’s fund publishes public info.
Feel free to ask about a particular bond.
“the weakest insured bonds default and get paid first. It’s quite counterintuitive . There’s nothing left when the bonds with a high underlying rating go bad” …. sometimes the world is so beautiful I can barely stand it.
this is comedy gold.
James, I strongly suggest you do NOT rely on any generic indicator, like Fidelity’s “I”, because most Muni bond insurers went belly up in the 2008 GFC. So, a bond might still be insured, but the insurance is no good. There are mainly two Muni bond insurers still actively writing new policies:
Assured Guaranty aka AGMC aka AGM
Build America Mutual aka BAM
I consider both of these as money good insurers and you will find a lot of policies covered by them.
National/MBIA wrote a lot of policies but they are in “runoff” meaning they are NOT writing new policies but still paying on existing coverage, most notably on the Puerto Rico Electric bankruptcy.
You will see a smaller number of policies covered by Ambac which is also in runoff. Azure Blue thinks they are money good. I think they are not and do not depend on their coverage.
Very rarely will you see a bond insured by Berkshire Hathaway which I also consider money good.
As LT, mentioned many states have programs called either “school funds” or “state intercepts” where they will step in an make the payments if a municipality defaults.
Some brokerages do a good job describing what, if any insurance a bond has. Other’s do a terrible, close to worthless job. Only way to know for sure is to look at the prospectus on MSRB’s “EMMA” site which is the gold standard for all Muni bond info. If you use the “screener” provided by a brokerage to look at only “insured” bonds, that is NOT sufficient.
There is another interesting quirk. Some amount of municipalities “escrow to maturity” a bond by depositing cash with the bank/trustee. The bank/trustee invests the funds, typically in US Treasuries, to guarantee all of the payments will be made on time, in full. In many cases, the ratings on ETM’ed bonds are dropped. They will show up as NR or WR, when in fact they are arguably the most secure Muni’s. Note in this case the insurance coverage is DROPPED, but in discussion with many Muni old timers, we are NOT aware of any case where the ETM was withdrawn.
Good luck, something over literally 1 million Munis to choose from.
Another post I’d like to give a “Like” to but am prevented from doing so….
Anyone interested in BAM as an investment, see WTM – White Mountain Insurance Group, an under the radar insurer long considered to be built on the Berkshire/Buffett model, similar to Allegheny [formerly Y] now acquired by BRK. https://www.whitemountains.com/companies/
For those who think debt is a problem, global public debt just passed $100T…
https://www.reuters.com/business/finance/imf-says-global-public-debt-top-100-trillion-growth-may-accelerate-2024-10-15/
https://www.imf.org/en/Blogs/Articles/2024/10/15/global-public-debt-is-probably-worse-than-it-looks
Makes me very nervous because I keep hearing “it is different this time” from the “borrow and spend” (modern monetary) crowd.
I am not that old, but I have been through enough financial crises/meltdowns/etc. that every time things fall apart, there was a chorus singing that tune.
Unfortunately, there isn’t much we can do about it other than to hold your nose and try to find candidates to vote for who will borrow less
The worst part- The US is almost 36% of that 100T
There are 13 countries over 1T with Mexico soon to be # 14.
The entire financial system is debt/credit based. It’s where money comes from. Any event that causes lenders to lose trust shuts down the debt/credit creation cycle. Every so often in his newsletter, John Mauldin reposts the experiment in which researchers created a sandpile by dropping one grain at a time, trying to figure out how avalanches worked. Some were big, some small. A lot of small ones protected against a large one.
The global debt pile might behave similarly. When the pile is gigantic and small defaults are being papered over with more debt at higher rates, you seriously wonder if there’s going to be a big one. But why? What? Where?
After the GFC there was lots of “how could you have known” BS being aired in the media. Well, you could have. Mauldin and others warned about sub-prime loans in 2006. The Big Short-er figured it out. If some big default risk is developing, someone will have sniffed it out and be writing about it. I like to anchor my anxiety to some substance. Otherwise, it’s just amorphous worry. Damn the torpedoes. Half-speed ahead.
EGPLV:
Note that this is when-issued, so there’s no settlement until it’s no longer when -issued( “when, as, and if issued”) ….so payment isn’t due until that date. Useful if you have a Schwab account that is constantly not paying (stealing) interest (ok, what .2%?) on funds until you move them to a MMA.
Does anyone know when this is supposed to settle?
LT,
Does anyone read Tim’s daily postings of news of interest to preferred stock and bond holders? This was posted yesterday.
https://www.businesswire.com/news/home/20241015711923/en/Eagle-Point-Institutional-Income-Fund-Approved-to-List-Preferred-Shares-on-New-York-Stock-Exchange.
Don’t know if anyone remembers me posting that the live chat I had with a FIDO rep told me they couldn’t trade this stock because SEC hadn’t approved it.
Charles,
Thanks for the reply and pointing me to that.
Humbly (tail between legs),
LT
LT
Honestly, I didn’t connect the dots until this morning when you posted this
It’s trading on Fido this morning as EGLPP, presently @ 24.82
It’s interesting and disappointing that the Fidelity notice of the call of FTAIP does not include any amount of accrued interest– I know the amount, why don’t they ? Is that industry wide, or just Fido?
thx
outstanding 4,180,000 8.25% Fixed-to-Floating Rate Series A Cumulative Perpetual Redeemable Preferred Shares (the “Series A Shares”) at a redemption price equal to $25.00 per Series A Share in cash, plus approximately $1,579,811 of accumulated and unpaid distributions thereon to, but not including, the redemption date of October 30, 2024 (the “Redemption”).
EPD K-1 questions
I’ve read some number of discussions on EPD here on III. I was hoping a holder might be able to post the significant data from the K-1 for the 2023 tax year.
I’m a new holder in 2024, and have not been able to find any (good) 2023 data about the tax characteristics of the distributions.
Also, how many states are listed on the K-1 and did you file returns in all of them?
Thanks for your help!
I have a K-1 for EPD from 2023. Mine shows box 1 ordinary income as a negative number. It shows 0 for interest or dividends (boxes 5, 6 and 6b). It shows a small box 10 net section 1231 loss. Box 19 distributions has code A and lists the amount I received.
There are quite a few states listed on it. The states that have a non-zero number are AR, CO, IL, IN, KS, LA, MS, NC, NM, NY, OH, OK, and PA.
porcupine73 –
Thanks for the help and quick response.
I already have to file a NM non-resident return for a trust, so only 12 more to go! 😉
CTM
If K-1s require filing multiple state returns, how does anyone say TurboTax handles these easily and it’s no big deal? I’ve considered braving them but now I’m scared.
my tax preparer eats k-1s for lunch and is only about 2x the cost of the turbo tax fee (400ish$).
If you are planning an estate I can’t think of a better security. Downside – selling after acquiring is a not-great idea since taxes are deferred and the stepped up basis is the main benefit. also, obviously not risk free, but their leverage ratios are better than in the past and the sector has learned from past mistakes.
Overweight mlps and like to sell puts at specified prices to obtain juice on mm funds. I avoid extraction companies and vertically integrated companies. Would consider the royalty trust. I’m not a fossil fuel bull, but understand all too well that many people in the globe can’t even obtain cooking fuel, nat gas, etc and still rely on wood / dried dung and think that people need cheap energy because they don’t have means. i.e. I think volumes will remain similar for the next 20-30 years even if prices are volatile.
Not to spoil a party here but with all of these there’s a risk here of phantom income exceeding the value of the security .
The following happened to me and I thought ,”What a great idea it would be to buy this for someone you hate”
https://seekingalpha.com/instablog/1099377-courage-conviction-investing/4956450-vanguard-natural-resources-and-cancellation-of-debt-income-codi
I owed a bunch in taxes and had to carry the capital loss from sale for years. I received NO distributions.
I encourage you to make a list of people you truly dislike and plan to buy this for them on the day you see another of these
CTM. …. Most states have a minimum amount of income for filing a return. Unless you own a large number if shares you are probably below this amount. I would visit each state’s website before I went to the trouble of filing a return to see if you fall below the minimum.
CTM – I have owned EPD for about 5 years, as well as several other K-1 companies. Right or wrong, I have ignored the states listed on the K-1s. No issues so far. Also, I live in Texas, so I don’t file state taxes here. For what it’s worth. Good luck.
Dj & Fryman –
Thanks for the replies.
I have other LPs and trusts, so I have filed non-resident returns for some states, but for others, the low dollar amounts seem well below the tax-man’s radar. EDP with 13 states listed sets the record for me.
iShare iBonds ETFs, has anyone done a nice pro-con analysis of these date specific ETFs? Seems like a lot more Pro’s than Con’s from my vantage point. Mature annually on Dec 15, monthly dividends, mature at NAV. Reasonable fees, 7bp for Treasuries, 10bp for Inv grade Corp, and 35bps for High-Yield. Would be interested in any thoughts. IBHG with a net acquisition yield to maturity 12/27 of 6.27%.
https://www.ishares.com/us/strategies/bond-etfs/build-better-bond-ladders
Thanks
I consider it a good way to get a basket of hy bonds and appreciate the followings: sizing, liquidity (spreads, and avoid spreads on 1000 bonds), gets loaned out often (shorted, i.e. extra income), diversification with junkier holdings, and reasonable fee with a stated maturity. Commenters online have said that the real ytm can be slightly lower because it starts turning into cash earlier than maturity. 9/10 will continue to use. (also use lots of the blackrock cefs)
Roth Conversion question regarding the withdrawal of Earnings. Hopefully, I’m not breaking any board rules by posting this question but I appreciate the collective knowledge and friendliness I’ve seen on this board as people often share their own experience and understanding.
Background: I opened a Roth IRA in 2018 at age 60+. I have made annual conversions (laddered) every year and plan to continue this laddered process until my traditional IRA is emptied, being cognizant of my marginal tax rate, upcoming RMDs at age 73 and the use of QCD’s.
Roth withdrawals are in order of 1) contributions, 2) conversions, and 3) earnings. Each Roth conversion has its own 5 year holding rule before Earnings can be withdrawn without a tax penalty. Is that still the case when the account age and owner’s age reach predefined age thresholds?
This answer will assist in my tax strategy planning. While I’ve not had to make use of my Roth account to date, should a personal ‘black swan event’ occur, it would be nice to know whether I can rely fully on the then total Roth account balance or have to take into consideration a pending tax penalty on earnings from conversions which haven’t met their own 5 year rule.
Kind regards to all and thanks for listening if you’ve made it this far.
Monk
I believe once you reach age 59 1/2, the 5 year rule no longer applies and distributions are not subject to the 10% penalty. See IRS pub. 590-B under Roth IRA distributions.
Yes I see that too on post 59 1/2 Roth conversion money no more 5yr rule on ea contribution. I get it for pre 59 1/2 having to wait 5yrs. Even something as simple and important as the RothIRA they have to confuse the h out of you huh. Bea https://www.fool.com/retirement/plans/roth-ira/5-year-rule/?msockid=187bf416665d66522f36e10f67c46737
ScotinCT, Bea;
Appreciate both responses and guidance. That’s what I’m hoping for in that this rule would no longer apply. In my research, I’ve not seen this clearly addressed and on a couple of occasions people have claimed that it does apply to all conversions regardless of age. I even had an individual within the tax department at the brokerage where my account(s) are held say that it still applies. This should be strait forward and simple but as you’ve mentioned, they love to season it with the sauce of confusion.
Thanks again
You know, looking at 590-B, it says: “Unless one of the exceptions listed later applies, you must pay the additional tax…” Then under exceptions, it says, “Exceptions. You may not have to pay the 10% additional tax in the following situations.
You have reached age 59½….”
Referring to your sauce of confusion, I don’t understand the use of the word “may” in that sentence. There is no further explanation that I could see explaining when you might have to pay the tax, though I certainly didn’t read the whole document! Any tax experts reading this please chime in!
Appreciate your second look into this. The flowchart on page 32 of Pub. 590-B indicates that any distribution at my current age and Roth account age since inception should ALL be considered “qualified”. Which I’m hopeful is correct.
Then of course you encounter the other language on the following pages, which should apply(?) only to non-qualified distributions, we hope.
Anyway as you’ve mentioned, hopefully a tax expert will weigh in with a solid answer.
sold 1/2 CUBB as cubb/igib pair is trading near yearly high .. at price of 21.49 yield is 7.23 ..pair has gone from 2 sigma cheap in august to near 3 sigma rich today
Monk and all, Google ED SLOTT. I receive his updates. He is no doubt the “guru” of retirement accounts. You can search on the website for your question. If you don’t find it then you can post question on the community page. I think most CPAs follow him and take his courses.
Infinitely off topic, but insight into what is possible. If you have not seen the SpaceX launch pad recapture of their booster rocket, spare literally one minute and look at the video. The 233 feet tall rocket does a controlled descend and is clamped by “chopsticks” before hitting the ground.
Ask yourself if you thought this was possible: 1 week, 1 year, 1 decade, ago? I don’t even think Grid would have bet on it happening. Beyond the 69 Mets winning the World Series and that was a miracle per George Burns.
Should bring a sense of optimism that many “unsolvable” problems can be solved in our lifetimes. . .
Can you see the video in many places, here is one:
https://www.youtube.com/watch?v=jFpyZHueLWY
Dang, I accidentally sent the address for a longer video. Here is the one minute version:
https://www.youtube.com/watch?v=t63Gos5Bnxw
I’ve watched this multiple times and it gives me the same thought every time I think about the various rovers running around the surface of Mars, or the advancement of the latest quantum computer – There are some incredibly smart people in this world.
Anyone super-familiar with TIPS?
I understand bonds in general as well as how tips interest in handled with cpi adj to principal, but at least as it’s shown on IB, as rates in general rise, the bond price is falling and the inflation factor is going up. Is this correct? I would have thought the bond price wouldn’t necessarily change if you’re getting what amounts to an adjustable rate security
I’m not an expert, but I do hold a couple TIPS. They do pay a (small) coupon as well as being inflation adjusted, so I think it makes sense that the quoted price would change a bit in the direction you say, although perhaps less than a straight bond.
I don’t think the “inflation factor” should be changing with rates, though. This is calculated from CPI, and is a published number for each individual bond based on the official amount of inflation since it was issued.
Are you possibly getting misled by the way that the prices are quoted? To me (more familiar with stocks than bonds) it’s confusing. For the secondary market, the price quoted still needs to be multiplied by the “inflation accrual” factor. I think this means the quoted price might move more with interest rates than you might otherwise expect.
There’s a full explanation here under the heading “Secondary market purchase”: https://tipswatch.com/tips-in-depth/. The TipsWatch site is a great resource and should definitely be trusted over anything I say.
Thanks!!
SPAXX my Fido sweep a/c down to 4.55% although SGOV where I have the bulk of my ‘cash’ w rolling tbills 1-3mo is going to pay higher for a little while. Have to start doing serious tax planning for next 6-7yrs out, w some Traditional IRA monies to still rollover, SS coming in, int/divs.
Mixing in some muni CEFs maybe and low/no div paying value stocks in the Taxable a/c. I already have Morguard Corp MRC in Canada, might add to that, tiny div big disc to market value of its properties, building new lux apt complex outside Toronto and bot into the A+ Telus building in Vancouver (office! what!! lol.) When short term gainers hopefully turn into long term in the taxable take some profits, been holding off there although if they fall they are fine being kept too w the divs.
So much uncertainty really will probably do very little thru year end like Tim. Oh well quiet start to the week w bond mkt closed. GLTA. Bea
Bea, BMY, PFE, MRK, GSK, MOS, ADM, CAG, TSN, JBSAY,
Interesting stable, Charles
Somehow seem to have almost all in my holdings.
Magnetism?
@Bea, I’ve read a number of your posts about IRA conversions, tax planning and divies. I am continuing a similar program to convert to Roth at lowest possible tax rates. For a couple with standard deduction this year I figure the optimum MAGI is just under 276K which is just under the 100% IRMAA surcharge. In our case we can convert about $100K at an aggregate tax + penalties rate of 27.2% federal (tax rate + IRMAA + NIIT). Going above $276K to the next threshold (the top of the 22% bracket) causes a 33% tax rate on the incremental $46K. I don’t want to pay that much. However, going all the way to the top of the 24% bracket at $505K MAGI, and tripping 3 more IRMAA levels, provides an additional $230K of conversion capacity at an aggregate incremental tax + penalty rate of 29.1%. Is this how you are approaching conversion planning?
Thinking longer term, 2025 may be the last year of the current tax structure, or maybe not if the Dems take full control and pass a tax bill during 2025. But in any case,I expect there will be some “room” to covert $ at a rate less than 30%, but I may never be able to convert all of my Traditional $ to Roth.
In my case, I withhold $ from each conversion for taxes to avoid depleting my modest taxable accounts. After RMDs start this won’t be necessary.
BTW, muni income counts towards MAGI so its not very interesting in the 22-24% brackets
thanks th-nc, Charles, a lot to consider, appreciate it. Bea
If you live in a state with income tax, that can change this calculation a lot. Many of them have non-obvious tax cliffs.
Do you know about the Money Moustache spreadsheet?
https://forum.mrmoneymustache.com/forum-information-faqs/case-study-spreadsheet-updates
David, one of the major areas of financial advice for people living in high tax states (California) is to move to low tax states. Talk to any CA RIA and they have case study after case study of clients doing this. Tax savings of >million $’s are a dime a dozen. So it must be considered as part of the the retirement planning process.
Sure, the dream is to live in Washington and shop in Oregon.
But I didn’t get the sense that rt-nc is considering moving before the end of the year.
David thanx for the mustache site! interesting. I keep a stable of bookmarks w so much time in caregiving on my hands. Apparently Substack is getting a lot of writers and people can be paid? I know Paul Drake from SA has a thing there.. as we go down the rabbit hole of the internets.. https://substack.com/search/income%20tax?utm_source=global-search
Bea
th-nc
Are you thinking that RMDs are not taxed?
I would put this inquiry under the umbrella of, buying something way over par and hoping it doesn’t get called vs. buying some over levered small cap junkier company etc. Not by any means ideal for more conservative income seekers.
Circling back here on ARGD. Quite awhile ago now, we have established that even though this was a Brookfield RE acquisition, this debenture is standing on its own, if you will. Anyone have any updates or more recent DD on this one?
Not a terrible duration here of 18 years and one of few legit issues I could find that hasn’t rallied 10-20% just in the last 1-2 months. YTM still 7%+ here.
But is that extra 100bps really worth it, when you can buy a best in breed RZB with near 5.8% yield trading a few pennies under par?
Not that it matters regarding the point you’re making, t, but “duration” is not synonymous with years to maturity. https://www.pimco.com/us/en/resources/education/understanding-duration. Although I’m not a confident duration calculation person, I think duration on ARGD falls in the 10.5 range according to https://exploringfinance.com/bond-duration-calculator/
Fair point and true. It’s a bad habit I have. I need to start saying, years til maturity.
I’ve owned ARGD for years and my cost basis is probably $12 or so. Don’t want to sell and pay the cap gains tax, plus my yield on cost is 12% or more. Keeping my fingers crossed.
Check my math : WCC prfd A is 25.85. It’s a 10.625 % prfd (profitable Wesco, which purchased Anixter, likes to run the business with junk credit rating).
Callable 6/22/25. Sure too be called as it adjusts to 5 yr T plus 10.325.
Do you get a YTC close to 5%?
lt-
WCC-A div = $0.664. There are three left = 3 x $0.664 = $1.99. Subtract the capital loss = $1.99 – 0.85 = $1.14 net.
% gain = $1.14/$25.85 = 4.4%
% gain annualized = 4.4% x (365/252) = 6.4%
Buy at 25.70 for a 5% gain
So, 6.4 to the call is what you’re saying if I read that correctly.
That’s not a bad “do.” I think their long maturity debt was trading around that yield last I checked.
I
25.85 for settlement 10/15, taking into account .111 in accumulated dividend = 6.186% using https://digital.fidelity.com/prgw/digital/priceyieldcalc/. Note call date does not coincide with a normal div payment date.
2wr, Thank you very much!!
I’m rapidly using up all my capital buying things discussed on this site.