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Still No Reason to Buy or Sell

Looking over markets today and I see no reason to either buy or sell anything–for the moment I feel comfortable where I am at–obviously we have tons of uncertainty out there as to whether interest rates are heading down more or have we seen the lows in yield for the time being.

The 10 year yield have crept back up the last 2 days and is up 4 basis points now and trading at 4.64%. The low was 4.55% on Monday as euphoria over a new administration sparked a rally in bonds. Certainly everyone is waiting with baited breath to see what direction taxes and tariffs are going to head before moving rates sharply higher or lower.

Yesterday I posited whether Steel Partners 6% preferred (SPLP-A) might be a good holding to diversify the portfolio a bit. After reading all the feedback in the comments I have determined I will ‘pass’ on this one. While I am quite certain that shares will likely be redeemed on schedule in about a year the management team gives me a bit of a pause. In the past I have almost always shied away from investments where there is even an inkling of possibility that management is not working 100% in the shareholders interest–I am going to turn my back on this one.

So it is back to waiting and watching–what comes next is anyone’s guess. Just going to collect dividends and interest–for now.

9 thoughts on “Still No Reason to Buy or Sell”

  1. Slowly building cash again.
    Decided to park some cash in a new agency bond @6%. Probably get called away in the spring, but better than MM

    1. Private, You read the report Rocks posted about the interconnected major economies and indications excess capacity and increasing unemployment proceed a recession. I remember the article you posted last year about the beginning of the economy stalling in China and speculation if it would affect other economies around the world.
      I hear a butterfly flapping its wings.

      1. Scary times, Charles.
        Chinese economy continues to auger in. The gov. stimulus plays have not really helped. Population is shrinking, production is slowing, housing bubble is crashing, unemployment is growing (esp. among young people). Gov. publishes false numbers regularly trying to put a good face on a looming problem.

        Chinese Gov. recently announced it has stopped buying (China) bonds because the market is tanking (yields down into the 1% range).

        China has been reducing its positions in US bonds and is supposedly building its gold reserve to offset those bonds. Personally, I think they are buying fewer bonds because they don’t have the money, and I think the “buying gold” story may be a lie to cover their falling reserves. Who verifies that their gold stockpile is growing? or that it even exists? A pretty easy lie to tell.

        That said, there are rumors that China may be getting gold from Russia to pay for China’s help with the war, but I would think that may be a rumor started by the gov. to bolster their “building gold reserves” story. I think they would take oil before gold, but you never know. Just my thoughts, nothing to back it up. (sorry, sitting in a waiting room again and just writing my thoughts unfiltered).

        One of the biggest requests we get from Chinese contacts now is for help getting their family members (and money) out of China. Looking for an overseas school, job, whatever – just a way to get people out for the long term.

        Families are willing to pay a lot of money to get their kids out. We have a business that does this legitimately, but there are a LOT of scams running (offers to guarantee to get kids into Ivy league schools for $500K (paid upfront, of course), or to guarantee a green card for $1M.) Lots of silliness that worried families will fall for.

        Pressure to exit has been growing for about 10 years, but its not as easy as it used to be. Between China cracking down on its people going overseas for school, and countries reducing immigration opportunities for Chinese, we are having to get very creative.

        1. Private, hope things are going good. I’ve spent a couple hours a day in my son’s hospital room last 2 weeks.
          The China government ordering insurance funds and investment funds to buy bonds with 10% of all new money coming into the funds for the next 3 yrs sounds good until you think about how much worse it can get if these bonds blow up in on the holders.
          My brother in law got his mother out of Hong Kong 3 or 4 years ago and I am guessing most of the family assets too. There used to be a loophole in the law something if you invested a certain amount of money in a business and employed a certain amount of people you could get a green card. I wouldn’t be surprised Indians and Middle Easterners do this with restaurants, motels, gas stations, and mini marts counting family members as employees. I seem to remember Jared Kushner offering overseas investors some deal in New York using this buy in for a green card.

  2. WTFCP…..seems as safe as one can get with a 99% call in 6-7 months…..Yield somewhere around 5.8% clearly beating Money market rates…

    For those with a little more risk CIM-D below par ..24.83…yielding 11% but callable every quarter knowing CIM- B will be called 1st……..waiting for CIM to announce another Baby Bond to start paying these off

    1. Agreed – I have an oversized amount of the former at just under par and an undersized amount of the latter at ~$24.64. Call ’em baby!

    2. CIM common looks like a rolling disaster…made an all-time low in June and hasn’t done much since. That’s why I’ve avoided CIM preferreds. What’s the story?

      1. Exactly why I kept the exposure low in CIM-D – it’s like 10% of what a normal position might be and I do not plan to add…

  3. I had to chuckle at the title of your post. As I was clicking to come to the site to see what was new I was thinking there is really nothing to take action on right now. No great deals to buy, nothing really to sell, no big divs/interest rolling in to reinvest, and otherwise a very dull week.

    Just let each day slide by knowing someone owes me a bit more money.

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