Ugly Stock Market Day–Income Issues Stay Stable

In an orderly selloff common stocks (down 500 on the DJIA) are taking quite a drubbing today. We have just reviewed all the preferred stocks and baby bonds and find them overall very stable.

The day started off with long term interest rates a few basis points higher and we thought might happen this week, but it didn’t take long for the flight to safety to start and rates are trading right where they ended last week–2.74%. While we are seldom concerned with the fall of common stocks there is a point where selling spills into preferreds and baby bonds as nervous nellies move to treasuries. We have not reached that level of concern with income investors as of yet–it normally would take 3 or 4 days of heavy selling to start to panic them.

For now we sit tight watching–no need to even consider any type of buying or selling.

16 thoughts on “Ugly Stock Market Day–Income Issues Stay Stable”

  1. GW, It peeps!… Went to store today to load up on some 50% off ones and hardly any were left unfortunately. Im always thinking, and coming off the sugar high, I am getting worried a bit… Very few people have the problem I do. Most are worried about their income issues being hit from interest rate hikes. Most of mine, I need interest rates to climb to protect them from calls. That is why mine are largely all up this quarter. If rates on long end start heading down lower, I may have to tweak some of mine to protect myself from being gobsmacked from calls.

  2. Tim,
    Have you had a chance to look at AFH’s financial results? It’s difficult for me to interpret but the bottom line “Loss per common share (“EPS”): Atlas generated $4.48 loss per common share diluted for the three month period ended December 31, 2017. This compares to a loss of $1.13 per common share diluted as reported for the three month period ended December 31, 2016” doesn’t sound very good. Maybe you see some good news in the report? After hours trading shows no indication either, at least yet.

    1. Hi Leonard–no – I believe it just came out. They preannounced the large reserve addition so the key is how the release compares to the pre announced release. Will look at it later today.

  3. Wow–all you folks are really going conservative. I may have to raise a little cash to invest if ‘armageddon’ comes.

    1. I’m not there yet, Tim. For where I am in my journey, 1.7 or 1.8% doesn’t get it done for me. I’m continuing to scout for preferred’s and baby bonds that are looking good and holding up in this tape.

      1. And with Grid you never know where he is going–going from Glacier Water to tbills is quite a leap. I bought 200 ($50/share) of his GDL-C puttable preferreds last week–a nice 4% right now

        1. Tim, I bounce like a ball! When about everything I own is $1-$2 over par and past call, you are packed to move on short notice. This was a backwards trade though…. When the decision is made to buy the TBill and then you go ahead and buy more than what your account says you have, something better be sold before the end of the day. I wanted a nice little stash of 20k impounded. Once that happened, in that account the choices to sell were MER-P (have it in 2 accounts), NSS, AHT-D, or ALLY-A. GWSVP essentially drew the short straw with AHT-D. ….But I am hardly running for the hills. Outside of my bank savings and checking account money, this TBill is the only thing not chasing yield in a crazy but overall conservative way.

  4. Decided at opening to sell out my GWSVP and use it with unused cash last week to buy my first TBills…. A secondary 9 month maturity issue. Feels kind of good to put some money in Timeout….

    1. Agree G-Bird.. I took some cash out of my “cash” account as well and put it in a 3mo CD for 1.70%.. not much return.. but safe and these falling knives are getting sharper. Don’t want to tempt myself, will look at things after earnings are out. Still have a lot of dry powder if we get a juicy plunge in some things on my watch list. Bests, Bea

      1. Bea, I think 3 month is a great parking spot….I really should have went 6 months, but I have been pretty much fully invested so it will be good to have some money forgotten about and off limits for me. I actually found 9 -12 month brokered CDs to be paying a bit more than what I bought. But I had never bought a TBill before and was itching to do it just for something new.

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