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What an Ugly, Ugly Day

It was red today–almost solid red. With the 10 year treasury up 5 basis points for the day we normally wouldn’t see so much red in preferred stocks and baby bonds, but we sure had a sea of it.

It goes to show you that reactions to higher rates varies from year to year–maybe even from month to month. Certainly we had days with 5 basis point moves in interest rates within the last couple of months with no reaction whatsoever. We have more than interest rates moving the markets.

We have the children in Congress unable to get anything done. We have senators castigating the Fed Chair. We have energy prices spiking higher. We have never ending disagreements on Covid vaccinations and booster shots. Let’s face it things are a damn mess.

Anyway with all the baloney going on I bought a couple preferreds today–actually I added a little (a few hudred shares) to current positions.

The Armour Residential REIT 7.00% (ARR-C) monthly paying preferred was off as much as 50-60 cents during the day today so I picked up a little around $25.45–this issue was trading up around $26.60 last month so while it may still fall further it was much cheaper to buy today.

Also I bought a little more of the Telephone and Data Systems TDS-V 6.00% perpetual preferred which traded as low as $25.18 during the day–down from around $25.85 a couple days ago.

I am not recommending anyone buy willy nilly here–but there are opportunistic buys that can be made–probably will end up buying more if issues continue to fall.

15 thoughts on “What an Ugly, Ugly Day”

  1. Buy when “damn messes” are in the streets turns out to be a good strategy. ARR-C and TDS-V up smartly today. Good call!

    1. Landlord–had them already so felt comfortable with them–so why not add a little more.

  2. I’ve been adding to my position in FFC. Normally I shy away from anything that uses leverage but this is the “New Abnormal” so I guess you have to improvise and adapt

  3. Pretty much a ‘Meh…’ day- portfolio off much less than the markets: – .28% ,
    1/6th -1/7th of DOW & SPY

  4. Nothing really happened today. I’m not seeing much of anything below $25…nothing to buy….nothing to do.

  5. I went Mr. Mayaghi (HHyyyYYyaAhHH!) on the Krane Shares and have been steadily adding as they continue to drop. KHYB has a nice yield, short duration, and not much correlation to US debt (at least according to the model I ran). Best to limit the position though, as a small asset base and frequent blow ups, can and do occur in EM. I would like to see it base quickly or maybe have an upgrade through some political support to hold longer term.

    I bought PAX as a small flyer position based on a Credit Suisse research report I saw at Schwab. Didn’t they get Achegoosed (C Suisse)? Anyhow, we’ll see how this one goes before adding more.

    NBB hit my limit order. I like it the best of the taxable munis. I had sold it for a profit already this year. I would continue to add more on weakness. Better to invest in the states than the Fed right now IMHO.

    I also took a flyer on RISN. Very small amount, but a lot of these multi-asset funds should pay some nice cg’s that they have been sitting on all year. This one seems to have minimal price movement as well, but will need to verify before adding more.

    The last buy I added today was NUSI. I recommended this before on III and it has done well for me. You can even hedge NUSI’s price movement using inverse ETF’s (which I have been doing mostly as a thought experiment). I think their use of the collar strategy works better compared to just a straight covered call technique (IMHO).

    NUSI and NBB would be more long term if need be. The others not so much with a hold and flip for both PAX and KYHB. RISN, I may just hold until the cg’s or maybe longer.

    I also added on 9.27.21 more….
    PSECPRA – Yes, I know its hated.
    GMLPF – Tried to buy it again today 9.28 at Fido….no soup for me 🙁

    1. NWGG–I have plenty of psec-a and will be adding. Yes it is one of the most ‘hated’ issues.

    2. Thanks for the reminder of NUSI and NBB. I own them as well and just now added more to NUSI.

  6. Picked up more BRG-D today after selling it last week for 25.45, and up on my CUBI-E

  7. Trading the Pink No Info issues without bid/ask prices is exactly how it would be if every exchange/network was a “dark pool.” There might or might not be open buy/sell orders, but since you cannot see the price you are in the dark on what price to set your order at. There are some that propose that model for ALL trades with the claim being it forces investors to do more research setting “proper” prices. LTSF and LTSH both traded @ 12.00, down ~ 34% from yesterday’s close. Volume was microscopic, 750 shares on LTSF, 136 shares on LTSH. I bet the buyer(s) never expected to get filled at that price.

    We have small amounts of LTSH in some accounts, but no open orders to buy or sell.

    If you can find a brokerage that allows you to trade these issues, it might be an interesting time. . .

  8. SEC with their infinite wisdom has hurt the diligent, safe investors of the OTC baby bonds and prefers. this is such BS that it’s nauseating. Worst of all, I can’t even buy the LTSF, LTSH LTSK dips nor buy the GMLPF dip.

    Truth is definitely stranger than fiction today.


  9. Somebody got slaughtered for 136 shares? Welcome to the SEC “protecting retail” I am pretty sure Gridbird would have paid more than 12 I know I would!
    I had a slew of GTC orders cancelled this morning at Fidelity including some Canadian stocks that file with SEDAR and I get as much or more info as NYSE stocks.

  10. These current events combined with the new otc rules has given some great opportunities. Wake me up when new preferred of a decent quality start getting issued at 5.5%. Otherwise what exactly will people buy right now? Just sit on cash and pray that every company who wanted to borrow will race out to borrow more at higher rates?

  11. It wasnt actually a bad day at all for me pretty much nothing happened. Oh wait, I missed LTSH…Never mind, it was a very bad day, ha!

    1. Oddly enough, I had a pretty good day.

      I have been out-of-pocket for the last couple of weeks, so I am not able to do much in “real time”, but several of my GTC sell orders filled and I ended up the day with about 2% more cash than I started. Really surprised me that some issues spiked up on a day like today.

      Not sure what I will do with the cash, but there are worse problems to have.

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