Where Do We Go From Here?

Well it has been a decent morning for me–not profitable, but not negative.

As you might suspect I bought modest positions in Proshares Ultrashort SP500 (SDS) late yesterday. As always when you hold these short positions it is a question when to unload the shares.

It seems like on these 500-1000 DJIA down days the safer issues (CEF and utility preferreds and baby bonds) are not moving much lower–seems like shares have moved to stronger hands after the illogical sellers unloaded them last week.

On the less than investment grade issues seem like there are still plenty of bargains being created–although todays bargains may be next week fire sales. Look at the big loser list.

This afternoon it will be interesting to see if folks ‘bail out’ prior to the close. Odds are I will hold my SDS position through the weekend–opening myself up to a spanking on Monday if we get a pop–thats life.

After the strong market performances this week my personal accounts have now moved nicely toward breakeven for the year–not quite there yet. I have 1 account down 2%, one down 4% and another down 5%. If I had more time to spend at the computer those numbers could be better–but I am satisfied.

66 thoughts on “Where Do We Go From Here?”

  1. I really like your lists of preferred stocks ranked by “Alpha” and “Yield”. Can you explain how you determine Alpha? Thank you.

  2. Beware the words and actions of the pump and dump crowd.

    We have already hit the average decline of 24% – 32% that the stock market hits during a recession (two quarters of negative growth). Is it overdone, is this really a recession? Everybody will have their own view.

    If you want to believe that a drug company will find an effective treatment (not even a vaccine), we could snap right back.

    But even on a snapback, we cannot get rid of most of the 2.5 – 3 trillion in debt we have started to incur (taking into account both bills).

    Maybe debt doesn’t matter at all. Maybe this time it is different. I don’t believe that at all. But I have been 100% wrong about this in the past. So my track record is one NOT to follow. But, I will stay the course in those beliefs.

    We cannot snapback away this amount of debt.

    For the most part, I held my preferred holdings. I did buy HT and am holding it mentally counting it as worth $0. So, a snapback rally would be perfect for me to root for but unrealistic for me to believe in. I would sell such a rally.

    I do believe that this is time to consider common stock to replace the preferred holdings of the same company. As long as the common stock has been cut in half. Better long term risk/reward in my view. Exceptations to cut in half would be utility companies.

    1. Agree with you Steve, with regards to moving some money over to the common side. I’ve been about 50/50 common to ‘fixed’ invested, which is down from 100/0 over the past 3 years or so. But now I see a lot of opportunity with the likes of MSFT, NEE, CSCO, DIS, KO, PEP, ABT, D, and so many other commons brought down with the swoosh. I’m still up well over 125% in cap gains in some of these, even with the downturn this past month. Jumped back into AAPL and am already up 10% in a week and so on. I’ve got ~30 buy orders in on the ‘fixed’ side, but I’m not chasing anything as the bobbleheads keep saying we’ll retest the lows. When we do, that’s when I’ll be doing my biggest buying.

      Pairing buys is also an option, i.e., NEE common and NEE-N/NEE-K fixed
      SO common and SOJA/SOJC fixed
      SRE common and SREA fixed
      T common and TBB/TBC fixed

      These pairs make sense because when one side is down, the other can offset and you get paid to wait either way.

      1. Have to say agree with Affinity and Steve A. Respect everyone on here and most of you have invested in preferreds much long than i have. Buy trading preferreds is not why i got into them; hold and take my dividends is what i need as high quality bonds dont offer nearly enough for me. Buying the dip on preferreds not something i’m comfortable with — obvious reason is how do you know it’s going to pop back up? Im trying to focus on good YTC opportunities with IG issues. Also, Affinity, I’ve always had commons (split into growth and income producing) and have shifted more that way. Picked up KO last week at a 4% yield. I see that as an opportunity u don’t often get, and hold it forever. Have also split commons with preferreds, as you mention, like with T. There are commons that are good companies that will be around a long time unlikely to cut dividends, we can argue over them but some of the banks (WFC) are offering rare opportunities in dividends plus on various days some excellent yield on non callable bonds. Unfortunately, there is not much written in the press about piecing together an income strategy for retirment like this — some preferreds, some bonds, some income producing stocks, some growth stocks, some cash. What i have learned the hard way (from people here) is keep your preferred investments in high quality issues and don’t get too greedy.

        1. Good commentary, Franklin. Some here ‘juice’ their returns by flipping frequently or day trading the ‘fixed’ side issues. Since I’m still working full-time running my businesses, I prefer to ‘juice’ my returns by blending the common side holdings (cap gains/growth) with the ‘fixed’ side preferreds/ETD/trusts (my self-made annuity or social security).

          I’ve found that works for me. I love the fact that I don’t have to worry about whether social security is there for me when I get to collect it. I don’t think it will every give me back what I’ve put into it or what I “deserve to receive back. It’s foolish to rely on the government, IMO. So for decades, I’ve been building my own support system.

          1. AFFINITY
            You can make things a bit more complex but also for me clearer. I have my accounts split between equity and fixed income. But then about 70% of the fixed income is targeted at munies or IG product. 30% of the fixed rate portion used for more aggressive things. The split between equity and fixed rate depends on your situation but something between 20 to 35% equity seems reasonable at your probable age. best sc

          2. Affiinty, I guess I have a different perspective. I always hide out in the “government/public” sector. The only people I know that retired in their 50’s or early 60’s are public (govt.) employees with pension plans. The federal budget is now over 50% public employee benefits. It is we in the private sector that are at greatest risk.

            My largest holdings are in “too big to fail” companies. During the recent turmoil, I have observed small cap performing poorly. Large caps will receive government assistance same as public employees.

            So to mitigate the risk for working in the private sector, I invest in government “too big to fail” securities. Microsoft, Johnson & Johnson, Amazon, Apple, Boeing etc. have given me generational wealth. Even with this market I still have a gain in these securities. (But certainly my portfolio value is less!) Simply, time in the market. I have no doubt these companies will not be allowed to fail.

            1. TNT,
              I am a 100% private sector person and plan to retire at age 50 and without any pension or other help until I qualify for SS – provided I make it that long, which is not expected. That’s why it has been my primary focus, to build an income stream that will/is a salary replacement.

              While I’ve always been a small biz advocate, since I’ve been investing, I’ve seen only one place to go for outperformance and that’s the large caps. I’ve sprinkled in mid and small caps along the way, but in my experience, large caps are where stable long term wealth are created.

              I totally agree with you on many of your names. My top 5 names would be: PG, KO, JNJ, MSFT, T.

              I’ve long been a fan and investor in the Dividend Kings and certainly the Dividend Aristocrats. Any company who has raised their divided for more than 50 straight years has demonstrated that they can power thru most anything: 87 crash, dot com bursting, taper tantrum, great recession, covid-19. Long live the LOW, MMM, EMR, CL, EMR type names.

        2. Franklin the reason over time more conservative investors prefer higher quality (though many may not understand the details, which is fine) prefereds boils down to avoiding a high yield chase game that is betting on leverage and liquidity. Lose the battle with either one in those high yield buys and its game over. Preferreds crater right with the common.
          When economic upheavels or recessions kick in leverage destroys and lack of liquidity access to capital is game over.
          Lets take a recent example this week why utes trade with lower yields and why. Dominion… Not my favorite and dont own but still the example is perfect…
          Dominion Energy (NYSE:D) has tapped $1.2B in new bank lines while selling $750M in notes, while also saying it had no plans to draw on its $6B master credit facility.
          Just look what D above did…Its positioning itself for turbulent waters ahead…And as you see it was able to do what no Mreit or dirt bag leveraged reit could do now….Hit the debt capital markets AND be sitting on a $6 billion untapped credit facility.
          They will have the cash and liquidity to survive near term problems. Stressed high leveraged outfits are left begging for handouts or staring at the brink of insolvency…Liquidity is gold in times of trouble…

          1. Thanks Grid. Have learned a lot here from reading your comments and have invested a lot in high quality utes as a result. Unfortunately have chased some yield with lower quality issues and i’m paying for it (literally!) right now but they aren’t a huge part of my holdings. Your words about quality, leverage and liquidity should be a primer for every new preferred investor.

    2. Would PSEC qualify?. John Barry the CEO has bought 100 Million dollars worth of the common stock at prices 4.19 to 5.01 all in March.
      PSEC also tendered (bought back) 28,000 shs of PBB i believe at $17. This saved them $200,000 in having to buy that back and the interest paid on that.
      Does one buy the common instead of the Preferred? You will get a better yield as well.
      Other inside buys;
      MNR $400,000 inside buys in March, UMH $300,000
      ARR $ 315,000 inside buys in March
      One can check others on
      http://www.insidercow.com/

      1. Newman,

        People either seem to love or hate PSEC. Very little in between. It’s never been a SWAN stock from all I’ve heard and participated in. Personally, I’ll never touch it again. Traded it some and got burnt plenty with their ‘funny accounting’. I’m a bit of a chartist. Just look at a long term chart… They are in way worse shape now than during the depths of hell in 2009. That’s not a bullish signal by any means. That should have scared them straight back then, but it doesn’t appear to have changed them much. They continue to rob Peter to pay Paul if you study the financials over the years.

        This is just my opinion. If you like them, go for it. No problem at all with some spec positions in the portfolio – I have mine… And they are the ones bleeding the most right now and the most likely to win the race to $0 value. ARR-C is one spec I took on. If only I had known. Lesson learned.

        I’d much rather look at the powerhouse long term chart of NEE and jump into NEE-N right here. Or take a look at D and jump into DRUA. Consider BAC-B or JPM-C. Look how ‘little’ they dropped during this recent swoosh when some preferred dropped up to 90% plus. BAC and JPM are going nowhere and thus, holding those juicy 6% preferreds are a way to almost guarantee a SWAN retirement funding, if you know what I mean.

        MNR is a much weaker REIT, but I hold it (MNR-C). However, the cream of the crop in REIT land would be the common of O (I own 2 trucks of it), common or preferred of PSA, common or preferred of NNN, etc.

        Just my opinion… Not knocking what anyone else is doing.

        1. AfI, I have no desire to buy Reits or BDC companies.
          I am licking my wounds and awaiting another selloff wherein i buy the IG preferreds and hang on for yield and Cap Gains.

          I actually bought 1535 shs COFPRJ at 10.97 and sold at 15-16 .
          I don’t expect IG issues falling that badly again, but my cash is at 75% now.
          I will wait for the Virus peak and then leg in.

          Parrotheads anyone?

          “Wastin’ away again in Marketville
          Searchin’ for my long lost Capital Gains
          Some people claim that there’s a Virus to blame
          But I know it’s nobody’s fault”

          1. Great score, Newman! Especially on the lower yielding COF offering still floating around out there. I’m holding WFC-Z, which is pretty comparable to the COF-J.

          2. Amen Newman. I only have half your cash level. I have just about all the debt I want though (I usually allocate ~70%). Like Franklin was saying, I want some common equity in the near future. The stuff I want is still overpriced – MSFT, GOOGL, PSX, ASML, TSM, JNJ, MMM, LCRX, DIS, QCOM, UTX, AMZN, CVX, AVGO for example. Only a couple have reached levels where I would start buying, and none have bottomed IMHO.

    3. new drugs either medicines or vaccines may take weeks or months to develop but they take much longer to confirm that they have no side effects- it is the testing of new medications which really takes the time not always the development of the product. The FDA could wave the need to do such testing during emergencies but this would leave many docs uneasy. Vaccines are the same thing i.e. you need to be able to study the impact of the product on people over a prolonged period i.e. short term is 6 months and longer term could be two to three years. Under present conditions vaccines under development could be reduced to development within 12 months but what this means is that we do not fully know the full extent of side effects. SC

  3. The big difference between this crash and those of the past beyond the obvious is the interest rate scenario. In the past, you could move your money into anything else and survive with the yield of a bond or a CD. Now the government is literally asking you to pay them for the privilege of owning short term treasuries. For any income or growth investor, you sadly have no choice but to put your money in stocks. That played out this week, and will shape the market direction once stock estimates and guidance have some validity again.

  4. My guess is the S&P500 tests the 1700 level over the next three months or so, depending on how much impact the virus has. I do not expect there to be a V shaped recovery at this point.

    1. I suspect the economy has rough times after the virus is over due to repercussions of the shutdown and stimulus. A short term rally after peak virus is past but that’s not the end of the bear.

    2. V is the favorite letter in Wall street. I agree that it’s not likley this time around. Not sure if we go down to 1700 but a return to the old high with many millions unemployed and earnings slashed left and right doesn’t appear to be in the cards. Lots of chop in the days and weeks ahead and we should be getting better opportunities to pick up some good issues for a longer term hold.

  5. FWIW regarding mkt commentary, now that I’m working from home I try to tune into Bloomberg Surveillance in the morning. Radio over internet. Interesting discussions, often way above my head, kind of like reading III used to be for me, but that’s how you learn stuff – the Academy of Gridbird (and too many other masters to mention). Aside from hanging with my kids back in the day , haven’t really watched TV since Reagan was president. Wishing everyone a restful weekend, try to tune out if you can, SNAFU resumes Monday.

  6. I just must say that until I found Tims great site that I did not realize there were so many day traders in preferreds. I have always deemed them as good investments until they get called. I have never day traded.

    1. Until I discovered this site it seemed like I had the technique to myself. Didn’t know anybody else who was doing it. Not exactly “day trading” though I sometimes close a position the same day I bought it. Whenever opportunity strikes.

      My biggest trading account is at a new high. I was making trades constantly but unable to keep up with the falling prices. Now that it bounced back I have something to show for it . ….until the next leg down.

      1. I know quite a few people who are day trading pref spreads with lots of size. It has been a very profitable period for the nimble

        1. Playing the spread is one of my best tactics in a slow moving market. In a wild market I’m missing too many bargains that way. Meanwhile price improvement has been incredible lately. Often midway between bid and asked, sometimes more. So when I see a good price in a wild market I jump right in before it disappears. And playing the spread risks that the price will leap right past you.

          1. I missed out on a huge mint by not dropping a couple credit notches in trading recently. But in reality my stash dropped by a smaller amount because I wasnt ever in those to begin with either. In the long run it is better for me to be consistent and just play in the sandbox I am comfortable playing in.

    2. One way to think about is is to look at your holdings and compare it to yield metrics of similar securities. In theory it is no longer a good investment if there are better yielding alternatives out there.

      1. I held on to some “bad” investments because I was trading them on the way down. Those gains put a dent into the losses and made them not so bad invesrments.
        I haven’t recovered from MITT and TWO preferreds but those are the exceptions.

    3. Chuck there is nothing wrong with that. But I dont consider it day trading when at times the market is just begging you to take easy money. I did a lot of them, but I will mention the last one yesterday and Wednesday as it was the last one.
      INBKL and INBKZ…The only difference is a slight longer maturity of Z, a slight longer fixed period of Z and a slight smaller adjustment when it floats to L. INBKL was constantly moving upward and onward back over $20 and Z was languishing in $14-$15 range. It was inevitable Z was going to climb.
      I really didnt want to buy Z but it was so obvious what was going to happen I had too.
      Then the other types of “day trading” are just exploiting buy/sell imbalances of illiquids. It doesnt matter whether one owns Wisconsin Electric, Union Electric, Indianapolis Power and Light, Connecticut Power and Light,etc. The credit quality is all the same. When one rises from buy imbalance you dump and when one drops from sell imbalance you buy.

    4. Chuck P
      I didn’t want to day trade but this market is’t normal, its surreal. What you thought would be good solid dividend payers suddenly lost value and were 8 to 10 dollars less then they recover some of what they lost only to fall again and looking at what we know of the economy and our past knowledge of a company you end up selling to buy at a lower entry point then turn around and sell it again to recover some of what was lost on the initial drop. Hoping at some point the roulette wheel stops and you hope you landed on the right number when it all settles down.

  7. PSA-C has an 11.1% ytc if anyone interested. Call is in one year on 5.13% coupon. I grabbed some.

    1. PSA-C is not a bond. PSA-V, X, W, and B all pay higher dividends and would most likely get called first if. However, PSA would have to issue somewhere around $1.25 Billion to call in those 5 issues. That’s not likely to happen in the next 2-3 years. So in the mean time you’ll get around a 5.4% yield on one of the safest preferred stocks there is.

  8. Nice to have things return to normal past 2 days (Monday who knows). Market in general goes up my stash goes up and when market goes down like today, my stash still goes up. I like the return of the good old days! 🙂

  9. I’m glad I don’t listen to biz news! I do have Bloomberg on volume off and even that’s too much for me to take on any given day.

  10. Where Do We Go From Here?
    It’s all about the virus now. The Fed and the government have opened their fiscal and monetary firehoses so there goes the balance sheet for both. Unemployment will go even higher. I had to layoff all 4 of my employees today and I’ve never had to layoff anyone in 25 years. So ya, things are ugly out there and it’ll take a while for things to settle down. Wall street can skyrocket when you have 3.2 million new applications for unemployment and Manuchin can say that millions becoming unemployed is “not relevant” all they want. Just don’t say that to those who have to wonder if they’ll be able to pay their bills next month.

  11. Tim,
    Thanks for your post on the mReits on Wednesday. Helpful in these chaotic times. Good luck with your SDS trade. I do the same with VIXY, crazy volatility.
    I currently own AATRL based on previous sock drawer comments. Like everything it has traded down significantly but given that AMG is a solid Investment Grade company it seems very over sold. I re-read the prospectus today to better understand the rules for deferring payments and it seems very unlikely AMG would do that unless their business was in severe trouble. Any reason not to be buying here under $30 ?
    Thanks
    Gary

  12. Tim, agreed. One of the better articles on SA is from Eric Parnell today, yesterday. He makes a case for the markets to climb in stages next week until federal #’s on unemployment come out next Friday and his prediction for coming April as companies report 1st qtr earnings. This is a trading market as you and some have pointed out, time to flip a few stocks and get some cash for next leg down which I think will test prior lows.

  13. Given it is a quiet day on the board, I figure it is a good time to ask some newbie questions.

    I don’t recall seeing any talk about BDC baby bond debt (Tim does have a post on gain which I read). Is this stuff generally as safe as CEF debt or does the cumulative feature of CEF debt make it far superior? Clearly BDC debt is offering crazy yields.

    What I see in the market place is that the highest quality bonds and cumulative preferred shares recovered very well and some are already close to par. I also see that ‘riskier’ assets had larger capital gains.

    TBC (ATT) fairly safe entry at 23 and shot back up to 25.5 – +1 year of interest in one week
    PRS (Prudential) ~20 – 25 better capital gains – +2 years of interest in one week
    SAF (Saratoga Investment – BDC) ~13 -21 – +4 years of interest in one week – wow and if they don’t go under even more gains to come.

    I can show this same relationship with many cumulative preferred issues.

    Now the above makes sense, TBC would seem to have stable revenue, PRS possible large insurance losses and SAF revenue damage from bankruptcies.

    In a high income portfolio, why not take a little more risk during these episodes and flip into lower yielding safer ones after capturing the capital gains?

    Finally, I understand math like yield to maturity / call but am new to term preferred and exchange traded debt. Other than loosing a premium to par, what are the other gotchas when these get called or covenants like DUKEB having the right to suspend dividends for 10 years?

    1. Handi, sounds like you have a good understanding as it is. I just don’t like BDC’s in general as they can play more games and are not transparent about loans they have out. At least my experience say with several. I don’t want to babysit my holdings. Example, which has happened, just don’t ask me to research it. BDC has loan due but borrower can’t pay back, so BDC rolls it over to show as new loan with borrower still current. What really is truth is they may never pay it back especially if times get tough. Be forewarned. need to be able to see what companies they have loans out to.

    2. handicpd, re: the risk to insurers – I think the risk could potentially be mitigated for exclusively Covid-19 losses by force majeure clauses. This would likely not apply to life insurance but could apply to annuity contracts, property/casualty, etc.

      For BDCs it will be dependent on what happens to portfolio companies, but the risks are certainly less than in mREITs. How many of their portfolio companies will BK, and what will recoveries look like? Still, I personally only own the debt and not preferred or common equity of BDCs. Risky enough for me.

  14. I think we go lower from here, but it seems like that would be too obvious.

    I’m on the fence about buying PSA-W today

    1. Consider PSA-H. Trading near par, it has 5.6% yield with 4 years to 1st call. It is also about 15% off its high and with treasury rates stuck ultra low, you have a good shot of getting back there in the next year.

  15. C’mon Grid, do you really think he was that far off on his Herbalife bets?

    I do agree, he did clearly state that he was buying stocks but that was after he ranted for quite a while about the end being near.

    1. A4I, Ol Icahn whipped him good on that one didnt he. Thats why no one should quit listening until the end, I guess. I did the opposite and didnt pay much attention to his early Fathers Day love, but listened more attentively at the end…Wasnt swayed to buy Hilton.. Im not as fearful of corona as I should be…But there is no way I am staying at a germ virus infested hotel room until the problem is solved. I would suspect many feel that way.

      1. I like Icahn and Leon Cooperman, but my fav has to be Ken Langone – the co-founder of Home Depot. No way to get brutal honesty about what’s happening in the markets like listening to how these guys tell it with a combined, what, 150yrs experience or so?

        These hedge fund guys, to me, are amazing because they talk out of both sides of their butts at the same time – but there are a few who seem genuine.

        1. A4I, Investors can be odd ducks…Consider one I own ASRVP. Anyone could have paid market at $24.65 yesterday and received the over 50 cent interest payment. Instead they want to buy exD miss the payment and presently have a standing bid at $25.20…Life is a mystery….

          1. I haven’t seen anyone talk about the details of ASRVP here, but it looks interesting. Any hard to find fine print I should know about it?

            1. Irish, Simply put it was one of those trust debt issues that was legal back in the day where a bank could issue a debt wrap it inside a trust wrapper and then package it out as a tradeable debt issue. Via the trust mechanism the bank was able to count the debt as capital (like a traditional non cumulative bank preferred is now) but unlike the preferred, could also write the interest expense off on the taxes unlike what a preferred can do today. It was grandfathered being the bank is less than 15 billion in assets, as that was the threshold for grandfathering with exception of a few TARP big bank issues.
              The fine print is actually not the concern but the big print is. Its a small little holding company bank with a few regional branch divisions in a non growing more economically challenged part of PA. It is a union bank which is basically unheard of, so benefits are better for the workers (some are still accruing pensions, good for the workers not so much for a small margin business like a bank as an investor). They also got fat cat executive salaries for many of the “suites”. So the bank muddles along. They service a lot of local loans for small businesses and mortgages of the area so they will be exposed to that and the current situation we are in.
              The issue was originally about a $35 million issue in late 1990s. The bank got into some trouble around 2004 and struggled to pay the issue. So they made an offer to convert ASRVP shares into a certain amount of common stock. Roughly 2/3 float accepted the offer so only about $13 million of the ASRVP float still exists since about 2004. Ironically they made it through the 2008-09 bank crisis without any problems paying the interest on ASRVP.
              I have owned it quite often over the years and have about 500 shares. I keep my position modest here and consider it a part of my high risk bucket. Would love to load up on something like this but being as small as it is and such I keep it modest and do monitor their filings. They give a rather nice folksy narrative almost normal person readable quarterly SEC filing under ASRV.

  16. Is anyone managing to make money trading VXX? I keep thinking there must be a way, but it’s not obvious.

    1. David,
      I trade VIXY almost daily now. I like the ETF better then the ETN. Same theory though. Very volatile both ways so you must limit your risk. I open a position pre- market if the futures are down more than 2%. As soon as the market opens I establish a bracket on the trade with a trailing stop exit and a proft exit so that as the position gets more profitable the trailing stop moves up with it. I usually set the loss limit at 2%. I suggest you start with small amounts to see how it works. Good luck
      Gary

  17. I haven’t committed new capital yet, aside from upgrading the quality of certain sectors holdings I am dipping back into the options market. The premiums offered are nicely priced given the alleviated volatility. Selling SPY cash-covered puts and buying back on up days been a nice way to generate extra cash.

  18. I am using a different strategy than most. Will it work? Time will tell.

    Let’s use Ally/PRA as an example, I brought it at 24.80 when the downslide started. I sold it today at a 12% loss. I have replaced it with the exact amount of Ally. Why? It trades in the same manner as the common stock. If everything were magically reverse, it would be 100% gain paying a 4.7% dividend. The preferred has NO chance of gaining 100% to trade at $49 per share.

    I am considering that whenever the loss on the common stock hits 50% or more. Considering CTL which is down 13%. Doesn’t take much of a recovery to get 13%. An alternative way to do this, is to buy both and sell the common when you have recovered any losses. At 8.90 per share, the common only has to recover to $10 for me to recover the CTBB loss I have.

    1. Maybe I should do that with AT&T. TBB @ $25.05 has a yield of about 5.4% vs the common @ $29.86 with a yield of 6.8%. The bonds probably have a 10% upside and a 10% downside, vs a 30% upside / 15% downside for the stock. Not sure I’ll do that but worth considering.

      1. My preference is to do this when the common stock is cut in half (offering a potential 100% gain). In own a small amount of AT&T preferred. Holding it until it recovers.

  19. Tim, I think you sds will work even if we bounce a little higher. I see the next move lower taking us in the 2060-2000 area. Worst case scenario 1708. ATB

    1. TimH–I am in and out every few days–purely a crap shoot for me. I see no reason for the markets to head higher–now. Of course I don’t think we know anything yet on economic destruction–think it is worse than markets are indicating.

  20. Looks like a bear market rally so I’m trimming some positions. Not major selling but enough to notice.

  21. Iam addicted to CNBC and have been for many years now. I can tell that there is a definite change in the atmosphere of the show. Just sitting here listening to the Anchor of CNBC get into an argument with a guest (Jim Liebenthal) over if he DID or DID NOT recommend Alaska Air. I don’t own it so no big deal to me but my point is if you watch these talking gurus there is a definite change in the whole landscape and you can see and hear the nervousness in the market. Just like Bill Ackmans 6 page letter from his wednesday speech of 28 minutes of how he was “Jumping out the 8th Floor Window” and when he said “HELL IS COMING” creating a huge continuation of “SELL NOW”!!!! All the while as he was turning $27 million into “Over $2 BILLION”. These folks are truly something else!!!!!!!!!!!!! Still not finding any bargains today on quality preferreds either.

    1. I heard that, Chuck. Unfortunately, the Judge cannot stop showing how much of a T_ _ _ _ hater he is and now he makes a ridiculous stand about someone’s personal/professional stock picks? On and on he went about the GM situation, which actually has numerous parts/angles to it. Juvenile. Same stupidity in the early morning with Sorkin. Same exact behavior. I think Ackman is in major CYA mode.

      I’m perpetually trying to figure out why we MUST retest the lows. WHY? Why is the de-facto requirement? Oh, right. Because it gives these guys another set of ways to game the retail investors for the most part. Dump and pump x2 or more.

      No need IMO to be buying anything today going into the weekend, but, also not selling anything either.

    2. Chuck, I listened to Ackmans interview on CNBC. I guess people take what they want out of anything. I didnt take it that way. He clearly said he was buying and buying distressed issues and gave names such as Hilton. There is a real living world and a stock world. I personally thought he clearly segregated his thoughts, but many didnt.
      He really isnt a market mover anyways. He was the butt of jokes for several years running as his funds lost billions in the big market upswing a few years ago.

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