Investing is a mental game–and mentally everyone is worried this week. Of course not much has really changed since last week–but all the folks who were deniers of higher interest rates last week have now done an about face to say ‘higher for longer’. Certainly we can see they are much higher today with the 10 year treasury yield ramping up to 3.93%–up 10 basis points. Finally all the Fed yakkers are getting to folks.
Right now the average $25 share is off almost a 1/2%–surprisingly it isn’t worse.
I’m doing what I always do – watching for potential buys – but not very motivated to pull the trigger since we are being paid to be in cash and there are no real ‘bargains’ out there at this moment.
I am watching the Affiliated Managers (AMG) baby bonds and the Federal Agricultural Mortgage (AGM) preferreds. I had decent positions in these issues up until a couple weeks ago when I trimmed off a bunch to capture some nice 10-12% capital gains–now I am looking to re-enter when they set back some more.
The MGR 5.875% Affiliated Managers baby bond has set back 6% in the last 2 weeks from up above $25 not sure at what point I buy more of it–no rush–maybe a dollar lower would be a decent place to enter a Good Til Cancelled buy order.
9 thoughts on “Wow!! Starting the Week on a Sour Note”
I have no problem taking a hit today on share prices that have a par value for higher interest rates on CDs and US Treasuries tomorrow. It seems for the purposes of mass media and internet click bait sites the benefits of higher interest rates for Fixed Income investors is non-existent.
Tim… Ty .. everyone who”s selling, for the bargains , still buying , $3- 5 below par and 6-7% return ..98% of my preferred stock are below Par Now..Georges
“we are being paid to be in cash and there are no real ‘bargains’ out there at this moment.”
Exactly, probably will retest the October lows. With The Fed on the gas pedal for higher rates and the SP500 PE at a big fat 18 times earning and corporate earnings a big question mark, it’s great we have 4 1/2% $MM (and going higher) to wait this out.
11-month T-notes were selling at 5.04+% yield at TDA this morning.
before this is over I think equties will blow thru the Octorber low and put in a new bottom.
When the markets realizes that the Fed is serious and committed to crushing inflation, they will have to reprice assets lower given the risk. Good time to short equities – I like REK, housing short.
Yeah, the naive Fed thinks that increasing interest rates will really affect inflation. It has nothing to do with the fact that the US Government has added 25% to our money supply ($6.5 Trillion) since 2020, right? Inflation was bound to occur because of this radical act. Milton Friedman was right….J Pow is wrong.
You’re probably right Windyducat as the Fed as a track record of breaking the economy.
Very easy to run through stop signs when are looking in the rear view mirror!
I agree, been selling perpetuals for some time and dumped some more at market open before they sagged. I only own 4 perpetuals and only one (CNTHP, Alpha’s fav, lol) with anything of any amount to it. But hey I did buy 7 shares total of BACRP at 175 and 190 I sold earlier today at at $210 to keep my amount over 100 shares. What a riot this nut bag issue is. I bought 125 a week or 2 ago in $130s, and sold over 25 of them from $200 up to $225, usually 1 share at a time. The damndest thing I have ever seen.
Still own some adjustable live floaters as they are still doing just fine. But, some of them have been lightened up on past week or 2 and some of this herd could get culled too.
Grid, re CNTHP – a solid issue though not yet a buyer. If its recent price trend continues south would at some point be a welcome add to LT holdings.