Our site runs on donations to keep it running for free. Please consider donating if you enjoy your experience here!

Wrapping Up This Stellar Week

There were nice gains for almost everyone this week and it is certainly super to have strong portfolio gains helping to recoup some of the losses from the last many months. My personal gains were great enough to put portfolios back to the 1 1/2% off of all time high levels. Obviously my portfolios have been helped by having a heavy weight in shorter dated CDs and treasuries–but given my lack of dry powder now if we get further gains in preferreds and baby bonds I will underperform. I hope this week has been generous to everyone.

The 10 year treasury is trading at 4.65% right now a basis point or two below the close yesterday–kind of drifting waiting on employment numbers in 30 minutes.

Forecasts are for 170,000 new non farm payroll jobs being created in October–we all know the actuals can come in dramatically different from forecast. One would be silly at this point in time to forecast market reactions to the number–this week has shown that short term movements are impossible to guess–just like long term movements are near impossible. Bring on the CNBC panel – let them prove that they have no clue–just like the rest of us.

Just checking CD rates this morning – they have drifted down 1/10% since the week started (at least on Fido). 5.65% is still available on a 1 year (callable) from JPM–but for a non call 1 year from Goldman you will get 5.45%. We’ll see what happens – I am not in the market for CDs now – I have a truckload already–I am most likely to nibble preferreds and baby bonds.

33 thoughts on “Wrapping Up This Stellar Week”

  1. I took some profits in riskier names and deployed into safer names that haven’t rallied as much.

    This includes purchases of CSWCZ and JXN-A.

    1. Maine, I am curious as to your rationale for buying JXN-A, and why you think that is a safe name .
      I was considering JXN-A as well, but decided to buy CHSCM instead. Still have enough left to get a couple hundred shares, hence my question.

      1. Insbudget,
        That’s a good question which I don’t have a great answer. I don’t have a strong understanding of their business so I am relying on rating agencies and a cursory look at their business, especially their balance sheet.

        Their investment portfolio seems relatively conservative, much better than most of the banks.

        See page 23 of their Q2 presentation. Their office exposure is relatively low and in decent shape.
        https://s202.q4cdn.com/231638402/files/doc_financials/2023/q2/2Q23-Earnings-Presentation-Final-v2.pdf

        Lastly, my definition of “safe” may be your definition of “risky.” I have been lightening up on recent MREIT pref purchases, including the AGNC names which had tanked temporarily.

        If you are looking for safer, I prefer the high quality REITS. This includes the RPT and REXR prefs, both yielding close to 7%.

  2. Cashing out some, huh? I dont blame you. I do largely the same thing with a different twist. Instead of buying more something, sell something off at a slight loss to buy a similair ilk issue that cratered harder. Works the same way at the end of the day. I sold off 4 or 5 but I am keeping peddle down, since I already have enough safe stuff (and apparently going to buy more IBonds after your arm twisting, lol). Many issues were exploding up, but a few in my groupings I watch actually have sagged some more, so I am now going into those fox holes. Like HWM- I reentered at $49.50 today and that company is doing great. And then one old goofy one I hadnt been in over a year or two. The old venerable HL-B at $50.70. It bounces up and down a couple bucks during a day quite often. I noticed it closed over $52 today.

  3. Thieves all the way around. I wanted to sell some of a bond at a slight loss to buy a dropped preferred. TD sent me a bid to buy at $97. I thought that was fair being it was trading around $100. I immediately accepted and they immediately switched and offered $90. Turds…I have same bond at Schwab and they offered an ask over $97 and accepted my sell offer. TD was trying to screw me!

    1. Grid – What an eye opener! You, of course, know the reason this happened. It’s because TDA acts as a principal and, therefore, when they think they can rip retail to shreds, they’ll mark up their sell price or mark down their buy price by whatever amount they feel they can get away with….. Schwab acts as a broker with a set $1/bond commission, probably with a minimum and a maximum. So both are probably getting the bid externally from the same source but Schwab has no incentive to mess with it since they get their $1 per no matter, TDA not so much. It’s quite surprising that at this stage of the game regarding the two becoming one, they still have these diametrically opposed commission schedules and approaches…. This is surely one thing I will not miss when my TDA account gets Schwabbed… It’s why I never do bonds at TDA other than Treas auctions and CDs.

      1. Join the dark side and get an account at interactive brokers.

        They have the largest amount of bonds on offer of all retail.

        The only negative is that they don’t offer new issue.

        1. While IB is good, they do not trade some older corporate bonds that you can purchase at other brokers. I think it relates to the amount of bonds outstanding for an issue. For them, small size equates to roach motel if they want to liquidate your account.

  4. Hello, I am much newer to preferreds than most here. I have a question that I hope someone can help me with. I have 200 shares of CSWCZ at Fidelity. The research page shows it pays .4448 which matches the 7 3/4 %. The payment I recently received was $50.59. I calculate it should be 96.88.
    After a long talk with several Fidelity reps, I was told that was the correct amount. I pointed out it doesn’t match their info, but just got told that was the right amount. What am I not understanding about this? If someone would be so kind as to explain, I will be most appreciative.

    1. Doug, check Sandbox Page (older comments) for previous discussion.

      I still haven’t gotten my corrected amount at Fido.

      1. Thanks. I found the older discussion. What gets me is I was told by two reps the amount was correct. I explained it did not match their info, but got no satisfaction. I sold my 200 shares at a small profit, and am thinking about changing something, not sure what. But that is not the way I expect to be dealt with from a broker.
        I appreciate you taking the time to answer.

        1. Did you talk to the fixed income rep? He checked with the people that are in charge of these things and came back with a confident answer in a few minutes at 9am this morning.

          1. Thanks. Yes the second one said he was, and then he put me on hold for a few minutes and came back and said it was correct. I explained why I was baffled, and he said he would check some more and call me back, which he did.
            This was 10 or 11 this morning.

        2. Sadly Doug at any broker you need to get to the right rep

          I am guessing you just talked to one of the random front line desk jockeys – rather than a fixed income expert or someone more experienced / higher up in the food chain

          It was an error by the companies trustees. The front desk jockeys would typically be clueless. the correction once the broker receives the funds would be handled by their back office staff

          1. Thanks. I was told I had fixed income specialist on the phone. I have been at Fidelity for decades and this is the first time I have had a hiccup, so there is that. I hear you that it was caused by company trustees. I wish I had gotten the correct answer when I called like others did. But move on..Back to Mr. Reagan’s ‘trust but verify’ mode for a while.
            Thanks to all who post and to Tim for providing such a spot.

    2. I spoke with them this morning, the correct amount should be posted Monday. It was an error at the issuer side, and Fido is being slow to correct it.

      1. Thanks . Fidelity told me this morning it was the right amount. I am not happy with this event. I appreciate your update.
        I wish everyone a fine weekend.

  5. It has been a nice run. If I add back the RMD I had to take, I’m up 2 1/2% over my Feb 2d year’s high. Don’t feel it will last in this environment.

    1. Gary, quick post 5:30 here where I’m at. Past week has been crazy, not counting the 3% my wife is withdrawing the account is up roughly 4% and 1% over the all time high for the yr. Sold a few holdings at what I felt was decent gains even as they continued to go up. You can’t complain when you have a profit or break even.

  6. Grid, now that you mention it, I noticed my bond holdings never reflect current highs but they sure do like to show the drop in value when they go down.

    1. Thieves all the way around. I wanted to sell some of a bond at a slight loss to buy a dropped preferred. TD sent me a bid to buy at $97. I thought that was fair being it was trading around $100. I immediately accepted and they immediately switched and offered $90. Turds…I have same bond at Schwab and they offered an ask over $97 and accepted my sell offer. TD was trying to screw me!

  7. non farm payroll increased 150K, and prior revised down 40K

    Bond Mkt rally mode again……for now

    10 yr – 4.56%

    1. Has supply/demand completely gone out the window on all aspects of the Treasury market? How can this not be a violent over reaction to a pause in raising in the face of all the supply to come and at least in yakker’s mouths the continued likelihood of one more eventual rise and still higher for longer? I don’t think lowering rates anytime soon is in the Fed’s crystal ball yet, is it?

      1. My feeling (not based on any intellectual astuteness mind you) is that we will know this isn’t a head fake if the short end rallies as well. As of now, short end reaction has been fairly muted, but there is some movement last few hours.

      2. Was hoping long term rates would catch up to short term uninventing the curve. Historically this has never happened before.

        1. We’ll bide our time micah. It will happen. Just hoping it’s the long rate that goes up and not the short down.

  8. …. Bring on the CNBC panel – let them prove that they have no clue–just like the rest of us…. Excellent comment Tim. In just 2 days they go from, “there isnt enough money on the planet to buy our treasury debt issuances”, to long end plummeting 40 bps…. I listen some to ponder and reflect but largely just to fine tune. Typically for me it winds up being, “hurry up and do nothing”. That being having a big ballast in CDs, short treasuries, and IBonds, and a select group of preferred issues rotating in and out of on dips and rips. Past couple days have got me back to yearly highs. Should be higher but ahole bond brokerage thieves that have instantly raised the prices offered on my bonds available to buy past couple days, dont seem to have the same energy level to raise what they are worth in my account. To bad these guys werent sitting in my house right now as I would be dragging them behind the woodshed as I am typing,

    1. Grid, It used to be that you could call your bond trading desk and ask them to get a current bid/ask and they would then update the price in their system to reflect that. It has been many years since I did that and I have no idea if anyone does that now, but I am guessing not. Maybe someone wants to try.

    2. I was thinking about the “not enough money on the planet to buy our treasury debt issuances” and it reminded me that last I looked at foreign governments purchases of treasuries, they seemed to be down. I think a lot of countries are having to fund a domestic items with a lot of the money they might have invested.

      Less elasticity of demand is not a good thing when you are pumping out supply.

    3. Grid, Have found Fidelity to be consistently more friendly on “all” trades. In side-by-side comparisons TD consistently nicks us $1s on bonds (but your’s today was outrageously offensive), and dimes on preferreds.

      Relentless averaging-down over the last few months was getting uncomfortable, many positions were bloated and loot was short. But math is math and held out; the last few days blew the lid off. Tranche-by-tranche swapped about 6,000 preferred shares for cash today with sell criteria being at least one year’s divvies baked into cap gain but many had two or more, a few had 3 and one was almost four years of divvies baked-in (PSA-something). You made me look; past couple of days got me to new yearly highs. Will be interested to see where the dust settles over the next few days.

      1. oops. sharing details of the wild couple of days with the wife and something didn’t sound right so went back and checked…”many had two or more and one almost “three” not four. duh.

Leave a Reply

Your email address will not be published. Required fields are marked *