Preferred Stock Investing-The Good , The Bad and The In Between 2015 - 2020

[Mulligan]

Quote:

Originally Posted by bobandsherry Thanks for sharing info on TY-. Low volume may make it hit/miss to get in/out, but looks like decent return. Just curious, what % of preferred's make up your portfolio? Perhaps you mentioned previously but I don't recall.

About everything....Thus the mixture of adjustables, term dated, and preferreds... This is money I will never use. I dont even spend but about 60-65% of my monthly pension, and I am getting my COLA next month.

[Coolius]

I have held TY- for a few months now, bought at higher prices, around the $51.05-$51.10 area.

No concerns about this one, but also not expecting much in the way of cap losses/gains either.

A really boring holding, not much excitement about it, but that's just the way I like it.

[bobandsherry]

Quote:

Originally Posted by Mulligan About everything....Thus the mixture of adjustables, term dated, and preferreds... This is money I will never use. I dont even spend but about 60-65% of my monthly pension, and I am getting my COLA next month.

Nice position to be in. I was wondering what you've had with returns with that portfolio, but with pension more than covering your living expenses I can understand your alignment with preferred's.

[Winemaker]

Quote:

Originally Posted by Mulligan About everything....Thus the mixture of adjustables, term dated, and preferreds... This is money I will never use. I dont even spend but about 60-65% of my monthly pension, and I am getting my COLA next month.

Brother, can you spare enough for another FIRED brother to buy some wine?

[Mulligan]

Quote:

Originally Posted by bobandsherry Nice position to be in. I was wondering what you've had with returns with that portfolio, but with pension more than covering your living expenses I can understand your alignment with preferred's.

I really only went heavy a few years ago. Returned about 30% previous two years, and dropping to about 10% this year. The way I have moved my stuff around the past few months I suspect at best next year we are looking at the yield return of about 6% at best. But with a lot of them term dated or adjustable I really dont see much reason to mess with those. Throw in the ones I dont want to trade, and I dont have enough of the others to flip like I used to. Previous couple years one could make money flipping prefereds about every day as the illiquids I invested in were pretty jumpy. But past year they have crept upwards but not much bouncing to take advantage of.
I went leaning towards term dated and adjustables lately to prepare for inevitable drop in prices if yields do rise.

[Mulligan]

Quote:

Originally Posted by Winemaker Brother, can you spare enough for another FIRED brother to buy some wine?

Dont give me that, Winey. You could buy me and Chateau Sainte-Marie out with your cash and still have plenty left over!

[pig pile]

Quote:

Originally Posted by Mulligan Pig, here is a bit of interesting history for you...WGLCP was issued $100 par at 5% in 7/1958 when 10 year was 3.2%.... So you have in essence a 4.95% yield today with a 2.4% treasury. So on relative terms as much as one would find surprising it is a better value deal today than when it was first issued.

Crazy!!!!

[Mulligan]

Forgive us for we have sinned....Coolius and I both bought a small amount of MH-A today.

[Coolius]

Yes, yes.

Mully & I listened to the siren song and fell right into the cesspool.

MH-A, past first call, selling under par. 8.25% yield.

No risk of loss if called, in fact will be a small cap gain.

The next dividend is in 2 1/2 months time, for $0.50 cents.

Only real and present danger is the BK of Maiden. I looked at the related companies Nat Gen, and AFSI - nothing appears to be bad there ( not that they are pristine companies, far from it ).

This is going way out on a limb for me, I'm usually not this adventurous, LOL

[Winemaker]

Let's have full disclosure, I sold MH common to break even some time ago, and own AFSI-A.

[brokrken]

In on GWSVP at $26.40

[Mulligan]

Quote:

Originally Posted by brokrken In on GWSVP at $26.40

Couldnt resist huh, Ken? I hate to do this but I got it in my taxable account in case I get a call slam.

[Mulligan]

Quote:

Originally Posted by Winemaker Let's have full disclosure, I sold MH common to break even some time ago, and own AFSI-A.

I think I am getting confused....There must be 2 Winemakers posting here... One that complains about his low risk 5% preferreds getting called....And a second Winemaker you trades in higher risk casualty insurers.

[Mulligan]

I pulled the plug on a few “B” league preferreds and moved more money into LANDP today at $25.88. Goes monthly exD early next week so purchase is really $25.75. This has moved into the number 2 hole on my preferreds having well over a 1000 shares. Anytime I can move into term dated or adjustables it helps reduce my perpetual exposure.

[brokrken]

What's the problem with having too much perpetual exposure.....assuming the issues are liquid?

[Mulligan]

Quote:

Originally Posted by brokrken What's the problem with having too much perpetual exposure.....assuming the issues are liquid?

Liquidity really doesnt matter. Every preferred bought has yield risk, duration risk, and credit risk. A term dated issue eliminates 2 of those and mitigates the length of the 3rd (credit risk). A 100 basis point rise in 10 year treasury will permanently impair $3-$4 of a 6% $25 par issue more than likely. 2013 proved this but peoples memories are short and yields quickly dove tailed so it was forgotten. But economy is considerably stronger than 2013 and rates havent spiked yet. Most people who have bought perpetuals in past 3-4 years dont really have an understanding of what rising yields can do to permanently impair portfolio value. The risk is high enough for me to be cognizant of this, so I am shifting accordingly the best I can.

[bobandsherry]

Agree with you Mulligan. Almost all the preferred's I've picked up are adjustable rate. Fixed rate is going to feel the pinch once (if/when) rates move up. Those tied to LIBOR index should make me feel better about them holding their value.

[Texas Proud]

Quote:

Originally Posted by Mulligan I pulled the plug on a few “B” league preferreds and moved more money into LANDP today at $25.88. Goes monthly exD early next week so purchase is really $25.75. This has moved into the number 2 hole on my preferreds having well over a 1000 shares. Anytime I can move into term dated or adjustables it helps reduce my perpetual exposure.

Which good ones do you have that is adjustable I am looking to get a few that have a good + number as I do think rates are going to go up and this will fix the price problem with rising rates....

[Winemaker]

Quote:

Originally Posted by Mulligan I think I am getting confused....There must be 2 Winemakers posting here... One that complains about his low risk 5% preferreds getting called....And a second Winemaker you trades in higher risk casualty insurers.

I was never complaining about issues getting called..... I have too much wine around here.....

My complaint was trying to find good issues that were under par, hence the AHSI-A purchase. A 200 share sour position wouldn't kill me, but it would expose me the heckling and good natured ribbing I get from retired folks on this thread.

[capjak]

Quote:

Originally Posted by Mulligan Liquidity really doesnt matter. Every preferred bought has yield risk, duration risk, and credit risk. A term dated issue eliminates 2 of those and mitigates the length of the 3rd (credit risk). A 100 basis point rise in 10 year treasury will permanently impair $3-$4 of a 6% $25 par issue more than likely. 2013 proved this but peoples memories are short and yields quickly dove tailed so it was forgotten. But economy is considerably stronger than 2013 and rates havent spiked yet. Most people who have bought perpetuals in past 3-4 years dont really have an understanding of what rising yields can do to permanently impair portfolio value. The risk is high enough for me to be cognizant of this, so I am shifting accordingly the best I can.

should I be selling my preferred...AILLL, CNLPL, KTH, CNTHP, WFCPRL?