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Old 06-07-2017, 09:19 PM   #2021
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Running Man; What think you about the near future for intermediate term rates? I'm very happy with my purchase of WFC-PL back in 2015. Wish I owned more. Also own a tad of Mul's favorite illiquid Utes( Preferreds =1.5% of Investments) The decision I am wrestling with this morning is whether to dump a substantial position in VWITX ( Intermediate Term Tax Exempt =8% of Investments) which has rallied of late back to a MV near my cost, and invest instead in VWSTX Short Term Tax Exempts to ride out an impending slump in bond prices. I have always hated bond funds despite plans to hold the fund for the long term presumably negating losses. All of our other fixed income investments -32.5% of Assets- are in individual bond ladders in our IRA's. I see an opportunity to get out today with no losses and trade that higher yield for a lower safe yield while intermediate term rates travel north at a slow but steady pace. What is your crystal ball telling you?
Near Future: I take that time period to be the next 6 months so letís say from now to the end of the year. It would not surprise me if there was a sharp spike in interest rates of 1-2 percent driving the 5 year treasury to 2.5 to 3 percent or if there was a sudden drop in the 5 year treasury to 1 percent. It will depend on ongoing inflation news.

This is why I have my fixed investments primarily in ladders, overall I would expect the rates to rise because if the FED was being thoughtful they would see that continued low interest rates are going to bankrupt virtually every pension fund in the world.

However, I never expected the FED to allow rates to go to Zero because of the experience the Japanese had with rates and the FED has been equally trapped here for 10 years and getting trapped for another 10 is very easy to occur.

My crystal ball therefore is cloudy but I anticipate most likely (Iíll give it a 65% chance) of a run up in the next 6 months to 3 percent yield on the 5 year treasury.
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Old 06-07-2017, 10:03 PM   #2022
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How about some conviction with your predictions RM, lol.. No mention of 10 year? That is where my interest really lies and the 30 year.... Im going to stick my neck out and say there is zero percent chance the 5 year hits 3% by end of year. Cant be so bold to say such a thing with 10 year though... Fed dumping long treasuries could cause it to happen. But inflation is heading south again so rate hikes wont come from there near term. Commodity basket index I track is drifting toward 52 week low.
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Old 06-07-2017, 10:27 PM   #2023
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The whole reflation story seems to be deflating. I think deflation has not been slain.

If they start letting the Fed balance sheet shrink that is highly deflationary.
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Old 06-08-2017, 07:26 AM   #2024
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I think the Fed is going to raise this month. But language will indicate they will perhaps be more tepid in the months ahead watching data. I don't see another rate rise until Dec after this one. Bond market still drives the Fed which is against what all the experts have been saying lately with the "activist Fed" talk. The Bond market knows this economy isn't real good.
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Old 06-08-2017, 08:27 AM   #2025
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Well I may have just guaranteed Mulligan's prediction, as I hit the sell button on 8% of our FI allocation invested in VWITX. Will park that money in VWSTX and watch the ride of VWITX with interest but no skin in the game. Thanks for your thoughts RM.
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Old 06-12-2017, 08:55 PM   #2026
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I mentioned this one to Pig and Coolius but it may be of interest to someone here or at least study and decide...LANDP...This is a farm land reit specializing more in produce and speciality items for farm land, not row crops such as corn and wheat. It was issued a year ago, but I kind of lost track of it as it jumped to $25.50 immediately and I was still in the middle of chasing and flipping some utes that are now gone. Anyhow bought 500 at $25.73 today and it goes exD next week. Pays monthly. The mechanics of issue is what is most alluring to me. Becomes callable Sept 2018. I doubt that occurs since it was only issued a year ago. Has a maturity date of fall 2021. It they dont call it then it has a 300 basis point penalty added to the yield. Excellent incentive to call issue. So in todays sky high perpetual prices and uncertain rate market this one has nice clarity to it.
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Old 06-13-2017, 02:12 PM   #2027
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If any of you own CFC-B, be aware that the stock has dropped dramatically yesterday and today, with unusual high volume.

This is possible indication of an imminent call. I might very well be wrong, but am going to play it safe.

So sold entire position today, for loss, but offset by dividend received, netted out with a minuscule gain after trade commission, taxes.
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Old 06-13-2017, 02:30 PM   #2028
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I have been out about a month when it spiked above 26. Its movement is unusual to other preferreds, so your fear is warranted. But if it drops below 25.40 it could be a buy as that is below call plus next month interest payment.
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Old 06-13-2017, 02:53 PM   #2029
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I was looking at MER-K, which originated from the Merrill Lynch acquisition.

Priced around $25.30, just went ex-div yesterday. Like the others, way past call date, so call risk is very much evident.

One could conceivably bet that the next $0.40 dividend will be paid, and buy at this price.

With 30 days accrued interest considered, max risk exposure is about $0.17, even if they announced a call tomorrow.

Not sure if I want to take the chance, but would like to put the CFC-B proceeds to work.
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Old 06-13-2017, 03:43 PM   #2030
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I was looking at MER-K, which originated from the Merrill Lynch acquisition.

Priced around $25.30, just went ex-div yesterday. Like the others, way past call date, so call risk is very much evident.

One could conceivably bet that the next $0.40 dividend will be paid, and buy at this price.

With 30 days accrued interest considered, max risk exposure is about $0.17, even if they announced a call tomorrow.

Not sure if I want to take the chance, but would like to put the CFC-B proceeds to work.
I bought MER K and MER L years ago when they were around $22. The MER L was called last year some time, so I expect a call soon for the MER K......
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Old 06-13-2017, 04:38 PM   #2031
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Preferred Stock Investing-The Good , The Bad and The In Between

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I bought MER K and MER L years ago when they were around $22. The MER L was called last year some time, so I expect a call soon for the MER K......


I know Congress is looking to tinker or abolish Dodd/Frank. This may allow them to need less "Tier capital". I know some of these big bank TRUPs grandfathered status ends in 2018 or 19. Dont know if these are applicable to these issues or even if D/F will even be around then to matter. Bottom line is almost all of them have been called an incrementally so. Its been a year since last TRUP call so more dominos may fall soon. There really are only 3 good ones left. And historically no rhyme or reason by yield in call order. Some low 6s have been called and some 7s. If CFC-B drops another dime or so, I am going back in!
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Old 06-15-2017, 11:25 AM   #2032
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AILLL had a bungee cord experience today. Dropped 1.6% dramatically on 806 shares traded, and within 10 minutes jumped right back to where it was before the dump.

Hopefully one of you illiquid gatherer-hunters got those shares @ $26.00. My bid was a little lower than that, so missed out on it.

Ya gotta be sharp, when hunting for those illiquids!!
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Old 06-15-2017, 02:10 PM   #2033
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AILLL had a bungee cord experience today. Dropped 1.6% dramatically on 806 shares traded, and within 10 minutes jumped right back to where it was before the dump.

Hopefully one of you illiquid gatherer-hunters got those shares @ $26.00. My bid was a little lower than that, so missed out on it.

Ya gotta be sharp, when hunting for those illiquids!!


I didnt get dip but I took advantage of liquidity and got 200 more at $26.55. I also bought 500 of CFC-B at $25.65. Sister issue MER-P which is a higher yield and just kicked out its divi shot right back to $26.43. So CFC-B is considerably better risk/reward on call loss. I have made good money on this one and I am tip toeing back in. Im a bit more daring than you, Coolius.
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Old 06-20-2017, 08:27 PM   #2034
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Well today was "easy money day". Held UMH-B and LANDP for maybe a week or two and booked 60 cent profit per share on a flip and collected a divi too with LAND. Flipped out of MHO-A with about 60 cent profit also. Sold DMRRP $6 per share above purchase price 2 months ago and snagged a $1 per share divi also. Yep these high long end yield curve worries are really killing the preferreds...not... Just taking some easy money off the table. Also flipped out of my AILLL purchases at $26.50-55 and sold at $26.95- $27 a week later... I dont hang around for the call axe exposed...Dine and dash, baby... Did buy 400 shares of BPFHP at $25.63 today. Still got a slug of cash to put to work. It doesnt sit on the sideline for more than a day before it is sent to the coal mines to work!
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Old 06-20-2017, 09:01 PM   #2035
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Mulligan, kudos on your trading activity, and the flipping for quick and easy profit.

However, unlike you, I have income needs that cannot be exposed and possibly jeopardized by trading, so I do not trade anywhere as often as you do. But I sleep well at night, and am comfortable, even with the call risk of our favorite illiquid Utes.

Didn't do much today. One of the corporate bonds in my IRA got a tender offer, so I put in for it.

Other than that, it's just trying to keep cool on a 108 degree day. And our home AC is not strong enough to cool the house comfortably, we have to close ducts in rooms we don't use to get appreciable air flow in the rooms we do use. but it's HOT !
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Old 06-20-2017, 09:08 PM   #2036
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Mulligan, kudos on your trading activity, and the flipping for quick and easy profit.

However, unlike you, I have income needs that cannot be exposed and possibly jeopardized by trading, so I do not trade anywhere as often as you do. But I sleep well at night, and am comfortable, even with the call risk of our favorite illiquid Utes.

Didn't do much today. One of the corporate bonds in my IRA got a tender offer, so I put in for it.

Other than that, it's just trying to keep cool on a 108 degree day. And our home AC is not strong enough to cool the house comfortably, we have to close ducts in rooms we don't use to get appreciable air flow in the rooms we do use. but it's HOT !


I never miss a divi with the "hot money" Coolius. No moss grows on that cash. Sometimes it collects 2 divis in a cycle, lol... 108 in California? What are you doing that for? Quit being a cheapo living in the hot California area and buy the mansion in San Diego area. If you are going to pay all those crazy California taxes, at least do it while writing the checks in 70 degree weather, lol.
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Old 06-20-2017, 09:40 PM   #2037
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Coolius, I think I need a trip to the doctor for a medical exam especially the cranial area. I recently bought 200 shares each of GAINN, and ABRN. And since I bought them in such small amounts I wont notice them and actually plan on keeping them.
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Old 06-20-2017, 10:00 PM   #2038
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Mulligan, I think you have been exposed to some kind of mind-dissolving drugs!! I hope you don't need a lobotomy!

My old ER friend Mulligan has gone off the deep end - GAINN?? ABRN have you gone bonkers??

Best go and get some real good wine from Winemaker - spare no expense, and wash it down with a cup of Kopi Luwak. There's a thread on the forum about how exquisite it is.

And remember to take your meds...... you're a big boy, should know better by now.
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Old 06-21-2017, 09:42 AM   #2039
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And since I bought them in such small amounts I wont notice them and actually plan on keeping them.
We all know the signs of an addict....."this time I'll stop". But in Mulligan's case, it's "but THIS time, I'll keep/hold them".
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Old 06-21-2017, 03:27 PM   #2040
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We all know the signs of an addict....."this time I'll stop". But in Mulligan's case, it's "but THIS time, I'll keep/hold them".


Coolius, Moorebonds has finally rubbed off on me. He would be proud of me owning GAINN and ABRN. Or at least until before he recently got married. He may be all in CDs now as a beaten down hubby by now!
Well I bought 200 shares of CRLKP (wanted more just couldnt make myself do it). Started recently doing more of the spread em out Moorbonds trick at 200 a pop...Well almost...Stepped to plate and battling CFC-B one last time at $25.60. In for 1500 shares so it is show down time and dare them to call.
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