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Old 11-01-2017, 06:52 PM   #2661
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Had a nice little divi dump last couple days so I used that and some excess checking account cash building up to buy 300 more shares of LANDP at $25.93 today. My focus has been on term dated issues lately.
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Old 11-01-2017, 07:39 PM   #2662
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Had a nice little divi dump last couple days so I used that and some excess checking account cash building up to buy 300 more shares of LANDP at $25.93 today. My focus has been on term dated issues lately.

I also bought more LANDP yesterday, at $25.90.
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Old 11-01-2017, 07:53 PM   #2663
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I also bought more LANDP yesterday, at $25.90.


This is a safe play... I had been buying around $25.9 getting a divi and sell on spikes into $26.20s. Just built my share count up back to full amount... I might just hold as it does get harder to buy as the months have gone on... And 2021 isnt far away so a very respectable plus 5% YTM holding.
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Old 11-01-2017, 07:53 PM   #2664
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Unbelievable! JPM-D (perpetual)is being called. This was a $1.3B issue with a 5.5% coupon. This is going to cause other financial preferred stocks to be pulled higher as funds re-balance. The banks must know something about where interest rates are heading (flat to lower) otherwise this call makes not sense. I own 4500 of JPM-H (purchased at $24.60) and have call protection to 9/2020.
The target on my back is getting bigger, this is the 3rd issue at 5.50% that got called. the only consolation I have is I paid $22.80 each.

I'm gonna have to start playing the flippin' game!
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Old 11-01-2017, 08:53 PM   #2665
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The target on my back is getting bigger, this is the 3rd issue at 5.50% that got called. the only consolation I have is I paid $22.80 each.



I'm gonna have to start playing the flippin' game!


I know you like par Winey... Might not quite be a buy yet, but you may watch this one as it is about as safe of preferred as there is....TY-... It went to $50 today ( 5% yield) at par...TY-... Its an old low level juice for their closed end fund of stocks. Basic good ones. Been around since 1962 and call price is $55 (wont ever be called I suspect). We had a discussion on this in another thread and the stock market would have to drop something like 75-80% to endanger payment of the preferred. I have looked at its 20 year price history and it stays pretty strong. It only dropped very briefly below $40 even in depths of the 08-09 financial crisis..
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Old 11-02-2017, 01:01 PM   #2666
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These are only issued for reasons of capital reserve ratio regulations. Its possible they don’t need as much capital in reserve
and not making a value judgement on rates. My theory of buying old higher yielding tiny float preferreds has definitely paid off over the years. I have only had one call on me this year and that was TCF-B that I knew would likely be called but there was some meat on the bone to pick off.
I tend to stick with investment grade or upper end high yield notes and preferreds that are fairly liquid. My average position size is about 4800 shares for preferred and exchange traded notes and about $100K for bonds and notes.

On another note, DFS-B got called. The supply is running out.
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Old 11-02-2017, 02:52 PM   #2667
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3 of my issues dont even have a float of 4800 shares outstanding, lol.
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Old 11-02-2017, 05:19 PM   #2668
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On another note, DFS-B got called. The supply is running out.

Do you have a link to this announcement? Thanks.

Edit: I found it under DFS investor relations press release. Redemption date is Dec 1.
No accrued interest as that day is also a dividend payment day, so regular dividend of $0.40 is also paid.
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Old 11-03-2017, 08:11 PM   #2669
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Small swap today.

Sold CNTHP @ $55.25, bought CNLPL @ $54.40.

Lack of volume forced me to trade only 100 shares each way. They don't call them illiquids for nothing.

I'm beginning to root for a rate hike to bring down Preferred prices, there's slim pickings out there.

And DFS-B was called.....
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Old 11-04-2017, 08:59 AM   #2670
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Small swap today.

Sold CNTHP @ $55.25, bought CNLPL @ $54.40.

Lack of volume forced me to trade only 100 shares each way. They don't call them illiquids for nothing.

I'm beginning to root for a rate hike to bring down Preferred prices, there's slim pickings out there.

And DFS-B was called.....
A rate hike has been priced in for December. The spreads between the 30 year 10 year and 2 years are narrowing. If we get to an inverted yield, perpetual preferred and long date notes are going to spike up. I picked up some CTX and CTU below par to replace CTQ that got called last year and whats left of my CTW that has gone through 2 partial calls. Both CTX and CTU are passed their call date by a few months so they will stay close to par.
If banks across the board are calling low coupon preferred stocks, and a company like AT&T is able to float a long dated 2066 note at 5.35% at a time when rates are supposed to be rising, it tells you something about what's to come. There are some low investment grade corporate notes being sold off from Teva, CBL&Associates. With tax loss selling approaching, these notes will continue to sell off and become bargains.
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Old 11-04-2017, 11:07 AM   #2671
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A rate hike has been priced in for December. The spreads between the 30 year 10 year and 2 years are narrowing. If we get to an inverted yield, perpetual preferred and long date notes are going to spike up. I picked up some CTX and CTU below par to replace CTQ that got called last year and whats left of my CTW that has gone through 2 partial calls. Both CTX and CTU are passed their call date by a few months so they will stay close to par.
If banks across the board are calling low coupon preferred stocks, and a company like AT&T is able to float a long dated 2066 note at 5.35% at a time when rates are supposed to be rising, it tells you something about what's to come. There are some low investment grade corporate notes being sold off from Teva, CBL&Associates. With tax loss selling approaching, these notes will continue to sell off and become bargains.
I do find this odd, as supposedly rates will rise .5 to .75 percent per year for a couple of years. My thinking (which could be totally wrong, please advise) is that banks are expecting rates will stagnate at low rate levels for many years.
This thinking has made me comfortable with owning some preferred shares as getting 5 -> 7 percent would turn out to be great if rates stop rising for 10 more years, or only rise .25% per year.
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Old 11-04-2017, 01:07 PM   #2672
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Had a nice little divi dump last couple days so I used that and some excess checking account cash building up to buy 300 more shares of LANDP at $25.93 today. My focus has been on term dated issues lately.
Mul - How likely would Gladstone be to let this stick around until 2021, as opposed to calling it in on 9-15-18? Second question - is your 5% YTM based on 9-15-18 or 2021? (Sorry too lazy to do the math)
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Old 11-04-2017, 05:56 PM   #2673
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I do find this odd, as supposedly rates will rise .5 to .75 percent per year for a couple of years. My thinking (which could be totally wrong, please advise) is that banks are expecting rates will stagnate at low rate levels for many years.
This thinking has made me comfortable with owning some preferred shares as getting 5 -> 7 percent would turn out to be great if rates stop rising for 10 more years, or only rise .25% per year.
Back in mid-2013 the "rates are rising" narrative started. A lot of people were dumping perpetual preferred stocks and long dated notes in favor of short term preferred stocks (there aren't very many of them period) and notes. I did the opposite and loaded up on investment grade perpetual preferred stocks and even CEFs such as FFC, PDT, FPF, HPI, HPS at the end of December 2013 during tax loss selling season. Here we are 4 years later, and the 10 near note yield is lower than it was at this time in 2013. At some point you have to ask yourself is a 6.5%-7.5% yield on a high quality preferred (investment grade) or notes good enough? This is my YTM for my core holdings from JP Morgan, Bank of America, Capitol One financial, Citibank, Goldman Sachs, Ebay ...etc. Buying a short term investment grade note yielding 1.5 to 2% makes no sense to me. I would rather buy CDs, My biggest regret was selling off my CEF holdings last year because of their volatility and interest rate risk. The performance of the CEFs I used to hold has been phenomenal since the end of 2013 whereas the performance of most passively managed preferred stock ETFs has been dismal. I may be wrong this time, but I believe that there is too much debt out there (government and corporate) for interest rates to rise dramatically. The federal reserve knows this. The CEOs of JP Morgan, Goldman Sachs and others know this. Do they really want to pay more to service the 20 trillion of debt that is increasing by $700B every year? A lot of companies have been issuing debt to buy back their stock, what happens when those notes and bonds become due? Will they be able to re-finance at higher rates? Another issue are mortgage debt on malls and other retain properties. Malls have been growing exponentially and the retail mall and new store opening bubble is bursting. Restaurant chains are closing restaurants in large numbers. How long can mall owners continue to support their mortgage payments with their tenants closing their doors. Don't be surprised if you see rate cuts next year. Just my thoughts interest rates.
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Old 11-05-2017, 06:05 AM   #2674
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A rate hike has been priced in for December. The spreads between the 30 year 10 year and 2 years are narrowing. If we get to an inverted yield, perpetual preferred and long date notes are going to spike up. I picked up some CTX and CTU below par to replace CTQ that got called last year and whats left of my CTW that has gone through 2 partial calls. Both CTX and CTU are passed their call date by a few months so they will stay close to par.

If banks across the board are calling low coupon preferred stocks, and a company like AT&T is able to float a long dated 2066 note at 5.35% at a time when rates are supposed to be rising, it tells you something about what's to come. There are some low investment grade corporate notes being sold off from Teva, CBL&Associates. With tax loss selling approaching, these notes will continue to sell off and become bargains.


I would suggest based only on what I am concerned with (long end yield curve), there has been no yield rate increases. 10 year is lower now than Jan. 1 of this year... Short end yield hikes are not reflective of perpetual yield. But.... Though the yield curve is flattening we are still under market manipulation throughout world. There is no way this economy or world economy based on measurable economic data should even begin to suggest the yield curve should flatten. The long end should be growing in yield, yet
it hasnt. ... It is what it is for me now. I have all I can put in term dated issues, and unwilling to sell the perpetuals to adjust.
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Old 11-05-2017, 06:11 AM   #2675
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Mul - How likely would Gladstone be to let this stick around until 2021, as opposed to calling it in on 9-15-18? Second question - is your 5% YTM based on 9-15-18 or 2021? (Sorry too lazy to do the math)


Golden, going from memory but I think I had it just over 2% for a YTC, and 5.1% for YTM. Gladstone historically doesnt get to gung ho about calling immediately. Obviously I am betting they stay outstanding longer or I wouldnt own. Gladestone mentioned this spring about another preferred they may offer. But hasnt brought it up since, so maybe plans have changed. If they did I would sell this and roll into other one, but I have not heard of this since.
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Old 11-05-2017, 09:28 AM   #2676
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Tutorial? Beginners guide? Online learning?

Looking for someone to point me to any instructional blogs on how to evaluate preferreds. Not a “what is a preferred” but more a guide to evaluating rates, call options, risk of issuer etc. more so i can understand what is a good deal and the risk involved.

Huge knowledge here, and looked at beginning of thread and did a quick search, but did not see a discussion of how to guides.

Anyone who could point me in the right direction would be helpful.

(Fyi. The only preferred i now own are wfc-L and bac-L. Bought them just below their 1300 conversion price based on another blog i read back over the summer. )
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Old 11-05-2017, 10:16 AM   #2677
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I thought the conversion price of wfc-l is: $156.71×6.3814 which is approx $1,000.

The same with bac-l just using different values, still approx $1,000.

Both get triggered when stock price is 30% over, but they convert at the conversion price, which I don't read as the stock price.
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Old 11-05-2017, 11:11 AM   #2678
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Looking for someone to point me to any instructional blogs on how to evaluate preferreds. Not a “what is a preferred” but more a guide to evaluating rates, call options, risk of issuer etc. more so i can understand what is a good deal and the risk involved.



Huge knowledge here, and looked at beginning of thread and did a quick search, but did not see a discussion of how to guides.



Anyone who could point me in the right direction would be helpful.



(Fyi. The only preferred i now own are wfc-L and bac-L. Bought them just below their 1300 conversion price based on another blog i read back over the summer. )


Beach that is pretty broad and so many variables. Buying a preferred is like car. One type doesnt fit all. What you need to determine personally is... Yield needs, risk needs (those two variables are usually inversely related), perpetual?, cumulative?, term dated? adjustable?, call protection? QDI? Non QDI? Sector? Ala, real estate, industrial, utility, shipping, etc....
Quantumonline will give you synopsis of preferred along with link to actual prospectus of the preferred. Due to structural level of where preferreds lie, their risk level is above the companies bonds. Google debt ratings of the company interested in. Notice the rating of the bonds in relation to secured bonds and unsecured bonds, such as Moodys, S&P, and/or Fitch. Unless you are a through deep diving inspector of a companies financials then
you would thoroughly peruse the companies quarterly and yearly SEC filings.
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Old 11-05-2017, 11:11 AM   #2679
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Hence my need for some training! Ha ha.

But I do think I get the 20 shares of stock if they convert and tre price needs to be 65 or more recent avg so it works out to roughly 1300 dollars of stock, no?
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Old 11-05-2017, 11:20 AM   #2680
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I thought the conversion price of wfc-l is: $156.71×6.3814 which is approx $1,000.

The same with bac-l just using different values, still approx $1,000.

Both get triggered when stock price is 30% over, but they convert at the conversion price, which I don't read as the stock price.


Sunset, no, Wells can force conversion when stock price is 130% above the conversion price. Im just going off memory but if it ever got there years from now, the conversion price would be closer to $1300. The $1000 par is really only relevant to a holder if the company was liquidated.
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