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Preferred Stock Investing-The Good , The Bad and The In Between
Old 07-12-2016, 12:04 PM   #941
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Preferred Stock Investing-The Good , The Bad and The In Between

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Thanks, Mulligan.

I'm in at about 1 divi over the call price, so I guess I'll stand pat and wait for a lower price.

Prices on these issues don't seem to be going down at the moment, though. I find myself owning about half of what I'd like to own, but not seeing prices I want to pay to invest the other half.


That is the dance I am doing...I bought a few "lower yielders". And my CTWSO and CTWSP are flat out untouchable despite being close to 5% yielders. They are impossible to buy and almost complete guarantee payment forever. But I dont want to make a living owning all of my money in these as cap losses could be huge if rates ever spike.
That is an example of why I loaded up on PVTBP and PFK. Absolutely nothing to lose on PVTBP and 9.5% yearly gain potential, plus a flip opportunity down the road will be there... PFK, Im just taking my 2.5% plus monthly CPI, until mandatory call in April 2018. I know I will make some money with this, sleep at night issue, and maybe at that something more appealing will present itself. I know exactly where I stand here. But like any issue, if an idiot bid comes out, I will sell.

We could easily find ourselves in a 1940s situation where inflation runs considerably higher than bonds yield though. Many are not aware this can happen.

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Old 07-12-2016, 01:49 PM   #942
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How about some GOODO?

Monthly dividend of $0.156 goes ex this Friday. Price is a bit less than three months divi over call. Seems like they were flirting with calling this one and decided not to.

Any comments?
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Old 07-12-2016, 02:05 PM   #943
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Originally Posted by Slow But Steady View Post
How about some GOODO?

Monthly dividend of $0.156 goes ex this Friday. Price is a bit less than three months divi over call. Seems like they were flirting with calling this one and decided not to.

Any comments?


The issue they were trying to call was the mandatory 1/2017 call GOODN. The underwriters met this new issue with such underwhelming enthusiasm they could only bring $25 million to market and still cant completely call N which is a $35 million issue...Pretty pitiful. So I would say GOODO is not yield trapped and its yield is what its worth. They are not the most strongly capitalized company. It may be fine..I held for about a month and sold on 30 cents profit per share. Not ever reconsidering going back to it.


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Old 07-12-2016, 02:21 PM   #944
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Slow, it looks like you are wanting to get something near 7%. While my original investing in preferreds started there a few years ago, price appreciation has taken me away from that area, so I have little understanding of these issues and companies strength. One must have some faith or understand "the books" better than I do.
The only ones I own in that area and above are PVTBP, SIVBO, OSBCP, and AILNP (which is not buyable). The reason why I loaded up on PVTBP so much is a slew of accountants dug into the books and determined it was worth buying out at a huge premium than the then current stock price was. Way smarter than me, so I take the call risk to chase yield which almost apparently isnt on the radar based in recent CEO comments and SEC filings.
I think CVB has strong merit at right price also. I dont own any now as I sold most peripheries to make the easy money on BGLEN, then have used some of that to buy the PVTBP. But if any tax deferred money becomes available I will revisit it again.


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Old 07-12-2016, 07:17 PM   #945
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Originally Posted by Slow But Steady View Post
Thanks, Mulligan.

I'm in at about 1 divi over the call price, so I guess I'll stand pat and wait for a lower price.

Prices on these issues don't seem to be going down at the moment, though. I find myself owning about half of what I'd like to own, but not seeing prices I want to pay to invest the other half.
Wait until the general market takes a 5 - 10% breather then you can pick up the preferreds at lower prices. I do that with CHSCM.
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Old 07-14-2016, 05:36 PM   #946
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Well after some pondering last few days, I decided I was getting a bit too chummy with the low yielding issues. Capital preservation rates about on equal terms with yield so I get caught in the middle sometimes. But the bottom line is I keep coming back to "reach for safe yield above par and accept the call risk, but look to dine and dash when needed".
So I sold off CRLKP, HAWEL,and PFK for some quick profits, and bought 1200 shares of CVB and more PVTBP. Have almost 2000 shares of PVTBP. It has moved into the 2 spot a distant second to Amerens. CVB, I have owned a few times. It is noncallable BBB- rated and a 7.19% yield. I had to dump them several weeks ago when I was rounding up any loose buck to secure the easy BGLEN score. Had to buy 6 cents higher than last owned, but made $4 a share on the "borrowed money" with no divi missed... No regrets there.....Didnt want to sell PFK, but when you collect a dividend and 45 cents run up on a term called issue a year in a half away that is now 70 cents above par on a 2.5% base yield, you have to lock in the profits and leave.


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Old 07-15-2016, 01:34 AM   #947
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Mulligan where does Kmi announce news such as distribution dates. I know it's 3/1 and 9/1 but where can I find the official news announcements for CVB.
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Old 07-15-2016, 05:46 AM   #948
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Mulligan where does Kmi announce news such as distribution dates. I know it's 3/1 and 9/1 but where can I find the official news announcements for CVB.

http://www.nasdaq.com/symbol/cvb/dividend-history

Here is a link Alaska. It appears it will be declared in mid August. Here is the confusion problem with the issue. KMI has nothing to do with it. Its technically Lehman ABS Trust Certificates. Lehman bought a chunk of KMI's subordinated debt (when it wasn't even named KMI, too actually) back when the debt was issued and repackaged it into a $10 retail investment. They served as the trustees, KMI sends dividend to Lehman, then Lehman then passes on dividend to you as a certificate holder of the trust. And of course Lehman went belly up years ago, so US Bank took over the trust and now passes on the income to you.
Some of these older issues have an interesting history behind them.


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Old 07-15-2016, 11:56 AM   #949
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Originally Posted by Mulligan View Post
Well after some pondering last few days, I decided I was getting a bit too chummy with the low yielding issues. Capital preservation rates about on equal terms with yield so I get caught in the middle sometimes. But the bottom line is I keep coming back to "reach for safe yield above par and accept the call risk, but look to dine and dash when needed".
So I sold off CRLKP, HAWEL,and PFK for some quick profits, and bought 1200 shares of CVB and more PVTBP. Have almost 2000 shares of PVTBP. It has moved into the 2 spot a distant second to Amerens. CVB, I have owned a few times. It is noncallable BBB- rated and a 7.19% yield. I had to dump them several weeks ago when I was rounding up any loose buck to secure the easy BGLEN score. Had to buy 6 cents higher than last owned, but made $4 a share on the "borrowed money" with no divi missed... No regrets there........
Would you be willing to share what you paid for CVB and PVTBP
I look at the prices and worry that I'm missing something that would cause me to lose $$$ quickly.
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Old 07-15-2016, 12:36 PM   #950
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Lehman ABS Corporation (CVB) Dividend Date & History - NASDAQ.com

Here is a link Alaska. It appears it will be declared in mid August. Here is the confusion problem with the issue. KMI has nothing to do with it. Its technically Lehman ABS Trust Certificates. Lehman bought a chunk of KMI's subordinated debt (when it wasn't even named KMI, too actually) back when the debt was issued and repackaged it into a $10 retail investment. They served as the trustees, KMI sends dividend to Lehman, then Lehman then passes on dividend to you as a certificate holder of the trust. And of course Lehman went belly up years ago, so US Bank took over the trust and now passes on the income to you.
Some of these older issues have an interesting history behind them.


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What would happen if KMI defaulted on the payments? Would US Bank be obligated to make the certificate holders whole?

I believe that US Bank is a strong company, but the question here is whether they have any responsibilities for maintaining the payments.
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Old 07-15-2016, 01:18 PM   #951
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What would happen if KMI defaulted on the payments? Would US Bank be obligated to make the certificate holders whole?

I believe that US Bank is a strong company, but the question here is whether they have any responsibilities for maintaining the payments.


US Bank going belly up has nothing to do with the safety of the investment... If they go belly up someone else would run the trust. Lehman proved that when they went belly up. No effect on issue...Its all about the underlying company that issued the debt....KMI....


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Preferred Stock Investing-The Good , The Bad and The In Between
Old 07-15-2016, 01:23 PM   #952
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Would you be willing to share what you paid for CVB and PVTBP
I look at the prices and worry that I'm missing something that would cause me to lose $$$ quickly.


Sure...I reentered CVB at $10.80... Since it is not callable being over par is not such a big deal. The yield is nice....PVTBP is a bit more problematic for someone entering... I bought 500 at $26.50 and sold before buyout offer at almost a buck profit in a week...A few hours later when call fear busted out from merger, I bought a 1000 that same day at $25.57 ...Then I bought more at $25.62, then $25.78, and my last 200 yesterday at $25.98.... Have about 2000 shares...Pays 62.5 divi every 3 months. It sure looks like next divi will happen. Most of mine was bought at one divi or less above par.

Added....Another member on another forum informed me there may be call warrant holders on CVB. Which means they have the right to call them at $10, and assume them...This has been that way since 2007. So there have been better times when issue was higher priced past call and this did not happen. So who knows, but one must decide that risk. Im not worried, but all of mine are so that is more of a reflection of my call tolerance than it is that they are not callable.

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Old 07-19-2016, 05:31 AM   #953
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Heads up! Merrill Lynch 6.45% Trust Preferred (MERPRM) called 8/15/16 for $25.00.

I had a great ride, many, many shares purchased for under $22 back in 2008-2009. I had to suffer through many divvies since.
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Old 07-19-2016, 05:51 AM   #954
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Heads up! Merrill Lynch 6.45% Trust Preferred (MERPRM) called 8/15/16 for $25.00.

I had a great ride, many, many shares purchased for under $22 back in 2008-2009. I had to suffer through many divvies since.


Winemaker, lets dont just leave it at you complaining about all the income you received over the years...Are you going to try to fleece a buyer or just hold until call accepting the $25?....Have any plans for the incoming money or just digging some more foam out of the mattress to stuff it in there?


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Old 07-19-2016, 04:43 PM   #955
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Winemaker, lets dont just leave it at you complaining about all the income you received over the years...Are you going to try to fleece a buyer or just hold until call accepting the $25?....Have any plans for the incoming money or just digging some more foam out of the mattress to stuff it in there?


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I will be respectable and hold til call date. No foam digging, but come September, the grapes will be ripening in sunny Kalifornia. Do you know how many grapes it takes to fill a barrel?

My modus operandi has always been to purchase under par, but even the lowly GS-A and MS-A floaters are up over a buck in the past week. Methinks a bubble has been forming in preferreds the last 6 months as people are chasing yield. Don't know if it's bad, or what the bear trigger is, but I'm sure I can bail out fast enough. That is unless I'm up to my knees in grapes and grape juice.
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Old 07-19-2016, 05:07 PM   #956
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I share your concern. That is why I have loaded up on PVTBP. Great upside, minimal downside and hope things cool down for better entry points and hopefully collect the 9.65% while patiently waiting. Even my glorious illiquids have been bit on. Glad I got in when I did and will just hunker down and hold them. The flipping days are over,


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Old 07-19-2016, 05:15 PM   #957
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I share your concern. That is why I have loaded up on PVTBP. Great upside, minimal downside and hope things cool down for better entry points and hopefully collect the 9.65% while patiently waiting. Even my glorious illiquids have been bit on. Glad I got in when I did and will just hunker down and hold them. The flipping days are over,


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Hard to believe I'm hearing from the Great Mulligan - his Flipping days are over?? Say it ain't so !!

But there's simply no fun in investing if we don't Flip - for us ER folks the alternative is to go to the mall, ogle the young ladies there, and feel sorry that you're not 20 years younger.

I'd bet Mulligan goes back to flips, flops, twists & turns before too long.....
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Old 07-19-2016, 09:04 PM   #958
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Hard to believe I'm hearing from the Great Mulligan - his Flipping days are over?? Say it ain't so !!

But there's simply no fun in investing if we don't Flip - for us ER folks the alternative is to go to the mall, ogle the young ladies there, and feel sorry that you're not 20 years younger.

I'd bet Mulligan goes back to flips, flops, twists & turns before too long.....


It was a forced retirement.... But I wont give up hope... I got a little more cash to put to work so that will keep my occupied a few days...BUT...I hope in a few months when the PVTBP scare dies down and a few divis pass, the idiot yield chasers come out and bid it back up again, and then I will flip a 1000 of my 2000 stash to book a nice little profit and get my total amount of PVTBP into a more sane ratio of my portfolio amount....Because it isn't anywhere near 3% I assure you!


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Old 07-20-2016, 12:12 PM   #959
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I could not resist the siren song of the Flippers....

This morning, I saw a CNLPL bid at $55. Ask was $55.65.
Decided to sell 200 shares at that price - had bought those 200 shares couple days ago for $53.60..

Now the bid is $53.60.

Will watch and buy back if I can, hopefully below $54.

Mulligan will be proud of me - I'm carrying on the Flipping tradition !!
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Old 07-20-2016, 06:10 PM   #960
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I could not resist the siren song of the Flippers....

This morning, I saw a CNLPL bid at $55. Ask was $55.65.
Decided to sell 200 shares at that price - had bought those 200 shares couple days ago for $53.60..

Now the bid is $53.60.

Will watch and buy back if I can, hopefully below $54.

Mulligan will be proud of me - I'm carrying on the Flipping tradition !!


I wish I could just do those sorts of things 3 times a day and still collect the dividends while trading....Life would be good.....The past few years dancing and flipping past call higher yield investment grade issues has been a great thing... But I fear the train wreck before it is even coming....I have Mickey moused around the edges to help mitigate it, but those solutions are not inspiring either... 1) Go lower yield adjustables 2) Buy lower yielding perpetuals and pray Mr. Market has forever forgotten about higher interest rates 3) Chase risker companies to "reach for yield". 4) Sit in the corner and pray the current issues are forgotten by management and never called.
Im at the point where I have at least popped Winemakers cork, and seriously considering drinking a big glass of "adjustable wine". It might wind up being very tasty!


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