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

[Texas Proud]

My wife and have been busy taking care of both sets of parents, so I haven't posted here much lately.

Like Running Man, I have a bit less than 10% of our portfolio in preferreds. (Shown as percentage of total portfolio.)

Seems like, as Mulligan said, the prices just go up lately. These are the issues I hold. I probably don't have the diversity I think I have.

AILLL 0.27%

ALBMP 0.42%

AHT-D 0.38%

AHT-A 0.94%

CIM-B 0.94%

CHSCO 0.53%

C-N 0.49%

DX-A 0.47%

GWSVP 0.58%

IPWLK 0.37%

MDLQ 0.47%

NGHCO 0.47%

OSBCP 0.57%

PVTBP 0.50%

SIVBO 0.49%

TNP-B 0.24%

(Don't copy me! However, comments or suggestions are welcome.)

Is the % a measure of how much this is to your whole portfolio

IOW, you have over 8% in pref stocks?

 

[Slow But Steady]

Is the % a measure of how much this is to your whole portfolio

IOW, you have over 8% in pref stocks?

Yes, I have a bit over 8% of the overall portfolio in preferred stocks.

 

[Freedom56]

I sold MHNB, MHNC, and MH-PC this morning after the FBI sting report on AFSI (AMTRUST Financial). I bought these well below par. MHLD is down almost 10% today reacting to the AFSI news. The companies are too connected. I hate to let 8% yield notes go but I had $150K tied up in these notes and have held them for over a year.

 

[Mulligan]

Dont blame you Freedom. My rules are no Mreits, shippers, and no accounting clouds...especially in a leveraged business.... I dont usually dumpster dive either not looking for appreciable cap gains...just reliable income mostly.

 

[Freedom56]

Dont blame you Freedom. My rules are no Mreits, shippers, and no accounting clouds...especially in a leveraged business.... I dont usually dumpster dive either not looking for appreciable cap gains...just reliable income mostly.

When I read that the Madoff Whistle-blower was involved in reporting Amtrust, I headed for the exit with Maiden holding. I stay away from anything connected with accounting fraud. However, I can tell you that 90% of the companies in the S&P 500 use aggressive accounting. Having worked in executive management in an Aerospace company, I can tell you that for large projects, the finance people in these companies accrue sales by percent of completion not by what was shipped and invoiced. The percent complete that determines the sales reported is pretty subjective.

On another note, my OHI is doing great since the ACA repeal failed. It's over $34 now which is over $3 up in a few weeks. I wish someone would do something with drug prices here. My doctor was complaining about it during my annual checkup a couple of weeks ago. Thankfully the only thing I have to take is 81 mg Asprin. My wife went for her check-up, and her doctor prescribed her a cream. It costs $350 per month after insurance coverage. The exact same drug costs $48 Canadian for a one month supply without insurance. Her doctor wants here to use it for 6 months. Guess where I'm going to buy it.

 

[Mulligan]

When I read that the Madoff Whistle-blower was involved in reporting Amtrust, I headed for the exit with Maiden holding. I stay away from anything connected with accounting fraud. However, I can tell you that 90% of the companies in the S&P 500 use aggressive accounting. Having worked in executive management in an Aerospace company, I can tell you that for large projects, the finance people in these companies accrue sales by percent of completion not by what was shipped and invoiced. The percent complete that determines the sales reported is pretty subjective.



On another note, my OHI is doing great since the ACA repeal failed. It's over $34 now which is over $3 up in a few weeks. I wish someone would do something with drug prices here. My doctor was complaining about it during my annual checkup a couple of weeks ago. Thankfully the only thing I have to take is 81 mg Asprin. My wife went for her check-up, and her doctor prescribed her a cream. It costs $350 per month after insurance coverage. The exact same drug costs $48 Canadian for a one month supply without insurance. Her doctor wants here to use it for 6 months. Guess where I'm going to buy it.

Tell me about it... Doc gave me an optional script for something last month. Before I filled order I asked price, and lady said $5.82.... I said, that is cheap enough I will get it. I go to pick it up and the lady said $262.00.... WTF! I explained to her and she thought I was lying, and told me to go to the original order desk. Before I went there she suggested maybe my insurance didnt cover it. I said, I never even offered my insurance card, I was paying cash from get go.
So I go to the order desk lady and she rings up $135. Now I am blowing my top. I said, due you guys just make up $hit and charge what you feel like? I was told $5 bucks. And the other lady 30 seconds ago said $260..... Then the lady said there was no way anyone told you $5 as it is a compound...Well another lady overheard and came up and said she remembered telling me $5.82 and pointed to the screen.... Well I know what happened...The chemicals were $5.82 and they jacked up the rest stirring it up. I said you guys can keep it, I am not buying it.
Anyhow, AJA, shamed me back into CHS....I bought 200 of CHSCO at $28.71. Not a steal but its drifting down. I will buy 400 more if it drops under $28.

 

[aja8888]

Tell me about it... Doc gave me an optional script for something last month. Before I filled order I asked price, and lady said $5.82.... I said, that is cheap enough I will get it. I go to pick it up and the lady said $262.00.... WTF! I explained to her and she thought I was lying, and told me to go to the original order desk. Before I went there she suggested maybe my insurance didnt cover it. I said, I never even offered my insurance card, I was paying cash from get go.
So I go to the order desk lady and she rings up $135. Now I am blowing my top. I said, due you guys just make up $hit and charge what you feel like? I was told $5 bucks. And the other lady 30 seconds ago said $260..... Then the lady said there was no way anyone told you $5 as it is a compound...Well another lady overheard and came up and said she remembered telling me $5.82 and pointed to the screen.... Well I know what happened...The chemicals were $5.82 and they jacked up the rest stirring it up. I said you guys can keep it, I am not buying it.
Anyhow, AJA, shamed me back into CHS....I bought 200 of CHSCO at $28.71. Not a steal but its drifting down. I will buy 400 more if it drops under $28.

Glad to hear you are back in CHS land..!!!

Good story on the script.

DW just got a script for FORTEO for her osteoporosis. Went to pick it up...$4000.00 per month... Oh, Medicare? Part D, well it's only $850 + $52 for the needles. I am so relieved....$10,800/yr. Now about her other meds...not talking.

 

[Mulligan]

Glad to hear you are back in CHS land..!!!



Good story on the script.



DW just got a script for FORTEO for her osteoporosis. Went to pick it up...$4000.00 per month... Oh, Medicare? Part D, well it's only $850 + $52 for the needles. I am so relieved....$10,800/yr. Now about her other meds...not talking.

Wow, those meds arent cheap! Well at least you arent like my Dad. Last fall he had to get that Gilead Hepatitis medicine. He said insurance was reviewing it. I looked on line and it listed close to $100k. He said "I aint paying that" (cheapo wouldnt pay it, and yes he has the money too, but that doesnt matter to him). Anyhow I made mistake of telling him the same medicine sells in India for $1000. Well he was all over that. I told them there is no way you can buy this in India and get it shipped here. Well he wouldnt listen and tried to find a way (with no success). I told him to relax as insurance would pay as it was medically necessary for his cancer treatment. And it did after a week review....But if it hadn't, I guarantee you he would have rather died than paid for it.

 

[aja8888]

Wow, those meds arent cheap! Well at least you arent like my Dad. Last fall he had to get that Gilead Hepatitis medicine. He said insurance was reviewing it. I looked on line and it listed close to $100k. He said "I aint paying that" (cheapo wouldnt pay it, and yes he has the money too, but that doesnt matter to him). Anyhow I made mistake of telling him the same medicine sells in India for $1000. Well he was all over that. I told them there is no way you can buy this in India and get it shipped here. Well he wouldnt listen and tried to find a way (with no success). I told him to relax as insurance would pay as it was medically necessary for his cancer treatment. And it did after a week review....But if it hadn't, I guarantee you he would have rather died than paid for it.

He could have flown to India, saw a doc, got the meds, took a vacation there and saved a ton!

FORTEO is daily injections (self-administered) for two years, then she can't take any more.

 

[Texas Proud]

Wow, those meds arent cheap! Well at least you arent like my Dad. Last fall he had to get that Gilead Hepatitis medicine. He said insurance was reviewing it. I looked on line and it listed close to $100k. He said "I aint paying that" (cheapo wouldnt pay it, and yes he has the money too, but that doesnt matter to him). Anyhow I made mistake of telling him the same medicine sells in India for $1000. Well he was all over that. I told them there is no way you can buy this in India and get it shipped here. Well he wouldnt listen and tried to find a way (with no success). I told him to relax as insurance would pay as it was medically necessary for his cancer treatment. And it did after a week review....But if it hadn't, I guarantee you he would have rather died than paid for it.

Or maybe had rather booked a flight to India!!! That is what I would do...


Oppps... saw AJA after I posted...

 

[Mulligan]

Or maybe had rather booked a flight to India!!! That is what I would do...


Oppps... saw AJA after I posted...

My Dad is 80 and old school. Never been on a plane. He probably would have wanted me to sneak it in boxers and bring it back, lol.

 

[Coolius]

My Dad is 80 and old school. Never been on a plane. He probably would have wanted me to sneak it in boxers and bring it back, lol.

Have you checked if the prices in Canada are cheaper? Or even Mexico ?

 

[Mulligan]

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

Have you checked if the prices in Canada are cheaper? Or even Mexico ?

It all worked out in a week or two as insurance approved payment, so it was all good and worked. He was just convinced they wouldnt. I knew they would as it was medically necessary and not an experimental drug. It was that Gilead hep medicine that made them so much money. Unfortunately for Gilead they created a medicine that actually cures something instead of just treating it forever. So they are running out of customers because its a cure.

 

[RicDee]

Any idea why WFC-L is going up?

 

[Freedom56]

Any idea why WFC-L is going up?

The 30 year bond yield is falling... That's why!

 

[Mulligan]

Went picking up nickels on the ground again. Held 300 shares of GJP for a week and sold at 21.93 after buying at 21.25 and collecting a 6 cent monthly dividend. Bought 300 shares of GBLIZ at par with divi being kicked out in 2 weeks.

 

[Coolius]

Unusual price strength in HE-U the past 2 trading days, bringing down the yield below 6%. Sold 1/2 my position at $28.00 as this is around the 52 week high.

Note that this is way beyond First Call date, so risk of a call is a "real & present danger".

Fully expect to buy back later in the mid to low $27's.

 

[Mulligan]

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

Unusual price strength in HE-U the past 2 trading days, bringing down the yield below 6%. Sold 1/2 my position at $28.00 as this is around the 52 week high.

Note that this is way beyond First Call date, so risk of a call is a "real & present danger".

Fully expect to buy back later in the mid to low $27's.

That was laying on a tee and you knocked it over the fence! Smart trade... I bought 400 shares of GBLIL at $24.85. A.M Best rates it BBB- investment grade. I think they got a rep for being a bit "soft" on their ratings. So still a new issue yielding about 8% is too much to pass on. I got 300 shares of sister GBLIZ at par Thursday and it jumped a bit to $25.33. I am hoping liquidity dries up on the new GBLIL and flip for a few hundred gain when it gets closer to its first exD date this summer. Not enthused about holding 700 shares long term. Will settle into 300-400 range down the road tops.
They yield higher than the AmTrust debt AFSS without the accounting cloud hanging over them.

 

[Running_Man]

So interest rates are continuing to decline after failing to take out the 3 year top in yields for the 30 year bond, which is now smack dab in the middle of the 2.25- 3.50 range. I continue to let the interest rates themselves let me know what they want to do and it seems they want to stay in this lower range, at least for now. After recently failing to even take out last July’s intermediate and lower high of 3.25, I will await another run at the high end of the range before I would add any more preferred stock for now.

 

[Mulligan]

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

So interest rates are continuing to decline after failing to take out the 3 year top in yields for the 30 year bond, which is now smack dab in the middle of the 2.25- 3.50 range. I continue to let the interest rates themselves let me know what they want to do and it seems they want to stay in this lower range, at least for now. After recently failing to even take out last July’s intermediate and lower high of 3.25, I will await another run at the high end of the range before I would add any more preferred stock for now.

I just keep on keeping on and essentially full speed ahead with your steadfast belief in lower for longer. After the Trump Tantrum they sagged then went back up even when yield was staying stubborn at 2.5 level for considerable time. I agree no rush to move fresh money in, but I keep it fully invested so I dont have any money on sidelines.... Well if Ottawa win this series with Bruins and Blues take the Wild, I will. [emoji3]

 

[Mulligan]

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

Blues and Senators both won...Betting account too flush, so the spillover goes to my preferred buying account.... How is this for a purchase I just made today....I bought a preferred that has no operations and no employees. The company quit having yearly elections in 1996 to approve board of directors who received no pay to oversee a company that had no operations or employees...But...has consistently paid its dividend since 1863. This one is non callable and will out live me.

 

[Golden sunsets]

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

And the yield is And the name of this preferred is?


Sent from my iPad using Early Retirement Forum

 

[Mulligan]

Its yield is nothing to brag about. I just wanted it from its historical prospective. It even had a state supreme court decision over its dividend being ruled non taxable to shareholders back in 19th century. Its yield is 5.5%. Its a rail road preferred the Dayton and Michigan RR (DMRRP) 8% $50 par, perpetual guaranteed payment (called cumulative now). CSX is guaranteer of payment. Only about 8,000 shares outstanding. It only trades a few hundred a year so I had to pay up as person chased above me to $71 so I paid $73 ask. Previous 100 share trade was last July.

 

[Golden sunsets]

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

Interesting. As you may recall, I'd be interested in picking up some CTPPO but it seems to trade way above par and in lots of 1, but I keep an eye on it[emoji102]

 

[Mulligan]

Interesting. As you may recall, I'd be interested in picking up some CTPPO but it seems to trade way above par and in lots of 1, but I keep an eye on it[emoji102]

Remember Golden, par doesnt matter with this one...Its the call price...Call price is $110. It effectively was called several years ago. They are through with trying to get the shares. I think there are only 2,000 shares left outstanding which is just a dribble... Most were surrendered on a voluntary call.... Yes, it will be very hard to snag a 100 at once.
I bought a few hundred more of CFC-B to empty my investing cash out again... Im betting it lives on a bit while more. Its sister issues are acting like it... We shall see... It goes exD in the morning.