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

[Winemaker]

I may be premature, but maybe wine doesn't kill all my brain cells. This is a long distance race. Reminds me of an old Cliff Clavin joke from Cheers.


https://www.manmadediy.com/users/ch...ic-cliff-clavin-on-why-beer-makes-you-smarter

 

[Mulligan]

Winemaker, life cant be all about danger, excitement and AFSI. Have bought 10 shares of MTB-C today at 1025. Goes exD next week at $15.94. So about 6.3% QDI and a very rarity...Cumulative. I suspect it will be called at 1000 in Oct 2018 being its a TARP cummulative issue.

 

[Winemaker]

Sometimes ya win 'em, sometimes ya lose 'em. If your minimum cutoff is 7%, maybe thou takes too much risk? Or is that an appropriate rate of return to pay for the risk? I dunno. I made a similar ploy back in 2006 or 07 on some FNMA 6.875% preferred at $12.25. I got a few divvies, before I lost all my moolah. It was in my funny money account. I just made a bunch on the BAC-B warrants. I bought at $0.28 each, sold at $3.27 the other day. Not bad for a retired coal miner. Ya win some, Ya lose some.

 

[Mulligan]

Sometimes ya win 'em, sometimes ya lose 'em. If your minimum cutoff is 7%, maybe thou takes too much risk? Or is that an appropriate rate of return to pay for the risk? I dunno. I made a similar ploy back in 2006 or 07 on some FNMA 6.875% preferred at $12.25. I got a few divvies, before I lost all my moolah. It was in my funny money account. I just made a bunch on the BAC-B warrants. I bought at $0.28 each, sold at $3.27 the other day. Not bad for a retired coal miner. Ya win some, Ya lose some.

I really dont have a yield threshold just a smell test. Take FIISO that Coolius and I own.. Over 8% QDI but a very safe issue many times over coverage ratio. PFX is 10% but debt rating is improving and on upswing. NSS is heading to 8.45% in April but oil is up big and this sits nicely with all their pipeline contracts coming due for renegotiation this year. Plus Moodys says they have plenty of liquidity this year. AFSI has a cloudy reputation and some potential loan loss reserves to be restated. Plus they have about reached their reinsurance off loading limit so they will be on the hook. Which means regulators can ask for more reserves and require suspension of dividends to holding company which means....suspension of divi for a non cum preferred...Im just hoping to hang long enough to get next divi declared see a spike and exit....If I was smart I would sell tomm and pocket my $200.

 

[redduck]

Sometimes I just come over and visit this thread. I understand very little, but am in awe with the knowledge you guys have acquired regarding the preferreds. And, you seem to be having a lot of fun. It's all very impressive.

 

[Coolius]

Winemaker, life cant be all about danger, excitement and AFSI. Have bought 10 shares of MTB-C today at 1025. Goes exD next week at $15.94. So about 6.3% QDI and a very rarity...Cumulative. I suspect it will be called at 1000 in Oct 2018 being its a TARP cummulative issue.

Occasionally I see Mulligan come back to his roots, LOL.

He and I started off with conservative income stocks, but somewhere along the way Mulligan went to the dark side and embraced the likes of AFSI and other such stuff.

Now his buying of MTB-PC takes a step back toward his return to the Force.

I own a sister issue, MTB-P, which has a similar yield, and same First Call date. A very safe issue, and one can always hope they will not call at FC date.

 

[Mulligan]

Occasionally I see Mulligan come back to his roots, LOL.

He and I started off with conservative income stocks, but somewhere along the way Mulligan went to the dark side and embraced the likes of AFSI and other such stuff.

Now his buying of MTB-PC takes a step back toward his return to the Force.

I own a sister issue, MTB-P, which has a similar yield, and same First Call date. A very safe issue, and one can always hope they will not call at FC date.

This is a very unique bank preferred...First it was originally issued to the Treasury as a TARP preferred. Then it gets its yield changed to 6.375% and recycled out to institutional buyers from Treasury. It maintains its cumulative feature which is rare as hens teeth. They have no interest in selling to retails investors this just trades in small amounts despite huge size. They have a 3rd big preferred that is also a $1000 par, but doesnt even show trades. It must be totally institutionalized.

 

[Mulligan]

Sometimes I just come over and visit this thread. I understand very little, but am in awe with the knowledge you guys have acquired regarding the preferreds. And, you seem to be having a lot of fun. It's all very impressive.

Redduck, nobody smart is allowed to participate in this thread. So since you say you understand very little, you will fit right in with us!

 

[Winemaker]

Redduck, nobody smart is allowed to participate in this thread. So since you say you understand very little, you will fit right in with us!

+1 If I was smart, I would have been able to retire earlier instead of 56!

 

[Mulligan]

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

+1 If I was smart, I would have been able to retire earlier instead of 56![emoji23]

I was so dumb I didnt even notice I was going to have a nice pension until I was about 35. Pensions are for very old people, and I was never going to be old....Where did the time go?
Got in on a major selloff of INBKL this morning. 400 at $25... Becomes a nice floater in 3 years at first call date....Held my nose and jumped in at morning bell noticing a $1 sell off in ASRVP late the day before right at close. Bought at $26.50 for almost 8% yield. Past call danger but this mediocre bank seems to muddle along so Im counting on the trust preferred to stay outstanding.

 

[redduck]

Redduck, nobody smart is allowed to participate in this thread. So since you say you understand very little, you will fit right in with us!

Thanks for the invite, but I have battles waiting for me on a dividend investors thread.

+1 If I was smart, I would have been able to retire earlier instead of 56!

Beat you by a lot: I'd fit in so well--I retired at 70.

OK, you guys, get back to making money and having fun.

 

[aja8888]

Thanks for the invite, but I have battles waiting for me on a dividend investors thread.



Beat you by a lot: I'd fit in so well--I retired at 70.

.

Looks like you and I have the qualifications to join the "retired late" club!

 

[redduck]

Looks like you and I have the qualifications to join the "retired late" club!

Great, you, me and Nemo2. That should put this wonderful, active and long-lasting thread into a downward spiral. Coolius is cashing out as we speak, gonna' put all his preferred money into a target date fund.

 

[aja8888]

Great, you, me and Nemo2. That should put this wonderful, active and long-lasting thread into a downward spiral. Coolius is cashing out as we speak, gonna' put all his preferred money into a target date fund.

I Used to be in this thread a bit more, but now I just concentrate on what to spend my RMD distributions on. Lately its been medical stuff. I still have some preferreds, but I have to look at my account statement to see what they are. Maybe I should look into those target date funds? Maybe find one for 2020?

 

[Mulligan]

I Used to be in this thread a bit more, but now I just concentrate on what to spend my RMD distributions on. Lately its been medical stuff. I still have some preferreds, but I have to look at my account statement to see what they are. Maybe I should look into those target date funds? Maybe find one for 2020?

Play it safe Aja, and go 2019 target! I have been wheeling and dealing...Buyer dippers and selling uppers. Working hard juicing returns... I noticed I had 16 preferreds at end of Dec. and have 17 now... 9 of them I didnt have a month ago...

 

[Winemaker]

Play it safe Aja, and go 2019 target! I have been wheeling and dealing...Buyer dippers and selling uppers. Working hard juicing returns... I noticed I had 16 preferreds at end of Dec. and have 17 now... 9 of them I didnt have a month ago...

Who is getting richer you or your broker?

 

[Coolius]

Great, you, me and Nemo2. That should put this wonderful, active and long-lasting thread into a downward spiral. Coolius is cashing out as we speak, gonna' put all his preferred money into a target date fund.

Redduck, ha ha - would be nice to cash out and put everything into a "safe" fund, but then there would be no horror stories to tell any future grandchildren I may have.

Mulligan is wobbling between greed and conservatism, that's why he is so active in flipping. I am betting that he is no longer SWAN sensitive.

My flipping activity is way less than Mul's, and usually for very modest gain - a perfect example of picking up pennies before the steamroller. And yep, have been run over a few times.

My sock drawer is pretty stable; WFC-L, BAC-L, MTB-, AILLL, CNTHP, CNLPL, IPWLK, HE-U, FIISO and others of less noteworthy stature. Definitely NOT considering swapping these out for a Target Fund !! So you, nemo & aja are very welcome to join us in this financial version of a mud wrestling brawl.


SWAN - Sleep Well At Night

 

[Mulligan]

Who is getting richer you or your broker?

It has to be me because he charges $3.95 and I wont flip unless its more...Take today as an example.. I sold 400 shares of landp at 25.96 that i bought at 25.88 and collected a divi. I plowed that into ASRVP. Its up a quarter from my 26.50 purchase, while LANDP actually went down after I sold. I then flipped KTBA at 28.36 that I last bought at 28.18 last week. Then I rolled this into the Bank of Internet fixed to float at $25 on a big selloff. Last trade went out at $25.37 today... u keep rolling these types of trades and you double your returns pretty easily....Technically i do it opposite...I buy the securities and then sell something as I borrow the brokerages money to buy ( without permission). As long as I get my balance above zero before end of day it doesnt matter

 

[Mulligan]

Ol Walmart really wants them 7.55% 2030 bonds bad offerring almost 150 for them. About 50% of the holders of the billion dollar float have accepted. They arent getting the ones GJO possesses in trust. And I aint selling my GJO either.

 

[Mulligan]

Winemaker, I should have had bigger Kahauna’s... AFSI preferreds are rising nicely above my purchase price... And INBKL and ARSVP have spiked nicely also since yesterdays purchase. Your lowball buy of AFSI is looking good now!

 

[Winemaker]

My lowballs may be bigger than my brains!

 

[Freedom56]

Year end portfolio restructuring time. I sold my JPM-H, COF-F, SNHNL, LMHA, EBAYL, C-S, BAC-C, DLR-I. I have held these in some case for over two years and my gain is now equivalent to the next two years of dividends and as they will approach their call dates, they will start dropping to par. My capital gains tax will be at a 15% rate. If there is a sell-off of these I can always get back in. I assessed the risk on the downside for those preferred stocks and exchange traded notes.

This was one of the best moves I made at the end of last year. The sell-off of PGX and PFF have started. These ETFs are now lower by almost $1.8B since the beginning of the year. Whereas HYG has been relatively flat. The yield curve is flattening even more. The last time the 10 year was at 2.70% the 30 year was at $3.33. Today the 30 year is at 2.93%. With the size of PFF and PGX and the continued sell-off, I should be able to re-enter my positions well below par. I bought 2024 Centurylink 7.75 notes at 96.10 in December they are trading at 101.70 now. I also bought Qwest 2031 7.75 notes at 84.20 and they are trading at 90.50 now. The sell-off is more to do with fund redemptions rather than fundamentals. There are a few exception: Amtrust and Maiden holdings. I believe that Amtrust is running a fraud and so is Maiden holdings.
It looks like this is going to be a repeat of 2013 all over again. However this time, PFF and PGX are much larger ETFs with the potential to cause more volatility in preferred stocks and exchange traded notes.

 

[Mulligan]

The fear still hasnt hit yet. If we get 2013 the ball hasnt began to run down the hill yet. All of my issues that I trade are higher now than last month. But I am in more niche preferreds. Will look to rotate out after the others drop. I agree on AFSI. But Im above water on those and will continue the experiment until divi declaration and sell before earnings announcement.

 

[Mulligan]

The 5% liquid issues are starting to head back behind the woodshed I noticed.

 

[Freedom56]

The fear still hasnt hit yet. If we get 2013 the ball hasnt began to run down the hill yet. All of my issues that I trade are higher now than last month. But I am in more niche preferreds. Will look to rotate out after the others drop. I agree on AFSI. But Im above water on those and will continue the experiment until divi declaration and sell before earnings announcement.

Reality will sink in soon. The empty mall problem is not going away anytime soon. If fact I have sees even lower foot traffic during the past two months. I can't see retailers keeping the under-performing stores forever. there are just too many stores and strip malls. Banks are shutting down branches as people use online banking and ATMs. Tourism is down compared to 2016. The most shocking thing I saw was last week at Fort Lauderdale beach. The temperature was a pleasant 82 degrees but the beach and beach front restaurants were empty. The manager at the Bubba Gump we had lunch at said business is down about 30% and some are seeing declines as high as 60%. The $1000 bonus sounds good but the vast majority of employers are small businesses that are struggling and are not handing out more money. This explains why the long bond is still below 3%. It looks like we are headed for an inverted yield curve which is not supportive of the rally in bank stocks.