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Old 09-28-2021, 10:52 AM   #401
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Which brings me to a question -- how much bargaining power would I bring to that kind of environment? I've settled a few buys with bids below the asking price, but it's usually been a matter of chiseling a basis point or two, maybe enough to cover the markup. I'm tempted to really lowball some of these unloved offerings.

There's no harm in trying. However, if you bid too low, then the system will block you and give the range that your bid must fall within. I don't understand that, and I complained to Fidelity about it, with a couple other issues with their handling of muni orders. I think the highest chance for success is to pull up the trade history and see when the dealer picked up the bonds - and aim for those that have been sitting there for the longest period, as there will be more incentive to get rid of them. Also, I believe there's also better chances if you do it close to 5PM, and especially 5PM on a Friday or before a holiday.

A while back, I figured a flaw in their logic - even though it wouldn't let you go too low, if you placed a bid within the range, it then reset that valid bid range based on the low bid. Then you could place another bid even lower, below the original range and cancel the original bid. You were able to do it multiple times taking the bid as low as you wanted. I think they've plugged that hole as I remember trying it not long ago, and it was then retaining the original valid bid range. I may try again just for the heck of it.
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Old 09-28-2021, 11:31 AM   #402
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Nope! The bug is still there!

Place your bid at the lowest it will accept. After it shows the bid when you search for the bond, then place a second order below the first bid seeing how low you can go - it will below the original range. Then cancel the first order. Your second one will still remain at the lower bid, below the original valid range.

Now, whether you have any shot in hell that the dealer will give it to you is an entirely different story. But, if you just put the bid out there and let it sit all day, or do it close to end of day, no telling if he may fill it, or you never know, maybe someone else comes along and is desperate to sell.
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Old 09-28-2021, 02:09 PM   #403
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Nope! The bug is still there!

Place your bid at the lowest it will accept. After it shows the bid when you search for the bond, then place a second order below the first bid seeing how low you can go - it will below the original range. Then cancel the first order. Your second one will still remain at the lower bid, below the original valid range.

Now, whether you have any shot in hell that the dealer will give it to you is an entirely different story. But, if you just put the bid out there and let it sit all day, or do it close to end of day, no telling if he may fill it, or you never know, maybe someone else comes along and is desperate to sell.


I may just wait a bit and see how things are shaping up. Seems like we're in another one of those cycles where everything is down -- bonds, stocks, gold, even bitcoin. I'm liking cash quite a bit at the moment.

That GS CD showed up in my portfolio today. I might take a plunge for another $25K in structured CDs at some point, but with all the political gamesmanship in progress some buying opps may develop elsewhere in the next few weeks.
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Old 10-06-2021, 06:55 AM   #404
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Just picked up some of these - not bad...
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Old 10-06-2021, 09:25 AM   #405
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Just picked up some of these - not bad...
You're in over my head, Howie. Did you pick that up on the secondary market? And the call date is today? So even if you hold it only one day, you gain a point and change, do I read that correct?

I had another bond called as of 10/1 -- Greater Orlando Airport -- but they went through some redemption procedures that seem to have confused even Fidelity. It's still listed in my portfolio but it was obviously redeemed and cashed out into my account. If I get another interest payment in April I won't complain, but I suspect Fido will sort it out by then.

I picked up a hospital bond from Norfolk, Neb., yesterday, yielding a hair under 2.5% YTW if called 7/27. 3.5% coupon. CUSIP is 557352EW7.
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Old 10-06-2021, 09:40 AM   #406
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You're in over my head, Howie. Did you pick that up on the secondary market? And the call date is today? So even if you hold it only one day, you gain a point and change, do I read that correct?

I had another bond called as of 10/1 -- Greater Orlando Airport -- but they went through some redemption procedures that seem to have confused even Fidelity. It's still listed in my portfolio but it was obviously redeemed and cashed out into my account. If I get another interest payment in April I won't complain, but I suspect Fido will sort it out by then.

I picked up a hospital bond from Norfolk, Neb., yesterday, yielding a hair under 2.5% YTW if called 7/27. 3.5% coupon. CUSIP is 557352EW7.
On the CDs, yes, Fidelity secondary market. There were about 175 of them and I bought in a few accounts before they were all gone in about 10 minutes. Yes, call date today - continuously callable, they can call whenever they like. Yes, at 98.247 - if they call tomorrow I make about 1.75% for one day hold...which is how much annualized? Clearly whoever dumped them believes interest rates are headed up and they aren't going to be called. I look at it and say, thank you very much, I'll take 3.17% YTM and you can call whenever you like or not.

I have one of those Orlando Airport bonds with call date of 10/1, so I need to check in to that - CUSIP 392274B47. Thanks.

Hospital bonds - there's one I've had my eye on, but trying to get dealer to come down some on price. Williamsburg Cnty, SC 6.625% coupon 2042, YTM 6.279%, YTC 2.109% 9/2022, CUSIP 969535AK9. It's BBB-rated, so I really want a better price and I'm not budging.
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Old 10-06-2021, 09:46 AM   #407
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Quick check of my Orlando Airport bonds - I think they're still good and likely won't be called. Only 2 years left and just $1.8 million outstanding in the issue for remaining 2023 and 2024 maturities. I didn't see any call/redemption notice for the issue.
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Old 10-06-2021, 09:55 AM   #408
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You're in over my head, Howie. Did you pick that up on the secondary market? And the call date is today? So even if you hold it only one day, you gain a point and change, do I read that correct?

Well, just got a call from Fidelity fixed income desk. They're busting all the purchases of the CD. Claim it was a mistake. I've had it happen before on munis and treasuries here and there. I hate when they do that, but there's nothing you can do about it. Sigh.
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Old 10-06-2021, 10:39 AM   #409
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Well, just got a call from Fidelity fixed income desk. They're busting all the purchases of the CD. Claim it was a mistake. I've had it happen before on munis and treasuries here and there. I hate when they do that, but there's nothing you can do about it. Sigh.
Too good a deal to be true, eh?

My Orlando bond was picked up in a partial call. Then there was some kind of weird CUSIP swap for some bonds, and the process was botched, so they had to issue a correction. Maybe the securities industry is short-staffed too.

Looks like the dealer has some room to bargain on that SC bond, if trade history is any indication. Good luck!
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Old 10-07-2021, 07:02 AM   #410
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Too good a deal to be true, eh?

My Orlando bond was picked up in a partial call. Then there was some kind of weird CUSIP swap for some bonds, and the process was botched, so they had to issue a correction. Maybe the securities industry is short-staffed too.

Looks like the dealer has some room to bargain on that SC bond, if trade history is any indication. Good luck!

They said that the CD should not have been posted, that the 3.0% coupon on it was incorrect, that it was some other structured product. Bottom line, they were reversing the purchase. Nothing to counter with.

As far as the Orlando bond being botched, nothing surprises me any more in the fixed income space.

On the SC hospital bonds, I played games with the dealer all day yesterday, didn't get anywhere. Today he knocked 0.2 off of it. But, I've had more time to review the last couple years financials for the hospital, and I understand why it has the BBB rating. Although there's a high likelihood they will call in 11 months, I'm going to stay clear. I don't think making $100 or $125 for 11 months is worth the potential risk.
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Old 10-07-2021, 08:26 AM   #411
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I didn't look too closely at it -- a 6+% coupon in itself implies risk.

I left $25K of that Nebraska hospital bond on the table. There doesn't seem to be a lot of interest, but it serves a city that looks prosperous. I don't think it's going anywhere even if the financials aren't stellar.

Looks like someone picked up the last $25K yesterday.
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Old 10-07-2021, 06:15 PM   #412
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I didn't look too closely at it -- a 6+% coupon in itself implies risk.

I left $25K of that Nebraska hospital bond on the table. There doesn't seem to be a lot of interest, but it serves a city that looks prosperous. I don't think it's going anywhere even if the financials aren't stellar.

Looks like someone picked up the last $25K yesterday.
6+% doesn't bother me much if the financials are strong. Many of those high coupons are legacy from 2009-2012 and they should be called as soon as they are able. The South Carolina hospital was bothersome because they've been running an operating deficit annually for the past several years.

Anyhow, I had an interesting situation today...seems it's been my week for them.

In the morning I requested bids for a bunch of my munis to see what kind of interest I'd get. One of them came back above the mark-to-market, was a partial call over the summer (about half of mine were called and the other half left with me), 6.19% coupon, BBB- rating. Mark-to-market is 100.218 and the bid was 101.387 so I took it. No problem. Happy to part with the BBB-

Now, the interesting one. This one is a Wyoming electric utility with a 6.954% coupon, past call date, but can only call on the interest dates every 6 months. Next call date is Dec 1. Mark-to-market is 100.671. The bid comes back at 101.387. I think about it...it is a decent bid...YTC is negative 3.82% if they call Dec 1, so if I take it and they do call, I'm ahead. But looking at the prior trades, I was looking for something at/above 102. So I just ignored the bid. This was around 9:45AM and the bid was good until 5PM. Then, at 3:30 in the afternoon, I get another notification from Fidelity - a new best bid for it at 102.4! What? How did that happen? Within a minute or two, after quickly running my calculations and seeing YTC is negative 10% if they call Dec 1, I take it. I made about $100 over the original bid, and $170 above the value shown in my account. Good deal. So, about 15 minutes later, I go back to see if the dealer who took it from me relisted it and at what price. Well, he already sold it - another dealer paid 102.65, and then he slaughtered a retail buyer with a 2.5 point ($250) markup selling it at 105.15! YTC for that buyer if Dec 1 call is exercised = negative 28%. He has to get through this Dec 1 call date as well as the next one in June just to break even. CUSIP = 210295DG3

So my cash is starting to build up and I have one CD maturing along with 3 muni calls next week. I'm thinking/hoping that we're going to see another one of those crazy liquidity events sometime between now and end of Q1 next year, and I'm just going to be patient and wait for it to scoop up some muni bargains.
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Old 10-07-2021, 07:51 PM   #413
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6+% doesn't bother me much if the financials are strong. Many of those high coupons are legacy from 2009-2012 and they should be called as soon as they are able. The South Carolina hospital was bothersome because they've been running an operating deficit annually for the past several years.

Anyhow, I had an interesting situation today...seems it's been my week for them.

In the morning I requested bids for a bunch of my munis to see what kind of interest I'd get. One of them came back above the mark-to-market, was a partial call over the summer (about half of mine were called and the other half left with me), 6.19% coupon, BBB- rating. Mark-to-market is 100.218 and the bid was 101.387 so I took it. No problem. Happy to part with the BBB-

Now, the interesting one. This one is a Wyoming electric utility with a 6.954% coupon, past call date, but can only call on the interest dates every 6 months. Next call date is Dec 1. Mark-to-market is 100.671. The bid comes back at 101.387. I think about it...it is a decent bid...YTC is negative 3.82% if they call Dec 1, so if I take it and they do call, I'm ahead. But looking at the prior trades, I was looking for something at/above 102. So I just ignored the bid. This was around 9:45AM and the bid was good until 5PM. Then, at 3:30 in the afternoon, I get another notification from Fidelity - a new best bid for it at 102.4! What? How did that happen? Within a minute or two, after quickly running my calculations and seeing YTC is negative 10% if they call Dec 1, I take it. I made about $100 over the original bid, and $170 above the value shown in my account. Good deal. So, about 15 minutes later, I go back to see if the dealer who took it from me relisted it and at what price. Well, he already sold it - another dealer paid 102.65, and then he slaughtered a retail buyer with a 2.5 point ($250) markup selling it at 105.15! YTC for that buyer if Dec 1 call is exercised = negative 28%. He has to get through this Dec 1 call date as well as the next one in June just to break even. CUSIP = 210295DG3

So my cash is starting to build up and I have one CD maturing along with 3 muni calls next week. I'm thinking/hoping that we're going to see another one of those crazy liquidity events sometime between now and end of Q1 next year, and I'm just going to be patient and wait for it to scoop up some muni bargains.
Crazy. I don't understand why someone would go that deep into the hole on a callable bond, unless they have some inside knowledge. Financial transparency is one of the reasons I like munis ... I wonder how transparent a utility has to be.

Meanwhile, I contacted Fidelity about that Orlando airport bond I mentioned. It seems it's back in my portfolio with a different CUSIP. The proceedings there were transparent, I guess, but they sure were confusing. It's a 4.250 coupon, so I'm happy to have it back.

I thought we might have a shakeup this month yet with the debt ceiling deadline, but that seems defused for now. December is not far off, though.
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Old 10-07-2021, 08:15 PM   #414
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So my cash is starting to build up and I have one CD maturing along with 3 muni calls next week. I'm thinking/hoping that we're going to see another one of those crazy liquidity events sometime between now and end of Q1 next year, and I'm just going to be patient and wait for it to scoop up some muni bargains.
I sure hope that's correct. I got extremely lucky w/ the March '20 "liquidity event" and picked up 3 munis that were long, medium, and short term. The short term felt very good/clever at the time since I was a newbie but now the ride is coming to an end and I need to re-deploy along with maturing CD's. It's generally hard for me to keep enough dry powder on hand to take advantage. Practicing patience.
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Old 10-08-2021, 11:58 AM   #415
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I sold a bunch of munis so far today - all of them past the call date and the dealers are giving me nearly one year of interest payments above 100.0 on all of them. Complete insanity. My portfolio value is going up as I'm selling because the prices are all well above mark-to-market. By the end of the day I may be close to 10% cash.
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Old 10-08-2021, 07:57 PM   #416
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I sold a bunch of munis so far today - all of them past the call date and the dealers are giving me nearly one year of interest payments above 100.0 on all of them. Complete insanity. My portfolio value is going up as I'm selling because the prices are all well above mark-to-market. By the end of the day I may be close to 10% cash.
I guess that's another atmptom of the investment madness we've been ling through the past five years or so. Covid seems to have turned up the temperature for some reason.I have some bonds that have appreciated quite a bit, but if I sold them I'd have to put the money somewhere that earns less. I look at the call dates and figure I'll have more cash in my pocket if
i hold on

Meanwhile, the Greater Orlando Aviation Athority redeemed my airport bond again. The cash is back in my account.





































i guess
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Old 10-08-2021, 10:02 PM   #417
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Meanwhile, the Greater Orlando Aviation Athority redeemed my airport bond again. The cash is back in my account.
OMG! That is insane!
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Old 10-11-2021, 12:57 PM   #418
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Keep an eye out for Muni Bond closed end funds (CEFs) they are slowly selling off as interest rates rise(primarily due to 40% leverage). However, when their yields cross 6% (now on average 4.4%) and they start trading at 15% discount to asset value, it will be time to load up on them. I am tracking several California Muni Bond CEFs and set up trigger alerts on Fidelity.
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Old 10-12-2021, 07:24 AM   #419
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Keep an eye out for Muni Bond closed end funds (CEFs) they are slowly selling off as interest rates rise(primarily due to 40% leverage). However, when their yields cross 6% (now on average 4.4%) and they start trading at 15% discount to asset value, it will be time to load up on them. I am tracking several California Muni Bond CEFs and set up trigger alerts on Fidelity.
Good idea, thanks!
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Old 10-15-2021, 05:30 AM   #420
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The one I dipped into has only a 125% participation rate this month (vs. 140%). The 200% CDs are enticing ... I'll have to think about it.

The thing is, I'd like to see the results of my plunge when the books are settled in 2016. But I may have lost my cognition by then -- who knows?

Your 5 year JPM is with 150% participation rate this month.
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