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

[Slow But Steady]

Quote:

Originally Posted by Mulligan The liquidity is such you may at times be chasing a ghost and looking back may not get what was traded, as your present bid will always be put at the back of the bus.The best way is to set the bid at the price you are comfortable buying at, and let it come to you in time.

If I'm ready to buy something, I usually put in my bid a bit above where I see the current ask. Is there a better way?

[Mulligan]

Quote:

Originally Posted by Slow But Steady If I'm ready to buy something, I usually put in my bid a bit above where I see the current ask. Is there a better way?

You mean the current bid offering correct? In theory yes, if that is a price you can accept purchasing at. Though at times you will get "front run" and "computer botted" so dont get in a chasing game. Over time your order will move to the head of the list. I confess I am not as good as being patient as say Coolius is. He will set a bid even if its lower than the current bid and will wait weeks for his bid to strike. But he is also comfortable knowing the transaction may not occur. Patience truly though is a virtue with preferreds as you are buying for yield not capital appreciation.


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[Coolius]

Quote:

Originally Posted by jim584672 Vanguard's web platform choked on my WFC-L order. Had to call, they transferred me to the bond desk. By that time the price moved and I told them not to enter the order. grrrr...

I bought more at $1,166 a few days ago. You might be able to get them lower as we approach the Fed meeting.

From a % POV, a dollar/share is less than 0.1%, about 2.5 cents on a conventional $25 par issue. It just looks humongous to those of us used to $25 issues .

The next exDiv is 3 months away, so you have time - chances are good you could get it for $1,164 by being patient.

[Mulligan]

Quote:

Originally Posted by Slow But Steady If I'm ready to buy something, I usually put in my bid a bit above where I see the current ask. Is there a better way?

Btw- If you stick with your name, Slow, you will do fine. I am a bit conservative, but all 13 issues I own are positive on the year in price, not counting the yield. That isn't as important as the fact they will always pay and I will not be hurt on a call as I don't drift much above par on a past call issue...Stay away from BDC's, shipping companies, and energy production unless you are man enough to accept a possible ass whipping chasing yield. Many aggressive income investors on their forums are crying like babies that have just had their first trip back from the woodshed. If the yield is too good to be true...IT IS! I feel very comfortable with Wells preferred, but don't engorge too much on them.
The utilities, strong banks, insurers, and select Reits are the best areas to indulge in.


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[Golden sunsets]

Patiently waited for a week with an offer of 1164.25 for WFC-L - a whopping 10 shares. Finally filled today!! Now I'm wondering if I should have bought more?

[Slow But Steady]

Quote:

Originally Posted by Golden sunsets Patiently waited for a week with an offer of 1164.25 for WFC-L - a whopping 10 shares. Finally filled today!! Now I'm wondering if I should have bought more?

I've put this one on my radar screen too. I'm thinking of waiting until the Fed does their thing, hoping for a knee-jerk price drop.

[Coolius]

Quote:

Originally Posted by Golden sunsets Patiently waited for a week with an offer of 1164.25 for WFC-L - a whopping 10 shares. Finally filled today!! Now I'm wondering if I should have bought more?

Congrats! A good price, IMO.

I've been communicating with Mulligan about this, but if you take a close look at the 1 year chart of WFC-L, you might be able to see something interesting occurring around the time of each dividend.

PM me or Mulligan, and you're welcome to join the discussion; not sure if it would be fruitful or not. But hey, we're all retired and need something to do, right ?

[Mulligan]

Quote:

Originally Posted by Golden sunsets Patiently waited for a week with an offer of 1164.25 for WFC-L - a whopping 10 shares. Finally filled today!! Now I'm wondering if I should have bought more?

I hate to play financial advisor to anyone.... But at this current time and price and the fact its not callable makes it a good purchase. But... whether you should have bought more is more dependent on how much of your portfolio you are investing it in. If I had a $3 million portfolio and no pension, I would lose no sleep in having it all in my top 3 utility preferreds (yes that violates every rule of diversity). But no way would I consider ever having more than 5% of my portfolio in a bank preferred. Wells is the safest by far, but not worth piling in overboard.
Worst case scenario (and yes Wells was one of few that avoided the crisis last time) and if 2009 occurred again, the Feds will not bail out preferreds like last time. They were constructed as trust preferreds and got treated like debt and got bailed out. Don't count on that as they are now non cumulative preferreds. Ultimately bank preferreds are just money being covered by money.
If I am going to get greedy it will be with companies that can grease public service commissioners, who are allowed a guaranteed ROE by law, and get more guaranteed profits by building out more T&D lines.



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[Coolius]

The Black Friday Sales Event for Preferred Stock is now on !!

Come in for the best selection of Preferred stock in all sizes and shapes, all priced to move at some of our lowest prices for the year!!

I have spent some of my dry powder, and looking to pick up more bargains if possible.

[Mulligan]

Quote:

Originally Posted by Coolius The Black Friday Sales Event for Preferred Stock is now on !! Come in for the best selection of Preferred stock in all sizes and shapes, all priced to move at some of our lowest prices for the year!! I have spent some of my dry powder, and looking to pick up more bargains if possible.

Four of my biggest 5 issues are unchanged and the other is up 73 cents today.....Quit peddling junk to the uniformed masses, Coolius, you snake oil salesman!


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[Coolius]

Now, Now, Mulligan --- you know we never peddle junk to the masses. Consider them diamonds buried in coal mines. The trick is to find 'em.

Seriously though, today's action just proves the validity of what you & I have maintained earlier in this thread; Utility Preferreds, especially those that are thinly traded ( i.e., low liquidity ) tend to be very stable in tumultuous times.

If these Ute Preferreds are a small issue, say about $50 Million or so, ETFs/Funds have little interest in them; owners tend to be trusts and individuals who have no need to dump out of desperation or because of cash requirements.

And the parent company of small issues may have less incentive to call them, due to costs of redemption and perhaps other, more pressing matters to tend to. Mulligan says that some of these Ute Preferreds have been paying for 50 years - those are the ones to try and get.

Having said all that, today was a bad day for income oriented issues.

But I remain confident this will pass; for example look at Realty Income O; the preferred issue O-PF went down by 1.8%, but the common went up by about 1.4%. That is NOT a sign of selling because of company specific problems - that's a ETF/Fund throwing the baby out with the bath water.

[24601NoMore]

I absolutely LOVE O as a stock. Own a very few (<100) shares and am looking to buy a lot more in RE. It's remarkable stable in down markets, up in even slightly green markets, and pays a nice DIV monthly.

[Coolius]

Quote:

Originally Posted by RetireSoon I absolutely LOVE O as a stock. Own a very few (<100) shares and am looking to buy a lot more in RE. It's remarkable stable in down markets, up in even slightly green markets, and pays a nice DIV monthly.

+300 ( that's the number of O shares I own )

[Sunset]

These P's are hard to buy.
I just had an email saying my order was about to expire, and I didn't recognize the symbol. Naturally I thought my account was hacked, but after looking it up I realized it was a Util preferred.
I had wanted to buy 200 but got no bites on an all or none order...

I'm not much of a fisherman, so that might be the issue.

[Coolius]

Quote:

Originally Posted by Sunset These P's are hard to buy. I just had an email saying my order was about to expire, and I didn't recognize the symbol. Naturally I thought my account was hacked, but after looking it up I realized it was a Util preferred. I had wanted to buy 200 but got no bites on an all or none order... I'm not much of a fisherman, so that might be the issue.

Those thinly traded Ute Preferreds are, indeed, very hard to get. Putting a AON order, unfortunately, makes it even less likely to fill.

I have had bids on AILNP open for weeks on end, renewing the bid when it expires, no special instructions, without bites.

So, I'm as poor a fisherman as you are.....

Looks like only Mulligan knows the right kind of bait to use. Gotta pick his brains a little......

[Mulligan]

Quote:

Originally Posted by Coolius Those thinly traded Ute Preferreds are, indeed, very hard to get. Putting a AON order, unfortunately, makes it even less likely to fill. I have had bids on AILNP open for weeks on end, renewing the bid when it expires, no special instructions, without bites. So, I'm as poor a fisherman as you are..... Looks like only Mulligan knows the right kind of bait to use. Gotta pick his brains a little......

I agree with Coolius, Sunset. I would never use AoN for preferreds. Get what you can when you can... Most of the times I bid for 100 to 200 shares. But sometimes you can get the damnedest amounts filled, especially with the $100 par ones... 22, 73, 56, 30 are examples are various partial fills. Some are just not available because no one is willing to sell. Then some sell in bunches and dry up immediately. BGLEI was an example for Coolius and I. Probably 100,000 shares traded within a week a few months ago, and then a month goes by without a single transaction.


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[Coolius]

Quote:

Originally Posted by Mulligan I agree with Coolius, Sunset. I would never use AoN for preferreds. Get what you can when you can... Most of the times I bid for 100 to 200 shares. But sometimes you can get the damnedest amounts filled, especially with the $100 par ones... 22, 73, 56, 30 are examples are various partial fills. Some are just not available because no one is willing to sell. Then some sell in bunches and dry up immediately. BGLEI was an example for Coolius and I. Probably 100,000 shares traded within a week a few months ago, and then a month goes by without a single transaction. Sent from my iPad using Tapatalk

But be forewarned that having no AON could result in being sold so few shares that your trading commission kills any profit for maybe a long time.

For example, I had a 200 share bid open on a Ute preferred; I was sold 1 ( yes - one !! ) share. And broker charged me the usual $7 commission !! ARGH !!

Fortunately, I have good relationships with a particular client services manager, called him and he graciously comped me the commission.

So, I now have a line item in my portfolio that is only 1 share. This particular issue is not thinly traded as the ones we've mentioned, so am confident I can buy another 199 later. Today it dropped along with everything else, and is now 4 cents below what I got it for.

[Mulligan]

Quote:

Originally Posted by Coolius But be forewarned that having no AON could result in being sold so few shares that your trading commission kills any profit for maybe a long time. For example, I had a 200 share bid open on a Ute preferred; I was sold 1 ( yes - one !! ) share. And broker charged me the usual $7 commission !! ARGH !! Fortunately, I have good relationships with a particular client services manager, called him and he graciously comped me the commission. So, I now have a line item in my portfolio that is only 1 share. This particular issue is not thinly traded as the ones we've mentioned, so am confident I can buy another 199 later. Today it dropped along with everything else, and is now 4 cents below what I got it for.

Where is your sense of adventure, Coolius? Sometimes in life you just have to let it all out and go for bust risking that $7 transaction loss.


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[Coolius]

Quote:

Originally Posted by Mulligan Where is your sense of adventure, Coolius? Sometimes in life you just have to let it all out and go for bust risking that $7 transaction loss. Sent from my iPad using Tapatalk

A little testy today, eh? Betcha you had a bad day on the golf course this morning.....

'Cause I know you did OK in the market today.....

Talking about golf.....

A preacher and his friend were playing golf. The friend had a bad habit of cussing whenever he missed or fumbled a shot. His usual outburst would be " Dammit, missed the **** !! "

This went on for 9 holes, and the preacher's ears were getting severely disturbed. Finally, he told his friend that he had heard from God, that his cussing was offensive, and the next time he cussed, God would shoot a lightning bolt from heaven and zap him dead on the spot.

Thoroughly scared, the friend determined to keep his mouth shut.

Things went well until the 18th, when the final shot, a 10 foot putt for the friend curved around the hole and stopped right at its edge without dropping in.

This proved too much for the friend. " Dammit !! Missed the ****!! " he yelled.

At once a lightning bolt flashed down from the sky and struck the preacher dead.

A voice was heard from on high: " Dammit! Missed the **** !! "

[Mulligan]

[emoji23]...Good one!


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