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Old 03-05-2018, 01:23 PM   #3141
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Finally stopped chasing and just bought 200 SSW-E at $24.05. YTC = 12.35% at that price. Cost myself probably $0.25 trying to get cheap bids picked up over the last few weeks.
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Old 03-05-2018, 01:33 PM   #3142
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A very good chance of that (Waldenization) happening with Amtrust. I think there will be another shoe to drop before this saga is over. I expect Barron's to be writing something on this soon. There is something going on. They delayed their earnings release. A.M. Best is still reviewing Amtrust with "negative implications". One of their partners in crime Maiden Holdings reported another huge loss yesterday. They are still under investigation by the SEC.
Decided to be safe and sold my holding.... got a divi and a small bit of cap gain... and now do not have to worry about this happening...
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Old 03-05-2018, 01:51 PM   #3143
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Decided to be safe and sold my holding.... got a divi and a small bit of cap gain... and now do not have to worry about this happening...
I would have made the same move. It would have kept me up at night.
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Old 03-05-2018, 02:43 PM   #3144
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Decided to be safe and sold my holding.... got a divi and a small bit of cap gain... and now do not have to worry about this happening...
I got out of Amtrust preferreds along with Maiden holding notes and preferred a long time ago when Barrons reported on their accounting issues. They were trading above par and continued to rise after I sold. But then people started taking the news (SEC and FBI probes) seriously and the plunge started. It's interesting to see that Amtrust common continues to drop even with an all cash offer of $13.50. With low rates, it should trade at a slight discount to the buyout price. But it's well below that. Perhaps the market is skeptical about the financing for the buyout or is as Barron's contends, the buyout is an attempt to take all the problems private in which case the buyout may not happen.
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Old 03-05-2018, 02:59 PM   #3145
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Finally stopped chasing and just bought 200 SSW-E at $24.05. YTC = 12.35% at that price. Cost myself probably $0.25 trying to get cheap bids picked up over the last few weeks.
YTC is nice IF it's called. What your confidence in it being called? With no stated maturity and likelihood of higher rates, there's more risk here than I think I'm comfortable with.
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Old 03-05-2018, 03:41 PM   #3146
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Keep an eye on LQD. They own a lot of investment grade short and medium duration short term notes and those issues have been under pressure as redemptions have forced selling by LQD and other similar ETFs. A lot of their holdings are good for conservative investors who want some safety in short and medium term investments. I am building a tracking sheet for 2018-2028 notes. With a 3.3% yield LQD will see a lot of pressure if the TNX crosses 3%. The spread between LQD and the TNX is too narrow. Either the TNX yield will drop or the yield on LQD will rise. Something has to give.
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Old 03-05-2018, 03:46 PM   #3147
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YTC is nice IF it's called. What your confidence in it being called? With no stated maturity and likelihood of higher rates, there's more risk here than I think I'm comfortable with.
Not entirely confident because they still have the D out there that has been callable for just over a year. However, if they don't call it I'm fine to sit back and collect the coupon regardless of what rates do. They have become the clear leaders in this industry, growing consistently. They also have good dividend coverage ratios and seem to have good relationships with lenders. If this point and their recent issues are any indication, it's possible that when this one comes due in just one year, they could refinance it and the D at a lower rate.
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Old 03-05-2018, 04:08 PM   #3148
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Not entirely confident because they still have the D out there that has been callable for just over a year. However, if they don't call it I'm fine to sit back and collect the coupon regardless of what rates do. They have become the clear leaders in this industry, growing consistently. They also have good dividend coverage ratios and seem to have good relationships with lenders. If this point and their recent issues are any indication, it's possible that when this one comes due in just one year, they could refinance it and the D at a lower rate.
If rates do go up, not sure if SSW would find a benefit of refi, they'll have to juice the next issue. They also have senior notes that they'll have to refi next year so that may put some constraints to move on D and E. Not a bad yield even without the call. Haven't done any due diligence on the company, but do see that BofA dropped the target price the common just a couple days ago, so seems something under the covers may be a concern.
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Old 03-05-2018, 06:27 PM   #3149
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YTC is nice IF it's called. What your confidence in it being called? With no stated maturity and likelihood of higher rates, there's more risk here than I think I'm comfortable with.


If I bought this, I would be focused on current yield and not YTC as these shipper issues probably arent in line for a call. Of course I am a bit biased about little concern about YTC. As I suspect over the past 5 years, 90% of mine were purchased with negative YTC.
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Old 03-06-2018, 10:10 AM   #3150
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If I bought this, I would be focused on current yield and not YTC as these shipper issues probably arent in line for a call. Of course I am a bit biased about little concern about YTC. As I suspect over the past 5 years, 90% of mine were purchased with negative YTC.
I've got a couple that I bought at a premium and could be called now or in the near future (GWSVP, LANDP, NSS), but not at negative YTC! You're a wild man.

And yes, I understand current yield is probably most appropriate for this one, but I like the visual of that YTC.
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Old 03-06-2018, 10:13 AM   #3151
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Ken, unless you got it at a very special price, GWSVP has pretty much been a negative YTC for years on end.
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Old 03-06-2018, 10:35 AM   #3152
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Ken, unless you got it at a very special price, GWSVP has pretty much been a negative YTC for years on end.
Good point, it was callable 10 years before I bought it. And no my price isn't so special. I'm in at $26.40
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Old 03-06-2018, 10:40 AM   #3153
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Yes, you are like me now Ken...A negative YTC holder! See its not so painful is it? Provided it doesnt get called, lol...
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Old 03-08-2018, 08:25 PM   #3154
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Got ahold of Vanguard rep to exercise my rights to GDL-C today...Sold off half my NSS at 25.42...Something isnt right here with NS as the preferreds and common are just trading horribly. NSS has been holding pretty strong and I sold at a profit. But if there is something wrong NSS could tumble more also due to ultimately its relative thin extra layer of protections
over the preferreds.
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Old 03-08-2018, 09:08 PM   #3155
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I had seen NSS dropping today by 1%, seemed to be just re-calibrating based on it's recent run-up. I then looked at NS which dropped by over 2%. Then saw that NS preferred's and saw A and B was down by over 4% and C was near 3%. Had me wondering what's up as well. News on NS rating affirmed as BB, but outlook downgraded to Negative due to liquidity concerns probably sent people running for the doors. I was considering what to do, I'm up still from purchase and pocketed a div along the way so a good return for my holding period. Maybe roll over part into ALLY-A, only concern there is getting a call with the premium paid. I'll sleep on it tonight and see where the markets at tomorrow on these issues.
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Preferred Stock Investing-The Good , The Bad and The In Between
Old 03-08-2018, 09:21 PM   #3156
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Preferred Stock Investing-The Good , The Bad and The In Between

Bob its worse...The preferreds and NSS a couple weeks ago were downgraded to B1 and negative watch... I wouldnt watch the bonds as there is a clear huge line between their actual bonds and subordinated debt/preferreds. The bonds must be safely covered but the rest is in danger. But this was out a few weeks ago, something has happened since...Dont know...Maybe another soul crushing preferred to be issued? This would not be good S&P has already went on record saying they will not even count all preferreds as equity now because they have too much of it. There just hasnt been any good news in a long time. Just management blather and unfulfilled promises. I decided to forgo some credit risk and do what I like to do more...Take on call risk. Bought 500shares of MER-P at $26.38 today. The 47 cent interest payment will go ex and be paid off all in about a weeks time from today. Then it becomes stare them down on a call and collect relatively safe BAC 7% plus debt or look for a flip out in a few weeks.
Also bought a couple hundred shares of Exxon when it hits 2 year low yesterday just to get my feet wet.
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Old 03-08-2018, 09:59 PM   #3157
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NSS downgrade seemed like stale news, so must be something recent. Maybe just have some big investor moving out. I think that MER-P is safe from call in the short term. Hold that guy until and it becomes floating
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Old 03-08-2018, 10:08 PM   #3158
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NSS downgrade seemed like stale news, so must be something recent. Maybe just have some big investor moving out. I think that MER-P is safe from call in the short term. Hold that guy until and it becomes floating


And snag that Libor plus 1.67 adjustable in 2062? You may have to do me a favor and spend the interest payments for me, as Im expecting to be deep into an under the dirt nap slumber by then!
The disturbing thing about NS preferreds today as they all went down. Usually a seller isnt in all of them and volume appeared heavy in all preferreds while NSS was on average volume down less at 1%. But it is still in its trading range, while the preferreds are rocks being thrown in the pond trying to swim.
This is where dumpster divers would like to enter as yields are hugging 10%. Im not a dumpster diver, so its not suitable for me to dive in.
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Old 03-08-2018, 11:40 PM   #3159
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And snag that Libor plus 1.67 adjustable in 2062? You may have to do me a favor and spend the interest payments for me, as Im expecting to be deep into an under the dirt nap slumber by then!
The disturbing thing about NS preferreds today as they all went down. Usually a seller isnt in all of them and volume appeared heavy in all preferreds while NSS was on average volume down less at 1%. But it is still in its trading range, while the preferreds are rocks being thrown in the pond trying to swim.
This is where dumpster divers would like to enter as yields are hugging 10%. Im not a dumpster diver, so its not suitable for me to dive in.
Mulligan - The sell-off of the preferred stock may have to do with the re-financing of $350M debt on April 15. The market hasn't been too kind to MLPs over the last few years and more recently. Nustar Energy cut its distribution recently which can't be helping. This article was one of the first to warn about MLPs and was right on:

https://www.barrons.com/articles/why...ner-1443476002

MLPs started the year strong, but then reverted back to its downward trend started back in 2014.

I stay away from anything to do with energy. The companies are not that same as they were decades ago. They have far too much debt now. This includes the majors such has Chevron and Exxon. I'm trying to figure our which one of the two, Chevron or Exxon is the next GE. Both are on a downtrend so I guess you can flip a coin.
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Old 03-09-2018, 06:13 AM   #3160
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Freedom their bonds have basically been fine. The 2027 maturity that is a yield of sub 6% is trading at $99. So the debt rollover doesnt appear to be a problem and has been in the forefront for some time. I have never had any interest in MLP commons so they arent a real concern its NuStar specifically and their situation is what has my ears to the ground...Remember NuStar is in no way considered your typical MLP. It has a lot of other moving parts like oil storage and Venezuela issues for example. And none of it is going very well.
I dont have enough money in Exxon to be stressed, but they will be ramping up cap ex. no doubt. Things looks fine at $60 a barrel and profitable at $40. Projected 3%-7% yearly divi increases during next projected earnings cycle. It wont build me a mansion, but the odds of Exxon being sliced to $35 in 2 years as is the equivalent of what happened to GE doesnt seem too probable.
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