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

[pb4uski]

Yeah, its a bit funny in that when this thread started you were much more of a buy and holder and more focused on safe utilities as I recall... and I was drawn into these preferreds and baby bonds mostly as a relatively safe income source... and over the years as you've learned more you've become much more adventurous.

We all evolve.

I wonder if there are any research tools that I am missing. quantumonline is my go-to place, but I also browse through posts and the preferred and baby bond lists at innovativeincomeinvestor and read any free preferred stock articles on Seeking Alpha (with some skepticism). The tools for researching preferred on Fidelity and Vanguard have been ok, but disappointing. My focus is more towards investment-grade credits, with little call risk with yields in the 5-6% range.

 

[pb4uski]

This thread made me think to look back and see how I had done on the issues that I've had that were called... and I was pleasantly surprised.

Only 2 losers... worst was one where it was called less than 3 months after I bought it and I lost $294... the other was a $41 loss after 5 months... but all the calls combined had a ~3.4% IRR so not so bad I guess.

 

[Mulligan]

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

This thread made me think to look back and see how I had done on the issues that I've had that were called... and I was pleasantly surprised.

Only 2 losers... worst was one where it was called less than 3 months after I bought it and I lost $294... the other was a $41 loss after 5 months... but all the calls combined had a ~3.4% IRR so not so bad I guess.

PB, roughly 35% are still in pure illiquid utility preferreds. But I figured out over time with these I can just trade in and out of them as the market doesnt care if its Connecticut Light and Power or Alabama Power. For example I do this all the time... NSARO was about 2 months ago laying there for the taking at $103.70. I bought over 300 shares. Then one day a couple weeks ago bids were coming out around $108 so I dumped them all. Then just this past week I bought them back at $104.70 and it goes exD in a week. I really didnt want to sell them but when the bids go up, out goes the sell button as I know I can get them back.
Another example off top of head.. APRDO came available day before exD 3 months ago at $103. The very next day I captured divi and flipped them at $105-106. Then a few weeks ago I bought them back at $104 and still captured the 12/14 divi. See to me this is how I turn 4% issues into 10% plus issues.
They arent growth stocks but range bound issues. Buy on lower end sell on upper end. But dont get greedy either way as the trade wont happen.
Of course nothing is wrong with buy and hold, for income seekers only. I like to goose returns and I reinvest the income anyways.
Yield chase for me generally has to have “wind behind my back”. For example QTREP. Its a riskier play, but QVC is on a roll, cash is rolling in and company is doing great. I will ride these for a while and collect higher income. I still watch this one closely, because John Malone being John Malone isnt going to take all that free cash and pay down debt. He is giving big chunk special one time common divis, which do nothing for the preferreds. He likes his leverage unfortunately. But he and another insider have $100 million of the preferreds themselves, so they got skin in it too.
I also have other IG or near IG stuff too besides utes. I have a full position of KTBA I mostly sit on. Also LXP-C and SLMNP too. That kind of stuff. I will run a base position then go up and down on it based on its price movement. But never totally vacate the positions.

 

[Gumby]

New thread for 2021 is started here. https://www.early-retirement.org/fo...the-in-between-2021-a-107188.html#post2538962