Mulligan
Give me a museum and I'll fill it. (Picasso) Give me a forum ...
- Joined
- May 3, 2009
- Messages
- 9,343
Preferred Stock Investing-The Good , The Bad and The In Between
Makd, now I will explain my thoughts on buying the yield chasing way above par purchases...Take the bank TRUP I mentioned a few posts ago concerning the problems they are having in dealing with a call. Yes they said they would nit do anything in immediate future...But does that mean 6 months? I bought a week ago and it has appreciated $1 already... Its getting close if it appreciates much more I will bail...Why? Well I can collect almost 6 months of divi in say 2 weeks and then reinvest money in something else... Why not just stay and collect the 9% plus yield?
Well lets say I get 2 divis and then they call it... I didnt make $1.25 on the deal...I lost 30 cents holding it 6 months and getting a call. So take the profits and run, and if it drops again reenter... Now if it heads south I stay and collect as I have nothing to lose if it sunk near par.....keep it and collect the 9%... This is how I operate to sneak in higher yields and not get caught with my pants down on a call chasing yield... Now take BGLEN... It got it so close to par on the fire sale, I am holding for awhile and seeing what they do. I feel my risk/reward is better served holding it as I dont really have a place to unload $75,000 on at this time..And it is as safe as can be and a 6.4% yielder, call risk aside... But I will take the call risk as I will not lose money on this endeavor.
Preferreds are like woman... There are certain ones you only date and only a certain few that are marriage material.
Sent from my iPad using Tapatalk
Makd, now I will explain my thoughts on buying the yield chasing way above par purchases...Take the bank TRUP I mentioned a few posts ago concerning the problems they are having in dealing with a call. Yes they said they would nit do anything in immediate future...But does that mean 6 months? I bought a week ago and it has appreciated $1 already... Its getting close if it appreciates much more I will bail...Why? Well I can collect almost 6 months of divi in say 2 weeks and then reinvest money in something else... Why not just stay and collect the 9% plus yield?
Well lets say I get 2 divis and then they call it... I didnt make $1.25 on the deal...I lost 30 cents holding it 6 months and getting a call. So take the profits and run, and if it drops again reenter... Now if it heads south I stay and collect as I have nothing to lose if it sunk near par.....keep it and collect the 9%... This is how I operate to sneak in higher yields and not get caught with my pants down on a call chasing yield... Now take BGLEN... It got it so close to par on the fire sale, I am holding for awhile and seeing what they do. I feel my risk/reward is better served holding it as I dont really have a place to unload $75,000 on at this time..And it is as safe as can be and a 6.4% yielder, call risk aside... But I will take the call risk as I will not lose money on this endeavor.
Preferreds are like woman... There are certain ones you only date and only a certain few that are marriage material.
Sent from my iPad using Tapatalk
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