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

[Mulligan]

I mentioned this one to Pig and Coolius but it may be of interest to someone here or at least study and decide...LANDP...This is a farm land reit specializing more in produce and speciality items for farm land, not row crops such as corn and wheat. It was issued a year ago, but I kind of lost track of it as it jumped to $25.50 immediately and I was still in the middle of chasing and flipping some utes that are now gone. Anyhow bought 500 at $25.73 today and it goes exD next week. Pays monthly. The mechanics of issue is what is most alluring to me. Becomes callable Sept 2018. I doubt that occurs since it was only issued a year ago. Has a maturity date of fall 2021. It they dont call it then it has a 300 basis point penalty added to the yield. Excellent incentive to call issue. So in todays sky high perpetual prices and uncertain rate market this one has nice clarity to it.

 

[Coolius]

If any of you own CFC-B, be aware that the stock has dropped dramatically yesterday and today, with unusual high volume.

This is possible indication of an imminent call. I might very well be wrong, but am going to play it safe.

So sold entire position today, for loss, but offset by dividend received, netted out with a minuscule gain after trade commission, taxes.

 

[Mulligan]

I have been out about a month when it spiked above 26. Its movement is unusual to other preferreds, so your fear is warranted. But if it drops below 25.40 it could be a buy as that is below call plus next month interest payment.

 

[Coolius]

I was looking at MER-K, which originated from the Merrill Lynch acquisition.

Priced around $25.30, just went ex-div yesterday. Like the others, way past call date, so call risk is very much evident.

One could conceivably bet that the next $0.40 dividend will be paid, and buy at this price.

With 30 days accrued interest considered, max risk exposure is about $0.17, even if they announced a call tomorrow.

Not sure if I want to take the chance, but would like to put the CFC-B proceeds to work.

 

[Winemaker]

I was looking at MER-K, which originated from the Merrill Lynch acquisition.

Priced around $25.30, just went ex-div yesterday. Like the others, way past call date, so call risk is very much evident.

One could conceivably bet that the next $0.40 dividend will be paid, and buy at this price.

With 30 days accrued interest considered, max risk exposure is about $0.17, even if they announced a call tomorrow.

Not sure if I want to take the chance, but would like to put the CFC-B proceeds to work.

I bought MER K and MER L years ago when they were around $22. The MER L was called last year some time, so I expect a call soon for the MER K......

 

[Mulligan]

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

I bought MER K and MER L years ago when they were around $22. The MER L was called last year some time, so I expect a call soon for the MER K......

I know Congress is looking to tinker or abolish Dodd/Frank. This may allow them to need less "Tier capital". I know some of these big bank TRUPs grandfathered status ends in 2018 or 19. Dont know if these are applicable to these issues or even if D/F will even be around then to matter. Bottom line is almost all of them have been called an incrementally so. Its been a year since last TRUP call so more dominos may fall soon. There really are only 3 good ones left. And historically no rhyme or reason by yield in call order. Some low 6s have been called and some 7s. If CFC-B drops another dime or so, I am going back in!

 

[Coolius]

AILLL had a bungee cord experience today. Dropped 1.6% dramatically on 806 shares traded, and within 10 minutes jumped right back to where it was before the dump.

Hopefully one of you illiquid gatherer-hunters got those shares @ $26.00. My bid was a little lower than that, so missed out on it.

Ya gotta be sharp, when hunting for those illiquids!!

 

[Mulligan]

AILLL had a bungee cord experience today. Dropped 1.6% dramatically on 806 shares traded, and within 10 minutes jumped right back to where it was before the dump.

Hopefully one of you illiquid gatherer-hunters got those shares @ $26.00. My bid was a little lower than that, so missed out on it.

Ya gotta be sharp, when hunting for those illiquids!!

I didnt get dip but I took advantage of liquidity and got 200 more at $26.55. I also bought 500 of CFC-B at $25.65. Sister issue MER-P which is a higher yield and just kicked out its divi shot right back to $26.43. So CFC-B is considerably better risk/reward on call loss. I have made good money on this one and I am tip toeing back in. Im a bit more daring than you, Coolius.

 

[Mulligan]

Well today was "easy money day". Held UMH-B and LANDP for maybe a week or two and booked 60 cent profit per share on a flip and collected a divi too with LAND. Flipped out of MHO-A with about 60 cent profit also. Sold DMRRP $6 per share above purchase price 2 months ago and snagged a $1 per share divi also. Yep these high long end yield curve worries are really killing the preferreds...not... Just taking some easy money off the table. Also flipped out of my AILLL purchases at $26.50-55 and sold at $26.95- $27 a week later... I dont hang around for the call axe exposed...Dine and dash, baby... Did buy 400 shares of BPFHP at $25.63 today. Still got a slug of cash to put to work. It doesnt sit on the sideline for more than a day before it is sent to the coal mines to work!

 

[Coolius]

Mulligan, kudos on your trading activity, and the flipping for quick and easy profit.

However, unlike you, I have income needs that cannot be exposed and possibly jeopardized by trading, so I do not trade anywhere as often as you do. But I sleep well at night, and am comfortable, even with the call risk of our favorite illiquid Utes.

Didn't do much today. One of the corporate bonds in my IRA got a tender offer, so I put in for it.

Other than that, it's just trying to keep cool on a 108 degree day. And our home AC is not strong enough to cool the house comfortably, we have to close ducts in rooms we don't use to get appreciable air flow in the rooms we do use. but it's HOT !

 

[Mulligan]

Mulligan, kudos on your trading activity, and the flipping for quick and easy profit.

However, unlike you, I have income needs that cannot be exposed and possibly jeopardized by trading, so I do not trade anywhere as often as you do. But I sleep well at night, and am comfortable, even with the call risk of our favorite illiquid Utes.

Didn't do much today. One of the corporate bonds in my IRA got a tender offer, so I put in for it.

Other than that, it's just trying to keep cool on a 108 degree day. And our home AC is not strong enough to cool the house comfortably, we have to close ducts in rooms we don't use to get appreciable air flow in the rooms we do use. but it's HOT !

I never miss a divi with the "hot money" Coolius. No moss grows on that cash. Sometimes it collects 2 divis in a cycle, lol... 108 in California? What are you doing that for? Quit being a cheapo living in the hot California area and buy the mansion in San Diego area. If you are going to pay all those crazy California taxes, at least do it while writing the checks in 70 degree weather, lol.

 

[Mulligan]

Coolius, I think I need a trip to the doctor for a medical exam especially the cranial area. I recently bought 200 shares each of GAINN, and ABRN. And since I bought them in such small amounts I wont notice them and actually plan on keeping them.

 

[Coolius]

Mulligan, I think you have been exposed to some kind of mind-dissolving drugs!! I hope you don't need a lobotomy!

My old ER friend Mulligan has gone off the deep end - GAINN?? ABRN have you gone bonkers??

Best go and get some real good wine from Winemaker - spare no expense, and wash it down with a cup of Kopi Luwak. There's a thread on the forum about how exquisite it is.

And remember to take your meds...... you're a big boy, should know better by now.

 

[MooreBonds]

And since I bought them in such small amounts I wont notice them and actually plan on keeping them.

We all know the signs of an addict....."this time I'll stop". But in Mulligan's case, it's "but THIS time, I'll keep/hold them".

 

[Mulligan]

We all know the signs of an addict....."this time I'll stop". But in Mulligan's case, it's "but THIS time, I'll keep/hold them".

Coolius, Moorebonds has finally rubbed off on me. He would be proud of me owning GAINN and ABRN. Or at least until before he recently got married. He may be all in CDs now as a beaten down hubby by now!
Well I bought 200 shares of CRLKP (wanted more just couldnt make myself do it). Started recently doing more of the spread em out Moorbonds trick at 200 a pop...Well almost...Stepped to plate and battling CFC-B one last time at $25.60. In for 1500 shares so it is show down time and dare them to call.

 

[Texas Proud]

Well, recently sold my AES-C as I wanted to flip to AHT-D and get an extra divi...


Am thinking about a longer term in CFC-B, but now that Mulligan has dared the call gods I know it would be called if I bought... but I have a month before divi, so I still might dip my toe in it...


An update on my yield grab... I am in at 266 days... have done 13 flips so far... and the results are mixed...

On my second trade I got caught in a problem with the company and the shares dropped... lost net about $800 on that one trade... so, including that trade I am up a weighted return of 3.8% annual return...


However, if you take out my first two trades... I have had only one bad one since... and my weighted return is 13.6% over 218 days...

I am doing small dollars here, like $12K to $14K trades, so not any big time gain, but it is something interesting to do...

Trying to buy my next flip... I have 5 days to buy and the price is a bit higher than I want... so I either pass or take a chance on a lower payout... however, I have made a good annualized return on a fast flip... my best is 82% holding for 7 days.... but that is not usual...

 

[Mulligan]

Im learning on my flips, Texas. I made some mistakes but got bailed out knowing the call occurred before masses did and with exception of once, I always got out with a profit. Some of them I sold on a call date and bought more back than what I owned later in same day as the dump orders drove it below call price. But largely now I dont often look for flips. I just buy to own and if the price jumps I sell. I had full intention of keeping LANDP I bought last week, but when you capture the monthly divi and see a 60 cent spike, I just unload...And the price has already dropped quite a bit since I sold into the spike...
Now for me CFC-B is the perfect flip issue. Why? You are only exposed around 17 cents if you get in at $25.60. If no call occurs in next couple weeks, this thing will climb into exD date. It will be around $26 by week before exD date. Then you decide if you want the 40-50 cents and run...Or hold thru exD and let it ease back on up as I doubt there would be a call announcement right after paying. If bad news is too occur it will be in next 3 weeks or so. Now at that point after exD you can also freely hold until a call or whatever because you are in the black no matter what. If no call occurs by Aug. 1 and you hold, you are basically breakeven at that point. A 6.8% issue with incredible backstop price support is worth 17 cent risk to me. But its all on what any individual wants from trading it. Last month I sold out around $26 on a spike...I have reentered 40 cents cheaper which is basically the divi right there. So maybe I am feeling a bit like its house money already.

 

[Texas Proud]

OK... does anybody know the ticker to use with Vanguard for CFC-B


It does not even get CFC... I guess it does not want me to buy any

 

[Mulligan]

OK... does anybody know the ticker to use with Vanguard for CFC-B


It does not even get CFC... I guess it does not want me to buy any

Every brokerage has their wonky ways... Maybe Wall Street should standardize these darn things...Vanguard the symbol is... CFC_PB
Notice the underscore and not a dash... Yepper odd stuff.

 

[Coolius]

Texas, it is CFC PRB. Have a space in between the first & second group

I just tried it, and it works....

 

[Mulligan]

Texas, it is CFC PRB. Have a space in between the first & second group

I just tried it, and it works....

That is odd...Your method Coolius does not work on my Vanguard account...It only works as CFC_PB... This the account that I bought mine in..

 

[Coolius]

Mulligan, your way works as well on my Vanguard screen.

So there are 2 ways to enter:

CFC PRB

CFC_PB

 

[Mulligan]

You got some variety! All sorts of symbols...In another acct I have its CFC-B and in a third account its CFC.B.... Uniformity at its best!

 

[jimnjana]

Any thoughts on the CBB PRB shares? I picked up some under 50 and am having second thoughts. Keep missing out on AILLL, got 100 shares and my GTC day orders go unfilled and next day seems it drops. Happy with GBLIL and AFSI PRA shares. Also got a few of the RSO PRB shares although I thinking I should have got the C shares instead.

 

[Mulligan]

Any thoughts on the CBB PRB shares? I picked up some under 50 and am having second thoughts. Keep missing out on AILLL, got 100 shares and my GTC day orders go unfilled and next day seems it drops. Happy with GBLIL and AFSI PRA shares. Also got a few of the RSO PRB shares although I thinking I should have got the C shares instead.

That is a tough one... It is yielding about what it should.. It isnt the strongest of balance sheet companies and they have about sold off all their cash cow data reit holding so there is no golden goose to feed them cash. Its sink or swim on their own fiber optic network and such. They had a disastrous acquisition (maybe Broadcom if memory is right, dont hold me to the name though) a long time ago and never really dug themselves out of that hole. If your goal is 7% qdi, you arent going to find many other opportunities though.
I have owned it but presently do not. Not really looking too either unless it sells off big. My recent purchases have been issues with term dates and mostly holding... GAINN, KYN-F, LANDP (thought I sold them all on flip and discovered I had 250 shares in a separate account. I must have had a big love affair with LAND that day as I thought I owned only what was in a separate account), ABRN. CRLKP and CNIGO are also longer term dated issues I own.