How I handle a market downturn

[Mulligan]

I have been buying utility and REIT preferreds for awhile now ( since 2012 ) but had to accumulate in small amounts each time because they were so thinly traded.

Took me about 18 months to build up some positions, eg. HE-U.

Now have reasonable amounts of several of them, but always looking to add in the event of a motivated seller appearing on the scene. And they come and go pretty quickly.

They allow me to sleep very well at night - witness this past week as an example.

Coolius and I are like investing siamese twins. More than once we will PM each other buying the same illiquid on the same day without knowing the other was buying. The bad part is he usually gets them a dime cheaper because he is more patient, or smarter....or maybe both!


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[Coolius]

Coolius and I are like investing siamese twins. More than once we will PM each other buying the same illiquid on the same day without knowing the other was buying. The bad part is he usually gets them a dime cheaper because he is more patient, or smarter....or maybe both!


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Nah, nowhere smarter or patient - was just lucky on some occasions.

But Mulligan hit a few home runs, too, with AILNP, KCC and couple others. He's just a modest and humble fella. I was like, out in left field, hoping for a fly ball with my mitt facing the open - and empty - sky.

 

[Walt34]

P.S., I always have in mind that two dear friends died in 2015. It changes the perspective.

Just today DW got a message that the brother of one of her childhood friends had died. He was 56.

 

[NW-Bound]

I just came down from the DIY home improvement project upstairs, finished putting all the aromatics into the pot to braise a piece of lamb for dinner. So, I have some time to kill before going to take a shower before dinner.

I know, NW. That is why I like posting you with you. Who just wants to read boring factual statements!

Hey, what are you talkin' about? Do you mean we are just telling fabricated stories here? Exchanging fairy tales?

Hey there are all sorts of preferred issues out there that are very liquid. Chesapeake Energy has all sorts of them! . Seriously there are some liquid ones out there such as the Wells Fargo and Cenex Harvest a Fortune 100 company that yield near 7% and trade thousands daily. I

Just kidding again.

Yes, I also looked at a few of the more prevalent and liquid preferreds. But the dividends are not that high compared to common stocks (am I too greedy here?), and then I kind of like to get some capital appreciation on top of the dividends. Yes, I am really greedy. And I am now paying for it.

But, but, but revenge will be mine. I shall live long enough to see my greed, er, conviction vindicated. And my portfolio shall again reclaim its triumphant previous high, then goes on to ever higher values.

 

[unclemick]

Sums it up nicely for me.

Ditto. aka +1

heh heh heh - even though I've been through a few since 1966 I still get a twinge every time but usually manage to 'stay the course' or 'hurry up just stand there' ala Mr B.

 

[Mulligan]

I just came down from the DIY home improvement project upstairs, finished putting all the aromatics into the pot to braise a piece of lamb for dinner. So, I have some time to kill before going to take a shower before dinner.





Hey, what are you talkin' about? Do you mean we are just telling fabricated stories here? Exchanging fairy tales?







Just kidding again.



Yes, I also looked at a few of the more prevalent and liquid preferreds. But the dividends are not that high compared to common stocks (am I too greedy here?), and then I kind of like to get some capital appreciation on top of the dividends. Yes, I am really greedy. And I am now paying for it.



But, but, but revenge will be mine. I shall live long enough to see my greed, er, conviction vindicated. And my portfolio shall again reclaim its triumphant previous high, then goes on to ever higher values.

Yes, if you are looking for capital gains, that isn't the investment vehicle. My average combined yield is 6.48% due to my conservative profile. But for me, I will gladly take that every year for the rest of my days. I am greedy with my gambling, not with my investments.


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[NW-Bound]

It is true that risks and rewards go together. People who buy stocks believing that it always goes up will be disappointed. At some point, I will have to buy it from them to alleviate their pain. But for now, it is nowhere near bad enough.

 

[Mulligan]

It is true that risks and rewards go together. People who buy stocks believing that it always goes up will be disappointed. At some point, I will have to buy it from them to alleviate their pain. But for now, it is nowhere near bad enough.

Im not giving up complete hope that I can re-enter the market. Since Im not effected by downdraft of market, it may at some point be easier for me to buy since I have not been losing money. But like you, I don't think it really has been a meaningful downturn, yet. But boy them talking head CNBC commenters are calling for a big haircut....Until the market has a good day then they will be talking about the bull market is still intact.


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