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

[Mulligan]

On quantumonline:

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Current market cap of PCG is about $22B. I haven't found a site that lists an updated estimate on the cost of the CA wildfires, but various references anywhere from $20B to $30B+. Given how insane some juries are in awarding punitive damages, do you think even just a small % liability + punitive damages would almost certainly bring this company under? There is no proof...but get 12 members on a jury and show them how any transformer could shoot just one spark in the tinder brush and start a blaze, and I'm betting PCG will get hit with at least some liability (maybe 10%?) of the wildfires.

So say they get hit with a $10B legal judgement - Would their common just get snapped in half? Or does someone see something else happening? (If they sold $8B in bonds, that would definitely impact the profit margins, but should the preferreds make it through still standing as long as the judgement doesn't exceed about 75% of the common equity value?

I have been reading 15 billion range...Nobody knows... They went bankrupt 15 years ago thanks to deregulation. But they worked out the sham bankruptcy where the bond holders got reorganized, but the commons were not diluted, the divi eventually reinstated, and the preferreds (these very same ones as they are 50-80 years old)were made completely whole.
In fact Moodys knocked them down a notch recently but still have them BBB-. Very unusual for a suspended preferred to be rated investment grade, lol...
A lot of moving parts here and it will take time. They are planning on using a previous court case to knock out the inverse condemnation clause. They have about a billion in insurance...Suspending common is bankrolling about a billion a year...The suspended preferreds save $14 million...A pimple on the ass....Im up 2% so I should sell, lol... The whole thing intrigues me, so I am holding.....On a straight up risk/reward in total, I would say the trade isnt a smart play. I do like the potential rewards from this...But the risk is heavier though I think.

 

[Winemaker]

If there was liability, I'm sure the customers will end up paying higher rates.

 

[bobandsherry]

On a straight up risk/reward in total, I would say the trade isnt a smart play. I do like the potential rewards from this...But the risk is heavier though I think.

Did someone steal Mulligan's identity? This doesn't sound like the Mulligan I've come to know.... Lol.

 

[Mulligan]

I have done so well the past few years, Bob, I feel like I can enjoy gambling a little bit. And since I dont even come close to spending my pension check and have a PT job, I feel redneck rich enough to have a bit of fun investing a few of the dollars.

 

[Winemaker]

Carl Icahn announced his stake in Amtrust and his opposition to the private takeover. AFSI-D up $1.37 today.

 

[bobandsherry]

I have done so well the past few years, Bob, I feel like I can enjoy gambling a little bit. And since I dont even come close to spending my pension check and have a PT job, I feel redneck rich enough to have a bit of fun investing a few of the dollars.

Understand, kind of why I took a shot at FTRPR. Hope you see a big payoff.

 

[Mulligan]

Understand, kind of why I took a shot at FTRPR. Hope you see a big payoff.[/
Your payoff was bigger than mine, Bob. Heck I might wind up day trading them for quarter price movements, lol...

 

[bobandsherry]

Your payoff was bigger than mine, Bob. Heck I might wind up day trading them for quarter price movements, lol...

Oh, I see you are playing at the $5 tables But seriously, seems like you can end up with a nice windfall on those, just depends how long you want to sit at the table.

 

[MooreBonds]

I picked up 100 shares of CDR-b at 22.65 today in one retirement account, along with almost 200 TRTX in another, to replace SAN-A and ECCZ that were called.

(on PCG-G)

A lot of moving parts here and it will take time. They are planning on using a previous court case to knock out the inverse condemnation clause. They have about a billion in insurance...Suspending common is bankrolling about a billion a year...The suspended preferreds save $14 million...A pimple on the ass....Im up 2% so I should sell, lol... The whole thing intrigues me, so I am holding.....On a straight up risk/reward in total, I would say the trade isnt a smart play. I do like the potential rewards from this...But the risk is heavier though I think.

Looking at PCG-G a bit more, I'm curious about your risk-reward view: the coupon is only $1.20, so right now at $20.50, it's yielding only 5.7% (when/if it resumes dividends). Best-case, it resumes and it might rise in price a little, but you still have a 5.7% current yielding security. Worst-case, it gets wiped out by a legal settlement.

I realize the chances may be slim of a complete wipe-out, but for a current yield of just 5.70%, I just don't see the payoff here, when you can get plenty of other utes that aren't involved in this big potential disaster yielding just about as much, or even slightly more.

 

[Mulligan]

I picked up 100 shares of CDR-b at 22.65 today in one retirement account, along with almost 200 TRTX in another, to replace SAN-A and ECCZ that were called.

(on PCG-G)


Looking at PCG-G a bit more, I'm curious about your risk-reward view: the coupon is only $1.20, so right now at $20.50, it's yielding only 5.7% (when/if it resumes dividends). Best-case, it resumes and it might rise in price a little, but you still have a 5.7% current yielding security. Worst-case, it gets wiped out by a legal settlement.

I realize the chances may be slim of a complete wipe-out, but for a current yield of just 5.70%, I just don't see the payoff here, when you can get plenty of other utes that aren't involved in this big potential disaster yielding just about as much, or even slightly more.

I bought at 19.70....But I already sold for a 40 cent share profit this past week. I was able to get another 100 shares of the Entergy Arkansas preferreds that will be redeemed soon. I flipped out all my BGCA preferreds the other day at 25.96, booking the whole divi holding a month...Bought 400 shares of BRG-A Friday. Got a butt load of Entergy Arkansas preferreds holding until they get redeemed. Eying one last purchase of excess BGCA funds money that I have to dispose of.

 

[Mulligan]

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

I bought at 19.70....But I already sold for a 40 cent share profit this past week. I was able to get another 100 shares of the Entergy Arkansas preferreds that will be redeemed soon. I flipped out all my BGCA preferreds the other day at 25.96, booking the whole divi holding a month...Bought 400 shares of BRG-A Friday. Got a butt load of Entergy Arkansas preferreds holding until they get redeemed. Eying one last purchase of excess BGCA funds money that I have to dispose of.

I used the PCG-G proceeds to buy the Entergy Ark preferred...I actually own all four of them now.

 

[bobandsherry]

I used the PCG-G proceeds to buy the Entergy Ark preferred...I actually own all four of them now.

Bam, a quick hit on PCG-G and already found a home for those funds, win. I didn't think PCG-G was your style [emoji3]

Any idea when Entergy Ark may be redeeming those ancient issues? Def not much of anything trading, guessing the 17 shares of the N that traded where all yours.

I'm traveling so not much time to watch that shares, so good luck on filling your plate up for quick payout. Will be on the road from Chicago and heading down to your state. Not sure where in MO you are but we'll end up in the boot heal where life is just real slow. And looks like rain too.....

 

[Mulligan]

Bam, a quick hit on PCG-G and already found a home for those funds, win. I didn't think PCG-G was your style [emoji3]

Any idea when Entergy Ark may be redeeming those ancient issues? Def not much of anything trading, guessing the 17 shares of the N that traded where all yours.

I'm traveling so not much time to watch that shares, so good luck on filling your plate up for quick payout. Will be on the road from Chicago and heading down to your state. Not sure where in MO you are but we'll end up in the boot heal where life is just real slow. And looks like rain too.....

It probably wasnt, but I try to keep a decent percentage in utilities so I dont stray to far....I am guessing they announce redemption notice with the dividend declaration in relative short order. I didnt get those few shares, but I have enough already. Over 500 of them. ..I dont get to the Boot heel very much. I live closer to Stl. Im heading out to central Mo myself today.

 

[bobandsherry]

I didnt get those few shares, but I have enough already. Over 500 of them. ..I dont get to the Boot heel very much. I live closer to Stl. Im heading out to central Mo myself today.

Looks like you'll be on the search soon for place to stash the proceeds from those 500 shares. You got in deep with those. I figured StL was more your area, safe travels.

 

[Mulligan]

Looks like you'll be on the search soon for place to stash the proceeds from those 500 shares. You got in deep with those. I figured StL was more your area, safe travels.

Made it already...A short 2.5 drive, not like your long drive was Bob. Your drive is too long! I have been taking as much money as I can when I find them to load up on short term duration deals. Largely manufacturing perpetuals into short term dated deals. Mostly to keep capital fresh in case a sell off would occur in general between now and end of year. Probably looking at one other such trade on Tuesday if I can.

 

[Mulligan]

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

Big sell order out on KTBA . The 6 month divi goes exD Wednesday. I bought 400 at $28.30. So it should trade lower tomorrow without interest payment.

 

[Mulligan]

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

Big sell order out on KTBA . The 6 month divi goes exD Wednesday. I bought 400 at $28.30.

Ooops...I got 28.20....

 

[bobandsherry]

Big sell order out on KTBA . The 6 month divi goes exD Wednesday. I bought 400 at $28.30. So it should trade lower tomorrow without interest payment.

On the road all day so didn't get to snag any of these or chance to catch any EArk. Thanks for sharing.

 

[Mulligan]

On the road all day so didn't get to snag any of these or chance to catch any EArk. Thanks for sharing.

After a few more days I have largely given up on getting more Entergy Ark issues at a decent price. And...it hasnt been officially called either so no guarantees of a redemption. I suspect I am in a holding pattern until they are redeemed unless something really special falls out of the tree.

 

[Texas Proud]

Got snagged again by the shyster brokerage firms.... had shares on sale for $26.50... someone bought 100 shares and the brokerage sold them for $26.499


This was 25 cents higher than other sales during the day... I was hoping to snag a few nickels but got pick pocketed...

 

[bobandsherry]

After a few more days I have largely given up on getting more Entergy Ark issues at a decent price. And...it hasnt been officially called either so no guarantees of a redemption. I suspect I am in a holding pattern until they are redeemed unless something really special falls out of the tree.

Seems secure that call will happen based on the prospectus. Since you got in early before the jump you probably are in a good place. But right now without a def call there doesn't seem to be enough meat on the bone.

 

[bobandsherry]

Ooops...I got 28.20....

Hope you get a good flip on it

 

[Mulligan]

Hope you get a good flip on it

Bob, I think I am just going to hold this one and use it as an income
anchor. 6.4% investment grade debt from T isnt bad. I got enough higher risk and call risk issues, I need a bit more anchoring and quality to get back in my comfort zone.

 

[Mulligan]

The risk reward got too high for me so I bailed on my 500 shares of CPE-A at 52.15 today. I captured more than the quarterly dividend holding maybe a month, and now am not exposed to a call. Its just too far above next divi being past call.

 

[brokrken]

What the heck is going on with GWSVP? Huge volume and price is way down.