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Post by richardsok on Jun 27, 2023 13:12:56 GMT
SWVXX 35% Schwab money market Preferreds 12% Assorted individual positions ET 6% both common and preferred shares PDI 5% FSCO 3% (short term trading asset) As you can see, I have gone quite conservative but continue trading aggressively around the edges. I just sold big positions in HIX, FINS, AIQ, IBM and preferred CEFs on technical indicators. Could return to any of them, depending on momentum. I am particularly watching (but not yet buying) SVOL PHD PSF PGP MMT BCI JCP FLC GOAU HFRO PTA. I may increase PDI if operations clarify. Or, if I imagine I see aggressive moves are called for, I will resort to QLD or SMHB. Market looks tired at the moment. Possible next moves: dump FSCO and buy bear mkt hedge SQQQ. Add to BTI? Regrets du jour: relatively small positions in BABA, BXMT. Dumb & dumber. Hi Richard, I noticed you bought more Preferred today. Are all your preferreds perpetual or some limited term preferreds? Re my portfolio? More than 40% is in US treasury instruments. QQQ is the next largest at 15%. Ani-- Although I remain an active trader, it is impossible for me not to notice that preferreds are historically low. (The bellweather PFF etf is down around the darkest days of the Covid panic, as an example.) So I've thought to deploy preferred positions into my IRA for the oversized retirement income as longer term holds -- much better than income streams from money market, corporate paper or treasuries (about which we are all chattering constantly!). I do like the perpetuals if I can lock in a favorable rate on a one-and-done buy -- but limited term positions are OK if I can get them WELL under par. I've never bought so many individual preferreds b/c I've never seen such opportunities before. I surmise if we are indeed near the end of interest rates rising, then I should have gains on my positions in 2024. I'm kind of surprised there's so little talk about preferreds these days. I look for yields of 7% or better (often MUCH better) as opposed to the 5.5%- 5.8% people are getting from debt OEFs. So I am hoping my preferreds bucket will out-run inflation longer term. I require that the company be profitable with good projected earnings, that it pay a well-sustained common dividend and reasonably investor-friendly management as far as I can discern. Although it is projected to swing profitably next year, I won't buy TWOpA because the company is still losing money. If I see a promising quarterly or semi-annual report, I might change my mind. Just at the moment I'm looking at NSpA. I have never been comfortable making the really BIG technical trades, moving in and out of positions in such volume that it actually moves the needle on my PV. I've always traded too small. FD makes those kinds of trades, which allows him to make fewer and act more efficiently. The size of my trades have always been hampered by my fearful caution. But if I can lock in a good part of my portfolio for a favorable stream of income, that should allow me to make smaller sized technical trades with the assets left over. I intend to continue trading preferred ETFs & CEFs like JCP, FLC, FFC, etc on technical signals, as before. Ditto PDI, in which I hold a big position. This post is longer than I'd intended. Hope it clarifies my thinking. But, please -- I'm making NO recommendations here. Just musing.
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Post by steadyeddy on Jun 27, 2023 14:00:47 GMT
Hi Richard, I noticed you bought more Preferred today. Are all your preferreds perpetual or some limited term preferreds? Re my portfolio? More than 40% is in US treasury instruments. QQQ is the next largest at 15%. Ani-- Although I remain an active trader, it is impossible for me not to notice that preferreds are historically low. (The bellweather PFF etf is down around the darkest days of the Covid panic, as an example.) So I've thought to deploy preferred positions into my IRA for the oversized retirement income as longer term holds -- much better than income streams from money market, corporate paper or treasuries (about which we are all chattering constantly!). I do like the perpetuals if I can lock in a favorable rate on a one-and-done buy -- but limited term positions are OK if I can get them WELL under par. I've never bought so many individual preferreds b/c I've never seen such opportunities before. I surmise if we are indeed near the end of interest rates rising, then I should have gains on my positions in 2024. I'm kind of surprised there's so little talk about preferreds these days. I look for yields of 7% or better (often MUCH better) as opposed to the 5.5%- 5.8% people are getting from debt OEFs. So I am hoping my preferreds bucket will out-run inflation longer term. I require that the company be profitable with good projected earnings, that it pay a well-sustained common dividend and reasonably investor-friendly management as far as I can discern. Although it is projected to swing profitably next year, I won't buy TWOpA because the company is still losing money. If I see a promising quarterly or semi-annual report, I might change my mind. Just at the moment I'm looking at NSpA. I have never been comfortable making the really BIG technical trades, moving in and out of positions in such volume that it actually moves the needle on my PV. I've always traded too small. FD makes those kinds of trades, which allows him to make fewer and act more efficiently. The size of my trades have always been hampered by my fearful caution. But if I can lock in a good part of my portfolio for a favorable stream of income, that should allow me to make smaller sized technical trades with the assets left over. I intend to continue trading preferred ETFs & CEFs like JCP, FLC, FFC, etc on technical signals, as before. Ditto PDI, in which I hold a big position. This post is longer than I'd intended. Hope it clarifies my thinking. But, please -- I'm making NO recommendations here. Just musing. richardsok, what is your theory as to why Preferreds are so much lower in price? Is it that they tend to be issued by financial companies and the market is pricing in risk of recession/higher interest rates?
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Post by richardsok on Jun 27, 2023 14:25:45 GMT
eddy -- Pardon my overly simplistic answer. As you know, preferreds often work as a rough proxy for bonds. As the Fed raised interest rates from about 1% to 5%, existing long term bond funds fell in price -- effecting a rise in their new yield-on-cost rates (for new buyers) to keep pace with the changing Fed rates. Preferred prices and rates acted in sympathy. Now, Powell has signalled more interest rate hikes are ahead -- but, like many, I believe we are much closer to the top than to the bottom in interest rates. If I am correct, preferreds should do well. If I am wrong and the Fed continues aggressive rate increases like it did in the early 1980s, then preferreds still have further to fall.
(chang, if you want to create a new "Preferreds" thread, starting with my two previous posts, I have no objection. Regret the topic drift.)
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Post by chang on Jun 27, 2023 15:32:00 GMT
chang, if you want to create a new "Preferreds" thread, starting with my two previous posts, I have no objection. Regret the topic drift. Relevant posts moved to a new thread, as requested. (You're lucky I noticed the post, as I wasn't actually tagged, and I'm not really following this thread.)
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Post by shridog on Jun 27, 2023 16:35:33 GMT
I currently hold 24 preferred positions, 14 on them are MReit companies. Started buying these mostly in the 4th quarter of last year and continued through April of 2023. The preferreds make up 34% of the total portfolio. Mreit preferreds are very volatile especially in times of financial stress. However, the Fed and Government has demonstrated a willingness to backstop the bonds themselves, so it really is a matter of selecting good management. The volatility comes from leverage and black box nature used by Mreit model along with the low liquidity in their preferreds. I do belong to a paid forum who has outstanding working knowledge of the Mreit business. It also helps that Lord Xot is a member and shares his knowledge openly. All of these preferreds will be held until called as part of our income focused strategy. (Not to digress, but there are also some baby bonds being issued in BDC land that are solid high yield investments for the high yield investor.)
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Post by richardsok on Jun 27, 2023 17:48:06 GMT
Thanks for the post, dog. Good to see someone else interested in these assets. Coincidence I had just been looking at AGNCpG for my next buy as a hold, and also the REIT preferred ETF PFFR, which I'd deploy as a trading vehicle. Its 8.4% yield beats a lot of the individual prefs. Would appreciate if you or XOT would care to share some of your favorite ideas here.
Please give LXot my regards. A lot of the old timers from M* remember him well and I'm sure would be delighted to hear from him..
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Post by steadyeddy on Jun 27, 2023 17:58:21 GMT
Thanks for the post, dog. Good to see someone else interested in these assets. Coincidence I had just been looking at AGNCpG for my next buy as a hold, and also the REIT preferred ETF PFFR, which I'd deploy as a trading vehicle. Its 8.4% yield beats a lot of the individual prefs. Would appreciate if you or XOT would care to share some of your favorite ideas here. Please give LXot my regards. A lot of the old timers from M* remember him well and I'm sure would be delighted to hear from him.. This forum can benefit from LXot...
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Post by shridog on Jun 27, 2023 18:34:46 GMT
richardsok Last post Xot made regarding preferreds indicated he hasn't bought any Since 1st week of June. Headed into BDCs and BDC baby bonds. He does hold AGNCL and I am looking at the "N" and "O". New baby bonds include GAINL, SAZ, CSWCZ. But I think these are past par or close to it. The paid site also has a couple of BDC "analyst types" that are superior to most sell side and SA BDC "experts". (Conservative in nature in a non-conservative sector.) 37% of our portfolio is in 10 BDC stocks. I could not find AGNCpG. Perhaps a typo? Other than the AGNCN and AGNCO I am not really looking too hard for another issue. However my list of Mreit preferreds come from AGNC, CIM, CHMI, MITT, NYMT, PMT, RITM, RWT, TWO. A combination of fixed and fixed to float. All floats are due to float in next 18 months or so except for RITM-D which is tied to 5 yr T-Bill and won't float for a couple more years. All of the underlying companies are survivors of 2008 and/or 2020. Other preferreds include TNP-E (TNP-F just as good), CMRE-E, CEQP-, and SEAL A and B. I forgot ABR D and E. For gambling I have less than 1% of BW-A (Bab and Wilcox) and 1% in FBIOP a preferred from Frostress. FBIO is a holder of several Bio-pharms that hopefully will have a winner or two. I will most likely sell in it gets over $20 again. Lesson here is careful when being a yield hog. (I am.) CEQP- is Creastwwod Energy (MLP) and cannot be called. They do however issue a K-1 and all distributions classified as UBTI. Therefore in IRAs have to be careful of the UBTI limits.
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Post by anitya on Jun 27, 2023 22:23:55 GMT
richardsok , We do not talk much on this forum about preferreds as we turned out by non-design an equity focused or a non-specialized forum but if you go to a dividend and income forum or retirement income forum, I will be surprised if preferreds do not take up a lot of oxygen there. shridog , If I recall correctly, LordXot visited this site for a day or two and shared his knowledge and even shared his spreadsheet. What is the site where you and he share your preferred and BDC ideas? I am not yet ready to get back into Preferreds or mREITs but will follow this thread closely. I am more of a fund investor but currently have zero invested in the space. I am hoping you two will keep this thread alive and going. Thanks. A
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Post by shridog on Jun 28, 2023 17:02:56 GMT
The "other" forum I use is Value Forum. It is a pay site, but there is a 3 month trial rate. I will say it took me a year to learn the other posters and their biases. Many members are from the financial industry and use their expertise benefit the forum. There are roughly 600 members. Great knowledge in the Mreit, preferred, and energy fields. Not much on mutual funds. For traders, a lot of action and expertise in options. I continue to belong because of the knowledge of a few posters in BDCs and preferreds. I will say, the big money has been made in most preferreds by now and just collecting the dividends until called.
Warning: the site is very political, but I just let that roll off my back.
One other item. Not about preferreds, but did all you realize Cappecod Dick posts comments on Seeking Alpha? Again political often, but you don't have to read that stuff. Just read comments regarding the CEFs. He posts under Dick Cod.
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