July 10, 2020. The SPY 50 dma is moving above the 200 dma, a technical indicator that tells us markets are going higher. Stocks are grossly over priced and we think a correction is coming in August.
We expected GDX (gold) to hit $40 before a pullback. It has been weak the last two days, never hitting $40, and we are getting out with a 6% gain. SELL GDX. We will be buying gold again at the lows, assuming it drops. Longterm gold is a winner.
A major contribution to the stock market has been made by big money hiding in the big five tech stocks of Apple (AAPL) Amazon (AMZN) Microsoft (MSFT) Alphabet (GOOG) (GOOGL) and Facebook (FB) A significant part of the rise in the five stocks is due to their price-to-earnings multiple expansion, not improved fundamentals.
July 8, 2020. BUY/ADD. We have been slowly adding to GDX the gold position, and have a 4% gain.
Short term GDX is probably going to $40 and long term much higher. We continue adding to GDX. We have a Trailing Sell Stop at $1.50 in case GDX decides to drop temporarily.
We still anticipate SPY/DOW declining going into August, at which time we may be BUYING positions that are on sale.
In a new survey from the Pew Research Center, nearly 40 percent of U.S. adults in June say the outbreak has been exaggerated – an almost 10 percent increase since April. In terms of political party, respondents who identified as Republican or leaning Republican had the largest increase between April and June, going from 47 percent to 63 percent believing the outbreak has been exaggerated.
As the DOL reported today, there were 19.29 million workers receiving unemployment insurance. And yet, somehow, at the same time, the BLS also represented that the total number of unemployed workers is, drumroll, 17.75 million.
If you said this makes no sense, and pointed out that the unemployment insurance number has to be smaller than the total unemployed number, you are right. And indeed, for 50 years of data, that was precisely the case.” (bad data from our government lol: realinvestmentadvice.com
July 6, 2020. One of our best Corporate Bonds has been called: Digital Realty. We had a very large position and today we are buying to replace this bond.
SPY and the general stock markets have held up better than we expected…..with futures up this morning around 340, it looks like the party will continue through July. Yes we admit to being shocked at the advances since the March lows.
BUT we still anticipate some significant declines into August. We are primarily in BONDS and they are providing us some decent dividends.
The polls are saying Trump is in serious trouble, and a Biden election is not good news. And the selection of a minority VP may lock up his win.
Investors who are closing out other positions may wonder how they can maintain income. AGNCP provides an opportunity with lower risk. Yes, the yield is lower. However, the risk also is lower. If the market enters another panic, these shares should decline far less. If investors want to take on more risk at that time, they have that option. We believe there’s very little additional (potential) reward for taking on extra risk at this time.
If the market recovers, AGNCP still has significant upside and enough yield to be quite respectable. It’s an option to maintain a large chunk of the upside but significantly reduce the downside.
AGNC Investment Corp. 6.125% Dep Shares Ser F Fix/Float Cumul Red Preferred Stk Ticker Symbol: AGNCP CUSIP: 00123Q872 Exchange: NGSSecurity Type: Traditional Preferred Stock
QUANTUMONLINE.COM SECURITY DESCRIPTION: AGNC Investment Corp., 6.125% depositary shares, each representing a 1/1,000th interest in a depositary share of Series F Fixed-To-Floating Rate Cumulative Redeemable Preferred Stock, liquidation preference $25 per depositary share, redeemable at the issuer’s option on or after 04/15/2025 at $25 per depositary share plus accrued and unpaid dividends, and with no stated maturity. Cumulative distributions of 6.125% per annum ($1.53125 per annum or $0.3828125 per quarter) will be paid quarterly on 1/15, 4/15, 7/15 & 10/15 to holders of record on the record date that will be the first day of the calendar month in which the dividend payment date falls
A press release via Walmart on Wednesday (July 1) said, “Walmart is transforming 160 of its store parking lots into contact-free drive-in movie theaters where customers can safely gather to watch movies programmed by the Tribeca Drive-in team.”
Beginning in August, Walmart will roll out this red carpet experience in towns across the country for a combined 320 showings. This family-friendly night will include hit movies, special appearances from filmmakers and celebrities and concessions delivered right to customer vehicles.
NOW IN OUR 8TH YEAR. This blog is intended for INCOME investors. IF you are heavily invested in stocks, caution is advised as we head in August. Go to the Core Portfolio for current holdings. Don’t forget to hit the like button. This blog is designed for retired investors seeking income.
July 2, 2020. On Tuesday we got filled on GBAB at the price we wanted, but NOT BBN. We are now holding off on BBN as the price spiked up.
We ARE looking at FCT First Trust Senior Floating Rate Income in the senior loan arena. The article linked below gives you an excellent description of this category. Also continue watching BBN
Today’s futures spike, up 400, is based on OLD news: we currently anticipate about an 8% decline in SPY going into the middle of August, so hopefully we can pick up positions at lower prices AT THAT TIME.
NOW IN OUR 8TH YEAR. This blog is intended for INCOME investors. IF you are heavily invested in stocks, caution is advised over the next 2-3 months. Go to the Core Portfolio for current holdings. Don’t forget to hit the like button. This blog is designed for retired investors seeking income.
Note: Altho the liberal biased press is going hysterical over the increased virus infections, it appears death rates and hospitalizations are not really terrible. So we are getting a little more comfortable in buying investments.
FUND DESCRIPTION: BlackRock Taxable Municipal Bond Trust, formerly Blackrock Build America Bond Trust, is an exchange-traded closed-end fund or a closed-end ETF that is officially described as a non-diversified, closed-end management investment company. INVESTMENT OBJECTIVE: The BlackRock Taxable Municipal Bond Trust primary seeks high current income, with a secondary objective of capital appreciation. FUND STRATEGY: The Trust invests at least 80% of its managed assets in taxable municipal securities, which include Build America Bonds (BABs), to finance capital projects, such as public schools, roads, transportation infrastructure, bridges, ports and public buildings. The Trust’s portfolio includes in sectors, such as utility, transport, education, tobacco, housing, local tax-backed, state tax-backed, school districts and other industries.
FUND DESCRIPTION: Guggenheim Taxable Municipal Managed Duration Trust, formerly Guggenheim Build America Bonds Managed Duration Trust, is an exchange-traded closed-end fund or a closed-end ETF that is officially described as a diversified, closed-end management investment company. INVESTMENT OBJECTIVE: The Guggenheim Taxable Municipal Managed Duration Trust seeks to provide current income with a secondary objective of long-term capital appreciation. FUND/TRUST STRATEGY: The Trust seeks to achieve its investment objectives by investing primarily in a diversified portfolio of taxable municipal securities known as Build America Bonds (BABs), Under normal market conditions, the Trust will invest at least 80% of its Managed Assets in BABs, and may invest up to 20% of its Managed Assets in securities other than BABs, including taxable municipal securities that do not qualify for subsidy payments, tax-exempt municipal securities, asset-backed securities (ABS), senior loans and other income producing securities
We started with a tiny position. We are going to triple this position by buying more today.
We are still expecting declines in the stock market averages going forward. But we are also reviewing potential income generating ‘buys’ if we can get positions ‘on sale’, possibly in August. There are sectors that look really good to us: warehouses “the Amazon factor” and cell towers/data centers.
We do own Digital Realty in both corporates and preferreds and Duke Realty. Prologis, Monmouth and Corsite are just a few that look promising in warehouses.
(If you own Amazon you are already invested in the warehouses and data centers that we are talking about here….Amazon is NOT a buy at these prices.)
The Buffett Indicator
Yes, there is actually a Buffett Indicator and it looks at the equity market capitalization relative to the country’s GDP.
One of those measures, in particular, has popped up on investor radars lately, and that’s the “Buffett indicator.” The Berkshire boss called it “the best single measure of where valuations stand at any given moment.” If historical patterns hold true, a thrashing could be in store for complacent investors.
Put simply, the indicator is the total market cap of all U.S. stocks relative to the country’s GDP. When it’s in the 70% to 80% range, it’s time to throw cash at the market. When it moves well above 100%, it’s time to lean toward risk-off.
So why did Trump do better than the polls in 2016? You don’t need to say the polls were all wrong. You just need to realize that more than 15% of the electorate didn’t like either candidate, and half of them broke for Trump. This year, with Biden at or near 50% in the polls, is leaving a lot fewer undecideds on the table for Trump to try and win over.
If Election Day looks like today does (if somehow, we don’t get about a dozen world-changing stories between now and then), Trump will lose, and not because people turned away from him, but because he drew a much less hated opponent.
The US is already the most obese nation in the world, and thanks to the “Quarantine 15” it is about to get even fatter.
According to a new report in Obesity Research and Clinical Practice, roughly 22% of Americans (based on sample extrapolation) said they gained between five and ten pounds since the coronavirus lockdowns (“within those who gained 5–10 pounds, there was a significantly higher percentage of the total sample who reported they increased eating in response to sight and smell, eating in response to stress, and snacking after dinner compared to those who stated they did not change those behaviors at all.”) In a separate poll of more than 1,000 U.S. readers of WebMD, 34% of respondents said they’d gained weight “due to COVID restrictions.”
June 25, 2020. The stock market continues to weaken, and today’s futures are down again. We continue to anticipate substantial declines into August. If you are heavily invested in stocks, we strongly suggest, again, that you have sell stop orders in place as you will MOST likely lost money if you continue to hold.
The bond positions in the Core Portfolio have shown small declines, but much smaller that stocks…..we hold bonds for the dividends.We did ADD to the GDX gold position……long term it should go higher.
Rising virus infections are a negative. BUT the growing popularity of demented Biden is making stock investors nervous. He would be terrible for markets.
With sentiment currently at very high levels, combined with low volatility, and a high degree of investor complacency, all the ingredients necessary for a market reversal are currently present. Am I sounding an “alarm bell” and calling for a massive correction? No.
I am suggesting that remaining heavily invested in the financial markets without a thorough understanding of your “risk exposure” will not have the desirable end result you have been promised.
As stated above, my job is to participate in the markets while keeping a measured approach to capital preservation. Since it is “bearish” to point out potential “risks,” then you can call me a “bear.”
Just make sure you understand that I am currently a “fully-invested bear.”
However, that positioning can, and will, rapidly change as needed.
June 23, 2020. Gold has been dead in the water since early April. But it is starting to make a move higher. We own two positions and will probably buy a small position in a third this morning: GLD. The move may not be huge, but will be worth taking advantage of.
A shocking Zogby Analytics poll found a majority of voters believe presumptive Democrat nominee Joe Biden is “in the early stages of dementia.”
The survey, released Wednesday, said 55 percent of likely voters think “it was more likely that Vice President Biden is in the early stages of dementia, while 45 percent think it was less likely.”
The poll found 56 percent of independents think “Joe Biden had early-onset dementia.” Seventy-seven percent of Republicans believe so, while nearly a third of Democrats, 32 percent, believe it.
Sixty percent of young voters, those aged 18-24 and 50 percent of 65 or older voters believe Biden is in cognitive decline.
Perhaps the most startling numbers: 71 percent of union voters think it is “more likely” Biden is suffering from the disease, while 61 percent of Hispanic voters think so.
Truth be told, Biden has not looked that great in his few video appearances, and has yet to really hit the trail with a winning message due to Covid-19. At some point the former vice president will need to be his best if he is going to win over voters, and appeal to important swing voters in order to defeat President Trump. Right now voters have questions concerning Biden’s mental health and stamina, but will it cost him votes in November is undiagnosable at the moment.
Bloomberg: 1600 companies are going under every day.
June 19, 2020 We own two Iron Mountain Corporate Bonds, one of which has been called: CUSIP: 46284PAQ7
BUY AGG iShares Core U.S. Aggregate Bond ETF (AGG)
The investment seeks to track the investment results of the Bloomberg Barclays U.S. Aggregate Bond Index. The index measures the performance of the total U.S. investment-grade bond market. The fund generally invests at least 90% of its net assets in component securities of its underlying index and in investments that have economic characteristics that are substantially identical to the economic characteristics of the component securities of its underlying index.
BUY MBBiShares MBS ETF (MBB)
The investment seeks to track the investment results of the Bloomberg Barclays U.S. MBS Index. The fund seeks to track the performance of the underlying index by investing at least 90% of its assets in the securities of the underlying index and in investments that provide substantially similar exposure to securities in the underlying index. The index measures the performance of investment-grade mortgage-backed pass-through securities (“MBS”) issued or guaranteed by U.S. government agencies.
Following the severe market declines earlier this year. we are building a much more conservative Core Portfolio going forward. The positions are primarily income generating bond funds which are suitable for the bond or conservative’ portion of YOUR portfolio. We are retired, now approaching 70, and do not want to take excessive risk in this stock market environment.
We anticipate a 10% decline in stocks going into the end of July, and probably FURTHER DECLINES AS we enter August. With the continued strong advances in stocks, investors will probably not want to believe declines ae possible…..but if you are trading stocks be very diligent.
Every summer the bike has problems. So yesterday the front tire was flat and we headed down to the local shop. They are so backed it will take a week to get the tire fixed. One week!! Typically they would fix it while you wait. And they say they cannot get supplies as the warehouse is back ordered. Problems in China?? lol And the clerk was NOT wearing a mask.
Went to the dermatologist in the hospital complex. Took your temperature and gave you a mask as you entered.
Markets continue higher and are way over extended. DANGER!! We had a substantial drop last week (with gains this week) which is a prelude to upcoming declines.
The economy is still in the dumper and it now appears a second wave of the virus is in fact coming. Stupid people are not wearing masks.
The odds tell us a pullback is in the cards so have some sell stop orders in place, just in case.
We are 46% in cash, primarily in indiv. corporate bonds, and other bond funds.
Common sense would seem to indicate the horrific unemployment numbers, the lack of a vaccine, the bulk of the world still in some form of shut-down, the seriously bad earning’s reports, the lack of any meaningfully positive economic forecasts…. would see a crashing stock market, but so far, the infusion of trillions of emergency support dollars pumped into the economy has buoyed the market and it looks like more is on the way. One has to be very careful, though, to simply assume this market will move a lot lower when the massive infusion of ‘free money’ is still in play. As I have alluded to many times, I suspect this market has a floor in it that will be defended at any cost by the government to keep the economy (and by extension, the stock market) from falling off a cliff. There may be many pull-backs as we saw last Thursday (and maybe today), but I doubt (this is just a guess on my part) that we will see any sort of capitulation until later this year (if then). Turner Capital Investments Inc.