December 16, 2016
We have been looking at a dozen positions for potential buys. Can you believe that?
But investors and everyone and their brother are driving up prices beyond belief. The Trump rally is great but the underlying fundamentals don’t support these crazy prices.
The stock market is going thru the roof: be sure you have limit orders in to sell in case things go badly.
And we cannot get the low prices that make sense on bonds.
As an example: At the top of our buy list, we really want to buy ARU and have a limit order in for $25.31….but we don’t want to pay this much. The price may decline today. Watch this closely and try to get it for $25.00 or less. It is paying just under 6%.
QUANTUMONLINE.COM SECURITY DESCRIPTION: Ares Capital Corp., 5.875% Senior Notes due 2022, issued in $25 denominations, redeemable at the issuer’s option on or after 10/1/2015 at $25 per share plus accrued and unpaid interest, and maturing 10/1/2022. Interest distributions of 5.875% per annum ($1.46875 per annum or $0.3671875 per quarter) will be paid quarterly on 1/1, 4/1, 7/1 & 10/1 to holders of record on the record date which will be 12/15, 3/15, 6/15 & 9/15 respectively (NOTE: the ex-dividend date is at least 2 business days prior to the record date).
This ends very badly.
Well, until it’s not. While real median incomes in the U.S. have been stagnant for almost a
decade, real household personal consumption has continued its steady
rise as American’s have simply replaced lost income with new debt. But,
with household leverage near all-time highs and interest rates on the
rise, we suspect this could all end very badly for the U.S. consumer and those pension funds that were forced to “stretch for yield.”
Per a Bloomberg article posted today, the average U.S. household is carrying roughly $133,000 worth of debt, spread between mortgages, credit cards, auto loans, student loans and the newly-popular, crowd-funded, personal loans.