January 8. 2018
We have been following FIV First Trust Senior Floating Rate 2022 Target Term Fund since we saw an article (link below) on SeekingAlpha.com way back in November.
This is a fallen angel where the price has plunged. Our philosophy is to buy when positions are on sale……in the bargain bin.
The price is the SAME as when the article was first published. But it is stable, the technicals are looking very good, and we think the price ($9.26) is due to start climbing. FIV pays 5.4%.
85% of the fund is in senior secured loans, which is the highest ranking security in the capital structure. Even if an issuer is rated in high yield categories, senior secured loans tend to perform better since they are first in line for repayment. In default scenarios, senior secured loans typically recover 60-70% of the loan value on average, while high yield bonds often get nothing or very little (often 0-10%). The other key positive of senior secured loans is that they are floating rate, which means that they are insulated from interest rate spikes. Rising rates actually can benefit senior loans.
The new book Fire and Fury (mentioned here last week) is creating quite the shit storm. The author is claiming Trump will be kicked out: hey…. outlandish claims make good promotion.
If you hate Trump you will love it.
If you love Trump you will hate it.
We picked up the book on Saturday and are probably a third of the way thru. Yes the author hates Trump and is doing everything in his power to destroy el Presidente but so far there is no news that we haven’t already read in prior books. Trump is a self-centered narcissist but at least he is getting things done.
We could not help ourselves: we just love this pic of Crooked Hillary. With all the new interest in investigating her maybe she WILL end up in jail after all: tho we are not holding our breath.