Not a Wild Day!! Boring is Good

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August 11, 2014 – 11 pm  

Today was a relatively quiet day in stocks and bonds.  Stocks seemed a little lost on whether to go up or down, but bond yields knew exactly what to do–stay low.  While the 10 year treasury yield closed a tad higher than last Fridays close, it remains low, and we believe heading lower.  In addition to all the retail numbers to be released starting tomorrow in the U.S. we will get peeks at European growth (or lack thereofr) as well as Japanese GDP which likely was pummelled following a hot 1st quarter.  As you recall Japan instituted a massive sales tax hike in the 2nd quarter and 1st quarter growth was  very hot as consumers raced to purchase prior to the tax hike.

Today preferred stocks and exchange traded debt closed just 1 1/2% off of this years highs, while MLP’s are just 1% off their highs.  Stay turned for more gains as money chases yield (again–sounds like an old story doesn’t it?).  


Todays star performing preferred was the Ladenburg Thalmann Financial 8% preferred (ticker:LTS-A), which has been selling at a discount for a number of months (current yield of 8.64%).  The shares closed 69 cents higher as the company announced solid growth in revenues plus a spate of acquisitions.  It will be a very long time before LTS has solid net income–but growth and break even performance help to give confidence to preferred buyers as it makes the dividend more secure.  We have these shares in 3 accounts and believe even at the $23.14 close today they still represent a good value (plus the dividend is monthly pay).

Now we wait on economic releases starting tomorrow with retail sales.

Tim McPartland

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Tim McPartland
Tim McPartland is a private investor with over 45 years of investing experience. His analysis, research and writing is devoted to the hunt for income producing securities of all types, but in particular specializing in preferred stocks, exchange traded debt and Master Limited Partnerships.
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