Stocks Slammed at the Open While Rates Tumble

The stock market continues to move sharply — both up and down.  Today is a down day and our common shares continue to get hammered and it appears that we have the ‘worst of the worst’ in our portfolio.  Fortunately they compose only a tiny part of the portfolio (11%) so they don’t knock the total value down too much, but we are considering unloading the Transcanada (ticker:TRP) holding as we are really skeptical of the energy sector at this time.  Additionally one of our long time favorites B&G Foods (ticker:BGS) has performed horrendously and is a good lesson in what happens when you are ‘married’ to a company you have followed since their inception.  It seems that the old line food companies are no longer the safe haven they were at one time–their margins are getting squeezed hard.

As interest rates continue to head lower, so do income issues.  We are at the stage where investors are simply liquidating.  We note that the preferred stock ETF’s have moved only gently lower–while the preferred stock closed end funds (CEF’s) have moved lower much quicker than the ETF’s.  This is the price you pay for holding a levered security instead of a non levered investment.

In the REIT’s and MLP’s only 1 issue is off sharply (more than 3%) today and that is REIT Sabra Healthcare (ticker:SBRA) which is off 4.71% on the announcement of a secondary offering.  It is offering a 6.22% current yield today–not too bad–we will look closer at it today.