RiskTrade

Avoid Banks' Common Shares; Opt for Preferreds, Minibonds

Pointless Article. Buying pref rather then common makes little sense. Buying pref only caps your upside while really exposing you to the same risk as common. In a default pref holders and common holders both get nothing. Whats worse is that bank pref suffers from the risk of forced conversion to common. Further pref usually involves liquidity risk relative to the common. Also from a relative value perpsective it makes more sense to buy the sub debt rather then the pref.