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John Huss

John Huss
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  • Morgan Stanley - Better Than Goldman But Fixed Forever [View article]
    Appreciate another one of your crisp, clear, easy for a non-professional to understand article. Please opine as to why the institutional issues ($1000 par) have interest rates so far below the retail ($25 issues)? Why would an institution not buy the $25 par issues? Is the call protection different? Are there protections buried in the prospectus that make the $1000 par more attractive?
    Apr 23 08:04 AM | Likes Like |Link to Comment
  • Affiliated Managers Group Preferred Stock: Opportunities And Risks [View article]
    One major reason for a price and yield disparity is the difference in maturity for the two issues: MGR matures in 2042 and AFM in 2022
    Apr 21 08:17 AM | 1 Like Like |Link to Comment
  • Is There Adequate Bench Strength For Digital Realty? [View article]
    As an owner of DLR-E and DLR-H, I found your article useful and comforting. Do you find their PFDs SWAN holdings for someone who is a buy and hold income investor not concerned with capital gain potential?
    Apr 17 12:08 PM | 2 Likes Like |Link to Comment
  • RAIT Financial - At 7.625% Their Debt Is Attractive [View article]
    I think you establish the relative attractiveness of TEMP-05 over RAS Pfds, but given the small size of the company and the presumably non-investment grade quality of the debt, do you find this security more attractive tban MFA-A, NRF-D, and RSO-B, when you consider relative size (in the case of MFA and RSO) or D/E ratios (in the case of NRF and RSO)? Aren't these all "business man's risk" type investments for a retail investor? Should I really sleep better at night with this new RAS debt offering than with the Pfds I mention? I do have small positions in RSO-B and NRF-D, so I might consider TEMP-05, but to me market cap does mean something when the companies are not investment grade rated. If one considers Sr Unsecured for these firms so much more secure than the Pfds. wouldn't MFA 8% Sr. Unsecured look more attractive than RAS's TEMP-O5, given their difference in size?
    Apr 14 02:33 PM | Likes Like |Link to Comment
  • Game Of Yields: 8% With Safety [View article]
    Whether leverage is "high" or "low" is a function of the nature of the investments acquired with the leverage. By itself the categorization high/low is unhelpful. MREITS investing in Non-Agency securities always have lower leverage than those focused on Agency Securities, because Non-Agency Securities are riskier.
    Apr 14 08:48 AM | Likes Like |Link to Comment
  • Rates Rising: 5 Closed End Funds To Have In Your Portfolio [View article]
    Thank you golden bear65. That helps to explain part of the reason for the combination of high yield and short duration. But given the fund's 2 star Morningstar rating, I've decided to pass on BLW at least until I learn more.
    Apr 9 08:47 AM | Likes Like |Link to Comment
  • Goodbye Fed - 2014 Sees Preferred Stock Investors Shed QE Jitters [View article]
    BruceM--Appreciated your comment. My bogey is 7%. What are you investing in for income with new money available for investment or are you leaving money in cash? I treat a BB or Ba PFD as equivalent to a BBB or Baa in a bond as far as real riskiness is concerned given the optionality of the Pfd payment. I'm not comfortable with a non-investment grade bond below BB and any non-investment grade bond with a maturity of over 5 years or so. Given those parameters, Pfds seem relatively attractive to me. Investment grade bond yields are way too low without durations functionally akin to Pfds.
    Apr 8 11:47 AM | Likes Like |Link to Comment
  • Upcoming Sallie Mae Spin-Off Holds Promise For Investors [View article]
    Any thoughts on how SLM bonds will fare once the spin-off occurs? Moody's appears likely to downgrade and the bonds have been trading badly--as if they were seriously junky.
    Apr 7 04:36 PM | Likes Like |Link to Comment
  • Goodbye Fed - 2014 Sees Preferred Stock Investors Shed QE Jitters [View article]
    IMHO, Pfds of decent quality are the only real game in town for yield seeking investors, with the exception of leveraged fixed income CEFs which also offer attractive yields. I can't quite understand why investment grade or near investment grade Pfds offer exceedingly higher yields and much less risk IMHO than most non-investment grade bonds above Caa ratings. My personal preference is to buy individual bonds over Pfds (or ETDS), but the difference in yield on comparable quality paper on what is readily available to the retail investor is is positively shocking.
    Apr 7 11:43 AM | Likes Like |Link to Comment
  • Rates Rising: 5 Closed End Funds To Have In Your Portfolio [View article]
    I have been considering an investment in BLW and have come up with the following issue. How can any fund with such a short duration expect to maintain a distribution over a time span longer than a year or two at most anywhere near 6.9% no matter how high yield its portfolio? The current yield even with the boost from leverage must be based on high coupon investments selling well above their value at maturity and we are told that maturity will be relatively soon. If so, aren't the current distributions simply in effect compensating for the principal loss to come? On a total return basis 6.9% yield on a portfolio with a short duration is a recipe for principal loss. Or what am I missing?
    Apr 2 10:27 AM | Likes Like |Link to Comment
  • Rates Rising: 5 Closed End Funds To Have In Your Portfolio [View article]
    Worthwhile article. Would you care to comment on the quality of the bonds held by these funds? I believe EVV is considered basically non-investment grade. I do have a position in EVV.
    Mar 31 11:59 AM | Likes Like |Link to Comment
  • Earn A 3.7% Investment Grade Yield Over 14 Months With Prospect Capital Bonds [View article]
    I'm not suggesting that PSEC paper is extremely risky--most

    BB bonds never default--, but if the BBB rating is clearly sound, why hasn't PSEC gotten rated by Moody's and Fitch? The market doesn't treat PSEC paper as BBB if you compare yields on their paper with yields on other BBB paper of the same maturity.
    Mar 11 10:47 AM | 1 Like Like |Link to Comment
  • Public Storage - Put The New Preferred In Storage, Not In Your Portfolio [View article]
    PSAPrR looks relatively attractive on a stripped yield and YTC basis, with the only trade off being the shorter period of call protection. Why is it not a recommended alternative?
    Mar 11 10:40 AM | 1 Like Like |Link to Comment
  • Earn A 3.7% Investment Grade Yield Over 14 Months With Prospect Capital Bonds [View article]
    According to Lawrence Zack Galler's recent articles this comment by management (referred to but not made by Downtown Investment Advisory)is misleading in the extreme:
    "According to management, since 2008 not a single one of its loans has failed to pay interest or principal on time, and during the worst of 2008-09, the non-accrual rate peaked at close to 6%"
    I suggest checking out Mr. Galler's recent articles"Prospect Capital's Growth Hides Bad Underwriting" and "Prospect Capital: Meet NMMB Holdings."

    There is more risk here than the BBB rating would lead one to believe. Nonetheless, I agree with the thesis of the article. PRY (in which I hold a small position) is safe enough for me and is very likely to be called for the reason given by the author: PSEC can very likely refinance at a lower rate. And as noted, if not called, you have a bond maturing in 2022 at a higher interest rate than comparable BBB bonds. I also have a small position in a few of PSEC's internotes--BY FAR the highest paying new issue investment grade bonds available to retail investors today. Given the risk of dealing with a deceptive managment, I am not likely to buy any more PSEC paper.
    Mar 10 02:37 PM | Likes Like |Link to Comment
  • A Value Investor Explains Why He Owns Digital Realty [View article]
    I sleep better at night with invetments with less volatility, so I am satisfied to have a small position in DLR+E and DFT+B, both PFDs yielding 7%+, with less volatility than the common stock. I find Brad's analyses of REIT common stocks very valuable in looking at whether their PFDs are worth considering.
    Mar 10 02:10 PM | 2 Likes Like |Link to Comment