This is a quick stream of consciousness post on one issue I have noticed in the preferred share universe, Thomson Reuters Corp, Series II (ticker TRI.PR.B). I believe this an issue left over from Thomson Corp days (pre-Thomson/Reuters tie-up). I actually think that the majority of folks participating in floaters have no clue what they own. They look at current ytm, extrapolate, take the plunge and then pay the price after. Take Thomson Reuters preferred B. This is basically the equivalent of cheap debt on the part of the issuer. The specs: Floating rate preferred, pays 70% x Canada prime x $25 (par) 6 m shares o/s Callable anytime at par Here’s the chart through current: Absolutely ridiculous There’s only 6M shares o/s, so this thing is highly illiquid. This will trade in conjunction with whatever Canada prime does (and expectations over the future direction of prime). Here’s a historical ch...
This post will be devoted to creating a base case for tracking my investment journey. Note that I said investment and not trading. Over the years, I've come to believe that for the average retail investor with no edge (or special powers), trading is just one aspect of creating an investment plan, and lets leave at that. To me, trading is the mechanical act of purchasing or selling an asset consistent with the overall objectives and constraints of my own personal asset allocation model (more on this shortly). And I will say this loud and clear, I give TONS of credit to professional traders who are able to consistently generate alpha negotiating an ever changing market landscape. One of the topics taught in finance is that financial time series have a non constant variance (financial markets are non-stationary). To me, this means that modelling, or extrapolating the future based on the past as seems to often be the case in trading (i.e., expecting patterns to resolve a certain...