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Strategies & Market Trends : Value Investing

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To: Madharry who wrote (69164)11/20/2021 7:30:35 PM
From: E_K_S  Read Replies (2) of 75693
I have been an avid reader of the SI-Income Investing thread. I thought since I was spending a lot of time reading the different Preferreds they Own/Buy and 'flip', I built my own basket of preferreds. It's small as a percentage of the portfolio but I also look at special situations specifically potential 'Value' trades if when a preferreds breaks down.

You must look at the business and their underlining assets, cash flows and why the preferred(s) have broken down (default risk) and if taking a small position at a super discount may/could eventually turn out.

This was the case w/ the COVID 'crash'. I picked up AHT-G at/near $5/share (PAR is $25) and sold my last piece for $26.35/share.

I also have about 3 other plays some still underwater or w/ suspended dividends. The suspended dividends must be made whole before a common dividend can be paid.

Finally, during the 3/20/20 'crash' I wanted to Buy good paying preferreds that maybe selling at a significant discount. Those in my top 3 were bought at a 20% discount and have worked out well (so far).

I am still sitting on 20% cash and when the next 'crash' comes, I have a list of a few stocks I want to Buy w/ GOOG being one of them. Can I get shares at a 50% discount to the current market price?

Perhaps in the last 21 years we had 2-3 excellent buying periods; 2009-2011 and the flash crash 3/20/20.

I still have several stocks I bought on the cheap during 2009-2011 but it was more difficult and longer lasting. I did make a large real estate purchase where I bought a Duplex for $270K and spent $80K fixing it up (rather than buying stocks). That purchase was 11/2011

It turns out down the street there is a Townhouse/Condo development (about 400 units built in 3 phases) that is now selling $1million - $13 million units. Has been under development for over 10 years and the first units just hit the market 24 months ago starting asking price $550K. Nothing available under $1 million and they have HOA fees of $800/month too.

Fast Forward 10 years and I am working on splitting my Duplex lot into two Townhomes that may/could have a fair market value of $1.3 million (or $650K per Townhome). I have no intention of ever selling but this split proposal gives me a lot of flexibility for future estate planning. Association fees are $250/year for road repair and annual snow removal.


My takeaway is there are always investment opportunities but you also need to be lucky too.

Happy Thanksgiving and hopefully we see MAC rally back to $90/share. I will be satisfied w/ mid $40's.
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