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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).
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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.

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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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