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Pastimes : Learning To Invest Correctly - A Shared Experience

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To: K A Anderson who wrote (16)	7/24/1998 6:43:00 PM
From: EL KABONG!!!	of 253

KAA, Given only those two choices, I'd go with the more liquid common stock. It would have a wider following (and larger float), easier to research, easier to buy/sell and less able to be manipulated (bid/ask spread) by the MMs. On the other hand, preferreds often come with clauses stating that the company can redeem outstanding shares when advantageous to do so (usually advantageous to the company, not the shareholder). Preferreds may pay nice dividends, but they carry a higher risk of loss on the stock price. If I wanted dividends, I could buy munis or corporate bonds that will yield nearly the same return without the stock risk. And, as a bondholder, I have some indemnification if the company fails which is not true of preferreds. Just a quick opinion off the top of my head. KJC (shooting from the lips)

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