Berney; RE:" Ersatz Bondz "
Here are the ones that I have found so far...
APJ - Appalachian Power 8.25% DEBS A
AZD - Arizona Public Service 10% MIDS A
CSJ - Columbus Southern Power DEBS A
DTD - Detroit Edison 8.5% QUIDS
JRL - Cincinnati Gas & Electric DEBS 30-JUN-05
KPC - Kentucky Power 8.72% series A
OPJ - Ohio Power 8.16% DEBS A
PCQ - PaciCorp 8.375% QUIDS
PGB - Portland General Electric QUIDS
They all become ex-dividend 25-SEP and have a payout date 30-SEP as part of a quarterly pay schedule. Thus, tomorrow, Thursday 24-SEP is the last day to buy them and qualify for their dividends - Friday being ex-dividend (please correct me if I am mistaken about the precise timing of ex-dividend dates).
These are high Annual Percentage Rate yielding instruments; given today's closing prices...
APJ -- 7.91%
AZD -- 9.41%
CSJ -- 8.03%
DTD -- 8.29% *
JRL -- 7.94%
KPC -- 8.25% *
OPJ -- 7.90%
PCQ -- 8.05%
PGB -- 7.89%
Their stock prices always drop, typically gap-down open, between ex-dividend date and payout date. Their stock prices tend to gain from this drop up to the next quarterly payout date, presenting us with a tradeable phenomena. So, the anticipated price drops should take place either Friday or Monday.
There is about 3/8 to 3/4 point, typical, between the high and low of their swings after the ex-dividend dip. These things don't grow, generally - but they don't decay, either.
* From a T/A perspective, DTD - Detroit Edison is the most interesting - and stable - of the bunch : it has no Trend whatsoever, being in orbit around 25.375 median - with three, 0.125-increment bands above and below. It's a "buy" at or below 25.125 (8.48% yield) and a "sell" at or above 25.625 (8.31% yield).
If one were to buy 1000s DTD after the drop at say, ~25.125 and sell, say 980s at ~25.625 - the resulting 20s ($500 kapital gain) would yield 8.48% APR, for example. Such a strategy, ( if successful ;-) would be equivalent to a ~$500 contribution per quarter to an 8.4% APR account, while preserving principal. Other tactics are possible; I am just beginning to explore the potential of this tradeable phenomena.
* I find KPC - Kentucky Power to have the second most regular T/A cycle : it appears to have a median of 26.0, with a lower support around 25.75 (8.47% yield) and an upper resistance around 26.25 (8.31% yield).
AZD looks tempting because of its high yield, but it also has a long-term DownTrend, and does not drop and retrace up in a clockwork fashion like the others.
-Steve |
