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Strategies & Market Trends : Value Investing -- Ignore unavailable to you. Want to Upgrade?

To: Paul Senior who wrote (14640)	6/14/2002 9:06:24 PM
From: Grommit	Read Replies (4) \| Respond to of 79000

FR-d: you said -- "but I want the steadiness provided by the dividend to offset some volatility in my portfolio." I do not want to appear to be hyping a stock, but if you're interested... I've been following and investigating preferred stocks for a year or so and presently have around 15% of my stock mkt portfolio in preferred stocks (for the reasons you cite). Most preferreds are trading at a premium to their call price. Of course, premium or discount -- who cares -- as long as you factor it in. I've seen quite a few of the preferreds which I follow be called a week or so after the redemption date. This one which is at a discount is FR - D shares. quote.yahoo.com Presently yielding 8.2% (at $24.3). The redemption date is 5/14/02 and the redemption price is $25). That's another 2.7% in 8 months, which is worth 4+% annualized if they redeem it on that date. So who knows the final yield? But maybe 10-12%. And if they never call it -- 8.2%. This is the company that was in Buffet's wallet when he sold it to raise money for some charity a year or so ago. He has since exited the stock, but the preferred is quite secure, in my view. And 10-12% secure yields are nice to add to the portfolio. I happened to buy this one a short while back, under $24. I suspect it will go up and approach the redemption value as time passes -- so you can get the higher yield +/- whether they call it or not. (I'm guessing). I think I may have convinced myself to buy some more -- if I can find something I want to sell... :o) enjoy, grommit PS to anyone -- let me know if you like this concept, and if it's appropriate for the thread, because I sometimes feel like I'm writing to myself. I've investigated most preferreds and know which are the pick of the litter. I think I own 10 different ones right now.

To: Paul Senior who wrote (14640)	6/15/2002 11:55:10 AM
From: - with a K	Respond to of 79000

Thanks for your response and analysis, Paul. FWIW, I always appreciate your honesty and straight-forwardness in your posts, which is one of the reasons I frequent here. You bring out some valid points, but in a bullish (naive?) response, one could argue that the "informal data request" by the SEC is benign and the cloud will soon lift. I am also encouraged by management's denials and actions, as opposed to some of their energy brethren. Finally, James Stewart (of SmartMoney and MSN) wrote this week that he added to his position. I will continue to watch. - Kris