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To: YieldHog who wrote (10799)	7/3/2014 9:42:36 AM
From: Lord Xot	7 Recommendations Recommended By KEN2CWL MRothaus1 RoomWitaView Schnullie tjon72 and 2 more members Read Replies (2) \| Respond to of 52049

Re: re GST-B There are other considerations to sales of over par pfds. Personal investment methods figure large. Suppose one flipped GST-B for SB-D or LGCYO...... or both..........and both just under par and just above 8%. You would now have a slightly positive YTC with good gain potential and in securities that are less likely to be called. You would be trading a stock with a built in loss potential, due to underlying security characteristics, for ones with reasonable gain potential and built in price stability....again, due to security characteristics. One certainly could wait three or so years and attempt a sale before par and call exert their pull on this issue and i have no problem with that. But my investment technique is to move when it makes sense to do and let the market take care of itself. What if one can roll the funds to another issue such as mentioned. Suppose prices appreciate such that the new issues can be sold for just .75 profit in the next year. And i do this one time a year for the next 4.25 years. I collect 8.50 in divs but add 3.00 in gains for 11.50. With GST-B, i collect 11.43 in divs but lose 3.66 in nav for a return of 7.77. The difference in return is 48%. This math is approximate and meant to show method. This is portfolio maintenance as i call it. Security upgrading is another name. Even if i effect no trades, returns will be superior in the other issues, assuming a call of GST-B, and whether the other issues are called or not, and assuming par is used as the price at beginning and end. Straight arithmetic. I always move poorly priced pfds for well priced pfds whenever possible. One can certainly attain a good or better result by waiting a few years to sell GST-B and locking in that premium while collecting a superior yield. I wouldn't criticize those attempting to do so. Nothing here is written in stone. But staying at par with 8% yields offers opportunities for superior return and in a more reliable fashion, as stated previously......imho. I do realize we are talking about the future, there are many variables, and it could go either way. The important thing is to understand the process in order to make an informed choice............................................Xot

To: YieldHog who wrote (10799)	7/3/2014 10:56:48 AM
From: mopgcw	1 Recommendation Recommended By KEN2CWL Respond to of 52049

Re: re GST-B As for GST-B, as I previously stated, in my opinion it is way to early to sell this. It has not even been issued for a year and is over 4 years to the call date. I concur, and I own GST/B and MILL/D. they are both staying in the portfolio. I cannot come close to replacing my current yield on those dollars -- it is a negative trade today and there is no compelling reason to exit here. And I don't have to pay taxes on the trade for these. GST/B may indeed and hopefully will improve their finances prior to the call. But I am not sure credit spreads and absolute rates will stay where they are today in the 4 years from now. One really needs to look at a total return comparison to see if the trade makes sense swapping out today in conjunction with one's view of rates and credit spreads. And drpirhana - you are correct, these are not options and do not decay similar to an option to the expiration.