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M* tells me the average duration on bonds in my funds is 1.94. And that's after including VWINX, VWELX, PRWCX, and FBALX. So that might say something about how I feel about interest rates.
As for macro calls, I definitely pay more attention to how funds have behaved since rates started going up.
Down to 35 In the IRA, and only 27 in the taxable. There are at least 12 funds I would love to cut from the IRA. When the rate environment gets a little steadier, I'll be able to consolidate in that area too.
To be honest, with the unpredictable climate induced weather changes, I'd be very nervous about any utility which has power lines capable of starting a fire. California, Oregon, Hawaii, Texas...
To be honest, with the unpredictable climate induced weather changes, I'd be very nervous about any utility which has power lines capable of starting a fire. California, Oregon, Hawaii, Texas...
I'd say 'big forest fire' ... any ute could start a fire anywhere, even in a downtown metropolis. But I'm with you - there's more risk now than there used to be, and I don't want to own utes in the states you mentioned even if they've been on my radar for ages. Times change, and we change with them.
Yes it appears that the utilities in less regulated states with higher growth rates are also at the highest fire risk. You need a pretty accurate and detailed map to sort this out. Maybe New Mexico? I remember seeing a lot of pine trees at higher elevations in Arizona.
CT and MA are probably safer, but probably not as profitable, and they are wrestling with he offshore wind mess now.
Not a UTE, but home insurance hit with increase due to being in a designated tornado area. First time for a twister in Feb. & insurance company hits us with increase !
@rforno - You're right about 'big forest fire' but I don't know how anyone can really know what areas might be at risk anymore. I certainly wouldn't have thought that an area like the Texas panhandle, mostly sage and semi-desert, would be in danger but look at what just happened. And in Hawaii too- not a "forested area", but just dry grass. Good grief!
FWIW, CMS seems to service areas largely in Michigan, and there have certainly been major forest fires there also, though not, as far as I know, started by electric utility services.
FWIW, CMS seems to service areas largely in Michigan, and there have certainly been major forest fires there also, though not, as far as I know, started by electric utility services.
Yup. But ya gotta take some risks sometime....and we're always going to need power. Besides, there aren't many non-bank preferreds that I find attractive for the income side of my portfolios since I won't do bonds for tax reasons right now.
Crypto mining (not dying) uses up a lot of power. Now, AI uses a lot of power. As humans do less manual work, more power is needed. What I have not been able to figure out is how to invest in this growing need and letting PRWCX and BRK invest in the space for me, though I would prefer to do it on my own. May be we should start a new thread for an in-depth discussion.
Crypto mining (not dying) uses up a lot of power. Now, AI uses a lot of power. As humans do less manual work, more power is needed. What I have not been able to figure out is how to invest in this growing need and letting PRWCX and BRK invest in the space for me, though I would prefer to do it on my own. May be we should start a new thread for an in-depth discussion.
Take a look at GRID.
It's one of the small holdings in my IRA that I will hold onto until closer to RMD's.
GRID is great!.... 20% Utilities. Tracks an opaque index NASDAQ OMX Clean Edge Smart Grid Infrastructure QGRD, which has beaten global equities recently
NLR "nuclear power" is 50% Utilities based on another opaque index MVIS® Global Uranium & Nuclear Energy Index. Supposedly these companies have to get 50% of revenue from nuclear power related activities, but I think they fudge it saying "expected to get" Uranium is on fire in the last year or so
Of course now it has hit the headlines, it will all fall apart
Has anyone looked to see if any active mangers missed Utilities with significant exposure to wildfires?
I read the pole that started the fire in Texas was so rotten it had a sign on it that said "Do not Climb" Utilities will have to get a lot quicker a in repairing their stuff, or smarter in turning off the power with high winds. A switch that cuts power automatically with high winds or when line falls would be a great idea
That type of automatic shutoff switch has been around for many years. With respect to PG&E here in Northern CA they were set to shut off when sensing abnormal conditions, then automatically retry a couple of times to see if perhaps the problem had cleared. After it was determined that this procedure had resulted in a number of large fires the switches were reprogrammed to shut off as quickly as possible and then stay off until manually reset.
@WABAC, GRID appears to be a good fund. Seems like better than investing in populistic themes which I try to avoid. Does you having only a small position in it inadvertent or deliberate? Thanks.
@BaluBalu, small position in GRID was deliberate. In my strange mind it is paired with FIW as part of my utility basket, where the main player is FSUTX.
GRID has blown past the price I paid in November 2021. I also bought in July 2022. I have thought about it for the taxable, but the price seems pretty high now.
@sma3, five star FSUTX has PG&E at 6.09%, sixth place in its holdings. I don't know about the Texas ute.
BTW. Seems like ute's have been on a bit of rebound since Warren made his comments about them. Maybe that's due to chip fatigue.
Thanks. Do we have NLR holders in the house? I sold a while ago PCE 5% lower but one can play for bump in price when first Div is declared. Now own SWX.
Sold ETRN for a 15% gain in 45 days on news EQT is buying them back.
It's been trending higher in recent days and I didn't get the huge pop I was expecting on the news, but I primarily bought it for a 'trade' on the possibility of a sale. (I was hoping it would've been bought by WMB, which I also own.)
On the upside I could use the gains to offset some losses anyway, so it's still a win-win for me, just not a WIN-win.
I bought both GRID and NLR as part of climate change sleeve . Most of the more speculative clean energy stuff has cratered with rising interest rates, but Grantham thinks it is coming back ( see his recent letter)
Valueline Climate Change. newsletter recommended PCG recently as electrification is going great guns in CA. You will have to assume they learned their lesson in all the horrible fires, and the capital required to fix their grid is available and they can afford it
My cousins are lead plaintiffs in class action against their utility company for the MAria Fire. I think it is Southern California Edison
Sold ETRN for a 15% gain in 45 days on news EQT is buying them back.
It's been trending higher in recent days and I didn't get the huge pop I was expecting on the news, but I primarily bought it for a 'trade' on the possibility of a sale. (I was hoping it would've been bought by WMB, which I also own.)
On the upside I could use the gains to offset some losses anyway, so it's still a win-win for me, just not a WIN-win.
I am surprised no material change from Friday closing price. currently trading at $11.30 while the implied acquisition price is $12.5 (of course, it is an all equity transaction).
You may be right in bailing as today the price is lower than yesterday when I thought may be there will be delayed positive reaction.
I have a poor sell discipline and so took your cue and sold at $11.30.
(I had some distractions and did not follow through after the initial buy. But Thanks for bringing this to my attention and I count all positive trades.)
I have no complaints with the fund. But it's a fee fund at Fido. "So long, and thanks for all the fish." It was 12% of my bond holdings. Now I need to figure out how I want to rearrange the chairs on the bond deck. I'll probably keep leaning towards shorter durations,
In other news, I added to FMILX, DIVO, AUSF, XMHQ, FMIMX, and SYLD.
@MikeM. The equity portion is covered with swaps. From the prospectus:
The Fund expects to use only a small percentage of its assets to attain the desired exposure to the Index because of the structure of the derivatives the Fund expects to use.
The bond portfolio is collateral for the swaps. That's the way I remember it being described when I first bought it several years ago. These days they say that the bonds "seek to provide additional long-term total return." But yeah, it's also there for redemptions IMHO.
Duration on the fund is currently 1.32 according to Doubleline. Doubleline does not cooperate with M*. So I would take their coverage with a tsp of salt.
Comments
https://www.morningstar.com/etfs/compelling-shareholder-yield-etf
https://www.cambriafunds.com/assets/docs/SYLD_Investment_Case.pdf
If I heard of another fund that executed the strategy better and/or cheaper, I would look into it.
I also have SYLD in the taxable.
They also have EYLD for emerging, and FYLD for foreign markets.
Thanks. I thought may be you were making an interest rate or some other macro call, perhaps influenced by Powell testimonies.
As for macro calls, I definitely pay more attention to how funds have behaved since rates started going up.
Stay tuned.
CT and MA are probably safer, but probably not as profitable, and they are wrestling with he offshore wind mess now.
FWIW, CMS seems to service areas largely in Michigan, and there have certainly been major forest fires there also, though not, as far as I know, started by electric utility services.
It's one of the small holdings in my IRA that I will hold onto until closer to RMD's.
https://cleanedge.com/data-dive-charts/Smart-Grid-Infrastructure-vs-Nasdaq-Global-0
NLR "nuclear power" is 50% Utilities based on another opaque index MVIS® Global Uranium & Nuclear Energy Index. Supposedly these companies have to get 50% of revenue from nuclear power related activities, but I think they fudge it saying "expected to get"
Uranium is on fire in the last year or so
Of course now it has hit the headlines, it will all fall apart
https://www.washingtonpost.com/business/2024/03/07/ai-data-centers-power/
Has anyone looked to see if any active mangers missed Utilities with significant exposure to wildfires?
I read the pole that started the fire in Texas was so rotten it had a sign on it that said "Do not Climb" Utilities will have to get a lot quicker a in repairing their stuff, or smarter in turning off the power with high winds. A switch that cuts power automatically with high winds or when line falls would be a great idea
That type of automatic shutoff switch has been around for many years. With respect to PG&E here in Northern CA they were set to shut off when sensing abnormal conditions, then automatically retry a couple of times to see if perhaps the problem had cleared. After it was determined that this procedure had resulted in a number of large fires the switches were reprogrammed to shut off as quickly as possible and then stay off until manually reset.
@WABAC, GRID appears to be a good fund. Seems like better than investing in populistic themes which I try to avoid. Does you having only a small position in it inadvertent or deliberate? Thanks.
GRID has blown past the price I paid in November 2021. I also bought in July 2022. I have thought about it for the taxable, but the price seems pretty high now.
@sma3, five star FSUTX has PG&E at 6.09%, sixth place in its holdings. I don't know about the Texas ute.
BTW. Seems like ute's have been on a bit of rebound since Warren made his comments about them. Maybe that's due to chip fatigue.
It's been trending higher in recent days and I didn't get the huge pop I was expecting on the news, but I primarily bought it for a 'trade' on the possibility of a sale. (I was hoping it would've been bought by WMB, which I also own.)
On the upside I could use the gains to offset some losses anyway, so it's still a win-win for me, just not a WIN-win.
Valueline Climate Change. newsletter recommended PCG recently as electrification is going great guns in CA. You will have to assume they learned their lesson in all the horrible fires, and the capital required to fix their grid is available and they can afford it
My cousins are lead plaintiffs in class action against their utility company for the MAria Fire. I
think it is Southern California Edison
You may be right in bailing as today the price is lower than yesterday when I thought may be there will be delayed positive reaction.
I have a poor sell discipline and so took your cue and sold at $11.30.
(I had some distractions and did not follow through after the initial buy. But Thanks for bringing this to my attention and I count all positive trades.)
I have no complaints with the fund. But it's a fee fund at Fido. "So long, and thanks for all the fish." It was 12% of my bond holdings. Now I need to figure out how I want to rearrange the chairs on the bond deck. I'll probably keep leaning towards shorter durations,
In other news, I added to FMILX, DIVO, AUSF, XMHQ, FMIMX, and SYLD.
Cash-87.78%
Stocks100.44%
Bonds87.34%
Help, someone else can take it from here.
Duration on the fund is currently 1.32 according to Doubleline. Doubleline does not cooperate with M*. So I would take their coverage with a tsp of salt.