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Here's a statement of the obvious: The opinions expressed here are those of the participants, not those of the Mutual Fund Observer. We cannot vouch for the accuracy or appropriateness of any of it, though we do encourage civility and good humor.
  • Help buying individual BOND
    YB-Let me try - Cusip - 912796ZU6 UNITED STATES TREAS BILLS ZERO CPN 0.00000% 02/14/2023 - asking 98.6860 ask yield 4.155 what will I get when it matures on 2/14/2023.
    Thanks,
    D
    T-Bills are sold at discount. So, you buy at $98.686, get $100.00 on 2/14/23. My TR calculation is approximately (100/98.686)^(12/4) = 1.04048, or 4.05%, and that is close enough (better results with counting days).
  • Help buying individual BOND
    YB-Let me try - Cusip - 912796ZU6 UNITED STATES TREAS BILLS ZERO CPN 0.00000% 02/14/2023 - asking 98.6860 ask yield 4.155 what will I get when it matures on 2/14/2023.
    Thanks,
    D
  • Help buying individual BOND
    I think interest rates will be lower in 2 to 3 years, so I would buy either 3 to 5 year treasuries or solid corporates that are non-callable
    Does anyone else have different ideas about how far out to go on the yield curve?
    Any body tempted by "make whole Calls" ? As I understand them, if called the issuer has to also pay you the interest owed till maturity. While there is an opportunity cost if rates have fallen significantly, you would do better than with a traditional call.
    Several low yield bonds ( APPL 2025 under 1%) are trading for 85 to 90, ie as almost zero coupons with YTM of 4 to 5%. I would think the issuer would be unlikely to call a bond with that low an interest rate.
    There are others paying higher rates, which would also cost a bundle to call.
  • The Liz Truss Travesty Becomes Britain’s Humiliation
    Resignations start.
    The Home/Interior Minister has resigned "citing her minor breach/mistake of using her personal email for an official business" (an easy excuse to make up that doesn't rattle the apple cart) but also citing her other concerns. One recent lesson of the UK politics was that very harsh criticism of the party leader(s) can damage one's own future prospects.
    https://www.cnbc.com/2022/10/19/uks-suella-braverman-to-reportedly-leave-role-as-interior-minister-.html
  • The Musk clownshow.
    Conspiracy theory about Musk & Putin & US Federal Investigations liftoff in 3...2...1...
  • Analyst Says Apple to Launch Health Insurance Product in 2024

    The ACA pre-existing condition requirement covers ALL health insurance plans unless it’s a grandfathered plan: https://www.hhs.gov/healthcare/about-the-aca/pre-existing-conditions/index.html
    The information there is at best poorly written. If it is meant to describe only individual plans, the writing is poor because it doesn't say that. If it is meant to apply more generally, it is simply wrong.
    Medicare supplemental health insurance plans can deny coverage (except during initial open enrollment period or in special circumstances) based on health conditions.
    https://www.medicare.gov/supplements-other-insurance/when-can-i-buy-medigap
    There is a lot in the ACA that is specifically targeted to Medicare. So I don't wish to give the impression that the ACA does not apply at all to Medicare.
    In addition to Medicare supplemental plans, the medical underwriting restrictions in the ACA do not apply to large employer plans. Though they do apply to small employer plans. The rationale for the distinction is that if a small employer has one employee who is costly to insure, and if the insurer consequently hikes the plan rate, it could become unaffordable for the employer. Health coverage for every employee might vanish as a result.
    The Affordable Care Act limits the factors that can be used to charge consumers greater health insurance premiums. For insurance coverage effective January 1, 2014, health insurance issuers in the individual and small group markets are allowed to vary premiums based on age (within a 3:1 ratio for adults), tobacco use (within a 1.5:1 ratio and subject to wellness program requirements in the small group market), family size, and geography.
    https://www.cms.gov/CCIIO/Programs-and-Initiatives/Health-Insurance-Market-Reforms/Market-Rating-Reforms
  • SPR, Oil Futures, US Budget
    The US SPR is getting alarmingly low. Increasingly, the SPR is involved in the US oil policy and the fiscal/budget policy.
    In the WH announcement, notably item #2 implies using futures contracts, probably privately negotiated, not the public futures markets; or a mix of the two. Those futures prices are seen at CME for 2024 but there isn't any meaningful trading activity or volume in those futures.
    https://www.whitehouse.gov/briefing-room/statements-releases/2022/10/18/fact-sheet-president-biden-to-announce-new-actions-to-strengthen-u-s-energy-security-encourage-production-and-bring-down-costs/
    https://www.cmegroup.com/markets/equities/sp/e-mini-sandp500.quotes.html
  • from Canada: consumers will now be dunned
    Here in California, ARCO has perhaps the lowest cost gasoline. Since the composition of the profit margin for fuel from any gas station is a "black box", it's pointless to wonder what part of the price may be ascribed to anything.
    ...
    ARCO's price differential between cash and credit is also significant. So it's a no-brainer: if there's a convenient ARCO station, go there, use cash.
    Years ago (the last time I lived near ARCO stations), ARCO didn't take credit cards and sold cheaper grade (not Top Tier™) gasoline.
    Apparently not any more. ARCO's moved up in the world. Still cheaper, though.
    https://www.savingadvice.com/articles/2020/10/30/1034665_is-arco-gas-bad-for-your-car.html
    This got me looking, Where I live, the cheaper stations tend to be BP (no ARCOs). It seems that last year BP stopped selling Top Tier gasoline. Though BP claims that its Invigorate® additive exceeds Top Tier requirements.
    Invigorate® FAQ
    On the investment side, BP purchased ARCO in 1999. In 2012 it sold the ARCO brand and a refinery to Tesoro (now part of Marathon Petroleum), while licensing back the name for gas stations in Northern California, Oregon, and Washington State.
    As near as I can tell, OJ's ARCO station is still owned by BP. I don't know what brand gasoline comes out of its pumps.
  • Help buying individual BOND
    Graust - my understanding was 1/4 of 5.75 but wrote incorrectly - will fix.
    I am looking at new issue now in my fidelity account - cusip - 17330RME2 CITIGROUP GLOBAL MKTS HLDGS IN SER N 5.45000% 10/21/2024 MTN - looks like 2 year Bond - callable after 1 year and then can be quarterly.
    Rating: Moody's: A2
    Rating: S&P: A
    Coupon: 5.75
    Maturity: 10/21/2024
    Callable: Yes - after 1 year and then quarterly.
    My understanding - will collect 2.725 every six months - 2 times (i.e. 1 year) and then the accumulated interest with face value when it matures or called.
    Plan is to hold till maturity or called.
    Just 10K investment so moving slow, hopefully dust will settle by then.
    Thanks,
    D
  • Help buying individual BOND
    This helped me a lot.
    (Snip)
    Plan is to collect 5.75% every 3 months till maturity or called earlier.
    (Snip)
    Thanks a lot to everyone.
    D
    Just a reminder that the 5.75% is annual…so you will get a quarter of that (1.875%?), every quarter :)
    Never thought I would actually be buying treasuries, or CDs, or individual bonds in general, in my investing account! Thanks everyone for all the knowledge-sharing!
  • Help buying individual BOND
    YB - I am just starting my journey on this individual bond purchase so not confident about buying bonds in secondary market at this time
    Progress - I checked my Fidelity account - trade executed today at 3:58 p.m. I now own 100 bonds of 3134GX4W1 FEDERAL HOME LN MTG CORP MTN 5.75000% 10/27/2027. I will ignore the market price which will fluctuate. I expect to get 143.75 every quarter till the bond is called.
    Next looking for Corporate bond category - JohnN mentioned about it - will look for new issue and will come back with Q.
    Thanks to all of you for helping me in this journey.
    D
  • The Liz Truss Travesty Becomes Britain’s Humiliation

                               The U.K.'s Liz Truss hangs on by a thread, as party members call for her ouster
    Following are excerpts from a current report from NPR, severely edited for brevity:
    LONDON — After a bruising first six weeks in office, Britain's still very new Prime Minister Liz Truss is having to bat away repeated questions about her future at No. 10 Downing Street.
    She fired her first finance minister, Kwasi Kwarteng, last Friday. Since then, she has had to watch his replacement, Jeremy Hunt — a former leadership rival she appointed to the second most powerful post in government — publicly tear down a series of proposals that she had insisted were critical to Britain's long-term economic growth prospects.
    They included cuts to the United Kingdom's basic rate of tax, after she had already reversed course on tax cuts for Britain's wealthiest. A planned drop in corporate taxes was junked too, along with plans to keep alcohol prices low and incentivize overseas shoppers to spend money tax-free in Britain.
    Perhaps the most politically painful change of direction concerns an energy price cap that Truss promised last month to keep in place for the next two years. It was designed to protect British households from the high costs of gas and electricity required to heat and power their homes. If gas prices rose again precipitously, as they did earlier this year after Russia's invasion of Ukraine, the British government would be on the hook for what might be billions of pounds in unforeseen price hikes.
    Hunt said this was inadvisable, and reduced the plan's lifespan to just six months. That means by next spring, Britons may be once more at the mercy of global energy markets, at a time when inflation is expected to still be very high, and interest rates set by the Bank of England will mean mortgage costs for many have soared.
    Five Conservative legislators have publicly called for her to resign, with many more criticizing and questioning her position anonymously in British media outlets. British front pages in recent days have appeared united in the narrative that she cannot remain in the role for long.
    "People don't respect her, they don't trust her, and the government is now effectively being run by a chancellor who is going against the very thing the prime minister stood on," Rainbow Murray, a politics professor at Queen Mary University of London, said on NPR's Morning Edition. Murray was referring to the formal name for the finance chief — the chancellor of the Exchequer, which is the U.K.'s Treasury.
    Her failure to show up at the House of Commons on Monday to answer an urgent question about firing Kwarteng drew sharp ridicule: "Instead of leadership we have this utter vacuum," Labour leader Keir Starmer said in Parliament.
    Another Labour legislator accused her of having hidden "under her desk" to avoid parliamentary scrutiny. It will be harder to avoid Wednesday, at the weekly ritual known as Prime Minister's Questions, when Truss will be forced to explain her actions and reactions to political friends and foes alike.
  • from Canada: consumers will now be dunned
    Here in California, ARCO has perhaps the lowest cost gasoline. Since the composition of the profit margin for fuel from any gas station is a "black box", it's pointless to wonder what part of the price may be ascribed to anything.
    That makes the choice very clear: ARCO's prices, both cash and credit, are clearly posted for comparison against competitors, and ARCO prices are typically much lower- 30, 40, 50¢ per gallon... sometimes even more, especially when compared to Chevron.
    ARCO prices are roughly equivalent to Costco, but Costco stations are few and far between, and of course there's the membership charge at Costco.
    ARCO's price differential between cash and credit is also significant. So it's a no-brainer: if there's a convenient ARCO station, go there, use cash. Every week we travel back and forth between SF and our weekend place, and fortunately there's an 18-pump ARCO just north of the Golden Gate bridge, with some of the lowest prices in the Bay Area.
  • Analyst Says Apple to Launch Health Insurance Product in 2024
    AMZN + BRK + JPM tried Haven healthcare for 3 yrs but gave up in 2021. Each may continue somethings by themselves.
    AAPL has been talking about Apple TV, Apple Car, etc. Suddenly, it is Apple Healthcare.
  • Analyst Says Apple to Launch Health Insurance Product in 2024
    A bit creepy that they might use Apple Watch data to monitor the insured and what the implications to healthcare privacy might be: https://forbes.com/sites/barrycollins/2022/10/18/apple-will-launch-health-insurance--in-2o24-says-analyst/?sh=42fa1f1e62db
    Part of me thinks this is way outside their area of expertise. Yet if they price the insurance aggressively low based on the data they collect, I could see it being a financial success. Then again, all sorts of discrimination cases could emerge about premium pricing.
  • Help buying individual BOND
    @kings52man, setting up Treasury ladder is easy at Fido with secondary market Treasury purchases, and then you rollover at auctions as they mature.
    I recently helped a friend set up 6-12-18-24 mo T-Bills/Notes ladders at Fido and Vanguard. He will rollover into 2-yr T-Notes as each matures.
  • Help buying individual BOND
    So many good CD at fidelity
    If you buy CD day price 99.965, is that the same price you place for trade
    Tried get CD for mama this morning keep getting rejected - Morgan Stanley CD ytm 5.1% 12 months
    Also Bought mama gm bond bbb 3 yrs mature 5.4% ytm
    Cusip 37045vaw0
    Slow buying in next 6 9 months
    Don't jump in too fast and put all eggs in one basket
  • Help buying individual BOND
    This helped me a lot.
    FYI - My account is with Fidelity so it was the source of CUSIP number.
    3133ENT26 - it got fully subscribed so couldn't buy today.
    So went with cusip - 3134GX4W1 FEDERAL HOME LN MTG CORP MTN 5.75000% 10/27/2027 ('AAA' rated - callable every quarter), invested a small amount.
    Plan is to collect 1.875 % every 3 months till maturity or called earlier.
    Purchase is in retirement account so it will fund my withdrawal.
    I have been buying CDs - 1 month - riding the interest rate increases - started with 1.75 to now 3.015, may go for higher maturity when dust settles (Central banks pause).
    I don't plan to open account with any other entity (bank or brokerage) - just Fidelity is fine for me now.
    Now going to hunt for Treasury bills/notes - shorted duration - to build up the bond ladder, will post what I do and/or ask Q.
    Thanks a lot to everyone.
    D
    Edit - corrected the % above - 1.875 (Thanks Graust).