Weekly Update, Jan 21, 2017

There seems to be a lull in the news, analysis and commentary on economy, market, etc … earnings will be in full bore next week and most eyes are focused on US Govt shutdown.  What could go wrong?

Actions and Considerations last week

  • Preferred ETF (PGX) is starting to look interesting … its compliment in my non-taxed account is PFF, but PGX is looking like better entry point – patience here until rates stabilize some and the government goes back to work
  • VGIT – i was tempted to increase my position here, but did below instead
  • Corporate Bonds … i snagged a few Apple 2016 bonds w/ a YTM of >3%.   There is a portion of my capital that i will accept 3% return especially if the capital carries little risk.  I see Apple bonds as better than Treasuries in the 10 year horizon.
  • Problem Childern
    • QTS – this is a ‘don’t lose capital’ situation.  The dividend is too small, the possible growth is shrinking i think.  The big cloud service providers will use lease space as small footprint geo distribution and burst capacity but will continue to create their own top-secret data centers.  Then you can ask – for future growth in the data footprint where will the apps be done?  I think the major cloud folks – Facebook, Apple, Google, Microsoft, Amazon, and then their peers in China – Tencent, Baidu and Alibaba.  I am just really struggling to see enterprise off premise and small cloud providers utilizing the full capacity that exists today … it will really slow down, and then the dividend should be in the ~5% range.  This is problematic for DLR and others I think.
    • HCN – there is just 0 demand for this equity and it’s hanging by its fingertips … i would buy more but am already to my maximum position UNLESS i swing trade this within the quarter (high risk given the macro pricing risk).

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