Trading Diary: Hurricanes, politics make Friday a tough trade

Our short trading column today highlights one ETF sale and one serendipitous UK REIT purchase. Plus, follow-up on the Insmed, Inc. secondary offering.

A Rainbow Infrared graphic of Hurricane Irma from 07:15 UTC to 14:15 UTC 5 September 2017 from sensors on the GOES Floater satellite. Center of Hurricane Irma East of Antigua and Barbuda, Sept. 5, 2017. (NOAA graphic, U.S. Government, public domain)

WASHINGTON, September 8, 2017 – Having dealt in our companion column with the likely affect that incoming Hurricane Irma will have on most of Florida this weekend, this one will be short and sweet.

Troubled U.S. stock markets have been getting too much news tossed at them this week. Right now, stocks look like they’ll end Friday in a state of complete and total confusion. In addition to the recently-departed Hurricane Harvey and the about-to-hit monster storm, aka Hurricane Irma, we also have reports of a massive earthquake and related tsunami hitting off the Yucután coast of neighboring Mexico, though not much hard news has followed as we write this article.

Read also: Irma hits insurance stocks before landfall, averages confused

Then there’s that surprise deal struck yesterday between President Trump and Democrat minority leaders of the House and Senate. As if The Donald’s accession to the Oval Office hasn’t been discombobulating enough for Washington’s political and media swamps, now it looks like the President is happy to do business with anyone in Congress who will do something – anything – about moving his massive and heavily promoted recovery agenda through D.C.’s dysfunctional fiefdoms.

Lest we forget, look for that fun-loving punk who runs the People’s Paradise in North Korea to pull another smart-ass publicity stunt over the weekend.

After all this goes down, who has any clue as to what will happen when Wall Street opens for trading Monday morning?

Trading Diary

Given our preamble above, we’re pretty much not doing anything with the portfolios today save for trimming a tiny amount of shares in small ETF positions that are going nowhere. Ditto for our 300 shares in the Alerian Master Limited Partnership ETF (symbol: AMLP), which is an easy (and paper-free) way to invest in high dividend paying oil and gas master limited partnerships while avoiding all those annoying IRS K-1 forms.

For now, at least, AMLP is in the midst of a mini-selloff, so we’ve exited with a mini-profit right now and hope to get back in when this ETF bottoms. Stay tuned.

Somewhat whimsically, based on a half-decent article/analysis posted in the generally too-verbose but sometimes useful site Seeking Alpha, we picked up a modest position in a UK REIT known as British Land Company (Pink sheet symbol: BTLCY). It’s normally a bad time to buy REITs when the Fed appears to have lost its appetite temporarily for hiking interest rates. But our investing model is pretty much devoid of international stocks right now, save for a single ETF, so this looked like a fairly benign way to get a little UK exposure.

BTLCY took a nasty hit in the summer of 2016 when news of the Brexit vote hit the wires. Apparently, most big investors instantly assumed that every single business would immediately exit London. In this case, BTLCY, which is primarily a prestige office-oriented REIT, was supposedly about to lose every one of its quality tenants.

Such overreactions are usually nonsense, of course. So the stock actually remains a bargain even today after last summer’s beating, still selling moderately below book value. Looked good to us, so we’re in. We’ll see how it works out.

Although they’ve backed off a bit today, our opportunistic share grab Thursday of a small position in the secondary stock offering of profitless biotech Insmed (INSM) popped a modest but nice 7.4 percent by Thursday’s closing bell. It’s off 68 cents this afternoon, along with many other stocks, though it scarcely matters to us, at least for now. That’s because getting in on any IPO or secondary offering at our discount brokerage “requires” that we hold onto those shares for 31 days before we can sell them. I.e., no “flipping,” for fun and profit like all the rich people do with their IPO shares.

Sure, we can sell the shares the minute they open for trading. But then we’ll be banned from IPOs for at least 6 months, as I recall, a penalty I accidentally incurred a few years back. It’s irritating, but it’s okay. Generally, I make enough money on the IPOs and secondaries I choose anyway, so I usually don’t complain.

That’s it. I’m headed to Trader Joe’s today to replenish my currently drained reserves of cheap-but-good vin ordinaire. After the week we’ve had, I plan to start in on at least one of these new bottles right away this evening.

See you Monday, assuming you’re not in the path of Irma, which, at the moment, we’re not.

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