The Lacher announcement occured on Monday, July 18th. The prior business day close was July 15th and ALL closed at $29.47. Today ALL is at $26.31, so down roughly 10.72%. But, to get back to the Lacher level, the stock would now have to increase 12.01%. Not even three weeks. Nice going Tommy W. At least you showed Joe who is the boss.
If you know how to buy preferred stocks great! If you don't then you MUST LEARN. You must learn what the Par issue price was.
You have to know how much the par price is. If it is $25.00 and you buy the stock for $24.50 you got a good buy. Maybe it was after a dividend ex-date on a semi-annual paying stock. If you paid $26.00 you paid $1.00 over par value for a $25.00 stock.
This matters as does when you will collect the first dividend and the amount of the dividend. The matter of it is that if the issuer "Calls" in the stock obligation you are at risk. You will be paid only par value (in this case $25.00) plus interest earned between the last time a dividend payment was actually paid, not simply due or allowed as in some cases to go unpaid and accrued, and the date the payment for the stock and interest is paid to the stock disbursing agent used by your broker that issues it to you a day to three later. You need to know "Where you will be" in regard to par value and interest earned when you buy the stock and weigh the tolerance for the call risk.
Learn that there are "Callable" dates on the note and check it when checking the par value. Learn what notes (stocks) are Callable, Convertible and Cumulative (Cumulative can go unpaid as were some Ford). Cumulative can be very cheap to buy, come already loaded with previously unpaid dividends and eventually be very profitable as was a recent Ford note in about 2010. Cumulative can simply fall apart as well. There are a ton of poor to bad unpaid financial or real estate cumulative notes to be purchased. One must learn to read carefully each one of these and no what the mean.
There are also a few hard to notice but labeled notes (preferred stocks) that pay dividends "In Stock Only". These can be a nescience because of minute fractional shares not being paid in cash either which causes problems when liquidating a position with some brokers that may charge an extra fee to liquidate for you.
It can be very hard to tell what company a note or preferred stock was issued by. You have to "KNOW YOU KNOW" who's debt you are buying.
Not all preferred stock debt issued and on the market is still owned by the originally named issuer due to a business sale or merger.
I have myself pleasurably held all of these telecoms listed below at least once or more over an extended time without disappointment or serious seeing serious sustained fluctuations even during "The Flash Crash". Some of the original issuers may have been acquired. Some issues may seem slow to identify themselves to you. I have not looked at them in a few months nor their headings.
All yields are original issued yields at original issue price at par value. Today’s yield would reflect today’s selling price.
(UZV) US CELLULAR 7.5%
(ATT) AT&T 6.375%
(PKH) QWEST 7.75%
(FJA) Centurylink 7.1%
(PJL) Verizon 7.62%
Take it slow. don't make an identification mistake. Do not over pay. Check past price patterns.
I know absolutely nothing and I have no advice whatsoever for any of you. I would not pay attention to a thing here!
Excuse the spelling, it's late, not early.
(1) They likely would refuse to discuss that with you if you asked. This being even if you were a highly recognized economics journalist. Proprietary reasons might me given as why or you might as an individual simply get blown off like a mosquito by them with perhaps an attitude of your not being worthy of an answer to anything. They of course being so much above ALL OF US.
(2) I think your questions can be answered sufficiently by yourself if you like and you would find it more enjoyable to think them through yourself. Some short-cuts though:
The great yields on great preferred stocks and other debt you and I would, and may both consider stable, can still come with those ratings problems that become the portfolio entrance stopper. Remembering as necessary any specific limitations on rating levels, accumulated totals of rating mixes in volume percentages and so forth can all be portfolio road blocks towards the specific reserve requirements of various types of institutions under the regulatory practices or monetary covenants they are subjected to. This is true when the security in question may be deemed much safer to hold by you or I than the security of the institution holding it or than what the rating implies the safety is.
(3) Along the lines of your question.... I continue with the above only to ask how comfortable would you be with bonds from the state of Illinois or California by the truck load in your life insurer's portfolio? Remember the great city of New York that barely got a bail out in the last hour before bankruptcy a few decades ago?
(4) ( T ) ( VZ ) ????? You said high, yield safe investment I believe. I consider these to be two potentially market sensitive volatile stocks that can be a good or very good yield depending on how badly the stock price is or is not being punished at the time or how well you bought into the stock to begin with. I believe a beginning yield at the time of purchase is always the yield and then it is compounded and regularly computed from there by your own book work. How else do you know YOUR yield? A new purchase or a dividend payment that changes your cost basis or a change in the amount of the "yearly" dividend amount will always change YOUR yield. All that is real is "your yield", and not the one advertised "For Sale As Is".
Since you asked about these telecom stocks, I'll tell you what I "Really think". My experience creates my preference. my preference is to by the preferred stocks in telecoms. Telecom stocks are not useful to me except to invest in. I will not invest in (VZ) or (T) again. I never want to go on that ride again. It is too volatile to be anything but a trade to me.
I only invest in the stability of preferred telecom stocks. They do not make big moves. Some of them are hoarded, hard to get people to let go of. Learning about preferred stocks and how to understand what you are buying is not hard it only requires care. Learning how to find preferred stocks on your own is what can be hard.
I will let the paint chip eating maroon (Bugs Bunny) answer this for you.
Then what ever he says, do the opposite.
He's the original George Costanza. I suspect that he will be off of this board soon enough. He places what should go on at an insurance company onto Allstate. Current management of this company is on Acid and should be jumping off the building at any time now. If that happens and they bring in a CEO that isn't completely brain dead, this company might come back to life. As it is. See that 10 foot pole.
I'm not picking sides here, just asking a few simple questions and happy to receive any thoughtful (& ideally informed) replies:
1) Does it really matter to an insurance company if US Treasury interest rates are very low (i.e. 0.25%-2%) when highly rated municipal bonds are yielding in the neighborhood of 5% (nominal/pre-tax) all along the yield curve?
2) Similar question ("Does it matter...") except that there are a variety of 'highly rated' equity securities with seemingly reliable dividends in the 4-6% range (e.g. T,VZ, etc)?
So, while I recognize that there is a greater risk of loss with equities, in the current overal environment are there not a broad variety of investments that an insurance company can make to generate a sufficient return on it's assets to meet future projected liabiities?
IN ADDITION TO ANY CONCERNS YOU MAY HAVE. YOU HAVE TO ACCEPT THAT
BESIDES THE POLICY LOSSES....... BESIDES INVESTMENT LOSSES.....
Don't expect strong results from insurance companies when the interest rates are and will remain virtually zero.
Your statement, besides the policy losses.....besides investment losses, shows how little you actually know about this company and investing in particular. How many policies can this company shed before it matters? Well if you have 1 million fewer policies over a 3 year period you have to raise the rest of the policies by that much just to keep premiums the same. When you make investments and the losses are equal to about 15% of your market cap, there is a problem. The stock is down because because when there is a cancer the body reacts. There is a great cancer within this company the problem is the cancer is brain cancer and it's at the top.
Ahhhhh, make that about down about 14.65% since the close before the announcement of Wilson cutting Lacher loose because they did not see eye to eye (or Lacher criticized Wilson in front of some agents during non-working hours). Current price/closing price on ALL for 9/16/2011 is $24.94 plus I will adjust for the .21 cent dividend that went ex on 8/29/2011, so you have $25.15 versus the $29.47 price at the close on July 15, and thus you have a 14.65% drop since Lacher was cut loose. NICE Progressive is down 8.92% in the same timeframe, and Chubb is down 2.94% during the same timeframe. Tom is doing a great job running this company.
It is too bad the BOD are in bed with this guy Wilson. They are apparently scared of him. They are worried they could lose their perks and prestiege if they rock the boat. He should have been gone awhile ago. Apparently the BOD does not care.
AS of the close on 9/21/2011, and after adjusting for a .21 dividend, the stock price is now down -20.936% since Smart Tommy fired Joe Lacher. It is also starting to look like Smart Tommy overpaid for Essurance, striking a deal at recent highs before the markets crumbled. Tommy is one heck of a CEO. Too bad the Allstate Federal Bank did not take off under his watch. Not good to have people doubting his sharp leadership skills headed into a major market decline. Well, at least he showed Joe Lacher who is the boss. Too bad many Allstaters are locked out from buying Allstate at the current 52 week low. That might have cushioned the fall a bit, but not now. If you mess too much with the free market system, you get unintended results.
Good thing you're cost averaging down your cost basis so it will go down the same way the stock price is down by buying on the dips and selling on price increase oppertunities if they come your way.
Hang in there!