My point was that the AAR doesn't sell w/ accrued interest, like a bond.
EP_PC might be becoming noteworthy if there is further weakness. (note: EP_PA must be avoided, but the _PC might ne compelling if we get another couple of points. I don't think it will accomodate me, thought. but I watch, like CYA.
<<(Kami, by the way, I was stopped out of TBL today at the open. Lesson learned,
maybe, if you'll tell me what that lesson is . . .)>>
I dunno if there is a lesson. Maybe it has to do w/ trailing stops vs chart-selected (resistance) supports.
I know that disciplined traders do better than undisciplined traders; o you're better off to stick w/ your stop-loss discipline.
I remain short, but wish I hadn't added in, obviously. I'll probably cover most of it towards the close, unless it's weak. Trading at major resistance, but the chart sure didn't telegraph an upside surprise this morning, and I really don't want to ride this thing to 38, which is the next obvious cover. Yeck.
The 30% yield is based on current market price.
Insofar as div. is fixed, and *not* variable, your yield, on basis of cost, will be unchanging.
Re: your daddy: While a lot of the lower-skilled people in the world can be thought to be overpaid, there are frequently reasons not visible for their treatment. Excess responsibility, willing to work OT, etc.
One coul argue that this is excess fat that the company will be able to reduce.
Maybe they can fire him and hire three guys at 35k to do the job. Oh- and one doesn't show up, and one is always late, etc.
If your daddy does works 80, he ought rightly to be well paid. IMHO. Problem I have is with the pilots, who can make 300k working 25hrs/week, doing little more than driving a bus.
My poijt re: AAR is simple: They avoid BK, I win. Period. For life, essentially. There is NO WAY I'll net 30% annual for the next decade trading stocks. I am not that smart. This is a no-brainer. IF they avoid BK. If they BK, I lose ~1/2. Quick.
Also: TBL: F_cked again.
Also: HBs: Didn't see WSJ article yeterday til I got home. Front page of one of the sections. Usual
Well, I got one right and one wrong. Here's the summary from the AAR prospectus. There are no dividends here, these are AMR debt obligations. But they don't appear to be a roll-up (collection of other debt), either (maybe I was thinking of CYA); just straight new unsecured notes from the airline.
7.875% Public Income NotES (PINES(SM)) due 2039
This is an offering of 7.875% Public Income NotES ("PINES") due 2039 of AMR
Corporation. The PINES will be general unsecured, unsubordinated obligations of
AMR. AMR will pay interest on the PINES on January 31, April 30, July 31 and
October 31 of each year. The first such payment will be made on July 31, 1999.
On or after July 13, 2004, the PINES will be redeemable at the option of AMR, in
whole or in part, at a redemption price equal to 100% of the principal amount
redeemed plus accrued and unpaid interest to the redemption date. The PINES will
be issued in minimum denominations of $25 and integral multiples of $25."
Here's the description from Quantumonline. AAR is simply a roll up of AMR's debt obligations which originally were priced to pay out 7.875% on a par value of $25, or $1.969 per share of AAR.
"SECURITY DESCRIPTION: AMR Corp., 7.875% Public Income NotES (PINES), due 2039, issued in $25 denominations, redeemable at the issuer's option on or after 7/13/2004 at $25 per share plus accrued dividends, maturing 2039, distributions are paid quarterly on 1/31, 4/30, 7/31 & 10/31. The PINES are general unsecured, unsubordinated obligations of AMR."
Receiving $1.969 on an investment of $6.14 (today's price) gives you a yield of 32.1%, assuming no default, which is a big assumption. When this thing trades down to $5 a share, its yield will be 39.4%, and so it goes.
There are no dividends here--I think the mention of dividends in the Quantumonline squib is a typo. Also, the coupon never rises, it's always 7.875 on the face amount, what changes is the trading value of the security. As that falls, the yield rises, as that rises, the yield falls.
(Kami, by the way, I was stopped out of TBL today at the open. Lesson learned, maybe, if you'll tell me what that lesson is . . .)
A little favor here. Could you use standard spelling? Typos we can tolerate, but the use of 'u' for 'you' is something 13-14 year olds do.
<<u still holding tight on RRI have not jumped back in yet bull u still bullish on rri>>
You know, there's no surcharge for typing out a whole word, or using punctuation, or using capital letters when required.
<< why u are so hot on it ?? >>
My analysis is simple: If they avoid BK, I will get 30% on my money, year in and year out. I doubt that I can do better year in and year out trading stocks.
If they pay, I win large. If they go BK (and these are not deferravle, unlike my AES_PC), I expect to lose about 1/2; but it could be more.
I think I am buying here at the point of maximum desperation. The common & preferred collapsed week and a half ago. There is very little speculative hope built in to the stock.
I will *never* sell the stock if they avoid BK. I will take 30% and be happy. If they go BK, the stock might go to 2, 3, 4, and get a dead cat bounce back to 4,5.
If AAR is above 6, and CYA retests its low, I'll buy that also. If AAR goes to 5 I'll buy more. I am at 15000sh on a target of 20000, AC is now 7. I have a day LO left from this am at 5.01; if it goes off, I'll be happy; if it expires, I'll be happy.
I don't think I can find the exact bottom of this stock, but think it is compelling at these levels. I am prepared to drop 1/2; but that is about my max. (although, if not BK, I'll ride it to the bottom).
Which begs the question: Will they go BK? Honestly, I have absolutely no idea.