Congratulations to Dennis from
Arizona for being the winning bidder for Preferred Stock
Investing on eBay!
By being the winning bidder in
last month's 7-day auction for one copy of Preferred Stock
Investing, Dennis received Preferred Stock
Investing plus the CDx3 Special Report Prospectus For
The Rest Of Us for a really great price.
If Dennis chooses to open a
qualifying TDAmeritrade account, he will also
receive a $30 Shell Gift Card from me. I'll actually end
up paying him to buy Preferred Stock
Investing.
Watch future issues of the CDx3
Newsletter for this eBay auction to run again; maybe you can be
the winning bidder and get paid to purchase
Preferred Stock Investing.
The CDx3 Newsletter has a new
look this month. The new format allows the CDx3
Newsletter to integrate with new features of the
Preferred Stock Investing
Google
Group. The Special Announcement section
below explains how and why, and the benefit to you as a CDx3
Newsletter reader.
In last month's CDx3
Newsletter, I asked you to check out the market price of a CDx3
Preferred Stock from Torchmark Corporation, just for fun.
See the CDx3 Company Spotlight section below to see how it went
for CDx3 Investors.
The CDx3 Question Of The Month
explains what preferred stocks are and how/why they are
different from a company's common stocks. I also present
one of the three Rules of Market Price Predictability
that allow CDx3 Investors to know when the market price of a
CDx3 Preferred Stock is most likely to peak and why.
And if you haven't gotten your
FREE copy of the CDx3 Special Report Calculating Your Rate of
Return, check out the Free Special Offer section below.
I close this month's CDx3
Newsletter with a CDx3 Preferred Stock to watch in March -
specifically, on Tuesday, March 13. On that date, CDx3
Investors will make a respectable gain by selling a CDx3
Preferred Stock from Duke Realty Corporation that they purchased
last June.
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The
quarterly Target Sell Date for the
following CDx3 Preferred Stock arrived last month.
Torchmark Corporation is featured in this month's CDx3 Company Spotlight below.
Let Preferred Stock
Investing teach you how to get
these kind of results at "CD-like" risk:
Note 1: As determined several
months in advance by the CDx3 Income Engine
investment method described in
Preferred Stock Investing.
Note 2: What is the formula
for calculating the effective annual rate of return
for a CDx3 Preferred Stock? See Free Offer below.
Note 3: Closest maturity to
Days Held; $10,000 CD. Multi-institution average
annual percentage yield at IPO date. Source:
bankrate.com
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Google recently revamped its "Groups" system. In additional to posting
discussions related to preferred stock investing, the new system now allows me
to post documents and other types of computer files, such as the CDx3
Newsletter, so that the general public can see and use them.
I only post this CDx3 Newsletter on the Preferred Stock Investing Google Group after most of the promotional offers and
special prices that are offered to you, as a CDx3 Newsletter reader, have
expired.
 This
new document posting feature of our Google Group
(called "Pages")
requires that the document being posted, such as
this CDx3 Newsletter, be in web page (HTML) format. Therefore, the
CDx3 Newsletter you will now be receiving will look more like a web page than
prior editions.
Because I can now post the CDx3 Newsletter to the Preferred Stock Investing
Google Group, I am using our Google Group as an archive of past CDx3
Newsletters. This means that you can reference prior issues from any
computer in the world at any time. Also, it means that I can reference a
prior issue by providing a link to it. For example, to view the February
2007 CDx3 Newsletter from the Preferred Stock Investing Google Group archive,
just click here:
CDx3 Newsletter - February 2007.
This is especially important for those of you who use an
email system that has trouble displaying these CDx3 Newsletters and the graphics
within them. Notice at the top of this CDx3 Newsletter there is now a
"View As" feature that allows you to view this CDx3 Newsletter either as a PDF
document or as a web page in your web browser. So, one way or another, you
should now be able to view this CDx3 Newsletter as it was intended to be viewed.
And here's another new feature: I can now post files, such as Excel
spreadsheets, onto our Google Group. This new "Files" feature is very
powerful, as it allows me to respond directly to your requests and do so in a
way that can be shared by all.
For example, I recently received
a request for an Excel spreadsheet that would automatically calculate the
rate of return on a CDx3 Preferred Stock investment. I created the
spreadsheet and posted it on our Google Group under the new
Files section. The spreadsheet is called
"CDx3-EffectiveAnnualReturn.xls." Feel free to look it over and/or
download it.
If you clicked on the three links within this Special Announcement section, you
can see how the new format of the CDx3 Newsletter allows me to integrate
very tightly with the content of our Google Group.
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Who are
these companies that issue CDx3 Preferred
Stocks?
At the
end of last month's CDx3 Newsletter, I
highlighted a CDx3 Preferred Stock from
Torchmark Corporation.
Torchmark Corporation (NYSE: TMK,
www.torchmarkcorp.com) is a $6.4 billion
life and
 health insurance company
headquartered in Birmingham, Alabama. Torchmark sells its products throughout
the United States, Canada and New
Zealand. In the U.S., the company
specializes in providing its insurance
products to "middle income" Americans.
To do so, Torchmark has been very
successful marketing its products to
union employers.
In June
2006, Torchmark introduced its
Series A CDx3 Preferred Stock (trading
symbol: TMK-A), paying an annual
dividend rate of 7.10%.
At the
time, 9-month CDs from your local bank
were paying an annual interest rate of
about 4.5%. CDx3 Investors,
however, chose to purchase TMK-A for
about $25 per share.
The
CDx3 Income Engine, described in
Preferred
Stock Investing,
set the Target Sell Price for TMK-A
at $25.89.
This is the market price that CDx3
Investors would be looking to sell TMK-A for
on February
23, 2007 (the
Target Sell Date) - about 9
months later.
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On February
23, 2007, the market price of TMK-A was
$26.80.
As with
96% of the CDx3 Preferred Stocks issued
since January 2001, the market price of TMK-A
exceeded the price
that CDx3 Investors were looking for
on the exact date that the CDx3
Income Engine said that it should. All
you have to do is, on that date, look up
the market price. That's all there is
to it.
Actual Results: CDx3
Investors who sold TMK-A on
February 23 owned it
for a total of 263
days (about 9 months) and earned $1.80
per share in capital gain income
(profit) plus $0.87
per share in dividend income
that Torchmark
had
paid since June 2006, for a total
income of $2.67
per share
(that CD would have generated about
$0.84 on the same $25 investment).
The effective annual return realized by
CDx3 Investors for this 9-month
investment was 14.75%,
which is over triple
(3.3x)
what that 9-month CD would have paid
you.
LOOK INSIDE:
Page 9-2 of
Preferred
Stock Investing
presents a 5-year table that compares the
actual
annual return that you would
have made as a CDx3 Investor versus bank
CDs being offered at the same
time.
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 From
EdC at Yahoo: When
you said "preferred stock", I thought you meant a
stock that you "preferred" over other stocks. After
reading a couple of your newsletters, I
understand it better now.
But how are preferred stocks
different from a company's regular (common) stock?
Chapter 1 of
Preferred Stock Investing
goes into the answer to this
question a bit more than I can
here, but let's start at the
top. When a company offers
their first issue of preferred
stock, it is referred to as
Series A; the next issue is
Series B, and so on.
Preferred stocks have been
around for a long time. In
fact, there are still preferred
stocks trading today that were
issued in the 1930's
(Consolidated Edison, 5.00%,
issued March 24, 1936, trading
symbol ED-A).Many years ago,
preferred stocks were issued
just by utilities, but those
days are long gone. There
are several different kinds of
preferred stocks these days and
they are offered by many types
of businesses.
"Preferred Stock,"
WHY THE FANCY NAME?
A benefit to owning a
company's preferred stock,
rather than its common
stock, is that if the
company has a cash crunch
and is unable to make its
dividend payments to both
its common stock holders and
its preferred stock holders,
the preferred stock holders
get paid first. That is, you
have "preferred" status over
holders of the company's
common stock. That's where
the name comes from.
BUT WHAT DO YOU GIVE
UP? In return for
paying you a great dividend rate
and signing up to all sorts of
other risk-reducing obligations,
companies that issue preferred
stocks ask you to give up the
voting rights that holders of
the company's common stocks have
in corporate elections. But
let's face it; for most of us,
the bigwigs in corporate board
rooms are not waiting
breathlessly for us to cast our
votes in corporate elections.
Until you own hundreds of
thousands, or even millions, of
shares of a company's common
stock, believe me, no one is
waiting anxiously for you to
vote. So, when buying preferred
stock, giving up voting rights
is, for most of us, a pretty
easy condition to live with.
BETTER INCOME OPPORTUNITY:
Take a look at this simple table
that compares the income
producing aspects of common
stocks, bank CDs and preferred
stocks.
 From this
table, you can see why preferred
stocks attract some attention -
they have two streams of income:
obligatory dividend income plus
capital gain income.
While
many common stocks pay a dividend to
those who own them, the issuing
company is not obligated to do
so, and the amount of the
dividend is not fixed and can
vary dramatically from one
period to the next or be
eliminated entirely. With
preferred stocks, your dividend
income is locked-in.
BUT WHAT ABOUT A CAPITAL
"LOSS"? If you sell a CDx3
Preferred Stock for a lower price
than you originally paid for it, you
would, indeed, lose money. So how
do you avoid this? Simple. Don't
sell your CDx3 Preferred Stock for a
lower price than you paid for it.
Chapter 5 of Preferred
Stock Investing teaches
you the three "Rules Of Market
Price Predictability" and
here's just one of them:
Let's say you buy one share of a
CDx3 Preferred Stock for $25.00.
Now, three months goes by and you
are one day away from receiving your
very first quarterly dividend payment of, say,
50 cents. I call you up and offer to
buy your share from you for the same
price you paid for it three months
ago - $25.00. You'd tell me to go
pound sand, since you are just about
to collect three month's worth of
return on your investment - 50
cents.
In fact, you'd tell me, I would have
to pay you at least $25.50 or no
deal since you don't want to lose
out
on your dividend income, right?
In other words, the closer the
dividend payment date gets, the
higher the market price of a CDx3
Preferred Stock tends to go. This
is "The Rule of Buyer/Seller
Behavior" presented in Preferred
Stock Investing.
It's no secret, nor did I invent
it. In fact, there's a great
example of this very mechanism
posted on the web site of the U.S.
Securities and Exchange Commission.
As the dividend payment date
approaches, the market price tends
to increase by at least the amount
of the upcoming dividend.
So, if the market price of a CDx3
Preferred Stock tends to increase
from the beginning of the dividend
quarter to the end of the dividend
quarter, when do you think CDx3
Investors make their purchases of
CDx3 Preferred Stocks? Answer: at
the beginning, of course, when the
price tends to be lower. And when
do you think they sell them? You
got it: toward the end of the
dividend quarter when the Rule
of Buyer/Seller Behavior tends
to push the market price up.
And
remember, this is just one of the
three Rules Of Market Price
Predictability. With a 96%
success rate since January 2001,
CDx3 Investors enjoy both quarterly
dividend income plus a nice capital
gain when the time comes to sell.
Preferred Stock
Investing
teaches you
how to calculate your "Target Sell
Price" and the exact date that your
Target Sell Price is most likely to
occur - weeks in advance.
Thanks to EdC at Yahoo for the great
question. You will receive a
complementary copy of the CDx3 Special
Report Dividend Accounting.
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As a
recipient of this monthly CDx3 Newsletter,
you are entitled to a FREE copy of the CDx3
Special Report titled "Calculating Your
Rate Of Return."
This CDx3 Special Report shows you how to
correctly calculate your effective annual
rate of return on this type of investment,
complete with the Microsoft Excel cell
functions -
FREE.
To download your free copy, just click on
the following email address (or just send an
email message to):
CDx3MonthlyResults@PreferredStockInvesting.com.
No need to type anything in the body of the
message, just click the Send button.
You will receive an auto-reply email message
with download instructions for your free
CDx3 Special Report.
To see the entire library of useful and
educational CDx3 Special Reports, including
three sample pages from each one,
click here.
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Preferred Stock Investing
explains how to calculate the Target
Sell Price of a CDx3 Preferred Stock
and the exact date that the Target
Sell Price is most likely to occur
each quarter. The
CDx3 Income Engine has been right
96% of the time since January 2001.
 Last
June,
CDx3 Investors purchased a CDx3
Preferred Stock introduced by Duke
Realty Corporation (trading symbol:
DRE-N)
for about $25 per share.
On Tuesday,
March 13, 2007 (the
Target Sell Date
for this quarter), CDx3
Investors will be looking for the
market price of DRE-N to be at, or above, its
Target Sell Price of $25.91.
How
can you check the current
market price of this Duke
Realty
CDx3 Preferred
Stock during March
for yourself?
Click here.
Or
put a note on your calendar on
March 13, 2007 to come back to
this CDx3 Newsletter and click on the above
link to see the market price. If it
is greater than $25.91, CDx3
Investors will consider selling it;
otherwise, they'll just cash the
great quarterly dividend check from
Duke Realty (DRE-N pays 7.250%).
I'm
really looking forward to reporting
to you at the beginning of April.
March is going to be a huge month
for CDx3 Investors as multiple
selling opportunities, in addition
to DRE-N, are going to present
themselves for great returns. Next month's CDx3
Newsletter will be jam-packed
with great news for CDx3 Investors
and I'm already anxious to show you
the results.
Remember, I'm not a stock broker;
I'm not trying to sell preferred
stocks to you; I'm not a
financial advisor; and I don't sell
investment advice. I'm an
investment researcher with a data
analysis and statistics
background who has developed a
simple way to earn a respectable
return at "CD-like" risk. And I've
written it down in
Preferred Stock Investing.
I'm hopeful that you find these
monthly CDx3
Newsletters interesting, and
will consider learning more by
purchasing my 190-page eBook, Preferred
Stock Investing.
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Please
take a look at
www.PreferredStockInvesting.com. Preferred
Stock Investing
is available for download right now - no
shipping costs, no handling fees, no
sales tax, no delays; and don't forget
about my
FREE SPECIAL OFFER.
Know
someone who might be interested in simple,
low-risk investing for non-investment
experts? Have them send an email
message to
CDx3MonthlyResults@PreferredStockInvesting.com and
they will automatically
begin receiving this monthly CDx3
Newsletter
next month (plus a
CDx3 Special Report) - all FREE.
Then they can make up their own mind.
Many Happy Returns,
Doug K. Le Du
P.S.: If you do not want to receive news
regarding Preferred Stock
Investing, just
send an email message to
OptOut@PreferredStockInvesting.com
and you will be automatically removed
from my address list. Best wishes to
you. |
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