impressed with this program, and have happily started to receive
dividends this month."
- Bob V.
Happy New Year everyone and
welcome to all of the new CDx3 Newsletter readers.
Thank you all for your interest in
Preferred Stock Investing.
In the Last
Month's CDx3 Investor Results article below, you'll find a
summary of how 2007 went for CDx3 Preferred Stocks. I
think that you'll find the results, when compared to the 2007
performance of bank certificates of deposit (CDs), particularly
Version 3 of the
PreferredStockInvesting.com web site is now
This month's Special Announce-ment article
describes the new site and the free resources it offers to
readers of Preferred Stock Investing.
Another great American company is
featured this month in the CDx3 Company Spotlight article.
Learn more about the country's largest publicly traded
owner of shopping centers and issuer of CDx3 Preferred Stock -Kimco
The years of research that went
into Preferred Stock Investing made it very clear that
preferred stock investors were better off investing in new
issues, then selling them within three years. The CDx3 Question Of The
Month article explains why, and where you can get your hands
on lists of the highest-quality, lowest-risk preferred stocks -
CDx3 Preferred Stocks.
For our new readers, there is a free calculator available
to you that allows you to correctly calculate the effective annual return of
preferred stock investments. The Free Special Offer
article below provides you with a download link. Also,
please be aware that the $30 Shell Gift Card offer that was
available at PreferredStockInvesting.com expired on December 31,
2007. Keep an eye on this monthly CDx3 Newsletter
for announcements of future promotions of CDx3 products and
January, the Federal Reserve Board
meets again in a two-day session
starting January 29th. Wall
Street fully expects the Fed to
continue to lower interest rates,
not just at this January meeting,
but well into the middle of the
year. It's going to be a great
2008 for CDx3 Investors; here's why:
Income Now Plus Capital Gain Income Later
CDx3 Preferred Stocks Finish Year
Paying 7.863%, Bank CDs: 4.863%
2007 produced the
strongest buyer's market that CDx3 Investors
have seen in five years. The highest dividend
payer was issued during August, offering an
annual dividend rate of 8.0%.
There were a total
of 15 CDx3 Preferred Stocks issued throughout
the year, with August being the busiest month
with four new issues.
Here are the
monthly average dividend rate results for CDx3
Preferred Stocks that were issued during 2007:
By the end of
2007, CDx3 Investors were earning 62% more
income than if they had put that same money in
bank certificates of deposit (CDs).
mortgage mess boiled over in June. Cash
got harder to come by, so companies had to
sweeten the deal for CDx3 Investors by offering
higher dividend rates on CDx3 Preferred Stocks.
Set-Up 2008 Capital Gains: Another gift from
the subprime mortgage mess to CDx3 Investors was
that these high dividend-paying CDx3 Preferred Stocks
could be purchased for bargain basement prices.
There is a chorus
from investment writers and analysts alike
singing the praises of preferred stocks
("Abnormal Yields and Abnormal Value" - Merrill
Lynch, The Fixed Income Digest Special
Edition, November 21, 2007; "Preferred
holders are sitting pretty." - Richard Young,
Intelligence Report, January 2008).
As explained in
last month's CDx3 Newsletter, when large,
institutional investors (pensions) were unable
to figure out where, exactly, the subprime
mortgage risk was going to bite next, they
pulled billions of dollars out of the market and
parked it in Treasury bonds and gold. The
yields on Treasurys fell to two-and-a-half year
lows while the market price of gold jumped from
$640 an ounce to $840 (and climbing).
And the market
price of just about all other stock-related
investments, including preferred stocks, fell as
well. CDx3 Preferred Stocks that normally
would sell for $26 to $27, fell to $23; some
jumped in and purchased the highest-quality,
lowest-risk preferred stocks (CDx3 Preferred
Stocks), paying near 8% annual dividends, for
bargain basement prices.
It's Going To
Be Great In 2008: There are many
things that are unique about the subprime
mortgage mess, not the least of which is that we
know, right now, in advance, for a fact, when it
is going to wane.
We know, for a
fact, that there are 2 million remaining
adjustable subprime mortgages that have yet to
play through the financial system (source:
FDIC); and, we know that they will do so by
At that point, the
fear that chased the billions into Treasurys and
gold should pass. In that event, the
billions should start coming back into the
market, starting with investments that are seen
as relatively safe (such as the highest-quality,
lowest-risk preferred stocks - CDx3 Preferred
What do you think
is going to happen to the market price of CDx3
Preferred Stocks once the billions of dollars
currently parked in Treasurys and gold returns
to the market?
Stocks, that CDx3 Investors have been (and will
continue to be) able to purchase for, say, $23
should start to return to their normal pricing levels
around $26 or $27 per share during the second
half of 2008. The low market prices that
CDx3 Investors took advantage of during 2007,
not only produced CDx3 Preferred Stocks that pay
very high dividend rates, but also set CDx3
Investors up for a nice capital gain, starting in
buyer's market (high dividend payers for low
market prices) will continue for at least the
first half of 2008; but, after that, the CDx3
Income Engine is poised to start adding huge
capital gain income to the portfolios of CDx3
Investing provides the web sites and other
resources that readers need in order to start
positioning themselves for this unique
For those who
would rather not take the time, there is the
CDx3 Notification Service. Subscribers to
CDx3 Notification Service receive an
automatic email message whenever there is a
buying or selling opportunity for CDx3 Preferred
Stocks, and weeks in advance, too.
See examples of
CDx3 Buyer's Notification and
Notification email messages and please consider
becoming a subscriber to the
Service. Start building your CDx3
Portfolio and set yourself up for high dividend
income now, plus great capital gain income later.
Last month, the
U.S. Treasury announced a plan to ease the
burden for those struggling with adjustable
mortgages. Also, the Federal Reserve Board
did their part by lowering interest rates once
again (which many say is likely to continue well
into 2008). Both of these policies are
designed to hasten the end of the current
mortgage crisis, which should bring the return
of billions to the market. For CDx3
Investors, it all means that increasing market
prices, and a corresponding return to a seller's
market, is on the way for CDx3 Preferred Stocks
that we purchased during 2007 and will be
purchasing during the first half of 2008.
Time will tell,
but 2008 could very
possibly deliver the highest capital gains on
CDx3 Preferred Stocks that we have seen in many
years. But, one
thing is for sure - those billions are going to
come back into the market at some point; and
when they do, the market prices of CDx3
Preferred Stocks should go up, delivering
substantial capital gain income for CDx3
subscribing to the
CDx3 Notification Service and
position yourself for great dividend income now,
plus capital gain income later.
Version 3 Of PreferredStockInvesting.com Is Now
Web Site Showcases Free Reader Resources
On December 26, 2007,
version 3 of the
PreferredStockInvesting.com web site
went online. The new version of the book's web
site showcases the large variety of free resources that
are available to readers of Preferred Stock Investing.
The original research into
the market price behavior of certain preferred stocks,
ones that meet ten specific criteria, began in 2002 and
was the subject of an 8-page research paper in 2003.
"You've got to write a book about this" was the
most common reaction to that research paper.
As the research
continued, a web site, that we call "version zero," was
created in July 2006 that did little more than provide a
summary of the research and allow people to leave their
email address to be notified once the book was finished.
When the downloadable
eBook edition of Preferred Stock Investing was
first published on the Internet in October 2006, version
1 of the web site allowed web surfers to purchase and
download the eBook.
In June 2007, Preferred
Stock Investing became available in paperback, and
was updated to include all investment results through
December 2006. Version 2 of the
PreferredStockInvesting.com web site allowed readers to
purchase the updated eBook edition or the paperback from
a variety of retailers.
The free resources that
the new version 3 web site offers to readers includes:
free monthly CDx3
free CDx3 Special
Report "Calculating Your Rate Of Return" when you
sign-up for the monthly CDx3 Newsletter;
free updates to the
preferred stock lists and investment results
presented in Chapter 9 of Preferred Stock
Investing (annually, each April, or sooner if
selling activity warrants);
free excerpt from Preferred Stock Investing.
free Reader's Forum
for readers to share ideas, access prior issues of
the CDx3 Newsletter and download tools that
are helpful to preferred stock investors;
free meeting materials
for members of investment groups who are interested
in learning about preferred stock investing;
free CDx3 Special
Reports that are available for immediate download;
free Frequently Asked
Questions (FAQ) library.
PreferredStockInvesting.com web site also provides
information about the
CDx3 Notification Service and
allows readers to subscribe.
Testimonials that I am
thankful to continually receive from readers are also
sprinkled throughout the new web site.
Combined with snappy new
3-D graphics, transparent color effects and a brighter
color palette, the new web site is packed with free
resources, it's easy to read and simple to use.
Click here, and a new window will open on your screen.
These Companies That Issue CDx3 Preferred
Kimco Realty Corporation
Ever shop at any of these
stores: Home Depot, Old Navy,
Payless ShoeSource, Ralph's
supermarket, Famous Footwear,
Hollywood Video, TJMax, Kmart,
Gottschalks, Ames, Bed Bath &
Beyond or Ross? Then the
chances are pretty good that you
have shopped at a Kimco shopping
Kimco (NYSE: KIM) is a $8.25 billion company
that acquires, develops and
manages shopping centers.
And I don't mean just a few.
Kimco is the largest publicly
traded owner and operator of
shopping centers in the United
Kimco (the name coming from
Kimmel and Milton Cooper) now
has more than 1,500 shopping
centers with 180 million square
feet in 45 states, Puerto Rico,
Canada, Mexico and Chile.
Kimco, founded in 1960 and based in New Hyde
Park, New York, now has 618
employees and reported a Q3/2007
(September) net profit margin of
see if you've been shopping at a
Kimco-owned shopping center,
Last October, subscribers to the
CDx3 Notification Service
received a CDx3 Buyer's
Notification that a new CDx3
Preferred Stock had just been
introduced by Kimco Realty
were two things that made this
new CDx3 Preferred Stock
interesting. First, at a
time when the 90-day average
dividend rate for new CDx3
Preferred Stocks was 7.417%,
Kimco's new issue came out at
7.75%. That was enough to
get most people's attention.
Secondly, Kimco had not issued a
CDx3 Preferred Stock since May
9, 2003; over four years had
passed since its last issue.
Because the market price of this
investment grade CDx3 Preferred
Stock is currently $23.10
(January 2, 2008), you would
actually be making about 8.4% on
your money if you were to
purchase it now.
Subscribers to the
Notification Service receive
CDx3 Preferred Stock Spec Sheets
for every newly issued CDx3
Preferred Stock, very often
before they even start trading.
are now anticipating a nice
capital gain downstream, in
addition to the 8.4% yield they
are current earning in dividend
income with this CDx3 Preferred
Stock from Kimco Realty
Does a preferred stock have to
be a recent issue to be considered a "CDx3 Preferred
Stock," or do you also consider older preferred
stocks? Do you provide lists of preferred
- Earl M.
Yes, we provide lists
of CDx3 Preferred Stocks, both for subscribers to
CDx3 Notification Service and for
non-subscribers, but the timing is different.
CDx3 Notification Service receive a
Preferred Stock Spec Sheet whenever a new CDx3
Preferred Stock is introduced. Subscribers are
also provided with an exclusive web site, just for
subscribers. This web site is the home of the
CDx3 Preferred Stock archive, where subscribers can
find the CDx3 Preferred Stock Spec Sheets for prior
Chapter 9 of Preferred Stock Investing lists
all of the CDx3 Preferred Stocks that have been
issued since January 2001. Within Chapter 9, there
is also a secret email address that you, as a reader
of Preferred Stock Investing, can use to
request updates to the lists in Chapter 9 (they are
updated as selling activity warrants, but at least
If you want
"real-time" notification of the newest,
highest-quality, lowest-risk preferred stocks (CDx3 Preferred
Stocks), plus access to historical lists and CDx3
Preferred Stock Spec Sheets, the
Notification Service is for you.
Regarding Earl's other
question "do you also consider older preferred
stocks," Preferred Stock Investing
presents the "three rules of market price
predictability." Preferred Stock
Investing documents three known forces
that act upon the market price of CDx3 Preferred
Stocks in a fairly predictable manner.
these three rules is the "Rule of Call Date
Preferred Stocks have a lifespan of five years, but
you will tend to sell them within three years;
here's why: CDx3 Preferred Stocks have a "call date"
of five years from the date of issue. What that
means is that the issuing company regains the right
to buy your shares back from you, at $25.00 per
share, five years from now. Until then, they have to
continue making the quarterly dividend payments to
Since you, and everyone else in the
world, know that the issuing company
could buy your shares back from you on a
specific date five years from now, what
do you think happens to the market price
of your CDx3 Preferred Stock as that
date approaches? It tends toward $25, of
and that's the Rule of Call Date Gravity
- the market price of a CDx3 Preferred
Stock will tend toward $25.00 as the
call date approaches.
When does the market price start to come
under the influence of the Call Date?
About three years after a CDx3 Preferred
first introduced (two years prior to the
call date), the market price will start
to trend toward $25. Therefore, CDx3
Investors tend to sell their CDx3
Preferred Stocks within three years -
and now you know why.
The CDx3 Preferred Stock archive
includes the CDx3 Spec Sheets for CDx3
Preferred Stocks going back to mid-2006.
Generally, as a CDx3 Investor, you would
not want to consider preferred stocks
that are any older, for two reasons: (1)
they have much
lower dividend rates than today's offerings, and (2)
they are 1.5 years away from the point
where the Rule of Call Date Gravity
kicks in and starts distorting the
But, if you are interested in older CDx3
Preferred Stocks, see the tables in
Chapter 9 of Preferred Stocks
Investing; they go all the
way back to January 2001.
Thanks to Earl M. for
the great question. You will receive a
complementary copy of the CDx3 Special Report
Special Report Also Has Free Companion Excel
See How To Correctly Calculate Your
Effective Annual Return - FREE
The Preferred Stock Investing Reader's Forum provides a
Excel spreadsheet calculator that you can use to
calculate the effective annual return (EAR) of your
preferred stock investments. The calculator allows
you to just plug in a few parameters from your preferred
stock (such as purchase date, purchase price, sell
price, etc.) and see what your effective annual return
really is, or will be if you sell.
you initially download the EAR calculator, it is set up
using the Series A CDx3 Preferred Stock from Dominion
Re-sources (D-A) as an example. This is the same CDx3
Preferred Stock that is used as an example through-out the CDx3
Special Report titled "Calculating Your Rate Of
recipient of this monthly CDx3 Newsletter,
you are entitled to a FREE copy of "Calculating Your
Rate Of Return." So, get
them both - FREE - and use them together to
learn how to correctly calculate your rate
of return on this type of investment. To download your free copy
of Calculating Your Rate Of Return, just click on
the following email address:
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,
Fed Set To Meet In January- How Low Will They Go?
CDx3 Investors Anticipate More CDx3 Preferred Stocks At
Bargain Basement Prices
As we start a new year,
there is much for CDx3 Investors to look forward to.
Preferred stock offerings are the preferred funding
vehicle right now, as the credit crunch has made
cash harder to come by than usual. America's
largest, oldest and most successful companies are
issuing CDx3 Preferred Stocks that pay some of the
highest dividends that we have seen in years.
With the huge supply of
high-quality, high-dividend preferred stocks
available on the market for buyers to choose from,
market prices for these CDx3 Preferred Stocks are at
bargain basement levels. These buyer's market
conditions create two great opportunities for CDx3
Investors: (1) high dividend income now and (2) an
enormous opportunity to sell your CDx3 Preferred
Stock downstream for a nice profit (capital gain),
since you were able to purchase them now at such a
low market price.
The Federal Reserve
Board continues to lower interest rates and create
innovative new ways for financial institutions to
get a hold of cheap cash. The Fed meets
eight times per year to consider their policies; the
next meeting is a two-day affair scheduled to begin
on January 29. I am anxious to report back to
you regarding the activities of CDx3 Investors
during the first month of 2008 in next month's
Remember, I'm not a stock broker;
I'm not trying to sell preferred
stocks to you; and I don't sell
investment advice. I'm an
investment researcher with a
economics 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
Newsletters interesting, and
will consider learning more by
purchasing my book, Preferred
take a look at
http://www.PreferredStockInvesting.com. And don't forget
FREE SPECIAL OFFER.
someone who might be interested in simple,
low-risk investing for non-investment
experts? Have them send an email
they will automatically
begin receiving this monthly CDx3
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
send an email message to
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from my address list. Best wishes to