Always treat others with respect and kindness, even if you disagree with them. Avoid making personal attacks or insulting others, and try to maintain a civil and constructive tone in your discussions.
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Investment Strategies / Mechanical Investing
No. of Recommendations: 2
Has anyone looked at FRC preferreds? They are non cumulative and payments have been suspended, so they're not paying anything right now.
However, dividends can't be paid to common shareholders unless they reinstate payments to the preferred.
A lot of them are trading in the $5-$6 range.
Going back to 2008, here are some stats from Chat GPT. Ok- so I didn't fact check them but most of these look correct(?) at a high level.
Bank of America suspended its dividend payments in 2009 and did not reinstate them until 2014.
Citigroup suspended its dividend payments in 2009 and did not reinstate them until 2011.
JPMorgan Chase suspended its dividend payments in 2009 and reinstated them in 2010.
Wells Fargo suspended its dividend payments in 2009 and reinstated them in 2011.
Bank of China - Suspended dividend payments in 2009 and reinstated them in 2011.
Mitsubishi UFJ Financial Group (Japan) - Reduced dividend payments in 2009 and resumed regular dividend payments in 2011.
HSBC Holdings (UK) - Reduced dividend payments in 2009 and resumed regular dividend payments in 2010.
BNP Paribas (France) - Suspended dividend payments in 2008 and reinstated them in 2011.
Banco Santander (Spain) - Reduced dividend payments in 2008 and resumed regular dividend payments in 2010.
Barclays (UK) - Reduced dividend payments in 2008 and resumed regular dividend payments in 2014.
China Construction Bank - Reduced dividend payments in 2008 and resumed regular dividend payments in 2010.
Royal Bank of Scotland (UK) - Suspended dividend payments in 2008 and has not yet reinstated them.
Bank of Communications (China) - Reduced dividend payments in 2008 and resumed regular dividend payments in 2010.
Sumitomo Mitsui Financial Group (Japan) - Reduced dividend payments in 2009 and resumed regular dividend payments in 2010.
Most of them only took 3-5 years before they started paying dividends again.
Assuming a scenario where it takes a whole decade before they can reinstate their dividends, assuming the price only recovers to half of par, that would still be a 100% return.
You wouldn't do this with a large part of your portfolio, but this seems like a decent bet. The largest risk is if they go bust. Also I'm not entirely sure what would happen if FRC gets bought out.
Any thoughts?
No. of Recommendations: 1
Even though the dividend is suspended, the IRS calls it "original issue discount" and charges you tax on the imputed dividend that you don't receive.
No. of Recommendations: 12
I would not accept anything from ChatGPt without a fact check.
I asked for three mean calculations - one was totally wrong.
My husband checked his vitae, said he was dead.
Today on a podcast, a scientist checked for quotes from his 3 favorite influences. All amazing quotes. Only thing, all three were made up.
My husband tried researching something he already knew: made up. Hallucinations.
ChaptGPT is a "language" ai, not a fact-based researcher.
No. of Recommendations: 23
Wells Fargo suspended its dividend payments in 2009 and reinstated them in 2011.
...
I would not accept anything from ChatGPt without a fact check.
Probably good advice.
For example, Wells Fargo did not suspend their dividend, they cut it to $0.01 per quarter. The chatbot is wrong.
That sounds like a minor difference, but no: it's exactly the subject you mentioned.
Because the common dividend was not completely axed, all of the preferred dividends had to be paid.
This is presumably why they cut it to a penny but did not eliminate it: to send precisely that message that the preferreds remained whole.
Jim
