RE:RE:RE:RE:Getting Ready to Buy more Preferreds... ~10% Yields !!!Preferreds are "shares". Commons are shares. Whether they have voting rights or not do not determine if they are shares or not. Preferreds are a "higher" class of shares. They have "Priority" over Commons. Hence, I called them "higher class".
Many comanies have common shares that have no voting rights. Class A, Class B . Preferreds just another class. "Preferred"..... sure sounds like a "higher class" of something...
But, Yes, they are more like Bonds (Debt). Only reason they are called "shares" is that the company has the right to "supend/undeclare" the dividend/interest payment. Preferreds are Cummulative, so eventually they will have to pay all missed dividends.
I'm responding to Indoughtgetout. I disagree, but appreciate him/her for posting. Debates are good. Different views are good..... but let's try to keep it clean.
Just like my view of going Private.... I'm probably wrong on that. Got me thinking... caused me to reconsider the Yield I will add more at.
I might have already added more Preferreds already if it wasn't for the post on going Private. Now I'm demanding a higher Yield to add more. If I'm "forced" to hold, I'm going to demand a high Yield. I guess that's why Indoughtgetout thinks Preferreds will go down. I'm living Proof. But I don't see this as a negative, I see this as an opportunity.
Husky4000 wrote: Preferreds are not a 'higher class of commons'. They don't carry voting rights, as commons do. They are like a hybrid between bonds and commons. They are illiquid and trade like bonds. Upside is 'limited' and depend on interest rates.
Preferred get priority in case of bankruptcy. In a sense, they are less risky.
I don't understant the debate, as commons and preferreds are different products and I own both.
Husky is not going bankrupt, they have a good credit rating and I wouldn't worry a second about their ability to pay the dividend or the quote from the market. This is a pretty safe investment and I see them doubling eventually.
As for the commons, they are more risky but can triple, quadruple or even more.
As I said, I don't understand the debate, it's like comparing apples to oranges.