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  • Writer's pictureJerremy Alexander Newsome


SPDR Barclays Convertible Securities ETF, Ticker CWB With this fund, we are not considering top-down automobiles, but rather common stocks, preferred stocks, and/or bonds which can be converted for one another under certain conditions. Suppose we are the tail gunner in a World War II B-17 bomber flying, with rain, snow, and turbulence present, while we try to hit the enemy attack planes. In other words, it is trying to make decisions and hit a moving target from a moving platform somewhat as an investor might be trying to figure out when/if to convert one security into another in a profitable manner while prices of each security are in motion. Perhaps investors would prefer to go on glide path, and receive a nice income, while CWB brains and computers do the figure-it-out work? This appears to be the situation because CWB has about $2.8 billion in net assets. The CWB traders have numerous avenues to succe$$, but perhaps this one method will somewhat illustrate how they operate: Suppose 1) CWB buys a bond which becomes convertible in three years (or whatever time or date) to common shares. 2) As the value of the common shares increases, 3) the value of the bond increases, and 4) the bond can then be sold for a profit or, 5) converted to common shares which can be held for dividends, sold, traded, or whatever. The convertible bond earns interest income while being held and increases in market value. Yield information: 1) CWB pays out some earnings each month, but the amount varies widely. 2) In years 2013, 2014, and 2015 the year end pay-out has been very significant at $.48, 2.38, 2.12, respectively. 3) In 2016 the monthly pay-outs total about $1.27 for 10 months. Other information: 1) Shares outstanding 51 million 2) Institutions and mutual funds own about 45% of CWB 3) At present the basket of holdings has about 98 positions 4) Regional exposure is about 88% North America, 5% Europe, 7% other areas 5) CWB trades close to net asset value 6) Annual turnover about 30% 7) Volume, 90 day average, about 790,000 8) 52-week hi/lo range 46.95 to 38.56 9) CWB appears to have little currency exchange risk 10) This company makes money for investors by a) receiving income from owning convertible bonds, preferred stocks, common stocks and b) trading those securities to secure gains based upon the convertible features in most of their holdings. Information presented here is believed to be accurate, but is not, and cannot be, guaranteed by the writer or Real Life Trading because the information is taken from readily available public websites,, and/or stockbroker websites. This writer does not own any CWB and does not plan to invest in CWB. This presentation is intended for reader interest or entertainment only and does not encourage or discourage any investment in CWB. EACH READER MUST CONDUCT THEIR OWN RESEARCH BEFORE MAKING ANY INVESTMENT. Happy$$$trading Ed Reed

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