Peculiar_Investor wrote:Could that be the "teaching moment" here
Technically, the teaching moment is to give up trying to learn more
...Specifically, to learn more about those motives and thus to better predict the behaviour of the issuer when in the situation of possible redemption (presuming no exposure to inside information).
What do you mean by "technically"?
ISTM, that the teaching moment includes humble recognition that a) predicting incorrectly, from time to time, does not invalidate either the method of analysis or the judgement of the analyst, and b) even if, after analysis points to shares being redeemed, they may not and that this known risk is presented each time Mr. Hymas makes a prediction, whether or not the reader assiduously considers the warning.
My original query, to which you responded, Descartes, was why there was a sudden, sharp increase in CM.PR.D's share price that put it into a negative yield position, three months before possible redemption. I didn't suggest this was a prediction by Mr. Hymas, and I'm unaware of any prediction he has made on this issue. I was asking in case I had missed a CIBC press release about the pref or some event had occurred that caused this trading action.
You and I are both aware that uninformed investors often make irrational bids on preferred shares without reading the prospectus and based solely on the current yield of the issue. There are also occasions when a seemingly irrational bid might be appropriate because of the individual circumstances of the purchaser (who perhaps needs a short-term stream of income and would welcome a later loss to offset some capital gain). However, with CM.PR.D, the buyers this week had already missed the record date of the penultimate dividend; there seemed no cause (let a lone a rational one) for the sudden spike in price.
So far, adrian2's "madness of crowds" has my vote as the most likely reason. And I benefited from this madness by selling, pocketing more than an extra dividend in the process, thanks to the tools/information provided in Prefblog and Prefinfo.