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Subject:  Looking at CA Muni Bonds Date:  11/21/2012  3:08 PM
Author:  trader2012 Number:  34515 of 35930

In another thread, Blacktree introduced the idea of buying CA munis. So, let’s pursue it. For those who might want to follow along, I’m going to assume you have an account at E*Trade.

An unrestricted search returns more than five hundred issues. So, start imposing filters. An obvious one is a 'yield filter', such as 3%. (Why would you accept less for a muni no matter how good its credit-worthiness might be?) That scan still returns more than 500 bonds, which is more than will appear on a single webpage, which is more than can be downloaded by a single click. So, either adjust the parameter for the filter, such as by increasing the minimum YTM to 4%, or add a new one.

At this stage in the scanning process, I’d say not to tighten up the yield, but, instead, partition the set into more manageable groups, and this is the reason. Yield numbers by themselves are meaningless. What you want to see is how any given bond’s yield compare to that of its supposed peers across the range of available maturities. So, at this stage of the shopping, you want to see what that range of yields might be. So, keep the min-yield at 3%, but partition the set into “Use of Proceeds”.

The first choice in the drop-down menu for “Use of Proceeds” is “Agriculture”, and a mere 13 bonds will be returned. That’s a manageable sized group to look at. So, go back and relax the yield filter, as well as relax the credit-rating filter (which had been set at its default of ‘invest-grade