I have to second this discouraging review. I just bought and read the book because 1. there is so little literature on this subject and 2. most of the reviews were positive. The book reads like a first grade primer, repeating everything dozens of times (See Spot. See Spot run.) and taking simple concepts (interest rates up, prices down) and turning them into pretentious sounding RULES. He makes a big deal out of the fact that unlike bonds, there is no "accrued dividend" with preferreds. So he urges buying them after the dividend is paid so you get the lowest price. But he doesn't tell you its a wash. If there is a .50 dividend the share price will be .50 higher the day before it is paid than the day after. So what? If you pay .50 more and get .50 in dividends the next day, the net price is the same. He also makes a big deal about getting capital gains if you buy below the liquidation price of $25. Again, so what? The price of the stock is going to reflect the present value of its stream of dividends. If you sell for a capital gain, you are giving up that stream. Since the tax rate on most preferred dividends is the same as capital gains........15%, its also a wash. And if you buy for your IRA, it doesn't make any difference. But my biggest beef is that he doesn't tell you how to analzye the safety of the preferred. He talks about Moody's ratings but doesn't tell you that those ratings are as of the issuance date and are seldom updated. And you know who pays for the ratings? Right, the issuer. It would have been useful if he had discussed a commonly used financial ratio: earnings to fixed charges and preferred dividends. See the Graham and Dodd manual. (For your information, this ratio appears as Exhibit 12 to Form 10-K). This measures the issuer's ability to pay the dividend, the most important factor in deciding whether to invest. Another safety factor he doesn't mention is whether the issuer pays dividends on its common stock. Since the preferred is senior, the common stock dividends are available to the preferrd if the issuer has financial difficulties, which is a nice buffer. Also, I would refer you to an excellent website: www.quantumonline.com which provides most of the info that the author would have you pay for with a subscription. It is referenced in his appendix with an implication that you must pay to use it. Not true.
BTW, anyone one to buy this book? I'll sell it for less than retail and you might get a capital gain.