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I use preferred for 5-8% of a portfolio for clients; another 10-15% in MLPs, 40-50% in institutonal quality senior debt with 5-6% yields and 20-30% in dividend paying stocks with low d/es and high fcf. Of course, I am not a speculator, just enjoy boring. I just want a consistent 7-8% annual rate...

I would suspect your friend bought in March or April, when preferred were trading at all time discounts. They typically trade between $20-$25/share, as they usually come out at $25. They don't move much, except with the crash last year...

You want to look for a debt to equity ratio below .8, significant free cash flow, a history of sustainable dividends amd the ability to pay these from less than 100% of FCF. Set a stop/loss of 10% of original purchase price and a trailing stop each 20% increase from that price. There are a few...

You may want to look at quantumonline.com and preferredstockinvesting.com, the latter being a link to his book. The former is quite a good educational site as well as data and link provider.:)