Mortgage REITs: Fashionably Late To The Party [View article]
Former, thx for the comment... there are certainly many considerations here. Shrewd management is certainly key. AGNC's Gary Kain is widely considered the best of the bunch, it was one of my attractions to it.
Mortgage REITs: Fashionably Late To The Party [View article]
Corvette, indeed, there is a lot of non-agency exposure here - and at this point who knows when rates will move.... been hearing it for years, and nothing come to fruition.
Mortgage REITs: Fashionably Late To The Party [View article]
Jag... mREITs and traditional brick and mortar REITs are two different animals. Traditional REITs are judged on a Funds From Operations (FFO) basis, whereas one of the important metrics looked at with regard to mREITs is book value.
Amazon: It Is Amazing How Overvalued Its Share Price Is [View article]
Tony, quite true on the timing aspect. Even thoughtful, correct analysis can be burned by near-term irrational exuberance. NFLX, ZNGA, and GRPN have met their maker. Facebook is getting there. Amazon appears to a holdout for whatever reason.
Those betting against Internet dreck back in the late 90s were ultimately right, but suffered through a lot of pain, or succumbed to it before the train finally derailed in 2000.
I think #3 above is what is really holding this stock up. Institutions own 2/3 of the shares and there seems to be Koolaide drinkers lining up to own the stock for whatever reason. Bezos and other insiders own another 20 percent, so retail float is fairly small.
Either those institutions didn't learn anything 15 years ago, are too young to remember, or have some sort of Nostradamodic capabilities.
Amazon: It Is Amazing How Overvalued Its Share Price Is [View article]
Paulo, I have to say the current AMZN environment is so reminiscent of 1999 that it's almost scary. It's Internet bubble take 2. This time instead of Pets.com and eToys, it's Zynga, Groupon, and Facebook.
Users bought enormous amounts of stock in brands they loved and got burned to shreds. History does repeat itself.
One Investor's Very Brief Dalliance With American Capital And Annaly [View article]
MIke, enjoyed the read. I think most investors have a flip-flop story along the line, I would think it pretty natural. Worse yet is buyer's remorse and what to do with something you're not sure you want after a day or two. For traders it's easy, for buy and hold investors, not so much.
I've had a similar mentality with regard to mREITs. Wanted to own them as an investment, never flipped the switch on an individual stock, although was pretty close. In the end, I thought the risk profile and the possibility of an individual blowup that I couldn't foresee was too high, so I opted for REM, the mREIT fund.
Open Letter To ETF Industry: Create A Better Dividend Growth Product [View article]
Bruce, while I'm a proponent of the better managed CEFs, I have to agree with your critique for the most part. They are investments to closely monitor, especially the leveraged ones. And you're right about the expenses... highway robbery in some cases. Although the best ones have fees that barely outpace ETFs
But, I don't think investors in the quality CEFs, and there are many good ones, are any worse yield chasers than those abandoning risk-free yield and upping exposure to dividend stocks and DG.
Lastly, I think DVK publicly discusses what I would consider an actively managed strategy. He invests in a core group of stocks he's picked from the DG universe, monitors them, actively adds to them with cash flow generated from dividend payments and occasionally jettisons positions for purely fundamental rationale. OTOH, the index proposition does seem more like active monitoring since it operates subjectively rather than objectively. And while indexes are "cheap," I'm not sure they offer much long-term "value" to investors. A good manager can provide value, assuming you can find one.
Frankly, I'd rather see a fund run on the exact premise on which DVK and other pure DG investors run their personal accounts, rather than an index that holds most everything. JMO
Open Letter To ETF Industry: Create A Better Dividend Growth Product [View article]
Dave, I think just like any strategy it's difficult to place a straight characterization on DG. Some sit back and relax with just a few stocks while others take a more active role, trimming or adding to several dozen positions, making judgmental portfolio purchases and/or sales on a regular basis depending on changing yield, valuation, portfolio composition, and income stream potential.
And I do think this is something that could be done at the ETF level, but because of the nuances of the strategy I think I'd rather have an active mgr. making moves on a regular basis, not just once a month - perhaps someone like yourself!
Open Letter To ETF Industry: Create A Better Dividend Growth Product [View article]
Dave I think most ETFs take on the facade of passive, 'quarterly rebalance and reconstitute,' investing. ETF shops, in my view, are investment stewards and index trackers rather than true money managers.
Having said that, I think a dividend growth strategy product, index or otherwise, deserves a dedicated money manager who can handle the criteria you laid out, monitor, and make nuanced changes on an as-needed basis. Specific yield criteria, valuation constraints, and a focus on a growing income stream, rather than general total return, are fairly specific attributes that fall well beyond the simplicity of most of the static ETF world.
I read your past articles and agree that the ETF and mutual fund offerings in the dividend universe are rather fuzzy, yield devoid, and probably not appropriate, strategically, for a true DG investor.
Keep in mind that a fund with 50 basis points of expense eats away 15-20 percent of a fund with a before-fee 2.75 - 3.25% blended yield, which I suspect is a common current blended yield for some DG portfolios. Fifteen-twenty percent is a lot of income to give up if you don't have to.
Open Letter To ETF Industry: Create A Better Dividend Growth Product [View article]
Dave, interesting idea and concept. I think it might work better in an closed-end fund with an experienced active management shop, like Gabelli, for instance. Unfortunately, there would have to be an IPO for such a concept and CEF IPOs are typically expensive and very unfriendly to initial investors.
But, the closed-end concept would eliminate inflow and outflow issues and provide a better platform, imo, for a DG fund to operate. Plus, CEFs afford investors the occasional opportunity to buy shares at a discount to NAV.
Avon's 6% Dividend: Whistling Past The Graveyard [View article]
Seatlle, I think you're on the money here. Not racing to the table to engage Coty was a serious managerial error. Turning a blind eye to a $25 bid, with the stock now at $15, is reminiscent of Yahoo rebuffing MSFT 4 years ago. Not sure if the new CEO, McCoy, was told not to engage them or if she thinks she can pull a rabbit out of her hat. Either case, shareholders should be fuming.
As the brand slogs around and arguably becomes an unwanted dinosaur like Yahoo, the stock will continue to suffer. There's little equity here to get excited about, doubtful growth, questionable mgmt. .... and the dividend does appear to be in jeopardy as Alan writes.
Don't Assume Anything From Ultra-Low Interest Rates [View article]
Tack, I guess you are referring to a "dour" pessimistic atmosphere. I guess I would tend to agree, although permabull arguments with no meat and pervasive unsubstantiated optimism seem to abound as well.
Your argument holds a lot of weight in my view, however, I'm unconvinced of a catalyst, but like I said earlier, I'm hedged for a recovery and would like to see one. A stagnant economy does not benefit society over the long run.
Don't Assume Anything From Ultra-Low Interest Rates [View article]
RH, Tack.... My inclination is to "hope" that conditions improve out of normal cyclicality, and I don't believe my message is of doom and gloom, more of caution.
To assume that the market simply rebounds because history says it should is a bit fallacious in my view. There are too many different headwinds facing corporate America and the domestic/global economy and to be cavalier in the face of reality isn't always wise.
Mortgage REITs: Fashionably Late To The Party [View article]
and I would agree with your view on interest rates, nothing is certain and sudden fluctuations could derail this group to an extent.
Regards, AA
Mortgage REITs: Fashionably Late To The Party [View article]
Mortgage REITs: Fashionably Late To The Party [View article]
Thx for reading, AA
Mortgage REITs: Fashionably Late To The Party [View article]
Amazon: It Is Amazing How Overvalued Its Share Price Is [View article]
Those betting against Internet dreck back in the late 90s were ultimately right, but suffered through a lot of pain, or succumbed to it before the train finally derailed in 2000.
I think #3 above is what is really holding this stock up. Institutions own 2/3 of the shares and there seems to be Koolaide drinkers lining up to own the stock for whatever reason. Bezos and other insiders own another 20 percent, so retail float is fairly small.
Either those institutions didn't learn anything 15 years ago, are too young to remember, or have some sort of Nostradamodic capabilities.
Amazon: It Is Amazing How Overvalued Its Share Price Is [View article]
Users bought enormous amounts of stock in brands they loved and got burned to shreds. History does repeat itself.
One Investor's Very Brief Dalliance With American Capital And Annaly [View article]
I've had a similar mentality with regard to mREITs. Wanted to own them as an investment, never flipped the switch on an individual stock, although was pretty close. In the end, I thought the risk profile and the possibility of an individual blowup that I couldn't foresee was too high, so I opted for REM, the mREIT fund.
Open Letter To ETF Industry: Create A Better Dividend Growth Product [View article]
But, I don't think investors in the quality CEFs, and there are many good ones, are any worse yield chasers than those abandoning risk-free yield and upping exposure to dividend stocks and DG.
Lastly, I think DVK publicly discusses what I would consider an actively managed strategy. He invests in a core group of stocks he's picked from the DG universe, monitors them, actively adds to them with cash flow generated from dividend payments and occasionally jettisons positions for purely fundamental rationale. OTOH, the index proposition does seem more like active monitoring since it operates subjectively rather than objectively. And while indexes are "cheap," I'm not sure they offer much long-term "value" to investors. A good manager can provide value, assuming you can find one.
Frankly, I'd rather see a fund run on the exact premise on which DVK and other pure DG investors run their personal accounts, rather than an index that holds most everything. JMO
Open Letter To ETF Industry: Create A Better Dividend Growth Product [View article]
And I do think this is something that could be done at the ETF level, but because of the nuances of the strategy I think I'd rather have an active mgr. making moves on a regular basis, not just once a month - perhaps someone like yourself!
Open Letter To ETF Industry: Create A Better Dividend Growth Product [View article]
Having said that, I think a dividend growth strategy product, index or otherwise, deserves a dedicated money manager who can handle the criteria you laid out, monitor, and make nuanced changes on an as-needed basis. Specific yield criteria, valuation constraints, and a focus on a growing income stream, rather than general total return, are fairly specific attributes that fall well beyond the simplicity of most of the static ETF world.
I read your past articles and agree that the ETF and mutual fund offerings in the dividend universe are rather fuzzy, yield devoid, and probably not appropriate, strategically, for a true DG investor.
Keep in mind that a fund with 50 basis points of expense eats away 15-20 percent of a fund with a before-fee 2.75 - 3.25% blended yield, which I suspect is a common current blended yield for some DG portfolios. Fifteen-twenty percent is a lot of income to give up if you don't have to.
Open Letter To ETF Industry: Create A Better Dividend Growth Product [View article]
But, the closed-end concept would eliminate inflow and outflow issues and provide a better platform, imo, for a DG fund to operate. Plus, CEFs afford investors the occasional opportunity to buy shares at a discount to NAV.
4 Passive Portfolios For The Lazy Investor [View article]
pros of funds: instant diversification, professional management, a "market return,"
cons of funds: no guarantee of return of capital, fees that eat away at already historical low yield.
pros of individual bonds: craft a portfolio your way, low-risk loss of capital if held to maturity,
cons of ind. bonds: difficult to craft diversified portfolio with limited capital, potential liquidity problems on thin-traded issues.
These are the first that come to my mind. Maybe some others have some input.
Good luck, AA
Avon's 6% Dividend: Whistling Past The Graveyard [View article]
As the brand slogs around and arguably becomes an unwanted dinosaur like Yahoo, the stock will continue to suffer. There's little equity here to get excited about, doubtful growth, questionable mgmt. .... and the dividend does appear to be in jeopardy as Alan writes.
Don't Assume Anything From Ultra-Low Interest Rates [View article]
Your argument holds a lot of weight in my view, however, I'm unconvinced of a catalyst, but like I said earlier, I'm hedged for a recovery and would like to see one. A stagnant economy does not benefit society over the long run.
Don't Assume Anything From Ultra-Low Interest Rates [View article]
To assume that the market simply rebounds because history says it should is a bit fallacious in my view. There are too many different headwinds facing corporate America and the domestic/global economy and to be cavalier in the face of reality isn't always wise.