PennantPark Investment - An Irrational Reach For Yield [View article]
I will parse these comments by saying I've never specifically looked at PNNT or what it is investing in.
@Daniel.. I think a good overview of PNNT and the increasing risk the company's profile may present to retail investors, given premium pricing and heightened credit metrics. However, I'm not convinced this is an irrational reach for yield, maybe aggressive a more appropriate word? I think the general yellow flag warning is appropriate however.
@Tack...I think the management effectiveness is key here and was something noticeably missing from the analysis. Who's managing the BDC or other economically/credit sensitive entities like mREITs, junk bond funds etc... is what I want to know more about. Past performance may not indicate future results, but it can be helpful, especially with these kind of entities.
JCS.. somewhat surprised to read you think ETFs and CEFs are that far apart. As far as I'm concerned they're both just pooled investment products structured somewhat differently, and yes CEFs can add the leverage kicker. I think the comparison of a bond to a preferred stock may be more appropriate.
I'm not sure what you mean by "actual mgmt. fee." I guess you mean active vs. passive mgmt. expense? I'd argue for some CEFs the extra you're paying for "active" mgmt. is hardly worth the price since since some seem brain dead and just as passively managed as an index, with the higher fee to boot.
Interesting tidbit on PCEF. I did not know they published the info. Why do they do it? Where can you find the data?
bad, CEF is short for closed-end fund.... it is a pooled asset class similar to a ETF except there is a defined number of shares outstanding and the market price can vary significantly from the Net Asset Value of the security pool. It can trade as what is known as a discount or premium to NAV.
as I said in the article, bad, 6% or the lost nominal value may be a small price for some to pay if they are uncomfortable with stocks. I want my destiny in my own hands. Just like some stocks, some ETFs/CEFs are good, some are bad. Just make sure you have some good ones if you are going to pay someone to manage them.
3 Small REITs, One Large Opportunity [View article]
We now know the apparent reason for the divvy delay.. WMC announced a restatement of core earnings today, which they say does not affect equity, book value, or cash flow numbers.
And they increased the quarterly divvy to .95 from .90, a 5.5% sequential increase.
While I think the announcement on the surface seems rather sloppy, the stock is trading higher today, the market seems more enamored with the divvy announcement opposed to the mild accounting snafu.
Turk..thanks for posting... I would say ETFs, in general, are somewhat of a passive entity and CEFs are a bit more on the managed side, thus part of the reason for the higher cost.
I did make note that a good night's sleep and comfort in what you are doing is paramount. Not everyone is a great stock picker, but I think with decent education and practice, stock picking skill can improve over time.
curr... I really haven't done any work on open-end mutual funds in quite some time. While I hesitate to say I would never recommend one, especially one with a front load, it would have to be awfully special to invest in.
Besides the up front costs of an "A" share, you deal with probably anywhere between .5 -1.5% a year in ongoing cost, so despite the lack of trading fee within the fund complex, you're still paying probably 1-2% a year to own them for the first ten years, compared to .4 for the average ETF.
If we ran a comparative simulation on performance lag with a loaded open-end fund, I think the results would be pretty ugly at the onset, but would improve somewhat over time as the initial load hit wore off. Still, the ongoing cost would be higher than an ETF, even with no trading cost.
TBI... I think you make a good point and I didn't specifically touch on it. I would agree that the smaller the portfolio, the more prudent the use of ETFs would be. Investors just starting or with smaller portfolios might also consider direct stock investing or DRIPs to keep transaction costs low, yet get their feet wet in individual stock land.
About two decade ago when I made my first investments, I did no-load mutual funds, graduated on to direct stock investing and DRIPs, then on to a mostly stock portfolio.
I think you seem wise beyond your years TBI and it sounds like you have a good plan in place. Continued well..... AA
Thanks Global... ... there's inquisitive value to be had in the CEF class in my view, but it's not broad based. Some might be able to craft an entire portfolio around them, but given the research and time involved, I'd much rather spend it finding a good portfolio of stocks with no assoc. fee.
3 Small REITs, One Large Opportunity [View article]
koh... your link doesn't work. As to your question, that would be speculation. It would be a vertical business move considering the mostly triple net nature of Northstar's directly owned portfolio, but given Hamamoto's past at Morgan's and the resgination, perhaps something is in the works.
Silver Bay Realty Trust - A Business Model Doomed To Fail [View article]
Nice write-up. I guess I would have liked to see a short position in conjunction with the thesis. I'm long CLNY, for now, as I see some wisdom in the strategy, but CLNY is not a pureplay like SBY. I also think lower above makes some good points - this isn't exactly a rocket science business, but does require good organization.
Your thesis also predicates a long-term economic malaise, which is certainly arguable. If economic fundamentals strengthen and home prices rise, this is a large total return play. But I do see substantial risk in SBY, given its pure play model.
How To Diversify Your Income Streams With A Single ETF [View article]
Mprye... ETF fund of funds products are about as inefficient cost structurally as anything you can possibly buy on the market today. You pay 1.23% aggregate fee for the closed-end funds held in PCEF, and then you pay .50% to Invesco to manage the 150 holdings. (combined for the 1.73% you quoted). I know a lot of people who own it, but I personally find it an unnecessarily overdiversified product.
FOF is another one that does this and is sponsored through Cohen and Steers. Its fees are .95% with the underlying funds probably adding another 1%, so you pay somewhere around 2% to own that one. I think they need to change the ticker from FOF to FEE.
At least IYLD utilizes internal iShares products and waives a portion of the fee, so the net is 60 basis points which I think is reasonable for a product of its nature. But you're still layered with your fee payment.
Dividend Growth Investing: A Strategy For Young Investors, Too [View article]
DGM... the reason I think investing success is agnostic to strategy is that no matter the market environment, there are companies of all sorts moving against the grain. If you find the right ones, you succeed, if you don't, you won't. And while DG, from my perspective has more of a failsafe aspect to it then other types of investing, it certainly isn't foolproof.
And I think I disagree that there isn't somewhat of a success-timing aspect to DGI or any strategy for that matter. If you plop money down on a company or a market at a top and manage to panic and sell significantly at a bottom, it could be years before you make back your capital. Someone who bought Apple five years ago and is still holding is looking at a much different situation than the poor guy who bought it 6 months ago. Someone who bought MCD in 2000 is looking at double their money, someone who bought it in '03 is looking at about 7X their money.
Dividend Growth Investing: A Strategy For Young Investors, Too [View article]
Good overview of how young investors can reap success with DGI, DGM.... After a year of pondering DGI, I've become convinced it could or should be a core or potentially single strategy for just about anyone. However, I still feel a well balanced portfolio that includes some thoughtful aggressive growth opportunities and alternative income generating plays outside the purview of DGI probably could be at minimum entertained to provide portfolio diversity, ten-bagger potential, and better overall risk-adjusted total return potential. But strategy selection and asset allocation preference, as I've come to believe, is the penultimate investment decision predicated on personally subjective and objective attributes.
In the end, no matter what macro investment theme you most gravitate to, success typically comes down to the specific buy/sell and timing decisions you make, and not your broader theme. Skilled or "lucky" DGI'ers can beat growth investors and vice versa, not necessarily because of how they are investing, but specifically what they're investing in or how well they've timed their moves.
PennantPark Investment - An Irrational Reach For Yield [View article]
@Daniel.. I think a good overview of PNNT and the increasing risk the company's profile may present to retail investors, given premium pricing and heightened credit metrics. However, I'm not convinced this is an irrational reach for yield, maybe aggressive a more appropriate word? I think the general yellow flag warning is appropriate however.
@Tack...I think the management effectiveness is key here and was something noticeably missing from the analysis. Who's managing the BDC or other economically/credit sensitive entities like mREITs, junk bond funds etc... is what I want to know more about. Past performance may not indicate future results, but it can be helpful, especially with these kind of entities.
Long PSEC, SLRC
Don't Become The Biggest ETF Loser [View article]
Regards, AA
Don't Become The Biggest ETF Loser [View article]
I'm not sure what you mean by "actual mgmt. fee." I guess you mean active vs. passive mgmt. expense? I'd argue for some CEFs the extra you're paying for "active" mgmt. is hardly worth the price since since some seem brain dead and just as passively managed as an index, with the higher fee to boot.
Interesting tidbit on PCEF. I did not know they published the info. Why do they do it? Where can you find the data?
Don't Become The Biggest ETF Loser [View article]
as I said in the article, bad, 6% or the lost nominal value may be a small price for some to pay if they are uncomfortable with stocks. I want my destiny in my own hands. Just like some stocks, some ETFs/CEFs are good, some are bad. Just make sure you have some good ones if you are going to pay someone to manage them.
3 Small REITs, One Large Opportunity [View article]
And they increased the quarterly divvy to .95 from .90, a 5.5% sequential increase.
While I think the announcement on the surface seems rather sloppy, the stock is trading higher today, the market seems more enamored with the divvy announcement opposed to the mild accounting snafu.
Don't Become The Biggest ETF Loser [View article]
I did make note that a good night's sleep and comfort in what you are doing is paramount. Not everyone is a great stock picker, but I think with decent education and practice, stock picking skill can improve over time.
Regards, AA
Don't Become The Biggest ETF Loser [View article]
Besides the up front costs of an "A" share, you deal with probably anywhere between .5 -1.5% a year in ongoing cost, so despite the lack of trading fee within the fund complex, you're still paying probably 1-2% a year to own them for the first ten years, compared to .4 for the average ETF.
If we ran a comparative simulation on performance lag with a loaded open-end fund, I think the results would be pretty ugly at the onset, but would improve somewhat over time as the initial load hit wore off. Still, the ongoing cost would be higher than an ETF, even with no trading cost.
Don't Become The Biggest ETF Loser [View article]
Don't Become The Biggest ETF Loser [View article]
About two decade ago when I made my first investments, I did no-load mutual funds, graduated on to direct stock investing and DRIPs, then on to a mostly stock portfolio.
I think you seem wise beyond your years TBI and it sounds like you have a good plan in place. Continued well..... AA
Don't Become The Biggest ETF Loser [View article]
Regards, AA
3 Small REITs, One Large Opportunity [View article]
Silver Bay Realty Trust - A Business Model Doomed To Fail [View article]
Your thesis also predicates a long-term economic malaise, which is certainly arguable. If economic fundamentals strengthen and home prices rise, this is a large total return play. But I do see substantial risk in SBY, given its pure play model.
How To Diversify Your Income Streams With A Single ETF [View article]
You pay 1.23% aggregate fee for the closed-end funds held in PCEF, and then you pay .50% to Invesco to manage the 150 holdings. (combined for the 1.73% you quoted). I know a lot of people who own it, but I personally find it an unnecessarily overdiversified product.
FOF is another one that does this and is sponsored through Cohen and Steers. Its fees are .95% with the underlying funds probably adding another 1%, so you pay somewhere around 2% to own that one. I think they need to change the ticker from FOF to FEE.
At least IYLD utilizes internal iShares products and waives a portion of the fee, so the net is 60 basis points which I think is reasonable for a product of its nature. But you're still layered with your fee payment.
Dividend Growth Investing: A Strategy For Young Investors, Too [View article]
And I think I disagree that there isn't somewhat of a success-timing aspect to DGI or any strategy for that matter. If you plop money down on a company or a market at a top and manage to panic and sell significantly at a bottom, it could be years before you make back your capital. Someone who bought Apple five years ago and is still holding is looking at a much different situation than the poor guy who bought it 6 months ago. Someone who bought MCD in 2000 is looking at double their money, someone who bought it in '03 is looking at about 7X their money.
Dividend Growth Investing: A Strategy For Young Investors, Too [View article]
In the end, no matter what macro investment theme you most gravitate to, success typically comes down to the specific buy/sell and timing decisions you make, and not your broader theme. Skilled or "lucky" DGI'ers can beat growth investors and vice versa, not necessarily because of how they are investing, but specifically what they're investing in or how well they've timed their moves.