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Alex Trias

 
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  • What Happens To REITs If (More Like When) Inflation Goes Wild [View article]
    Well, I guess we're like Superman and Bizarro Superman, because I'm generally about forty years behind my time.

    Look forward to reading your next article, Reuben.
    Jan 18, 2015. 11:03 AM | 1 Like Like |Link to Comment
  • 5 Dividend Stocks For Simplifying The 4% Rule [View article]
    Robert - that's a great article! Thanks for the link. There are plenty of companies that never cut dividends in 2009 or 2010. I own Stanley Black and Decker and Dupont, for example, these companies haven't cut dividends ever in the past 100 years! Amazing.

    But if you're like me, you're the type who wears three belts, two pairs of suspenders, safety pins his pants up, all the while keeping a steady eye upwards to check for killer asteroids. The bulk of my portfolio consists of dividend paying companies with twenty years or longer histories of growing dividends, but I sleep much better at night knowing I can ride out periods when dividends might contract.
    Jan 18, 2015. 11:00 AM | 1 Like Like |Link to Comment
  • 5 Dividend Stocks For Simplifying The 4% Rule [View article]
    I agree - looking at a ten or twenty year history of dividend consistency is a great start, but does not guarantee anything when it comes to future dividends. I'd only add that in picking dividend stocks, the investor should focus on industries that have nothing to do with one another, or that are inversely correlated (for instance, owning oil stocks like Chevron and stocks of companies that do well when oil prices are falling - utilities, perhaps). I'd also add that you want income sources apart from traditional dividend stocks - maybe rental real estate, preferred stocks, REITs, MLPs, and bonds. Even for an investor who hates bonds (like me), I don't know why you'd would want to invest 100% of your assets into just one asset type.

    I'd also suggest that investors who want to go heavy into dividend stocks might consider keeping some cash handy at all times to get them through protracted periods when some companies they own might be cutting or even eliminating dividends - like what we saw in 2009 and 2010. It really pays to assume the worst can happen and prepare for the worst well ahead of time - particularly if you're heavily allocated towards equities.
    Jan 17, 2015. 05:02 PM | 1 Like Like |Link to Comment
  • What Happens To REITs If (More Like When) Inflation Goes Wild [View article]
    I'd be at least as worried about deflation. Falling commodities prices, negative yields on various European government bonds, to say nothing of the ultra low yield on US Treasuries. These, and other, factors seem consistent with market expectations of deflation or price stagnation, and are not consistent with market expectations for price inflation in the foreseen future.

    Great article, but perhaps a couple of years ahead of its time.
    Jan 17, 2015. 04:38 PM | 2 Likes Like |Link to Comment
  • Royal Bank Of Canada: Solid Buy On Commodity Pullback [View article]
    From 2001 to 2002, the price of oil dropped from $35 to about $20, and RY held up pretty well during that selloff. Has anything much changed since then to suggest RY won't do as well during this latest oil price upheaval? Perhaps RY has more energy-related loans in it's portfolio?
    Jan 14, 2015. 10:18 AM | Likes Like |Link to Comment
  • Why Buy Long-Term Treasuries? Dividend Growth Retirees Should Consider It For Ballast [View article]
    Great article, George. A financial advisor I spoke to recently suggested that instead of owning a combination of DGI stocks and Treasuries, investors should consider holding ONLY dividend stocks and utilizing some of the distributions to purchase put options as a means of protecting capital. His backtest suggested that an investor would capture more upside this way, with comparable downside. Not really a strategy that interests me at all, personally, but thought I'd pass it along since it touches on your topic of capital preservation/ DGI. Thanks!
    Jan 14, 2015. 09:59 AM | 2 Likes Like |Link to Comment
  • The World's Largest Net Lease REIT Is Ripe For A Takeover [View article]
    Hey Mark_A, do you read the news? ARCP's financials were, in fact, misstated and withdrawn. Intentionally misstated, in fact. So what exactly does "cook the books" mean to you? Your comment is ridiculous.
    Jan 8, 2015. 03:31 PM | 4 Likes Like |Link to Comment
  • The World's Largest Net Lease REIT Is Ripe For A Takeover [View article]
    Nice article, Brad. What about all the unknown liabilities that ARCP faces (regulatory and criminal fines, shareholder litigation, etc.) Presumably, those unknown but probably very large liabilities would tag along like remoras were any other REIT to step in and buy ARCP (or any large bulk of ARCP assets). Wouldn't that be a significant deterrent to any company seeking to acquire ARCP or a majority of ARCP's assets? I mean, the question of unknown unknowable liabilities (along with some suspicion about the books getting cooked) was THE reason we wouldn't buy Lehman Brothers one fateful weekend in 2008. Lehman's books were pristine compared to ARCP's.
    On a related note, could ARCP adopt the classic "good bank, bad bank" structure, where they ring-fence some of their best properties in a newly formed "good REIT", and park the liabilities (and potential liabilities) in a "bad REIT?" If so, perhaps that would facilitate any sort of takeover by another player like O or NNN, would you think?
    Jan 8, 2015. 12:48 PM | 1 Like Like |Link to Comment
  • Peter Lynch On Dividend Growth Investing [View article]
    An acquaintance that I met some time ago finally got onto the subject of money. He's been retired for a number of years now and lives off his portfolio's dividends. What's interesting is that he has absolutely no background in finance or investing, and doesn't even find the subject all that interesting. His approach is that he has owns about 25 blue chip companies that are listed in the S&P500 and that all pay dividends. That's it. When he has extra cash lying around, he pulls the list, sees which company he already owns that is now paying the highest dividend, buys it, and goes back to doing whatever he was doing before. He says he only sold stock once in his, to help pay for a daughter's wedding. Every single other transaction he's ever engaged in with regard to his portfolio is a buy
    Dec 25, 2014. 05:51 PM | 4 Likes Like |Link to Comment
  • The Case For Navios Maritime Partners' Stock Buybacks [View article]
    The slide seemed to coincide with a downgrade by Morgan Stanley. At that point, many shipping firms had already had dramatic share price decreases, and NMM, belatedly, joined the party. Much of the sell off seems fueled by the concern that lower commodity prices may signal weaker demand, and hence, less need to ship products. I also read that with lower fuel prices, shippers may start to run their vessels at faster speeds - effectively increasing the number of available shipping days. The last straw was a notion that with the recent collapse in shipping rates measured by the Baltic Dry index, Navios will have a tougher time renegotiating leases that are set to expire next year and that are currently above market. This may lead to a decrease in earnings and, simultaneously, dividend cuts at some point down the road. It's impossible to look at a stock with a 17% yield and not feel that what the stock market is saying is that the dividend is far too high to last.

    Of course, much of what the market "says" is complete gibberish. I agree with you that the best time to buy into a business is when the erstwhile owners are willing to sell it to you at any price. I certainly feel better buying NMM at $10 or $11 a share than, say, $20 a share (where it was trading just a few months ago). I'll tell you what, I'd be much, much happier if the stock dropped to $5 a share, although I'm not holding my breath. The way I see it, if you can buy an expertly run business in an industry that is absolutely critical (and that's been around for a couple thousand years) at a price that's well below the actual value of the business, you're in luck. The market, in it's infinite wisdom, often offers prices for companies that are nothing short of lunacy. That's fine news for investors, as long as you're comfortable focusing on stuff like earnings and dividends, rather than share prices.
    Dec 25, 2014. 04:59 PM | 1 Like Like |Link to Comment
  • DryShips Is Exploding Ahead Others For Good Reason [View article]
    Worst scenario seems clear enough - they go bankrupt. They're already in violation of some loan covenants and trying to work through the issues to avoid bankruptcy. They rely on spot rate charters more than many other shipping companies, so current weakness in the Baltic Dry index couldn't come at a worse time.

    Best case scenario is maybe a buyout. I could see spinning out the ORIG shares to shareholders, and then selling the dry cargo and tanker business to a stronger player (Navios holdings, perhaps?)

    I own a tiny position in this stock, and consider it highly, highly speculative. I own it because I believe the CEO is very focused on unlocking value, and there seems to be quite a bit of untapped value to work with. The biggest risk I see is timing. Can DRYS stay solvent long enough for shareholders to realize the value locked up in the company? They're probably going to need to move far more quickly than they might want - conditions in the shipping industry are going from bad to worse, and for DRYS, the clock is ticking.

    Shipping must be one of the least attractive places to invest at the moment, which means you're going to see plenty of values, but also plenty of value traps. I don't know which one DRYS will turn out to be, but I suspect that if you own a few different names in this particular space, some are sure to drop 90%, but if a few soar in value, you'll come out ahead. It may take quite a bit of patience, though, if you're investing that way.
    Dec 24, 2014. 09:18 PM | 1 Like Like |Link to Comment
  • The Case For Navios Maritime Partners' Stock Buybacks [View article]
    I'm not too focused on quarter to quarter performance - I generally look at the average for five years worth of earnings, so even a year's worth of sour earnings doesn't always have that huge an impact on my determination of a company's basic value. Navios typically comes through challenging market conditions very well, and can often use these types of situations to the company's advantage. With that in mind, I have been pretty happy with the recent sell off in the stock - I'd rather buy the company when conditions are terrible and the stock is cheap than the other way around. My only question is that the dividend yield is so high now, the market must be pricing in a significant dividend cut. I have no unique insight on whether the market will prove correct, or whether Navios will be able to maintain the dividend beyond 2015.
    Dec 24, 2014. 08:56 PM | Likes Like |Link to Comment
  • Dry Shipping: Don't Worry About Slow Steaming, But That's Where The Good News Ends [View article]
    Thanks for the article, Specialist. Just curious, but do you see the current situation in the drybulk market as similar to, say, the early part of 2012 when the baltic dry crashed? One difference, no doubt, is the lower cost of fuel, which as your article points out, can increase the supply of shipping services. By the same token, the Chinese stock market has been rising for a while now, which arguably might suggest stronger economic underpinnings in China. 2012 was tough on shipping companies' stock prices, but the ensuing recovery in 2013 was spectacular in some cases. Alas, the 2013 recovery was only fleeting, and for many shipping companies, their stock prices are effectively flat since 2012 - and in some cases even worse. That said, as an investor, you'd clearly be happier right now having invested in the darkest days of 2012 than the heady days of late 2013. Any thoughts you might care to share on whether 2015 is the new 2012 would be of great interest.

    Thanks again, and I hope you have an enjoyable holiday season.
    Dec 24, 2014. 01:48 PM | Likes Like |Link to Comment
  • DryShips Is Exploding Ahead Others For Good Reason [View article]
    Omninoob - yes, absolutely this should impact the value of DRYS if you are trying to figure out what it might be worth on a going concern basis - in that case, you'd probably want to take a multiple of the average cash flows from operations minus an impairment charge for wear and tear. The poor conditions in the market today will take down this average. I figure DRYS is probably worth more broken up that it is worth operating in it's current form.
    Dec 23, 2014. 01:29 PM | Likes Like |Link to Comment
  • DryShips Is Exploding Ahead Others For Good Reason [View article]
    My bad - Google finance lists the total number of shares for DRYS as 650,000,000 but the latest quarterly lists the total number of shares at only 412m.
    Dec 23, 2014. 12:55 PM | Likes Like |Link to Comment
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