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Capt. Spaulding

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  • I'm Waiting Patiently For This Blue Chip REIT To Go On Sale [View article]

    You caught my eye with your comment about buying a risky and a less-risky stock in the same group in order to get a blended dividend yield. I think of that approach as a "quality barbell," and have been using it for quite a few years, particularly with telecom, energy, and tobacco stocks. In recent years, I've extend it to REITs, private equity companies, and BDCs. It's a strategy that requires patience, careful selection and monitoring, and (as always) some luck, but -- so far -- it has been rewarding.

    Long O, LXP, STWD. Waiting for NNN.
    Aug 27 01:36 PM | 1 Like Like |Link to Comment
  • Putin Is Winning The Cold War: Fight Back With These 3 Natural Gas Winners [View article]

    Agreed. Glad that others see clearly what has been happening with Russia, and what is likely to come. One quibble about timing: Putin, who is playing an intermediate-to-long-term game, is crafty enough to pullback from the brink if he can see an advantage in doing so. That's because he knows full well that Western leaders will be only to happy to give him some running room in return for being able to postpone making any substantive decisions.

    Churchill was correct in the months immediately after the end of the Kaiser's War: we should have smothered Bolshevism in its cradle.

    Capt. Spaulding
    Aug 24 11:04 PM | Likes Like |Link to Comment
  • Putin Is Winning The Cold War: Fight Back With These 3 Natural Gas Winners [View article]
    Russia is an extremely difficult position, one that poses great danger to the rest of the world (including China). On the economic front, demographic trends indicate that it is all but certain that Russia's long-term decline, which already is under way, will accelerate in the next several years, despite the country's wealth of natural resources. Meanwhile, it is run by a kleptocracy that does not acknowledge the rule of law, let alone honor contracts. That's a volatile mix, to say the least.

    In my view, it is beyond understanding why any investor would risk taking a position in the securities of any Russian company, or in those of any non-Russian company that derives a sizable portion of its business from that country. One of the glories of the marketplace is that it always presents alternate opportunities. There are many, many more-attractive opportunities around the world than those related to Russia. Just ask folks who held Czarist-era bonds.
    Aug 24 03:49 PM | Likes Like |Link to Comment
  • Build A 'Whatever Happens' Portfolio... Now [View article]
    Excellent article. Thank you for posting it on SA.

    This section made me smile:

    "Personally, I prefer nations with a hard-working populace, recent experience with the "workers paradise" of socialism, and no albatross of welfarist public coddling. I'll take France, Spain and Greece for the weather and the Republic of Korea, Poland and Latvia for nations that will repay their debts honestly. PCY fits that bill."

    Nice combination of clear thinking, solid investment advice, and good writing. Looking forward to more.

    disclosure: long PCY
    Aug 18 11:04 AM | 1 Like Like |Link to Comment
  • The Same Returns With Half The Risk? [View article]
    Thank you for the excellent article. There certainly is a lot to be said for your investment approach. In fact, I follow a version of it myself. Year-to-date, my portfolio -- which has a beta of 0.42 -- is a couple of percentage points ahead of the S&P 500.

    That could change for the worse in a flash, of course, depending on the whims of the market gods. But, like you, I'm willing to take the risk/reward trade-off. The way I look at it is this. Losses are real, and they could be devastating; why not try to limit them in a prudent way that still provides some upside potential? On the flip side, it is very difficult for an individual, retired investor to try to match the performance of the broad market in a strong upturn such as we had in 2013; so why take the risk inherent in that approach? The comfort zone between the two is the investment mix that provides reasonable returns and still lets you sleep at night.
    Aug 15 10:05 AM | 2 Likes Like |Link to Comment
  • 3 REIT Ideas For The Buy-The-Dip High-Yield Portfolio In August 2014 [View article]
    Another good article. Thank you!

    I'm long LXP, and plan to look into the other two you mention.
    Aug 14 10:02 AM | 2 Likes Like |Link to Comment
  • The Slow And Perilous Death Of Bull Markets [View article]

    Would you please share your thoughts on why stop loss orders are not a good tactic? Your profile indicates that you are an experienced investor, and I'm very curious to listen to (and learn from) what you have to say.

    Thank you,
    Capt. Spaulding
    Aug 7 10:55 AM | 2 Likes Like |Link to Comment
  • The Slow And Perilous Death Of Bull Markets [View article]
    A timely warning, similar to a friend pulling you aside for "a word in your ear."

    Eric is correct: the bear leaves its tracks in a pattern of lower highs and lower lows. And, as the charts show, the periodic upticks generally provide ample opportunity to lighten positions before the downward cascade gets under way in earnest. An old pro I know used to say that down markets always give you a chance to get out, and up markets always give you a chance to get in; let the tape tell you what to do.

    My two cents in the current climate: use stop loss orders -- they impose discipline by taking the emotion out of selling. Set them at levels that let you sleep at night. A rule of thumb that I use is 15% or so below a stock's recent high; if the price slides that much, I'm usually ready to concede that the market knows more than I do. (And remember, you can always buy it back later, or move on to another opportunity.)

    One thing to keep in mind is that stocks may not be setting up for a fearsome bear market. History shows that there are two types of corrections -- sharp, brutal downturns that clear the air fairly quickly, and prolonged periods of backing-and-filling that gradually remedy built-up imbalances. Time will tell which one lies ahead. But Eric is right: this is the time to watch out.
    Aug 7 07:33 AM | 6 Likes Like |Link to Comment
  • 3 Keys To Watch In The Week Ahead [View article]
    Your recent articles warning that difficult times may be ahead have been outstanding, even by the high standards of your previous work.

    One of the most important points you made in the past few days came in your "Why Thursday's Sell-off Matters." It was your use of quotation marks around the word "end" when you mentioned the end of the financial crisis. In the words of the sage, "It ain't over 'til it's over," and this financial crisis is far from finished, in my view.

    The adverse impact that the financial crisis is having on the "real" economy has been masked by the torrent of liquidity that the Fed and other central banks have unleashed. That, combined with the Washington's disgraceful abdication of its responsibility to conduct fiscal policy prudently, has made a toxic mess of epic proportions. (And that short list doesn't even mention geopolitical risks.)

    One straw in the wind: policymakers and the chattering class have been whistling past the graveyard recently as they gush about "improvement" in employment measures, and how that bodes well for real economic activity. Yes, change occurs at the margin. But the gushing smacks of desperation, because they are ignoring the fact that the labor data remains exceptionally weak in absolute terms, particularly this far into a "recovery."

    All told, there has been a whiff of panic in the financial markets. Whether it spreads remains to be seen. But the downside risk seems to outweigh the upside potential in the period immediately ahead. It couldn't hurt to book some gains and stash them in cash for a while. No one ever went broke taking profits.
    Aug 3 05:09 PM | 4 Likes Like |Link to Comment
  • Blackstone Group LP Is On A Roll, Growing Both Earnings And Distributions [View article]
    "...why would it drop almost 2X as much as the broader index?"

    BX has a beta of about 2 (according to FINVIZ data). The market's beta is 1.0, by definition. That means that if the market were to decline by 2 percentage points, investors could expect shares of BX to decline by twice as much -- i.e., 4 percentage points. Which is exactly what happened.

    Private capital is a risky business, offering very strong returns for folks who can tolerate the downside.

    disclosure: long KKR (which also has a high beta)
    Aug 1 12:05 PM | 2 Likes Like |Link to Comment
  • Time To Sell Windstream Holdings Today [View article]
    I took a look at this article to read a view on Win, which I have held for some time, and was surprised to see a mention of TAXI, a stock that's not too widely known. This is the second time in the past few days that I have "stumbled" across TAXI here at SA. (hmmmmm...)

    As I mentioned in another comment, I've looked into TAXI several times over the years, and have passed on it each time. That is in no way a reflection on the company's management, or how they run the business. Rather, it is because local politicians have the power to change the grounds rules of the taxi-medallion financing industry quicker than you can holler "Call me a cab!".

    As a native New Yorker, I've spent a lifetime enjoying the "entertainment value" of local politics. Experience shows that most of the participants (state legislators, city councilmen, judges, bureaucrats, lawyers, etc.) are, at best, only a few days away from being indicted, surrendering to the DA, or fleeing the country. Those people represent an investment risk I'd rather not take.
    Jul 29 04:33 PM | Likes Like |Link to Comment
  • S&P 500: Still Trading Below 2000 A Decade From Now? [View article]
    Ted Waller:

    For another valuable article that complements Eric's, you might refer readers to your own piece on reversion to the mean.
    Jul 26 03:16 PM | 1 Like Like |Link to Comment
  • 3 Smaller, Lesser-Known High-Yielders For Your Retirement Portfolio [View article]
    What you say is true, and the idea makes sense, but there could be some liquidity risk in these funds during a market meltdown. According to Finviz, PCEF trades an average of c.127,000 shares a day, and BDCS trades only 23,000. Just something to consider.
    Jul 26 11:55 AM | 1 Like Like |Link to Comment
  • Total Return BDCs For Q3 2014: Part 7 [View article]
    re TAXI: I have looked into this stock several times over the years, and have passed on it each time. As a born New Yorker with a taste for the "entertainment aspect" of watching city and state politics unfold, I am very reluctant to invest in any company whose business is, or can be, influenced to a substantial extent by rules and regulations made by local politicians.

    This is in no way meant to suggest that I have any doubts at all about the management of TAXI. The pols -- who can change the rules of the medallion business overnight if they choose to -- are the ones I'd worry about.
    Jul 26 08:55 AM | 1 Like Like |Link to Comment
  • High Quality Stocks For Late Stage Bull Market (27 Stocks) [View article]
    Thank you very much for this outstanding, timely article. I have hit the "print" button, and will be revising my watch list as I do more research into some of the stocks you've listed.

    long BAX, COST, SYK. (JNJ has been a good holding, too, these past few years)
    Jul 25 10:18 AM | Likes Like |Link to Comment