Seeking Alpha
View as an RSS Feed

Darren McCammon  

View Darren McCammon's Comments BY TICKER:
Latest  |  Highest rated
  • SandRidge Permian: Beware Of This Oil Yield Trap [View article]
    Does your model gives any terminal value to the trust?

    I would think existing tertiary recovery techniques, much less what might be available by 2030, will be able to squeeze some additional value out of the property. As such, there should be some termination value.
    Mar 27, 2015. 03:44 PM | Likes Like |Link to Comment
  • Capital Product Partners Has A Sustainable 11% Dividend [View article]
    CPLP pulled it's refinance offering on the 12th and filed a shelf offering on the 16th. Since then the stock price has declined about 6%. Putting 1 and 1 together to get 3, I am guessing CPLP has either been selling shares into the market in order to raise funds for ship drop downs or investors in the stock are anticipating they will be.
    Mar 27, 2015. 02:37 PM | Likes Like |Link to Comment
  • Economic data shows Japan nearing deflation [View news story]
    MS = MB * V
    The money supply equals the monetary base (amount of money) times the velocity of money (a.k.a. how much it is used).

    The aging of the population naturally reduces the velocity of money as retiree's produce less (no longer working), consume less (lower bills) and tend to invest in lower velocity assets (sovereign debt vs. growth stocks). Additionally, government actions to grow the monetary base (e.g. QE) are essentially moving money from one pocket to the other (Treasury bills to Fed) a very low velocity activity. They do fund government spending but this by it's very nature also lowers velocity. Subsidies and welfare programs (whether they be health care, social security, unemployment and disability insurance, farming subsidies, etc.) are essentially paying someone not to produce or subsidizing their inability to produce. They lower animal spirits, economic activity and thus the velocity of money. Thus while QE actions can increase the monetary base (MB) they also can reduce the velocity of money (V).

    What is really needed are actions which stimulate animal spirits and the velocity of money. It is not enough that we increase the monetary base, we also have to ensure that the increase in base is utilized to create additional value. Unfortunately, actions which would increase the velocity of money frequently require controversial changes on a legislative branch level: reduced protectionism; relaxed immigration; regulation, rule or tax law changes; etc. Unfortunately, the tyranny of the masses that Madison warned about, coupled with legislative partisan-ism, has prevented such changes.

    Japan may be a precursor to US and other aging economies. As such citizens of these economies should pay attention to and learn from what happens there.

    I have gone too long and become too theoretical for most, but if there is anyone whom I haven't already lost, here is one suggested change which would increase the velocity of money:
    Mar 27, 2015. 01:02 PM | Likes Like |Link to Comment
  • When Beating The Market Is Not Enough [View article]
    I commend the thought process articulated in this article.

    You might consider amending it from what you want to what you need. The two can be very different and the later, a focus on what you need, result in signficantly different investment choices.

    Also realize what you want or need in the accumulation phase and what you want or need in the distribution phase of your life can be different. In the accumulation phase a long term total return over and above inflation may be an appropriate goal. However, in the distribution phase an gross income stream growing at or above the rate of inflation, might be a more appropriate target.

    I think you would enjoy reading this white paper: (Note, I have no relationship with Trust and Fiduciary Management Services, I just think the white paper informative.)
    Mar 27, 2015. 11:53 AM | Likes Like |Link to Comment
  • CEFL Still Attractive With 17.6% Yield [View article]
    You get a like because you voluntarily disclosed your positions, and thus bias, in a comment. Everyone should hold themselves to this higher standard.
    Mar 27, 2015. 11:37 AM | Likes Like |Link to Comment
  • CEFL Still Attractive With 17.6% Yield [View article]
    tom field,

    It helps if you address your question so we know who you are asking. I'll assume it was directed to me. The answer is, CEFL would likely decline in value were interest rates to increase. The leverage would get more expensive, the CEF dividends would become less attractive relative to bonds and other income providing assets, some of the CEF underlying assets (e.g. mid and long duration bonds, preferreds, etc) would decline in value (though others would be not as effected or even improve).
    Mar 27, 2015. 11:33 AM | Likes Like |Link to Comment
  • YMBC - A Very High Yield, Leveraged Portfolio - One Year Review [View article]
    DYI semi-mechanical trading. Basically I use mechanical screens to come up with a list of 30 equities from which I choose 10 to invest in. So the first part is mechanical (finding a good pond to fish in) but the second is not.

    This may all be a moot point anyway. I pulled the first blog post on the Mechanical portfolio as a number of people who currently benefit from the trading strategy objected to it's wider dissemination. While I didn't think the small audience I was likely to attract via the blog and the way I was doing it (10 equities opportunistically chosen out of 30) would create enough volume to be an issue, certainly not enough to make the advantage disappear, I needed to respect the concerns of others.
    Mar 27, 2015. 11:14 AM | Likes Like |Link to Comment
  • This REIT Yielding 7.4% Should Benefit Investors When Rates Rise [View article]
    Interesting find. Seems very similar to a BDC, with the main difference being that the notes are secured by real estate collateral. I therefore would probably compare them to BDCs from a valuation perspective. Comparing BXMT to BIZD, a BDC ETF, we see the yield is about 1% less but you do have real estate instead of business assets as collateral.
    Mar 27, 2015. 10:48 AM | Likes Like |Link to Comment
  • A Completely Transformed mCig May Be The Sleeping Giant Of The Marijuana Sector [View article]

    ebbu is supposed to debut their RAW product line in Colorado pretty soon which is CO2 extracted and includes vape pen cartridges. I don't know what state you are in or if that would fill your need but their model includes providing oil to other product producers "ebbu inside" so their should eventually be a variety of choices.
    Mar 26, 2015. 05:16 PM | 1 Like Like |Link to Comment
  • CEFL Still Attractive With 17.6% Yield [View article]

    I think you'll find many of the UBS 2x ETNs have lower correlation to each other than you may think. Back when I ran them for this article: most were +/- .10 or less (10% or less of the movement in one explained by the movement in the other).

    So far in 2015 however, I have noticed the correlations between the YMBC portfolio components has been increasing:

    This is somewhat worrisome if the trend continues, however for now I still think the correlations are acceptable. Run daily since inception, BDCL and MORL for instance continue to have low correlation of only .16:

    BDCL borrows short to invest long predominately in floating rate senior notes of small and mid market companies. Conceptually therefore BDCL has credit risk (hurt by a recession), short term interest rate risk since it both borrows short and is levered 2x (hurt by increase in short term rates), but little longer term interest rate risk since loans made are tied to LIBOR. Interest rate increases can actually increase profits for BDCL once LIBOR increases above current floor rates. So find something which does better in a recession and when short term rates rise, but worse when overall interest rates rise. MORL only partially fulfills this requirement as it is hurt when short term rates rise similar to BDCL. An insurance company with a large amount of it's asset base in short term loans or a collection of disaster bonds (e.g. BCRH) might be other good low correlation assets to hold in conjunction with BDCL.

    Disclosure: long BDCL, MORL, BCRH in personal accounts, client accounts or the 50+ portfolio which I manage.
    Mar 26, 2015. 04:42 PM | 3 Likes Like |Link to Comment
  • CEFL Still Attractive With 17.6% Yield [View article]

    Thanks for including the weighted average discount for the 30 closed-end funds in CEFL. I would be curious to know how this 6.72% discount compares to the last 1 and 5 year averages. (and appreciate it when other people freely do my work for me) :)
    Mar 26, 2015. 03:36 PM | 2 Likes Like |Link to Comment
  • Fishing In The Oil Patch [View instapost]
    If for instance the situation in Yemen devolved into a proxy war between Sunni (Saudi Arabia) and Shia (Iran) forces it could eventually qualify as, "some war or insurrection significantly effecting oil production capability".
    Mar 26, 2015. 12:45 PM | Likes Like |Link to Comment
  • 3D Systems: Short Interest Hits New High [View article]
    Mar 26, 2015. 11:13 AM | 2 Likes Like |Link to Comment
  • Is The YMBC Portfolio Correlation Increasing? [View instapost]
    FYI, dividends were re-invested in SMHD today.
    Mar 26, 2015. 11:04 AM | 1 Like Like |Link to Comment
  • The Rise Of Mortgages: Too Much House? [View article]
    Well done article. Draws into question whether it is really in our best interest to promote housing through the various government subsidies.
    Mar 25, 2015. 03:42 PM | 1 Like Like |Link to Comment