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Doug Meeks

 
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  • Fleet status from Diamond Offshore, Hercules adds to concern over drillers [View news story]
    Check the dividend growth on HP and the payout ratio and look ahead. Why not have both? HP has strongly, not in a small way, outperformed SDRL over the last few years.
    Aug 21 08:07 PM | Likes Like |Link to Comment
  • Fleet status from Diamond Offshore, Hercules adds to concern over drillers [View news story]
    I would like to add that HP has damn near no debt. Debt to Equity ratio showing 0.02 on M*
    Aug 21 03:14 PM | Likes Like |Link to Comment
  • Fleet status from Diamond Offshore, Hercules adds to concern over drillers [View news story]
    Mike, that the same situation that HP is in on land....utilization is high, orders for new rigs is max'ing out the build out of new equipment and capital expenditures for new rigs is up and up with long term contract coming in. Just like SDRL, HP has a better drill. Long HP.
    Aug 21 03:12 PM | Likes Like |Link to Comment
  • The Dividend-Growth-Devoid Income Portfolio [View article]
    surf, good stuff. I would add only that the income level of a high yield investment is almost 100% correlated with the price, meaning that a disruption in income will cause capital impairment. As with anything that actually does have a price (all equities do), the market can adjust its perception of the stability of the income thus discounting the price and in your example of PG and PSEC, you will see that the market was pretty smart arriving at the same TR, PSEC with discounted price, high yield (risk) and PG with premium price, low yield.

    I like your example of PSEC and PG, almost the same TR, high yield vs low yield. Two ways to get there, tax advantage goes to PG, it would change some for that, but if you need the income, look what PSEC is doing for you, wow. It's needing the income that creates the questions in my mind, an investor needs a way to use capital to earn what is needed..... the best way is to have more capital when you need the income. Awesome discussion, surf, thanks!

    Doug
    Aug 21 03:05 PM | 1 Like Like |Link to Comment
  • The Dividend-Growth-Devoid Income Portfolio [View article]
    an example:

    A woman I just talked too has 300K she put in an annuity 8 years ago for a 6% minimum return with a 6% GLTI at annuitization. She retired and worked for 6 months to qualify for SS and Medicare here in Texas.

    The 300K is not enough to make a difference late in life against the medical bills that will be due for most, as a DGI portfolio it would have to be spent down before the State programs would pay for her medical. This same asset inside an irrevocable family trust would be just as sheltered (after 5 years) as the annuity from the need to spend it down before the State program would pay for most of the medical.

    every situation is full of details
    Aug 21 01:05 PM | 1 Like Like |Link to Comment
  • The Dividend-Growth-Devoid Income Portfolio [View article]
    BHN, it may be better to say State plans. But Medicare and Medicaid.
    Aug 21 12:59 PM | 1 Like Like |Link to Comment
  • The Dividend-Growth-Devoid Income Portfolio [View article]
    Bob,

    I'm just trying to get to 8% while considering the risk to capital. DVK has some sweet individual advice going on. When things change you need good input and an open mind to dig into things that work for the specific situation. Most people with 500K or more should look strongly at a irrevocable family legacy trust and tapping in to the federal medical programs that are designed to handle those kinds of things.

    one of the big problems is that during these these emotions run high and decisions do not have a good basis to be made from.

    Great discussion here, wow.

    Doug
    Aug 21 12:53 PM | 2 Likes Like |Link to Comment
  • The Dividend-Growth-Devoid Income Portfolio [View article]
    bob,

    Interest rates are not going to allow sufficient protection of capital to get that far. You can get 8% but the capital erosion in a rising rate market would be a strong tail wind against the equities or bonds. I would think that some reach would get you to 8% and might stay there from a yield YOC standpoint.

    Leverage might help. LNCO could help, things are better there. PSEC could help, VNR worries me but have never failed me.

    At 8% you most likely will give up growth above inflation. That's a tough spot. Individual corporate bonds could help, perhaps some perpetual convertible preferrers. Would love to hear from surf on that, he spends tons of time on high yield for sure.

    Doug
    Aug 21 08:30 AM | 1 Like Like |Link to Comment
  • The Dividend-Growth-Devoid Income Portfolio [View article]
    Gary, I'll jump in here. I like your comment and your thoughts on bonds are great, I'm not a fan of bond funds and I'm not interested in them with the exception of some interest in high yield corporate bond funds in Europe (yield contraction base on highly possible Euro Central Bank bond purchase plan).

    I will say the talking on market risk is a function of income needs at this time. With elevated prices across many of the safe DGI stocks it's a tough time to buy JUST FOR PRICE. If an investor needs income and the option is to invest in a conservative portfolio or to spend capital, then I suggest setting a plan and buying in even at elevated prices. I DO NOT advise that a person be 100% invested, cash cushion and emergency funds are essential as well. However.....if you spend capital on expenses, that capital is 100% lost, even if your income producing equities drop in value those dollars are not 100% lost. Now I'm talking about the capitalization of expenses which often takes a ratio of 16:1 or more but it is essential to earn new dollars when retired and no longer earning from your labor. Price changes all the time, income is always positive return.

    After reading your comment, I think you are going to be fine. Just sharing my thoughts today before I carry on with a busy week. Thanks again to Adam for getting this going with another rock solid article.

    Doug
    Aug 20 12:24 PM | Likes Like |Link to Comment
  • The Dividend-Growth-Devoid Income Portfolio [View article]
    DN,

    You'll need an attorney to set it up, and a good bank that holds trusts. You can manage it yourself (as trustee) or farm it out to a professional. Revocable trusts do not shelter assets from being counted as "spend down" needed. Knowing about how to classify your assets as you plan these things is shockingly important. Individual specific advice is hard to get and general council is very rarely worth paying for, I have seen enough to know.

    Start with Wells Fargo Private Banking and find somebody you trust that you can talk to about it. Remember that Financial Services have changed in the last several years, the range of services and fees has grown very wide, do not over pay but don't let fees make these decisions either. Research this stuff during your 2-3 hours per day, that is 99.999999% more time than most professionals will spend on your situation.
    Finally as an adjunct to this conversation, I do not offer planning as a service, nor do I provide for the formation of Trusts. I'm a strategic asset manager, providing DGI portfolio direction as a fee only RIA and all that good stuff.
    regards,
    Doug
    Aug 20 12:10 PM | 3 Likes Like |Link to Comment
  • The Dividend-Growth-Devoid Income Portfolio [View article]
    billinsd, ARCP had great earnings this last quarter. Risk is elevated and I may reduce or exit them for the same reason you mentioned, but they have preformed well and coverage is good. No need to fire sell them, some stops might be prudent.

    Doug
    Aug 20 11:45 AM | 2 Likes Like |Link to Comment
  • The Dividend-Growth-Devoid Income Portfolio [View article]
    DivNut,

    You are doing great, I would like to add my support to the importance of long term care insurance. I would also add that some, not all, should consider an irrevocable family legacy type trust. This protects a portion of the assets from "spend down" before one can access state and federal programs. You have to do that 5 years in advance. It's rarely used when needed.

    As selling assets looms....you could consider an annuity, this is a case where that can add some benefit, but much consideration is needed.

    I would like to say that I think it's rare that an elder has wise family support, good job. This is one of the main reasons that I support the more conservative DGI approach to retirement mobilization, selling and harvesting capital gains requires a performance level that is rarely maintained during a large part of retirement, especially for couples, as often the wife outlives the husband. I'm generalizing here, but in a good way, I hope.

    Doug
    Aug 20 09:11 AM | 3 Likes Like |Link to Comment
  • I'm Glad I Have This West Coast Gem In My REIT Portfolio [View article]
    Thanks Brad, I always appreciate your work. So much information concentrated here, nicely done.

    Doug
    Aug 20 09:06 AM | Likes Like |Link to Comment
  • The Dividend-Growth-Devoid Income Portfolio [View article]
    Bob, I hope you are well. I know that many situations are different, but often it is easier to lower expenses than to add income. This can be true when you are 18 years old and it's still can be true when you are 70. This is why I only manage assets and never do financial coaching, I will give an individual specific advice and often do, but only when asked, most people never think that retiring comfortably was something that started at age 18, they assume that massive savings rates have more to do with massive income than massive discipline.

    Flexibility is a blessing. Your wisdom shared is much the same. I hope people keep listening.
    Aug 20 08:33 AM | 4 Likes Like |Link to Comment
  • The Dividend-Growth-Devoid Income Portfolio [View article]
    Counter, Great comment and important, thanks for staying in the discussion.

    Doug
    Aug 19 10:01 PM | 1 Like Like |Link to Comment
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