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John M. Yenkes  

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  • 14% Dividend Stocks Offer High Returns And High Risks [View article]
    I bought more TWO today along with new positions in CYS, HTS, DX, and CHKR. I'm looking for a secondary from AGNC, or at least a technical correction, and will buy back in if we get back under $33.
    Jul 13, 2012. 03:59 PM | Likes Like |Link to Comment
  • 14% Dividend Stocks Offer High Returns And High Risks [View article]

    Great article and very timely. AGNC has been my largest single portfolio position since I bought in October of last year. Yesterday I sold all my shares at $35 as I think we will see a short term pull back that brings us closer to book value, and because the capital gain was more than I originally imagined it would be and I wanted to take some profit. My question is twofold. First, I still like AGNC as a long term hold, so provided I'm correct and we see a short term pull back, what would be the approximate range you suggest to buy back in. Second, I own several other mREIT names (MTGE, AMTG, TWO, PMT, REM), and I'm looking to park the AGNC proceeds somewhere else for the short term. Any suggestions other than HTS and CYS? I also have some traditional REITs and MLPs, and I'd like to stay away from any more exposure to those sectors as well.
    Jul 11, 2012. 01:40 PM | Likes Like |Link to Comment
  • Natural Gas: Why Prices Are Headed Lower, And How To Profit [View article]

    Judging from this and all of your other posts on this site, you are clearly a troll that has nothing to offer in the way of insight or constructive thought. Judging from your inability to notice this article was from April 12th, over two months ago, you are clearly lazy. Judging from the fact you don't know the difference between "write" and "right," you are clearly an idiot.
    Jun 14, 2012. 05:06 PM | Likes Like |Link to Comment
  • Natural Gas Has Nowhere To Go But Up [View article]
    I hope that is not your exit price target. Simple arithmetic says it is much more likely to hit $3.00 than it is to reach $30.
    May 2, 2012. 12:58 AM | Likes Like |Link to Comment
  • Natural Gas: Why Prices Are Headed Lower, And How To Profit [View article]
    These products are not appropriate for anyone looking to invest in natural gas long term, and should only be used for (1) short term trading, or (2) shorting longer term, typically via put options. First, you should understand that BOIL is tied to the Dow Jones Natural Gas Index, and is designed to track 2x the DAILY return of this index. The underlying index tracks forward month futures contracts on natural gas. Commodity futures contracts specify a certain date for physical delivery of the underlying commodity. Assuming you don't actually want the commodity, in order to avoid delivery and maintain a long position, nearby contracts must be sold and new forward month contracts purchased ("rolled forward"). Currently, natural gas is in steep contango, meaning the longer dated contracts are significantly more expensive than near dated contracts. In fact, the curve is so steep that if you were to simply roll forward every month for the next year, it would cost 95% of the current price in roll expense. Said another way, roughly speaking, prices need to double just to stay even on the investment. This is part of the reason why the index is down 65% while the spot price of gas is down only 48% over the past 12 months. Now imagine a financial product that DOUBLES this and you understand why using BOIL as a buy and hold vehicle for natural gas is a bad idea. If you are bullish on natural gas, you are much better off buying stock in natural gas producers and companies that will profit from a price rebound. Some ticker symbols that come to mind include (LINE), (CHK), (LGCY), (XCO), and (VNR). Some of these companies have hedged their gas positions out for several years and maintain healthy dividends despite current low prices.
    May 2, 2012. 12:50 AM | 1 Like Like |Link to Comment
  • Natural Gas Has Nowhere To Go But Up [View article]
    This summer is expected to be cooler than most due to the effects of El Nino.

    The increase in demand cause by "switching" of coal fired plants is only expected to increase demand within the electricity production sector by 17%. Given that this represents only a ~6%-7% increase in overall monthly nat gas demand, I don't think switching will be the magic bullet that keeps prices from falling over the summer months.
    Apr 28, 2012. 11:56 PM | Likes Like |Link to Comment
  • Stocks As 'Giffen Goods,' New Market Data, And ETF Performance [View article]
    “The rally in bonds is a once in a millennium event, but it’s absolutely mathematically impossible for bonds to get any kind of returns like this going forward whereas stock returns can repeat themselves, and are likely to outperform . . .If you missed the rally in bonds, well, then that’s it.”
    Apr 27, 2012. 12:33 AM | Likes Like |Link to Comment
  • Stocks As 'Giffen Goods,' New Market Data, And ETF Performance [View article]
    No, I don't see anything on the immediate horizon that threatens to sink equities like in 2000 and 2008. I'm certain there will be other economic contractions that will negatively affect equity valuations over the next 10, 20, and 30 years. Notwithstanding such cyclical recessionary periods, I'm confident equities will outperform bonds by a considerable margin. Again, even if yields stay where they are today (which I believe is unlikely), equities could return only HALF their long term average and still beat bonds.
    Apr 27, 2012. 12:12 AM | Likes Like |Link to Comment
  • Stocks As 'Giffen Goods,' New Market Data, And ETF Performance [View article]
    Maybe we have a different view on what "long term" means. I didn't say stocks have been better over the last 10 years. No question the dot-com bubble and housing crisis of the 00s caused a flight into bonds and out of equities, making bonds a much better investment. Government bonds have slightly outperformed over the last 20 years and stocks slightly over 30 years. However, over the "long term" it's not even close, stocks have returned more than double the compound annual return of bonds since the 1940s. As to our current situation, you will notice that stocks have tracked their historic average return over the last 40 years, while bonds have produced SIGNIFICANTLY higher returns over the last 30 years as compared to their historic average. Looking beyond the numbers, it's easy to see why. Bond yields have steadily dropped since the early 1980s (link below). If we are talking about "probabilities and odds," barring another great depression, there is a 100% chance this scenario will not play out again over the next 10, 20, and 30 year periods. Even if there is no correction in the bond market, and yields simply stay where they are today, equities will easily outperform bonds.

    "When financial history is written, it will surely speak of the Internet bubble of the late 1990s and the housing bubble of the early 2000s. But the U.S. Treasury bond bubble may be regarded as almost equally extraordinary."

    -Warren Buffett
    Apr 26, 2012. 11:46 PM | Likes Like |Link to Comment
  • Natural Gas Has Nowhere To Go But Up [View article]
    "Just look at the above chart and tell me that you would have any confidence that prices will stay at $2 for very long. Really?"

    I agree, it will not be at $2.00 for very long. We will be under $1.50 before the fall. While technical analysis might be helpful for picking entry and exit points, for a commodity like natural gas, using price history to conclude it can't go any lower shows naivete as to how this market operates. The supply/demand fundamentals and steep contango issues should be addressed before any technical analysis even begins.

    "At $2 per mmBTU even conventional production has become unprofitable. The hydraulic fracturing or "fracking" which has been responsible for the modestly increased supply in the U.S., will go away completely at these prices. And it won't come back until we are safely in the $8-10 range, especially when there is $100 oil to drill for in the Bakken."

    False. The majors are still making money well under $2. We are still producing more gas than last year, and with storage levels 52% higher, we will run into storage problems unless something changes dramatically from today.
    Apr 26, 2012. 06:20 PM | 1 Like Like |Link to Comment
  • How To Invest In Annaly Capital Management Safely [View article]
    Happy to hear the market is so efficient.
    Apr 25, 2012. 01:50 PM | Likes Like |Link to Comment
  • Annaly And Other mREITs: Lower Dividends And Stock Prices To Come [View article]
    While I am optimistic the economy will continue to improve, and believe the FED will have to raise short term rates before 2014, there are a lot of economists and fund managers that believe we are in for a protracted "new normal" where rates stay low for a very long time while economic growth remains muted. In the extreme, this would be somewhat analogous to Japan's lost decade (er, two decades). I think the possibility of this long term structural change is wholly discounted by those who demonize mREITs. If true, and the overall U.S. market languishes for another decade, it would make these investments a tremendous opportunity. Again, my bias is to say it is unlikely, but it is something to consider when looking at the mREIT sector.
    Apr 24, 2012. 07:15 PM | 1 Like Like |Link to Comment
  • How To Invest In Annaly Capital Management Safely [View article]
    If we are talking about risk management, selling puts is a good way to get burned.
    Apr 23, 2012. 07:37 PM | 2 Likes Like |Link to Comment
  • How To Invest In Annaly Capital Management Safely [View article]

    Not to pile on too much here, but you have obviously never actually executed this trade. If you had, you would realize it is a near certainty you will be called away the day before ex-div unless the stock price has dropped considerably. In my opinion, if you are an income investor, the time premiums offered for mREITs are so thin it's not worth writing covered calls and risk losing the dividend. Also, unless you are only holding a single stock in your portfolio at any given time (which is unwise), this sort of strategy hurts your overall return in the long run, because you are forced to sell your "winners" too early, leaving stocks that have under performed on a relative basis. If you want to sell covered calls for income, you are better off picking a growth stock you are long term bullish on that has a higher beta and larger premiums. Take Chipotle (CMG) for example. The 2014 $420 LEAP is $76, over 18% premium.
    Apr 22, 2012. 07:39 PM | 8 Likes Like |Link to Comment
  • Natural Gas: Why Prices Are Headed Lower, And How To Profit [View article]
    More precisely, the actual demonstrated working capacity is 4.05tcf, with another 0.28tcf reported by operators as being available. Thus, 4.1tcf is a conservative estimate. The truth is we don't know total storage capacity to a 100% certainty. While dry gas production is slowing (somewhat), it's not happening fast enough to forestall a backup later this year. Many of the large producers will make money well under $2/mmbtu, and we still have 600bcf of oil byproduct. Surplus bottomed in March at 2.43tcf, and next highest-low in a shoulder season has been 1.67tcf. Given that capacity typically reaches 93% at the end of injection season, I'm skeptical that production cuts and an increase in demand for electricity will make up for the nearly 20% overhang. Also, it's worth noting the regional nature of the gas system, where the largest production areas (in the east) are also the areas historically most susceptible to filling up (96% demonstrated capacity). It's not another warm winter we should be concerned about today, it's a cooler summer, which would take all bets off the table regarding a price bottom.
    Apr 20, 2012. 04:02 PM | Likes Like |Link to Comment