Mitch Tuchman

Mitch Tuchman
Contributor since: 2008
Company: MarketRiders
Zack: I'd welcome you to try our service which has been reviewed here in SeekingAlpha and also is truly "open source" as we're not affiliated with any online brokers or ETF providers. Contact me at and I'll take you through it.
Gary -- I could never get comfortable with buying an ETN for owning MLPs because MLPs have so much variation. I like ETFs for asset class investing. What I did, was built my own basket of mid-stream MLPs and have owned the top 10 in terms of market cap for over a year. While my "index" is down about 20%, I'm getting an average of 10% return and have very little exposure to the price of energy since I own MLPs that are paid for the amount of oil and gas that runs their their pipelines. The other thing about MLPs, is that you should plan on owning them for a long time in a taxable account. The returns come to you on a K1 and are classified largely as a "return of capital" so there are no immediate taxes due. However, sell the MLP, and you'll have to recapture all of that at some point. So if you're going to own them, make a long term commitment and enjoy the ride. Also plan on spending a few extra $ with your accountant entering all the K1s into your tax return.
Another M-REIT that invests in agency paper and that I own, along with MFA Financial (MFA) and Anworth Mtg (ANH), is Dynex (DX) which is run by an extremely accomplished CEO, Tom Akin, who also happens to own close to 20% of the company.
Avi -- I've read your MLP articles with great interest and they've helped inform my thinking quite a bit. You seem to really understand the area. I'm curious -- why don't you own MLPs personally? Do you see something in the horizon that will make them a better buying opportunity? It seems that the institutional dumping that went on last week might have been about as perfect of a storm as you're going to get.
Kevin -- if you do your own chart over a number of years, the data is indisputable. Of course if someone is trying to time the market, my conclusion is moot. But for those of us who want long term exposure to the small cap asset class with periodic rebalancing, I don't know why anyone would use a Russell index.
Are commodities an asset class or a "sector bet?" I consider them the former.
David - I posted a response. I think his attack is based upon a the theory that a portfolio's amount is "fixed." Frankly I enjoyed your ideas more in your ETF Guide where you use rebalancing to "lean" in and out of allocations based upon an investment thesis for the particular asset class.
Phil -- all of this sounds interesting from an academic standpoint. But frankly when I read it, my eyes glaze over a little as I do when I read other studies like these. Please don't take offense -- here's why. Most investors add and subtract capital from their investment accounts during the year. This presents a very different context for the rebalancing argument. A fixed portfolio that has no new invested capital or withdrawals is different than a dynamic one where the investor is adding and subtracting capital.
Let's assume a dynamic situation where someone is adding or subtracting capital each year. This investor can choose to do so in a way that rebalances back to the target allocations -- or not.
So If I told you I was adding 5% each year to my portfolio for 20 years, would you recommend that I rebalance when adding or subtracting funds, or not? I think this is a more relevant question.
Hey Microcap Speculator -- get your facts correct. The article said MLF owns 3 stocks besides Delias and one of them is AMIE which is its 4th position. AMIE was purchased around $10 and closed last year in the $40's. Its down this year as well, but Feshbach is the closest you'll find to a Buffett-style investor who walks the walk. Neither he nor his investors are watching the tape very day and they are pleased to own great businesses that will compound returns at greater than the market. Feshbach owned AMIE for years before it ran and I'd expect him to own it for many years to come.