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Rubicon Associates  

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  • Buying LQD Is A Waste Of Time [View article]
    As I see it, the main reason to own LQD is to get exposure to the sector. ETFs such as this are asset allocation tools. Asset allocation will determine a significant amount of a portfolio's return. While I do agree that owning individual bonds can help an investor create a "mostly" efficient portfolio (using, in this example, 20 bonds), for retail investors, you can get slaughtered on the price. Look at trace data for a VZ benchmark bond (say a new 10yr). If you look at the # of bonds traded and the price at which they trade, the difference between institutional and retail trades is apparent. When I trade for an institutional portfolio (min size is $5mm), I will get a much better price than I will if I tried to trade retail size (couple 000s).
    Feb 25, 2015. 11:12 PM | 1 Like Like |Link to Comment
  • BlackRock brings "smart beta" to fixed income [View news story]
    To accomplish this, the fund will own more corporate bonds, and alongside Treasurys, it will hold derivatives to hedge against them.

    We all know that rates and the economy are mutually exclusive. Oh, wait... Add credit risk and hedge against it. Ok, sounds like traders designed this to fill some free time. Let's not forget the mortgage segment of the agg. Hmmmm, reduced mortgage issuance got you down? Can't find too much cuz the Fed reinvests cash flows? Why, try smart beta! Cures baldness too.
    Feb 22, 2015. 11:54 PM | Likes Like |Link to Comment
  • Apple's Dirty Little Rare Earth Secret [View article]
    Look back a couple of years to China's restrictions on REEs and the impact it had on Toyota - the largest consumer of many REEs for their Prius. China has shown again and again their willingness to use all of their resources to accomplish their ends. As well, China has been making an "effort" to reduce environmental hazards (or use this as a reason to restrict supplies via mine closure).
    Feb 20, 2015. 11:03 PM | Likes Like |Link to Comment
  • Bank Of America: Buy The Dip, It Will Not Last [View article]
    regulatory reform will ensure sifi banks never trade at multiples they used to. Capital reform alone will dampen earnings potential relative to historical standards. One thing you can always count on with BAC is another dip.
    Feb 19, 2015. 08:11 AM | 2 Likes Like |Link to Comment
  • Government Properties Income Trust: The Government Really Is Here To Help [View article]
    keep in mind that GOV's manager, RMR, is widely held as one of the worst external managers when it comes to performance and self interest. They were removed from Commonwealth and are under fire in SIR. careful who you get in bed with.
    Feb 12, 2015. 01:39 PM | 7 Likes Like |Link to Comment
  • Sell Apple And Google Bonds, Buy Microsoft Bonds [View article]
    Just revised the title, should re-launch soon. Honestly, if I wanted clicks, I wouldn't write about bonds. I am not a writer, I do not do this for the money (if I did, I am failing miserably). I manage institutional bond and preferred stock portfolios, that is my "day job". I just like to write about assets, asset classes and opportunities that are not widely followed. I have tried to give folks a means to determine value (relative value) rather than looking at, say, Microsoft's bonds in isolation. The title has, unfortunately, messed this up.
    Feb 11, 2015. 07:39 PM | 2 Likes Like |Link to Comment
  • Sell Apple And Google Bonds, Buy Microsoft Bonds [View article]
    One suggestion: Read the article then comment, you might have a better experience if you approach it in that order. Aside from this, I will hold my tongue.
    Feb 11, 2015. 07:34 PM | 5 Likes Like |Link to Comment
  • Sell Apple And Google Bonds, Buy Microsoft Bonds [View article]
    Bonds can be bought through a broker, the same as a stock. Most on-line brokers have a decent bond/fixed income section for high grade bonds.
    Feb 11, 2015. 07:32 PM | Likes Like |Link to Comment
  • Sell Apple And Google Bonds, Buy Microsoft Bonds [View article]
    Just did that. Apparently, what seems obvious at midnight is not so obvious in the light of day. I can see how saying bonds at the end wasn't exactly clear.
    Feb 11, 2015. 07:31 PM | Likes Like |Link to Comment
  • Sell Apple And Google Bonds, Buy Microsoft Bonds [View article]
    Now THAT sounds like an asset manager!
    Feb 11, 2015. 01:47 PM | 1 Like Like |Link to Comment
  • Sell Apple And Google Bonds, Buy Microsoft Bonds [View article]
    Agreed. These bonds may work for institutional portfolios due to various constraints and indices, but again, retail investors can do better in the common or the plentiful choices in BBB and BBB/BB or preferred stocks. The article/analysis is mainly directed at institutional investors as a relative value focus.
    Feb 11, 2015. 01:47 PM | Likes Like |Link to Comment
  • 5 Real Estate Trusts To Outperform In 2015 [View article]
    Anything managed by RMR has warning flags - hence the attention to all their REITs by activists (SIR, EQC). While they have made some (forced) improvements in their management agreements, it usually pays to avoid their REITs - the higher yields come at a cost.
    Feb 6, 2015. 09:57 AM | Likes Like |Link to Comment
  • Apple: New Debt Deal Priced On The Screws [View article]
    Indeed. AAPL debt is generally redeemable at the greater of par or make-whole +10-20bps. However, as the inclusion of debt in the capital structure lowers their WACC, I do not think they would call the debt.
    Feb 4, 2015. 12:51 AM | 5 Likes Like |Link to Comment
  • What Is The World's Largest Net Lease REIT Worth? [View article]
    Good stuff Brad. Factual and straightforward. Like the spreadsheets, info on ARCP NOI is hard to find and while cap rates are somewhat subjective (and open to debate), if nothing else this gives a good starting point for a sensitivity analysis and probability matrix.
    Jan 29, 2015. 02:19 PM | 1 Like Like |Link to Comment
  • Cliff Natural Resources announces suspension of $0.15/share quarterly dividend [View news story]
    While the retained cash won't pump the company back to life, this was the best decision they could make after instituting their dividend folly plan. Of course, didn't they just say they were comfortable with it? Credibility is waning guys.
    Jan 26, 2015. 08:31 AM | 1 Like Like |Link to Comment
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