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  • REIT Basket Strategy: Bought CORRPRA  [View instapost]
    Regarding the odd lot trades, I just published an Instablog discussing that issue.

    Scroll to C. Use of Odd-Lots:

    It is interesting to me how gratuitous personal slams directed at me, continuously here at SA apparently as my reward for time consuming efforts made without compensation to me, can become slams made by me. There is a lot that I do not understand and maybe that is something that is best left alone.
    May 3, 2015. 08:28 PM | Likes Like |Link to Comment
  • Pared Interest Rate Risk Exposure In Roth IRA: Sold 300 AllianceBernstein Income Fund Shares At $7.81 And 200 BlackRock Core Bond Trust Shares At $13.86 [View article]
    I was hoping that my blog readers could explain Crimsonbey's first paragraph in his second comment, the one that has received 1 like so far. I have only been following the FED for over 40 years now and am eager to learn whatever I can from those who have in depth knowledge.

    I have asked the readers at my blog website to help me understand, but no one has yet responded to that offer.

    I do not think that further elaboration from Crimsonbey will be of much use to me, since the thought process just went way over my head and totally outside of my realm of knowledge regarding what the FED is really doing.

    Rather than continuously commenting on gratuitous slams directed at me, which has become time consuming and unproductive, though no doubt enjoyable for those dispensing those pearls, I am just going to include a discussion of some of the more common remarks in a few Instablogs and then refer back to the blog rather than taking a lot of time in a futile exercise of writing responses in the comment section.

    Regarding the odd lot trades, I just published an Instablog discussing that issue.
    May 3, 2015. 08:21 PM | Likes Like |Link to Comment
  • REIT Basket Strategy: Bought CORRPRA  [View instapost]
    S: Your question is a legitimate one, and has been frequently asked and answered by me. I do publish snapshots of my broker calculated total return numbers as well as snapshots of trades and broker calculated profit and losses from each trade.

    I am not suggesting that anyone follow my trading techniques for building and managing a position. It is up to each investor to do their own original source due diligence and to develop an investment process and strategy that fits their own goals. I am not in an accumulation phase anymore and have a far greater emphasis on risk adjusted total return with a capital preservation bias.

    The per share commission cost is high with fewer shares purchased. Without question, two fifty share lots would have a higher per share cost than one purchase of 100 shares or higher.

    Is the commission cost the only factor impacting performance in your view?

    A large number of people apparently believe that commission costs actually have a significant impact on total return over time.

    I will just drag and drop a comment made a couple of days in response to the same question. This comment was made in reference to the worst drag commission drag on total return, the Lottery Ticket Basket where purchases have a $300 limit.

    "I generally make the following observations in response to the commission drag on total performance.

    First, I view the Lotto purchases as an alternative to playing blackjack at a casino. I am also more likely to have winnings in my stock Lottos than playing blackjack, particularly when measure over a long period of time.

    Second, as shown in the trade snapshots in my Gateway Post for this topic, I have reaped almost $15,000 in profits with a number of disasters which is to be expected when dumpster diving:

    Snapshots at the End of This Post:

    Lottery Ticket Basket Strategy: New Gateway Post

    Third, I would not have that net gain unless I was using the basket strategy with that low limit. Why? I would have never bought the security in the first place given my overall conservative approach to investing.

    Fourth, as noted in my discussions of this basket, I am buying securities, for the most part, that have already been smashed in price.

    The last buy was discussed here in a SA article involving the HK company Li & Fung:

    Update Of Lottery Ticket Basket Strategy As Of 3/20/15/Bought 150 LFUGY At $1.86-LOTTO

    The then current holdings are in a snapshot reproduced in that post. I counted 34 positions. I added two since that time which I will discuss when I get around to the next update. Generally, the total out-of-pocket exposure will fluctuate up and down between $4K and $7K.

    Other baskets may fluctuate in a $40,000 to $70,000. The higher limits are based on a risk/reward balance assessment. The Lotto Ticket Basket would by its name suggest the highest risk category with the second highest risk category being the Flyer's Basket (up to $1000). These categories are all related to risk control rules.

    5. Fifth, I lack clairvoyance. The baskets will have successes and failures, incredible percentage gains and disasters. When I buy a Lotto, I do not know the future.

    I will have flame outs. I will also have moon shots. An example of one of those was AMOT, bought at $5.95 (2012) that closed yesterday at $35.51, having a really bad day after its earnings release, which brings me to the sixth issue.

    6. I sold AMOT at $16. The decision to buy or to sell at a particular far outweighs the commission cost issue. I also have the liberty with such a small position to avoid risk mitigation sell orders due to an unsatisfactory price decline. Several of my largest gainers collapsed after purchase and the soared back to give good % returns. If I had serious money in those positions, I would have harvested a loss before it grew and missed out on the gains.

    The problem is that I will also ride down a position until having any hope about the future would be irrational. But, given the small amount of money, I would have the same view of that result as playing one hand of blackjack for $300. I just would not care. It is slightly material that the basket itself is doing okay and generating some gains.

    7. I frequently, though not always, account for the commission cost by limiting limit orders below the then existing bid price that accounts for the commission costs and the same would apply to sell orders."
    May 3, 2015. 01:08 PM | Likes Like |Link to Comment
  • Bought Back In An IRA AT&T At $32.52 In The Context Of A Total Return Investment Strategy [View article]
    T: Are you going to make a substantive comment about AT & T and the points made in the article?

    As to other commenters, you are in cahoots in ways that are not readily apparent to you. I am not suggesting that you know each other. There does seem to be a common characteristic on the number of followers each of you have to date as well as the inability to make any substantive comments about the points actually made in the article.

    Why do you think that they have "real wealth" by the way?

    I am glad for the reasons discussed in this article that I do not own thousands of T shares. I am a fact based total return investor and prefer to have larger positions in stocks that are actually contributing in a significant way to my real wealth.

    I am going to uncheck the "Track New Comments" box. There is no need to address further comments being made to this article. I would hope that you will not read another one of my posts, and consequently would not have a desire to leave a continuous stream of non-substantive comments.
    May 3, 2015. 01:02 PM | 1 Like Like |Link to Comment
  • REIT Basket Strategy: Bought CORRPRA  [View instapost]
    Rod: My posts are intended to provide a framework for analysis.

    I am addressing only one question with many examples. How do I arrive at a decision to buy or sell a security?

    One common theme is the acquisition of relevant facts and then evaluating that information in a rational manner.

    A process that involves unbiased fact acquisition is just a bridge to far for most individual investors, and that is the first of many reasons for their failures.

    20 Year Average Investment Results:

    Page 65

    The Twitter Generation frequently confuses a snarky comment or a put down as a sign of intelligence or knowledge.

    Given the U.S. government's fiscal condition, the Twitter Generation will have to rely on their own skills as investors more than any recent generation.

    No prior generation IMO is more lacking in the tools or the mindset to become successful investors. I am grateful that I will not be around when they turn 65. I would not want to listen to them blaming everyone but themselves for their predicament.

    May 3, 2015. 12:02 PM | Likes Like |Link to Comment
  • Pared Interest Rate Risk Exposure In Roth IRA: Sold 300 AllianceBernstein Income Fund Shares At $7.81 And 200 BlackRock Core Bond Trust Shares At $13.86 [View article]
    I thought that I would give you some worldwide exposure, adding to my most recent blog post an addendum.
    May 2, 2015. 11:13 PM | Likes Like |Link to Comment
  • Pared Interest Rate Risk Exposure In Roth IRA: Sold 300 AllianceBernstein Income Fund Shares At $7.81 And 200 BlackRock Core Bond Trust Shares At $13.86 [View article]
    I am amending my most recent Instablog to add a comment at the end referring to you. I made a lot of effort to respond to your question and you rewarded me with a gratuitous slam.
    May 2, 2015. 10:58 PM | Likes Like |Link to Comment
  • Pared Interest Rate Risk Exposure In Roth IRA: Sold 300 AllianceBernstein Income Fund Shares At $7.81 And 200 BlackRock Core Bond Trust Shares At $13.86 [View article]
    I have no reason to swing for the fences or "to take as much risk as I can handle". Consequently, I will average into positions with smaller trades, taking advantage of a securities natural volatility, sell higher cost shares on pops and then buying back on declines, lowering my average cost and raising my yield over time.

    I will generally top out a position in a single company at $10,000. I of course know that is peanuts to the heavy hitters at SA, but I have to make do with what I have and to be comfortable with the risks that I am taking when I am in a capital preservation mode rather than an accumulation mode.

    I publish my performance numbers in my blog and not here. Somehow, I manage to do okay even though my analysis is not as "deep" as many here. Is your first paragraph deep in your opinion?
    May 2, 2015. 10:50 PM | Likes Like |Link to Comment
  • Updates On The "January Effect" & "Dow Dogs" Portfolios [View instapost]
    F & G: Donald Luskin is unquestionably correct that the USD hit to earnings and revenues is an "accounting fiction". The foreign revenues, by and large, are not actually converted from Euros to USDs, except for GAAP accounting purposes. Those revenues are not repatriated back to the U.S. due to the repatriation tax.

    I focus on the constant currency numbers that are disclosed in the earnings reports. That is where I hope to see earnings and revenue growth. I am not at all concerned about fictional currency gains or hits to GAAP earnings.

    I own Unilever for example that had a 10%+ revenue gain in the 2015 first quarter due to currency. Sure, Unilever's sales made in the U.S. look better when artificially converted from our strong currency (at the moment) into one that has been deliberately torpedoed by the ECB to make their exporters more competitive.

    This currency movements come and go. Looking at a 25 year EUR/USD chart, my only observation is that currency traders need to have an IV of chill pills probably on a 24/7 basis.^EURUSD&t=BAR...

    I attribute the USD parabolic spike to a lot of sloppy reasoning and group think. The story being sold was that the U.S. FED was in a rate increasing cycle, while other banks were still loosey goosey. Yet here we are in May 2015 and the FED has not even raised the FF to .25% since that talk started back in June 2014.

    The other "rationale" is that the U.S. economy was so much better. Yet, here we are slowing down in the 4th quarter and slower still in the 2015 1st quarter as Europe starts seeing more green shoots.

    I would pay attention to the German 10 year movement in the next several weeks. German inflation ticked up in April and has averaged over 2% since 1950. Inflation was over 2% in 2012 and remained positive in 2014 even after the crude parabolic slide. Their 10 year was over 4.5% in June 2008.

    Starting on 4/20/15, the German 10 year, which had closed at a .07%(!!!!!), yield started to spurt up and the blow back was felt in the U.S. bond market. These crazy rates, where the lenders have to pay the borrowers, could easily reverse, potentially rapidly, causing a spike in rates even if inflation remains low.

    You may also start to see some hot inflation numbers in the US starting with April as gasoline and other energy products have surged in price.
    May 2, 2015. 10:43 PM | 3 Likes Like |Link to Comment
  • Bought 50 ARCC At $15.41-A Typical Small Lot Purchase Of An Externally Managed BDC Stock  [View instapost]
    I liquidated my last remaining ARCC position by selling 100 shares at $17.195 bought in two fifty share lots:

    1. Sold 100 ARCC at $17.195

    I did not reinvest the dividends. One lot was bought in January 2011 and the other was the 50 share lot discussed in this Instablog.

    The 2011 lot was bought at $16.17 and generated an annualized total return of 11.36%. That is in excess of the dividend yield. I try to manage my small BDC positions so that my total return is higher than the dividend yield at my cost. I also sold this position at a premium to the last reported net asset value per share.

    In my blog discussing this disposition, I use an online calculator for both total returns and total annualized returns that will give me separate numbers for reinvested dividends and cash dividends.
    May 2, 2015. 10:00 PM | Likes Like |Link to Comment
  • Pared Interest Rate Risk Exposure In Roth IRA: Sold 300 AllianceBernstein Income Fund Shares At $7.81 And 200 BlackRock Core Bond Trust Shares At $13.86 [View article]
    C: Did I say money "haven". I meant money "heaven" or perhaps money "hell" is more apt.

    The Fed started its Jihad Against the Saving Class over 6 years ago when it implemented ZIRP. QE and other abnormal policies by the FED and other central banks have produced negative real rates of return.

    One reaction was to buy about 40 or so junk bonds in the bond market when they cratered in 2011, using a ladder/barbell strategy. The top of the bell was 2016 as I recall.

    Even those bonds have been redeemed by the issuer early when they could refinance at a lower rate.

    Short term investment grade bonds are not worth the effort of entering an order IMO. Why bother?

    I am darting in and out of leveraged bond CEFs that provide me with some yield that is barely tolerable, which is the case for BHK. I still own BTZ in the Roth IRA.

    I have darted in and out of several unleveraged bonds CEFs the most notable being IGI which liquidates in 2024 like GDO. One of my larger positions is in GDO (around 820 shares). I sold out in early 2013 and then bought back the shares at lower prices. GDO uses less leverage (close to 21%) than ACG and BHK and has a higher dividend yield. It also has a 2024 liquidation feature:

    I discussed a 100 share purchase in a November 2014 Instablog here:

    The duration is also lower and the discount was 9.59% as of 5/1/15 with a 7.5% distribution rate.

    IGI closed last Friday at a slight premium to NAV per share and at a 5.62% distribution rate. That fund may be acceptable to many income investors.

    I have to have a much larger discount before I try IGI again for the nth time. The overall total return is much higher than the dividend yield due to that constant trading movement. By buying that fund or others like it, I avoid the leverage risk, (leverage increases duration too) which is very important now in my opinion. I still have interest rate risks related to duration and the risks of lost opportunity when and if rates start to rise again and this one goes back down in price.

    I describe those kind of risks in my Instablog published this evening:

    REIT Basket Strategy: Bought CORRPRA
    Scroll to Risk Section

    I have also used CSI which is unleveraged but the yield and discount is unappealing to me now.

    I am having a lot of problems now finding anything acceptable in bond land.

    I consequently have adopted a hyper trading system.

    I also receive a lot of income from DG stocks. The yields on many of those are far higher than bonds, and many are over 10% based on my constant cost numbers. I mention some yields just in my regional bank basket in a recent article here.

    You can see some of my articles discussing buys of junk E & P bonds when they cratered in price, as well as the first mortgage bond ELB:

    Added 100 ELB In Roth IRA: An Exchange Traded First Mortgage Bond Issued By Entergy Louisiana

    There are several posts discussing the purchase of floating rate equity preferred stocks that pay the greater of a fixed coupon or a spread over the 3 month Libor rate.

    Equity Preferred Floating Rate Stocks: Added 50 Goldman Sachs Group Preferred Series C At $19.63

    Equity Preferred Floating Rate Stocks: Added To MSPRA At $19.87

    The largest single position in that category is a 2009 purchase of SCEDN that is paying a spread to the 30 year treasury and was bought at $84. It has already been partially called and will be fully called if and when the 30 year moves up some more.

    Given the low yields of those floaters, I will generally top out my exposure in the $2K to $4K range and trade their volatility. I had 250 MSPRA and now I am down to 100 I think.

    An exchange traded bond that I call a trust certificate was discussed in an Instablog which SA did not publish as an article probably due to its complexity. I have given SA permission to publish my Instablogs without payment of compensation to me. Given the boo birds out in force with ad hominem attacks, I may have been better off if SA had decided not to publish the recent AT & T article. It did exceed the Twitter limit.

    Bought PJS In Roth IRA: An Exchange Traded Bond With A 7.55% Coupon On A $25 Par Value
    May 2, 2015. 09:46 PM | Likes Like |Link to Comment
  • Bought Back In An IRA AT&T At $32.52 In The Context Of A Total Return Investment Strategy [View article]
    T: I am still waiting for a substantive comment from you "my good man".

    And you did not answer the question either?

    I am aware that you were referring to my title. I still can read and will make it pass the first sentence of a comment.

    Have you left similar comments to titles of similar length here at SA, or are you just focusing your wit just on my article.

    Are you aware of anyone, other than yourself, who has referred to the title of Dr. Strangelove, as "clunky" or "unwieldy". I do not understand the analogy. The title fit within the 140 word Twitter limit.
    May 2, 2015. 09:03 PM | Likes Like |Link to Comment
  • Bought Back In An IRA AT&T At $32.52 In The Context Of A Total Return Investment Strategy [View article]
    T: I have only received that kind of comment here at SA. It tells us a great deal about Nacf.

    I have written over 2000+ very long blogs at my website and have not received a single comment like that one or many others made to this article.

    It is amusing that gratuitous potshots are taken at me, along with a barrage of critical comments that have no substance, are ignored by SeekingAlpha moderators. How many substantive comments about the contents of the article are made here? I had one substantive question from one reader, which I answered as I always do, and that is it.
    May 2, 2015. 08:21 PM | 3 Likes Like |Link to Comment
  • Update For Regional Bank Basket Strategy As Of 4/20/15 [View article]
    In several recent SA comments and articles, I have been discussing interest rate risks.

    The regional bank basket has had a $40,000 to $50,000 out-of-pocket monetary exposure range since it was initiated in the 2009 spring.

    To better balance this basket as a natural interest rate hedge for my REIT Basket, I have decided to increase the range to $60,000 to $80,000.

    The most recent article discussing interest rate risks was published last Friday here at SA:

    Pared Interest Rate Risk Exposure In Roth IRA: Sold 300 AllianceBernstein Income Fund Shares At $7.81 And 200 BlackRock Core Bond Trust Shares At $13.86

    I also discuss interest rate risks in the most recent Instablog involving the purchase of CORRPRA:

    Risks Section:

    I have left several comments today to other articles about these risks including this one to an article about OHI:
    May 2, 2015. 07:53 PM | Likes Like |Link to Comment
  • Bought Back In An IRA AT&T At $32.52 In The Context Of A Total Return Investment Strategy [View article]
    T: Thanks for that observation. I would just note that I receive no compensation from SeekingAlpha, having given them permission to publish my Instablogs for free. I do have to put up with a lot even though I am receiving nothing for my efforts.

    I would disagree with your comment about credibility. I may be the most credible author on SA, showing everyone snapshots of my trades, profit and loss calculations and broker snapshots of performance numbers in my blog.

    E.g.: Portfolio Management Goals-Snapshots of Performance Numbers YTD, 3 and 5 Years Cumulative

    I think that others are the ones who need to look inward on the credibility and other issues, including whether or not their comments add anything to the learning experience here at SA or just pot shots taken at an author.
    What have we learned from your comments? I asked you some substantive questions about the Dr. Strangelove movie, which you brought up in reference to my title and have not heard back yet.

    I will let the comments made to this article speak for themselves on the foregoing. It does not take any intelligence to see the answer.
    May 2, 2015. 07:38 PM | 2 Likes Like |Link to Comment