REITS Benefiting From The Mom And Pop Boom [View article]
Goalkick9
Thanks for the comment. I understand your preference, but I also understand that REM is invested in "Mortgage REITS" that manage mortgage loans, basically making its income from interest and financing activities. In other words, any actual real estate that they own is incidental. The REITS in this article own and develop the real estate assets and make money from sales and rental of assets. I guess I am more comfortable with the physical assets than the loans. The reason that the Mortgage REITS (including CMO that I own with a 11% divvy) have dropped lately is the QE3 plan for the Fed to buy mortgage instruments, making the average interest rate lower for the ones held by the Mortgage REITS.
Anyway, good luck and thank you for reading my article.
Too Many Goodies On The Menu?: Buy The ETF [View article]
galicianova,
Every investor has different goals and diversification needs. However, in general, we like about 15% of a diversified portfolio to be in Consumer Discretionary stocks. I also like the portfolio to pay a minimum of 2% in dividends and hopefully more. Depending on the goals, some of the sector stocks should be large/mid cap stocks and a smaller percentage in small caps. In my personal portfolio, I keep about 1/3 Consumer Discretionary in Small caps and so that represents about 5% of the portfolio. I prefer to own full lots (100 shares minimum) of most stocks if possible, as that gives me the flexibility to sell calls, buy puts, etc. Ideally, one would own directly a few specific small cap companies and PSCD to add diversification. That might mean a 2-3% allotment to PSCD.
I hope that makes some sense. Maybe I should write an article on porfolio diversification according to size and goals.
Politics And 3 'Socially Responsible' Stocks With Game Changing Technologies [View article]
Joe,
Thanks for the comment. Actually I did not intend to take a party stance, one way or the other. My experience is that each time I think I am leaning one way, that party does something idiotic to turn me off.
Coal is problematic and I appreciate your bringing that factor into the equation.
Our Mid-Year Precious Metals Update And What's Next [View article]
Bill,
Thanks for the comment. We own plenty of Hecla, and we like that one. Arcana is obviously more speculative, but two large producing mines and a market cap of $350 has potential for appreciation. Shafter was purchased when silver was below $10/ounce and PanAm needed funds. It remains to be seen who got the "shaft."
Having said that, I am concerned that Arcana was "ahead of schedule" in the Shafter development, but has now pushed "commercial production" to 2013. In the conference call they mentioned labor shortage and removing unqualified workers as a challenge. I am hoping to make a site tour to Shafter in a few weeks and maybe get a better understanding as to what is going on there. I expect to be able to report that in another article.
PS. I considered the last Hecla call to be positive and mgt. seems pretty confident that they are not going to have more problems with the Lucky Friday.
Our Diversified Dividend Portfolio Update: Best Of The Best [View article]
galicianova,
I like all three actually. I also own VNR and believe that diversification is good when investing in energy MLPs. I also am inclined to look at long-term trends more than short-term operations.
As for LGCY, I noticed that it had dropped further than the other MLPs when the price of oil dropped. My view is that the price of oil is probably long-term headed higher, while I am not as convinced that natural gas or NGLs will enjoy the same appreciation. My perception is that LGCY management leans more toward oil production than gas, and their acquisitions seem to reinforce that. Also, I think that is why the drop in oil prices created a better buying opportunity in LGCY. Long term, I think they will continue to move more toward oil production, and that is where I think the best growth for distributions lies.
Unpopped Kernels: Our Two Worst Portfolio Stocks ... But Not For Long [View article]
keeladog,
Thank you for the comment. I agree with you and that is why we continue to hold this stock. In time, the real value will be recognized, and in the meantime, we sell out-of-the money calls.
Our Mid-Year Precious Metals Update And What's Next [View article]
kurtdabear
Thank you very much for the comment.
The geographic risk is a concern with these stocks, and this contributes to why some of these stocks are selling where they are. This risk is the main concern specifically to BAA and EXLLF. Mexico has been a good mining environment, but maverick unions and corruption are part of the risk for any business there. If we eliminated major mining stocks that have operations in Mexico there would be few major players left. I actually have been involved in Mexican business activities since the early 90's and I have seen many of these issues, which eventually are resolved. At least the silver is still there, and it will eventually be mined. I think that geographic concern is one reason why EXLFF is moving to advance its Canadian operations. BAA contributes a large part of its profits to schools and hospitals in the Congo to keep the government on its side. However, your comments are legitimate, and government leaders are unpredictable. As BAA becomes profitable, we can expect some taxes or other efforts by the government to take a piece of the pie, but that "goes with the territory."
It is true, there are many stocks in safer mining jurisdictions, but that is also priced into those stocks. The market is pretty efficient, so the biggest upside potential is probably in those that have this cloud hanging over them. However, I think I will isolate precious metal stocks in "friendly" jurisdictions and see if there are any that offfer similar upside potential...maybe it will produce an article.
As I tried to point out in the Conclusion, these are speculative stocks that have a high Risk/Reward profile and investors need to gauge if they have the stomach for the risk associated with them.
Our Mid-Year Precious Metals Update And What's Next [View article]
Joe
Thanks for the comment.
FCX announces quarterly results on Thursday. Analysts almost unanimously rate FCX a BUY. This is despite the fact that they dropped their average earnings estimates from about $.95 to $.84, without changing their BUY rating. I think this is because FCX is fundamentally a great long-term buy, and they want to set the bar low so that FCX can clear it. For that reason, FCX may get a pop from the earnings report, but if FCX cannot clear the bar, the analysts ratings will start dropping and the stock will go with it.
I myself am going to wait for the earnings to see how this goes, and I also want to listen to the conference call for clues about Indonesia and other operations. I like the Bernard Baruch philosophy about guessing where bottoms are in stocks, "you take the bottom 10% and the top 10%, and I'll take the 80% in between."
Trans World Corporation: The Little Casino Stock That Could [View article]
cp757
I guess the readers will have to decide if insider buying and essentially no sellers are bad things from their investment perspective. The thin trading is definitley a concern for short-term traders, and that is why I made a point of not only mentioning the low volume according to Yahoo calculations, but also the caveat that many days see no trades. As for my own investment in TWOC, I have no concerns about the daily trades (or lack thereof) or even the resulting volatility, for that matter. I have a long-term perspective. and that opens up more possiblities for liquidation of a position. This is why I advised reeaders: "It definitely pays to have a long-term perspective with this type of stock."
Although I do not have a crystal ball to predict the future and things like the probablity of bankruptcy to the second decimal point, I think it is at least as likely that this company will be bought out or taken private by the insiders which already own more than 50% of the stock. There are hundreds of small under-the-radar stocks each year that appear dormant, but jump up once they become better known. It should be obvious that this requires some patience, which is why I advised readers, "impatient investors may not be able to wait for the big picture to develop. It is impossible to predict when the Trans World story will catch fire with the investment community..."
I disagree that this is not a suitable investment. I am in the camp of the institutions that own 35% of TWOC stock, per Yahoo. I also think that the majority of 401k plans are managed by brokers or fund managers, and this kind of stock is not included in most mutual funds. I recenlty received a communication that indicated that Morningstar and JP Morgan prepared reports indicating that 79% of brokers and fund managers failed to perform as well as the S&P 500. Here are some of the quotes in the article:
"They may dress better than average, but they usually don’t invest that way... Beating the market is a tough trick—one that most [fund] managers don’t have up their sleeves." —CNNMoney
"84% of actively managed mutual funds did worse than their benchmarks in 2011." —Business Insider
"Stock mutual funds are having their lousiest year since 1998." —Bloomberg News
And not just last year—they’ve actually had over a 60% failure rate for the last ten years in a row."
One reason these funds have done so badly is that they apply arbitrary restrictions to investments, such as not investing in stocks under $5. This is one of the most dynamic areas for long-term profitablity. That is one reason why I contend a self-directed Roth IRA is a good complement to the company 401k plan that an employee has, so he/she can create diversification by investing in stocks that may not be in the 401k. The Roth IRA, by rule, cannot be withdrawn earlier than 5 years without losing tax advantages. Small stocks like TWOC that should be purchased as long-term holdings give the investor some diversification into the specualtive microcap market that he is not getting from the 401k plan.
Our Diversified Dividend Portfolio Update: Best Of The Best [View article]
galicianova
Thank you for the comment.
I am not familiar with HQH as my original article was focusing on closed end funds that use option strategies to maximize income. I do not think that HQH sells options. As I mentioned in the article, the BME yield, according to its quarterly distribution rate, is lower than HQH, but at end of the year, it has declared a special dividend. In 2011, that was $.93 per unit. If it pays the same special dividend in 2012, the yield for BME will be slightly higher than HQH's indicated rate. As for performance, a review of the 5-year charts of both indicates that the unit prices are about where they were 5 years ago. I guess that is a tie, although the performance this year looks better for HQH.
Having said that, I did review the HQH holdings and the fund seems more skewed to biotech discovery than established healthcare providers, which probably gives it a higher risk/reward factor. I personally like that as we prefer a long-term approach, and it is a great way to make income while participating in one of the dynamic and exciting sectors.
Both look good to me and thank you for bringing HQH to my attention.
Our Diversified Dividend Portfolio Update: Best Of The Best [View article]
Dag,
Thank you for reading the article.
Of the three, I consider CIMT to be the most speculative. It does trade thin and so it is not a trader's stock. The following form 20-F has a lot of information about the company:
I included CIMT for diversification because it has global exposure with 70% of revenue generated outside the US and Israel. Revenue and profits have been on a double-digit growth trajectory, but I like the fact that 50%+ of revenue comes from service and maintenance for installed products. This guarantees some recurring revenue because even in tough times, the manufacturers are not likely to change or eliminate the CAD systems that are incorporated into their manufacturing process.
I think the company pays big dividends as a way to pay back management and owners of the company. I think management has been fighting for the approval to pay dividends because they own shares and there is more than $1.60 per share ($15MM) locked in cash. The company has high profit margins and reliable recurring revenue. CIMT received approval to pay out up to $10MM in dividends in the next 12 months, and it has more than $5MM in free cash flow annually from operations, so there is no doubt that it can handle the dividend payment of $.40 per year (10%), ..which amounts to less than $4MM. I would not be surprised to see a special dividend before the 12 months expire. I would expect management to seek further approval in following years and obviously they know the process.
CIMT fills a spot in a diversified portfolio as a long-term holding. As you may have surmised, we look for under-the-radar companies, and if they appear to have good value and solid business prospects and management, we take some risk on the less "popular" stocks in their sector. We have owned TEF as another global play with a big dividend, but feel that because CIMT has limited focus and a simplicity to the business model, it is not only less susceptible to surprises, but also easier to monitor.
2 'Shadowy' Growth Stocks With 5% Payouts [View article]
Dag,
Thanks.
In the universe of stocks, these are still pretty good values. If you are a long-term investor wanting to add an income component, these are good choices, IMO.
I like management that seems to include the interests of stockholders in their decisions making.
REITS Benefiting From The Mom And Pop Boom [View article]
Thanks for the comment. I understand your preference, but I also understand that REM is invested in "Mortgage REITS" that manage mortgage loans, basically making its income from interest and financing activities. In other words, any actual real estate that they own is incidental. The REITS in this article own and develop the real estate assets and make money from sales and rental of assets. I guess I am more comfortable with the physical assets than the loans. The reason that the Mortgage REITS (including CMO that I own with a 11% divvy) have dropped lately is the QE3 plan for the Fed to buy mortgage instruments, making the average interest rate lower for the ones held by the Mortgage REITS.
Anyway, good luck and thank you for reading my article.
Stan
Too Many Goodies On The Menu?: Buy The ETF [View article]
Every investor has different goals and diversification needs. However, in general, we like about 15% of a diversified portfolio to be in Consumer Discretionary stocks. I also like the portfolio to pay a minimum of 2% in dividends and hopefully more. Depending on the goals, some of the sector stocks should be large/mid cap stocks and a smaller percentage in small caps. In my personal portfolio, I keep about 1/3 Consumer Discretionary in Small caps and so that represents about 5% of the portfolio. I prefer to own full lots (100 shares minimum) of most stocks if possible, as that gives me the flexibility to sell calls, buy puts, etc. Ideally, one would own directly a few specific small cap companies and PSCD to add diversification. That might mean a 2-3% allotment to PSCD.
I hope that makes some sense. Maybe I should write an article on porfolio diversification according to size and goals.
Politics And 3 'Socially Responsible' Stocks With Game Changing Technologies [View article]
Thanks for the great comment!
Nice picks actually, also.
Stan
Politics And 3 'Socially Responsible' Stocks With Game Changing Technologies [View article]
Thanks for the comment. Actually I did not intend to take a party stance, one way or the other. My experience is that each time I think I am leaning one way, that party does something idiotic to turn me off.
Coal is problematic and I appreciate your bringing that factor into the equation.
Stan
Our Mid-Year Precious Metals Update And What's Next [View article]
Thanks for the comment. We own plenty of Hecla, and we like that one. Arcana is obviously more speculative, but two large producing mines and a market cap of $350 has potential for appreciation. Shafter was purchased when silver was below $10/ounce and PanAm needed funds. It remains to be seen who got the "shaft."
Having said that, I am concerned that Arcana was "ahead of schedule" in the Shafter development, but has now pushed "commercial production" to 2013. In the conference call they mentioned labor shortage and removing unqualified workers as a challenge. I am hoping to make a site tour to Shafter in a few weeks and maybe get a better understanding as to what is going on there. I expect to be able to report that in another article.
PS. I considered the last Hecla call to be positive and mgt. seems pretty confident that they are not going to have more problems with the Lucky Friday.
Our Diversified Dividend Portfolio Update: Best Of The Best [View article]
I like all three actually. I also own VNR and believe that diversification is good when investing in energy MLPs. I also am inclined to look at long-term trends more than short-term operations.
As for LGCY, I noticed that it had dropped further than the other MLPs when the price of oil dropped. My view is that the price of oil is probably long-term headed higher, while I am not as convinced that natural gas or NGLs will enjoy the same appreciation. My perception is that LGCY management leans more toward oil production than gas, and their acquisitions seem to reinforce that. Also, I think that is why the drop in oil prices created a better buying opportunity in LGCY. Long term, I think they will continue to move more toward oil production, and that is where I think the best growth for distributions lies.
Hope that helps.
Unpopped Kernels: Our Two Worst Portfolio Stocks ... But Not For Long [View article]
Thank you for the comment. I agree with you and that is why we continue to hold this stock. In time, the real value will be recognized, and in the meantime, we sell out-of-the money calls.
Our Mid-Year Precious Metals Update And What's Next [View article]
Thank you very much for the comment.
The geographic risk is a concern with these stocks, and this contributes to why some of these stocks are selling where they are. This risk is the main concern specifically to BAA and EXLLF. Mexico has been a good mining environment, but maverick unions and corruption are part of the risk for any business there. If we eliminated major mining stocks that have operations in Mexico there would be few major players left. I actually have been involved in Mexican business activities since the early 90's and I have seen many of these issues, which eventually are resolved. At least the silver is still there, and it will eventually be mined. I think that geographic concern is one reason why EXLFF is moving to advance its Canadian operations. BAA contributes a large part of its profits to schools and hospitals in the Congo to keep the government on its side. However, your comments are legitimate, and government leaders are unpredictable. As BAA becomes profitable, we can expect some taxes or other efforts by the government to take a piece of the pie, but that "goes with the territory."
It is true, there are many stocks in safer mining jurisdictions, but that is also priced into those stocks. The market is pretty efficient, so the biggest upside potential is probably in those that have this cloud hanging over them. However, I think I will isolate precious metal stocks in "friendly" jurisdictions and see if there are any that offfer similar upside potential...maybe it will produce an article.
As I tried to point out in the Conclusion, these are speculative stocks that have a high Risk/Reward profile and investors need to gauge if they have the stomach for the risk associated with them.
Our Mid-Year Precious Metals Update And What's Next [View article]
Thanks for the comment.
FCX announces quarterly results on Thursday. Analysts almost unanimously rate FCX a BUY. This is despite the fact that they dropped their average earnings estimates from about $.95 to $.84, without changing their BUY rating. I think this is because FCX is fundamentally a great long-term buy, and they want to set the bar low so that FCX can clear it. For that reason, FCX may get a pop from the earnings report, but if FCX cannot clear the bar, the analysts ratings will start dropping and the stock will go with it.
I myself am going to wait for the earnings to see how this goes, and I also want to listen to the conference call for clues about Indonesia and other operations. I like the Bernard Baruch philosophy about guessing where bottoms are in stocks, "you take the bottom 10% and the top 10%, and I'll take the 80% in between."
Trans World Corporation: The Little Casino Stock That Could [View article]
I guess the readers will have to decide if insider buying and essentially no sellers are bad things from their investment perspective. The thin trading is definitley a concern for short-term traders, and that is why I made a point of not only mentioning the low volume according to Yahoo calculations, but also the caveat that many days see no trades. As for my own investment in TWOC, I have no concerns about the daily trades (or lack thereof) or even the resulting volatility, for that matter. I have a long-term perspective. and that opens up more possiblities for liquidation of a position. This is why I advised reeaders: "It definitely pays to have a long-term perspective with this type of stock."
Although I do not have a crystal ball to predict the future and things like the probablity of bankruptcy to the second decimal point, I think it is at least as likely that this company will be bought out or taken private by the insiders which already own more than 50% of the stock. There are hundreds of small under-the-radar stocks each year that appear dormant, but jump up once they become better known. It should be obvious that this requires some patience, which is why I advised readers, "impatient investors may not be able to wait for the big picture to develop. It is impossible to predict when the Trans World story will catch fire with the investment community..."
I disagree that this is not a suitable investment. I am in the camp of the institutions that own 35% of TWOC stock, per Yahoo. I also think that the majority of 401k plans are managed by brokers or fund managers, and this kind of stock is not included in most mutual funds. I recenlty received a communication that indicated that Morningstar and JP Morgan prepared reports indicating that 79% of brokers and fund managers failed to perform as well as the S&P 500. Here are some of the quotes in the article:
"They may dress better than average, but they usually don’t invest that way... Beating the market is a tough trick—one that most [fund] managers don’t have up their sleeves."
—CNNMoney
"84% of actively managed mutual funds did worse than their benchmarks in 2011."
—Business Insider
"Stock mutual funds are having their lousiest year since 1998."
—Bloomberg News
And not just last year—they’ve actually had over a 60% failure rate for the last ten years in a row."
One reason these funds have done so badly is that they apply arbitrary restrictions to investments, such as not investing in stocks under $5. This is one of the most dynamic areas for long-term profitablity. That is one reason why I contend a self-directed Roth IRA is a good complement to the company 401k plan that an employee has, so he/she can create diversification by investing in stocks that may not be in the 401k. The Roth IRA, by rule, cannot be withdrawn earlier than 5 years without losing tax advantages. Small stocks like TWOC that should be purchased as long-term holdings give the investor some diversification into the specualtive microcap market that he is not getting from the 401k plan.
Our Diversified Dividend Portfolio Update: Best Of The Best [View article]
I have owned PSEC in the past and like it a lot. I think that CEO John Barry may be the smartest guy in the BDC sector.
Thanks for the comment
Our Diversified Dividend Portfolio Update: Best Of The Best [View article]
Thank you for the comment.
I am not familiar with HQH as my original article was focusing on closed end funds that use option strategies to maximize income. I do not think that HQH sells options. As I mentioned in the article, the BME yield, according to its quarterly distribution rate, is lower than HQH, but at end of the year, it has declared a special dividend. In 2011, that was $.93 per unit. If it pays the same special dividend in 2012, the yield for BME will be slightly higher than HQH's indicated rate. As for performance, a review of the 5-year charts of both indicates that the unit prices are about where they were 5 years ago. I guess that is a tie, although the performance this year looks better for HQH.
Having said that, I did review the HQH holdings and the fund seems more skewed to biotech discovery than established healthcare providers, which probably gives it a higher risk/reward factor. I personally like that as we prefer a long-term approach, and it is a great way to make income while participating in one of the dynamic and exciting sectors.
Both look good to me and thank you for bringing HQH to my attention.
Our Diversified Dividend Portfolio Update: Best Of The Best [View article]
Thank you for reading the article.
Of the three, I consider CIMT to be the most speculative. It does trade thin and so it is not a trader's stock. The following form 20-F has a lot of information about the company:
http://bit.ly/Ndj7QF
I included CIMT for diversification because it has global exposure with 70% of revenue generated outside the US and Israel. Revenue and profits have been on a double-digit growth trajectory, but I like the fact that 50%+ of revenue comes from service and maintenance for installed products. This guarantees some recurring revenue because even in tough times, the manufacturers are not likely to change or eliminate the CAD systems that are incorporated into their manufacturing process.
I think the company pays big dividends as a way to pay back management and owners of the company. I think management has been fighting for the approval to pay dividends because they own shares and there is more than $1.60 per share ($15MM) locked in cash. The company has high profit margins and reliable recurring revenue. CIMT received approval to pay out up to $10MM in dividends in the next 12 months, and it has more than $5MM in free cash flow annually from operations, so there is no doubt that it can handle the dividend payment of $.40 per year (10%), ..which amounts to less than $4MM. I would not be surprised to see a special dividend before the 12 months expire. I would expect management to seek further approval in following years and obviously they know the process.
CIMT fills a spot in a diversified portfolio as a long-term holding. As you may have surmised, we look for under-the-radar companies, and if they appear to have good value and solid business prospects and management, we take some risk on the less "popular" stocks in their sector. We have owned TEF as another global play with a big dividend, but feel that because CIMT has limited focus and a simplicity to the business model, it is not only less susceptible to surprises, but also easier to monitor.
Hope this helps.
2 'Shadowy' Growth Stocks With 5% Payouts [View article]
Thanks.
In the universe of stocks, these are still pretty good values. If you are a long-term investor wanting to add an income component, these are good choices, IMO.
I like management that seems to include the interests of stockholders in their decisions making.
A Fresh Look At Energy Royalty Trusts In The Bargain Bin [View article]
Thanks for the pick. I will investigate this one. I like the dividend and the diversification of properties.
Incidentally, their office is 6 blocks from mine...maybe I will pay a neighborly visit.