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Land of Milk and Honey
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Individual investor. Generally using index Mutual Funds or ETFs. Trying to diversify more (foreign in particular). Pick up tips & concepts, & learn more. I'm at alpha to keep a finger on the current moods & predictions... and so I notice up coming big financial news events before... More
  • Best Ways To Invest -- What's Your Opinion? A Place To Share Ideas! #2 109 comments
    Feb 3, 2014 5:42 PM

    For those who've enjoyed IT's instablogs (Interesting Time's), I'm setting up this blog for the same idea. ...a community place to share our investing ideas. Hopefully so we all gain more ALPHA!!

    So all topics welcome. Investing, stocks, bonds, commodities, economy, politics about economy, and social (so we know who we're talking with).

    Only rules of the road are not to insult others, so state your view but don't call others names or put them down. Every view is valuable, if only to convince you, you are right!

    This is Chapter #2. As the instablog gets long, I'll create a new blog.

    Links

    IT has a fun Portfolio Challenge:
    seekingalpha.com/instablog/5038891-inter...-8

    Also his regular instablog: seekingalpha.com/instablog/5038891-inter...-50

    Regular poster Fear & Greed has instablogs outlining his ideas:
    seekingalpha.com/user/706857/instablog

    Regular poster User7 has instablogs with a specialty in CEFs & loves when ideas are shared: seekingalpha.com/user/7415181/instablog

    As for the regular posters, you'll get to know us, if you hang around!!.

Back To Land of Milk and Honey's Instablog HomePage »

Instablogs are blogs which are instantly set up and networked within the Seeking Alpha community. Instablog posts are not selected, edited or screened by Seeking Alpha editors, in contrast to contributors' articles.

Comments (109)
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  • User 7415181
    , contributor
    Comments (706) | Send Message
     
    Thanks for the link!
    3 Feb, 05:45 PM Reply Like
  • Land of Milk and Honey
    , contributor
    Comments (4053) | Send Message
     
    Author’s reply » What stocks you're watching for a good entry point as the market corrects?
    3 Feb, 06:28 PM Reply Like
  • Land of Milk and Honey
    , contributor
    Comments (4053) | Send Message
     
    Author’s reply » Is your portfolio balanced & diversified? What are you buying now to keep it in balance?
    3 Feb, 06:30 PM Reply Like
  • Eudaimonia
    , contributor
    Comments (558) | Send Message
     
    I'm not diversified at all, I feel like when you diversify you get the average, so just buy a cheap index.
    Anyone who owns more than 20 stocks and consistently outperforms is very talented or very lucky.
    5 Feb, 03:59 PM Reply Like
  • Tack
    , contributor
    Comments (13280) | Send Message
     
    YG:

     

    I have found that the secret to outperformance lies in buying almost exclusively currently-unloved, underperforning sectors/issues and the highest yielding securities within those sectors. Then, you sit and wait.

     

    When P/E's are low, price/book low, preferreds and debt below par, and yields correspondingly high, good things happen, over time.
    5 Feb, 04:06 PM Reply Like
  • Eudaimonia
    , contributor
    Comments (558) | Send Message
     
    I've read a lot of your comments, your concepts are interesting.

     

    I know its not up your ally but I would love another eye on (EZPW).
    5 Feb, 04:15 PM Reply Like
  • Tack
    , contributor
    Comments (13280) | Send Message
     
    YG:

     

    That stock is about as far afield from my interests and knowledge base that I'm not sure I could provide any useful insights. Is there some aspect to the company, not revealed in its performance history, that makes it interesting?
    5 Feb, 04:23 PM Reply Like
  • Eudaimonia
    , contributor
    Comments (558) | Send Message
     
    They are pawn operators, whats amazing about this company is the incredible way they have grown there earnings.

     

    Recently with gold plummeting they had to write down a lot of the assets which killed near term earnings.

     

    The thing is every sector of the company is growing, they will earn ~100 million this year and they got ~10mil more to write down. Every sector of the business not tied to gold is growing > 10%.

     

    The ROIC is very high the new stores they are opening in mexico are at 20%.

     

    There are two "risks" in this company the main one is regulatory considering they charge like 30% per year for the loans, most of the stores are in Texas there is absolutely no laws regarding the industry up for debate and nothing on a federal level.

     

    The other issue involves a split into A shares and B shares, the traded A shares don't have any voting rights, I see this as a non issue considering how well the company has been run the past 10 years.

     

    http://bit.ly/1bvS93W

     

    Even with the %40 drop in gold prices, first quarter of this year they earned $23 mil so for the full year ~80-100mil , they are a high growth company trading at 6-8x earnings.
    5 Feb, 04:36 PM Reply Like
  • Tack
    , contributor
    Comments (13280) | Send Message
     
    YG:

     

    Whether the gold issue is significant or not depends on whther their earninsg are directly influenced by the need to liquidate this collateral on a regular schedule. If so, then, the gold isn't like some long-term asset, not for sale, on some lender's books, where the varying book valuation of the asset has little impact on real operating earnings.

     

    A look at cash flows sees that cash from operations has decreased the last three years, so it's not immediately apparent to me that these guys are growing by leaps and bounds, no matter how their earnings may be explained.
    5 Feb, 04:42 PM Reply Like
  • Eudaimonia
    , contributor
    Comments (558) | Send Message
     
    You are right there earnings have not grown since 2010, selling scrapped gold became a large part of the business too large. After the drop while every other part of the business kept growing there was a 35% decline in scrapping revenue.
    Revenues:
    The first #'s are 2013 second 2012.
    Merchandise sales $ 310,521 $291,497
    Jewelry scrapping sales $123,162 $191,905
    Pawn service charges $221,775 $210,601
    Consumer loan fees and interest $174,726 $163,896
    Other revenues 5,113 3,759
    I looked at the cashflows just now as that worried me looks okay $120 operating for 2013,
    I'll take a look at the balance sheet also, thank you.
    *UPDATE*
    Interesting inventory / gdp has grown from an avg of 10% in 2010-2012 to 15% today.
    5 Feb, 04:54 PM Reply Like
  • BlueSkyForever
    , contributor
    Comments (1618) | Send Message
     
    Yair, a pawnbroker….well that sets off a lot of alarms to me. Maybe because I've been re-watching "Breaking Bad" on netflix. Sounds like the perfect business for Mexico & the states that border it.

     

    On the other hand, with gold down maybe it's harder to pawn those jewels.

     

    Seriously, pawn brokers do a good business, from what I've seen on that show about the store in Las Vegas that is a reality show.

     

    However, lot of room to fudge numbers in that business ; )
    5 Feb, 07:13 PM Reply Like
  • User 7415181
    , contributor
    Comments (706) | Send Message
     
    I'm fairly diversified, but probably not intentionally. I've been buying discounted preferreds and cefs heavily since last summer. So I've got fixed income with the preferreds. The cefs that were heavily discounted were mixed types and some of the buy/write variety. I even managed to pick up some convertible bond funds one of which I sold and added to the other since it's unloved.

     

    One neat thing about cefs is that the biggest discounts when you run a screen tell you what sectors are unfavored (sometimes it's not because the sector's hated - the fund's just crap) and you can keep an eye on the NAV of a fund you're interested in. When the NAV starts to go up and the market price doesn't or is even going down, that's when I want to purchase some.

     

    Here's a cef that doesn't meet my current 8% yield criteria, but I owned a couple of years ago. (TPZ)

     

    http://bit.ly/LJ2Jes

     

    Has lots of energy company and mlp bonds and even holds some mlps. For whatever reason, it's at a very large discount historically even though the NAV has been wonderful since it started.

     

    I won't have money to buy anything for a couple of weeks, but if the price keeps going down, I may buy into it even though the yield's lower than what I like.

     

    Anywho, I guess my point is that I get a lot of diversification by buying into unloved sectors and by buying into funds for the most part (except for preferreds).
    3 Feb, 06:28 PM Reply Like
  • astarr66
    , contributor
    Comments (207) | Send Message
     
    User 74......,

     

    What unloved sectors have you seen, apart from energy?
    4 Feb, 12:35 PM Reply Like
  • Land of Milk and Honey
    , contributor
    Comments (4053) | Send Message
     
    Author’s reply » @Astarr66

     

    Bespoke's unloved sectors:
    http://seekingalpha.co...

     

    I think I'm deciding to buy into ETFs for them. Just overweight a little in my port.
    4 Feb, 02:19 PM Reply Like
  • User 7415181
    , contributor
    Comments (706) | Send Message
     
    a66,

     

    Here's a link I refer to once in a while. Ranks at the top are most loved, ones at the bottom are unloved:

     

    http://bit.ly/1eRmyYb

     

    Which you might notice emerging markets integrated is near the bottom. And I just ran my own cef screen over at cefconnect and the one with the biggest discount is (TTF). It's at a fifty percent discount and has a 15% market yield and only a 7.5% nav yield.

     

    It only pays semi-annual and they just paid out yesterday. Which might explain the fifty percent drop in price along with that this distribution was much less than the last one. That's just from a quick glean - I don't know if it's worth buying into off-hand. And Thailand's been in a fair amount of chaos, but that's nothing new.

     

    (Sorry, I just got home from work and am unfocused - hope I answered your question and didn't go off on too much of a tangent)

     

    Anywho, aside from Thailand, lot's of global funds are at double digit discounts, so are preferred funds (which I like to pick out my own), actually pretty much any cef which has yield investments. And a bunch of cefs that are equity based as well.

     

    (Sorry, I just got home from work and am unfocused - hope I answered your question and didn't go off on too much of a tangent)
    4 Feb, 04:35 PM Reply Like
  • User 7415181
    , contributor
    Comments (706) | Send Message
     
    Ug. Can't really edit. I would point out that all that info on the Thai fund is from cefconnect, so if you are interested, you should verify that info with other sites.
    4 Feb, 04:39 PM Reply Like
  • User 7415181
    , contributor
    Comments (706) | Send Message
     
    Bleah. Forget TTF - had some down time at work and checked it out - nav dropped along with the price so is not at that jumbo discount. Reminder for myself never to invest based on only one source.
    5 Feb, 01:41 PM Reply Like
  • Land of Milk and Honey
    , contributor
    Comments (4053) | Send Message
     
    Author’s reply » @ U7
    So even within CEFs, you can diversify into sectors like Energy, and Consumables? Any reason for an 8% cut off? Your timing may be perfect for when your money frees up.
    3 Feb, 06:33 PM Reply Like
  • User 7415181
    , contributor
    Comments (706) | Send Message
     
    I originally got interested in high yield after I read this guy's series on high yield investing and even this article (which might make BSF mad):

     

    http://seekingalpha.co...

     

    And guess what? I googled high-yield investing and came across Tack's comments and some other folks. The premise is sound - expect most of your return to be based on dividends instead of price appreciation. It opened up a new way of thinking for me.

     

    But then again I've read compelling articles recently that it doesn't matter how you increase your returns - you just need to increase it. So I'm open to new ideas if they seem to make sense and try them out with a small bit of money for awhile. I just think that a dollar you get today will buy more than the one you get in a couple of years, so that's why I like dividends and such.

     

    And I suppose I originally was attracted to high yield after I decided I needed to replace my salary from working a job I dislike with dividends/distributions. 8% yearly in a zirp world seemed like a good starting place, so I've made that a central criteria. Interest rates will go up at some point, and then I'll adust the criteria upwards.

     

    Oh. I suppose I ought to answer some of your questions. There are about 600 cefs give or take. They are broken down by various types on cefconnect (although the information may or not be correct - (LCM) was not listed under convertibles, but it's holdings are indicated to be about 80% convertibles). There are energy sectors, commodity funds (I have had bad juju with the one I briefly held), various types of ways to invest in equities, and so on.

     

    Yes, TPZ is a fine all around fund to get exposure to energy (I think). The fees are high for a cef and the yield is less than I would like. Then again, you get an instant basket of mlps and bonds that I could not replicate at this stage of my life easlily. And the performance has been great since they started. And no K1 taxes to worry about.

     

    As a joke, I emailed my boss last week with a sarcastic email offering to be the dayshift supervisor of the facility I work at. I think I may be under serious consideration. : (
    3 Feb, 07:15 PM Reply Like
  • Land of Milk and Honey
    , contributor
    Comments (4053) | Send Message
     
    Author’s reply » U7,

     

    I started reading that article (very interesting)... it matches something I've wondered. Start with higher yield, and well, you have higher yield. It's very compelling.

     

    The parts I'm still puzzling out, is whether the higher yields tend to have less capital growth than DGIs. So over time, they're similar in results? Also, DGIs are very straightforward to buy... but high yields such as you and Tack are doing seems to take more savvy to spot the good entry points, and risk factors.

     

    So you may get a promotion? I know you're not crazy about your job... it'd be nice if your money grew, and got you other options :).
    5 Feb, 01:25 PM Reply Like
  • User 7415181
    , contributor
    Comments (706) | Send Message
     
    If it's not in that article, there have been others over the last few years that show that DG investing will outperform over the long haul. But there's assumptions to be made that dividends are compounded, the growth of the dividend doesn't decrease significantly and so on. I think it's a good strategy and don't begrudge anyone for using it.

     

    But I actually think common stock is harder to analyze than a preferred stock. I think a fixed income preferred is one of the easier things to analyze. But your total return will probably be limited, so that's one reason I set 8% as a minimum. The first one I bought was at par value - then the income investments started getting hammered and I've been buying various ones under par. On paper I'm down on many of them, but I keep getting the dividends. Things will change at some point and I may be able to sell them at par one day and get a capital gain.

     

    A cef is a bit trickier. Some good ones always trade at premiums and some crappy ones always trade at discounts. And here and there you can find ones that are pretty good but are currently hated and may go up in price in the future.

     

    Watching something I just bought go down sucks, but realizing I bought it for the income first makes it easier to deal with it. There are a couple of articles on utility cefs on SA that have come out recently and both mention a utility fund I picked up last fall. It went down a bit since I bought it, but it's back up to even now and I've recieved one distribution and will be getting another shortly.

     

    It's hard, but one thing I've had to try and teach myself is to instead of looking at the value of the account every day, look at the dividends and distributions coming in and how they compare to the previous month. And I set limit-sell orders for a 10% gain in case something spikes during the day.

     

    Promotion? My old house supervisor retired last summer. They've had one application and the applicant pulled a no-show for the interview. I just figured after seven months, they might consider anyone breathing and offered sarcastically. After being told to work on my communication technique, I was asked what day would be a good day to talk. I said any day this week since I'm at work. Haven't heard anything yet, so I figure the administrators must like doing the grunt work. : )

     

    Hope you feel better!
    5 Feb, 05:03 PM Reply Like
  • BlueSkyForever
    , contributor
    Comments (1618) | Send Message
     
    Hi LOMAH, I'm just going to add a little to some of my stocks, to lower my average cost. So (BA) Boeing for sure. Just a few shares, and I'll wait to see how this week goes.

     

    Boeing is not 15% down from its recent high. But I'll wait to see if it falls some more in the next few days.
    3 Feb, 06:49 PM Reply Like
  • Fear & Greed Trader
    , contributor
    Comments (4982) | Send Message
     
    Since I have been invested in this market I am cautious as mentioned in my earlier comments ,,

     

    If one has been in this market and enjoyed the run ,, Patience is required,,

     

    If one is new and has a LT outlook,

     

    some blue chips with decent growth potential , this is the chance to dip your toes in .....we are still in a secular bull market
    (CVX) PE 9 , if they raise their div. this year as they have in the last 10 yrs you will get a 4% yield at the current price.

     

    (MSFT) 3% yield

     

    (GE) 3.5% yield

     

    (INTC) 3.7% yield

     

    and (AAPL) is up today when the S & P is down 40 points !! . an indication that the selling there may be over ..

     

    (FCX) has dropped like a rock because of global concerns and yields 4.3%

     

    (RIG) and (ESV) as mentioned before are being thrown away .. great value & yields that are solid ..

     

    If the downturn continues there will be plenty more like these ..
    3 Feb, 07:00 PM Reply Like
  • BlueSkyForever
    , contributor
    Comments (1618) | Send Message
     
    good picks F&G
    3 Feb, 07:12 PM Reply Like
  • Land of Milk and Honey
    , contributor
    Comments (4053) | Send Message
     
    Author’s reply » @BSF

     

    What program are you in, that buying a few shares doesn't make a dent with commission. Even my $7 commissions, add .02cents per share on $4000 purchases. It's not much long term, but mentally makes it harder to add at varied times.
    3 Feb, 07:01 PM Reply Like
  • BlueSkyForever
    , contributor
    Comments (1618) | Send Message
     
    LOMAH, I have Merrill Edge & my trades are free, a certain number every month. They combine my account balances at Bank of America, so once you have a certain balance, you get free trades.

     

    If you open a new brokerage account with them they give a lot of free trades for that too.

     

    Basically we have all our accounts with BAC & Merrill Edge.

     

    Love the on line interface with both of them. My old Ameriprise account was pathetic in comparison, so ditched that last year. Years ago, I had American Express & it kept evolving over the years into different companies.
    3 Feb, 07:18 PM Reply Like
  • BlueSkyForever
    , contributor
    Comments (1618) | Send Message
     
    Power has gone out 3 times today, thankfully came back every time.

     

    We have very heavy, we snow here in NJ…must have been close to a foot. Over four hours shoveling whew! Super Bowl was lucky to have been played yesterday : )
    3 Feb, 07:20 PM Reply Like
  • Land of Milk and Honey
    , contributor
    Comments (4053) | Send Message
     
    Author’s reply » @BSF - Merrill says 30 free trades if you have a $25k balance. I'm trying to read the fine print, but can't tell - does that have to be cash or does balance in stocks count toward the $25k? I've been using Scottrade at $7 commission. Have you compared them? Bothered me a month ago it was down for a whole morning... and they never said anything to folks trying to sign in.
    3 Feb, 08:22 PM Reply Like
  • BlueSkyForever
    , contributor
    Comments (1618) | Send Message
     
    Lomah, account balance includes your cash, stocks, everything. In that, you can have your bank accounts added in. You will get even more trades that way. I've never used them all yet.

     

    See if they will give you more free stuff, like a $500 gift check if you move all your accounts there.

     

    I really like Merrill Edge & BofAm. Never used Scottrade but it would be hard to beat Merrill's online site, and BofA has a terrific online site as well. I pay all my bills with bill pay, it's great.
    3 Feb, 08:47 PM Reply Like
  • Land of Milk and Honey
    , contributor
    Comments (4053) | Send Message
     
    Author’s reply » BSF,
    Cool. When I'm up to snuff, I'll check into that. (When I'm seeing only one copy of the fine print at a time.)
    3 Feb, 08:56 PM Reply Like
  • Land of Milk and Honey
    , contributor
    Comments (4053) | Send Message
     
    Author’s reply » So now that I own BDC's...
    what external events can impact their prices? For instance, if interest rates rise? Or fear of them rising because of tapering?
    4 Feb, 09:55 AM Reply Like
  • Tack
    , contributor
    Comments (13280) | Send Message
     
    LMH:

     

    85% of BDC lending is floating rate, so they should resist earnings pressure if rates really did rise, although often the market initially fails to recognize this, and prices fall. Also, those with equity investments gain in rising markets.

     

    They perform best in moderate-growth to flat markets.
    4 Feb, 10:48 AM Reply Like
  • Land of Milk and Honey
    , contributor
    Comments (4053) | Send Message
     
    Author’s reply » Tack,

     

    Okay, thanks! Sounds like for traders they'd be a good short term play whenever rates go up unexpectedly. I assume they come back up in price.

     

    --
    On reading, seems there's frequent stock dilution on BDCs offering new shares, that reduces the value?

     

    --
    "Also, those with equity investments gain in rising markets. They perform best in moderate-growth to flat markets. "
    I didn't follow this. Are there BDCs that invest in stocks (aka equities)? Are those the ones that perform best in flat to mod-growth or BDCs in general? And why?
    5 Feb, 01:11 PM Reply Like
  • Tack
    , contributor
    Comments (13280) | Send Message
     
    BDC's issue shares regularly because they are forced to distribute income, so they can't grow internally.

     

    Many BDC's, as part of their financing arrangements with clients, take equity or warrant positions. These kinds of investments pay off best in rising markets, when clients get bought out at premiums or do IPO's.
    5 Feb, 01:15 PM Reply Like
  • Land of Milk and Honey
    , contributor
    Comments (4053) | Send Message
     
    Author’s reply » T,
    I'm still not following :). Could be that I'm still running a fever -- or it's over my head. Why can't they distribute income in the form of dividends? Doesn't creating shares to sell, raise money for them, not distribute it?

     

    On the equities, it's something of a bartering? The BDC takes equity stock shares in the company they are financing as part of their payment. It's unrealized payment until the company is successful. So almost all equities tend to do better in a rising market, so that's the point. Did I understand this? Why moderate-growth and not high growth market?
    5 Feb, 01:55 PM Reply Like
  • Tack
    , contributor
    Comments (13280) | Send Message
     
    LMH:

     

    Because BDC's are legally required to disgorge their earnings, the cannot grow through retained and redeployed earnings. Therefore, they must regularly make share issuances to grow. This isn't clear?

     

    BDC's are not seen by the market a go-go growth stocks because of their inability to retain earnings and because the bulk of their income is usually in the form of debt financing. Despite the floating-rate aspect of much of that debt, the market doesn't favor BDC's in high-growth markets because money gets attracted away to more go-go plays and because high growth usually engenders inflation, and higher borrowing rates are not seen as attractive for BDC's, despite issuing floating-rate paper.

     

    The equity warrants they hold, in some cases, are seen as asort of a bonus, so those that have such equity positions usually perform better in growing markets, favoring IPO's and buyouts.
    5 Feb, 02:04 PM Reply Like
  • Land of Milk and Honey
    , contributor
    Comments (4053) | Send Message
     
    Author’s reply » Tack,

     

    "required to disgorge their earnings, the cannot grow through retained and redeployed earnings. Therefore, they must regularly make share issuances to grow. This isn't clear?"

     

    Nope :). I don't even know what half those words mean off the top of my head. I'll come back to this. Any good beginner sources? BuzzBDC's looked good. Do you have some background in finance? I have zip. (Math & such.)

     

    The next two paragraphs make lots of sense. Those are great details! I find that "what effects what" stuff very fun, like a puzzle...
    5 Feb, 03:44 PM Reply Like
  • Interesting Times
    , contributor
    Comments (10911) | Send Message
     
    LOMAH

     

    Since the BDC'S cannot keep a majority of their profits, like most companies, they kinda have their hands tied as to what they can do. They MUST distribute most of the profits to investors through dividends..

     

    So they cannot save a ton of funds for a rainy day. That is why interest rates seem important. However TACK has pointed out that they borrowed their funds at a low fixed rate , but lend it out at a variable rate.

     

    So if rates do go a little higher it is actually beneficial although we might see a sell off first .
    5 Feb, 03:51 PM Reply Like
  • Tack
    , contributor
    Comments (13280) | Send Message
     
    LMH:

     

    I don't know if I can make it any simpler than the following trvial example:

     

    Suppose I run a fund, BDC, Inc.. You want to give me $1,000 to invest and do. I manage to make $100 in earnings on that $1,000. I must, by law, pay out $90 of that $100 to you, so I am left with only another $10, above that $1,000 already invested, to invest in new things. That's only a 1% retained earning ($10/$1,000).

     

    If I want to grow faster than 1% and take advantage of other new opportunities, I can only do one of two things: 1) issue shares or borrow. BUT, BDC's are also limited to borrowing no more that 1/2 their asset values, so I can't even expand borowings unless I also expand owners' equity by issuing new shares.

     

    That's a BDC in a nutshell.
    5 Feb, 03:51 PM Reply Like
  • Land of Milk and Honey
    , contributor
    Comments (4053) | Send Message
     
    Author’s reply » T,
    That's making more sense. But then why does it cause worry to investors / analyists?
    5 Feb, 03:59 PM Reply Like
  • Tack
    , contributor
    Comments (13280) | Send Message
     
    LMH:

     

    Because very few analysts understand BDC's.
    5 Feb, 04:06 PM Reply Like
  • Land of Milk and Honey
    , contributor
    Comments (4053) | Send Message
     
    Author’s reply » T,

     

    Ooooh. In a regular company stock, more stock issued means more people sharing in the same company that's now raised money.

     

    In a BDC, it means another chunk of investor money in (through shares bought) and given out to companies with interest rates, and as they pay it back it's given back to that new chuck of investors. Except it's all collected together and divided between all the BDC shareholders. It's a totally different concept than more owners in the same company.

     

    Only worry then should be if the new investments aren't done as wisely as prior ones... which is a totally different topic to do Due Diligence on.

     

    On what IT said, does that mean if interest rates are going down significantly... the BDCs can do more poorly because they borrowed higher so the spread gets smaller? Is that one of the "risks" to take into account?
    5 Feb, 04:16 PM Reply Like
  • Eudaimonia
    , contributor
    Comments (558) | Send Message
     
    LOM
    I'm not an expert on BDC's but what he means is that they must payout all or a large portion of there profits in dividends.

     

    So lets say a regular company earns $1 they can take that $1 and use it to buy another factory so next year they make $2.

     

    A BDC cannot do this they cannot "retain the earnings" they must pay them out to you the stockholder.
    5 Feb, 04:21 PM Reply Like
  • Land of Milk and Honey
    , contributor
    Comments (4053) | Send Message
     
    Author’s reply » @Tack

     

    Thanks for your patience explaining this. That last explanation was in a language I can understand (a math problem.)

     

    It's like a bank. To lend more money, they need more depositors (shareholders). Doesn't dilute anything.

     

    @Yair - that was helpful!
    5 Feb, 11:19 PM Reply Like
  • Fear & Greed Trader
    , contributor
    Comments (4982) | Send Message
     
    keeping things in perspective :

     

    From LPL Financial
    It is not unusual to see the market dip 3% in a month, especially after such a strong run-up throughout 2013. We have seen 18 months of losses for the S&P 500 since the bull market began 59 months ago in March 2009—that is about one-third of the months. The average decline during those months was 3.1%. So January’s 3% stock market dip is not particularly unusual or alarming.
    4 Feb, 10:10 AM Reply Like
  • BlueSkyForever
    , contributor
    Comments (1618) | Send Message
     
    Here's some more good news for those of us that are confidant about the future

     

    http://cnb.cx/MWZ1yB

     

    article talks about the growing number of small businesses that are borrowing money

     

    they wouldn't be borrowing if they thought their business prospects were declining
    4 Feb, 10:29 AM Reply Like
  • BlueSkyForever
    , contributor
    Comments (1618) | Send Message
     
    This isn't scientific, just something I've noticed over the last 5 years.

     

    Hopewell, NJ is a small town not far from Princeton. It's an old town, with lots of older homes. Five years ago I started going to Hopewell about every 3 months - to get my German shepherd dogs groomed.

     

    Back then, the town looked pretty bad. Not many small businesses or many businesses at all. Homes in the town mostly looked like they needed long overdue upkeep, from new roofs to siding. The only place that seemed to be doing well was a coffee house located in a decrepit old large home.

     

    Fast forward to just last Saturday, when I was there. I've been noticing quite a few new businesses. There's another old house on the main street that is a tea house/antique store/artist in residence that is doing nicely. Many homes are getting refurbished, so much so that the town is looking a lot better. Two more new restaurants in town. Now you actually have about 10 places to choose from, up from maybe 3 five years ago.

     

    I have all that time to walk around, go to the various antique stores, get a cup of coffee, and eventually end up at the town library. Which over the years is now getting crowded.

     

    Looks like more people are deciding to visit or live in Hopewell. A nice turnaround story. You can live in this town and walk to everything. The local school is small, but the buildings look first rate. NJ has suffered a lot since 2009, but we just might be doing better.
    4 Feb, 10:45 AM Reply Like
  • CWinn1970
    , contributor
    Comments (337) | Send Message
     
    This goes with what I stated a week or so ago...
    4 Feb, 01:01 PM Reply Like
  • Interesting Times
    , contributor
    Comments (10911) | Send Message
     
    BSF

     

    I also live in a small town and have seen it grow dramatically over the years. However as I talk to the owners I cannot comprehend the rents they charge for such a small town. So I constantly see turn over and then the store can stay empty for months.

     

    Never understood that logic.
    4 Feb, 12:53 PM Reply Like
  • BlueSkyForever
    , contributor
    Comments (1618) | Send Message
     
    Rents should be lower, especially these last few years. Maybe the landlords don't care if their buildings sit empty?

     

    It's so hard to make a small business work. Brutal, you have to be ready to not make money for several years before it can turn profitable. Plus the hours….way more than 40 per week. Small business owners work every day, most use their day off to catch up.

     

    Our three generation family drugstore will end when my brother retires. He may end up working into his 70s tho. My grandfather retired at 82 and my 89 year old mom is still helping out with the bookkeeping. She really is amazing. I did see a lady on tv last year that made the news because she is in her 90s & still working as a bookkeeper, so mom does have some competition :)
    4 Feb, 09:52 PM Reply Like
  • Interesting Times
    , contributor
    Comments (10911) | Send Message
     
    BSF

     

    These stores are in a strip mall...The owners won't budge , nor drop the price.. Yet as our country is built on, someone takes a chance !!

     

    Betcha mom is tight with the expenses...lol
    5 Feb, 12:04 AM Reply Like
  • Land of Milk and Honey
    , contributor
    Comments (4053) | Send Message
     
    Author’s reply » BSF, CWinn, IT

     

    One or two towns being fixed up is nice to hear, but doesn't mean much for the bigger picture... but CWinn, your observations from your job (future contracts) being strong really add to that.

     

    --
    I've been hearing from several families "it's such an expensive vacation, but we just had to do a real vacation this year with the kids." (to disney world, etc.) So that's more anecdotal.

     

    --
    There's nothing specifically dragging the economy down (except politics)... so it will tend to replenish itself. People tend to keep going, and creating futures for their families...
    5 Feb, 12:58 PM Reply Like
  • BlueSkyForever
    , contributor
    Comments (1618) | Send Message
     
    Lomah, we've been down a long time in NJ, it's been rough especially after Sandy. But I'm really sensing a come back feeling….and not just in Hopewell. The malls were packed in December, people are eating out again, there's a real vibe. Real estate picking up a little. Helps that we are not far from NYC.

     

    Yup, it's starting to feel like we are coming back, not just because of QE.

     

    I'll be going back to the midwest to visit my mom soon. It's got to warm up sometime, right? They never had the big down turn out there. Unemployment is very low in most of the midwest (Iowa, Minn, Nebraska etc) and farmers are enjoying their wealth. Iowa is doing very well compared to NJ.

     

    Not all doom & gloom everywhere.
    5 Feb, 06:47 PM Reply Like
  • Fear & Greed Trader
    , contributor
    Comments (4982) | Send Message
     
    No surprise here after the recent sell off, most sectors of the market are "oversold" on a short term basis

     

    http://bit.ly/MXGpP1
    4 Feb, 01:11 PM Reply Like
  • Fear & Greed Trader
    , contributor
    Comments (4982) | Send Message
     
    Interesting info on "market corrections "

     

    http://seekingalpha.co...
    4 Feb, 01:20 PM Reply Like
  • BlueSkyForever
    , contributor
    Comments (1618) | Send Message
     
    Really liked your article F&G, found it to be very informative.

     

    Let's see how the market reacts to tomorrow's news. I'm looking over the "rubble" to add to current positions & maybe pick up some new ones from Fish's CCC list.

     

    Here's a link if anyone likes DGI stocks

     

    http://seekingalpha.co...

     

    Click on "Dividend Champions" it will lead you to a link where you have to click on "US Dividend Champions" to get the spreadsheet.
    The next part of your due diligence, if you like any of the companies on the CCC list, is to decide if it is a good value now. Almost all companies are now a good value, after this dip.
    4 Feb, 10:24 PM Reply Like
  • Fear & Greed Trader
    , contributor
    Comments (4982) | Send Message
     
    Blue,,

     

    Thanks,, I also use the "chowder" rule as one factor in making a selection there .. It's explained in the notes section of his spreadsheet ....

     

    and a direct link to the Div Champions list
    for anyone new to this concept..

     

    http://bit.ly/aA8y3H
    5 Feb, 08:56 AM Reply Like
  • Land of Milk and Honey
    , contributor
    Comments (4053) | Send Message
     
    Author’s reply » I've always done mostly Small/Mid caps. I had a long horizon, goal growth not income. They've done very well for me.

     

    So I'm still debating how much DGI I want to do. I'm inclined to keep a lot in small/mid. I did notice one of the SA DGI authors says he's been surprised that DGIs are across caps, countries, sectors, and aren't just stodgy Blue Chip Large Caps. So I'll have to dig more on that.
    5 Feb, 01:03 PM Reply Like
  • BlueSkyForever
    , contributor
    Comments (1618) | Send Message
     
    Chowder is one of my favorite authors here on SA. His rule is a good one, dividend income + expected annual growth should = 12% helps you to identify good companies.

     

    One of the "DGI guys" I follow.
    5 Feb, 05:01 PM Reply Like
  • BlueSkyForever
    , contributor
    Comments (1618) | Send Message
     
    oops that's earnings per share, you can see that on CNBC.com when you check earnings.
    5 Feb, 06:56 PM Reply Like
  • Land of Milk and Honey
    , contributor
    Comments (4053) | Send Message
     
    Author’s reply » Why is (TGT) down today? Is there news that I missed?
    4 Feb, 02:41 PM Reply Like
  • Fear & Greed Trader
    , contributor
    Comments (4982) | Send Message
     
    CFO is getting grilled by congress on the recent security breach..

     

    I guess the wizards of Wash. feel they have to inject their wisdom in protecting us all..
    anyway , this should be the last of the "repeated" bad news on the CCard issue -Hang in there ..
    4 Feb, 02:46 PM Reply Like
  • CWinn1970
    , contributor
    Comments (337) | Send Message
     
    Oh the irony!!!! The crooks are grilling them on a security breach.
    4 Feb, 05:56 PM Reply Like
  • Land of Milk and Honey
    , contributor
    Comments (4053) | Send Message
     
    Author’s reply » Cwinn

     

    LOL!
    4 Feb, 08:07 PM Reply Like
  • Land of Milk and Honey
    , contributor
    Comments (4053) | Send Message
     
    Author’s reply » Oh is that what it is. ...which means it may make sense to buy more at these lower prices, if I wanted more... I wish I'd keep my thoughts together earlier -- I'd originally figured the day of or a few days before the congressional hearings, would be the best time to buy.
    4 Feb, 02:56 PM Reply Like
  • Fear & Greed Trader
    , contributor
    Comments (4982) | Send Message
     
    With the overall market weakness i'm practicing patience, especially on the names where the charts still haven't firmed up yet..

     

    Right now (TGT) falls into that category.. :)
    4 Feb, 03:00 PM Reply Like
  • Krustyman
    , contributor
    Comments (887) | Send Message
     
    Anyone bought some (MSFT) recently?

     

    Just curious.
    5 Feb, 09:21 AM Reply Like
  • BlueSkyForever
    , contributor
    Comments (1618) | Send Message
     
    Krusty, holding onto my (MSFT) and enjoying the gains. Love the new CEO, he is a sharp guy.

     

    Notice (GLUU) today? Good earnings report. Because of you, I got into (GLUU). Finally seeing some green!
    5 Feb, 05:08 PM Reply Like
  • Krustyman
    , contributor
    Comments (887) | Send Message
     
    Hi there BSF!
    Totally agree with you on MSFT. Sharp guy.

     

    As for (GLUU) my daughter is up 105% :-) and I bought for me after the earnings. A 10 bagger in the making IMHO. Glad that you are riding that one!
    Cheers!
    7 Feb, 07:45 AM Reply Like
  • Fear & Greed Trader
    , contributor
    Comments (4982) | Send Message
     
    If recent means the last 3 months -- Yes :)

     

    picked some up at 34- 35 and the chart looks constructive and has held here nicely in this dip.
    5 Feb, 09:32 AM Reply Like
  • Krustyman
    , contributor
    Comments (887) | Send Message
     
    So I am not alone. :-)
    Azure and Office 365 are amazing. The right CEO at the right time. 35% of my entire portfolio right now.
    5 Feb, 11:49 AM Reply Like
  • Fear & Greed Trader
    , contributor
    Comments (4982) | Send Message
     
    No u aren't alone,,

     

    looking at a LT chart , the stock has ticked above the old high of 36.81 back in oct '07 .. IF we have indeed broken out here from that LT base , clear sailing to mid 40''s .. The new CEO and the fact that it has held nicely in the face of the overall market selloff makes me believe that it will tick higher...
    5 Feb, 12:27 PM Reply Like
  • Krustyman
    , contributor
    Comments (887) | Send Message
     
    Fear, this stock could reach a $500B market cap by the end of 2015 IMHO.
    5 Feb, 01:10 PM Reply Like
  • Fear & Greed Trader
    , contributor
    Comments (4982) | Send Message
     
    500B is a nice round number :)
    5 Feb, 01:17 PM Reply Like
  • Land of Milk and Honey
    , contributor
    Comments (4053) | Send Message
     
    Author’s reply » Hi Krusty :)!

     

    That makes (MSFT) sound good. I noticed there was a positive reaction to the new CEO appt, in a negative mooded market...

     

    It feels like (MSFT) was getting irrelevant, and not worthwhile. A good buying sign with a company that's been that formidable at making an impact. Have you tried out Azure or Office 365? I haven't seen them yet.
    5 Feb, 01:32 PM Reply Like
  • Krustyman
    , contributor
    Comments (887) | Send Message
     
    Selling seems a little overdone by now.

     

    Bulls turned bear quickly, which is always a good sign.

     

    Tempted by (KO).
    5 Feb, 11:51 AM Reply Like
  • Land of Milk and Honey
    , contributor
    Comments (4053) | Send Message
     
    Author’s reply » @Krusty

     

    Do you mean the whole market is a little overdone on selling, or specific stock?

     

    I picked up (PSEC) & (TCRD) - BDCs. I got (TGT) but before the market turned down. For now I'm holding. Tack suggested for energy (SDRL) and (LINE) and others and Fear had suggestions.) I'm not sure I want to buy individually in energy since I know so little, or just use an ETF to diversify. Still figuring it out.
    5 Feb, 01:37 PM Reply Like
  • Krustyman
    , contributor
    Comments (887) | Send Message
     
    @LOMAH: Some sign of selling exhaustion for the whole market IMHO. Not impressed by the volume either.
    5 Feb, 02:03 PM Reply Like
  • BlueSkyForever
    , contributor
    Comments (1618) | Send Message
     
    good picks Lomah :)
    5 Feb, 05:02 PM Reply Like
  • BlueSkyForever
    , contributor
    Comments (1618) | Send Message
     
    Krusty, (KO) announced an investment into (GMCR) Green Mountain Coffee Roasters. They are going to package a product for cold drinks, that can be used in the new Keurig machine (GMCR) sells. Could be a very sweet deal.

     

    So (KO) is up. (GMCR) announced okay earnings today. Glad I own both companies. (KO) has been so frustrating, finally some good news.
    5 Feb, 06:28 PM Reply Like
  • Land of Milk and Honey
    , contributor
    Comments (4053) | Send Message
     
    Author’s reply » @BSF, Krusty

     

    I saw a comment that (SODA) is down 13% on (KO)'s deal. I'm thinking oversold and keep on eye on buying into (SODA)? At least for a while.
    5 Feb, 06:34 PM Reply Like
  • BlueSkyForever
    , contributor
    Comments (1618) | Send Message
     
    Lomah, Sodastream does not look good to me at all. It's beat up, but doesn't pay a dividend. I'm not sure about their business model either. If you can see that they have a future selling more of their soda machines….but I don't. On CNBC's Fast Money show, someone said after awhile, the machine broke. That's not good to hear.

     

    If the company only has one product, that's a bad sign to me.

     

    But what do I know. I'm just an old lady that likes dividends ; )
    5 Feb, 06:51 PM Reply Like
  • Fear & Greed Trader
    , contributor
    Comments (4982) | Send Message
     
    The chart on (SODA) is really broken,,

     

    looks to be headed to mid to upper 20's
    5 Feb, 06:58 PM Reply Like
  • BlueSkyForever
    , contributor
    Comments (1618) | Send Message
     
    wow just checked some of the comments under the "breaking news" for (GMCR). Someone thinks (PEP) Pepsi might partner with (SODA). Now that could be interesting….this single serve cold beverage idea could take off.
    5 Feb, 07:25 PM Reply Like
  • Land of Milk and Honey
    , contributor
    Comments (4053) | Send Message
     
    Author’s reply » .
    @Fear, BSF

     

    Interesting on the chart. It seems kind of close to it's prior low points. But I'd rather see a breakout before pursuing.

     

    That's unusual for the machines to break, anecdotally. A lot of people love them. And a lot of the buzz was from customers. (Which is how I learned of them.) Good point on one product. Their income stream is from the supplies that keep needing to be bought. A lot of the hype was that they'd be bought out at some point.

     

    I'm still looking for trades as well as long term... and even long term for growth... not everything needs a dividend for me to be interested :). I didn't focus on dividend before, and did well... And by the time I retire we'll be long past ZIRP, & I'll decide then what to invest in, such as many bonds?
    5 Feb, 07:34 PM Reply Like
  • Fear & Greed Trader
    , contributor
    Comments (4982) | Send Message
     
    L,
    I mentioned this one before (MU),, the chart is excellent, its a good "trade" --- or for me an intermediate holding (6-9 months)

     

    it has held the 22.50 - 23 area all thru this market decline.. so its a very strong stock with plenty of support..
    I'm targeting the 30 range ...

     

    Fundamentals are good , last earnings report was excellent..
    5 Feb, 07:47 PM Reply Like
  • Land of Milk and Honey
    , contributor
    Comments (4053) | Send Message
     
    Author’s reply » (SODA) popped up 6+% today.

     

    Would have been a nice shortterm trade!
    http://seekingalpha.co...
    6 Feb, 09:07 AM Reply Like
  • Krustyman
    , contributor
    Comments (887) | Send Message
     
    @BSF
    Yes, saw that one. Still tempted by (KO). I am wondering if (PEP) will do something with (SODA).
    7 Feb, 07:49 AM Reply Like
  • Krustyman
    , contributor
    Comments (887) | Send Message
     
    Seems that (SODA) is now at a bottom.
    7 Feb, 07:55 AM Reply Like
  • Krustyman
    , contributor
    Comments (887) | Send Message
     
    Just bought (ZNGA).

     

    Technically amazing.

     

    Fundamentally bottoming.

     

    Mattick is the right guy from the right biz. :-)
    5 Feb, 11:59 AM Reply Like
  • BlueSkyForever
    , contributor
    Comments (1618) | Send Message
     
    Krusty, do you have (GLUU)? Good earnings report today.
    5 Feb, 06:41 PM Reply Like
  • Krustyman
    , contributor
    Comments (887) | Send Message
     
    Yep BSF, I have both (ZNGA) and (GLUU).
    7 Feb, 07:55 AM Reply Like
  • Eudaimonia
    , contributor
    Comments (558) | Send Message
     
    Just reposting my positions, I would appreciate someone look at (EZPW) I'm super harsh but I don't understand why this is not a $25 stock.

     

    I invest differently, I try to limit myself to small cap value for stock positions, any place I don't feel like I can add value by stock selection I just buy the index
    ..
    I'm bullish on banking, I prefer the small ones to the big ones, I have a position in (IAT)
    I'm bullish on China, I'm selling LEAP put on (FXI) and buying (FCA)
    I have a position in (ACI) where I basically sell puts, own the bonds as a hedge against an equity offering, own LEAP calls covered by short term call writing.
    I am fairly bullish on steel (X), (AKS) but I have decreased my position and sold covered calls after the last 4 month spike.
    I have a large position in (EZPW) and a smaller one in (OTCPK:AEBZY) its the ADR for Efes Beverage Group.
    I hold (MGM) but have started selling covered calls against the position
    I hold (PSX) but have decreased my position by a third after the run up.
    I'm bullish on pretty much all the oil names, the Chinese ones are priced better and I like (DGO), (CEO) looks very cheap too.
    I am also selling puts against the homebuilders and sometimes against (GDX).
    5 Feb, 03:43 PM Reply Like
  • BlueSkyForever
    , contributor
    Comments (1618) | Send Message
     
    Yair, you're too smart for me to understand your trades. I just buy quality companies that pay dividends, and then hold 'em until the dividend gets cut or frozen. DGI investing, with a few growth stocks for kicks and some ETFs like (PSEC) and (PTY) for increased income.

     

    Over time, it works for me. Lately, the market is giving us some really nice opportunities to get into stocks that are beaten up.
    5 Feb, 06:39 PM Reply Like
  • Eudaimonia
    , contributor
    Comments (558) | Send Message
     
    Make sure you are not buying expensive DGI companies, a lot of them are valued way above the market.

     

    If short term rates go to 2-3% in 2016 they might underperform for awhile.

     

    If you are locked on DGI I'd overweight some of the oil majors.

     

    Just bought a 10% position in (CNCO) hope I'm catching the knife at the bottom!
    6 Feb, 11:47 AM Reply Like
  • Fear & Greed Trader
    , contributor
    Comments (4982) | Send Message
     
    (CVX) is one to look at

     

    PE 9.8 --- They have a 10 yr Div growth rate of 10% , if they follow that pattern this year - the yield will be 4% at the current price ...

     

    I added more this week.. It's cheap
    6 Feb, 11:52 AM Reply Like
  • Land of Milk and Honey
    , contributor
    Comments (4053) | Send Message
     
    Author’s reply » Anyone else buried under snow? Very pretty, but enough already.
    I'm really out of it (still sick), so I'm off to sleep.
    Hope your all having a good investing day!!
    5 Feb, 04:05 PM Reply Like
  • Eudaimonia
    , contributor
    Comments (558) | Send Message
     
    It's warm here in the middle east!
    5 Feb, 04:12 PM Reply Like
  • JohnBinTN
    , contributor
    Comments (3725) | Send Message
     
    No snow here, but the trees look like those on a Christmas card. The downed limbs are making driving treacherous, and electrical power not a given 100% of the time.

     

    I was hoping when we moved down here we'd get away from this kind of stuff... Not to be. Maybe we dragged it with us...
    5 Feb, 04:28 PM Reply Like
  • BlueSkyForever
    , contributor
    Comments (1618) | Send Message
     
    John I'm so sad today. One of my favorite evergreens had a number of limbs break, from the weight of the snow. Some limbs were over 4 inches diameter. We have this "frosted" look going now since Monday. Today, the driveway had a 2 inches of thick slush, like a snow cone. Power went out 4 times yesterday, once today….fingers crossed. Another storm expected over the weekend. That will be the 3rd wammy. This has been a really awful winter.
    5 Feb, 05:06 PM Reply Like
  • BlueSkyForever
    , contributor
    Comments (1618) | Send Message
     
    Yair, lucky you :)
    5 Feb, 05:06 PM Reply Like
  • Eudaimonia
    , contributor
    Comments (558) | Send Message
     
    Haha, if you saw the gas prices here you wouldn't be calling me lucky!
    5 Feb, 05:10 PM Reply Like
  • JohnBinTN
    , contributor
    Comments (3725) | Send Message
     
    BSF,

     

    I hear ya'... I'm scared to check on our cypress trees... Our neighbors had 2 really beautiful, full Bradford pear trees that split down the middle. Big mess. And our yard will take 'til the middle of August to dry out after all this (freezing) rain.
    5 Feb, 05:18 PM Reply Like
  • BlueSkyForever
    , contributor
    Comments (1618) | Send Message
     
    Sad about the trees JBT. After Sandy, my neighborhood lost some cottonwood trees - kind of like Bradford Pears, white blossoms in the spring.

     

    So the power went out again & I went outside to push the slushy stuff off the driveway. Over an hour ago, luckily the electricity came back. Almost fainted when I saw (GMCR) is up $40. Whoo hooo! (KO) up too. Celebrated with some diet coke
    ; )
    5 Feb, 06:34 PM Reply Like
  • JohnBinTN
    , contributor
    Comments (3725) | Send Message
     
    (KO) can use the boost. It's been a disappointment for a couple months now.
    5 Feb, 06:39 PM Reply Like
  • Land of Milk and Honey
    , contributor
    Comments (4053) | Send Message
     
    Author’s reply » Futures up solidly. Tomorrow is the big jobs number.

     

    Has the market blown off enough steam to continue upward. Or will this number have a big impact if weak?

     

    .
    Any other data likely to have a big impact now?
    6 Feb, 07:02 AM Reply Like
  • Land of Milk and Honey
    , contributor
    Comments (4053) | Send Message
     
    Author’s reply » Here comes chapter 3:
    http://seekingalpha.co...
    6 Feb, 09:22 AM Reply Like
  • Interesting Times
    , contributor
    Comments (10911) | Send Message
     
    My only concern is gold did not sell off as I expected it to...

     

    Wonder why ?
    7 Feb, 04:40 PM Reply Like
  • Land of Milk and Honey
    , contributor
    Comments (4053) | Send Message
     
    Author’s reply » @ IT
    Since that's a new thought that applies for today, can you re-post it on chapter 3? Thanks.
    7 Feb, 04:48 PM Reply Like
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