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I could put on this bio my education, work experience, investment strategy, and a nice thin (if I can find one) picture of me in a suit looking *smart*. Sorry but that's not my intent here. Sure I invest, help family make financial decisions, and make a ton of mistakes along the way. But my time... More
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Interesting Times For All Commodities And Investments!! CHAPTER 4......
  • Interesting Times For All Commodities And Investments!! Chapter 9..........  162 comments
    Jun 15, 2013 1:45 AM | about stocks: VBR, SCJ, MO, PM, TNH, COP, GIS, KMP, GGN, MDLZ, MUX, VYM, VXF, PLG, KKD, DBC, MORT, PFL, PHD, VVR, JRO, MTGE, NRF, RAS, PMM, MHI, NMA, KCAP, CHI, NCV, SAN, BBVA, VE, VGR, AWP, IGR, GPL, AUY, LYSCF, PSEC, PSLV, REMX, SLV, GNT, RAD, GDXJ, LMNX, NEM, ABX

    Where do commodities go from here, are stocks and bonds still sound investments? Oil. Etf's Physical metals..

    Folks.. we are growing and posters like it. If you are new to investing then this site is for you.

    I am going to be the first one to admit that I haven't a clue when or if Gold and Silver will ever take off in price. I expect they will though. Additionally I don't see much coverage or articles pertaining to the other commodities. So I would like to start up a blog where every commodity, and every investment is on the table for discussion. Even political questions. I only ask that you be courteous!!

    Someone posted the difference between being smart, foolish, and a moron. Well I have been all of the above and I will "man up" and admit it! However I came away from those experiences with both battle scars and knowledge.

    For years I have been reading basically any day now Gold and Silver will explode. Yet somehow the can gets kicked down the road and I live to learn another lesson. Then Sprott's ETF'S are talked about as being safer then others. (PSLV) is the silver ETF.

    With all the QE'S basically not creating any new jobs what will be the consequences in the future?. Will we be "CYPRUSED "?, are we in a serious stock market bubble? Obviously we read daily about these concerns but what about other commodities? Here is where most of us are uninformed and relish an education.

    Stocks are fine to discuss as well. All of us know that commodities should only be a % of your portfolio. I owned (PSEC) and liked the dividend. Others may not ! So please feel free to entertain your picks and why!

    REE'S have been an interest for a few of us over the last couple of years. I had exposure to Lynas (OTCPK:LYSCF). Some posters might have questions about this group as well.

    If you disagree with a post please bring proof and display your argument. If you agree with a post, find one interesting, or have questions please feel free to respond. We must remember were all in this together. So if you want to talk (GLD) or (SLV) that is fine.

    Now if some have an opinion on Copper, Zinc, Palladium, etc. Do not hesitate to post that. Most of us might not understand the post but I am sure well be open to learning. Lumber might interest someone and I would like to learn why I should invest in it. PLEASE bracket any symbol you use so that I can include that in the topic forum. It also allows a reader to click on it and get some data as well.

    My part time job is a college and high school official so I can sit here and referee all day long. I honestly hope that ALL will be professional with their comments. So lets see who comes on board. Looking forward to what can become a nicely knit group of diversified investors.

    I have invited a few Authors whose work I admire to bring their expertise to the forum here as well. Tom, Eric, Hebba, Doug, Chris, Focal Point, Tack, to name a few in no particular order. I am sure they will drop in once in a while to voice their opinions. Please feel free to ask your favorite Authors to join in the discussion as well.

    These are highly recommended people that I suggest you follow as well. I have learned a ton from them and find their work both challenging and engaging. Two areas that I hope inspire people who normally don't post to now feel free to do so !!

    Now I also feel compelled to encourage the use of the like button. It is human nature that once someone posts and see the like button add up they will feel they made a valid point. Upon that feeling they will post again! So if you do like what someone posted, either a question or an answer PLEASE use it ! It might help our core grow exponentially as well.

    As you see I have stopped adding any new symbols as they were growing way too fast for me to keep up !!

    We are living in some very INTERESTING TIMES !!

    Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.

    Additional disclosure: (ESV)(MRK)(NVS)(JPM)(AAPL)(EBAY)(GDL)(SLV)(YY)(VOO)(XIDE)(DATA)(GIMO)(VIX)(AFFX)(BAC)(PM)(SDRL)(MCD)(MRK)(MCK)(F)(FB)(KMP)(PWE)(WMT)(MMM)

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Comments (162)
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  • Author’s reply » Ok for all you weekend warriors here we go !!
    15 Jun 2013, 01:47 AM Reply Like
  • Author’s reply » "Investors booked profits following yesterday's big gains, as focus returned to the Fed and next week's FOMC meeting. Financial stocks lagged as data showed a slowdown in consumer sentiment, and energy stocks fell despite a rise in crude oil prices primarily due to headlines about Syria's civil war. Meanwhile, the IMF cut its 2014 U.S. growth outlook to 2.7% from 3%."

     

    I don't buy into investors booking profits, ME THINKS Syria had some influence and the players ALSO made money all week bouncing this market around.

     

    Interest rates rose, PM'S seem to have found a floor. So I feel other reasons were for todays selloff ..

     

    THOUGHTS!!!
    15 Jun 2013, 01:52 AM Reply Like
  • IT - I don't know you are quoting, but I have to disagree.

     

    I do think there was some profit taking, but largely the reason was because there wasn't any support overnight from the Asian and emerging markets. Financials were also the most hit on the idea if the Fed signals continued support of QE, then their nim's (net interest margins) would suffer.

     

    I don't think Syria had anything to do with the weakness. We've seen time and time again these geopolitical items being one day wonders at the most, so I think investors have learned to largely ignore them.

     

    And you're wrong. Interest rates fell a bit.

     

    What does PM mean?
    15 Jun 2013, 09:50 AM Reply Like
  • IT,
    My take, it's more of the churning around here as the market attempts to decide on the next move.. Media just inserts the headlines to match the move in the market.. Probably more of the same volatility ahead.

     

    Like southgent and others , I'm waiting for a good 10% correction.
    15 Jun 2013, 09:50 AM Reply Like
  • F&G:

     

    Market down 3.5% from highs, even after all the hysteria. We only get a 10% downer if Q2 reports and/or outlooks are lackluster, or worse.
    15 Jun 2013, 10:12 AM Reply Like
  • Author’s reply » DD

     

    First let me explain why I throw thoughts out. For this exact reason. Dialog.. Let me answer you though

     

    1) Interest rates have been rising for over a month now.( I am not wrong) Mortgage rates have increased as well. I don't mean a one day rise. I see a trend for a month and I can provide you with a link to a bond fund I follow if you'd like.

     

    2)PM'S are physical metals. Gold and silver were up yesterday.

     

    3) War.. Syria's threat might be a one day wonder to some but I know of investors who don't like to have long positions over the weekend. A weekend is more than one day. In fact if something happened on Friday late, or Monday early it becomes a four day event.

     

    4) The quote above was posted on SA'S home page. You always have profit taking , but I don't see that as the reason for the whole sell off.

     

    5) most important.. WELCOME HERE!! I hope to see you post more and what you posted was exactly what we like here. Questions !!!
    15 Jun 2013, 10:57 AM Reply Like
  • Author’s reply » F&G

     

    I am in the same camp as you. Looking for a 10% drop and I mentioned that to the guy who wanted to invest his 3k. Should he wait as well?

     

    That was a concern of mine, do others have a different idea?
    15 Jun 2013, 11:07 AM Reply Like
  • You're correct about interest rates rising for the past month, but I thought that post had to do solely with Friday's action.

     

    PM's might be physical metals in that post - but you used PM again in your next posting about a guy who had $3k to invest. I doubt it had the same meaning. Unless it's a standard commonly used abbreviation could you type it out? I can't be the only one that gets confused.

     

    I remember one SA article awhile back when some guy used the term BS to refer to balance sheet. I originally thought BS was bullshit - which also made sense in that context.
    15 Jun 2013, 12:01 PM Reply Like
  • You can't time things. Everybody has been waiting for a drop that hasn't happened. For the guy with 3K to invest I suggest one of two things: either putting the money in increments - perhaps $300/mo over the next 10 months or divide it in two: half now, then half if the market falls or $300/mo for the next 5 months.

     

    To minimize fees there are many etf's that are offered commission free by the various brokerage firms as long as you hold the position for at least 30 days and make the transactions online. Fidelity has a list of 65 that are fairly diversified. I believe the other major brokerage houses have similar offerings.
    15 Jun 2013, 12:16 PM Reply Like
  • Tack,
    Agree, and if those Earnings reports are OK, we may get the other possibility I've mentioned -- a 1995 scenario, no dips greater than 5% ..
    15 Jun 2013, 12:49 PM Reply Like
  • PM - private message
    15 Jun 2013, 12:57 PM Reply Like
  • IT,
    I am in a quandary with this also, I have folks that want to add here on the recent dips in certain sectors & I'm still a bit hesitant for them.. advising to be cautious, -- but they have been in market and enjoyed rally.

     

    There will always be an opportunity for your guy to get started so my opinion, let's see what ideas come up , keeping in mind a 10% or so correction is not the end of the world.. 
    15 Jun 2013, 01:04 PM Reply Like
  • Diva that is a good point a about low fee or no commision ETF's. I use Vanguard and from my brokerage account I can buy their ETF's at no commissions. I hold VNR right now but have held some of their others. The only problem is not all of their ETF's are top performers.
    15 Jun 2013, 03:16 PM Reply Like
  • BD4:

     

    Can you say some more about which of Vang's you've found are top performers & which aren't?
    15 Jun 2013, 03:45 PM Reply Like
  • Author’s reply » @DD

     

    I need to look back on the post where I used PM in the same post with the guy who had the 3k to invest. Most likely on Monday or if you have the link just post it and maybe I can explain it.

     

    Yes, PM'S are physical metals, not the paper trades. I should have clarified that for all. I will type it out in the future for all.

     

    That BS one had me laughing !!
    15 Jun 2013, 08:13 PM Reply Like
  • Author’s reply » @TACK

     

    DD. Tack just answered that !! Phew, saved me some work. Thanks!
    15 Jun 2013, 08:14 PM Reply Like
  • I have found that Vanguard ETF's are not necessarily top performers but reasonable costs and fees. They work well if you are looking for a sector play. I don't use them a lot but I was just commenting that they have no commission for Vanguard brokerage accounts.
    15 Jun 2013, 08:42 PM Reply Like
  • Author’s reply » @BDU

     

    Would you wait on this line to buy gold?? Man this can't be real is it??

     

    http://bit.ly/11HJOBX

     

    I am amazed..
    15 Jun 2013, 08:57 PM Reply Like
  • Author’s reply » FOLKS

     

    Do you realize our blog is beating out guys who have thousands of followers and also Authors who additionally write articles?

     

    I am amazed by this !! THANKS for everyone contributing. Pass the word around in articles about what we accomplish here, and how polite everyone is. Include a link as well.

     

    I know CURLS has already recruited TRADWIN and he seems happy. Word of mouth will make us grow and gather more information to decide our financial destiny...WHICH IS TO MAKE MONEY !! or gold and silver for some of us !!

     

    Even some lurkers now feel comfortable to join our extended family.. That is very important as you newbies are reading along but not posting. Please post so that your questions can be answered. You have my word EVERY post is important!
    16 Jun 2013, 01:15 PM Reply Like
  • Bd4: I have been moving most of my ETF new buys to the lowest cost ones that can be purchased commission free. If I note a big drop in the VIG price, just as an example, I could buy 10 shares in my Vanguard account since I do not have to worry about the impact of a $7 brokerage commission on the average cost per share. A $7 commission on a 10 share buy at say $67, my memory now of what I pay Vanguard as a Voyager Customer, would amount to a 1.12% reduction in the total dollar value invested and would over time significantly increase my average cost per share when doing the same type of buying repeatedly.

     

    The no commission ETF alternative is a cost effective way for a young investor to build up positions when they are in the early stages of building their pile of investable estates.

     

    F& G and I may have a few more years where we have been building our piles. I am in my 5th decade of pile building.

     

    Incidentally, TD Ameritrade offers Vanguard ETFs on a no commission basis. I am not aware of another broker who has that offer.

     

    I would add some caveats. For the young investor, I would try to pick a broad based and low cost commission free ETF. For U.S. stocks the Fidelity commission free option would be ITOT:

     

    iShares Core S&P Total U.S. Stock Market ETF
    http://bit.ly/YLDqxx

     

    A Schwab alternative would be one of their broad based U.S. stock ETFs. I manage my late father's testamentary trust at that firm and have bought several of those.

     

    This may take you their offerings which they compare to similar Vanguard ETFs:

     

    http://bit.ly/12P9oLM

     

    Another important point is not to sell during the really horrific periods like 1929-1932, 1974, 2000-2002, or September 2008-March 2009.

     

    The paring needed to be done in 1998-1999 when stock valuations were insane. I discuss that topic in this week's blog.

     

    Buying needs to start up when valuations return to something close to rational levels. Will that happen. Yes it will. A 50 P/E on GE's $57 stock price in 2000 stock price (over 30 times its forecasted 2014 earnings) is not going to last for long, anymore than a $800,000 home in San Jose bought in 2006 that has a fair market value of $400,000 will hold its value for very long. {quote from a 2009 post: "The median home price fell from $850,000 to $415,000. At the latest median price, 50% of the households can afford a home compared to 16% during the heyday of the real estate bubble.}

     

    So during a catastrophic phase of a bear market, such as the one experienced after Lehman's failure, the buying needs to pick up speed after a 45% decline, rather than heading for the fallout shelter or hiding under the sheets crying for your mama.

     

    That rule of thumb worked for three out of the four really bad short term bear cycles. It would have been premature in 1929-1932 but would have worked out after the market hit bottom.

     

    DOUG SHORT'S CHART The Four Totally Bad Bears: New Update

     

    http://bit.ly/S3fGSs
    16 Jun 2013, 01:52 PM Reply Like
  • Cool! Do you want to update your profile so the first line references the instablog? Something like "come join our instablog forum-style chat between authors & investors"? That way when someone mouses over your name in the instablog list... they know to join us...

     

    I'm off to do other stuff, but I'll be back later to see if I can absorb all the good info being posted!

     

    Happy Father's Day to the Dad's on here :) !!
    16 Jun 2013, 03:28 PM Reply Like
  • I'm definitely going to recommend this blog. Perhaps not in my profile, but in other comments.
    16 Jun 2013, 03:32 PM Reply Like
  • @Tradewin

     

    Ops, I don't seem to have mastered replies yet. I click & they wind up in the oddest places.

     

    My suggestion to add to profile was to add to IT's profile since his name is #7 in the top instablogs list :).
    16 Jun 2013, 03:36 PM Reply Like
  • Southgent ,

     

    Great stuff , I luv building piles. In retrospect , i wish i would have been a bit more aggressive during '09. I nibbled here and there. No regrets though, I know far too many that cashed in their chips in that timeframe and never caught the rebound..
    16 Jun 2013, 08:53 PM Reply Like
  • F & G: I just read my comment again to Bd4 above and noted that my mind tends to wonder when I type or possibly it was just another one of those brain synapse misfiring incidents. It is odd looking at something I previously typed sometimes. In the second paragraph, I wrote "investable estates" which caused the Old Geezer to wonder who used the word "estates" rather than "assets".

     

    I tried to from a convincing argument that I just made a few typos, but I don't think the younger crowd here would buy it so I will just let it be. Maybe no one will notice it.

     

    My biggest investing mistake, which was a valuable learning experience, was not buying Berkshire Hathaway when it was around $16 per share in 1974 since I was scared to lose money and that was most of my investable cash at that time. Personally, I would rather own 100 shares of the BIG B shares now and just forget about that lesson.

     

    It helps sometimes to reflect back and ask oneself what would I do the next time when and if I have a similar opportunity. Those chances are rare and that it why I recommended that younger folks remained disciplined during those inevitable market events like 1974 or 9/2008 to 3/2009. I just call them gut checks now. It is okay to go to the can and upchuck, howl a few times, but then you have to buy.

     

    One story that I related in my blog, to steel my nerve in April 2009, was about my great Uncle Tom, my grandfather's brother, who became a stock investor in 1932. He was a surveyor in rural Hickman County Tennessee but he seized the moment when he had the opportunity.

     

    He was able to build a big home in Dickson Tennessee. After his death, the trusts set up by him, funded by his stocks, took care of his wife who became an invalid and needed long term nursing care and his unmarried sister who had Parkinson's disease, with the remainder divided up after their deaths among the children of his brothers and sisters since he had no children. It was still a nice pile even after all of those years and expenses.

     

    I have a picture of that impoverished family in my blog taken around 1900:

     

    http://bit.ly/TRV1h8

     

    A photgraph of my mother in her high school graduation dress given to her by Uncle Tom, the only one who had any money back then, is also featured in this story. She is still going strong at 90.
    16 Jun 2013, 09:23 PM Reply Like
  • Author’s reply » Ok, got a PM this morning from the guy who had the 3k to invest. He wanted a few opinions as to who can suggest the following for him. HE WANTS A BUY AND HOLD for starters. The B&H could be for 3 to 5 years ...

     

    Name on stock which at this time the poster can recommend for a dividend and the best shot at appreciation ??

     

    I find that an interesting question because others are probably thinking the same thought.

     

    Mine, and I am limited, but right now I do love (PSEC) because of the high dividend. Not sure about appreciation though. But over 12% is fine with me..

     

    Remember he only is starting out with 3k now..

     

    OTHERS???
    15 Jun 2013, 08:37 AM Reply Like
  • "A buy and hold forever"?

     

    (T), (MO) or (VZ)

     

    Windwood Trader
    15 Jun 2013, 10:47 AM Reply Like
  • IT,

     

    Windwood's selections are great,, however you should tell your guy "buy and hold" , & review,, I don't use the "forever" word anymore.
    15 Jun 2013, 01:09 PM Reply Like
  • Author’s reply » @F&G

     

    " HE WANTS A BUY AND HOLD for starters. The B&H could be for 3 to 5 years ..."

     

    Maybe I said forever somewhere. But I thought I posted this only as the timeframe?

     

    I agree that you have to review and I explained that to him as well.

     

    Everyone is giving him soo many ideas his head is spinning..lol,.
    15 Jun 2013, 08:18 PM Reply Like
  • For 3k buy & hold, I'd go with $1500 in an S&P 500 ETF like VOO, and 1500 is a small-mid cap (I'd have to look it up on Vang's site.) If they have a 3000 min, either find an iShare with low expenses, or stick with the VOO. With these there's some diversification & dividends. Specify dividend reinvestment on the account.

     

    I would not start with (PSEC). It's a particular sector, & single company that has volatility at the least & higher risk at the most.

     

    With a short time span like 3 to 5 years, getting into the market right now could be a future high point.
    15 Jun 2013, 09:29 AM Reply Like
  • IT: "PM'S seem to have found a floor."

     

    How so?
    15 Jun 2013, 09:30 AM Reply Like
  • Author’s reply » @CURLS

     

    Silver hasn't broken below $20 dollars, and gold has tested $1350 twice already. Plus if gold broke below that BB 's deflationary nightmare would kick in. He is on record saying he would sell his soul to the devil to avoid deflation.

     

    IMO I believe we have seen a floor..
    15 Jun 2013, 11:02 AM Reply Like
  • Tradewin asked about Walter Energy (WLT) ripe for long/short trading Any opinions?

     

    "What's your take on shorting Walter Energy? I've traded it long and short before. It has big swings, but haven't been following it for almost a year. I just can't jump into something w/o doing any research. Made some good money shorting CHK last year."

     

    Looking at it myself, it's come down so much. Yet still seems weak. So shorting makes more sense, but not obvious it'd continue downward. All the bullish comments are more hopeful than fact-based.

     

    Tradewin, do you see something in the charts or have a specific plan in mind?
    15 Jun 2013, 10:02 AM Reply Like
  • Curls, tradewin,

     

    Take a look at a weekly chart of (WLT) . Fridays close @$12.13 puts it slightly above the Dec '08 intraday low of $11.12. You can make a case that this would represent a LT double bottom and a rebound would be in the cards. Look at Friday's volume , it was huge , indicating a final washout. ? It certainly has been weak, and if it does violate that level, you will see single digits..

     

    I would say $11 area holds.. Horrible fundamentals & sentiment, but washed out and oversold.

     

    Just some thoughts...
    15 Jun 2013, 10:23 AM Reply Like
  • @F&G

     

    " Horrible fundamentals & sentiment, but washed out and oversold. "

     

    I just did this with (MUX). It looked oversold, but with poor fundamentals & sentiment. Levels didn't hold. However it was slow volume. I got burned. I'd want to see some improvement in fundamentals before expecting a bounce out of (http://bit.ly/154m2Bb). It's too soon after the downslide, for new enthusiasm to build & push it up.
    (Big disclaimer: I'm very new to this. F&G is experienced.)
    15 Jun 2013, 10:39 AM Reply Like
  • Curls ,
    cant disagree with your perception of (WLT) , but the stock will turn whether its here or lower before you see any word on improving fundamentals.. .. Now the $64,000 question is do we have that signal in the chart for a possible turn.. Not recommending as a "buy " here but something to consider before setting up a "short"
    15 Jun 2013, 01:19 PM Reply Like
  • F&G

     

    Oh I see. You aren't long on (WLT). You were adding a concrete chart reading to my gut concern that it'd dropped so much, it may not drop more... which is a risk with shorting even though it's still weak.

     

    How do stocks start turning around before the fundamentals are published? Someone leaks something, or puts out an optimistic article, or enough time's passed for it to look like a "find" while the downturn is "forgiven or forgotten?" Then it swings up till the formal news comes, & it's great if good news, & a crash if poor news?
    15 Jun 2013, 02:22 PM Reply Like
  • Curls,
    Your comment : "Oh I see. You aren't long on (WLT). You were adding a concrete chart reading to my gut concern that it'd dropped so much, it may not drop more... which is a risk with shorting even though it's still weak."

     

    Exactly !

     

    Not referring to leaks or anything like that , keep in mind the market is forward looking,, In this case maybe all of the bad news is out there and the reason (WLT) is selling for $12. Now as the market looks ahead to '14 and beyond ,one can start to believe the fundamentals will turn and get better therefore the stock will begin to move ahead of that.. And as you stated, if the fundamentals then follow thru, the price may rise accordingly , depending on that forward looking outlook.

     

    Again, before shorting one has to decide if WLT is at that "turning" point, or on the other hand, if someone wants to buy here they may be trying to catch that "falling knife" .

     

    Not that it matters now, but WLT was a takeover target a while back somewhere in the $130 range , stock was $11 in '08 ,up to $140 , now back to $12.. full circle.. What a ride !, poster boy for BUY & Review.

     

    15 Jun 2013, 02:55 PM Reply Like
  • curls-100-

     

    One of the signs I use is to find a site that will give you the up and down volume for a stock. If a stock is near a support point and not moving much either way I look to see if there is a change in up/down volume. If there seems to be a shift towards more up than down volume- even while a stock continues down that could mean the stock is pretty much done dropping- nobody selling but some willing buyers equals a move up in my bible of traders' strategies.

     

    Another signal is if calls on a stock are being offered with increasing premium for a given strike. This is a sign that the hedgies are looking for a pop expecting an imminent reversal. Of course the only way you would know if the call premium is rising is if you have been monitoring such activity. If you see call prices increasing without the stock moving hat's one signal. Conversely a shrinking premium could very well mean that the heavies figure for the stock to continue to drop. Good tactic if you are considering puts or a short position.

     

    Those are two of my favoured trading strategic tools.

     

    Good fortune and have fun!

     

    Windwood Trader
    15 Jun 2013, 05:31 PM Reply Like
  • IT, as many of think, please tell your $3,000 investor to wait. Next week's FED meeting will roil the market. Let's wait and see how much.

     

    Also, whatever this $3,000 investor decides to do, please ask him to go slow. If he puts $3,000 into the market Monday June 17th he's sure to lose some of it.

     

    I would break that $3,000 into 5 trades (or more). Invest a maximum of $600 in June or July, and only on pullbacks. Tell this investor that patience, in the long run, is the best market philosophy. Expecting about a 5 to 10% return is also normal. Expecting to "double your money" every year will just frustrate this investor and may cause him to get into dangerous stocks that will do the opposite - lose money.

     

    The 10% correction we are expecting won't occur all in one day. It may take until October for it to happen....so "go slow" is my mantra.

     

    I would keep most of that $3,000 in cash (50 %) and go very slowly into the market. Buy good stocks that are beaten down, and buy into only great stocks, with currently low PE ratios that will make money. Like (WFC), (UNH) etc. Buy tried and true companies like (WMT). In fact this new investor would do well to look at the stocks in the DOW. CNBC.com has them on their front page, lower left side.

     

    If they are worried that they don't know enough to about how to value a stock (hey I'm still learning too) then buy ETFs. Like (PFF) and (JNK) that provide a good dividend plus low cost 0.4 or 0.5. I don't really like mutual funds anymore and have been gradually getting out of them. As you become a better investor, you will do better than most mutual funds.

     

    I'm learning from the investors on here that have been managing their own money for 40 + years. Because of them, I've got lots of cash and am waiting for the expected correction. Yes, I'm getting a little impatient but we will be rewarded for our conservative caution.
    15 Jun 2013, 10:46 AM Reply Like
  • BSF - so you think the Fed will provide a bearish impetus? Why? Don't you think they're scared about derailing confidence and the recovery?
    15 Jun 2013, 12:41 PM Reply Like
  • Author’s reply » Does anyone have thoughts on the Dividend Aristocrats for him?

     

    I thought that the ETF from Vanguard would be a good start. But what do I know.
    15 Jun 2013, 08:22 PM Reply Like
  • Author’s reply » @DD

     

    The FEDS will say three different things to confuse us, First things are going according to plan, then they are considering tapering, Oh wait never mind were not ready for that yet.

     

    Hasn't this been the routine ??
    15 Jun 2013, 08:24 PM Reply Like
  • Does an IPO in June for Noodles & Co. provide an opportunity?

     

    http://bit.ly/1aKOH1k

     

    The article says some of the IPO money will be used to pay debt & provide working capital. (NDLS)
    15 Jun 2013, 12:07 PM Reply Like
  • >curls-100

     

    IPOs are in a world of their own. I would not consider jumping on unless I was familiar with the industry and it looked to be growing rapidly.

     

    I can remember a situation twenty years ago where some clowns decided to do an IPO on a company which did not exist. The solicitation material and prospectus clearly stated that there were no sales, no profit nor any expectation for sales nor profit but that the sales from the IPO would be used solely to offset the cost of promoting the offering with any residual being held in reserve as a contingency book entry.

     

    The underwriter was a brokerage partnership that did it for a lark. The offering was for something like 2 million shares. They put it out for $10 as I recall and it was oversubscribed by a million shares with the close for the day up around 30% over the offer.
    They carved out a couple of million for 'offering expenses' and bought 2 year treasuries with the rest.

     

    The fun was when the fools purchasing the stock finally woke up and cried that they had been swindled. No way, Jose- They were just stupid.

     

    The stock continued to trade with a growing number of buyers although the price dropped well below the original offer price.

     

    The last I heard was that the company became a closed end investment fund and was actually making money.

     

    Is this a great country or what?

     

    Windwood Trader
    15 Jun 2013, 05:53 PM Reply Like
  • Curls,
    Agree with Windwood, I don't have the stats in front of me , but stock prices of most IPO's are lower 1 yr later.. Caveat emptor !
    15 Jun 2013, 06:02 PM Reply Like
  • F&G & Windwood

     

    Good info, lol. I was figuring on IPO for a quick pop. Wait after the offer to see if it's climbing, get in, then get out on the first signs of dropping, on even the first day.

     

    WWT comment: "The stock continued to trade with a growing number of buyers although the price dropped well below the original offer price. The last I heard was that the company became a closed end investment fund and was actually making money."

     

    ROFL. Oh my. Even more amazing, the company managed to give the stockholders' some worth. Bet this back when IPOs were wildly hot.
    15 Jun 2013, 07:15 PM Reply Like
  • Author’s reply » @F&G

     

    Wow , you are working overtime this week aren't you...

     

    I guess next week we should expect a 4 day weekend? Did you get CURLS approval?
    15 Jun 2013, 08:26 PM Reply Like
  • IT,
    Not yet, that's why i'm being extra nice :)

     

    Curls, Hope u r having a wonderful weekend :)
    15 Jun 2013, 08:51 PM Reply Like
  • I missed (WLT), not going to chase after it at this point. F&G is right about those double bottoms. Tops are the same, lots of traders buy and sell off of those. I don't know a thing about (NDLS).
    15 Jun 2013, 04:26 PM Reply Like
  • I glanced over the S1 on this thing. Sure, they are aching to do an IPO on it. The pie is only so big and everyone who has a big fat slice promised to them wants theirs on IPO day. A couple of guys who worked at MAC and got Chipotle rolling along at a good clip will probably reach their goal of 1000+ restaurants, but not on my dime.
    15 Jun 2013, 06:34 PM Reply Like
  • Thanks Tradewin!

     

    The ratios of debt to income concerned me as a bit extreme dependence on the IPO. You're right. You picked up something critical, that I hadn't added up.

     

    Btw, I was looking at it for a short term trade, a day or two, to ride up a bit on the happy offer-buying.
    15 Jun 2013, 07:25 PM Reply Like
  • There you go Curls. IPO info released here at SA on NDLS. Be careful.
    25 Jun 2013, 08:37 PM Reply Like
  • Yep, tradewin... now I know :-). There's lots of excitement & they've already raised the price...so we'll see. May not work well <wiggles nose.>.

     

    Any trades enticing you lately?

     

    (WLT) did come down as you expected!
    26 Jun 2013, 01:16 AM Reply Like
  • Still have a couple of shares of AMD. Got in that pretty good, so I'm staying with it. Thought we would get a bounce in gold, got stopped out summarily. Didn't lose much, but that's what happens when one tries to pick a bottom. Never been a gold bug. Also, in PSEC for a couple of shares. I'd like to see that accumulate over a year before I decide what to do with it. I like the div on that. Got some T for the long haul, but a target of $42. Another decision to make when it reaches that. I'm counting on the palm of my hand to start scratching if you make that play on NDLS. I'll be in the cheering section for you on that one.
    26 Jun 2013, 10:06 PM Reply Like
  • Sounds like a good mix. I'm considering some of them. In Chapter 17 (http://bit.ly/1ckN8aW), Tampat's in AMD & talked about it for short term trade. I discovered (NVTL) yesterday. It did 14% today, without me in it of course. I couldn't tell if there was a buy indication or not. Yesterday if'd bought, I'd have lost. @Tampat liked the chart on it too. Any opinions on it? They're part of a new release of a wifi operated irrigation that will be a hit in agriculture.

     

    On gold, it looked low, but I saw a few people (in the blog mostly, but one in the news too), that it will go down before it goes up, so I've been waiting. I'd like to pick up some for longer term. Better to get stopped out then stuck with it going down...

     

    I wish I was going to be home all day on Friday - make it much easier to make a move on NDLS (I'll be in appts so I can't get to internet). Cheering section is welcome!
    26 Jun 2013, 10:25 PM Reply Like
  • If you can get that, take it and run curls. On WLT, I would not be surprised to see it go into single digits. There, it would be a very long term play. It takes quite a while to recover after getting hit as hard as it has been.
    15 Jun 2013, 07:36 PM Reply Like
  • Author’s reply » Well I am not sure anyone will be posting more tonight. So if not I wish ALL the Families a Happy Fathers Day tomorrow!

     

    Spending time with family is always fun.

     

    But since I did my HONEYDO list today I might be logged in tonight for a while. Got some Treasury work to do for the condo association.

     

    If I told you folks what the past Treasurer did it would floor most of you! How about investing the monies held in our accounts !! A legal no no that board members could be sued personally for if they lost one dime of principal.

     

    They were in a bond fund and told me they had an advisor. I asked how much do you pay and it is illegal, the response, Oh it's the salesguy who sold us the fund.

     

    So I asked when was he contacted last? and do you know he is not our FA , he is just a salesperson? 5 years and no one even was monitoring it !!

     

    Sold that puppy the end of last month. By dumb luck they made a profit since the collapse but we all know what the bond funds did in May. The association took a nice hit on their profit, as we have close to 700 homeowners in our private group...

     

    Anyway enjoy the day folks!
    15 Jun 2013, 08:36 PM Reply Like
  • IT,
    Same to U !
    15 Jun 2013, 08:52 PM Reply Like
  • Author’s reply » Stan Druckenmiller on investing in government-driven markets devoid of price signals: "The importance of my skills is receding. Part of my advantage, is that my strength is economic forecasting, but that only works in free markets, when markets are smarter than people. That’s how I started. Today, all these price signals are compromised and I’m seriously questioning whether I have any competitive advantage left." One wonders where that leaves less talented investors.

     

    Guy made a ton of money in these markets folks. He may have a valid point!!
    15 Jun 2013, 10:51 PM Reply Like
  • As to the fellow with the $3000. The best recommendation I could make is opening several DRIPs (dividend reinvestment plans) for any of the following companies: Coca Cola (KO), IBM (IBM), Altaria (MO), Proctor & Gamble (PG), Colgate Palmolive (CL), EXXON Mobil (XOM), Chevron (CVX), 3M (MMM)

     

    Just those 8 would take $2000 to open up. Most are $50 a month minimum investments for another $400 a month.

     

    The whole point is that in the short term all of these are good companies that should fair well no matter what scenario ends up playing out. It will also give him time to research brokers and find out what is best for his investment strategy. Then he can use the $1000 left over to open a brokerage account. And , use the time to develop his own strategy to meet his needs for investing.

     

    In the long term it will give him a chance to study these companies and see why they are such good long term investments so that he can come up with his own strategies to screen for other companies to invest in. Once he feels comfortable he can just stop the DRIP and transfer it to a broker so that he can manage his own funds.

     

    Hope that helps???
    16 Jun 2013, 06:29 AM Reply Like
  • Author’s reply » @Thanks NOTRUB !!

     

    Every post HAS valuable information. Some of it at a higher level, some intermediate, and some for beginners.

     

    It is a wonderful thread!
    16 Jun 2013, 12:37 PM Reply Like
  • I have been reading up everything I could get my hands on the past few weeks about interests rates, bonds because of some of the trading ideas SG has been bringing up. I traded FOREX (currencies) for 5 years and know all about the "carry trade" (explained here: http://bit.ly/11R9Zcm) During the years I traded it was always the Yen and a country with a higher interest rate usually Australia, Euro., some times the dollar but not frequently.

     

    Anyway, during my research I keep running across the same themes about Japan and the US central banks having a hard time trying to keep interests rates on bonds low, not letting their markets become bubbles (like 2000 & 2007), and not letting their currencies start any kind of runaway devaluation. The events of the last few weeks since the US FED has "talked" about tapering has had some unintended consequences. Several articles on different aspects:

     

    Bond Vortex:
    http://bit.ly/16oWcLd
    Yen carry trade unwound:
    http://seekingalpha.co...
    Which also give one explanation for the depression of commodities including precious metals.

     

    And, finally an article about the corner the US FED has put itself in with the tapering comments:
    http://seekingalpha.co...

     

    You can find lots of info just Googling about it from last weeks trading in all markets.

     

    I have never been interested in investing in fixed income securities because I didn't really see the difference between that and a CD, ie. no growth. So I have been playing catch up on the bond markets and interest rates. To make a long story short, from what I have gleaned Japan and the US will defend low interest rates ( the US has already done it in 2011 and 2012 at the 2.4% mark) over and above their currencies or markets. With Japan's dept over 200% GDP I do not think they will be successful and have started incrementally (because I do not think this will be an overnight event, but gradually over weeks, months, years) buying (JGBS) which shorts Japanese bond prices. ie. when Japan interest rates go up so does JGBS.

     

    My question to you guys is that I think long term the US FED is in the same boat. I would like to also start buying (TBT) which shorts US bonds out to 20 years. My reasoning is that US 10Y interest rates hit the 2.25% mark some unwinding will take place as described in the "vortex" article above. Since the FED has been buying up to 83% of US bonds lately due to lackluster interest at auctions. And the market maker banks wanting to unload low interest rate treasuries and related derivatives so they aren't caught in the same trap that took them down in 2008-2009. That a situation is setting up for a Soros moment with US bonds. ( On September 16, 1992, Black Wednesday, Soros' fund sold short more than $10 billion in pounds, profiting from the UK government's reluctance to either raise its interest rates to levels comparable to those of other European Exchange Rate Mechanism countries or to float its currency.)

     

    I am just doing a reality check to see if my conclusion about US bonds and the remedy of buying (TFT) is way out in left field. Or, if you guys think there is actually something to it? The Japanese question I have no doubts about. The US bond question I am unsure????
    Thanks in advance...:o)
    16 Jun 2013, 06:29 AM Reply Like
  • Wow, there's an EFT that shorts interest rates (i.e. bonds)?

     

    Of course it's a good idea. I'll be looking into this. My one first question is timeline. How far out are their bonds, i.e. in what time period do rates need to increase? (I haven't read any of the SA articles yet, or googled on this.)

     

    Also as an ETF, what's their expenses, stability of management, & I see there's been a rise already -- are they overbought in the recent wave?

     

    Rates CAN NOT stay this low. My mom tells me rates used to be this low many years ago, so it can be this way for a while. However, currently it's not just savings accounts at banks affected. You can't invest in corporate or muni... or even treasuries. At some point bus loads of AARP members will march on washington. There will be a political movement to end this nonsense. You can not keep lifting the economy by giving money to Wall Street, by taking it from Main Street. The Fed knows this. They are looking for a way out. ZIRP will continue a while because the economy needs to be better, & Congress has to deal with the debit, before the Fed can let the full natural interest rate against the US debit. However ZIRP is currently holding down the economy -- and so it WILL come to an end, either by slow control of the Fed, or an unwinding of the Fed's control. The question in my mind is timeline.

     

    On Japan, I'm much less familiar so are they in the same boat? If so it's a great idea too.

     

    While one usually thinks of shorting the equities market, not bonds...bonds do move up & down in premium distinctly. Years ago, I had a CEF that'd paid nicely for quit a while. Then I knew rates were going up. We all knew within a year (even newspapers knew). I was going to sell, & sure enough my mom's broker was ancy as anything that I sell them before the rate move. So yes, betting short on bonds when you expect rates to go up, is a straightforward concept.

     

    If there are contrarian opinions on these ETFs, I'd love to hear them? Since I can't think of any & there ALWAYS is another way to look at things... Also are there other ETFs out there for this?
    16 Jun 2013, 11:37 AM Reply Like
  • Author’s reply » APPRECIATE SOME COMMENTS FROM THE DIVIDEND CROWD. do we wait for a correction or do investors start buying now!!

     

    "Forget talk of a dividend bubble; it's a "golden age" for dividends, ClearBridge's Hersh Cohen believes. Dividend stocks got extended in this year's run-up, not overpriced, he says. Besides, while price is important, "investors lose sight that their income can double in nine years" with dividend payers. Hersh can still find nicely priced examples, particularly in energy, such as Chevron (CVX), Shell (RDS.A) and Total (TOT). "

     

    Looking forward for comments on this as I know we have plenty waiting for answers!!
    16 Jun 2013, 01:07 PM Reply Like
  • One more addition to the div. group, (VGR). It's a vice industry, but has more leverage than (MO). Also the volume is much lighter, but it pays around 9.0%. No, I do not currently own (VGR).
    16 Jun 2013, 01:40 PM Reply Like
  • IT,
    My personal opinion is I HATE having money not working for me in some form or fashion. As I stated in another post there are a LOT of authors that have done articles than i ever could. My basic idea is that my money should always be working no matter what the current state of the market is. In line with that:

     

    Finding value in a market of stocks vice the "stock market":
    http://seekingalpha.co...

     

    The basic idea is that there will always be "value" stocks available in any market situation. The key is learning to identify those values.

     

    Since I know you are into the metals here is one you may find interesting. Palladium. The two big players in the world market are Russia 43% and South Africa 37%. Russia supply has been dwindling and South Africa is having mining problems due to strikes and unrest. Unlike some other precious metals palladium has an industrial use especially in catalytic converters for autos. So the more autos being produced the more palladium that is required. Platinum can be used an alternative, but its price make it prohibitive in all but emergency situations.
    Article on palladium overview:
    http://onforb.es/11Jnc3Q

     

    Up until this past month there have been two North American plays (SWC) and (PAL). Stillwater Mining (SWC) is the only palladium miner in the US. PAL the only one in Canada. Both had shake ups recently PAL having to take out a 15% loan to keep from going under and SWCs CEO stepping down over an internal conflict in SWCs purchase of an Argentine copper mine. Both stcocks have taken a beating in recent weeks. I believe PAL has some deep financial problems and may cease to exist in its current form. SWC on the other hand is in a lot better shape financially and I believe the stock will recover with time and the sell of its Argentine property.
    Here is the Yahoo financial on SWC:
    http://yhoo.it/11Jnc3U

     

    Not, a recommendation on my part, I don't hold either stock. Just putting out an idea on value in an area you understand.
    16 Jun 2013, 08:59 PM Reply Like
  • Another article on SWC/PAL:
    http://seekingalpha.co...
    16 Jun 2013, 09:05 PM Reply Like
  • As background I am retired US Navy and retired General Dynamics. I don't post much and I am not an author because my "type" (Dividend/Growth blue chip stocks seeking income. Selling calls on the stocks I own to generate more income) of investing , now that I am retired, is slow and boring. And, there are already several authors that do a much better job than I ever could on the subject.

     

    As to your question about ETFs that short bonds there are several. In my post I just used the two that I believe are the most "pure" plays without using leverage for what I am trying to achieve. The theme is I don not believe that Japan and the US can keep interest rates on their bonds artificially low indefinitely. Both ETFs cover the counties respective bonds out to 20 years, so it covers each duration of bond up to a 30 year treasury with 20 years left on it.

     

    As a starting point here is the Yahoo finance JGBS: http://yhoo.it/16vm8oz
    and TBT:
    http://yhoo.it/16vm8oB

     

    To help you if your interested in the inverse bond idea:
    http://bit.ly/16vm8oC

     

    Like I said, this whole idea is a "work in progress". So I have no idea the time horizon at the moment. Which is why I am using the income generated from dividends to slowly gain exposure to the two ETFs. Which I believe will also limit my risk until rates in both countries do go up to a more healthy 4-5%.

     

    The biggest caveat I see is if the world/US experiences a depression in which case I believe all asset classes will suffer some pain in the short term.
    16 Jun 2013, 01:10 PM Reply Like
  • No:

     

    "Like I said, this whole idea is a "work in progress". So I have no idea the time horizon at the moment."

     

    But, when shorting, timing is the entire ball game.

     

    Usually rates move more like glaciers than rivers. It can be like watching one of those old Heinz Ketchup commercials with Carly Simon singing "Anticipation." So, one can be sitting on lots of dead money, not going anywhere fast, and even paying somebody else's bond interest and one's own management fees for the fund. Hardly a way to get rich quick.
    16 Jun 2013, 01:40 PM Reply Like
  • Author’s reply » @NOT

     

    Your wrong. We need post from you to tell us your experiences in investing. YOU might think it is boring, I don't. I lost a ton of money day trading, and I know quite a few people, ( including me) WANT ideas on dividend plays that produce a dividend stream..

     

    I have posted a lot about ideas for these types of investors. So PLEASE do not stop the posts. They are helpful!! In fact it might bring out more of the lurkers as well. I gotta tell you half the posts here go right over MY head !

     

    Do you think a Depression might be on the horizon? I have thoughts of that happening for sure ..
    16 Jun 2013, 01:43 PM Reply Like
  • @Not

     

    I definitely want to hear about dividend streams & long term "boring" options. My moneys been in buy & ignore most of my investing years. I came here to improve my distribution. I've gotten interested in trading, but most of my funds need good long term places to sit. So all thoughts & ideas, are very, very welcome.
    16 Jun 2013, 03:07 PM Reply Like
  • It's the so-called boring stuff that makes or breaks fortunes in the long run. If that is the strategy you have used and it makes money for you, don't change it. Too many examples of billion dollar losses exist because someone made the mistake of trying out something different.
    16 Jun 2013, 03:26 PM Reply Like
  • Tack,
    As an update I now see the fallacies in my "plan". Thanks again for the response.
    16 Jun 2013, 08:58 PM Reply Like
  • Not,

     

    I also write calls on certain positions in my account for add'l income, it may be slow & boring , but can produce some nice yields. Slow and steady will win a lot of races..

     

    Welcome & best of luck ..
    16 Jun 2013, 09:00 PM Reply Like
  • I can not rule out the depression scenario. Despite the worlds best efforts at throwing money at the problem since 2009 it seems a lot of countries are back into recession or treading water. China has been the only real growth story and even it is starting to slow.

     

    So, I don't know if it will happen or not. But, I like keeping all probabilities on the table and invest accordingly.
    16 Jun 2013, 09:05 PM Reply Like
  • Tack,
    Thanks for the response. Like I said, I have little to no knowledge in interest rates and bonds. My whole idea came from doing DD on SG's post and his blog.

     

    As I sit here and think about your response two things occur to me.
    1) I don't see this approach as get rich quick as much as I see it as a hedge against the FED's ZIRP policy and its effect on my ability to grow income.
    2) In that light I am comfortable waiting on interest rates on longer term treasury bonds to rise. It is also why I am taking the slow approach of increasing my exposure as I receive dividends from the stocks I already hold. I KNOW the US FED will defend short term interest rates out at least to 10 years. They have already done it twice. My bet is that the FED will not and even better can not do the same with longer term maturities because people and funds like George Soros will play them for profit if they do just like they did the UK in the 1990s.

     

    I guess I should also state that I plan on implementing this strategy once the 10Y reaches 2.3% exiting this strategy once 10Y interest rates reach to 3.7%. The 3.7% is my current average return on all my dividend stocks.
    16 Jun 2013, 09:05 PM Reply Like
  • No:

     

    Compared to myriad other things you could do with your money for that duration, I believe you will seriously underperform. I liken these kinds of "hedges" to the penchant of today's society to want to be "insured" against almost everything, e.g., hurricanes, earthquakes, disability, illness, loss of income, etc. -- the list goes on and on -- without regard to the likely outcome occuring in a specific time frame and without weighing the likely gain from the payoff against the costs of maintaining the insurance.

     

    The reality is that most insurance against any variety of human fears is overpriced and not economic; hence, insurers get rich and build huge office buildings, and purchasers "sleep soundly," but make poor economic decisions.

     

    I'd suggest that shorting 10-year Treasuries falls into this category when compared to other investment opportunities. One cannot be sure of the timing, the degree of the move (it's not likely to be enormous), and one gets to pay management fees and someone else's interest payments in the interim.
    16 Jun 2013, 09:56 PM Reply Like
  • Author’s reply » @NOT

     

    Hence my position in holding a % of my portfolio in metals. I am not a gold bug, nor a silver one. I just feel it is insurance for a rainy day.

     

    Honestly I hope I don't need it, but if I do I will be glad to have it. I KNOW many here don't see the need for it. But this QE stuff to me is knew to the markets and no one knows how it will end.

     

    So I just try to cover all the bases that's all. Just like I have exposure to (PSEC). I like that fat dividend and don't see how they can stop the QE'S yet so I ride it out. Plus it is giving me an income stream as well.

     

    But I am still waiting for a market correction before I jump back in with two feet !!
    16 Jun 2013, 11:08 PM Reply Like
  • (TBT) is the inverse of (TLT). They both have enough volume to make it pretty easy to get in or out. Also for the S&P and the DOW. They've got all flavors. Some advice, follow those for a while before trading them. You will get a better perspective as to how they sometimes seem to trade out of sync with corresponding ETFs and markets.
    16 Jun 2013, 01:12 PM Reply Like
  • Thanks tradewind,
    I had forgot about addressing the liquidity of the two ETFs I referenced. Which is the only reason I find the .95% annual fee acceptable.
    16 Jun 2013, 01:58 PM Reply Like
  • Tradewin: TBT is an extremely flawed product in my opinion which "seeks a return that is -2x the return of an index or other benchmark (target) for a single day". The sponsor has "single day" in BOLD TYPE for a reason.

     

    http://bit.ly/11hZcZ4

     

    After one day, the security loses tracking to the index.

     

    I used TBT briefly in 2009 and sold out of it at realizing a gain because of the tracking issue. When I bought that security, I thought that it could be a useful hedge for my long corporate bond portfolio since treasuries will go down more during periods of rising rates than BBB rated corporates maturing at the same time, particularly when the rise in rates is due to an improving economy which would decrease the credit risk component of the corporate bond.

     

    In theory, that is correct but the product selected is just a bad one in my opinion. After buying at $36.68, I sold at around $45 in early April 2009.

     

    Sold TBT/Emerson/More on Dynamic Asset Allocation
    http://bit.ly/11hZfEt

     

    What happened after I sold this security?

     

    Let's look at a long term chart for a moment, always a good idea:
    http://yhoo.it/W67j4q;range=my;compare=;ind...

     

    I am using the maximum chart at YF. I just said that I sold at $45 in early April 2009 but this chart shows a $180 price in early April. What? Well, that is easily explained since this stock underwent a 1 for 4 stock split on October 5, 2012 (just click "splits" under "events")

     

    So if I had held those shares until today the price would have gone from a split adjusted $180 to last Friday's close of $68.38. NOT GOOD!

     

    So the treasury bond price most of gone up and the yield down by a huge amount to cause that carnage in the share price? Wrong.

     

    On April 1, 2009, the 20 year treasury was yielding 3.54% and the 30 year was at 3.51%:

     

    http://1.usa.gov/11hZcZ5

     

    Last Friday June 14, 2013, the rates were 2.95% and 3.28%.

     

    http://1.usa.gov/ZV7BAT

     

    16 Jun 2013, 02:22 PM Reply Like
  • SG,
    Thanks for the reply. Is there a better ETF that accomplishes the task of shorting US bonds without leverage?
    16 Jun 2013, 09:05 PM Reply Like
  • South

     

    thank you for the points you make in discussion and I agree with you; I traded (TBT) a couple years ago and made quick money but I have stayed away from all these powershares leveraged ETF that go down in value and then have a reverse split.
    17 Jun 2013, 09:17 AM Reply Like
  • I've never traded that long term. Either (TLT) or (TBT). I wouldn't suggest doing that. I don't believe it is the proper hedge instrument. I'd rather short the long bond contract holding the physical.
    16 Jun 2013, 02:30 PM Reply Like
  • Tradewin: If someone is going to use these flawed double and triple shorts, the time frame needs to be kept really short, but that creates yet another problem. Your timing really has to be spot on.

     

    What will treasury prices do next week or for the remainder of this month? Up or down or sideways? If you know now, share that with the group.

     

    I have multiple brokerage accounts that are all cash and consequently I can not short anything. Everything that I own is owned free and clear and I have done just fine without trying to become a short seller or using margin debt to fund purchases, which sometimes results for many individuals in a margin clerk making your sell decisions at the worst possible time. I do not trade options or futures. I am a cash only investor. If I can not buy it with cash, I do not own it.

     

    I would agree that it would be better to short TLT than to buy TBT, but I am not interested in doing either. My approach to treasury bonds now is not to own them. JUST SAY NO.

     

    I sold some 10 year TIPs bought at auction in 2009, when the current yield was 2% and sold them last year after calculating that the profit was then greater than the likely total amount of all interest payments made until maturity in 2019 and the accretion in the principal amount due to inflation.

     

    I would also be of the opinion that the best way to hedge stocks is to sell stocks.
    16 Jun 2013, 02:58 PM Reply Like
  • Thanks SG,
    I have been the same. All cash no leverage. I appreciate the input.
    16 Jun 2013, 08:58 PM Reply Like
  • Thanks tradewind,
    That is what I am trying to hash out. Whether the idea is sound and I am using the wrong vehicle to achieve it. Or, the idea is unsound and should be abandoned all together??? It is just I have observed a trend and I am trying to figure out the best way to capitalize on it.
    16 Jun 2013, 08:58 PM Reply Like
  • Notrub: I am suggesting that everyone stay away from TBT due to its really profound tracking problems. Someone willing to short TLT would at least receive perfect tracking. The long bond ETF that would go down the most in a rising rate environment would probably be ZROZ which has already declined from $127 to $99.12 last Friday. That one has the highest duration risk:

     

    http://bit.ly/125siGF

     

    I mention it in my blog as the one likely to decline the most. It is also the one that will rise the most when and if rates start to decline again. So, in a word, it is dangerous, but at least a short sell will track.

     

    My approach is simply not to own any treasuries and to shorten my duration.

     

    It was only a few days ago that the 10 year nominal treasury finally worked its way into a positive real yield based on the annual inflation forecast embodied in the 10 year TIP. A normal spread historically is 2.5% above the average annual inflation forecast.

     

    I do not fool with options but that could be another vehicle to use.
    16 Jun 2013, 09:43 PM Reply Like
  • south

     

    I agree with you; maybe the following will help the discussion; I own (FRFHF) stocks that is managed by Prem Watsa (known the Warren Buffett of Canada) that is fully hedged on US markets; the stock has been going sideways but during the markets fall of 2008-2009 it doubled in value since Watsa was one of the few who predicted the mortgages mess; some people might not want to wait but I don't mind if the chance of a doubler is there; I can buy more stocks when times comes and better then owning powershares etfs, in my view
    17 Jun 2013, 09:44 AM Reply Like
  • Rina: I am familiar with Fairfax, and the stock did perform well after the Lehman failure in September 2008 when the rubber hit the road:

     

    http://yhoo.it/12QCmL8;range=5y;compare=;ind...

     

    A foreign $400+ stock will generally be outside my investment horizon. Does Fairfax pay a common stock dividend and what is is the yield if it does? Yahoo Finance does not show anything.

     

    The only way that I will own Fairfax is through a mutual fund, but all of my Canadian stock ETFs are oriented toward high dividends and dividend growth. I own XDV, for example, which does not even list Fairfax among its holdings:

     

    http://bit.ly/12QCpqf

     

    Occasionally, I may buy 5 shares of the Baby B Berkshare shares or 5 shares of Google but one of those types of purchases happens about twice in a decade, and I would stick in those cases to U.S. companies where I have more familiarity.

     

    I did a google search of my own blog and see that I have mentioned Fairfax in five posts. Three of them dealt with the acquisition of Odyssey Re. I did not own the common but I ultimately loss to a call a floating rate either an equity preferred fixed coupon stock and/or a floating rate equity preferred stocks issued by Odyssey that Fairfax redeemed at par value after the merger. I owned both at one time. The only other mention was in response to a comment by a reader who referred me to the Fairfax stockholder message board, not for any matter dealing with Fairfax, but to a warrant being discussed about a security traded in the U.S. ,FFBCW, which triggered a long series of comments between me and that reader.

     

    Comment Section Only:
    http://bit.ly/VrqupY
    17 Jun 2013, 10:34 AM Reply Like
  • I have used selling short from time to time but it is a difficult game. First of all, there is the problem of getting shares to short. IB LLC can tell you how many shares they have available to short in a given security but those figures can change rapidly. Then you have to pay interest on the amount of the short position. Then you have to pay all dividends paid out on the account which restricts a lot of higher yielding securities. It is hard to have a winner unless your timing is really good. Shorting futures is actually simpler but you are shorting an index instead of an individual security. You don't pay interest or dividends on future contracts and you don't have to worry about having your short position closed because there are not enough shares available. It is still a very tough game that I do not often win.
    17 Jun 2013, 11:02 AM Reply Like
  • south

     

    (FRFHF) is set up like BRK and into insurance with the float from premiums invested in stocks; Fairfax pays a dividend that is not consistent; I intend to keep stock since it hedges US and world markets so that I don't have to use powershare etfs; Fairfax also buy US stocks and Prem is positioned in cash to buy in when US markets fall; patience is needed since Prem is a value investor; thanks for sites and I will check out (XDV)
    17 Jun 2013, 12:20 PM Reply Like
  • Rina: Are you from Canada?

     

    I will give you a heads up.

     

    My Right Brain, who variously refers to my Left Brain as a girlie man, the Lame Brain and the Nerd Machine, led a coup d'etat here at HQ's Trading Desk in early March 2009 to dethrone the Nerd Machine as Head Trader and quickly took a dump on the LB's ten trillion or so "stinking rules".

     

    It is known to only a few souls that RB is on a mission to acquire Canada, all of it, and rename that fine country Northern Tennessee, thereafter dispensing with that Loonie coin and replacing it with the likeness of Our Great and Dear Leader Headknocker.

     

    I own two Canadian stock ETFs:

     

    Canadian Dividend Aristocrats: CDZ Overview - iShares Canada ETFs
    http://bit.ly/13O5O10

     

    Dow Jones Canada Select Dividend-XDV:
    http://bit.ly/Wzh7KI

     

    I own own a Canadian Stock CEF-Canadian General Investments-CGI:
    http://bit.ly/11gOEJS
    17 Jun 2013, 12:33 PM Reply Like
  • I think bonds are poison right now. I am not qualified to give any advice to anyone for anything. I don't know Jack. But, if you happen to see him, give him my regards will you please?
    16 Jun 2013, 03:03 PM Reply Like
  • Tradewin: When it comes to predicting the future, it is wise to predict often to improve your chances about being correct. And, generally, to become a guru about future forecasting, I would suggest using a variety of words and phrases that actually mean nothing such as "could fall 10%" or could rise "up to" 20%.

     

    Then when the market falls 5%, you can go on CNBC and claim status as a future prognosticator and become Tradewin and Associates, Fortune Tellers, L.L.C. with 50 MIT pets at your disposal.

     

    The best that any of us can do is draw from experience and the past, have a grasp of what is happening now, and then plan based on probabilities and possibilities.

     

    I have a negative opinion about bonds myself but I own some bond CEFs, foreign bond ETFs bought on the Toronto exchange and individual bonds. I understand that my forecast about interest rate normalization may turn out to wrong. I expect that the 10 year will be a 3.5% in a year causing a 20+% unrealized loss to the buyer at the current yield. I view that as more probable than not only.

     

    I am in a hyper trading mode for leveraged bond CEFs.
    16 Jun 2013, 03:25 PM Reply Like
  • tradewin/SG,
    I get your point now about these ETFs being a bad vehicle. And, as this article points out there be no good vehicle for retail investors to get involved in the bond interest rates increasing.
    http://bit.ly/11wAQqQ
    Thanks for keeping my head out of the clouds...:o)
    16 Jun 2013, 09:05 PM Reply Like
  • @ SG
    What's a " leveraged bond CEF"? It's the "leveraged" I know nothing about.
    16 Jun 2013, 05:12 PM Reply Like
  • Curls: Leverage is just a fancy word for borrowed money. The leveraged bond CEFs will borrow money short term to buy bonds.

     

    The spread between the low cost short term borrowings and the higher yielding bonds purchased with those funds creates more yield than an unleveraged bond CEF with a similar duration and types of bonds.

     

    However, leverage can work both ways. If the price of those bonds purchased with borrowed money decline, which has happened since early May, the net asset value of that leveraged CEF will go down more simply due to having say 30+% more declining assets than its unleveraged cousin.

     

    For now, with short borrowing costs low and likely to remain so for another two years the leveraged bond funds will continue to earn a decent return on that spread between the cost of funds and the yield of bonds purchased with those funds. Borrow at 1% and receive a 5% interest coupon sort of deal. The problem is when the value of the asset bought with borrowed money starts to decline.

     

    Leveraged bond CEFs have been smashed pretty good since early May. Their discounts to net asset value have increased at a far higher percentage rate than their declines in net asset value, generally speaking. This creates a potential for a trade.

     

    I discussed buying a few in this weeks blog published yesterday and bought more than I mentioned in that post. The leveraged CEFs in this heading are BKK, NPI and FAX. I have already sold BKK.

     

    IRS Refunds/Bond Fund Risks/Sold 100 LF at $10.01/Bought 100 of the Municipal Bond CEF BKK at $15.93-Then Sold BKK at $16.82//Added 50 TICC at $9.85/Added 50 PSEC at $10.15/ROTH IRA: SOLD 50 GJT at $18.9/Bought 100 FAX at $6.35
    http://bit.ly/14CU4Q2

     

    Given the significant downward move in bond CEFs, I am buying in small quantities on downdrafts as explained in the blog prior to the one noted above.

     

    The BKK cost of leverage is very low due to a security known as "auction rate security", something that brokers sold their customers that has ended up costing them for the reasons discussed in this Wikipedia article if you are interested in that topic. Good for the owners of BKK. Bad for the owners supplying that low cost debt:

     

    http://bit.ly/TG5ucz

     

    If you want to learn more, you can visit the website for Nuveen's NPI which is a leveraged municipal bond CEF that I bought last week.

     

    http://bit.ly/1aj948p

     

    That one went ex dividend last week for its monthly dividend.

     

    CEFConnect has some basic data including the amount of leverage:

     

    http://bit.ly/1aj96Nu
    16 Jun 2013, 06:33 PM Reply Like
  • @SG

     

    "Leverage is just a fancy word for borrowed money."
    THANK YOU! In that short sentence, you've explained so many confusing articles I've read.

     

    So for the same reason house buying is a leveraging of money to increase wealth. A leveraged CEF uses lower short term money to buy longer higher paying bonds. Given my expectations that bonds will be flaky, this isn't for me right now. I'd need to be more savvy first. Cool, I learned much here.

     

    Goes down disproportionally is interesting. Not sure why that would be. But then it's like having a short sale. Maybe that's why - a less than ideal situation leads to greater premium reduction (i.e. discount to NAV.)
    18 Jun 2013, 01:15 AM Reply Like
  • Curls: There are several non-leveraged CEF bond funds that are available but their yields will be lower due to the lack of leverage compare to a similar leveraged fund.

     

    One example, which I have owned in the past, is the investment grade bond CEF CSI. If you go to the main page at CEFConnect for that fund, you will see the lack of leverage but the yield is also low compared to a leveraged investment grade bond fund.

     

    http://bit.ly/128IGpQ

     

    For both leveraged and non-leveraged bond funds, their effective yields will go up as their price goes down. So as long as CSI does not change its quarterly dividend amount, I would receive a higher yield now by buying that fund at a 11.06% discount and a $18.74 price yesterday compared to a $20.19 price and a 4.41% discount on 5/20/13.

     

    Leverage creates additional risks and benefits. One risk is that the assets purchased with borrowed money goes down in price. Another risk is that the cost of borrowed money starts to go up, squeezing the spread between the borrowing costs and the bond yield at the original purchase price, most likely at a time when those bonds are going down in price.

     

    The converse is also true. If bonds are rising in price, then the additional bonds bought with borrowed money would benefit the owner of the leveraged fund. More bank for the buck.

     

    As long as borrowing costs remain low, as they are now, AND bond prices are rising, then the leveraged bond fund has optimal conditions. The fund would be earning more through the leverage, but leverage works both ways.

     

    Most leveraged bond CEFs use over 30% leverage but some use less.

     

    GDO according to CEFConnect uses 12.46%:
    http://bit.ly/170LDxT
    18 Jun 2013, 08:32 AM Reply Like
  • I apologize for the convoluted appearance of my posts. For some reason it is taking 9-12 hours before they show up and not in the order in which I posted them. Sorry, if some of them look stupid...:oP
    16 Jun 2013, 10:10 PM Reply Like
  • Author’s reply » @NOT

     

    If YOU are still being monitored it can take that long. That should end soon and all your posts will be at "real time"

     

    Here I thought we would have a slow day of posters:)
    16 Jun 2013, 11:15 PM Reply Like
  • Author’s reply » Just read a Personal Message I received and a person wants to know if anyone would be kind enough to answer this. No obligations of course.

     

    1) Has 50k to invest
    2) Does not want to wait
    3) Wants a dividend stream if possible
    4) Will reevaluate this position in a couple of years
    5) Wants to take the dividends and hold them as cash to open new positions
    6) Not sure if this is possible to do
    7) Does not want Bonds, or Metals

     

    Ok, anyone wants to take a stab at this feel free. I am not that attuned to building ones portfolio on my own. However he asked if someone did try to help to break out the dollars to invest in whatever they recommend. Not a %.

     

    It is a lurker who doesn't want to post yet, feels a lot of what she reads is over her head, and doesn't want to start commenting until she feels more comfortable. Too much is info that she doesn't understand but feels that some posters here have been doing this a long time so they have ideas ...

     

    Thanks!
    16 Jun 2013, 11:30 PM Reply Like
  • IT,
    This one is actually a hard request. Not because it isn't possible to do, but, because we are our own worst enemies when it comes to investing. I could easily come up with the answer for all 7, but, the person would not know WHY they are holding those stocks.

     

    As, anyone who has been involved in any type of investing knows we constantly question ourselves if we have made the right decisions. It has taken me 36 years to understand first what is the best type of investing to fit my personality and needs. And, then decide on the best strategy to fit what I am comfortable with doing. The reason that knowing the WHY and HOW are important is because eventually an event will come along that will make you question everything. If you panic and just sell everything you are locked in with that profit/loss and then have to start all over again. If on the other hand you understand why you have invested in certain companies and have criteria for finding other companies that meet those standards any event just becomes a process of reevaluating your portfolio to see what still meets your standards and what doesn't and taking the appropriate action. When you understand WHY you hold a security/company events like 2008/2009 when most are throwing out the good with the bad become once in a life time opportunities to acquire more good companies based on your personal standards. Instead of becoming fearful and just selling off what you have in a panic with everyone else.

     

    The reason this person's request is hard is because I do not know them, their personality, goals, needs, risk tolerance. And, they don't know why I am recommending the companies to make up their portfolio. To me that is a recipe for disaster when the next "event" comes along.

     

    I know the resistance people have to coming on forums and posting. I am right there with them. But, in the long run it is in that person's best interest to jump in and let people get to know them and them to get a feel for the people who are in the forum that share their same ideas and goals. Maybe no one in the forum will fir that need. But, they may get recommendations to read articles from other who do. Eventually they will read enough to come up with their own strategy to invest with and will know WHY and HOW they will be doing what they need to do.

     

    Just so the persona doesn't walk away feeling empty handed. Here is the book that solidified my WHY:
    http://bit.ly/XzYRKQ
    I understand charting, which is actually this authors penchant, but, I do not depend on charting to make my investment decisions. The first 4 chapters solidified for me the WHY in investing in companies for long term dividend and growth over any other type of investing.

     

    Here are the profiles of some excellent authors on dividend investing. Just look at the profile list of articles and pick the ones that fit your needs
    Chuck Carnevale
    http://bit.ly/Q4JZ9O

     

    Tim McAleenan Jr.
    http://bit.ly/10pWHWg

     

    Dividend Growth Investor:
    http://bit.ly/10pWIcw

     

    Dividend Sheet
    http://bit.ly/10pWIcy

     

    David Fish, maintains the CCC (Dividend Champion, Challenger, Contender) list. It is a listing of all major companies that have consistently paid dividends for 5 years or more with all the metrics at a glance for each company. This is a great place to start your research for companies to begin a portfolio with.
    http://bit.ly/HJ82Gq
    17 Jun 2013, 07:50 AM Reply Like
  • >IT-

     

    Preferreds would be my advice. Subscribe to a blog that specializes in them.

     

    WT
    17 Jun 2013, 08:07 AM Reply Like
  • Sorry, the first post about WHY had gotten too long. So here is part 2 about HOW.

     

    Start with your your life. What products/services have you used for years? The thought here is that if you personally use a product or service for a long time that you trust the company and their product. Also, since you personally use the product you are constantly in contact with what the company is doing with their products which will give you confidence in investing in that company as long as they continue to meet your expectations. And, chances are if you do, then others do also. As an example Tide detergent has been used in the household every since I was a child. So I look and see who make Tide and come up with Proctor & Gamble, look up the stock symbol and get (PG). I go to David Fish's CCC list and find that (PG) is on the Champion list and has been paying a dividend for 57 years!!! So now I have a candidate for my portfolio. Now is the time to do some research on the company and see if it is something I would be comfortable in holding for the rest of my life??? So I go to Yahoo finance and pull up (PG): http://yhoo.it/12Du2Nr
    The first thing I look at is BETA which tells me how volatile the stock is compared to the rest of the market. I know I sleep best at night with stocks that are at a BETA of 1 or below. PG's current BETA is .32 so that is a check.
    Next I look at P/E (price to earnings ratio). This gives me a ball park idea of how the stock is currently priced. I know that the historical P/E for the SP 500 index is around 15 so that gives me a good starting point to determine if currently (PG) is a good buy right now or if I should wait for a better entry point to start investing in the stock. PG's current P/E is 17.48. For me that is kind of high, but not severely overpriced.
    Next I look at the company's dividend/yield. What I am looking for, in simple terms, is a yield that meets inflation expectations currently at 2.4%. PG is paying an annual dividend of $2.41 per share for an annual yield of 3.1%. So another check.
    Next I look at the news section at the bottom. What I am looking for is anything good or bad that would reflect on PG's current price. Many times you will find articles from authors on Seeking Alpha in this section which will break down a stock and give you their opinion if the stock is over, under or fairly priced in the current market. To help you make the best decision if NOW is the best time to take your position. You can also get a feel for what is the company's story from the news articles. In this case we would see that the company's CEO has just stepped down. It is going through a reorganization. It is a conglomerate, which in plain English tells me that this company sells products around the world and would be less affected by an event or downturn in only one country.
    I check a few other links on the left hand side to get other info that meets my investing style such as options, charts, etc. Even though you already are familiar with the companies products you still may want to check the company profile section as it also lists current acquisitions, mergers, etc. that could affect the stock price in the future.
    What is essential to me is the KEY STATISTICS page. Over the years I have developed my own set of stats I look at to determine a company's current financial health, whether it is stockholder friendly, but, not using debt to woo buyers of their stock with their dividend payout and forward growth prospects. My "quick and dirty" is as follows:
    EV/EBITDA ratio greater than 10
    Total Debt to Equity ratio less than 50%
    Dividend payout ratio less than 50%
    And positive % earnings growth, revenue growth, return on income, and return on equity. If any of these aren't positive I start digging everywhere I can find information to find out WHY???
    In PGs case everything is acceptable to my criteria.
    So after this due diligence, DD, I have to decide if it is time to add it to my portfolio of current holdings. MY quick and dirty way of making that decision is by looking at the PEG ratio. if it is 2 or less I buy. If it above 2 I put it on my watch list and go back and review it weekly until it meets all of my criteria.

     

    The only reason I have gone through this long process step by step is to give new investors an idea of how to get started in building their own do it yourself portfolio. With time and experience you will develop your own criteria. The important thing in the long run is having your own system in place. So when an event like 2008-2009 comes along you can quickly evaluate your holdings to see what works for you and what doesn't and take the appropriate action for your circumstances based on facts instead of fear or any other emotion. This in turn will help you profit from events because you know you hold sound companies. So when everyone else is panicked and selling you know it is the opportunity to start looking for more sounds companies for more long term profits or income.

     

    Sorry for the long winded response. But, I don't know any other way to cover the basics of getting started???
    17 Jun 2013, 09:19 AM Reply Like
  • Author’s reply » @NOT

     

    I agree with you on the personality, personal, risk tolerance points.

     

    I think the person does not want to read books and then have to decide the authors opinion as well. She has expressed the thought that we have some very real time investors here and would like to compile a list then make her choice.

     

    From what I can tell she is conservative, is about 50 years old, has a time frame of about 10 years, wants to be more conservative, also would like to buy stocks that kick off a decent dividend included. She did mention (PSEC) since I have held it but I added I might be wrong on that being a good choice.

     

    Won't cry over spilt milk if we get a correction, and I am not sure she is going to add anything else either to dollar cost average above the 50k. I DID NOT ASK WHY ONLY 50K AND WHY NOT ADD MORE.

     

    I am only going by the facts presented but I can tell she feels comfortable with what she has read from an intelligence standpoint ( minus my jokes of course) and wants to rely on the decisions some of you have made already in YOUR portfolios.

     

    Reading more books and articles on SA isn't what she wants at this point. Just symbols, maybe an explanation why, and how much $ wise on each.

     

    Now keep in mind no one has to answer this. But I have been reassured SHE will make the final decision after she reads ALL the portfolios some of you put together. I THINK this would be a good idea as I am sure other lurkers would like to know as well.

     

    Honestly, me included as I used Mutual Funds my whole life and if I decide to get back into the market I want strictly a dividend stream only !! That is my choice, I may sprinkle in a few value plays as well. But I am not a day trader like most of you.

     

    I would also want a buy and hold, check on it yearly , and reallocate yearly if needed. She is a simple investor who doesn't want to lose the money, but also wants to participate and use the inheritance she received..

     

    She is a novice so she feels the books may go over her head, the Authors could be wrong, and that she won't be able to ask follow up questions either. I know this takes guts to put out a plan, and I am not saying anyone has to either.

     

    She fully understands it could lose money as well. BUT SHE WANTS THE INVESTMENT PORTFOLIO FOR DUMMIES portfolio right now. If anyone has any other specific questions please post them and I will try to find out the answer.

     

    Thanks!
    17 Jun 2013, 11:55 AM Reply Like
  • Author’s reply » WT

     

    Her first question is what is a preferred and how to you buy them, and why??

     

    As you can see many things you guys take for granted some here have no clue about and admit it bit don't want to post it.

     

    Trust me I am trying to get them to post as it will make my life easier not losing anything in the translation but I promised I would do all I can to help at this point.
    17 Jun 2013, 11:58 AM Reply Like
  • Author’s reply » @NOT

     

    Great thought that is why she wants all the homework done already in the decision since she does not know how t do this. That is why she just wants a simple list , symbols and dollars invested in each.

     

    I suggested all of the due diligence SHE might have to do and her answer was I am clueless and don't want to rely on an author I have no clue who that person is. She is reading along with us and just feels comfortable with this group.
    17 Jun 2013, 12:01 PM Reply Like
  • >IT-

     

    "Her first question is what is a preferred and how to you buy them, and why??"

     

    Based upon her questions this lady should be spending some significant time with a text or two or three on investing. I read over a dozen books on investing prior to ever placing an order.

     

    Someone with her obviously limited knowledge should not be in the market at all.
    Most brokerage houses not only recommend reading material but conduct courses on investing, including preferreds, fixed income, equities, options and whatever else is needed. I don't feel these boards should replace lack of basic investment comprehension with online advice from the folks on the boards.

     

    Windwood Trader
    17 Jun 2013, 06:05 PM Reply Like
  • I agree with Windwood.
    If she has no interest at all in learning anything she should just open an acct at Vanguard or Fidelity and ask them for some advice. Get 5 ETF's and deposit $10k per month equally divided between them for the next 5 months. The ETF's will pay a small dividend.

     

    She might also consider a ladder of CD's through her bank staggered over the next year or so. Not a lot of interest earned but the money will be safe.

     

    If, as you say, she wants "THE INVESTMENT PORTFOLIO FOR DUMMIES", then at least buy the book:

     

    Investing For Dummies.
    http://amzn.to/127wC8r

     

    Tell her to read the reviews of the book, its not at all intimidating.
    I dont mean to be harsh, but she will have to take some responsibility for this money whether she likes it or not and at least learn some basic stuff.
    17 Jun 2013, 06:29 PM Reply Like
  • I agree Vanguard has a fund or group of funds they are called Life strategy funds. They are tailored for invest and forget type investor. I have held the (VSCGX) fund for a number of years and it has done me well. I reinvest the dividends. What I like best is it gives me very broad diversification at very low fees. It might be worth a look .. http://bit.ly/127xWbf
    17 Jun 2013, 06:41 PM Reply Like
  • Windwood,

     

    I agree that folks need to get educated, but initially not everybody thinks along those lines. In the end, for most, education is not only reading , but actual experience . That is where the educated can share their knowledge and soften the learning curve for the novices.. I only wish I had someone around when I was 25 or so.. instead I used the school of hard knocks to get by and learned a lot by my mistakes..

     

    Showcasing a need for reliable, trustworthy , advisors.. Not everybody can negotiate the investment world by themselves.
    17 Jun 2013, 06:43 PM Reply Like
  • Author’s reply » GUYS

     

    I agree with you about the homework. But as FEAR stated she is a widow, only raised her kids, her husband passed away, and she just feels that for her kids she should invest some money.

     

    I got the feeling she would not know the difference between a stock and a bond. That is why I asked for some input. We do have people reading along that have absolutely no clue what to do yet feel they should do something.

     

    Actually a poster knows her ( who will remain nameless) and asked me to ask the questions. I know my mom would not have a clue what to do so I helped her along in the 80's and 90's when times were good.My mom never finished high school, and my dad played Professional Baseball for the Pirates and Phillies minor league triple A teams until he blew out his rotator cuff.

     

    He threw over 90 miles an hr as a lefty and was told he needed one more solid year and we going to the show. He never finished high school either.

     

    I appreciate the thoughts of reading, but I know she won't !! Hope you guys understand this. I don't want to scare away readers like this, I want them to come here ! Some , even if they read won't understand the stuff you guys experienced over the years..

     

    Hope you guys understand a little more now.
    17 Jun 2013, 07:14 PM Reply Like
  • @NOT, You might like this: What's Behind the Numbers? by John Del Vecchio and Tom Jacobs.
    17 Jun 2013, 09:17 PM Reply Like
  • Thanks tradewin, just ordered it off Amazon.
    17 Jun 2013, 09:34 PM Reply Like
  • Author’s reply » @TRADE

     

    Maybe a hint what the book is about for those lazy who don't want to look on Amazon:)

     

    Plus that info might be useful here as well..
    17 Jun 2013, 09:43 PM Reply Like
  • Looking for opportunities in these markets is all about doing your own homework. This book is not the Holy Grail, but if one can develop the proper study habits by following this discipline, you will be far better informed than even seasoned analysts. All of this info is available through EDGAR the S.E.C. website. If you learn your way around it, you will realize it's the same stuff that most people pay somebody a couple of hundred bucks for. All free. You just have to have the desire. And it's not rocket science. If I can do it, every one of you here has to.
    17 Jun 2013, 10:03 PM Reply Like
  • Author’s reply » @trade

     

    You seem pretty sharp to me...Thanks for the info as I am sure others are ordering it as we speak
    17 Jun 2013, 10:08 PM Reply Like
  • Hey, I'm no smarter than anyone here. It's mostly about awareness IT. True stupidity is rare, although I sometimes think I work with the exceptions to that rule. I've got four bolts in my spine as well. It's a real wake-up call.
    17 Jun 2013, 10:55 PM Reply Like
  • Author’s reply » @TRADE

     

    Bad surgery as well? My pain never goes away. Had the Chief surgeon in NYC Beth Israel Hospital but made no difference.

     

    But I have been called stupid plenty of times for sure.. lol
    17 Jun 2013, 11:05 PM Reply Like
  • I was very fortunate. I'm back to work. But you gotta love those people who talk about "pain management". I just rack it up to the fact that we eventually wear out.
    I'd like to hear how some of your followers take to studying those balance sheets. The markets will always be here. It's better to get into them knowing much more than the average person simply because they bothered to do a little footwork.
    17 Jun 2013, 11:44 PM Reply Like
  • Author’s reply » @TRADE

     

    Mine was a guy running a red light. Wish it was just wearing out. Pain management is just a pill pusher, that's all!
    17 Jun 2013, 11:49 PM Reply Like
  • IT:

     

    I would suggest the book "The Ivy Portfolio". It has a simple investment strategy for most any investor. They can leave off bonds and commodities if they want but the strategy is very simple and only requires a few minutes per month. They can use Vanguard or TD Ameritrade and use ETF's that are commission free and develop a very low cost strategy.
    17 Jun 2013, 01:32 AM Reply Like
  • Author’s reply » EX

     

    She isn't going to read anything as she is a single person who is a widow . Her husband did all the decisions in the house, and does not feel comfortable finding a FA in her neighborhood.

     

    I know this isn't easy !!
    17 Jun 2013, 12:04 PM Reply Like
  • To everyone:

     

    I encourage you to read this article that was published here on SA:

     

    http://seekingalpha.co...

     

    He convinced me to buy (STKL) today. :-)

     

    Krustyman
    17 Jun 2013, 09:47 AM Reply Like
  • Krustyman: I have been buying and selling STKL for about six years now. I had an exchange with that SA author when he wrote an earlier article about SunOpta which is now only available to pro subscribers.

     

    I believe that most of my comments made in that article can be found in the area where SA has all of my comments and has a specific link to my comments on STKL:

     

    http://bit.ly/14drDWY

     

    I am not allowed to devote much money to a security that pays no income due to the myriad rules promulgated by my Left Brain over the years. I do own 50 shares of STKL in my Lottery Ticket Basket Strategy and 600 shares of Opta Minerals one of its majority owned subsidiaries that I bought on the Toronto exchange.

     

    The stock is discussed in a long post updated my Regional Bank and Lottery Ticket Baskets. If you are interested, just scroll down into the Lottery Ticket section until you see

     

    C. Bought 50 STKL at $5.85

     

    http://bit.ly/VrqupY

     

    I still own those shares.
    17 Jun 2013, 10:22 AM Reply Like
  • Southgent1951:

     

    Thank you very much for the link, wow there is a lot of valuable info in there!

     

    I will read further, but for what I saw I totally agree with you on the sell of Opta as a non core asset. But they are talking about that possible transaction for a while now if I recall correctly. I hope it materializes one of these days.

     

    Cheers! :-)

     

    Krustyman
    17 Jun 2013, 10:35 AM Reply Like
  • Krustyman: Based on a question asked by the author of that STKL article during an earnings conference call earlier this year, which is discussed in my comments somewhere, it seemed to me that STKL was really motivated to sell Opta and was just waiting for the right price. To receive a decent offer, it may just require some more time for the economy to pick up some more steam.
    17 Jun 2013, 10:42 AM Reply Like
  • Krusty, SG

     

    I posted my concerns on the (STKL) article to see what I think. SG you're comments adds so much info. Now Opta Minerals perks up my ears. It's bound to bounce up when it's sold. ...gotta investigate.
    17 Jun 2013, 11:01 AM Reply Like
  • IT,

     

    For that investor with 50K,

     

    I would keep it simple.. Have them go back and look at two authors here on SA that Notrub mentioned, Chuck Carnevale & David Fish, More than enough there to get started. This will give a good foundation. IMHO trying to cram too much info in a short period of time is counterproductive. As others have mentioned it takes years for the pieces to come together. . Start with that foundation and see how things develop.

     

    I have a similar situation now--- someone with 65K.. I will not invest it all NOW no matter what that individual says.. and that should be the advice to your individual. It has to be deployed in stages.
    The other criteria can be met without too much difficulty .. 

     

    17 Jun 2013, 09:57 AM Reply Like
  • Fear&Greed:

     

    "It has to be deployed in stages."

     

    Absolutely!

     

    Investing all your money at the same time is a recipe for disaster.

     

    Krustyman
    17 Jun 2013, 10:44 AM Reply Like
  • Author’s reply » F&G and KRUSTY

     

    Ok, Then how much and where does she start this week? Or do we wait for a pullback?

     

    Just trying to answer what I know she will ask. I am sure she will wait if that is the opinion. But maybe SOMETHING can be started soon?

     

    She isn't going to read, and hearing that FEAR isn't having a client invest now was advice already!!
    17 Jun 2013, 12:09 PM Reply Like
  • Author’s reply » Now this one is personal. Can some of you comment on my favorite and maybe shoot holes into why I should not be adding more to my position on (PSEC)

     

    http://bit.ly/11jC6kP

     

    I AM SURE I am missing something important !!

     

    Thanks.
    17 Jun 2013, 12:20 PM Reply Like
  • Author’s reply » PLEASE POST IN CHAPTER 10 !!!

     

    http://seekingalpha.co...
    17 Jun 2013, 12:53 PM Reply Like
  • IT,

     

    I like to divide it into 4 chunks.. pick a time period after first chunk, say 2 months , then deploy 2nd . I then monitor market for pullback, and /or look for individual situations that for one reason or another may have pulled back on their own. Use any weakness to add funds , or if market continues on this run, wait 2- 3 months and deploy funds.

     

    I monitor each individual situation , so I may make subtle changes along the way as I see fit..

     

    In your case keep it might be better to keep it real simple,, 4 pieces at 4 different times.
    17 Jun 2013, 01:49 PM Reply Like
  • F&G:

     

    It's impossible to predict the market now, in a month or three months from now. One must recognize value in individual issues when it presents itself.
    17 Jun 2013, 02:02 PM Reply Like
  • Tack,
    Totally agree, and that is the way I manage my own Money and most individual accounts. Right now I'm basically doing nothing.

     

    However there are some , that simply don't have the experience ,can't grasp value in individual issues or when an opportunity presents itself , etc. I am reluctant to even suggest some "names" at this point , but some don't heed advice & need to dabble now.. At least all that I have come across lately want the Dividend payers.

     

    17 Jun 2013, 02:16 PM Reply Like
  • Tack,

     

    probably should have added, the people that wish to dabble now , are starved for yield,, hence the requests to get them involved in the dividend names..
    17 Jun 2013, 02:53 PM Reply Like
  • IT:

     

    I agree with Fear&Greed (again!).

     

    4 chunks. However, I do not need a time line to buy but rather a 5-10% pull back. Also, when I am really impressed with a corporation's numbers I could make an exception and buy 100% of my position in 1 shot. That's what I did with (KKD).
    17 Jun 2013, 03:10 PM Reply Like
  • Krusty: I am a lifelong fan of Krispy Kreme doughnuts but I have not bought the stock. As a general rule of thumb, a position that runs from $6 to $18 in one year would likely cause the Old Geezer here at HQ to hyperventilate and require a bag to be placed over his head.

     

    I ate just one this mourning and something was said about a need to lose weight. I had a quick reply. It has not been proven yet that KK doughnuts, when eaten once a day, are not a cure for cancer.
    17 Jun 2013, 03:19 PM Reply Like
  • Southgent ,,

     

    I like your reasoning..
    17 Jun 2013, 03:53 PM Reply Like
  • Author’s reply » @TACK

     

    So how are you proceeding now with this uncertainty? Do you still see some value plays or are you waiting for more of a pullback?
    17 Jun 2013, 07:37 PM Reply Like
  • Author’s reply » @KRUSTY

     

    Are you following a certain list waiting for that 10% pullback and if you are would you mind posting them?
    17 Jun 2013, 07:38 PM Reply Like
  • Southgent:

     

    I know, the stock had quite a run but I feel the corp ia back on its feet again. Also, on a purely technical point of view, we broke a base where the stock took years to consolidate.

     

    Krustyman
    17 Jun 2013, 08:10 PM Reply Like
  • IT:

     

    BRK.B is on my pull back list.

     

    Krustyman
    17 Jun 2013, 08:13 PM Reply Like
  • IT:

     

    Mostly, I looked for issues that, in my opinion, were oversold in the panic, and added shares or instituted new positions. Some of these included: KCAP, GLAD, FSC, NLY, MTGE, NRF, RAS, RSO, STWD, PFL, PHD, SAN-E, JRS, AWP.
    17 Jun 2013, 08:51 PM Reply Like
  • Author’s reply » TACK

     

    Thanks for letting us in on your personal positions!! Very helpful for a lot of individuals!! Including me...
    17 Jun 2013, 08:57 PM Reply Like
  • Author’s reply » PEOPLE ARE WATCHING YOUR ANSWERS AS OF TODAY YOU ARE NOW THE... #6 ....INSTABLOG...

     

    Keep posting as it is obvious people are reading what you write!!
    17 Jun 2013, 12:27 PM Reply Like
  • Author’s reply » I JUST OPENED UP ANOTHER CHAPTER !!

     

    #10

     

    Can you folks be kind enough to respond to that portfolio and my (PSEC) question there ?

     

    http://seekingalpha.co...

     

    Thanks!!!!
    17 Jun 2013, 12:39 PM Reply Like
  • IT-
    Re:(PSEC)

     

    I have a significant position PSEC primarily because of the more or less healthy and stable income. The rather nice pop on Monday was a nice plus. This private equity development company is what I feel to be a main line investment.

     

    WT
    18 Jun 2013, 08:25 AM Reply Like
  • >IT- Sorry if this is a double post- Could not find the other though.

     

    "Her first question is what is a preferred and how to you buy them, and why??"

     

    Based upon her questions this lady should be spending some significant time with a text or two or three on investing. I read over a dozen books on investing prior to ever placing an order.

     

    Someone with her obviously limited knowledge should not be in the market at all.
    Most brokerage houses not only recommend reading material but conduct courses on investing, including preferreds, fixed income, equities, options and whatever else is needed. I don't feel these boards should replace lack of basic investment comprehension with online advice from the folks on the boards.

     

    Windwood Trader
    17 Jun 2013, 06:11 PM Reply Like
  • Author’s reply » OK, I just spent less then 10 minutes hitting the LIKE button for EVERYONE.. So whose going to do it next??

     

    We gotta build up the likes folks!!
    17 Jun 2013, 09:54 PM Reply Like
  • will do :-)
    18 Jun 2013, 03:50 PM Reply Like
  • Took me less than 2 mins to hit like on everything. Mostly that long because I noticed a few posts I'd missed along the way.
    18 Jun 2013, 10:15 AM Reply Like
  • Author’s reply » I hate repeating myself but it does work. If ALL just took a few minutes I have seen that having 5 likes per post brought quite a few new posters to a chatroom.

     

    Now they have to EARN that payoff, but those who have been here a while benefits when you post somewhere else. It really doesn't take that long .

     

    Pull up DOUBLE GUNS profile and look at the likes he has. His group was running for years of a core of about 20 of us!

     

    I know some feel it means nothing , but I would not be harping on this if it did not help EVERYONE! Oh well...
    18 Jun 2013, 10:19 AM Reply Like
  • That was not my group it was a mutual group of investors but if you go back to my early days and look you will see that I spent a lot of time on SA traveling many threads long before I became involved with the group that eventually became known as the Renegades. I believe if your looking for some kind of recognition from the likes or number of comments you might as well skip that idea today since I believe those days are gone. Folks are getting smarter. Now its about what you say not how often you say it or how many followers "like" what you said. JMHO

     

    I have noticed that on almost all of the threads today the number of likes has decreased substantially as now it appears to be about content not popularity. You may not have noticed but I had ALOT of dislikes before they were removed from the threads and now there is only likes. I think a lot of the old "likes" came from folks who disagreed with the "dislikes". I try to be brutally honest no matter how many dislikes it cost me and I think that some of the "likes" were simply folks offsetting the dislikes they felt were undeserved. Some more of JMHO.
    18 Jun 2013, 02:51 PM Reply Like
  • Indeed! LT posted an interesting article on the QC regarding interest rates and the FED control of interest rates slipping. http://seekingalpha.co... This could have an impact on commodities as well.
    24 Jun 2013, 03:47 PM Reply Like
  • Everyone:

     

    (WAG) seems technically interesting. Bought today for a couple of days. I am looking at a $1 movement to get out.

     

    Krustyman
    18 Jun 2013, 04:10 PM Reply Like
  • Krusty,

     

    I agree with you.
    If it breaks out above the May high of $51.25 you might get that $1 in one day.
    I'm tempted to join you in that one but I won't. It could stall and fall here as well like it did at end of May. Positive comments from the Fed may help propel it up though.
    I think I will stand aside until after the Fed results, maybe the rest of this week, to get a feel for where things are going to go.
    18 Jun 2013, 04:21 PM Reply Like
  • tampat:

     

    Thanks for your comment. I always appreciate it when you see the technical picture the way I do. :-) It reassures me.

     

    Krustyman
    18 Jun 2013, 05:01 PM Reply Like
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