What was I doing? Oh, yes. After taking a shower this morning, I had the unpleasant discovery of the back-up dog having a case of coprophilia. I encourage all not to google this term. I am still in distress and did not eat lunch.
Ran my usual cef screen. And then looked at moving averages. Aside from what I already own, not too many are jumping out at me. Two of which I wrote about last time:
(NYSE:DNI) - "this one has a miserable history since inception. No distribution until the end of June again. New fund manager since 2011. Close to 11% discount and over a 10% distribution. From what I've read, changed to a managed distribution payout. Has blue chip stocks and preferreds and bonds. Website sucks.
The nav chart has the 50 day sma touching and maybe crossing the 200 sma. The price chart already has the 50 above the 200. Even though the fund has been crap since it started in the 1990's, you're still buying management and that was changed a couple of years ago and it looks like things are turning around."
Here are updated charts in case the old ones don't come across correctly (market and then nav):
What's holding me back at this point is that the market price is moving up faster than the nav value. So, a maybe.
(NYSE:JDD) - "bought last fall and sold off in the last two months. A small amount was initially invested and had a decent payoff, but I'm thinking about coming back. Kind of like cocaine or whatever your favorite recreational drug is. Nice discount. 8.4% distribution. Broad diworsification. About 50% convertibles. And I've written about it before if you want to search around and other smart folks have as well.
Here are charts of the market price and nav, respectively (I will use this format for the others I bring up - I also should point out that each time I copy/paste the address for barcharts a huge wall o' text comes up and freaks me out):
What should be noted is that the nav has broken out quite nicely but the market price is blah, although has also broken out to the upside. Next distribution won't be til the end of June."
I'm more partial to this one. Nav's going up faster than the market price. Issue for me is that now that I'm buying something new every two weeks, there's no reason to buy it with This paycheck contribution since the ex-date should be in mid-June and I'll get paid before then.
So, here's a monthly paying etf that's based on an index of thirty cefs:
and here's a link to their website:
My briefly held (NYSEARCA:CEFL) is based on this etf or index or however you want to call it. Some of the funds this etf is based on I would not own. Some I might, but not at current prices. What I like is that it has diversification over a broad spectrum of cefs - bonds, option types, equities, foreign and so on. And it's monthly pay. And has about a 8.5% yield currently.
Since it's a new fund, my usual ma stuff doesn't work well for it. But, since it's very much diversified by being a fund o' funds, the 300 sma I like to use for my broad index funds in my 401k works:
Yep, the price is above the sma. So this is very likely my first pick this Friday. JDD as a back up option if YYY goes way up by then.
A second back up option might be the preferred stock LTS.A - it's another monthly payer and has close to a 9% yield. The eps has been improving yoy, but it doesn't have a positive pe yet or dividend (either or would be nice with a preferred). So to me, it's junk for the moment.
I believe I mentioned in my last entry that I would write a bit about p2p and what I found out over the last couple of months.
To keep it brief:
It's time consuming. You have interest and principle that you are receiving frequently that needs to be reinvested. Along with everyone else that's involved in these things.
The only two options you have (in the US) are Lending Club and Prosper. Both sites have been infiltrated with individuals/and or "hedge funds" that have a lot of money and automated computer programs that gobble up loans before the site's automated investment programs can act. And then you are left with manually selecting each loan you might find appealing to fund.
This type of lending has not been around long enough for there to be any strategy of consistently working more than it doesn't. Most people seem to go by what "grade" of loan has had the best return over a certain period of time. And to stay "diversified". Meaning that you put no more than $25 in any given loan. And you need to have over a hundred loans to be "diversified". See the above paragraph to see why that might be a problem.
You will be lending to individuals. There will be defaults. Some people will pre-pay the loan off when they get a better job. There's a problem when someone is willing to take on a 10% or much more loan for whatever reason. I can see doing it to pay down credit card bills, but it makes you wonder where their priority is/was.
The rates on these type of loans have fallen and keep falling as our economy improves. If things go south, war/some black swan event, and the jobs market turns to crap again, guess what's going to happen to your portfolio of loans? Yeah. Non-secured loans are going to be the first thing on the backburner of folks to pay.
And on their rates. Even with preferreds and many types of cefs taking off this year, I can still find bargains with a comparable dividend/distribution to these loans with a much lower risk of not paying than these loans.
And my main issue. If you go this route, despite all the social-justice-hippy-shit-of-sticking-it-to-the-man hoopla, you are still essentially investing in banks. Except you do all the work and put your money at risk, not theirs. Both of them take a cut from who they make the loan to. Both of them take a cut from their "investors". Prosper is finally expected to be profitable sometime this summer. Lending Club is already profitable and Google has a stake in it. Twould make more sense to me to invest in the actual company themselves when they go public.
And I noticed that in my previous copy/paste of charts I didn't do it correctly - I apologize!