Seeking Alpha

User 7415181's  Instablog

User 7415181
Send Message
I'm writing an instablog - I know of a few people who have read some, but the main reason for writing it is to clarify my thinking (and likely confuse you) before I invest in something every month or so. And also to act as a journal I can review every so often. I work as a mental health nurse.... More
My blog:
User 7 blah blah's instablog.
  • Terminal Show 3 comments
    Jun 16, 2014 10:21 AM

    I had a pleasant enough weekend and I hope you did as well.

    One thing I have to keep in mind is that I have to separate my hobbyist interest in geo-politics from my investing rules. For an example:

    I bought into three energy/infrastructure cefs early on in the year. NDP, TTP, TPZ. I sold the first two for a quick decent profit and have hung onto TPZ. Now with all the news I've been following for the last several months (Ukraine/Libya/Nigeria/Iraq), it's tempting to buy back into the first two with the idea that energy will be even more important down the road. Except the prices are even higher than when I first bought them, the discounts not as steep and the distribution you get at market value is less.

    Lesson to self is that I've got rules written down on what to look for (value with a high yield and evidence things are turning around) and I shouldn't deviate from that. Because in the few years I've been doing this, I would have been better off holding what I've sold for a longer period of time.

    A older and successful investor on this site, who I pay attention to when he posts, has opined on several occasions about his view from the mountain top when others are at the base and seeing trees instead of the forest.

    I have a different mentality. For me, anyway, it's better to burn the forest down to get a nice mountain view and the surviving trees you chop down to build your cabin. Because those trees were stronger.

    I suppose the moral is that being willfully ignorant of some things is an easy way to filter out the noise that might cause me to make an impulsive decision to change investments before they get the chance to play themselves out. It's also a reason there's only about ten authors or so on this site that I read.

    Anywho.

    I'm going to be changing gears for a couple of months. Cefs are prone to selling off hard starting off in late fall through the end of the year. And running my initial screen isn't revealing too many that look attractive to me at the moment - (NYSE:IVH) being an exception, but I already have enough leveraged fixed income types for the moment.

    And most of the stuff I currently own in the taxable account pays monthly. Exceptions being (NYSE:LCM) which has performed poorest but should do nicely if interest rates ever rise and RSO.PB.

    One thing I noticed about my own mentality as I was buying preferreds during last summer while the prices continued to crater, it was easier to hang on to them because the income was coming in pretty steady and avoid selling at a loss.

    But the four star steakhouse on half-off night of preferreds and cefs that were on sale last summer and fall is long gone. Now it appears more like the buffet at Golden Corral - might be plenty available, but not much that's edible and you have to watch out in case anyone's sneezed on the food or dug their hands through the salad bar.

    But. RSO.B will pay me at the end of July. And because it's quarterly, the dividend will be larger than any of the monthly payers I own. So, what if I buy several more preferreds, five, where I'm getting a large dividend every two weeks instead of having to wait until the end of the month?

    Won't make much difference financially, but like I said, with my mentality, it's easier to deal with portfolio ups and downs when that money is coming in frequently.

    So, with my preferred buying rules:

    Dividend needs to be at least 8%.

    Price needs to be under par.

    Cumulative dividends are nice, but not completely necessary.

    A dividend being paid on the common stock or a positive pe (violated both of those rules with my last purchase of LTS.A, but I believe that company is turning things around) is mandatory.

    And with all that said, my options are limited to mainly mreit type preferreds, a Greek shipping company that I used to own the common in and wouldn't touch with your money, and a mlp or two.

    I hate mreits. But since they're classified as a reit, they have to pay out 90% of any profits as dividends. And since the preferreds are required to get their dividends first, I'm okay with owning their preferreds.

    So a few current candidates for Friday that should allow me to receive the dividend in mid-July:

    (NYSE:CYS) - B

    NYMTP

    (NYSE:HTS) - A

    (NYSE:DX) - B

    The first two would be my first choices, but I'll dig around more. All should pay out in mid-July and I should be able to buy into one before the ex-date.

    I want things to be smooth and not bumpy when it comes to income. And I realize that I will run interest rate risk as I discovered last summer. But as long as the underlying common gets paid a dividend, which is pretty much mandatory for a mreit, I still will have that cashflow.

    As usual, I will update on buy day of what I decide on.

    Themes: HTS, CYS, NYMT, DX
Back To User 7415181's Instablog HomePage »

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

Comments (3)
Track new comments
  • User 7415181
    , contributor
    Comments (844) | Send Message
     
    Author’s reply » Okay. I sold off oxlco and tpz this morning at a profit - tpz may have been a mistake, but we'll find out later. As outlined above, I want dividends and distributions coming in every two weeks. Proceeds divided between nymtp, nrf.b, abr.b, and lrpsp.

     

    NYMTP should pay in the middle of July. NRF.B should pay in the middle of August. ABR.B should pay at the end of August. LRPSP pays in the middle of the month (and unfortunately has a k1 - the trade off is that it still gives me some energy exposure and paying in the middle of the month is fairly rare considering monthly payouts are usually the end of the month).

     

    This juices the portfolio yield a bit as oxlco at these levels is under 8% and tpz is under 6% (though I may miss some more capital gains, but oh well).

     

    So in keeping with this theme, the likely buy on Friday will be mitt.b which should pay in the middle of Sept and the one after will likely be ras.a which would complete my collection of preferreds and have dividends come in every two weeks.
    17 Jun 2014, 12:10 PM Reply Like
  • User 7415181
    , contributor
    Comments (844) | Send Message
     
    Author’s reply » Mitt.b it was this morning.
    20 Jun 2014, 10:16 AM Reply Like
  • User 7415181
    , contributor
    Comments (844) | Send Message
     
    Author’s reply » Well. I was planning on writing another post this week, but it was not to be. We got a letter from our landlords this weekend telling us that we have to be out of here by the end of August. This means a move, so this also means I need to raise some cash.

     

    Sold these today (all at a profit but LCM) - (BWG) (http://bit.ly/s0ea9K) (http://bit.ly/1r7qY7V) (http://bit.ly/1r7r0fW) (http://bit.ly/1r7qY7Z). I also sold off some of my overweighted (http://bit.ly/QjH9Mp) B shares.

     

    I also bought back into (http://bit.ly/1r7qY83).

     

    This is not ideal, but shit happens. We knew this was coming some day as we've been on month-to-month rent for a few years now. The JDD was bought instead of one of the RAS preferreds because preferreds continue up in price overall and it should pay out at the end of Sept. or early Oct. And it still pays close to a 8.5% distribution and is at a double digit discount.

     

    So, I still own preferreds and now one cef so that I will get paid a dividend/distribution every two weeks. Problem is that it won't be as much as I'm used to, but we need someplace to live.
    30 Jun 2014, 03:13 PM Reply Like
Full index of posts »
Latest Followers

StockTalks

More »

Latest Comments


Posts by Themes
Instablogs are Seeking Alpha's free blogging platform customized for finance, with instant set up and exposure to millions of readers interested in the financial markets. Publish your own instablog in minutes.