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Retired news reporter, former business writer for two daily newspapers. Former business owner. Manages own IRA, to keep hand on pulse of the market. Thinks the banking system is a no longer sophisticated control mechanism to keep the serfs in bondage.
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  • A Comparison Of Two Mortgage REIts The Past Two Years.

    I posted a response to an article on IVR and decided to also modify and post the same information here.

    I bought a very few shares of Invesco Mortgage Capital (NYSE:IVR) inside an IRA 30 months ago to see how it would perform. How has it performed in reality since then?

    My position is down 17 percent from the time of buy in. the current yield is 11.8 percent. Over 30 months I have gotten back in dividends about 30 percent of my initial buy in, for a cumulative net gain of around 13 percent.

    So over 30 months this investment has produced a roughly 5 percent annual yield, which is less than my holdings in two utility stocks, SO and DUK. But IVR has done better than leaving the funds in a money market.

    Had I done some dollar cost averaging these figures would have been higher... but for now if the dividend is cut the stock will drop further, wiping out all or maybe most of the in the money return. But this stock is so high risk and similar to junk bond yield I continue to just hold it and see what the total return is over time.

    Of course other growth stocks and funds within this account have done much better in the rising market.

    I don't plan to add to this tiny position... May sell if interest rates start to hike up... but for now the current yield will incrementally boost the cumulative and annual return figures - if the stock does not nose dive.

    By comparison, I also have two small positions in New York Mortgage Trust (NASDAQ:NYMT) in the IRA and in a separate taxable account.

    This is trickier to calculate as they were bought at two different times, but the composite holding average of both positions averages about two years and the positions are roughly equal in size.

    The current yield of NYMT is 13.8 percent and the combined blended holding is up 19 percent. So the cumulative return on NYMT over two years has been more than 27 percent, plus a 19 percent appreciation in capital. I figure this roughly means NYMT has had an annual return of 23 percent a year over two years.

    Jan 22 12:02 PM | Link | Comment!
  • Current debt system obviously doesn't work

    A factor in the Euro-centric crisis is the accumulated effect of compounded interest over time. Money paid to interest was money not available for operations and projects and thus more money was borrowed to replace money diverted to interest payment.

    I think the case is built for government to just print money and issue it, without having to pay interest on it.  Despite the alarms of the banksters, this could have been done in a more responsible manner.

    Central banks that create money out of thin air and then loan it out - and then demand interest - are doing what the government could have done directly interest free.

    As for elite families and widows and orphans who loaned money to these governments they should expect to take losses in a free market dog eat dog world.

    Why are there free markets and free trade if in the end the free markets demand  bail outs and help and socialist transfer payments from everyone else to the debt industry, which by itself builds nothing or creates nothing  other than debt obligation.

    Our debt money system is clearly not working. Why keep pumping it up higher and higher.

    Oct 27 4:12 PM | Link | Comment!
  • Phil Davis is Right - Stop the (Frantic) Trading this Week...

    One lesson of the insider trading probe is that the game is rigged against traders who are not GS or equivalent level of size and scope with corresponding  insider information networks.

    Since trading is a zero sum game it would seem logical that one should review Graham and Dodd and forget the frantic trading and just start and hold positions in good investing vehicles. 

    Better yet, withdraw your stocks from Cede and Co. and put them in a safe place where your broker cannot "borrow" from you and sell them short against your position.

    Turn to horse racing or casinos or poker to satisfy your gambling habit.

    If you had put $100 on General Quarters in the race before the Kentucky Derby, then bet those 8 to one winnings on Super Saver (as the CNBC $100,000 winner did) in the next race, you would have turned $100 into $8,000 in about 90 minutes.  I saw that play but had no one to quickly sell the information to so I could make money instead of quietly wagering and keeping it to myself, as real gamblers do.

    Or better yet, take up golf, protect your wealth by improving your marriage (divorce is a real wealth buster. A local scion had to divest several cash -cow convenience stores to a foreigner, a Muslim, to settle his third divorce), start enjoying the sunsets and take time to smell the roses, and get out of the artificial trading world that is so disconnected from our basic hunter - gatherer roots that used the body as well as the mind.

    An ounce of gold is an ounce of gold and the equivalent thousand ounce derivative chain linked to that original ounce of gold is exactly what will cause our equally abstract government to default and fail - and then none of you will have time to worry about puts and calls.

    Come to think of it, those shares you grabbed from Cede and put under the mattress might have more value being burned in the living room of your 4,000 square foot Mcmansion as you try to stave off the frigid ice age that materialized when the Gulf Stream stagnated unnoticed by you because you were trying to figure out just where you wanted to place your bet somewhere along that 1,000 ounce gold derivative chain anchored by a solitary ounce of real gold.

    Phil Davis has it right this week.  Stop the frantic effort to outwit GS and black boxes and enjoy the day, live the real world outside the cubicle, the corner office...  Your survival may require just that.

    Granted, a few people with outsized brains have sat in cubicles string at computer screens and have amassed huge sums of fiat money from the masses. If you were one of them you would not now have time to read Seeking Alpha - too many Playboy bunnies running around your estate. Unless you are George Soros, and then you will use your vast wealth to make sure the masses live under communitarianism, code for communism. But Soros has a mission in life, driven by a god.

    Earlier this year Phil told you how much more wealth the top 1 tenth of one percent accumulated in the past year. You are not clawing back wealth from them in any meaningful way with your frantic trading. Phil's own information shot down that falsehood.

    Come out of your cubicles and throw a sleeping bag in the back of your shortbed Chevrolet Colorado and head for the Bakken oil field.

    I would do just that but my face is glued to the computer screen and I just picked up some junior producers sniffing around that patch. .  Like you, too reserved to get my hands dirty.

    So I recant my hypocrisy and affirm you guys can trade your  highly sophisticated brainy way  and I will trade my low-brain intuitive way and patiently wait  - and to hell with the slowing Gulf Stream.

    Funny that the Millionaire Mind did not write about any options traders. Just service station owners and the like. Where is that information on SA?

    Disclosure: Long ROAOF
    Nov 23 10:42 AM | Link | Comment!
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