SLW

Dividend Aristocrats: 3 to Watch

I, too, have some minimum yield requirements (3.5%, generally) but like the growth prospects of many of the Aristocrats which don't have a yield that high, which is the normal and logical trade-off. To capture exposure to the lower yielding Aristocrats but maintain higher cash flow, I have been making smaller purchases of BDV and BDJ which are Blackrock closed-end funds focused on "Dividend Achievers" which are mostly Aristocrats with a long record of raising dividends. They are managed funds and BDJ is "enhanced" with buy-write activities. And they have managed distribution policies so normal caveats to current yield do apply. BDV is currently selling at a near 7% discount to NAV and paying a near 7% yield on current MV.

Switching subject a little, I am surprised that VZ and ATT aren't mentioned as high value propositions in the Aristocrat group.

Not for everbody, perhaps, but another way to approach it.

Enterprise Products Partners, Linn Energy: Petroleum Profits Without the Drama

HI, Neil,
Glad to see you are still alive and kickin'. I sort of miss your ranting and ravings and the "show me the cash" mantra in your former endeavor. I don't care much for the new look and direction, though Roger still maintains some of the old.

I like to see the cash. I figure my kids will eventually get the principal anyhow so as long as I can live on the income I'm not greatly concerned about volatility. EPD/TPP and LINE are two great examples which have helped soften the blow from a few "wrecks" like Thornberg and Acrtic Glacier (though the latter isn't down for the count just yet). What else is up? (or down and going up?)

Wells Fargo's Assets Sale Begs Some Questions

Thanks for taking the time to reply. I agree that once we know the details of this transaction, it could provide a clearer picture in a number of areas - but I will resist trying to extrapolate one specific transaction too broadly.


On Jul 15 05:38 PM Edward Harrison wrote:

> At this point, it IS a bunch of hypotheticals and getting some clarity
> will be very helpful in determining what this sale means for the
> PPIP program, where asset values are trading, what to expect at WFC
> for Q2, and how other regional banks in the Midwest are doing.<br/>
>
> I understand that the assets in question actually may NOT only be
> Milwaukee-based loans given the wording of the article. We maybe
> dealing with a standard MBS - so the Milwaukee part may just be a
> ed herring.
>
> Here are three possibilities regarding ownership:
>
> 1. This is a transaction where WFC is merely the broker/servicer.
> The question then becomes: who is the seller and is this a distressed
> sale
>
> 2. This is a Wachovia asset. Wachovia is known to hae had a lot o
> dealings with NovaStar pre-2007. The question then becomes: how far
> were these assets marked down? Wachovia assets were marked way down
> before going on WFC's books. So, it is entirely conceivable that
> WFC would record a gain from the sale.
>
> 3. This is a WFC asset. The question then is the same: where are
> the marks and are these MBS assets or straightforward loans?
>
> As to Norwest exposure, WFC does not have large exposure in MI and
> OH, but other large banks operating in the Midwest do and that's
> the point: if Milwaukee-based assets are selling at 35 cents on the
> dollar, where would Cleveland or Detroit-based assets sell in a similar
> transaction. And what does that mean about the potential writedowns
> for FITB or HBAN and the like?
>
> So, getting a hold on this situation will be very illuminating on
> a lot of fronts.

Wells Fargo's Assets Sale Begs Some Questions

Seems like a lot of hypotheticals, maybes, whatifs, and speculation to me. Also, keep in mind that WFC is really Norwest with a name change so it shouldn't be much of a surprise it holds assets originated in the midwest (more like MN, WI, IA,NE rather than Ohio and Michigan). And my preference would be for assets from the midwest rather than west coast ( perhaps we should refer to the Plains States rather than midwest - I always find it hard to think of anything east of the Mississippi as "midwest").

It seems much more likely to me that these assets had already been written down by the time they were sold and WFC is just as likely to recored a gain as a loss from the sale (assuming, of course, they owned them in the first place).

Its OK to have questions (and you raise some good ones), but don't try to provide the answers until you have all the information.

Treasury's Standardized Terms

Though Wells may say they didn't want it, it is remarkably timely. Considering that they needed to raise $20 Billion or so to support the Wachovia purchase, this is a very fortuitous event, indeed. The cost to raise that kind of capital would surely have been higher in the private market, even under improved conditions.

That Sucking Sound? It's FDIC Insurance Taking Over

The article plays to emotion and I would say is borderline irresponsible. Our banking system has been and continues to be the strongest and most admired system in the world. To suggest otherwise in an attempt to undermine our confidence in the system accomplishes nothing. Do you expect the corporations and other large depositors to move their money to a mattress? Perhaps to some Wall Street money market funds? Some banks are having some problems - it's the nature of the business and, actually, a sign the system is working. No pain, no gain.