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  • Gold Miners' Strong Q3 Operating Results Defy Universal Bearishness [View article]
    And further to noah katz' question regarding valuation,
    If gold mining companies are cheap, why isn't there a
    lot more merger and acquisition activity among them?

    Note that ABX and NEM were talking about it (for about the 7th time), but discussions broke off last April.

    There have been couple of deals year-to-date. But the lack of big M&A events may mean the bottom is not in ... yet.
    Nov 22, 2015. 08:26 PM | Likes Like |Link to Comment
  • Gold: On The Edge Of A Steep Cliff [View article]
    Portfolio is 99.9% bullion (62.3% gold & 37.6% silver)
    Nov 16, 2015. 04:20 PM | Likes Like |Link to Comment
  • Myopia And Market Function [View article]
    Aren't the payments out of fixed annuities lower if the annuity is bought when interest rates are lower? If the ZIRP economy is an argument against buying high quality bonds, would it not also be an argument for waiting to purchase a fixed annuity?
    An added virtue of delaying the purchase date is that some annuitants will have died before attaining their life expectancy (the early deceased annuitant's loss is -- in part -- the late annuity buyer's gain).

    I do not claim to know when, but at some time the ZIRP economy will transition back towards higher interest rates. I believe there are reasons to expect that hardly anyone will be talking about "looming deflation" during that transition. Rather, the CPI-U will be closer to its long-term average. Under conditions of rising inflation, I think that inflation-protected securities will be useful for not only income production but also portfolio market value. I have been a buyer of WIW and WIA closed end funds, as well as TIPs.

    Thursday 11/19 there will be an auction of TIPs to mature on 7/15/2025. Treasury Direct will complete settlement with buyers on 11/30. Someone interested in waiting until July 2025 to buy a Single Premium Immediate Annuity might consider bidding in the auction.
    Nov 14, 2015. 03:02 PM | Likes Like |Link to Comment
  • WIA And WIW Holders Deserve More From Chairperson Michael Larson And The Board Of Directors [View article]
    Now that my limit buy executed ($10.60) we bedfellas!

    For my goals, which include allocation of about 15% of fixed income investments to inflation-protected securities, I do not count on activist investors to change the structure of WIA. I regard WIW and WIA as 2 similar funds for hedging the risk of stagflation (slowing growth, rising CPI, continuing under-employment -- labor-force participation rates in decline). As such, WIA should perform relatively well compared with equities or straight bonds 2015-2025.

    Disclosure: Long WIA, WIW.
    Nov 10, 2015. 06:24 PM | Likes Like |Link to Comment
  • Median Inflation Vs. Mediocre Growth [View article]
    Stagflation in the USA last time was 1972-1980, right? If stagflation is established in 2017, it would persist into the 2020s.
    Nov 9, 2015. 09:44 AM | 1 Like Like |Link to Comment
  • Median Inflation Vs. Mediocre Growth [View article]
    Consistent with the observation that "conventional wisdom is that inflation is falling everywhere", today's Bloomberg TIP spreads:
    5 year 1.31%
    10 year 1.60%
    Nov 6, 2015. 06:38 PM | Likes Like |Link to Comment
  • WIA And WIW Holders Deserve More From Chairperson Michael Larson And The Board Of Directors [View article]

    Guggenheim Funds Distributors acts the servicing agent for WIA.

    Western Asset Management, and affiliate of Legg Mason, is the fund manager for WIA.

    Michael Larson, CIO of Cascade Investments, is responsible for the investment of the largest equity interest in WIA. Some sources identify Larson as the chair of the Board of Trustees of WIA. I would think that the Trustees will be diligent about the performance and integrity of the servicing agent and the manager of the fund.
    Nov 4, 2015. 03:39 PM | Likes Like |Link to Comment
  • WIA And WIW Holders Deserve More From Chairperson Michael Larson And The Board Of Directors [View article]
    I see that "REDI"/Montrose Capital Group is long WIW and WIA, and yet expresses the view that these two CEFs are "poor choice for investors" .. "the worst two funds" ... "deeply flawed"... with "structure unquestionably flawed".

    No doubt a good deal of research went in to the piece.

    I recently placed a limit buy order on WIA. In my view the fund would a good source of income. I agree that the fund's portfolio is not perfect, but I do not expect perfection. In recent years TIPs yields have been low. I think inflation expectations are relatively low at this time ... which may be contributing to the size of the discount. A portfolio that seems "deeply flawed" today might well seem ingenious in an environment of rapid inflation.
    Nov 3, 2015. 10:19 AM | 1 Like Like |Link to Comment
  • How Quickly Will The Price Of Oil Climb With The Death Of The Petrodollar? [View article]
    In the original article there are two points that I question.

    The Pan-Asia high speed rail network with connection to EU is not built. I see no reason to believe the Petrodollar is in immediate peril on that score.

    The implication that Jordan is replacing its alliance with the US with an alliance with Russia does not have a basis in fact.

    Nov 2, 2015. 04:11 PM | Likes Like |Link to Comment
  • 9 Simple College Savings Tricks [View article]

    Why should "the window to save for college" in a 529 Plan be less than 18 years? Kids are old enough to be beneficiaries as soon as they have a Social Security Number. (I started salting away funds for my grand-children when they had their first birthday... I could have started sooner though.) When the time comes to make withdrawals, unless the balance is large enough to pay for more than one year's expenses, I would suggest that they wait until the last year of their program of higher education. So if the program happens to be 4 years of university, I could be contributing to each Plan for 20 years before the first withdrawals.
    I will grant that "most people" may not save in this manner, and that for many (being realistic) it does not seem possible. Still and all, saving in advance is preferable to racking up the same dollar amount of student loan debt.
    In regard to the idea that stock and bond fund valuations are at risk of "swoons or collapses", the Age-Based 529 Plan Portfolios are an alternative for managing that risk. The age-based plans systematically increase the allocation to stable value funds, and reduce the allocation to equities gradually as the child's age approaches 18.
    Nov 2, 2015. 12:07 PM | Likes Like |Link to Comment
  • 9 Simple College Savings Tricks [View article]
    Like Chris DeMuth, I thought the Nevada 529 (Vanguard) was the one to beat. But then I moved to Wisconsin, where the state income tax deduction for a 529 Plan contribution is not allowed for a Nevada plan... has to be a WI plan. So contributions go to EdVest now.
    Oct 30, 2015. 06:41 PM | Likes Like |Link to Comment
  • Equity CEFs: Your Best Market Moves In Closed-End Funds [View article]
    Limit Buy Orders placed October 29 and good for 60 days will remain in effect through December 29.

    Among equity CEFs: Aberdeen Singapore SGF might increase international diversification at a limit buy price of $8.65. One can read in The Straits Times about the deepening pessimism as to economic growth, real estate, etc. Evidently Singapore stocks are relatively out of favor. I would expect some tax-loss harvesting by retail investors between now and year end.

    Adams Resources PEO 52-week low was $17.22 ... If the worst pessimism on petroleum is behind us, I believe PEO seems likely to trade below $19

    (Just my personal opinion.)
    Oct 30, 2015. 10:19 AM | Likes Like |Link to Comment
  • Technically Speaking: Has The Bull Returned? [View article]
    I note that Powershares QQQ, based on the Nasdaq 100 Index is very close to surpassing the 7/20/2015 intraday high of 114.39. For a while after 7/20 the "sky was falling", until QQQ made a low of 98.01 on 8/25. The retracement appears to be driven by a minority of the 100 stocks that comprise the index. For example on October 27, 34.9% of the stocks in the index advanced and 63.2% declined ... based on the Invesco website data.

    I suspect that there may be a short squeeze on short positions that were entered while the sky was falling, especially in the few stocks that are advancing by leaps and bounds.

    The bears may take solace in the weak breadth, as they are being gored.
    Oct 29, 2015. 12:11 AM | Likes Like |Link to Comment
  • AMT-Free Muni-Bond CEFs: Portfolio Quality [View article]
    From CEFconnect I gather that as of 6/30/15 Puerto Rico was 0.33%, and IL was not in the top 10 (thus IL bonds must be less than 3.7% of the portfolio of EIV) as of 2/28/14.

    From the Eaton Vance website, I understand that the leverage on the EIV balance sheet consists of $45 million in Auction Rate Preferred which resets every 7 days. The cost of this capital has been cheap of late. But if commercial paper rates were to rise, the cost of this capital would rise as well.
    Oct 23, 2015. 12:23 AM | Likes Like |Link to Comment
  • Anchors Aweigh! [View article]
    I, too, have often wondered about the Fed's notion of "anchored inflationary expectations".

    As I recall, economics professors can talk about the behavior of (hypothetical) consumers, union leaders, and investors in the expectation of inflation. Rational Consumers theoretically will buy big-ticket items and finance the purchase with a fixed interest rate loan. (Lenders, for their part, will price loans with interest rates that float or periodically reset.) Union leaders will step up demands for higher wages. Savers will eschew fixed-rate certificates of deposit, and opt for Treasury I bonds. Investors will be more interested in TIPs and "hard assets" that will hedge inflation.

    The Recency Effect may be a source errors in perception. The perceived risk of "looming deflation" may be based on recent declines in the price of gasoline. Or the perceived risk of inflation may be based on the rising prices of eggs and bread.

    I agree that the notion of a consensus inflation expectation is silly. Some of the people who are actually aware of expecting a certain percentage increase in the CPI-U will likely be over-estimating. The rest will likely be under-estimating. And over a long period of time, sometimes it may happen that the vast majority of inflation expectations will be proven erroneous.

    What then? Cognitive Dissonance theory suggests that an extreme about-face (metanoia) can be expected. Thus, a sharp rise in the CPI-U would be a trigger for new demand for TIPs and hard assets.

    Finally, despite the fun we are having with the notion of anchored inflation expectations, I believe that there are investable assets that would be more-or-less useful as an inflation hedge in a portfolio. Generally, hedges can be bought for lower cost at times when hardly anybody else is buying them.
    Oct 20, 2015. 10:11 AM | 3 Likes Like |Link to Comment