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apoplectic

apoplectic
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  • CNBC Viewership Down 28% [View article]
    II used to go to CNBC.. However. Like Seeking Truth said, there are ideological personas who seem to dominate.

    Lately I have been more satisfied with Bloomberg's coverage of the market/economic news. I can't comment definitively on cleavage, but (Asia Call) Bloomberg's Heidi Cooch has the Diphthongs!
    Jul 30 04:40 PM | 8 Likes Like |Link to Comment
  • Nordic American Tankers: Rise Of The Phoenix [View article]
    The peer group of tanker owners is populated with some highly leveraged enterprises, in contrast with NAT, which continues to issue equity.

    Recent years have witnessed bankruptcy filings by General Maritime (2011) and Oversees Shipbuilding Group (2012). Frontline (FRO) has a billion dollars of debt, including a $225 million convertible bond maturing in 2015, and I believe there is a possibility of a huge bankruptcy filing by FRO.

    The industry has been in pain for more than 6 years. I can't imagine recovery in the industry without the scrapping of excess tankers... Those tanker companies whose business model depends on borrowing will have a significant disadvantage, in that the banks with expertise will have experienced horrendous uncollectable loans along with collateral than has dropped in realizable value by 70%.

    Eventually NAT may emerge as a survivor... in a down-sized industry.
    May 31 11:29 AM | 6 Likes Like |Link to Comment
  • Retirement Strategy: Dividend Income Investing And The Distribution Phase [View article]
    I also am in the "die broke" camp, with the caveat that I am part of a duo, so the object is for the Second-to-die to die broke.

    Looking back on my experience (saving and investing since 1972, retired since 2000) clearly a program of dividend-growth investing and reinvesting dividends can result in a portfolio that can pay substantial cash dividend. But, I hasten to add, not without market fluctuations along the way, and not without security selection risk (there were buyers for shares in Kodak, Washington Mutual, and Enron, just to mention three of the cowpies an investor could have stepped in).

    Based on beta values from Yahoo Finance I would estimate a weighted average beta of the current BTD Portfolio between .6 and .7 Let's assume the portfolio's terminal value is $500,000, when the investor retires and begins receiving dividends in cash. If the SP500 drops 40%, it would be reasonable to expect the BTD Portfolio to decline in asset value from $120,000 to $140,000 (24% to 28%).

    As a retired person, I am averse to losses (even unrealized losses) of capital. So, in this phase of my life I allocate a percentage of my portfolio to Fixed Income securities, which is equal to my attained age. The FI securities are mainly municipal bonds which will mature in the years when I turn 74 to 76.

    The equity portfolio pays increasing dividends, but I do not expect increasing dividend income to fully offset increases in our cost of living in future years. My stratagem for coping with inflation is to start with an income significantly higher than the budgeted expenses of our rather simple small-town lifestyle. The initial excess will become smaller as the costs of living go up over the years. The excess enables gifting, some of which does cause pleasure for people! As a grandparent, I have been contributing to 529 College Savings Plans for each grandchild since the age of one...
    May 19 10:13 AM | 4 Likes Like |Link to Comment
  • When Is the Right Time to Sell Dividend Stocks? [View article]
    To clarify, WAMU's April 2008 dividend cut was the second cut, from 15 cents to 1 cent. Shareholders attending the annual meeting jeered CEO Killinger (who at that time had received about $98 million in cash compensation from the company over the years). Killinger was quoted on CNNMoney as saying, "I just want people to calm down and have a little faith. We will get through this."

    The first WAMU dividend cut was reported on Bloomberg on December 10, 2007, from 56 cents to 15 cents. Immediately before the annoncement WAMU shares were trading at $19.20. And following the announcement the shares dropped in price to $18.12

    If a WAMU shareholder had sold ASAP following the announcement, I would assume a selling price of $18.12 Depending on when the shares had been purchased, there could have been a gain or loss on the sale.

    In July of 2007, when WAMU had a history of increasing dividends quarterly for 48 quarters starting with October 1995, the shares traded at $42.27 From this price to $18.12 following the first dividend cut, the loss would have been about 57%
    Mar 24 02:09 PM | 4 Likes Like |Link to Comment
  • When Is the Right Time to Sell Dividend Stocks? [View article]
    If the trigger to sell is the fact of a dividend cut, it would fail to preserve capital in cases like WAMU. As I recall, the company maintained the dividend, while the price of the stock rapidly swooned. By the time the dividend was cut, a lot of damage was already done to shareholders.

    There may be other cases in which insiders are selling, and the CEO/CFO are publically saying "all will be well", while the company is borrowing to continue paying dividends... with the dividend cut happening only after the company has exhausted its ability to lever up the balance sheet.

    There might be increased comfort in monitoring the dividend payout ratio and the Fitch/Moodys/S&P ratings of the companies under consideration.
    Mar 24 11:49 AM | 4 Likes Like |Link to Comment
  • Has the Tsunami Destoyed Japan's Economy? [View article]
    Insurance companies and utilities earnings will be hit. But generally the need to rebuild infrastructure and housing should be positive for GDP. "The sun will come up tomorrow".
    Mar 12 11:20 PM | 3 Likes Like |Link to Comment
  • Living Off Dividends in Retirement [View article]
    Interesting article and comments!

    I ditto Rustier's comment about swapping one equity for another, although, in retirement, it may make more sense to rebalance from equities (with gains in excess of say, 65%) to TIPs -- (Treasury Direct will sell original issue TIPs, which may be either sold for a fee or held to maturity in 5 or 10 years.)

    hwood007: as an alternative to GS common, there are a couple of floating rate noncumulative preferreds. GS is rated A+ by Fitch and has been listed NYSE since 1896, so I personally do not expect liquidation. However, in case of liquidation the preferred holders might be in an advantageous position relative to partners. (Just a hunch -- I am no lawyer.) From an income perspective, the dividend is the greater of 3.75% of par ($25), or LIBOR+50 bp (I think). In the event of rising short-term rates, the FR preferred would be committed to a rising dividend payment.

    METLife is another highly rated company with a FR preferred, if the ethics at GS are just too malodorous.
    Apr 21 02:12 PM | 3 Likes Like |Link to Comment
  • The Municipal Bond Crisis Is About to Begin [View article]
    The Harrisburg incinerator was 23 years old when the Harrisburg Authority bought it for $41.6 million in October 1992. As Joyful pointed out in a comment above, the brilliant idea was to burn refuse for Harrisburg and surrounding communities, and generate steam for the greater good. The EPA put a fairly major fly in the ointment by ordering the plant closed in December 2000... due to the finding that the plant was the polluting the atmosphere with dioxin, etc.
    Harrisburg tried to retrofit the plant and control it to stay within EPA limits, and thereby pushed the debt on the incinerator over $288 million. CUSIP 41473EFJ5 due 12-2033. Trustee TD Bank. Insured by Assured Guaranty Municipal Corp (former FSA). When March 1 passes without the payment from Harrisburg, I would imagine TD Bank will have a claim for AGMC.
    The Commonwealth of PA would have the legal ability (Act 47) to categorize a municipality, such as Harrisburg, as distressed. The $68 million in payments due on the incinerator bond in 2010 may be regarded as beyond the city's ability to pay. (The mayor had proposed to the City Council a 20% increase in property taxes and a 40% increase in water rates, and they voted it down to settle on the 2010 budget which notably does not include payments on the incinerator.)
    It will be interesting to see how the political class sorts this mess out. Maybe the EPA would buy the plant for $288 million on the theory that "You broke it, it's yours!"
    Feb 17 09:40 PM | 3 Likes Like |Link to Comment
  • The Coming Market Crash And The "Trigger" [View article]
    I checked the info about "Portfolio Margin" on the websites of ETrade and TDAmeritrde. Basically margin is set at the amount the broker believes is "the largest loss identified" on stress testing the portfolio.
    TDAmeritrade gives the example of a diversified stock portfolio of $65,235 requiring a margin of $9,785.25 (15% margin). Mind you, an account has to be $125,000 minimum to start Portfolio Margin. And if the account value drops below $100,000 the Portfolio Margin eligibility would be finished.

    Still, the methods of Portfolio Margin look like they could increase the leverage of certain brokerage accounts quite a bit... with the increased risk of margin calls and forced selling, should the stocks drop by more than 15%.
    Aug 10 09:10 AM | 2 Likes Like |Link to Comment
  • I'm Buying W.P. Carey For The Long Haul [View article]
    I feel that the late William Polk Carey was a truly creative individual (... perhaps a unique individual!)

    I wonder if there is any significance to the fact Mr. Carey's Estate is systematically selling shares. Who, if anyone, is accumulating shares to assume prominence as controlling shareholder(s) of WPC?
    Apr 15 08:25 AM | 2 Likes Like |Link to Comment
  • A Few Reasons Why I'm Still Attracted To Shares Of Plum Creek Timber [View article]
    The October 2013 secondary public offering of 12,100,000 shares at $45 (at a time when the 200-day moving average of the share price was about $48.50) was dilutive. I believe the offering initiated a major round of selling.

    The recent price of $40.69 seemed to me a reasonable point to buy some more shares. If memory serves me, $40.29 was the price where PCL was buying back shares in the 2Q of 2007.

    Meanwhile lumber prices which fell from July 2007 to July 2009, have been higher every summer since. According to Random Lengths Composite series, 1000 board feet that was priced at $245 in July 2009, would be priced at $362 in April 2014.

    NAHB statistics on housing starts show a steep drop from 2007 to 2009-2010, and an ongoing recovery since then.

    PCL distributions are characterized as long term capital gains for tax purposes.

    (Disclosure: long PCL.)
    Apr 14 06:09 PM | 2 Likes Like |Link to Comment
  • Exelon: Selling At 10-Year Lows [View article]
    Can't say I agree that Scotty is all that great a contender, but I share your view that WEC is a well-managed utility. Exelon, on the other hand, IMHO is an accident waiting to happen.
    Dec 6 10:57 PM | 2 Likes Like |Link to Comment
  • Wells Fargo Got Some Nice Holiday Presents [View article]
    I am both a shareholder in WFC and a customer at a WFC store. I have lived in PA where Wachovia branches have been acquired. No doubt the Eastern ways of doing things are regional. Where I think WFC excels is in surveying customers. Eastern, Western, or Central USA -- wherever -- after a transaction with WFC, there is a high probability that an email or postal questionnaire will follow. I believe every WFC employee is aware that customers will be asked to evaluate transactions.
    So, WFC is organized to continuously learn how to do it better for their customers.
    I suppose it's Total Quality Management 101. Find out what it takes to delight the customer. Do that, and cross x cross sell.
    Jan 3 12:46 AM | 2 Likes Like |Link to Comment
  • U.S. Taxes: Who Makes And Who Pays - More Than The Rich Will Have To Pay More [View article]
    I appreciate the effort to bring data into the discussion of the Fiscal Cliff.

    I wonder about the deficit figure of $900 billion for 2013. I have seen people, such as Hamilton, say the annual budget deficits under Obama have averaged $1,274 billion, which would be higher than $900 bn by about 40%.

    Without in any way casting any aspersions on the original poster, and his fine piece, how do we know the 2013 deficit will be $900 billion?
    Dec 9 07:32 PM | 2 Likes Like |Link to Comment
  • Telefonica: Cheap For A Reason (Equity) [View article]
    Events such as the cancellation of the dividend have already been reflected in the declining prce of TEF shares.

    Asset sales are having the intended strategic effect of reducing leverage. There is evidently a pipeline, wih more planned sales ahead.

    In my opinion (recently long TEF) growth in Latin America is slow at this time, and Spain is in a severe recession. Is there a good time in the cycle of economic expansion and contraction to buy a telco? I believe the ideal time would be soon after there has been capitulation and panic selling in the equity.
    Aug 3 10:30 AM | 2 Likes Like |Link to Comment
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