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surfgeezer

surfgeezer
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  • You Might Be A High Yield Sucker If... [View article]
    Overall I liked the article Adam.

    Agree people need to understand the mREITs and how they make their money and be ok with a variable div. That said, and I am long AGNC, ARR, PMT, NRF, I do not agree rates are going up anything close to soon. I do agree the bond folks will keep the repo and treasury 10 yr bouncing around with their interpretations. I fully expect to continue getting a very nice YOC from holdings of AGNC and ARR, with the other two hybrids, PMT, NRF and now NSAM, that manage things much differently.

    I like CEF's. Use them extensively and usually use cefconnect.com. Think you glossed over the importance of looking at UNII, especially in a managed fund. That is key. However CEFconnect was wrong on the -UNII and I only found out by going directly to their site using my recently added PGZ as an example. Another key-do not trust third party info.
    I know it is RE based. I know it is 60+% CMO/CMBS backed commercial mortgages, 30+% preferreds, 20+% International and some RE securities directly including DLR. It is 30% leveraged with an Interest cost of 1.1%. All those things it owns are by definition yield spread positive over the 1.1% cost and because I bought the fund at a discount, I have them at a discount and again because of the leverage I own 30% more. Not that I could buy or manage commercial RE CMO's myself anyway. But I can through them, and as boost to me they are like me and have a low 1% turnover rate-NOT traders. Also monthly-LOL.

    I also look at things a little farther down the road on coverage ratios for MLP's and even BDC's. While correct "The higher the payout ratio, the less wiggle room the company generally has to make mistakes", it just means one should look at exactly why the current payout is low-IE are they in the middle of spending on something that has not started paying back? being the BIG question, and importantly do YOU think it will work?.


    So, like you, I say know the companies. I am long PSEC and several low/- coverage ratios MLP's (WMZ, CLMT come to mind). I believe PSEC will be fine on the divs, but agree the what would be called UNII in a CEF is low. They do have lots of unrealized gains available and things like their Real Estate holdings that have rising rents to help. I have no problem with smart people disagreeing, it makes the market. I have several PSEC Puts in @ 10$ Net prices 9.43-8.88$. We will see if it drops below 10$. I like what the MLPs are spending the money on, again we will see.

    Agree that monthly only helps a little from a pure Income gain point of view. For me any way, that is not the only driver of why I like monthly. I use a portfolio wide DRIP, or I use my divs and Put premiums to buy things on sale in my portfolio or add diversity to my portfolio. The monthly payers are much easier to manage the cash flow from and make my monthly buys that add to my real Income. I operate my portfolio like a CEF or BDC, except I have no mandate to do anything with my Income. Why I like the monthlies is just the flexibility of the cash flow.
    Sep 22 03:52 AM | Likes Like |Link to Comment
  • You Might Be A High Yield Sucker If... [View article]
    "If they are realizing those gains and distributing them to newer shareholders, you are essentially taxed for gains that you were not around to witness"
    wow that is a pretty tough standard Adam. To me Investment Income includes Capital Gains as well as the divs. In fact that Capital Gain, that he very well may have not ben around for initially, is a positive if he captures that real gain as probably long term Cap Gain. Where else you gonna get LTCG with a holding just a few weeks old? That is the seller of the CEF's loss and why I like the Closed part of closed end.
    I don't know UTG, but I would look at the historical turn over rate, because if trading is a normal part of the Closed End Funds biz, taking away trading profits from NII is not right IMO.
    Sep 22 02:28 AM | Likes Like |Link to Comment
  • Book Review: The Dollar Trap By Eswar Prasad [View article]
    Have not read that book, but completely agree with it's and your conclusions. I frequently try to make these same points, and have structured my portfolio that way. High yield Income.
    I would add a very complimentary read that is a little more historical based is Eichengreen's "Exorbitant Privilege".
    Sep 22 01:49 AM | Likes Like |Link to Comment
  • Northern Tier Energy - The Best Of The Variable Distribution MLPs [View article]
    Ok had to revise that Put comment as I forgot my dad's Sept @25$ Net 21.61$ sold in August. We picked them up this weekend @ the 21.61$.
    Sep 21 11:07 PM | Likes Like |Link to Comment
  • Get Paid While You Sleep: REITs That Pay Monthly [View article]
    Some reason my posts are super delayed. At the risk of repeating myself, thanks Brad another useful article, that I hope does not move markets in any way, since I am still working the Puts on ARCP and STAG and not technically long yet.
    Sep 21 10:59 PM | Likes Like |Link to Comment
  • Get Paid While You Sleep: REITs That Pay Monthly [View article]
    sorry something is really delaying my posts, thought the first one was lost.
    Sep 21 10:54 PM | Likes Like |Link to Comment
  • Get Paid While You Sleep: REITs That Pay Monthly [View article]
    Issuing shares is just part of normal REIT operation, it should be no surprise. ATM can be very efficient as opposed to a large share offering from a brokerage.
    Sep 21 10:45 PM | Likes Like |Link to Comment
  • Get Paid While You Sleep: REITs That Pay Monthly [View article]
    I believe high divs ETN's are fine long term, but you have to know the underlying fundamentals. mREITs WILL have fluctuating divs. The leverage enhances the fluctuation on price and div., but also is ALWAYS positive to received Income, IF the underlying has a yield better than the Interest and fee costs. Most ETN have fairly low fees and Interest cost, so positive yield spread.
    The price volatility can be hard to take or enhance traders returns.
    Long BDCL and MLPL.
    Sep 21 10:41 PM | Likes Like |Link to Comment
  • Get Paid While You Sleep: REITs That Pay Monthly [View article]
    Left Banker wrote a recent article on REIT CEF's.
    http://seekingalpha.co...

    I like CEF's because of the leverage and ensuing yield bump as well as ability to buy stuff at a discount. I liked PGZ, from the article and have added it to my Roth.
    Sep 21 10:34 PM | Likes Like |Link to Comment
  • Get Paid While You Sleep: REITs That Pay Monthly [View article]
    I agree with Adam, it is not hugely significant as far as additive to total DRIP.
    I still like them quite a bit. Because I basically have a pooled DRIP with my portfolio kicking enough cash and premiums to buy something every month. I use that monthly flexibility to buy whatever is on sale that month. It is the flexibility of not having to wait the three months. I now have several much smaller/larger months in some accounts that make it a little tricky, but I use leverage to smooth that out if necessary and try to keep a small amount of cash also.
    Sep 21 10:05 PM | 2 Likes Like |Link to Comment
  • Get Paid While You Sleep: REITs That Pay Monthly [View article]
    "Leverage funds like MORL are often not suitable for long term investors. And with an index as volatile as mREITs, things like decay are an even bigger problem. "

    Disagree, but I define "risk" to Income only. Leverage means you get more shares at an Interest and fees cost. IF those shares yield more than the Interest and fee/decay, then you GET more Income. Zero risk to that math. The more shares does mean more price movement, but if ignored like a long term Income investor should, their is little Income risk. MORL, being a leveraged to MREITs does mean a variable payout, but the costs of Interest and fees is low and hard to imagine a scenario where it would not have a positive yield spread or boost to Income.
    Just sayin, define risk- Income No, Price yes.

    No MORL but several pieces- CAGNC, ARR, PMT, NRF.


    Would also add I recently initiated a position on a leveraged CEF specializing in RE- PGZ.
    Sep 21 04:03 PM | Likes Like |Link to Comment
  • Get Paid While You Sleep: REITs That Pay Monthly [View article]
    U- yep. It is their basic biz, should be zero surprise.
    Sep 21 03:53 PM | Likes Like |Link to Comment
  • Look At These Juicy Yields - Are They Really Appropriate For Your Retirement Portfolios? [View article]
    "but plenty of value is available. "- yep


    This WEEK, I initiated NEW positions in a RE CEF in my IRA-PGZ price/yield 8.53% monthly, in my taxable-KNOP price/yield 7.46%, in my Roth with a Put-ARCC net price yield 11.49%, and in my dads taxable building on the existing shares with a Put NTI Net price current but variable yield of 8.45%.

    These were all funded by divs and Premiums. How I portfolio wide DRIP my high yield cash. Building diversity, three new cash flows and 1 add on, AND more Income.

    "Risky" my azz. Loot at each one individually and tell me EXACTLY how my cash flow is at "risk".


    I can-PGZ owns a lot of commercial loans and some REIT companies at good values and I would feel safe owning directly.
    KNOP is tankers with long contracts newer MLP IPO, so low IDR's
    ARCC has been a solid performer BDC and partnering with GE. Good NII and growth.
    NTI is a refiner with known variable payouts depending on what they have in profits from their cheaply sourced local oil and big demand from the same local oil economy boom with lots of retail stations to compound that. How can you not like depending on crack spread?

    Take any one of them over a 2-3% yield ALL day long, and more importantly- I CAN, because of the high cash flow and Income NOT locked up in unreal price crap.
    Sep 21 03:44 PM | 1 Like Like |Link to Comment
  • Look At These Juicy Yields - Are They Really Appropriate For Your Retirement Portfolios? [View article]
    "companies whose "normal" yield is in that 9-13 range are telling you something. It would be wise to listen. "

    OR find out why the STRUCTURAL differences account for such a high yield.

    You simply can NOT compare the payout/yield of a C Corp and the many, many different classes of high yield!

    What is a FACT however is how you are structuring your payout or as the article shows the ROR statistic.


    High yields MEAN high current Income, low yield MEAN low current Income. The overall ROR for BOTH can and frequently is the same and sometimes better for the high yield.
    But again it is HOW you want your return, NOT if! Assuming much due diligence at all.
    Sep 21 03:01 PM | 1 Like Like |Link to Comment
  • The 'Up And Coming' Blue-Chip REITs [View article]
    Ha, we are alike. I use two feet with an automatic on my 49 Willys when I am in the steep and rocky with 4wd low. That said, I also think it is time to do what I also do with it- hammer down on the throttle in the sand and let the V8 roar!

    Wish you had not mentioned STAG and ARCP, don't need a price bump and still working the Puts.
    Sep 21 02:26 PM | Likes Like |Link to Comment
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