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surfgeezer

surfgeezer
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  • This Graph Is The Reason My Current Cash Position Is 50 Percent [View article]
    Interesting to me. This article and all the comments are strictly on pricing, yet the author states he " In my view, there is only one thing that truly matters in investing: valuation. The price you pay for a financial asset is a huge determinant of the return an investor realizes."

    Well we disagree on that point, first and foremost. I concentrate on what is real also- the passive Income my Capital generates.

    What exactly is "value" good for? Besides impressing people at birthday parties with how "rich" you are!

    I will stick with the "reality" of the cash flow generated and the sustainability and growth of my retired lifestyle, just like when I was working. I find "richness" to be overvalued-ha.

    Guess what, real Income changes much less than "values" do, and impacts you're real life much more.

    I will keep my cash working for me, and by that I mean giving me real Income many times a month without selling a dang thing.

    Pure Wall St hubris to think everyone "needs" to be a trader and chase wealth accumulation at all costs.

    Happily retired because I don't. I do agree however buying when others are scared is a very good way to lock in yields. My Income flow is what allows me to do that, not my valuations.
    May 29, 2015. 01:27 PM | Likes Like |Link to Comment
  • Total Return Vs. Investment Income [View article]
    First, I like the articles intent of looking at things deeper and trying to accurately consider metrics for your goals.

    I understand the need, but since I have VERY different goals, I do wonder on the language.

    I agree a trader, who by definition wants to include trading profits as Income, should probably be looking at daily pricing as meaning a "Total Return" gain or loss. Their INTENT is to sell, so they MUST look at pricing as a FUTURE source of Income.

    The problem of course is they are not selling now, and will not be, until an ACTUAL trade is taken. The problem, IMO, is trying to "book" profits/loss when they have not occurred. Even a trader has to know that no one is forcing him to trade, he is merely evaluating pricing and the POSSIBILITY of a trade with it's loss or gain. It is NOT a "return" or Income-yet!

    As an Income investor, whose only real goal is increasing Income paid directly to me, I find "Total Return" pretty useless. I also find tracking profits fairly useless. I am not saying you can just waste Capital all you want. Capital IS a precious resource- it is where Income comes from. Why my Yield On Capital is so important to me as well as the change of projected passive Income from whatever time points you would be measuring the "Total Return" with. I look at how real Capital and Income has changed.

    As an example, I use options extensively-selling Puts, to buy more real Income. It defines the yield I buy at. It lowers the cost basis and the Premium is then untaxed until I sell, which I do not plan on doing. There is no "profit". If I had previously done a roll, the "profit/loss" is meaningless except to the tax man, which I agree has meaning but is not a primary driver for me.

    The "cash flow" reality is FAR more important- TO ME- than the "Total Return" of trading.

    Again, with that roll and buy example. If say the roll was a taxable "loss" and then the second contract buy was a better Premium discount to cost, the reality from a "flow" perspective is I have had TWO cash flow bumps, followed buy a cash flow/Capital dip ( and the Capital is already defined and tied up throughout the process ), to buy more Income flow in the future- at a defined yield lower than that day's market price. Maybe not tomorrows, but my goal of increasing overall passive flow is met, and a "taxable" loss is not horrific. I have allocated Capital successfully. Both during the option and now the long position. The only real future thing to worry over is the sustainability and growth of the passive Income. Not the herd pricing.

    The Capital tied up is secondary to the flow it generates- in a long position or contract on the future price.

    Covered calls and "Total Return" are by the very nature of the metric trader focused. Why I think, first people need to define WHAT they want out of the market, THEN start looking at metrics to help attain that. Covered Calls are designed to be a traders tool. You are by contract selling, and that MEANS you MUST buy again or Income stops.

    I look at flow and Capital as a tool to achieve passive Income, so I design my spread sheets around those goals and metrics. Since i have no "intent" of selling when I buy, I do not look at pricing the same way. It is merely something that impacts my option's flow and buying ability of the passive Income, with a benefit of managing taxes and Capital.

    I am in no way saying trading can not work to pop the Capital and buy more Income, it does- IF done correctly. It is just an added skill set and pricing on the top and bottom range becomes VERY important. Some people are good at guessing tops and bottoms in the cycles, and can generate additional cash/Income. Investors need to understand THEIR skill sets and match to THEIR goals.

    I prefer to try and guess mostly just bottoms and use the Premiums and divs to buy more Income. The reality is even if I miss and something continues down, my yield is what I bought it at. The important metric is not that "unrealized loss" on current pricing, it is whether I have done sufficient due on the div being paid and discounted by the market-currently and it WILL change. Because that DIV is what impacts the flow, not pricing. I have had an opportunity cost of missing a higher yield on buy point, not a real cost and that is important to understand.

    My most important metric is how the overall flow from Capital is generating new Income increases from share buys, not what others value my Passive flow at. Why I would never compare my "Total Return" to another's. Although somehow, by concentrating on real Income metrics, that overall "value" has done fairly well-for now, more importantly for me is however the passive Income. I have been retired for over 15 years precisely because I concentrate on the flow far more than the value. The flow is what matters IMO. It is what determines our lifestyle because I never consume investment Capital, only it's flow.

    IMO, the Income is what drives the value, not the other way around. But that is just me.
    May 29, 2015. 12:24 PM | Likes Like |Link to Comment
  • Is Lexington Realty's 7.5% Yield Too Good To Be True? [View article]
    Just gotta say the sentence ( my copy/paste is having probs ) of buying a good yield and also putting in a stop limit is counterproductive IMO.


    You are intermixing two strategies in a dangerous way, IMO.

    Buying for yield ( and it seems sustainable, but div growth is the question ) is what I do, to sell at an 8% loss is a horrific idea in my Income strategy. Good Income is good Income, no matter what the herd puts the price at.

    IBD ( and it suggestions ) is for traders, and that may be what you are after and I would not dis agree. People make money trading also.


    It is the intermixing of the two that is extremely hard and I would be very cautious in getting my goals sorted out.
    May 29, 2015. 12:43 AM | 1 Like Like |Link to Comment
  • Is Lexington Realty's 7.5% Yield Too Good To Be True? [View article]
    UTA- generally agree, BUT (LOL, it's SA ) we finally had a positive labor participation growth number and I believe that is one of the FED's real data points. Do agree wage growth is a bigee also.
    Anyway I think the chance for 2015 .125 or .25 bump has grown, but probably still in 2016. A lot also depends on US$ strength. We live in interesting times!
    May 29, 2015. 12:25 AM | Likes Like |Link to Comment
  • Is Lexington Realty's 7.5% Yield Too Good To Be True? [View article]
    In the long run, I find price is highly correlated to DGR.
    The problem here is the DGR guess/murkiness given the lowering leverage, IMO.
    For me, 7.25% without much DGR is crappy, but that is me.
    May 29, 2015. 12:11 AM | Likes Like |Link to Comment
  • Is Lexington Realty's 7.5% Yield Too Good To Be True? [View article]
    I actually try and time bottoms- tops no, but I am after building Income.

    I agree the technical's do tell a story-some what, but it could change in one news report that recalibrates the herds opinion.

    I usually just use below 200 day and 30 day with MACD and STO solidly moving up- to sell Puts and add more Income, either way the contract goes on the future price guess.


    Good income is defined as = yield +DGR ( and that is a forward guess not back looking, thanks Brad for your estimate here ) - 5% ( my Required Rate of Return since I am leveraged ).
    I buy good Income using Income, sell-not so much, I live on and reinvest the flow. Found it too hard reentering good positions for what are usually meager Capital pops. Think Chowder said it best-
    Don't sell your flowers to buy weeds. Course he thinks my flowers are weeds-LOL
    May 29, 2015. 12:03 AM | Likes Like |Link to Comment
  • Is Lexington Realty's 7.5% Yield Too Good To Be True? [View article]
    It is an interesting problem. Cap rates are low, but so is financing, so they are choosing to lower leverage and slow growth.

    I agree, not what I would do. Yield spread should still be good, but when others are bidding more than you are willing to pay......Can't fault discipline ( lord knows I need more-ha)

    But it does give them the ability to pounce later, so hmmm....
    maybe watch list and IF I see a good acquisition.......
    May 28, 2015. 11:42 PM | Likes Like |Link to Comment
  • Is Lexington Realty's 7.5% Yield Too Good To Be True? [View article]
    cz- according to Brads little pic up top, one has a NOI of 0$ and will not effect NOI, but Baker Hughes has 925,000$ of NOI that will effect FFO. They also of course have new stuff and rent raises to offset, but it does affect.

    Cost of doing biz. How it effects credit is part of the discussion when deed in lieu is negotiated. Depends on market value of prop.
    May 28, 2015. 11:38 PM | 1 Like Like |Link to Comment
  • A Few Reasons To Like Triangle Capital [View article]
    I am hoping to add, but we will see. Have the Puts in June, 22.5$, net 20.65$ ( probably just collecting the 20.79% A. Yield, but ya never know with herd pricing and it's 3 weeks away ) and hoping the price stays under 25$ so I can buy the 25$ Put, net 20.31$ sold in 11/14.

    Love those price worrier's.
    May 28, 2015. 10:50 PM | Likes Like |Link to Comment
  • A Few Reasons To Like Triangle Capital [View article]
    Depends on your goals. I have had PSEC since 2010. Reduced cost by selling some at a profit in 2012 and DRIP some share over the years ( but none lately ) and my YOCash is now 11.81% even after div cuts.

    That is fine with me, but I like Income first not value. Using the monthly Income to buy other things and have Puts out to buy more @ 7.51, 6.94, and 5.73$.
    May 28, 2015. 10:40 PM | Likes Like |Link to Comment
  • A Few Reasons To Like Triangle Capital [View article]
    Price change does not effect your real Income. .59c X 4=2.36$/22.48 ( your cost)=10.5% of real Income to you. The rest is fairy dust without a sale and why would you give up 10.5% in todays low interest world?

    Just saying- know your goals. You are intermixing in a dangerous way. Either you like the Income @ 10.5% or you like the quick 6.5% trading gain, but the reality is- it's one or the other.
    May 28, 2015. 10:28 PM | Likes Like |Link to Comment
  • A Few Reasons To Like Triangle Capital [View article]
    Yep Rip, and that is important point IMO.
    Many other BDC's got in trouble by not doing Cap Gains as specials, IMO. They do not bake in expectations that way of always having to sell things at a profit to make Div- a good thing to base div on NII.
    Main does that also. May be an Internal Management thing.

    It also happens to be how I think about my portfolio- no expectations of sales baked in, just NII.
    May 28, 2015. 10:18 PM | Likes Like |Link to Comment
  • Inside New Leveraged REIT ETN Issued By UBS [View article]
    I think what you are missing is two main things.
    1- the REIT's with that high a yield probably do not have as good a DGR as the low yielders in the fund.
    2-the fund gives you much more diversity.

    I looked at VNQ distribs history, and they are not as easy to figure the DGR, partly because of the short time and partly the dual div and ROC they pay. Sure seems to me is steadily going up however. I like that. Especially with good initial yield.

    Putting LRET on my watch list personally. Fed could give good entry.
    May 28, 2015. 02:05 AM | Likes Like |Link to Comment
  • YMBC Q1 2015 Review - A Foolishly High Yield Portfolio [View article]
    HA- revisiting and checking on some REIT stuff. Thought I remembered the 2x REIT ETN LRET discussed here.
    Still checking, but just have to add I like it. Yes the Yield is relatively low for a 2X Darren, but I think the important thing not mentioned is the DGR that comes with those fairly low yielding REITs.
    Price volatility is just price volatility, I will use it to get in normally, but with these ETN's it also effects the Interest payments if I understand them correctly. MLPL had a cut this quarter, and I know most the components were raising or flat ( of course new components also could be part of it ), surprised me.

    More important to me is an 8% initial with a DGR path that those REITs should deliver. But will they if price alone craters?

    DGR is usually fairly well coordinated with price-in the long run. I like DGR and Chowder rule- I just will not buy anything below 5% initial.
    Also looking at CEF RQI, also 8+% and showing good DG momentum.

    Interesting, both have Simon as their top holding. Way to low a yield for me but a very good DGR. I would love the DGR, with leverage to bring the yield up.

    May wait for Fed announcement, but still doubt this year---course ya never know, participation rate on Unemployment is finally going up and that was the data slowpoke the FED is watching, IMO.
    May 28, 2015. 01:42 AM | Likes Like |Link to Comment
  • Proposal To Improve The Economy And Provide Jobs: Allow All Corporations The Option To Elect Pass-Through Status [View instapost]
    Bottom line is corp's are better at avoiding the taxation than most investors, so I believe the gov nets more.

    Only problem I see is the inability of stockholders to affect most boards or CEO's. But probably a different topic.
    May 28, 2015. 01:39 AM | Likes Like |Link to Comment
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