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surfgeezer

surfgeezer
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  • The Dividend-Growth-Devoid Income Portfolio [View article]
    Sorry bob am actually camping in sierras so only really checking in between stuff. This one of my strange ways to have fun. That said

    Dave makes a good points. I believe in diversification and hopefully the extra income helps enough their is no need for mandatory sales at bad times, Doug's point could maybe kick in. The short answer is BDCs right now and CEFs. Both use leverage internally. Monitor the UNII in both and look for price vs NAV dips in both, I like monthly payers, my bills usually come monthly. I still like SDRL, but monitor for literal blow ups, and little else. I like BDCbuzz articles and I doubt we will see rapid escalation of interest rates from here. It would mean a hot economy and I hope I am wrong.
    The BDC's would do well for their income price? Lord only knows.
    Aug 21 02:24 PM | 1 Like Like |Link to Comment
  • The Dividend-Growth-Devoid Income Portfolio [View article]
    Yep we agree again. I will swap income, but like Chowder the DG growth really matters to me before I sell anything. It takes a lower yield and a expected drop in D Growth for me to take the cash and sell the whole thing. My Prefered method is just not buying anymore with the cash generated.
    Aug 21 02:10 PM | Likes Like |Link to Comment
  • The Dividend-Growth-Devoid Income Portfolio [View article]
    Maybe why I like what you write so much. I to will double check myself before just buying a price dip. I never, ever sell on other people's opinions of value. Maybe my landlord roots is the difference. Rent is what I retired with, have never sold a rental. Do sell stocks, they are very different beasts in many ways. ARCP is not long yet, but I sold both 12.50 and 15 puts. The 12.50s roll off each month so far and Premium is in the bank. The first 15$ is not mine till Dec- maybe LOL
    Aug 21 02:06 PM | Likes Like |Link to Comment
  • The Dividend-Growth-Devoid Income Portfolio [View article]
    Ok, I know the mechanics. The result on income is the same however. I would even argue the price volatility is worse on a varying CAGR, because low yield implies a much larger % percent of price appreciation in the " total return".
    Aug 21 01:58 PM | Likes Like |Link to Comment
  • The Dividend-Growth-Devoid Income Portfolio [View article]
    Yep it is, but I should have added over pure cash flow investors. I agree they are much less worried than the flippers, who are in the game strictly for trading profits.


    Why else buy with low yields? I to live with low yields if the herd prices it that way and DG is good enough alone, as I commentated with OILT.

    I say that because of the constant comments on Capital preservation and growth or total return that is by definition much different than cash flow growth. It is in no way a slam. It works. I only seek to make sure people know and define the priorities, since the language is overlapping. MY " risk" has almost no price in it, it is purely the Income "risk" because it effects the real yield spread Income. I view it as " safer", many disagree. What SA is about.
    Aug 21 01:52 PM | Likes Like |Link to Comment
  • The Dividend-Growth-Devoid Income Portfolio [View article]
    Yep, that is my next step if I see a problem. Some sites still crappy and you have to actually call IR.
    Aug 21 12:06 PM | Likes Like |Link to Comment
  • The Dividend-Growth-Devoid Income Portfolio [View article]
    Yep own both in IRAs.
    Aug 21 12:02 PM | Likes Like |Link to Comment
  • The Dividend-Growth-Devoid Income Portfolio [View article]
    Sorry little late on answer. First leverage means you get more shares. Those more shares means a price change influences you more on the TR ( Total Return of unreal price change crap Wall st sells. Remember unless you sell it is fiction). It also means you get more real Income from the divs. If the divs pay more than the interest you get what is called yield spread. Pure math only effected by two things cost of interest and div payments, price does NOT effect it. Why I keep saying I do not consider price a " risk " it simply is NOT, to me.

    My leverage is off my Real Estate, fixed Interest for 30 years @ about 3.5 ( two blended loans ). Again that means there is NO margin call or price risk. It also means the Interest is a write off. Because it a fully amortizing loan, my payment is higher but the Interest is compounding down. Again, I make sure I have high coverage on my payment costs.


    If you show a graph of how the Interest payments of a thirty year loan compound down and then overlay a graph of how Income growth from shares/div growth compound up you will quickly get my point. Price sucks for retirement unless you are very good trader.


    The exact same model I used to originally get my RE paid off early originally. Increasing rent with compounding down interest leaves you with both a much higher cash flow and now I will have two things to get Capital appreciation or depreciation on- the RE I took the loan on and the stocks the loan bought. More important however is the income being generated.


    Real numbers is my taxable portfolio has about 2/3 leverage, for every 1 of my dollars there is two of theirs. It is also 2/3 tax free or tax deferred Income generated with Muni CEF and MLP holdings. The fully taxable BDC & REIT holdings are roughly equal to my Interest cost. Net effect is they zero each other out tax wise, but having the super high yield ordinary income means I use up less Capital to cover my Interest expense. About 1/6 is qualified Income that helps a lot because I try very hard to stay in the low tax brackets. I do that partly by offsetting short term Capital gains from my options with having my Taxable set up to always sell the highest cost stocks first. IE- I just picked up some FSC shares with my Sept Puts, net cost 8.98$, before the end of the year I will sell the same amount of shares that I had bought back in 2010 for the 12.25$ range. That will be a taxable loss, but my portfolio % of income from FSC will not have changed. My YOC will go up for both my portfolio and FSC. Again I may not sell the same amount of shares and just let my real income increase some. It is how I do my DRIP with Puts, as well as buying new things at a lower cost sometimes.

    I use my Margin to back up my naked Puts ( no interest charged ) then use the cash accumulation from divs and Put premiums to actually buy. I am constantly watching the cash pool as one of my main metrics and that folks is REAL money, not baloney imaginary mind games of Total Return. Just saying my Puts are considered " price Insurance " by Wall St, I consider those price dips Income on sale events. The difference between a price flipper and a cash flow investor IS that difference in point of view on unreal price change effects YOUR reality.


    Why I constantly tell retiree's to understand their needs and goals, it matters.
    Aug 21 11:57 AM | 1 Like Like |Link to Comment
  • The Dividend-Growth-Devoid Income Portfolio [View article]
    DVK and others, the work is already done. Go to dividendchannel.com click on DRIP calculator and compare whatever two companies for whatever period you want.
    I commented below using PG and PSEC. My caution is it only shows the imaginary "total return", but it does show share counts also. So an Income/Cash flow investor must do the extra math of multiplying the current div by shares to get real income available for each. They seem to accurate to me.
    Aug 21 11:09 AM | 1 Like Like |Link to Comment
  • The Dividend-Growth-Devoid Income Portfolio [View article]
    Great article Adam. Commented on way down, but do feel it is not always a choice between high yield and div growth. SDRL, ARCP ie. Just saying it only takes the herd to not be comfortable. The div growth is the companies biz model, the yield is the herds opinion.


    That said, I personally have zero desire to buy something at a yield below 5%. Many disagree, but Yield on Cost is my main metric. Growing the income from that limited Capital is the ONLY reason I am in the markets.What that says is I both have limited Capital and I want my Income from it to grow. Willing to bet the majority of retiree's want the same thing. I frequently comment Wall St is based on building "wealth" and churn. I do neither as a primary function.


    Will also add my "risk" mitigation is diversity of how my companies make the money they pay me with. Countries, sectors, niches in sectors.


    Will also add I like leverage. My taxable is 2/3 the banks money costing about 3.5% and fixed. Better than most BDC and REITS cost of funds. I also run my portfolio much like a BDC or REIT. It is a part time biz. Leverage really is the solution, but I hesitate to say that in public because people only hear what they want. I would NEVER use leverage for flipping, but I have used it extensively for my landlord/cash flow Real Estate biz. Any one not understanding that sentence should NOT use leverage. For BOTH my RE and stocks is is ALL about building the cash flow. Price is for determining the cash flow at buy, the price alone means little after that. Truly believe and live that, but I do acknowledge it is not for everyone.


    Just saying my Capital is far exceeding the 35/500 k 7% yield you are targeting. Yes I have some companies not performing like I thought. Yes I sometimes take Capital losses, but they are less than the 5 BDC's I currently own % of bad loans. Oh well. The alternative is worse IMO. I also have things that I bought at my yield levels and are currently priced by the herd at low yields. Their "risk" has not changed, the herds opinion has. My two lowest yields are OILT and MMP, they are not gone because they still grow my Income well, I just buy no more new shares. YOC and growing my Income is my game, I will leave the price believing to others.
    Aug 21 06:03 AM | Likes Like |Link to Comment
  • The Dividend-Growth-Devoid Income Portfolio [View article]
    Gotta say I dig options. That said, covered Calls are WAY over done. You are in fact risking a sale and the ensuing tax consequences.

    My Portfolio DRIP is with Puts. I sell contracts that " makes" me buy cheap higher yield.
    Aug 21 05:20 AM | Likes Like |Link to Comment
  • The Dividend-Growth-Devoid Income Portfolio [View article]
    Both were great Put selling profit makers. Price does what it does. Neither had real earnings problems.
    Aug 21 05:16 AM | Likes Like |Link to Comment
  • The Dividend-Growth-Devoid Income Portfolio [View article]
    For what? Hopefully not price.
    I keep a daily news feed for actual blow ups and read the quarterly reports. The rest is baloney.
    Aug 21 05:10 AM | Likes Like |Link to Comment
  • The Dividend-Growth-Devoid Income Portfolio [View article]
    User-SPOT ON with both the people do not get how depreciation really can work for ya, and also not really getting CASH FLOW investing.

    Wall St has somehow trained people to believe price flipping is a " safer " model than cash flow. Unbelievable.
    Aug 21 04:59 AM | Likes Like |Link to Comment
  • The Dividend-Growth-Devoid Income Portfolio [View article]
    Div channel DRIP comparison for 10 years, 10k-
    Total Return PG-20,142$ PSEC- 20,485$
    Share count PG 185.5 to 243.2 PSEC 666.7 to 1877.6
    Income generated PG-625$ 6.25% YOC PSEC-2,478$ 24.78% YOC


    Just saying math is a wonderful thing.
    Aug 21 04:52 AM | 1 Like Like |Link to Comment
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