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John Huss

John Huss
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  • Resource Capital: A Strong Choice For Income In 2015 [View article]
    Could not one reason the PFDs trade under their redemption price is that RSO is perceived to be a very high risk company, as the yields on the PFDs imply? In this case hopefully high risk and high reward will go together. Even in the world of non-investment grade PFDs RSOpC's yield sticks out like a sore thumb.
    Mar 19, 2015. 05:46 PM | Likes Like |Link to Comment
  • Triangle Capital: Are You Aware Of These Guys? [View article]
    Reuters is reporting a rather different set of income numbers for the fiscal year ending 12/31/2014: "Net income decreased 65% to $28.4 M." Any idea why their numbers are so different from your numbers, even though you both use a $104.5M revenue figure?
    Mar 19, 2015. 04:36 PM | Likes Like |Link to Comment
  • Reduce Portfolio Volatility With Baby Bonds [View article]
    I would appreciate a follow up article on Term Pfds.
    Mar 19, 2015. 08:31 AM | Likes Like |Link to Comment
  • The REIT Dividend Delusion [View article]
    Interesting comment on how liquidity thins with aging of a PFD stock issue. Since I am a buy and hold investor and purchase in small quantities liquidity is not one of my concerns. From a buyer's standpoint, perhaps low liquidity can sometimes result in a bargain price. I would never buy a PFD except with a limit order.
    Mar 16, 2015. 09:22 AM | 3 Likes Like |Link to Comment
  • Cash Flow Vs. GAAP: The Battle Goes On At Eagle Point Credit And Oxford Lane Capital [View article]
    Steven,

    Thank you so much for your very helpful response!
    Mar 13, 2015. 01:42 PM | Likes Like |Link to Comment
  • Cash Flow Vs. GAAP: The Battle Goes On At Eagle Point Credit And Oxford Lane Capital [View article]
    Would you care to comment on the safety of Oxford Lane Capital's Term Pfd offerings (OXLCO and OXLCN)? From your previous articles on Oxford Lane, it seems you are placing a bet on the quality of Oxford Lane's management since the CLOs Oxford Lane owns are liked black boxes. Or do I misunderstand? Your basic position seems to be that CLOs are nothing to be afraid of per se, but are more or less risky depending on the quality of the loans included in the CLO. Do I understand you correctly?
    Mar 11, 2015. 10:09 AM | Likes Like |Link to Comment
  • Beaten Down BDCs: TICC Capital [View article]
    Since TICC and OXLC share the same management it would be interesting to compare the two companies investments. For example, does OXLC have a more risky portfolio of CLOs than TICC?
    Mar 11, 2015. 09:50 AM | Likes Like |Link to Comment
  • ARMOUR Residential REIT: Poor Value Creation Record Speaks Against Buying This Mortgage REIT [View article]
    For purposes of argument granting your position that investing in Armour Residential common stock is a high risk investment, do you believe that investing in ANWORTH MORTGAGE ASSET CORP 7.625% SER C CUM PFD is also high risk? Your opinion would be appreciated.
    Mar 4, 2015. 03:29 PM | Likes Like |Link to Comment
  • Anworth Should Disregard Advice About Being More Aggressive [View article]
    There is very little coverage of this very small REIT, so I am especially appreciative of your interest. What do you think of their ANWORTH MORTGAGE ASSET CORP 7.625% SER C CUM PFD? It is a very small unrated issue which has an appealing interest rate. What I cannot personally judge is the creditworthiness of the company? Could you provide your opinion, please?
    Mar 4, 2015. 03:16 PM | Likes Like |Link to Comment
  • Buying LQD Is A Waste Of Time [View article]
    As someone who has owned both individual municipal and corporate bonds and a variety of bond funds for the last quarter of a century or more, I find myself basically in agreement with the author because I have been and can afford to be a buy and hold investor who treats the fixed income portion of his portfolio as a source of significant income and not merely a ballast to an equity portfolio. I am more than willing to give up potential capital gains I will never realize with a buy and hold to maturity strategy to take advantage of the income I continue to receive from diving into the investment grade corporate bond market in 2008 and 2009, building a ladder (or an escalator down), and clipping my coupons. A similar coupon clipping strategy with a competent broker in the mid-1990's in the municipal market also worked out very well. With funds I prefer active management offering access to bonds a small retail investor cannot access. For skilled management I am willing to pay an annual fee, not for a bond index fund.
    At the moment neither individual bonds or bond funds are attractive purchases in comparison with PFDs and PFD CEFS.
    Feb 26, 2015. 11:16 AM | Likes Like |Link to Comment
  • Genworth Starts Strategic Review: Cost Cuts, Asset Sales, Debt Reduction To Come [View article]
    Well written article. As a Genworth bondholder I am concerned now that the bonds are no longer investment grade by any rating agency.
    Feb 19, 2015. 02:55 PM | 1 Like Like |Link to Comment
  • Genworth cut to junk status at Moody's [View news story]
    The headline is not consistent with the article. Baa1 is FAR FROM junk status.
    Feb 11, 2015. 03:15 PM | 4 Likes Like |Link to Comment
  • DuPont Fabros: Cheaper - For A Reason [View article]
    Thank you for another outstanding article. As a retiree, I find that my PFD holdings, including DFT-B, let me float above short term fluctuations in the price of the common stock of my holdings with a degree of serenity my temperament would not otherwise permit.
    Feb 9, 2015. 12:16 PM | Likes Like |Link to Comment
  • 'Income Growth' Vs. 'Dividend Growth' - The Re-Match [View article]
    Actually, a Total Return Strategy is for long term investors, especially of a buy and hold mentality, starting reasonably young, particularly when there is a judicious selection of index funds or a thorough analysis of actively managed funds. That is the Vanguard approach. Total Return as practiced by many (most?) financial planners and/or brokers may well involve trading strategies that often (usually?) prove largely self-defeating, but the strategy itself is not a trading strategy. I do think having the majority of one's assets in a Total Return Strategy at, after, or close to retirement when funds need to be drawn down can be quite dangerous, since the income produced by dividends from an ordinary Total Return portfolio will be quite inadequate to one's needs. A Total Return strategy as a long term hedge against inflation for a portion of one's portfolio, I think can make sense if one needs all or almost all the income churned out by an IG portfolio consisting of the majority but not the entirety of one's investable portfolio, but no more than that amount. Now the DG investor who started young enough and saved enough over the years may well be sitting pretty at retirement with his or her DG strategy because the amount of dividends available to be converted to cash to pay the bills may be sufficient. For most of us that situation is not the case.
    Feb 9, 2015. 12:02 PM | 1 Like Like |Link to Comment
  • 'Income Growth' Vs. 'Dividend Growth' - The Re-Match [View article]
    One thing to consider in determining a strategy is your age when you begin to actively manage your investments. A Dividend Growth Strategy seems to me to produce too little bang for the buck when you are close to or in retirement and need to spend much of the income and can't afford to wait for DG compounding to do its work. I have been pleased with the results of my version of an Income Growth Strategy which applies to about 2/3rds of my portfolio (virtually all my investments are in IRAs), with the rest in growth, value, or balanced mutual funds (effectively a Total Return Strategy). If I had the time, energy, and money to have a strategy of my own at a younger age, I think I would need to compare Dividend Growth, Income Growth, and Total Return Strategies to decide what to do.

    I think the article was particularly spot on in its comments on credit risk. Most of the individual bonds I own are BBB, but I do have a few non-investment grade bonds and in seeing what is available for purchase I see names of very respected companies which are non-investment grade including ratings as low as B, many of whose common stocks are considered buys by analysts.

    Perhaps the author is a bit too sanguine on interest rate risk. More than the spread between income and the cost of leverage is involved--there we are dealing with short rates for leverage cost. There is also the effect on the market value of the underlying investment when long rates go up. From today's ultra low rate environment one cannot count on simply riding out an interest rate cycle. What goes up may very well never come back down to what rates are today. That adds what I consider significicant risk to my CEF portfolio, as it does to the value of those of my MFs with a bond component. What I don't worry about is my individual bonds: as long as they don't default, they will be redeemed at par on maturity.
    Feb 6, 2015. 05:38 PM | Likes Like |Link to Comment
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356 Comments
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