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  • Don't Get Caught In A Bear Trap [View article]
    David, as usual you are correct. I bought SPXU at $21 earlier this year, watched it move to $22, then I ended up getting out at $17. Of course if you had owned DSLV yesterday you would have made 11% on your money in one day.
    Dec 12, 2013. 06:17 PM | Likes Like |Link to Comment
  • Income Investing With Bill Gross: A High-Yield New Year [View article]
    Agreed. If you have less than $1M to invest in Muni's then ETF's or CEF's is the way to go depending on your risk tolerance. However, with ETF's you can somewhat "go to sleep" a bit more than CEF's, particularly so with fixed date maturity ETF's (see Guggenheim). Most CEF's have anywhere from 30-60% leverage and durations around 20, so a 2% jump in interest rates and your CEF just went down more than 40%! It's like buying a single muni with a 30ish duration. For example, I am buying AAA muni's right now with 12-20 year maturities and 4% coupons and mid 4's% yield that were issued in the past 12-18 months that are selling in the low to mid-70's! The difference with the individual muni is that the guy that bought at par can still hold it to maturity and get his money back. Not true with the ETF's or CEF's. I do like some of the fixed date maturity Guggenheim ETF's (both high yield and regular) because there is a pretty reasonable chance that you will get par value back at the fixed date maturity. The only real risk with those is credit risk. I spoke to the Guggenheim trading desk and they've only had one default, which was insured, on any of their bonds in BSJI. Check out BSJJ and BSJI.
    Dec 10, 2013. 11:26 PM | 2 Likes Like |Link to Comment
  • Income Investing With Bill Gross: A High-Yield New Year [View article]
    The US has become Japan. Aging population, stock market/risk averse, fixed income focused. Rates aren't going anywhere. The Japanese just substantially upped their purchase of US Treasuries. Trust in Bill.
    Dec 10, 2013. 08:00 PM | 1 Like Like |Link to Comment
  • Income Investing With Bill Gross: A High-Yield New Year [View article]
    I am a fixed income investor and a believer in Bill Gross because all markets are controlled by "market manipulators". Bill Gross and Jeff Gundlach are fixed income market manipulators. If you want to blindly invest with Gross you probably won't go wrong. I've owned PTTRX for more than a decade in my 401K. Hedge funds are stock market manipulators. Retail buyers in the stock market are simply gamblers hoping that they happen to be on the right side of the equation that is decided by Ray Dalio or T. Boone Pickens, or Carl Icahn or you name it. The thing you have to watch with these CEF's are that many are taxable and there are often high fees because of the interest/leverage. In effect, you can be giving up close to 2% per year in fees on a tax free CEF that is paying 6-7%. Also, many of these
    tax free muni CEF's contain AMT bonds, so if you are in a high tax bracket then watch out for the % of AMT muni's in the portfolio. Additionally, I can put together a tax free CEF paying nearly 10% now if I wanted to load it up with Puerto Rico bonds. You need to look closely at what they are buying, so you can assess credit risk and what the duration is of the fund. Remember, for every 1 point increase in interest rates the price of your fund will drop by the duration. You also need to look at the call dates on their portfolio as well because that will help you assess whether or not the monthly distribution can be maintained long term. If you look closely at the historical pricing during the market melt down of 2008 many of these CEF's lost 50-70% of their value. Beware. You can't just buy a CEF and go to sleep. This is why I invest in individual muni's primarily. I'll buy CEF's when they are cheap (>20% discount to NAV-i.e. when no one wants them) and trade them when they move way above NAV and collect interest along the way. Muni CEF's are at Fall 2011 levels now and I would say are reasonably priced. Best of luck to you.
    Dec 10, 2013. 06:29 PM | 8 Likes Like |Link to Comment
  • Debt Ceiling And Stocks: Why The Media Is Deceiving You [View article]
    Obama will be smiling when this happens.
    Oct 19, 2013. 11:12 PM | Likes Like |Link to Comment
  • Is It Time To Move To The Sidelines? [View article]
    You are so correct. The market manipulators are "progressives" and this will not crash and burn until a Republican gets in. The liberal media will continue to spin these policies as great.
    Oct 12, 2013. 11:52 PM | Likes Like |Link to Comment
  • On Leveraged Municipal Bond Closed-End Funds [View article]
    I agree with both of you. I've been watching these CEF's for awhile. Historically, I have bought individual muni's and created a ladder. I am very skeptical about the muni market going forward. There is a general theme that has been created by Obama of "screw the rich guy" and with muni's being viewed as being owned by "rich people" there will be no relief for municipal bond holders should municipalities enter into some type of default position. It's sort of like the rich guy loaning money to the poor guy. The poor guy says, "Ah, I really don't need to pay him back because he has plenty of money anyway". I am still buying individual muni's, but I am not putting more than ~$5,000 in any one municipality and I am looking very closely at their finances and liabilities before doing so.
    Sep 30, 2013. 10:32 AM | Likes Like |Link to Comment
  • QE Infinity - More Money Printing? [View article]
    Thanks David. You say, "Investors will have more bonds to buy". This this is the part I am struggling with. If the FED has to unwind this bond position is the issue that there will be too much supply to attract buyers and they will have to lower the price, subsequently causing the yield to rise and bond principal value to decline? Then, I assume the rising bond yields start looking like a better investment alternative to the stock market?
    Sep 23, 2013. 11:19 AM | Likes Like |Link to Comment
  • QE Infinity - More Money Printing? [View article]
    Hi David,

    This is a great article. Let me see if I can summarize:

    1) QE is an asset swap and not money printing. The money supply isn't increasing.

    2) Banks are propping up the current asset bubble because they are investing their excess reserves in the stock market and/or mortgage loan market, rather than increasing their loans to businesses or individuals.

    3) Corporations are earning money because of low borrowing rates and flat wages and not because of revenue growth, which means PE ratios will flatten at some point.

    All that being said, it's really hard for me to judge what is going to happen.

    Let's say everyone agrees that QE isn't really helping the economy, but we keep QE going anyway. My assumption is the stock and real estate market will keep going up and rates will stay low because banks will keep putting these excess reserves to work.

    The real question is what is the downside to QE? If we just continue along as we are with low interest rates, low money supply and low inflation, then why would Bernanke or Obama's next FED puppet ever stop it? Theoretically, the only risk for an individual investor in the stock market would be that unemployment drops such that QE gets dialed back..Thoughts?

    -Jeff
    Sep 21, 2013. 11:46 PM | Likes Like |Link to Comment
  • Should You Sell All Long-Term Bonds Now? Not Necessarily [View article]
    Agreed. Laddered taxable high quality bonds is the way to go for SEP's and depending on your income tax bracket laddered tax exempt muni's are an excellent play for non retirement accounts. If a person has less than $100K to invest, then I think bullet share ETF funds is the way to go, so one can create somewhat of a taxable or tax exempt ladder. They might not be able to hit all the ladder points, but it's a reasonable approach.
    Sep 19, 2013. 10:14 AM | 1 Like Like |Link to Comment
  • No Taper Is A Gift: Sell All Long-Term Bonds Now [View article]
    If rates rise the dividends on these CEF's will be cut and the market price will drop substantially. You will get duped both ways. The duration on CEF's that are leveraged like this are scary. If interest rates rise a point in many cases these CEF's will drop 20% or more!
    Sep 19, 2013. 12:13 AM | 3 Likes Like |Link to Comment
  • 3 Indicators That Signaled The 2007 Top: They're Back [View article]
    Chris,
    Great article. I have liquidated multiple commercial and residential real estate holdings the past several months with one final closing set for November 1. I am long SPXU and have been for months. However, that being said, I will say that with a Democratic President and a Democratic/Liberal media working together in harmony they will do everything in their power to keep "the spin" positive, particularly since so many of the largest traders (aka Hedge fund managers) are supporters of such politics. Therefore, this irrational market may continue until a Republican becomes President and then the market will collapse shortly after he is elected. History suggests that this pattern is quite possible and will repeat itself.
    Sep 10, 2013. 05:45 PM | 4 Likes Like |Link to Comment
  • New Forward Rates: 10 Year Treasury Up 0.04% To 0.13%, 15 Year Mortgage Up 0.17% To 0.23% [View article]
    I totally agree. I own PTTRX and I'm not selling. This is an "artificial" market right now.The USA is heading down the same path as Japan. Older population, less and less innovation coupled with no growth. The FED "money printing" operation that is supported by Obama and further encouraged by the liberal media will continue to truck along until he's out of office. Once a Republican gets in, then the whole media spin will change and this entire market will crater. Look at history. Clinton-->Bush; Bush-->Obama. The reality is that 90% of these so called "jobs" being created are part time workers getting 2nd jobs because their 1st job employer has made them part time workers because of Obama care. It's all a crock that will keep running for 3 more years.
    Aug 23, 2013. 10:03 PM | 1 Like Like |Link to Comment
  • Low Interest Rates Ahead [View article]
    Great article. This is exactly what is happening and your analysis is completely logical. The problem is that we are in an illogical time with Ben and his Buddies controlling the stock and bond market. A day of reckoning is coming. Now, is the right time to be selling real estate and stocks. I've divested myself of both with the exception of my personal residence and I'd be selling that to if I didn't have kids in school. I believe that a laddered tax exempt muni portfolio will be a great approach as their continues to be FUD around Obama trying to make muni's subject to tax for earners above the 28% tax bracket to pay for the takers in our society. I believe the fear of taxation coupled with pension funding scares might drive long term yields on muni's up over 7%. If that occurs, it will be a historic buying opportunity. Bond funds aren't a great approach either, but for a 401K with limited investment options it's probably better than cash or stocks right now. Investing in a short term actively managed fund like PTTRX is reasonably safe and will still out perform cash and probably the market as a whole over the next 5 years or until the great correction comes, then buy SPY and jump back in.
    Aug 8, 2013. 01:16 AM | 2 Likes Like |Link to Comment
  • This Week's FOMC Meeting Could Signal The End Of The Policy Driven Bull Market [View article]
    Joseph, you are dead on in your assessment. I have 100% of my retirement in PTTRX: INSTL, 20% of my non-retirement in tax-exempt AAA bonds that I hold to maturity (that's my "I could careless what the market does fund"), 20% of my non-retirement in SPXU as a hedge and 60% of my non-retirement in cash. My prediction is your conclusion. Bernanke needs to "cool off" this market and do it in a way that people shift their money from stocks into bonds. He also needs to cool the housing market some. For crying out loud my house is appreciating like 3% a month. It's ridiculous. There is no growth and there is no justification for these asset valuations. If the market craters and bond yields jump, then the country becomes Greece... That's why PTTRX will go back up to $11.60ish and SPXU is heading significantly higher in the short term. This "correction" will transpire over several months and I think we will see the S&P back down into the 800-1000 range, which is when I will dump SPXU and stick 40% of my 60% cash into SPY. The other 20% I will leave for further buying opportunities if the market goes lower.
    Jun 18, 2013. 12:53 AM | Likes Like |Link to Comment
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