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I'm writing an instablog - I know of a few people who have read some, but the main reason for writing it is to clarify my thinking (and likely confuse you) before I invest in something every month or so. And also to act as a journal I can review every so often. I work as a mental health nurse.... More
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  • Terminal Show

    I had a pleasant enough weekend and I hope you did as well.

    One thing I have to keep in mind is that I have to separate my hobbyist interest in geo-politics from my investing rules. For an example:

    I bought into three energy/infrastructure cefs early on in the year. NDP, TTP, TPZ. I sold the first two for a quick decent profit and have hung onto TPZ. Now with all the news I've been following for the last several months (Ukraine/Libya/Nigeria/Iraq), it's tempting to buy back into the first two with the idea that energy will be even more important down the road. Except the prices are even higher than when I first bought them, the discounts not as steep and the distribution you get at market value is less.

    Lesson to self is that I've got rules written down on what to look for (value with a high yield and evidence things are turning around) and I shouldn't deviate from that. Because in the few years I've been doing this, I would have been better off holding what I've sold for a longer period of time.

    A older and successful investor on this site, who I pay attention to when he posts, has opined on several occasions about his view from the mountain top when others are at the base and seeing trees instead of the forest.

    I have a different mentality. For me, anyway, it's better to burn the forest down to get a nice mountain view and the surviving trees you chop down to build your cabin. Because those trees were stronger.

    I suppose the moral is that being willfully ignorant of some things is an easy way to filter out the noise that might cause me to make an impulsive decision to change investments before they get the chance to play themselves out. It's also a reason there's only about ten authors or so on this site that I read.

    Anywho.

    I'm going to be changing gears for a couple of months. Cefs are prone to selling off hard starting off in late fall through the end of the year. And running my initial screen isn't revealing too many that look attractive to me at the moment - (NYSE:IVH) being an exception, but I already have enough leveraged fixed income types for the moment.

    And most of the stuff I currently own in the taxable account pays monthly. Exceptions being (NYSE:LCM) which has performed poorest but should do nicely if interest rates ever rise and RSO.PB.

    One thing I noticed about my own mentality as I was buying preferreds during last summer while the prices continued to crater, it was easier to hang on to them because the income was coming in pretty steady and avoid selling at a loss.

    But the four star steakhouse on half-off night of preferreds and cefs that were on sale last summer and fall is long gone. Now it appears more like the buffet at Golden Corral - might be plenty available, but not much that's edible and you have to watch out in case anyone's sneezed on the food or dug their hands through the salad bar.

    But. RSO.B will pay me at the end of July. And because it's quarterly, the dividend will be larger than any of the monthly payers I own. So, what if I buy several more preferreds, five, where I'm getting a large dividend every two weeks instead of having to wait until the end of the month?

    Won't make much difference financially, but like I said, with my mentality, it's easier to deal with portfolio ups and downs when that money is coming in frequently.

    So, with my preferred buying rules:

    Dividend needs to be at least 8%.

    Price needs to be under par.

    Cumulative dividends are nice, but not completely necessary.

    A dividend being paid on the common stock or a positive pe (violated both of those rules with my last purchase of LTS.A, but I believe that company is turning things around) is mandatory.

    And with all that said, my options are limited to mainly mreit type preferreds, a Greek shipping company that I used to own the common in and wouldn't touch with your money, and a mlp or two.

    I hate mreits. But since they're classified as a reit, they have to pay out 90% of any profits as dividends. And since the preferreds are required to get their dividends first, I'm okay with owning their preferreds.

    So a few current candidates for Friday that should allow me to receive the dividend in mid-July:

    (NYSE:CYS) - B

    NYMTP

    (NYSE:HTS) - A

    (NYSE:DX) - B

    The first two would be my first choices, but I'll dig around more. All should pay out in mid-July and I should be able to buy into one before the ex-date.

    I want things to be smooth and not bumpy when it comes to income. And I realize that I will run interest rate risk as I discovered last summer. But as long as the underlying common gets paid a dividend, which is pretty much mandatory for a mreit, I still will have that cashflow.

    As usual, I will update on buy day of what I decide on.

    Tags: HTS, CYS, NYMT, DX
    Jun 16 10:21 AM | Link | 3 Comments
  • Kingdom Of The Worm

    No brief whining on my part of how my life's going? What? What's wrong with you User?

    I'm in a good mood! Currently, I just got off of work on the last day of my seven day rotation and have the week off. And Sunday is the day when the hospital switches over to a new computer system and they "go live". In honor of the event that I've been hearing about for months and forced training and with suck-ups volunteering to be super users and the bosses with nervous-glass smiles and such, I decided to print out a picture (you can guess which one) from this google-search:

    www.google.com/search?q=bill+o%27reilly+...

    and taped it to the front of our unit's help manual. I like it better than the cartoon guy hitting the computer.

    (NASDAQ:OXLC) - bought a good size chunk of oxlco again last time. Now they're offering oxlcn - 2024 mandatory redeemable monthly pay with 8.12% yield on the par price. Should start trading over the counter next week before I get paid. If I can pick it up a bit under par, say for 24.5 or under, I'll take it.

    Or if some folks sell off oxlco because they want the higher yield on the new one and the price drops a bit, I may pick up more of that.

    LTS.A - wrote about last time. Close to 9% monthly payer. And I'm seeing the underlying company's name on more of the new issue preferreds that are coming to market.

    (NYSE:JDD) - wrote about it last time and cannot be bothered to even copy/paste again. Revised MA charts:

    www.barchart.com/chart.php?sym=JDD&s...

    www.barchart.com/chart.php?sym=XJDDX&...

    Don't know. May have been one of those too early to sell and too late to buy situations.

    (NYSE:DNI) - same deal as above. Revised charts:

    www.barchart.com/chart.php?sym=DNI&s...

    www.barchart.com/chart.php?sym=XDNIX&...

    Even worse than last time I wrote about it - market price is outrunning the nav. My priority is on distribution sustainability first and then the nav going up and the market price lagging when I want to buy something. My reasoning for this is that if I'm wrong, I want to get paid something (yield, distributions) to wait and I want to buy something when it's underpriced.

    (PGZ) - something I wrote in the comment section last time. Revised charts:

    www.barchart.com/chart.php?sym=PGZ&s...

    www.barchart.com/chart.php?sym=XPGZX&...

    As you can see, the market price has jumped. Which irritates me. As it no longer even shows up on my standard screen.

    And there aren't that many funds that I don't own that meet my current screen criteria and have a moving average to the upside. Or haven't recently sold for a profit. This is kind of worrisome and why I listed the preferreds first. If sentiment changes against various classes of cefs, the preferreds may be nominally safer.

    But, one I found. Hippy shit! (NYSE:BQR):

    8.5% market dist rate. Quarterly. 10.5% discount.

    www.barchart.com/chart.php?sym=BQR&s...

    www.barchart.com/chart.php?sym=XBQRX&...

    Archer's-Daniel and Monsanto and Tyson are listed as amongst their top-ten holdings:

    www.blackrock.com/investing/products/240244/

    so maybe not as hippy as I first feared. Food is important. Water is and will be more important over the long haul. Both the semi-annual and annual reports are from last fall, so aren't' much good to me. What I can do is evaluate the nav of the fund and see it's turning around. And I like how the market price dropped today based on no news I can find.

    So. I am uneasy with how many, if not most, cefs have risen over the last few months. I'd like to buy into oxlcn for a first pick. (BQR) as a second. LTS.A as a third. Oxlco as a back-up option for a 1980's cd equivalent.

    As always, anything I buy will immediately drop in value. Anything I sell or pass on will increase.

    Best wishes!

    Tags: OXLC, BQR, LTS, JDD, DNI
    May 30 6:03 PM | Link | 8 Comments
  • Back At The Funny Farm

    What was I doing? Oh, yes. After taking a shower this morning, I had the unpleasant discovery of the back-up dog having a case of coprophilia. I encourage all not to google this term. I am still in distress and did not eat lunch.

    Anywho.

    Ran my usual cef screen. And then looked at moving averages. Aside from what I already own, not too many are jumping out at me. Two of which I wrote about last time:

    (NYSE:DNI) - "this one has a miserable history since inception. No distribution until the end of June again. New fund manager since 2011. Close to 11% discount and over a 10% distribution. From what I've read, changed to a managed distribution payout. Has blue chip stocks and preferreds and bonds. Website sucks.

    www.barchart.com/chart.php?sym=JDD&s...

    www.barchart.com/chart.php?sym=JDD&s...

    The nav chart has the 50 day sma touching and maybe crossing the 200 sma. The price chart already has the 50 above the 200. Even though the fund has been crap since it started in the 1990's, you're still buying management and that was changed a couple of years ago and it looks like things are turning around."

    Here are updated charts in case the old ones don't come across correctly (market and then nav):

    www.barchart.com/chart.php?sym=DNI&s...

    www.barchart.com/chart.php?sym=XDNIX&...

    What's holding me back at this point is that the market price is moving up faster than the nav value. So, a maybe.

    (NYSE:JDD) - "bought last fall and sold off in the last two months. A small amount was initially invested and had a decent payoff, but I'm thinking about coming back. Kind of like cocaine or whatever your favorite recreational drug is. Nice discount. 8.4% distribution. Broad diworsification. About 50% convertibles. And I've written about it before if you want to search around and other smart folks have as well.

    Here are charts of the market price and nav, respectively (I will use this format for the others I bring up - I also should point out that each time I copy/paste the address for barcharts a huge wall o' text comes up and freaks me out):

    www.barchart.com/chart.php?sym=XJDDX&...

    www.barchart.com/chart.php?sym=JDD&s...

    What should be noted is that the nav has broken out quite nicely but the market price is blah, although has also broken out to the upside. Next distribution won't be til the end of June."

    Again:

    www.barchart.com/chart.php?sym=JDD&s...

    www.barchart.com/chart.php?sym=XJDDX&...

    I'm more partial to this one. Nav's going up faster than the market price. Issue for me is that now that I'm buying something new every two weeks, there's no reason to buy it with This paycheck contribution since the ex-date should be in mid-June and I'll get paid before then.

    So, here's a monthly paying etf that's based on an index of thirty cefs:

    (NYSEARCA:YYY)

    and here's a link to their website:

    yieldshares.com/yyyetf.aspx

    My briefly held (NYSEARCA:CEFL) is based on this etf or index or however you want to call it. Some of the funds this etf is based on I would not own. Some I might, but not at current prices. What I like is that it has diversification over a broad spectrum of cefs - bonds, option types, equities, foreign and so on. And it's monthly pay. And has about a 8.5% yield currently.

    Since it's a new fund, my usual ma stuff doesn't work well for it. But, since it's very much diversified by being a fund o' funds, the 300 sma I like to use for my broad index funds in my 401k works:

    www.barchart.com/chart.php?sym=YYY&s...

    Yep, the price is above the sma. So this is very likely my first pick this Friday. JDD as a back up option if YYY goes way up by then.

    A second back up option might be the preferred stock LTS.A - it's another monthly payer and has close to a 9% yield. The eps has been improving yoy, but it doesn't have a positive pe yet or dividend (either or would be nice with a preferred). So to me, it's junk for the moment.

    I believe I mentioned in my last entry that I would write a bit about p2p and what I found out over the last couple of months.

    To keep it brief:

    It's time consuming. You have interest and principle that you are receiving frequently that needs to be reinvested. Along with everyone else that's involved in these things.

    The only two options you have (in the US) are Lending Club and Prosper. Both sites have been infiltrated with individuals/and or "hedge funds" that have a lot of money and automated computer programs that gobble up loans before the site's automated investment programs can act. And then you are left with manually selecting each loan you might find appealing to fund.

    This type of lending has not been around long enough for there to be any strategy of consistently working more than it doesn't. Most people seem to go by what "grade" of loan has had the best return over a certain period of time. And to stay "diversified". Meaning that you put no more than $25 in any given loan. And you need to have over a hundred loans to be "diversified". See the above paragraph to see why that might be a problem.

    You will be lending to individuals. There will be defaults. Some people will pre-pay the loan off when they get a better job. There's a problem when someone is willing to take on a 10% or much more loan for whatever reason. I can see doing it to pay down credit card bills, but it makes you wonder where their priority is/was.

    The rates on these type of loans have fallen and keep falling as our economy improves. If things go south, war/some black swan event, and the jobs market turns to crap again, guess what's going to happen to your portfolio of loans? Yeah. Non-secured loans are going to be the first thing on the backburner of folks to pay.

    And on their rates. Even with preferreds and many types of cefs taking off this year, I can still find bargains with a comparable dividend/distribution to these loans with a much lower risk of not paying than these loans.

    And my main issue. If you go this route, despite all the social-justice-hippy-shit-of-sticking-it-to-the-man hoopla, you are still essentially investing in banks. Except you do all the work and put your money at risk, not theirs. Both of them take a cut from who they make the loan to. Both of them take a cut from their "investors". Prosper is finally expected to be profitable sometime this summer. Lending Club is already profitable and Google has a stake in it. Twould make more sense to me to invest in the actual company themselves when they go public.

    And I noticed that in my previous copy/paste of charts I didn't do it correctly - I apologize!

    Tags: JDD, DNI, YYY, LTS
    May 17 4:55 PM | Link | 6 Comments
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