Seeking Alpha

User 7415181's  Instablog

User 7415181
Send Message
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
My blog:
User 7 blah blah's instablog.
View User 7415181's Instablogs on:
  • All In The Name Of Tragedy

    In yet another example of my mind jumping from topic to topic, several comments on the chatrooms on this site over the last several weeks mocking bunkers by associating them with gold bugs got me to thinking and I started googling.

    I live in a tornado and hail prone area. Would these make sense? A cousin of mine in PA lived in an underground house before she divorced the bastard. All I remember are complaints about humidity and being terrified of the cows running towards me across a field to check me out (yes, cowboy movies and stampedes from the films influenced a kid under the age of ten) and a banana tree growing in the middle of the interior.

    Turns out that some of these companies make pretty swank tornado/bomb shelters at insane prices. And some are obvious rip-offs. And some are just plain-jane underground rooms. And here and there, there are companies that seem to actually provide a genuine livable underground structure that should provide decent security and storm protection for a reasonable price.

    Anywho. Mulling things around that I've learned over the last couple of weeks, why not build a shelter and then build a house over it? Could act as a man-cave basement at the minimum if nothing happens and if a tornado is on the way, have a place that can provide protection. Or defend against zombies or whatever the current end-of-the-world scenario is.

    Now. Instead of considering my adhd when it comes to projects and purchases and toys, let's consider my rules based monthly/likely investment.

    I decided to start including my 401k in these blogs. Pretty simple and boring - I put in up to 6% of my gross pay and the hospital matches a bit over 50% of that. I'm now fully vested. I have three reasonable cost funds to choose from (there are others, but they have expenses that are quite high for a mutual fund and they haven't really out-performed for that expense over any length of time).

    VTSMX (vanguard total stock market fund), VGTSX (vang. total intl stock market), VBMFX (vang. total bond fund). Yes, I know, these aren't in bracketed quotes, but SA doesn't list mutual funds.

    What I do is look at the 100 day relative strength of all three funds on barchart www.barchart.com/ ; I want my money to be in the one with the highest RS. But I also want it to be above the 300 day SMA. If none of the funds match this criteria, the cash goes to a money market account. I examine my current holdings once a month.

    This is the article that originally got me interested in this:

    seekingalpha.com/article/921541-this-sim...

    Here are a couple of papers that extremebanker was nice enough to point me to:

    papers.ssrn.com/sol3/papers.cfm?abstract...

    papers.ssrn.com/sol3/papers.cfm?abstract...

    which all indicate a nice out-performance in a very bad market, mainly by getting out of stocks and going to bonds when things start to go south.

    Since I started this 401k last May, I have not gotten a sell signal yet. So I've been basically indexing vtsmx ever since. At some point, things will change and maybe abruptly - that's when I find out if this strategy is worthwhile. And keep in mind that I just started contributing to that 401k a year ago, so this will not break my retirement if things don't work out for it.

    Anywho, on to my taxable account plans:

    Last year I broke even. Which sounds like it sucks (it did), but the good news is that I really had just started and was buying preferreds and other cefs that got slaughtered all the way until the turn of the year. And a lot of those have turned around since January and have actually been doing better than my total market fund.

    Most of the preferreds I bought below par and I keep a limit order to sell at about par value or sometimes for a 10% gain if I bought it quite cheap. I did screw up with a couple and bought at par value before the slaughter started last May.

    Over the last couple of weeks I sold off OFG.B and NRF.D. I put the money from OFG.B into (GEQ) and the money from Northstar into GRH.C. GRH.C is risky, but reading company statements over the last couple of years indicates to me that they are slowly improving and hopefully won't go bankrupt before I can sell it for a decent profit and collect dividends along the way.

    Anywho, what to buy this friday.

    Like last month, not too many preferreds that I would like to buy. BPOPO is currently yielding 8.3% and is trading around $19 with a $25 par - but I already own a bit of bpopp and made some money on this one last fall. And bpop has yet to exit tarp. Possible their request could be denied. And it was fairly gut-wrenching to hold this and the ofg preferreds while all the articles came out describing Puerto Rico turning into Detroit.

    OXLCO is still my favorite preferred with a mandatory redemption in 9 years, but I bought into it around $23 and it's currently a dollar higher. And the market yield has dropped to under 8% and I already own a good chunk (third largest holding after psec and vtsmx). Might be worthwhile for someone who reads this to research it, though.

    RSO.B is one of the ones I initially bought at par value and doubled the position at the turn of the year and still pays a 9% market yield. I do not understand why this one hasn't gone up like the other ones I own, but I can be patient. Unfortunately, it's the fourth largest position I have!

    So, back to cef land.

    Preferred cefs still trade at a hefty discount, but I like to pick them out myself. There are still mreit type ones and option types at big discounts with good yields. Mreits make me nervous. I already picked up (JLA), (ETB), (GEQ) in the last six months, so I've got some defensive option ones. How about other countries?

    Another one I wrote about last time so I'll just copy paste again:

    "(CHW) - one of the cefs I sold off in the Roth account and I've owned on and off for a couple of years. About half equities, some convertibles some bonds. Global. Over a 13% discount right now, pays monthly and a bit over a 8% distribution rate. Even with all the European craziness and problems over the past few years, the nav keeps creeping up and the market price has started to diverge more."

    Actually the discount is currently 11% and they just increased the distribution a bit to make it a 9% market yield. Probably my first pick.

    Another copy/paste from a previous writing:

    "(BWG) - Ouch. Only started up in 2012 and the nav went up and now it's back to where it started. Currently at a 14% discount and close to a 9% market yield. It's listed as a global fund, but you might notice that most of its holdings are emerging market debts. Comparing this to other funds I examined today, I like that I don't see Venezuela govt bonds as a primary holding. Turkey also seems limited. Does have Portugal, but they don't seem to be inclined to have a civil war or coup (friend of mine has been quite correct on a number of global issues over the years - he does help draw up rules-of-engagement - he also visited Turkey on a cruise this year and told me that you could tell people were ready to overthrow Erodogen - I'm inclined to trust his judgment - and note that I don't know much about Turkey one way or the other, I just like to avoid investing in places that might end up resembling Detroit).

    Another reason I'm looking at this one is that they raised their distribution last year. And the brief look I've taken is that the eps is greater than the current distribution."

    It's risen in price since I wrote that (and briefly held and sold for a slight profit), but the distribution is still over 8% and it's still at a 14% discount. And I could add to what I previously wrote that I don't see Russian or Ukraine debt as top ten holdings like other funds I looked at this morning.

    Remember the above when I was talking about the momentum and relative strength that I use for the big funds I have? I ran the same screen on the nav of bwg and chw. I'm not going to use the same criteria to buy because these cefs only have a hundred holdings or so compared to a broad index fund.

    But for those who might be interested, the nav of chw has been above the 300 day sma for months. The nav of bwg just broke above that mark today. Good signs for both. I'm just liking chw a bit better because I'm more familiar with it having owned it off and on for a couple of years.

    As usual, I'll edit in what I end up buying on Friday. And update ahead of that date if I see something else that looks appealing.

    And an edit for 4/8:

    Browsing around I came across this -

    (cefl) - this article does better justice to it than I could:

    seekingalpha.com/article/2129673-is-it-s...

    And the ex-date is tomorrow. Still giving it some thought. Main risk that I can see in the prospectus is that the price hits $5 or drops 60% in a month then it can automatically be redeemed. I briefly owned a similar fund for mreits, MORL last summer and couldn't take the volatility. This one might be less volatile as it's based on a pretty broad array of cefs, but no guarantees.

    Tags: BWG, BPOP, GEQ, JLA, CHW, RSO, OFG, OXLC, ETB
    Apr 07 11:07 AM | Link | 2 Comments
  • Out Of The Night Comes A Song That I Know, Twisted And Ruined And Black

    "User doesn't like his current job and wants a different type of job being the house supervisor. Well, I don't know about his sense of humor or communication skills. He says he absolutely doesn't want to be charge nurse of the unit. He says he doesn't see the correlation between the two."

    "I know! Maybe if we make him do that a few times a week he'll learn to love it! Especially if we smile at him when we come through and act surprised that he's the charge! He can do the same type of work he's good at and have the added responsibility of supervising the entire unit and staff and wasting several hours a week in doctor's meetings and get paid a whole $1 extra an hour!"

    Yeah.

    One nice thing about writing these blog things is that I can look back and see if there are investments I was considering but didn't buy because another one was more appealing at the time.

    A week or two ago I sold off my Roth cefs and preferreds for a profit and bought (PSEC) the day after it started dropping. 12% yield compounded tax free should be quite nice for a while. (note that I'm not contributing to that account until the taxable has a year's equivalent salary in it and both my 401k and taxable account are worth much more and are much more diversified)

    (CHW) - one of the cefs I sold off in the Roth account and I've owned on and off for a couple of years. About half equities, some convertibles some bonds. Global. Over a 13% discount right now, pays monthly and a bit over a 8% distribution rate. Even with all the European craziness and problems over the past few years, the nav keeps creeping up and the market price has started to diverge more.

    (TPZ) - wrote about this last time so I'll just copy/paste:

    "owned it a couple of years ago, and if had not sold and dripped I would have been very happy. Anywho, currently at a 10.5% discount. Yield is only 5.8%. The NAV when they started in 2009 was 19 and is currently 28.4. And the distribution hasn't changed since it started. Monthly pay. Mix of mlps and energy bonds. No k1 form. NAV flatlined over the last year, so that may be the reason it's dropped to a big discount. Or because it holds a fair amount of fixed income. Monthly pay."

    Here's an article I came across a while ago about mlp cefs:

    seekingalpha.com/article/2045173-kayne-a...

    which is worth a read. Author argues that (KYN) is the best mlp fund and it may be. It also trades at a premium so that rules it out for me. I went to Costco a couple of Friday's ago and saw that tenderloin "prime" was $21/lb and "choice" was $11/lb. I don't doubt the prime came from a less deformed steer, but at the end of the day it's how you cook and season it that counts and I bet I can get a good meal for a better price.

    Anywho. Where was I? Oh. If not for that article I would not have known that a couple of the Tortoise funds are merging and that explains why some are at a significant discount (and thus show up when I do an initial screen) and others are close to nav value. What that indicates to me is that Tortoise is trying to compete with Kayne Anderson by making shareholder friendly moves.

    I bought NDP last time, and am considering TPZ in the hope that Tortoise might do some shareholder friendly moves with their other funds in the future. And a halfway decent yield is nice and the navs have done fine since inception.

    (UTF) - this is another fund I owned a couple of years ago and if had just held it and dripped instead of taking a quick profit, I would have been very happy with the results. Close to a 12% discount and a 6.5% distribution. It's listed as an infrastructure fund. Go over to cefconnect and check out how the nav has done and you'll see that it's come back nicely since 2008.

    No preferreds that I saw currently interest me. (GEQ) might be a wild card option, but the discount has narrowed a bit since I last was thinking about it. And the next distribution won't be until May or thereabouts.

    edit - OXLCO is my current favorite preferred below par value - I already have a fair amount (for me), but I would buy more as my backup option if the above things narrow their discounts. My crappy discount broker informed me that they will do a synthetic drip for preferreds, so the current plan is to buy them below par, drip the dividend and have a limit order in place for par value. And OXLCO is mandatory redeemable in 9 years. And is trading (when it trades) around $23 with a par value of 25. The underlying fund looks nice, but I will not buy into a cef unless it's close to double digit discount.

    So. If the discounts hold by my Friday paycheck, CHW first, UTF second, TPZ third.

    edit for 3/14 - TPZ it was.

    Disclosure: I am long PSEC.

    Additional disclosure: The sun is out! It's kind of warm!

    Tags: CHW, GEQ, TPZ, PSEC, UTF
    Mar 08 12:07 PM | Link | 9 Comments
  • Out Of The Sun

    Debating whether or not to go for a supervisor's position. Bosses seemed uneasy with my sense of humor. I don't blame them. One of them seemed sympathetic when I mentioned that I had applied at MacDonalds' and had been turned down. I informed her that that was a joke.

    Could I discipline myself to keep from making sarcastic and black humor comments that no one gets? I don't know. I do know that I google-searched horrible photo-shopped Valentine's day cards and printed many out that didn't include profanity and decorated my unit's staff lounge on Friday. The unit secretary told me while on one trip to the lounge that it was the first time she'd seen me smile! I was either getting it out of my system one last time, or I am really unfit for the job.

    I may very well go through with applying for it just to see how uncomfortable it makes my supervisors feel...

    Anywho,

    I had a new monthly preferred that I've been watching (ARCPP), but it's gone up past my 8% yield minimum cutoff. Here's an article that alerted me to it in the first place for anyone who might be interested:

    seekingalpha.com/article/1958501-america...-monthly

    Which should give plenty of info to research it yourself for anyone who's interested.

    If, by the end of the week, it falls back to where it's yielding 8%, I may pick it up (possible as it pays in the middle of the month, not the last day).

    I own a fair number of preferreds below par that I'm already interested in. My Puerto Rican bank preferreds have been getting slammed (OFG) (BPOP). The other ones appear to be making a comeback.

    So. Probably going to be a cef this paycheck.

    Already own plenty of covered call ones. Own a fair amount of a convertible one. Own a couple of mixed ones. I don't want to buy into a preferred fund as I think I've got that down. So where to?

    There aren't as many cefs in reits trading that meet my screen as a month ago. Even munis are going up compared to six months ago. So I'm thinking that I'm going to have to relax my screens this time for yield or performance.

    (BWG) - Ouch. Only started up in 2012 and the nav went up and now it's back to where it started. Currently at a 14% discount and close to a 9% market yield. It's listed as a global fund, but you might notice that most of its holdings are emerging market debts. Comparing this to other funds I examined today, I like that I don't see Venezuela govt bonds as a primary holding. Turkey also seems limited. Does have Portugal, but they don't seem to be inclined to have a civil war or coup (friend of mine has been quite correct on a number of global issues over the years - he does help draw up rules-of-engagement - he also visited Turkey on a cruise this year and told me that you could tell people were ready to overthrow Erodogen - I'm inclined to trust his judgment - and note that I don't know much about Turkey one way or the other, I just like to avoid investing in places that might end up resembling Detroit).

    Another reason I'm looking at this one is that they raised their distribution last year. And the brief look I've taken is that the eps is greater than the current distribution.

    (BBF) - muni fund - 9% discount and 6.7% distribution is pretty good. Again, eps is greater than distributions (by a tiny amount) which I want to see in a bond fund. No ROC is good. More Illinois in the top holdings than I would like, but at least it's not Michigan.

    And the two funds I'm reallllly interested in:

    (TPZ) - owned it a couple of years ago, and if had not sold and dripped I would have been very happy. Anywho, currently at a 10.5% discount. Yield is only 5.8%. The NAV when they started in 2009 was 19 and is currently 28.4. And the distribution hasn't changed since it started. Monthly pay. Mix of mlps and energy bonds. No k1 form. NAV flatlined over the last year, so that may be the reason it's dropped to a big discount. Or because it holds a fair amount of fixed income. Monthly pay.

    I looked at every Tortoise fund today and this is the only one that has not raised its distribution in the last year. Stays at about this discount, I'm going to buy.

    (TTP) - another Tortoise fund! Lots of pipeline companies! Close to a 13% discount. 5.8% yield again. Quarterly pay, but the ex-date should be after I get my paycheck this Friday. Unlike TPZ, the NAV went up for the year. More mlps, not so much in the way of fixed income. And I am giving serious thought to this one as the market price is going down and the NAV is going up.

    As you can see, I like Tortoise funds. Every one of them I've looked at has a low distribution, but has had their nav go up since inception and you've got to collect/reinvest that yield along the way. These two are the only ones trading at double digit discounts. If things stay this way by payday, it will be one or the other. And it will give me exposure to energy companies of some type which should also make a nice inflation hedge.

    Now I will have to ask myself if the 8% yield cutoff for this account needs to be cut and dried...

    edit for 2/11 - sold off BPOPP in the Roth account and added both TTP and BWG.

    edit for 2/14 - actually bought (NDP) today - another Tortoise fund that dropped to a bigger discount this week. I can wait on TPZ and see if the discount holds next month.

    Tags: TPZ, TTP, BWG, BBF, TPZ, TTP, BWG, BBF
    Feb 09 3:36 PM | Link | Comment!
Full index of posts »
Latest Followers

StockTalks

More »

Latest Comments


Posts by Themes
Instablogs are Seeking Alpha's free blogging platform customized for finance, with instant set up and exposure to millions of readers interested in the financial markets. Publish your own instablog in minutes.