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  • A Lesson From The Powerball  [View article]
    It would be interesting to compare the S&P 500 Consumer Staples index to the Low Volatility Index. My own work comparing XLP to SPY shows that XLP has better long term TR.
    Jan 18, 2016. 04:26 PM | 1 Like Like |Link to Comment
  • Do Total Returns = Dividend Yield + Dividend Growth?  [View article]
    hardog,

    Plus, the VIX.
    Jan 17, 2016. 04:34 PM | Likes Like |Link to Comment
  • Royalty Trusts Sing The Oil Well Blues  [View article]
    Pablomike,

    It is exactly 60%.

    The latest 10-K [1] describes what happens when the trust terminates:

    "Termination of the Trust

    The Trust will terminate if either
    ____ (a) holders of **at least 60%** of the outstanding Units vote to terminate the Trust or
    ____ (b) the net revenues from the Royalty Interest for two successive years are less than $1,000,000 per year (unless the net revenues during the two-year period have been materially and adversely affected by certain extraordinary events).

    Upon termination of the Trust, BP Alaska will have an option to purchase the Royalty Interest at a price equal to the greater of
    ____ (i) the fair market value of the Trust property as set forth in an opinion of an investment banking firm, commercial banking firm or other entity qualified to give an opinion as to the fair market value of the assets of the Trust, or
    ____ (ii) the number of outstanding Units multiplied by ... the closing price of Units on the day of termination of the Trust on the stock exchange on which the Units are listed...

    The purchase must be for cash unless holders of 60% of the Units outstanding authorize the sale for non-cash consideration...

    If BP Alaska does not exercise its option, the Trustee will sell the Trust property on terms and conditions approved by the vote of holders of 60% of the outstanding Units, unless the Trustee determines that it is not practicable to submit the matter to a vote of the Unit holders and the sale is made at a price at least equal to the fair market value of the Trust property as set forth in the opinion of the investment banking firm, commercial banking firm or other entity mentioned above and on terms and conditions deemed commercially reasonable by that firm.

    The Trustee will distribute all available proceeds to the Unit holders after satisfying all existing liabilities of the Trust and establishing adequate reserves for the payment of contingent liabilities.

    Unit holders do not have the right under the Trust Agreement to seek or secure any partition or distribution of the Royalty Interest or any other asset of the Trust or any accounting during the term of the Trust or during any period of liquidation and winding up."

    To summarize, when the Trust terminates, unit holders are cashed out at whatever their units are then worth less all existing liabilities and contingent liability reserves.

    According to NASDAQ, institutional owners hold 6.7% of BPT[2]. That is very far from the 60% needed to terminate the trust. If our friend Ed Rudy is typical of individual owners, I don't see much chance of a successful vote to terminate the trust.

    [1] http://1.usa.gov/1P9xKqZ
    [2] http://bit.ly/1P9xKr3
    Jan 17, 2016. 04:26 PM | Likes Like |Link to Comment
  • DGI Vs. Total Return: My Journey In Retirement Part II  [View article]
    FD,

    As a retiree and speaking entirely for myself, I certainly do know the difference between a DG portfolio in accumulation mode and in retirement mode. I invest in a blend of current higher yield and future higher yield, the former for today's living expenses and the latter for next decade's living expenses.
    Jan 16, 2016. 12:20 PM | 1 Like Like |Link to Comment
  • BDCs - Last Stop On Debt Food Chain  [View article]
    Thanks Robin. I looked at the latest version of HR 5929 and it is obviously not the correct bill.
    Jan 15, 2016. 03:52 PM | Likes Like |Link to Comment
  • BDCs - Last Stop On Debt Food Chain  [View article]
    According to Wells Fargo:

    >House Bill 5929 (HR 5929) allows, among other things, for BDCs to (1) leverage 2:1, up from 1:1 previously, and (2) count preferred equity as equity instead of debt.<
    Jan 15, 2016. 11:48 AM | Likes Like |Link to Comment
  • Put REITs In (R)(E)t(I)remen(T)  [View article]
    robertgriffin,

    The 10 year yield is falling now: http://bit.ly/1TYIzdx
    Jan 14, 2016. 06:26 PM | Likes Like |Link to Comment
  • Put REITs In (R)(E)t(I)remen(T)  [View article]
    Beware the low trading volume in LRET.
    Jan 14, 2016. 06:02 PM | Likes Like |Link to Comment
  • Is This A Buying Opportunity For Business Development Companies?  [View article]
    I think it is in part due to MAIN's energy exposure.
    Jan 14, 2016. 11:31 AM | 2 Likes Like |Link to Comment
  • Consumer discretionary sector looks for comeback  [View news story]
    The Consumer Discretionary ETF is (XLY), not (XLP).
    Jan 14, 2016. 09:47 AM | 1 Like Like |Link to Comment
  • Union Pacific Corp. Selloff Overdone  [View article]
    Yes, Altria is mighty MO.
    Jan 13, 2016. 07:14 PM | 3 Likes Like |Link to Comment
  • Union Pacific Corp. Selloff Overdone  [View article]
    Ray,

    Thanks for your article. I have had my eye on UNP for some time, but stayed away because it has been so obviously over priced. The cash flow chart is very helpful, and if you switch to FUN Graphs you can see a history of levered FCF vs dividends. Starting in 2010 LFCF has risen substantially and has provided a large cushion for the dividend.
    Jan 13, 2016. 01:51 PM | Likes Like |Link to Comment
  • Union Pacific Corp. Selloff Overdone  [View article]
    We are talking about might MO, correct?
    Jan 13, 2016. 01:28 PM | 3 Likes Like |Link to Comment
  • Royalty Trusts Sing The Oil Well Blues  [View article]
    JMO, I interpret the clause about extraordinary circumstances to mean some type of disruption like an earthquake.
    Jan 13, 2016. 12:21 PM | Likes Like |Link to Comment
  • Royalty Trusts Sing The Oil Well Blues  [View article]
    Your table has the wrong year in its date: 1/8/2015 should be 1/8/2016.
    Jan 12, 2016. 04:21 PM | Likes Like |Link to Comment
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