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  • MORL Still Attractive With 23.3% Dividend [View article]
    The ETNs are all linked to indexes. They 'own' whatever is in the index. If the index does not include preferreds then neither do the ETNs. It is a simple as that.
    Apr 26, 2015. 01:40 PM | Likes Like |Link to Comment
  • Retired Dividend Investors Are Deluded By Yield On Cost [View article]
    The author is not advocating a trading strategy.
    Apr 26, 2015. 12:22 PM | 1 Like Like |Link to Comment
  • MORL Still Attractive With 23.3% Dividend [View article]
    melfsh,

    During the financial crisis, both NLY and AGNC went up, not down. They both then held only agency paper, which was a good as Treasuries (NLY is now hybrid). I view the black swan risk in MORL as its non-agency components. During the financial crisis, the non-agency mREITs failed, while (repeating myself) the pure agency mREITs prospered. I view the biggest risk attached to MORL to be just this - the risk of failure by the non-agency mREITs.

    As for how UBS invests your money, UBS is very careful to not disclose specifics, but they would be very great fools to not buy the index. I do not think UBS management are very great fools.
    Apr 26, 2015. 12:02 PM | Likes Like |Link to Comment
  • ETN Showdown: Is MORL Overvalued? [View article]
    When the Fed finally does raise rates, 3 month LIBOR will also rise. Since UBS' financing charge includes 3 month LIBOR, this will directly affect the monthly reset of Current Principal Amount, which is reduced by the accrued financing charge. Thus an increase in 3 month LIBOR will automatically reduce the indicative values of these ETNs to an amount lower than it would otherwise have been. This is an effect of rising rates than I have not seen discussed in any of the many articles on the 2x leveraged ETNs.
    Apr 26, 2015. 11:49 AM | Likes Like |Link to Comment
  • ETN Showdown: Is MORL Overvalued? [View article]
    The margin call risk for UBS on these instruments is covered by the 'automatic acceleration' provision. Briefly, one of the conditions that can cause automatic acceleration is that if the underlying index drops by 30% during any one month, you will be forcibly cashed out at whatever the indicative value is that day. Another condition is a decrease of the indicative value to $5. UBS also has a call right that it can exercise at any time. Combining all of these, you can be sure that UBS will forcibly cash you out long before they would be subject to a margin call.

    If the index were to drop by 50% over the course of several months, each monthly leverage reset would reduce the absolute leverage to successively lower amounts. This process would protect UBS' leverage position. The cumulative index drop would then not trigger automatic acceleration.
    Apr 26, 2015. 11:34 AM | 1 Like Like |Link to Comment
  • Retired Dividend Investors Are Deluded By Yield On Cost [View article]
    IRS publication 590-B [1] has the answer.

    [1] http://1.usa.gov/1CZ0vuy
    Apr 25, 2015. 02:13 PM | Likes Like |Link to Comment
  • Dale's Super 7 Dividend Aristocrat And Achievers Portfolio Core [View article]
    Not so good:

    Walmart payout ratio = 0
    Family Dollar payout ratio = 0

    Huh !? These are so wrong they are laughable. I would not trust anything on this list.
    Apr 25, 2015. 02:10 PM | Likes Like |Link to Comment
  • MORL Still Attractive With 23.3% Dividend [View article]
    An increase in short rates will cause 3 month LIBOR to increase. This will in turn increase the financing cost for MORL and all of the other leveraged ETNs. The financing costs come directly out of the indicative value. Consider how bad this will be if LIBOR returns to historical norms[1].

    [1] http://bit.ly/1HCWJyj
    Apr 25, 2015. 11:07 AM | Likes Like |Link to Comment
  • MORL Still Attractive With 23.3% Dividend [View article]
    Johan2003,

    You should not own MORL if you have not read the Pricing Supplement and the Product Supplement. There are conditions in which UBS will forcibly cash out your position, and you need to be fully aware of those conditions before deciding to own. Look for 'automatic acceleration' in the Product Supplement.
    Apr 25, 2015. 11:00 AM | 2 Likes Like |Link to Comment
  • MORL Still Attractive With 23.3% Dividend [View article]
    NV_GARY,

    I don't own MORL at Fidelity, but Fidelity lets you own and DRiP everything.
    Apr 25, 2015. 10:56 AM | Likes Like |Link to Comment
  • Hoping For A Stock Market Crash [View article]
    "All valuation methods need to take into consideration either historical data or future predictions and not just one data point."

    I think both must be considered.

    We must also accept that the future will have unknowable negative events whose harm will scale from mildly annoying to catastrophic. We do our best to anticipate what might happen, acknowledging that all future projections will be imperfect, which is why I diversify.
    Apr 25, 2015. 10:53 AM | Likes Like |Link to Comment
  • Retired Dividend Investors Are Deluded By Yield On Cost [View article]
    I bought more OHI at ~38. Being of advanced age, my memory is not what it once was, so I cannot claim to have remembered specifically about the AVIV purchase.

    However, I do track my stocks on charts, and I do maintain dividend histories in Excel. When the announcement of the final 1/3 of the dividend was reported, I updated my dividend calculation, which sparked my memory of the partial dividend, so I knew that the reported current yield in several articles and news releases was way wrong. Then I looked at the chart. It looked like a relative bargain so I filled my position.

    My advice to anyone who wants accurate dividend information is to take responsibility for it. If you use historical information maintained by someone else, how can you trust it?
    Apr 24, 2015. 10:23 PM | 3 Likes Like |Link to Comment
  • MORL Still Attractive With 23.3% Dividend [View article]
    That depends on your broker. My understanding is that Schwab will not DRiP ETNs.

    To my certain knowlege: Wells Fargo will not let you own MORL. Fidelity will let you DRiP.
    Apr 24, 2015. 09:55 PM | 1 Like Like |Link to Comment
  • Hoping For A Stock Market Crash [View article]
    "If the analysis was based upon some kind of estimate of the average 10 year rate for the next 10-20 years, or longer, then there would be some validity."

    I have to laugh about the validity of any projection of such duration. Sorry, but that is just silly! ;-)

    “It's tough to make predictions, especially about the future.” ― Yogi Berra
    Apr 24, 2015. 09:47 PM | 1 Like Like |Link to Comment
  • Retired Dividend Investors Are Deluded By Yield On Cost [View article]
    Art Noonan,

    If you are investing for income, why do you care about draw downs? The offers by Mr Market have no effect on dividends or bond coupons.

    The same principle applies to stocks that have been bid up unreasonably as to stocks that have been bid down unreasonably. Mighty MO was bid down to as low as $15 in 2008, which gave it a yield of 8.5%. Now it has been bid up as high as 56 and has a current yield of 4%. Neither bid has any effect on the income it generates.

    The draw down in 2008 was an opportunity, not a risk. Did you seize it?*

    Finally, look at the relative valuations in late 2008 - early 2009, compared to today. Then ponder this bit of wisdom:

    “An investment operation is one which, upon thorough analysis, promises safety of principal and satisfactory return. Operations not meeting these requirements are speculative.” – Benjamin Graham

    * Full disclosure: I was not invested in individual issues before 2011. My money was in a 401K and variable annuities, both with only mutual funds as options.
    Apr 24, 2015. 09:35 PM | Likes Like |Link to Comment
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