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  • Has CEFL Done As Badly As It Looks? [View article]

    The CEFL pricing supplement says it pays a coupon. It is interest just like that paid by any other bond.
    Jul 1, 2015. 06:24 PM | 2 Likes Like |Link to Comment
  • The Frankenstein Fund - The End Of The Beginning [View instapost]
    Babylon 5: "When the long night comes, return to the end of the beginning."
    Jul 1, 2015. 02:47 AM | Likes Like |Link to Comment
  • Main Street Capital: An Investment For All Interest Rate Environments [View article]

    I download historical prices from Yahoo, but not dividends. I have spot checked the Yahoo historical prices with bigcharts and found no disagreement.

    One problem with Yahoo historical prices, and bigcharts, and Morningstar. For a very few dividend payment dates, there is no price quote.
    Jun 30, 2015. 07:49 PM | Likes Like |Link to Comment
  • GE sells European private equity unit for $2.2B [View news story]
    Answers my immediate question.
    Jun 30, 2015. 12:24 PM | Likes Like |Link to Comment
  • Do Buybacks Benefit Dividend Growth Investors? [View article]
    An estate planning attorney might have the answer.
    Jun 30, 2015. 11:15 AM | 2 Likes Like |Link to Comment
  • Greek Bank Holidays Won't Close The ATM Of This Dividend Growth Portfolio [View article]
    The recent article on FTR by Regarded Solutions had me shaking my head. What was he thinking? (or not)
    Jun 29, 2015. 10:26 PM | 4 Likes Like |Link to Comment
  • Greek Bank Holidays Won't Close The ATM Of This Dividend Growth Portfolio [View article]

    You answered my question. You aim to maintain approximate equality, are open to taking advantage of temporary mis-pricing, and are willing to start new positions.

    I have arrived at a very similar conclusion. I have also improved my spreadsheet to generate what-if scenarios. Helps with planning.
    Jun 29, 2015. 10:22 PM | 1 Like Like |Link to Comment
  • Greek Bank Holidays Won't Close The ATM Of This Dividend Growth Portfolio [View article]

    Calculating YOC is trivial. My question to George had to do with the weighting of each position. If you want to maintain equal income from each position, you cannot use current yield, since current yield changes frequently, often with each trade. YOC changes only when the dividend changes, so it is the only practical method.
    Jun 29, 2015. 10:20 PM | Likes Like |Link to Comment
  • Greek Bank Holidays Won't Close The ATM Of This Dividend Growth Portfolio [View article]

    When/if you buy more MAIN, will you try to maintain equal income across positions? If so, can you explain the mechanics of your process?

    I have a portfolio whose purpose is, like FTG, to generate equal income from each position. I find that, because I spread out my initial purchases over time, calculating the number of shares per company to be bought out of new dividends is an involved process. I have devised a methodology, but others may need some ideas. Even if you start your FTG portfolio with a big bang, dividend percentage increases will vary over time, which means you cannot simply reinvest into the payer. When you buy new shares in an existing position, your yield on cost is no longer simple.
    Jun 29, 2015. 06:51 PM | Likes Like |Link to Comment
  • Good On You, Alexis Tsipras [View article]
    I have known your name ever since Ronnie took you out behind the woodshed many years ago. I don't always read your articles, but I am never disappointed when I do. Keep up your counter-mainstream views, they are often a useful antidote to majority opinion.
    Jun 29, 2015. 11:52 AM | 2 Likes Like |Link to Comment
  • Main Street Capital Corporation A Safer BDC To Hold [View instapost]

    Good advice for your daughter. She could not do better in the BDC universe. The comparative price action between PSEC and MAIN tells the story loud and clear.

    I think the main (pun intended) reason for the flight to quality is in the compensation plan for management.

    PSEC is externally managed, for no good reason, with a traditional hedge fund 2-and-20 compensation plan. They are paid 2% of the assets under management, including idle cash, and 20% of the latest gains. There is no clawback to protect owners from capital losses. While PSEC has cut its dividend twice and lost considerable market value, management has been compensated very handsomely at an ever increasing rate. As a result, PSEC's cost structure is among the highest in the industry. The bottom line is that the interests of management and owners are severely out of alignment.

    MAIN is internally managed. There is no 2-and-20 compensation scheme. MAIN's cost structure is the lowest in the industry. The interests of management and owners are in complete alignment.
    Jun 27, 2015. 12:36 PM | 1 Like Like |Link to Comment
  • Which BDCs To Buy After Selling Prospect Capital? [View article]
    jaxgab, calculates reinvestment on the ex-dividend date. I know because I asked them.

    I have compared longrundata to Dividend Channel and in my experience their differences are very slight, on the order of a few hundredths of one percent. This leads me to believe that Dividend Channel also calculates on the ex-dividend date (I did not ask), and that the differences are in rounding. I suppose they also could be using different math libs.

    However, I have found that certain combinations of comparisons on Dividend Channel give nonsensical results. I gave up on them when this happened, and spurred me to collect and calculate dividend data for myself.

    My results differ from theirs at least in part because I calculate reinvestment on the payment date. You cannot reinvest a dividend that you have not received. I compute the number of shares bought based on the closing price on the payment date.

    I gather historical dividend data from company web sites, and supplement with data from Fidelity, Morningstar, and Yahoo Finance as needed. I get ongoing dividends from SA news alerts. I get historical closing quotes from Yahoo Finance with the RCHGetYahooHistory Excel add-in. Very rarely, there is no quote information for the dividend payment date. If memory serves, this has happened twice for PSEC and thrice for MAIN. In these instances I use the close from the day preceding the payment date.

    I make mistakes just like everyone else. My results satisfy me. I have no need and no interest in putting a stake in the ground and declaring my results to be 'correct'. I welcome constructive criticism and I am open to exchanging spreadsheets, processes, etc. I have learned some invaluable financial methods simply by asking questions at SA, and I freely share what I have learned.

    What you said about Morningstar is very surprising. Not that I doubt you, but I will try to verify what you said. I need to see it first hand, otherwise I am likely to forget.
    Jun 26, 2015. 05:59 PM | 2 Likes Like |Link to Comment
  • Scanning The SA Family For Alpha: Daskapital1000 [View article]
    ETFs might also save you on taxes. Mutual funds have the unpleasant habit of declaring capital gains that you have to pay taxes on, even though you do not actually get the gains. ETFs almost never declare capital gains.
    Jun 26, 2015. 01:37 PM | 2 Likes Like |Link to Comment
  • Do Buybacks Benefit Dividend Growth Investors? [View article]

    That is logical, but it is also theoretical so we don't really know, because, among other things, not buying shares is an alteration to the company's behavior, which could have unforeseen consequences. We all know about those.

    It is an epistemological problem. We would need, for instance, for those two paths to have occurred in alternate universes and then somehow observed them both.
    Jun 26, 2015. 01:33 PM | 1 Like Like |Link to Comment
  • Do Buybacks Benefit Dividend Growth Investors? [View article]
    It seems to me that we can make inferences about buybacks, but there is no way to know for sure.

    If a company that makes buybacks and pays dividends had instead, historically, used that buyback cash to pay more dividends, would an income investor have received more cash over the long term? Who can say? Nobody.

    As an income investor, I want the cash, not the buybacks. However, as a very happy owner of MO, I have to acknowledge that we cannot always get what we want.
    Jun 26, 2015. 01:19 PM | Likes Like |Link to Comment