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  • Defining, Measuring And Diversifying Income Risk [View article]
    Gary,

    >They distribute 90% of earnings by regulation...<

    Not true. There is no statutory requirement for any partnership to distribute anything. An MLP can have a contract between the GP and the LPs that stipulates the conditions under which distributions are made, and their amounts, but this obligation is contractual only.

    The 90% rule for an MLP to refers to its sources of income. To retain its tax status, it must earn at least 90% of its income from qualifying activities.
    May 27, 2015. 04:28 PM | 1 Like Like |Link to Comment
  • ETN Showdown: MLPL, A Great Play For An Oil Rebound [View article]
    Nick,

    >Would people choose MORL due to the yield being virtually double?<

    Not me. I own several mREITs but I do not own MORL. The reason is that mREITs are highly leveraged, on the order of 5:1 and greater, and I do not want 2:1 leverage on top of that.

    >what is the largest loss of either in a single month?<

    The loss you want to check is the loss in the linked index, not the ETN. If the linked index loses 30% during a month from its closing value on the last trading day of the previous month, you are forcibly cashed out.

    The fact that neither has been called tells you that neither has had its index drop by 30%.

    I don't follow MORL, so you are on your own there for price history. MLPL is linked to AMZI[1], so you can look at the chart and see for yourself how close it has come to being called.

    [1] http://on.mktw.net/1HM...
    May 27, 2015. 03:56 PM | Likes Like |Link to Comment
  • Prospect Capital: What Comes Next? [View article]
    The chart looks awful[1].

    [1] http://bit.ly/1HLuCxi
    May 27, 2015. 11:43 AM | Likes Like |Link to Comment
  • X-Raying CEFL: Leverage And Expense Ratio Statistics [View article]
    This is an income generating algorithm. It uses yield on cost to allocate positions. It is not affected by changes in prices paid by Mr Market. Only changes in dividends paid per share can affect the resulting income.
    May 26, 2015. 06:01 PM | 1 Like Like |Link to Comment
  • X-Raying CEFL: Leverage And Expense Ratio Statistics [View article]
    Yes, in these portfolios it goes into all of the other positions.
    May 26, 2015. 05:38 PM | Likes Like |Link to Comment
  • X-Raying CEFL: Leverage And Expense Ratio Statistics [View article]
    I will give you the rest of the story about why I do not own MORL, in addition to the reasons stated above.

    We have several TIRAs that I have allocated so that each position generates the same amount of income. (George Schneider does the same thing in his 'Fill The Gap' portfolio). We have a total of 28 positions. When I was modelling various possible portfolios, I tried AGNC in one position, then swapped it out for MORL. The total income for the portfolio was almost identical. The reason is that when you use this algorithm, the securities with the highest yields get the least capital, and the securities with the lowest yields get the most capital. Using MORL instead of AGNC caused less capital to be allocated to MORL than to AGNC, so the total dividend was almost identical. I therefore saw no reason to own MORL and reasons not to own MORL as explained above.
    May 26, 2015. 05:21 PM | 1 Like Like |Link to Comment
  • X-Raying CEFL: Leverage And Expense Ratio Statistics [View article]
    5x leverage and greater is typical for mREITs. This is from the 2015 Q1 10-Q of AGNC:

    >In the first quarter, we further reduced our “at risk” leverage, inclusive of our net TBA position, to 6.4x as of March 31, 2015, our lowest leverage level in over 6 years.<

    I have not looked into REM. I know it has been discussed extensively but I have not had any interest in it. You cannot know everything, or at least I cannot, so I have to ration my cpu cycles. There is a relentless process whereby my wetware is losing power.
    May 26, 2015. 04:20 PM | 2 Likes Like |Link to Comment
  • The Case For REITs In 2015 [View article]
    Mortgage REITs are like leveraged and hedged bond funds. They borrow at low short rates and lend at higher long rates. In the long run, their profits are generated by the spread between short and long rates. Lance Brofman has written about how the absolute level of short and long rates are not what counts. What counts is the slope of the yield curve, i.e. the difference between short and long rates. The difference between 1% short and 2% long is the same as the difference between 5% short and 6% long. Mortgage REITs should perform pretty much the same in both environments.
    May 26, 2015. 11:14 AM | Likes Like |Link to Comment
  • X-Raying CEFL: Leverage And Expense Ratio Statistics [View article]
    I own AGNC, CMO, TWO. The best performer of these in the time I have owned them, about 3 years, is (drum roll) TWO. The worst is AGNC.

    I do not own MORL (except for a 0.1% position to keep my interest) because I do not want 2x leverage on top of 5x leverage.

    The yield curve will vary over time and so will the mREIT dividends. An inverted yield curve never lasts for long, so I do not have any long term concerns about the mREIT business model.
    May 26, 2015. 04:38 AM | 1 Like Like |Link to Comment
  • Stress Test For Dividend Growth Investors [View article]
    This retired DG investor owns no bonds. Why? Because my pension income covers all of my fixed income needs and then some. I have a large cushion between my ongoing living expenses and my total pension plus dividends. If some of my dividend payers were to freeze or decrease their dividends, I would not have a cash flow problem.

    Maybe I missed it, but the author did not mention pension income for retirees. I would like to see an analysis like this article but including pension income. Retired investors would get a more realistic picture of what actually happened.
    May 25, 2015. 02:28 PM | 1 Like Like |Link to Comment
  • Stress Test For Dividend Growth Investors [View article]
    My fixed income allocation consists entirely of pension income. No need for bonds or CDs.
    May 25, 2015. 02:14 PM | 2 Likes Like |Link to Comment
  • ETN Showdown: MLPL, A Great Play For An Oil Rebound [View article]
    In researching MLPL, I discovered a difference between CEFL and MORL (monthly coupon payers) vs MLPL (a quarterly coupon payer) in regard to how fees are charged.

    CEFL and MORL reduce the new Current Principal Amount by the accrued fees.

    MLPL reduces the new Current Principal Amount by the accrued financing charges, but NOT by the accrued tracking fee. The quarterly coupon payment is reduced by the accrued tracking fee, and if there is a shortfall, no coupon payment is made, and the shortfall accumulates.
    May 25, 2015. 01:48 PM | 2 Likes Like |Link to Comment
  • X-Raying CEFL: Leverage And Expense Ratio Statistics [View article]
    In researching MLPL, I discovered a difference between CEFL (a monthly coupon payer) and MLPL (a quarterly coupon payer) in regard to how fees are charged.

    MLPL reduces the new Current Principal Amount by the accrued financing charges, but NOT by the accrued tracking fee. The quarterly coupon payment is reduced by the accrued tracking fee.
    May 25, 2015. 01:26 PM | 2 Likes Like |Link to Comment
  • Another Keeper Stock: Constructing The Fill-The-Gap Retirement Portfolio For Every Life Phase And Any Market Environment [View article]
    My brokers provide downloadable spreadsheets, but I have not seen any way to load directly into my own spreadsheets. Who knows, there may be a way.
    May 24, 2015. 11:41 PM | Likes Like |Link to Comment
  • X-Raying CEFL: Leverage And Expense Ratio Statistics [View article]
    "...ETRAC investors should be selective and targeted in their ETRAC holdings..."

    I agree. I have been very selective in the ETNs I own. I want the companies in the underlying indexes to be resilient when recessions occur. I want them to provide products and services that we need and buy regardless of what might be happening in our economic lives. This is how I manage my risks. To that end, I own DVYL, HDLV, and MLPL. Not CEFL, not BDCL, not MORL.
    May 24, 2015. 06:20 PM | 2 Likes Like |Link to Comment
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