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FrankEllis

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  • Oxford Lane Capital Has 'Got Some Splainin' To Do' [View article]
    Thanks, Steve.
    Hope you will write additional documentaries as each new bit of info is revealed. I've been in OXLC for the long haul, consistently reinvesting all distributions in additional shares. It would not be for the best to find management playing funny money, or avoiding proper reporting of inside information, so we certainly hope they will be forth coming, above board, and transparent, but it has already been ten days since the announcement, and no explanation. Did they stick their head in the sand, or assume that the holders of the company are better off ignorant?
    Aug 19, 2015. 02:32 PM | Likes Like |Link to Comment
  • An Update On UBS's ETRACS 2X Leveraged ETNs [View article]
    Appreciate your diligence and info. I do feel that an emphasis on the negative, the expense, is not where I choose to focus. I look at the after expense gain. The expense is irrelevant because the total distribution takes all expenses into account. If I'm making 15 to 26.5% after expenses, that is my retirement or reinvestible income. Expenses are only pertinent if they are taken out after the distribution is made. UBS is doing for me what no one else is doing. If there were other identical ETF's paying the same yield plus an extra percent or two because fees were lower, then fees would be a point of interest, because I would directly benefit from reduced fees. However, there is no comparable alternative yielding higher income due to lower fees. I am perfectly willing to pay the fees in exchange for the yield.

    All distributions are automatically reinvested into more fee paying, high yielding shares so that my retirement income is constantly growing. The current out-of-favor pricing is actually beneficial because distributions buy a greater number of shares at the lower price, which increases the next distribution, which increases the number of shares purchased with the next reinvestment.

    The measure of success is purely the amount of income produced, not the fees or the current price. I update my tally of income after each monthly reinvestment. This also means that every distribution and reinvestment increases yield on original investment and reduces my average cost per share.

    At 26.5% yield after fees, I double my number of income paying shares about every 2.7 years. Said another way, my yield on my original investment increases to 53% after about 2.7 years, and to 106% of my original purchase cost after about 5.4 years. The question then is does someone other than UBS offer an investment after fees that produces better yield? Not that I know about. If anyone is aware of a lower fee alternative that will increase the bottom line retirement income, please post the comparison to UBS yields.

    One other thing not mentioned. The UBS ETF's are each diversified because they correspond to an index. Owning multiple ETF's of non-overlapping indices further diversifies. Owning the top four yielding UBS ETF's diversifies one's portfolio into 24 REIT's, 106 small cap high dividend companies, 44 BDC's, and 30 CEF's, for a total diversification of approximately 200 different businesses which are a necessary part of the economy. If one added SPXL for growth, diversification increases to about 700 business, certainly more than an individual could research, buy, keep up with, and leverage with margin, not to mention commissions on purchases and reinvestments. Purchasing equal dollar amounts of the five would provide an average yield of about 17.3% plus the S&P growth potential times three. So excluding the growth potential, that portfolio will double about every four years and two months, double number of shares, double income, double yield on original investment, cut in half the average cost per share. Not bad for five purchases, only five stocks to watch and maintain. Most can probably keep up with about ten if more diversification is desired. The compounding of a buy, hold, and reinvest strategy in high yield retirement income portfolio will beat most in spite of fees, corrections, market fluctuations and all the other possibilities that bother an investor. It leaves me thankful to pay UBS fees.
    Aug 17, 2015. 05:09 PM | 9 Likes Like |Link to Comment
  • What Lies Ahead For Dividend Stocks? [View article]
    Consider the larger picture into which the "lost decade" fit. The markets tend to have a long term cycle, often stated at sixteen years. In the sideways cycle the S&P hit the same ceiling and dropped, until the growth cycle started at the point where the S&P powered through the old ceiling and has kept going.

    Consider the 40% and 60% "loss" in prices that afforded the lower priced better reinvestment of distributions in greater number of dividend paying shares at higher yields, and look at the long term gain on the worst and best prices. Anything purchased or reinvested in the sideways cycle of the "lost decade" has appreciated hugely since the growth cycle started. There was no long term loss, but a large return from dividends reinvested at those 40% and 60% corrections. Only the fearful, the short sighted, and the market timers lost. There is no loss until one buys high and sells low. Holding and reinvesting through all the storms of corrections rides high in the next growth cycle, and perpetuates the goal of investing for retirement income. Look at long term charts and see that every downward correction has been corrected with ultimate new highs. Judge according to short term corrections, price fluctuations, and one cannot see the forest for the trees, but gets a lot of drama, fear, worry, emotion instead of a steadily increasing income for retirement.

    Keep working your plan of perpetual reinvestment in more income producing shares. It works without exception when one keeps his eye on the goal instead of the short term fluctuations.
    Aug 17, 2015. 03:36 PM | Likes Like |Link to Comment
  • What Lies Ahead For Dividend Stocks? [View article]
    Thanks much for the article. Interesting concept for leading indicators. Is it possible that dividend investors are more conservative than growth without dividend investors? Retirees and those nearing retirement wishing to invest for income, but also wanting to protect the principle from substantial downturns because they may need withdrawals to support their retirement, may be a bit more sensitive to the possibility of loss.

    That said, what is an income investor to do when the market descends? My answer is simply that I am invested for income, so I stay invested, reinvesting income as the market drops to allow more shares to be purchased with the distributions. I seem to be a minority on SA, but I believe that a market price drop is actually a good occurrence, improving number of shares and yield, therefore increasing long term income. Seeking income rather than price appreciation, or concern about price decreases, I view price movement from the opposite perspective from many of the commenters on SA. I also am aware that selling the stock because of a price decrease of a potential market correction will zero out my income, the very purpose of my investing, so I ride the wild wave, certain that what goes down will rise again like the phoenix. I remember that in 1950 the S&P was at 19, and in spite of corrections of 40% and 60%, the S&P is up a hundred times.
    If one's view is to the long term, this country and the world will continue to grow, increase in population and demand for what business sells to give investors our income, and corrections are opportunities rather than fearful things, although a decreasing portfolio total value does require a mental discipline to not close out and hide it in a mayonnaise jar buried in the back yard.

    So, doing the best I can to purchase stocks of companies providing things that people will need, preferably index ETF's paying high yields, so that each one is diversified, and owning a variety of non-overlapping index funds to further diversify, I focus on the income rather than the ever fluctuating price, and reinvest as much of the income as possible.

    The question arises, when the price drops, when the market corrects downward instead of upward, did the country fail? Did the economy fail? Did the world fall and will never be able to get up? Or is price fluctuation short sighted much ado about nothing drama that is of no real concern to a long term investor, and more particularly a long term income investor? Does one invest in his future by selling holdings, or buying and adding to holdings? Does one invest for the drama of market timing and picking the perfect stock, or as a long term savings plan for a safe, secure, and brighter retirement?
    An investor MUST remember that there is nothing to fear but fear itself, and separate the emotional panic of falling prices from investment decision making. When one wakes up in the morning, or next week, or next month, or next year, or in retirement, the world will still be there, people will still be buying products from the companies we invest in, population will still be growing an ever greater demand, and equilibrium will force the fallen price to return to norm, just as the fall in price forced the over priced to return to norm. The inevitable sane, rational conclusion, then, is to invest more when the price drops, not sell out. Live below one's means, invest the top 10% of income before paying taxes and bills, and stay steadfast the course of adding as much and often as possible.
    Aug 15, 2015. 02:46 PM | 4 Likes Like |Link to Comment
  • 13.6% Dividend REIT New York Mortgage Trust Is Banking On Credit Investments, Will That Work? [View article]
    Think I'll just look on the bright side, think positive long term growth of my retirement income, and smile at the 200+ shares my reinvested distributions just added to, and ponder the extra 200 X 1.08 = $216+ extra to buy more shares. Life is good if one doesn't weaken with negative thoughts.
    Jul 27, 2015. 03:32 PM | 2 Likes Like |Link to Comment
  • 13.6% Dividend REIT New York Mortgage Trust Is Banking On Credit Investments, Will That Work? [View article]
    "U.S. housing starts rose 9.8% in June from May. Multifamily construction increased 29.4%, registering the highest level since April 1988."
    Jul 20, 2015. 05:36 PM | 1 Like Like |Link to Comment
  • Monday Mailbag: YieldCos [View article]
    Please compare MLP's and RIC's. I understand that partnerships are not Registered Investment Companies, but both must pass through taxable income. I treat them similarly as income producing investments of generally high yield. So I assume that the allowable amount of leverage may be the largest difference. It reaches the point that an investor must be a lawyer to keep up with the various Codes.
    Thanks.
    Jul 14, 2015. 07:47 PM | Likes Like |Link to Comment
  • ETN Showdown: Why Now Is The Time To Consider MORL [View article]
    No guarantees in the short term. However, in the long term, there must be the guarantee.

    What if rates and spreads and yield curves did not correct? There would be no mREITs to buy mortgages. Banks and mortgage companies would run out of funds, therefore could not lend any more. Home buyers could not get mortgages. Home builders could not sell homes. Construction supply, appliance companies, and labor would all go out of business. No one would be left to pay taxes. The country would go out of business.

    Yes, everything changes, fluctuates, falls out of equilibrium from time to time, but the whole, huge picture, all the components of the mortgage/housing industry and all of the labor from mortgage lenders to Home Depot workers, to lumber jacks, to brick layers and carpenters and appliance production line workers and nurseries growing plants that are sold to home owners are all affected. The picture is much too large for narrow focused stock buyers to see, but a long term state of inverted yield curves and narrowed spreads is an ultimate impossibility. Therefore, a long term guarantee is always in place, merely unseen by the short sighted.

    As you stated, with high yield investments, one is paid to wait until the price cycle rotates, but the economy, population growth, and the natural order of disequilibriums correcting themselves is a certainty. The only uncertainty is when. There is no if, but merely when.

    An individual unwilling to wait on a correction and recovery should not be in the game because they cannot see the forest for the trees, the big picture for a few insignificant elements of current news which block their focus of attention. I believe that, in general, income investors invest for long term income, retirement which can last for twenty, thirty, forty, fifty years, and look at that time frame rather than the short, limited, narrow, infinitesimal view of current news events. The long term income investor knows that every market crash has evolved into a new market high, no exception. He knows that the economy has been growing for thousands of years, and will continue to grow. He knows that for every trough there is a wave, so change and fluctuation is the constant, but population grow causes increase in demand, and supply is determined by the supplier's ability to make an acceptable profit. Rates, curves, and spreads will work out in the long run to afford the suppliers -- mREIT's and all others -- to make a profit for themselves and their stock/trust holders. Everything else is just static, illusion, clouds obscuring the guarantee that all business, the economy, will work toward and find an equilibrium of the Law of supply and demand.

    Investors should also have a little willingness to understand that yield is income divided by price. When demand for mortgages causes mREITS to have a steady stream of income, but panicky stock buyers sell off stocks causing a decrease in demand, thus an increase in supply of shares and a decrease in price, it is not the loss of income, but the decrease in price that causes yields to look inflated, the signal that the contrarian loves. The fact that RIC's do not pay income tax, therefore must pass through their steady stream of taxable income, is another factor that seems beyond the understanding of the short sighted, but attracts long term income investors. The negative comments on articles like this serve only to show that the commenter has not made the effort to understand the investment. Those who do understand can help the open-minded, but not the ones who obstruct their understanding with biased, poorly thought out opinions expressing lack of understanding.

    I am long on the American economy, long on the ETN's, long on MORL, and automatically reinvesting all yield into more shares. Thus, down cycles in prices are very beneficial to my long term goal of increasing long term retirement income. The downward pressure on price that some fear, I view as a wonderful opportunity because I look at a larger picture of the economy and a longer time frame.
    Jun 30, 2015. 03:51 PM | 18 Likes Like |Link to Comment
  • BDCL Still Attractive With A 19.2% Yield [View article]
    Do you understand what a RIC is?
    Jun 26, 2015. 03:28 PM | 1 Like Like |Link to Comment
  • MORL's Still Attractive Dividend Yield May Exceed 30% [View article]
    That is a GOOD thing. Means reinvested yield is buying at a discount, therefore buying more shares than if the price was higher, therefore buying more yield, more income. Purchasing at a discount, a lower price, is good.
    Income investors are buying for long term income, so lower prices mean higher retirement income. If a short sighted speculator is buying the ETN for price speculation, they simply have not figured out that High yield, income producing ETN's are not there for price appreciation, but for income appreciation. They should be investing in SPXL, TQQQ, or TNA for price appreciation, not interest sensitive, income paying, high yield instruments. They should not even be in this message board. And certainly, no one should invest in these if they think that they will need to withdraw the capital in the short term, like a year. This is for the long term, ten years, twenty years, retirement years. Short term ROI is gladly, happily, joyfully sacrificed for long term increased income.
    Jun 23, 2015. 03:21 PM | 6 Likes Like |Link to Comment
  • X-Raying CEFL (Part 2): Geographical Distribution [View article]
    no
    Jun 23, 2015. 02:31 PM | Likes Like |Link to Comment
  • X-Raying CEFL (Part 2): Geographical Distribution [View article]
    Greatly appreciate all the work you've put into research. YES, a January analysis will be very beneficial. Thanks for all you do.
    Jun 20, 2015. 05:14 PM | 1 Like Like |Link to Comment
  • Oxford Lane Capital Sell-Off Is Irrational [View article]
    I'm unaware of any accessible research on line. I have done my own through a wide range of REIT's, BDC's, CEF's, and MLP's. Yes, I agree that there is a recognizable price cycle with high yield quarterly payers. Many times the price will drop two to two and one half times the amount of the distribution on ex-date to ex plus a week. Often price will drop through the lower Bollinger band in the days following ex-date.
    Price should drop the amount of the distribution because on ex-date, the share of the company is worth exactly that much less, because the value is taken out of the share as a distribution, a fact that seems often overlooked. That is compounded by the dividend buyers who bid up the price prior to ex-date, and sell right after, or, as you mentioned, some sell the day before. Selling in a rising price is a good thing, especially when one knows the schedule, the actual day of when the price will drop, and the demand will drop.
    I worked with that scenario for several years, looking at the charts, seeing the lows on ex or ex+1, or ex+2 and so on for the history on each, then bought at that low, and sold a day or two or three before the next ex-date. If the price increases 2-1/2 times the amount of distribution from the ex+ low to a high prior to the next ex-date, theoretically one is better off following that quarterly buy/sell plan instead of a long term hold and reinvest dividend plan. One can sell on the pre ex-date high, reinvest at the post ex-date low, buying many more shares, quarter after quarter, and grow a portfolio.
    However, one can get stuck with market swings, Fed announcements, Congress antics, terrorist attacks, Greece non-payments, or the company doing something unusual. I lost that OXLC extra distribution because I was out of it at the wrong time. So it is not a perfect plan, and not recommended in the last quarter when special distributions are subject to be announced.

    Thus, a relatively flat price, cycling from the share being worth less on ex-date, to the share including another quarter's worth of income just before the next ex-date, is a recognizable price cycle. The emotions of the unknowing cause problems in the cycle, and the Fed govenors playing with the market, making false statements throughout the cycle, causes temporal havoc with the price as compared to what the company is actually doing for the value of the stock.

    The volatility of the market makes timing the market more uncertain, so I converted to a simple buy, hold, and reinvest the distribution strategy, owning virtually only high yielders, three individual companies and four 2X index notes of high yielders, plus a 3X S&P. I recompute my income after each automatic reinvestment, and watch it steadily climb quarter after quarter, year after year. I feel that the high yield offers a better rate of return/growing income stream than trying to figure out which stock would offer the equivalent rate of price appreciation.

    So, anyone willing to do the work of looking at the multiple year charts for high yielders, super imposing the ex-dates, moving averages, and Bollinger bands, and recognizing the generally gentle ebb and flow of the price cycles, can understand RIC's, high yield pass through companies. Understanding these are high yield BECAUSE they do not pay income tax but must distribute the taxable income on a regular time schedule is a step in the right direction. Understanding that the distribution is an actual piece of the share, and reinvesting the distributed piece into more shares, is a painless way to grow wealth, as well as grow income for whenever it is needed. And even when it is needed, or must be taken for RMD's and taxes, leaving any of it, even a small percentage, to be reinvested, is inflation protection. One must trust management, ignore the price swings, and focus on the income, reinvesting it when possible. Price will swing, and the individual investor has little control over price. But the individual investor does have control over emotions, selling/buying at the wrong time, and what is done with the income. I have faith in the long term ability of management to make and distribute profit on a regular schedule for years into the future. I have faith in the American way of life, the U.S. economy, and the capitalist system, but in the long term, not in the inevitable gyrations caused by manipulation of news, information, and emotions. Changes in price due to the ignorance of the market panics and euphoria have absolutely nothing to do with what the company and management is doing to make the profit that is being distributed. There is complete disconnect between the two, the perceptual and the actual. Learning to ignore the ever gyrating perceptions IS what the individual investor has control over.
    Happy investing!
    Jun 8, 2015. 11:08 AM | 2 Likes Like |Link to Comment
  • Oxford Lane Capital Sell-Off Is Irrational [View article]
    Given the lack of understanding by commenters in this thread, will some price focused individuals be surprized when the price drops $.60 on June 12, the ex-date, more if dividend buyers run the price up and then sell off on ex-date or the next day?
    Jun 5, 2015. 04:07 PM | 4 Likes Like |Link to Comment
  • Oxford Lane Capital Sell-Off Is Irrational [View article]
    What are they going to use for business growth, given they are required to distribute all income and cannot retain income for growth?
    Jun 5, 2015. 03:45 PM | 2 Likes Like |Link to Comment
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