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FrankEllis

FrankEllis
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  • CEFL September Dividend Projected To Bring Yield To 18.2% [View article]
    Lance, more appreciation added to your long list. Seems you finally weeded out the nay sayers. Consistent income is hard to argue with. Noticed that you hit the MORL Aug precisely! Certainly these high yield income investments are beating the mostly side ways market indexes. The less price appreciation, the more shares gained from reinvested income distributions.

    Would appreciate if you would add one small note to each article, indicating who if any changed their distribution that generates the ETN distribution.

    Glad those companies are taking note of your work as well as showing interest in what their shareholders say on SeekingAlpha. Long and reinvesting MORL, CEFL, BDCL, DVHL, and MLPL. Great products. Great income. Great diversification. Thanks to UBS!
    Aug 19 11:39 AM | 1 Like Like |Link to Comment
  • Leveraged ETFs: A Seeking Alpha Expert Panel [View article]
    By chance know a similar 3x ETN site. May be that UBS is the only offering. Thankx.
    Aug 16 04:17 PM | Likes Like |Link to Comment
  • A Change In Strategy Has Been A Boon For 13%+ Dividend Payer New York Mortgage [View article]
    Although the premium to book does reduce the number of shares purchased through automatic reinvestment of distributions, the strong past performance in both price and distribution continues to grow my position to the largest in my portfolio, in spite of the fact that I sell some to balance my portfolio. Been long in all family accounts since 2011, and happy with the results.
    Perhaps the bargain brands offer a discount to book, and that discount offers an increase in yield, but does one get what one pays for? Yield to book is 15.8%, while yield to price is 13.65%. At 13.65% investment doubles in 5-1/4 years when distribution is reinvested, which doubles yield on original investment to 27.3%. A little perseverance beats the current premium in about one year, and in the long term makes a substantial contribution to retirement income.
    Perhaps a better question would be, is it better to buy now at $7.93 (16.1% premium; 13.62% yield), or three days before the ex-date at $8.12 (18.9% premium; 13.3% yield), or seven days after ex-date at $7.55 (10.5% premium; 14.3% yield)? Understanding that high yield investment prices fluctuate by the amount of the distribution taken out of the price is necessary to determine the entry point. Compound the ex-date drop in price with the substantial sell off during the days after ex-date as all the "dividend buyers" exit, and one determines a be ready to buy by date and watches for the lowest premium to book price, which equates to the highest yield. In quarterly pay, high yielders, it is common for the price to drop twice the amount of the distribution within a short time after ex-date. Study the price charts and reduce premium while increasing yield, then reinvest consistently. By following this I have gradually increased my yield on original investment to about 18%, accumulating more shares which pay more distribution which buy more shares which . . . I hold high yielders in a retirement account, preferably a Roth, protecting the steady, ever increasing income.
    Aug 12 04:09 PM | 2 Likes Like |Link to Comment
  • If You Think Seadrill Ltd. 11% Dividends Are Too High, Then Let's Talk About Awilco Drilling Plc. And Its Whopping 21% [View article]
    Tried a dummy trade on Fidelity, and it showed a $50 fee. Will investigate further, call to see if it can be bypassed. $50 adds considerably to cost per share, and substantially reduces yield, on small positions. Guess one needs to go big or stay home. Was thinking of starting with less than a whole position, but that would not be economical.
    Aug 11 02:41 PM | Likes Like |Link to Comment
  • If You Think Seadrill Ltd. 11% Dividends Are Too High, Then Let's Talk About Awilco Drilling Plc. And Its Whopping 21% [View article]
    Thanks for the Fidelity info.
    Aug 8 04:58 PM | Likes Like |Link to Comment
  • Oxford Lane Capital Corp. Is Paying Double-Digit Yields [View article]
    Thanks for the three articles. Considering my respect for your research, opinion, and focus on income, I am very happy to see your alignment with my portfolio. Have been in OXLC several years and very satisfied. Your comment about the high premium price occurred as the "dividend buyers" ran the price up after the announcement of the regular plus special dividend. It was of course followed by a down turn following the ex-date. Over all, OXLC maintains a stable price channel, little appreciation except just prior to ex-date, and a strong yield. Buy after ex-date at the quarterly low when all the dividend buyers are selling. That quarterly price action is typical of high yielders.

    We discussed the high yield leveraged index funds. OXLC, along with NYMT and NMM are my only single company high yielders, but very satisfied with their steady, strong income distributions. They also seem to not be included in the UBS index funds, so it all fits.
    Aug 7 12:02 PM | Likes Like |Link to Comment
  • Double-Digit Yields From This Diversified ETN Of Closed End Funds [View article]
    Thank you for your input. Respecting your work, I am happy to see your change to a positive attitude about CEFL. I am a firm believer that UBS has given a great product to the small individual investor, offering high yield and diversification through leveraging other company's indexes.
    Long MORL CEFL, BDCL, DVHL. and MLPL, with yields from 8.99% to 20.88% automatically reinvesting in more shares, and covering 249 companies.
    Aug 6 06:30 PM | 3 Likes Like |Link to Comment
  • Should You Invest In UBS ETRACS Monthly Pay 2xLeveraged Mortgage REIT ETN? [View article]
    Thank you for an extraordinarily clear, concise, illustrated article. Appreciate the fact that it cleared up what less professional "too good to be true" writings had muddled. Excellent use of charts, facts, and UBS background info. Your article detailed total return, so I would have appreciated one extra line on distribution yield, a primary concern to income invertors, but understand that yield is based on the original purchase price which varies for each investor. Much gratitude for a job well done, and clarification on misperceptions stated in other articles. I look forward to more articles, perhaps on CEFL, BDCL, DVHL, MLPL, and most of all, any leveraged index funds new and less written about.
    Jul 21 01:52 PM | 6 Likes Like |Link to Comment
  • CEFL August Dividend Projected To Bring Yield To 18.4% [View article]
    Lance, much appreciation. Happy investing.
    Jul 21 01:11 PM | 1 Like Like |Link to Comment
  • MORL Is A 'Too Good To Be True' Investment [View article]
    I have no problem automatically reinvesting the distributions in the five UBS leveraged ETNs I own, nor in the leveraged Direxion investments, nor in the leveraged Proshare investments. May be a misunderstanding between you and your broker. One might also notice that AGNC is the second largest holding of MORL, and that REITs will be around as long as mortgages and the American way of life, home ownership, exists.

    I also have no problem with the muti-billion dollar international investment company UBS, whose combined expertise and desire to help the public and individual investor has placed them in the fore front with new user friendly innovative leveraged investments in indices that are developed by non-UBS companies located in the U.S., like Wells Fargo, ISE, and Alerian, or the fact that all 24 of the companies in the index compiling MORL are all located and operating within the U.S. with U.S. real estate assets and and U.S. mortgage investments. MORL, along with CEFL, BDCL, DVHL, and MLPL, not to mentions the many other UBS offerings, are not for everyone, but are a God-send for many who reap the benefits of a simplified investment already well diversified in the stated arena, and in an index determined by a third party, PLUS the steady stream of income on either a monthy or quarterly basis, as dearly needed by retirees.

    I live in Nashville, and we have a twenty story UBS office downtown, as do many cities world wide. So, innovative, new, different, not yet copied by other investment companies? Yes, the leader is generally the only one of its kind until others realize they are loosing paying customers to the company that built the better offering, then they play catch up with similar product offerings, knock offs, copy cats, by which time the happy investors in the UBS innovation are already wealthy. So you might want to discuss concerns with UBS and Schwab, and there is no requirement to use their products, but neither is there cause for fearful confussion about new dynamic products.

    Happy investing, always in products that will allow you to sleep at night.
    Jul 18 04:14 PM | 21 Likes Like |Link to Comment
  • CEFL To Pay The Highest Monthly Dividend Since Inception - Bringing Yield To 17.8% [View article]
    >>"instituting exit fees for mutual funds, closed ended funds".<<

    Guess I missed the excitement. "Fees" as in taxes? Who is instituting the fees, the mutual funds and CEFs, or the government? Many mutual funds already have exit fees. Many of the fees depend on the length of time they are held, and serve to protect the funds from day traders, money coming into the fund and pulled out before it can be invested. Such fees protect long term owners. CEFs are unaffected by definition because they are closed, traded like a stock, therefore trading has no effect on the company.

    Please share more about instituting fees. How does the Fed have any say so in IRS codes developed based on laws passed by Congress?
    Jul 15 05:27 PM | 1 Like Like |Link to Comment
  • Total Return BDCs For Q3 2014: Part 3 [View article]
    Question. Your use of SBIC does not have a column head, and I do not remember your previous discussion of the way you use it in your articles. I looked it up with the following results:

    Investopedia explains 'Small Business Investment Company - SBIC'

    Small Business Investment Companies are allowed to borrow from the federal government in order to augment the funds of private investors. SBICs usually focus on investments in the $100,000 to $250,000 range, and tend to be considerably more forgiving than venture capital firms in their underwriting requirements.

    A privately-owned investment company that is licensed by the Small Business Administration (SBA). Small Business Investment Companies (SBICs) supply small businesses with financing in both the equity and debt arenas. They provide a viable alternative to venture capital firms for many small enterprises seeking startup capital.

    ***
    Since we are discussing these as investments, I assume that all are publicly held and traded companies, not privately held and limited to investing $250,000 in its clients. Perhaps you would clarify your use of "SBIC".

    Thanks for all you do.
    Jul 15 05:12 PM | Likes Like |Link to Comment
  • Dividend Growth BDCs For Q3 2014: Total Return Part 5 [View article]
    Buzz,
    Great article. Appreciate your analysis. Question. Do BDCs pay dividends or make income distributions? Are BDCs RICs, Registered Investment Companies that do not pay income tax, therefore must distribute income, pass through taxable income and capital gains to shareholders so that income tax is paid at the shareholder level?

    C Corporations pay federal tax rates up to 38% plus state tax rates up to 15%, leaving after tax income to be used any way the corporation chooses -- paying dividends which are taxed a second time but at a lower rate, and/or retaining income for capital expansion, growth, etc.

    S corporations, RICs, pay no income tax, but must distribute at least 95% of taxable income, plus more in certain circumstances, and taxable capital gains. Due to the requirement to distribute taxable income, the distribution as a percentage of stock share price is generally several times higher in yield than the dividends paid by corporations that first paid 40 - 50% tax, therefore have only half of their income left to use as dividends and capital to grow the company.

    Since RICs are required to distribute all taxable income, they have no retained income left to grow the company, therefore must sell additional shares in secondary offerings if they need to raise capital, or must borrow/leverage to have additional capital.

    The difference between the two tax situations is often mis-named high and low yield, and there is a general lack of understanding as to evaluation of risk because higher yield is viewed as high risk rather than simply as compliance with Internal Revenue tax regulations. The real reason for "high yield" is that it is not taxed, not cut in half, before being distributed to the shareholder. Before tax income of a RIC MUST be distributed, whereas after tax income is not legally required to be given as a dividend.
    Income distributions received by the shareholder are taxed at the full marginal rate of wages plus other income of the shareholder. Dividends are generally taxed at a rate less than the full marginal tax rate of the shareholder because they are "qualified" for a lower personal income tax rate. This requires the stockholder to understand that generally a better account for BDC investments is their retirement account. In a Roth account no tax will be paid on the "high yield" and price appreciation. In a traditional IRA the tax on "high yield" and price appreciation will be deferred, then the IRA distribution will ultimately be taxed at the same rate it would have been taxed, the marginal rate of regular income. It is perhaps advantageous to own BDCs that are taxed, actually do pay dividends, in a taxable account and pay "qualified dividends" tax rate. Certainly investors need to be aware of tax implications BEFORE purchasing in an account, more so if their marginal rate is already high. Also, for tax purposes, one can take a loss against a gain to reduce a tax liability in a taxable account, but not in a retirement account.

    I ask this because of the title of the article and frequent use of the word dividend rather than naming it a distribution. I am aware that some BDCs elect to be taxed as a corporation in order to retain after tax income, and other BDCs elect to not be taxed, therefore cannot retain their income.
    Jul 15 04:46 PM | Likes Like |Link to Comment
  • Total Return BDCs For Q3 2014: Part 4 [View article]
    Yes, last posting was ACAS is the largest holding of the Wells Fargo index, 10.3% of the index, giving me a BDCL yield of a mere 15.82%, and price to my cost per share up a mere 8.3%.
    Jul 14 04:36 PM | Likes Like |Link to Comment
  • Dividend Stocks With No Debt, High Yields And Under $15 [View article]
    Any of these RICs?
    Corporate tax structure is different from RIC.
    RIC pays no income tax, therefore is a pass through entity that MUST distribute taxable income, therefore is "high yield" by comparison with a corporation paying tax and keeping income for future growth and expenses. IRS Code Registered Investment Companies include most REITs, MLPs, CEFs, and BDCs, and cannot be compared to taxable corporations.
    Thanks for an interesting article. I appreciate all potential investments brought out in articles.
    Jul 12 03:21 PM | Likes Like |Link to Comment
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192 Comments
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