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MSWENGINEER

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  • Can mREITs Live Happily Ever After? [View article]
    Professor,

    Thanks for writing all these great articles. In your table, I think the last column should be "spread notes-bills" and not "spread notes-bonds" so it agrees with the text.

    Is it true that the Federal Reserve has to return to the treasury 90% of the interest collected on the bills, notes and bonds that they hold? Also, what if the Federal Reserve decided to forgive the Treasury debt?
    Jul 29 03:20 PM | Likes Like |Link to Comment
  • Fed May Help Open Crack In Correction Door [View article]
    The US economy added 1.2 million jobs in the last six months and the GDP is going down? Is productivity dropping such that we are producing less with more workers? I think the GDP calculation with the large revisions maybe misleading.
    Jul 26 01:03 PM | Likes Like |Link to Comment
  • Oxford Lane Capital's New Rights Offering: Not The No-Brainer Of A Year Ago [View article]
    Steven,

    Thanks for the update on OXLC. I own shares. I am not sure if I should buy more or sell. CEFConnect as of January 28, gives the NAV at $16.13. So the rights are pricing the shares above the NAV. The one year RTN on NAV is 3.28% and the the 3 year RTN is 6.98%. The NAV does not appear to be updated often. That must be due to the nature of the assets. So I expect one day to see a big jump in the NAV. Also, how can they continue to pay a distribution that is about double the 3 year RTN?
    Jan 29 01:26 PM | Likes Like |Link to Comment
  • Larry Swedroe Positions For 2014: Risky Equities Always Trump Chasing Yield [View article]
    Thanks! I will have to read those articles and study it more, and run some scenarios to see the effects. I understand that allocation and risk plays major factors in the success of your financial plan. Also how much do you really need to live on, and do you want to take on more risk if you do not need the extra income. I just retired and converted a 401k to an IRA. So I am working on a financial plan and trying to determine the allocation to bonds. I know I have to add some risk to keep up with inflation. So your article is very enlightening.

    Thanks again.
    Dec 25 04:47 PM | Likes Like |Link to Comment
  • Larry Swedroe Positions For 2014: Risky Equities Always Trump Chasing Yield [View article]
    Larry,

    Thanks for the reply. I see how you consider social security as part of your financial plan to estimate the investment needed to support a retirement. It reduces the need to take risks to get your number. But if one is already retired, and receiving social security benefits and taking money from an IRA, would you look at it differently? Would the social security allow one to take more risk in stocks to assure income would last 30 years?

    I am also confused by the 4%, now 3%, guideline for withdrawals. Is the idea to take out 3% of the investment portfolio each year no matter whether the portfolio has a gain or loss? So the amount could increase or decrease each year. This would affect your standard of living. I thought the guideline was only to establish the amount needed, and the first year withdrawal. After the first year, one would increase the withdrawal by inflation to maintain a standard of living. The percent withdrawal could be greater than or less than 3% of the investment. With the right mix of stocks and bonds, Monte Carlo simulation showed the investment could last 30 years. So can I use the social security as part of the equivalent bond investment to increase the stock portion? As I understand it, you need the stock investment to offset inflation.

    Thanks again and Merry Christmas.
    Dec 25 01:50 PM | 1 Like Like |Link to Comment
  • Larry Swedroe Positions For 2014: Risky Equities Always Trump Chasing Yield [View article]
    Larry,
    Do you consider social security benefits in your portfolio balance, and if so how much of a replacement for the high quality bonds?

    Thanks for the great article. It provides great advice and a lot to think about.
    Dec 25 10:52 AM | 2 Likes Like |Link to Comment
  • CEF Premiums: Getting All The Risk, But Only Some Of The Reward [View article]
    Thanks for the information. I will have to study NHF more to better understand the risk. The management has made some great investments.
    Dec 21 02:07 PM | Likes Like |Link to Comment
  • Is The U.S. Bankrupt? [View article]
    Is the US bankrupt? I thought you were bankrupt when your debt exceeded your assets, and no one would lend you more money. I see a lot of discussion on the US debt, but not on the assets. What is all the Federal land worth? There are plenty of lenders ready and willing to lend money. So the US is not bankrupt.
    Dec 21 01:43 PM | 3 Likes Like |Link to Comment
  • CEF Premiums: Getting All The Risk, But Only Some Of The Reward [View article]
    Thanks for the quick reply. I screen CEF Connect to compare funds. For senior loan funds NHF stands out because the 1year Return on NAV is 66% and the 3 year is 22%, and the high discount. The other funds are between 8 and 12% and the distribution is only a bit higher. The other funds over the last year have gone from premiums to discounts. I am trying to understand what NHF is doing that they can increase the NAV much faster than the other senior loan funds.

    I am also long OXCL for the 14% distribution and increasing distribution next quarter from $0.55 to $0.60 per share. There is also an extra special $0.10 for that quarter. According to CEF Connect the one year return on NAV is only 3.3%. So if you add the distribution to the one year Return on NAV, the total return is not much greater than the other funds. But the high distribution appears to have created value since OXLC is trading for a premium.
    Dec 21 07:01 AM | Likes Like |Link to Comment
  • CEF Premiums: Getting All The Risk, But Only Some Of The Reward [View article]
    Steven,

    Thanks for writing all the informative articles. Since you are long OXLC, what is your opinion on NHF, another senior loan CEF? The NAV is going up faster than the price. The discount is between 18 and 20%.
    Dec 20 07:53 PM | Likes Like |Link to Comment
  • When The Fed Stops Buying These mREITs Could Be Flying [View article]
    RS,

    I understand that as long as the short term interest is ZIRP, and the long term interest rates go up, the mREITs make more money on the spread. But if short term rates rise, and the mREITs have lent long term, won't the mREITs have the same problem like the savings and loans had in the late 80's? The spread will shrink on the existing long term loans as the short term loans are replaced with higher rates.

    Thanks for writing this article.

    MSW Engineer
    Apr 6 04:05 PM | 1 Like Like |Link to Comment
  • Netflix: Don't Give In To The Hype And Buy [View article]
    In the last 3 days about 53 million shares have traded. There are 56 million shares outstanding. Any shorts left?
    Jan 25 03:08 PM | Likes Like |Link to Comment
  • Eagle Bulk Shipping: Another Drybulk Equity To Avoid [View article]
    Erik,

    Do you have an opinion on Safe Bulkers (SB)?

    Great articles. Thanks!

    JLM
    Jun 4 05:33 PM | Likes Like |Link to Comment
  • EV Tax-Managed Buy/Write Income: Equity CEF To Own Ahead Of Ex-Dividend Date [View article]
    Doug,

    Thanks for the reply. Since ETB has Apple in the fund, buying ETB at a 12% NAV discount is buying Apple but at a 12% discount. This looks good to me. I have been buying ETB on dips. So I am making money. I just did not understand if these funds where good long term holdings. I understand that if the market goes up the NAV will increase and if the market goes down the NAV will decrease. It just looks to me that over time, the fund managers cannot earn enough from the assets to continue the high payout. So the NAV just goes down over time and the funds need to be traded with the market and not just held long term.

    Thanks for writing your articles. I have learned a lot from them and the comments.
    Oct 12 10:55 AM | Likes Like |Link to Comment
  • EV Tax-Managed Buy/Write Income: Equity CEF To Own Ahead Of Ex-Dividend Date [View article]
    Doug,

    I am a new investor and have been reading your articles. Please help me to understand why ETB is a much better buy than SPY or an idividual stock. If on June 30 2005, I bought ETB for $20 and sold it today for $12.13, I would have a loss of $7.87 which is off-set by the $10.87 in dividends for a net gain of $3 per share. This is a 15% gain over about six years.
    If on June 30 2005, I bought the SPY for $119.18 and sold it today for 119.78, I would have a gain of $0.60 plus the $15.31 in dividends for a total return of $15.91 or a total return of 13.35%. It is about the same over the last six years. If on Oct 7 I sold it for $115.71, my return would have been only 9.9%. So I can see that timing is important.

    If on June 30, 2005, I bought a stock for $10 paying 4%, or $0.40 per year in a dividend and sold it to day for $10 today, I would have only the gain of the dividend about $2.50 over the years for a return of 25%.

    So why is it better to buy a closed end fund over a stock? What am I missing? Is the money made by buying these funds at a 12% discount and then sell them at a 12% premium?

    Thanks!
    Oct 11 01:08 PM | 1 Like Like |Link to Comment
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