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Since I posted this ----- we can change the numbers Annaly Capital Management (NLY) is now UP $6033. In the Green JNK is now positive $56,587 See what a couple of days can do? |
I just sent an email to my bond broker and instructed to sell my entire muni bond portfolio. I think we are going to start to see interest rates rise. Houses are selling. Employment seems to be improving. And in order to make money you must be AHEAD of the game many months. If I wait to be certain it can make a giant difference. As low as rates are right now, a very small move up would mean a huge drop in bond values. Since I have a nice capital gain now. I'd prefer to lock that in. And if I'm right I want to have even more money in equities.
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That's why I've reminded folks that these are not the "buy and forget" kind of stocks ---- these are places to put money to work if you're sharp and keep an eye out for what's coming. You've got to be nimble in names like these. They're really not for Investing 102... or for IRA's and that sort of thing. I've moved in and out of NLY several times in the last year... ditto JNK and HYG.... I purely use them to park money - pick up a dividend and wait for something else to come along. |
Since people are asking about Annaly Capital Management (NLY) here's a Motley Fool report on them.
PLEASE NOTE THE FINAL COMMENT ---- This is an INCOME investment --- not a price appreciation investment. The income is currently sky high and as such has been great for people like me... but please understand what your individual situations are and what each stock does or doesn't do for you. http://beta.fool.com/jordobivona/201...l-cliff/20301/ |
Greg, what's the difference between an income investment and a price appreciation investment?
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Income investment - let's say NLY - are bought because they spin off super sweet income in the form of dividends or interest... But you're not investing in them because you think the price per share is going very far. A price appreciation investment would be where you expect (hope) that the share price is going to go higher. So I might buy a stock where I "only" get 3% dividend - but to offset that smallish dividend - I need the share price to appreciate to give me a "TOTAL RETURN". Dividend plus share price growth. |
I had a funny thought this morning -- partly because of Mikes question about income vs appreciation... and partly because I got my Annaly Capital Management (NLY) dividend this morning.
Most of you guys own houses.... I think a "jumbo" mortgage is $417 grand in most states... I have about that much invested in NLY ($437 grand) -- but instead of paying someone -- IT pays me... $12,891 per quarter or $51,564 per year. That is INCOME investing... :D Side note --- AT&T is trading "ex" dividend today - so part of the price drop this morning is "market" and part is the "ex" dividend trade. |
Here's - to me at least - a CLASSIC example of using your own sense for investing.
If you drove down the major retail street in your home town -- which of those businesses would you likely "think" was doing well -- and which of those would be of the least interest to you. We've discussed this before... but todays news/articles just highlighted this for me once again. This article about SEARS... http://www.cnbc.com/id/100361253 The news is mostly uninteresting. BUT -- when I drill down on the article -- it shows a PER SHARE LOSS.... and when I couple that with something I would ask myself before investing ----- "WHEN WAS THE LAST TIME I WENT IN TO A SEARS STORE?" WHERE IS A SEARS STORE? vs - When was the last time I was in a Home Depot or Lowe's or name some other retailer... Put a different way --- how many of you have had to "manage down" in your lifetimes? It's a difficult job to CUT expenses and cut everything to the bone... versus manage your finances etc when things are going GREAT. I just don't choose to invest in any company that is trying to manage DOWN. Why would you do that? What is it that you'd see that would say --- HEY! What a great investment! Amazon is growing top line and growing it's business..... Sears is trying to manage it's loss of business and scale itself down to the shrinking customer base. Which one going forward is the better bet? These are hypothetical questions by the way and not meant to be answered --- they're just meant to THINK ABOUT when investing. :cheers: |
This brings to mind something that Gwen and I noticed this year....
Seems that 99 out of 100 Christmas cards we got this year were ordered/printed "electronically" -- rather than the store bought folding versions we used to get. Most of them had pictures of families on them and were single sided. Got me thinking --- when was the last time I saw a "Hallmark" store? Did they make the transition to "on line"? Or are they a Kodak that didn't see the switch to electronic cameras from film. Again - this is just the way I think when I choose investments. I use my own "sense" of how a business is going and or what it's competitors are doing.... THEN I start my research! |
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