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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?
Mike |
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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! |
By the way -- just for the record.... I don't think ANY of you should probably be in Annaly Capital Management (NLY) unless you're just parking money temporarily or are just interested in the quarterly income.
We are going into a RISING interest rate market -- IMHO -- The FED has already told us that it's basing it's interest rate on the employment figures and even if you don't believe those figures THEY are still using them as a gauge. They seem to be getting "better" as does the economy. Please be very careful about investing in things you don't understand - and or don't pay attention to. This is NOT a buy and hold investment... I use it as an example but it is NOT a recommendation (I don't recommend ANYTHING). And please don't feel comfortable with "Greg's in it" so it must be okay. My investing is COMPLETELY different than for most of you. I pay attention -- I have much more to risk - my numbers and your numbers are (I'm guessing) are completely unrealistic - and my investments are for MY purposes... and you need to tailor your investments for YOUR purposes. :thumbsup: |
Thanks Greg. I heeded your warnings this past week on NLY. I realized it wasn't for me, and given that interest rates are being held down artifically by the fed, I felt like it is time to get out before the stampede. For 3 years now, it baffles me that people are continuing to get cheaper and cheaper loans...it makes no sense so I'm out.
As for paper Christmas cards, you're impression is totally right. E-cards are getting popular, and there's an equally popular counter-movement going on. High-end paper stationery is booming. Check out minted.com (shameless plug, ran by a friend), whose business is doing very well catering to those that appreciate the sentiment of receiving something physical. :thumbsup: I got my IRA disbursement January 1st, putting me at 80% invested and 20% cash. Logic says to me that impending (imminent) rate hikes will damage the market, but I don't know if this is a 2013 issue or longer term. I am 80% confident the market will rise for a while, so being 80% in feels okay. I'm not out to time the market...but I do think there's a big trough coming when reality resets again. Greg, what are your thoughts on being invested in general in 2013? Thanks! :lateral: |
Steven --
#1 -- in an IRA/ROTH type account I'd always be 100% invested -- since these type accounts are purely retirement and as such are super long term... there's no reason to not be 100% invested. Remember that you don't just retire at 65 or whatever age - and suddenly withdraw all your money! You're going to take a small percentage of it out annually - for the next 20 or 30 years to retire on.... so you have to ADD that term to the term before you're even eligible to start withdrawals... for most here -- that's a very long time. I really don't do annual look aheads to figure out where I should be - or not. I INVEST for far longer term than that. However, I live off my investments -- and keep cash in shares that create income - and deploy those funds from time to time if there's a big dip in the market etc - but they're ALWAYS "invested". I don't keep any cash in money market type accounts etc. They earn NOTHING. I'm not rich enough (or is that stupid enough? :D ) to want to only earn .25% on my money. Thus - I keep "cash" in NLY and JNK and HYG.... that money IS subject to capital depreciation - but I don't sell in down markets unless I thought the 'loss' in the current holding would more than be made up for in the new investment.... and even then I'd scale in and scale out. Right now I have pretty large positions in NLY ($437K) and JNK ($2.5MM).... but that's because I took some nice long term capital gains leading up to the end of the year - and parked that money in those two names. So far - they've made me even more money - so for right now I'm happy just leaving it there.... but I'm VERY VERY watchful! If I sold now - I'd have SHORT TERM CAPITAL GAINS and I hate paying the gov 40%... but I also doubt I'll leave it in for the "year and one day" that it takes to get to the new 20% Long Term Capital Gains tax rate... so we'll just see what comes along that's interesting. Personally I'd like to put another 1 or 2MM into apartments or commercial real estate. I like the long term prospects of low cost money and long term appreciation. But the bulk of my money is in equities. Always has been and always will be. Good market or bad. |
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I went back and looked at the numbers and I'd posted them incorrectly -- the correct numbers are now in BOLD |
Ford gave out a 100% pay raise. Can't complain about that! I bought in at about $9.85, so the new dividend is about a 4% yield on my initial investment which is pretty darn good!
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Don't ya just love it!! Now -- my guess is that the shares will rise which will bring that % dividend down a little - but remember! What we L O V E is TOTAL RETURN.... and this is the way it gets done! :cheers: |
I sold T pre ex div day and bought back $1 cheaper the next day :thumbsup:
Anyone interested in investing or even daytrading should check this out www.daytradingradio.com Just a fan no personal affiliation |
Finally bought my next round of stocks today. Now it's just a matter of watching what happens with them throughout the year. Here's hoping they grow as well as pay me a dividend.
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Maybe so but I am firm believer in being an active investor, meaning follow your investments diligently, which can lead to daytrading... |
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No. Sorry, it doesn't. If that's what you think is investing then you just don't know anything about investing. |
I loved Art Cashen's statement this morning about INFLATION:
He says that banks have enormous balance sheets because they aren't lending... and if they aren't lending people and businesses aren't spending if people and businesses aren't spending then that's why we don't have any inflation! When you think about your house going sky high a few years ago - it was why? Because the easy money let everybody buy a house -- and they went thru the roof price wise... there was no value there - it was just pure inflationary pressures. Individuals REPAIR their own balance sheets by NOT spending, saving more, investing... growing their top line (income) and trimming expenses. While it might not "FEEL" as good as the paper gain of their house going up 100K a year.. in the long run it's far more healthy. Saving and investing is REAL cash -- paper is just that -- paper. |
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Interesting data (evidence?) that there was some money sitting on the sidelines waiting to be invested.
+++++++++++ Equity funds have this week seen the strongest inflows for more than five years as global shares surged and a compromise deal on the US fiscal cliff boosted investor confidence. Net inflows into equity funds monitored by data provider EPFR hit $22.2 billion in the week to January 9th – the highest since September 2007 and the second highest since comparable data began in 1996. Emerging market and world funds, which had record inflows, drove much of the expansion. +++++++++++++ We've discussed before -- that like anything - in order to go UP we have to have more buyers than sellers... and when new money floods the market - they're buying. We'll see how long and how much... :D |
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Also I am selling off some of my "Insurance",Precious Metals, and going into Dividend Stocks. I feel the Interest rates are going to rise and hammer Bonds, and i feel that I have got all the gains I can out of my Precious Metals. Normal Investing would say own more Bonds the older you get, and it seems counter intuitive to go heavier Stocks, but with the present conditions and Politics, I am decreasing my Bonds and Precious Metals and increasing my Dividend stocks... Mike:cheers: |
Smart move. If the economy is going to come around - which I think it is.... and houses are selling again... rates are going to rise from here.
Now for those that don't understand BONDS. People buy BONDS because you get 100% of their capital back upon maturity. That is - if you buy a 5 year bond - you'd get semi annual interest payments (NOT dividends!) each year and then at maturity you'll get all your cash back. Okay - so big deal!? Right!? Well.... the catch is that if bond yields (interest rates) RISE -- then the VALUE of your bond declines until it's STATED yield meets what someone could get by buying a new bond at current rates. Not a big deal IF -- BIG IF -- You're holding until maturity... but then let's say you have a 5 year bond @ 4% -- FIVE YEARS is a long time.... and it's ONLY going to pay 4%. Period. If I want to earn more money for the next 4 years... I have to sell that bond at a loss of face value... or I have to accept a sub par interest rate. Right now -- I owned bonds that paid above market rates -- therefore they were worth MORE than face value... so if you think rates are going to go up -- then not only would I lose the CAPITAL GAIN from the sale by holding to maturity -- I'd have below rate interest rate income as well and if I wanted to change that anytime before maturity I'd take a loss. So why not sell now - capture the capital gain --- and invest in something that is a little better going forward. Perhaps. I hope that makes some sense. |
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Wonder it there are enough "qualified" candidates to form a nationwide school security program? |
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My initial thoughts is that it would/could bring down some of their profit margin (made in the US = more expensive) and more jobs = less bottom line. Although, its great publicity. lol. How would you play this? I certainly dont think its a game changer on either front (buy/sell), and neither have anything to do with investing 102 (long term hold). But just curious. **I do not own any positions in WMT and do not plan to within the next 72 hours.** heheh |
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Nice caveat there! I personally HATE Wal Mart (WMT) --- I wouldn't shop there if the crap was free... IMHO they represent all that is wrong in America. They killed good factory jobs in the USA many years ago by shopping their inventory offshore... and the very people they sold that cheap crap too were the ones they were putting out of work. The more they bought - the more factories closed. Remember when you bought a toaster made in the US? That was made by low skilled under educated US middle america.... So now that's how I feel about Wal Mart ----- I don't really like their retail model -- high volume low margin. I'd buy COSTCO over Wal Mart if I wanted that retail exposure.... And I don't think this "move" will do anything -- near term -- but long term -- it can help AMERICAN jobs -- and if they're successful with the products and price points OTHERS will copy ---- and then that's not really a Wal Mart share booster -- but it's a booster for all of America. And that's ALWAYS good for the stock market. :cheers: |
I hate walmart too.. i do get some stuff there when i have too though.
LOVE Costco tho. If i had to pick one of the two to invest with, costco would be my personal choice. :cheers: |
I know it's best to think of each invested dollar as an 'employee', out to work for you and make a solid return. Going along with the metaphor, do you ever get the urge to get some "spare" employees together for a skunkworks operation (aka, speculation)?
The fledgling 3D printing industry is fascinating; the big players like 3D Systems (DDD) and Stratasys (SSYS) could take off in a big way. I know on this forum the guys are drooling for a 3D printing machine in their garage (ahem, make some floorspace GW). But it's not just about hobbyists; on a more macro-demand level, I see EVERY medium to large company that manufacturers products wanting one. One thing is for sure is that it will be bigger than it already is.... Have I been drinking the Koolaid (KRFT), or is there good sense in hopping on uncharted territory (that I believe in) with a 1% investment? |
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The 20MM I made in 2010 -- was made on a 385K purely speculative "investment". I also LOST 500K in another purely speculative investment made around the same time frame (about 6 years prior to 2010 -- both were made at around the same time). So it's worth repeating ---- NEVER "invest" with money you can't truly afford to loose... because you will loose it. The idea you're investing in might be a solid as they can get --- but the "investor group" runs out of interest about 6 months early and pulls the plug.... or people quit.... or people die... or get divorced... or the list goes on as long as you have lead to keep writing! BUT --- OBVIOUSLY people CAN and DO make money on these kinds of investments so I'm not a guy that would ever tell you "NO". I'm a guy that's going to tell you to make sure you have all your other ducks in a row before you GAMBLE -- because that's what this kind of investing is. Perfectly acceptable if you're a big boy and can take the hit if it comes to that. Great question by the way!! |
I will add to my above comment ---
Because re-reading your question -- I think you're asking about an investment in corporations that already exist and that maybe haven't shown the growth yet?? Such as the 3D printer business. SO if it's publicly traded already -- that's different -- then sure -- if you think it's a growth industry and want to speculate with even as much as 5% -- do it. Keep 80 or 90% of your money in "the right stuff"... That's why the 5% rule -- anyone can afford to have 5% go to zero - or not perform and they should be fine. If you're talking about a "start up" -- like I was referring to above post... then that's a really different kind of deal because those are loose 9 out of 10 or maybe more like loose 18 out of 20 investments. Really... better left to "big money" guys... but like I said -- can't kill ya either if that's what you think is worth the gamble. Just keep it "affordable". |
Tanks for the perspective GW!
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Welcome! Just like to toss a caveat in here while I can. Please remember that what I'm trying to RESPOND to is a WAY TO THINK... not THE WAY to do. I'm just trying to give you some food for thought. What you all do - what you all invest in - etc is entirely up to you. In investing - there are no absolutes. You just do the very best you can at that time with the information available to you at that time. If you have cash 'parked' -- you can't just forget about it. If you invest in something - you need to review each and every investment to make sure that investment is doing what you thought it should do. (employees sometime s don't work out - they need retraining! Don't let them go on permanent vacation! :warning: ) |
We have discussed Kinder Morgan Partners (KMP) a lot on this thread.... again -- caveat - it's not right for everyone and isn't a RECOMMENDATION -- it's been a very good EXAMPLE.
I love when the companies I invest in give me a raise!!! And when you choose good investments -- THIS is the kind of report you want to read! Pipeline master limited partnership Kinder Morgan (KMP) reported strong fourth quarter results Wednesday afternoon. Revenue surged 31% year-over-year to $2.5 billion, exceeding consensus estimates. Operating earnings per share grew 74% year-over-year to $0.61, also ahead of expectations. Distributable cash flow per share increased 6% year-over-year, to $1.35, more than covering the firm's payout during the fourth quarter. This led the company to raise its fourth quarter distribution to $1.29 per share (payable February 14, 2013), three cents higher than the previous payout. The firm's full-year distributable cash flow of $5.07 per share was significantly higher than in 2011, but more importantly, it easily covered distribution payments of $4.98 per share. |
Sweet! I get back from a week of blowing stuff up to find out I also got a raise on one of my stocks. That's news I can come home to
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Last week was a good week...You need to be Invested to capitalize on times like that...That is why you cannot try to time things..
Oh and i just got back from Celebrating the Inauguration in D.C. :confused59: :lostmarbles: Just Kidding....I just wanted to jerk some chains....:relax: :poke: |
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Exactly! Did you take plenty of ammo to DC?? :bitchslap: |
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