Investing 102

[GregWeld]

I was checking up on the latest BitCoin news -- just because... I follow lots of stuff... Whether or not I intend to invest. I just like to follow - ya always learn something.

So I accidentally stumbled on a Forbes article on BitCoin and whether or not it was following a classic "bubble" line. Who knew there was such a thing? I didn't -- so I have to keep reading and found that by golly there is such a thing!


Check it out! Remember what I've said about when EVERYONE is talking about "it"? Well apparently they can actually track that! See the part labeled Media attention in the "Public" time line -- then "Enthusiasm" -- Those are on the way up -- that when I'm saying to run like hell!!! HAHAHAHAHAHAHA

[sik68]

Originally Posted by GregWeld

I was checking up on the latest BitCoin news -- just because... I follow lots of stuff... Whether or not I intend to invest. I just like to follow - ya always learn something.

So I accidentally stumbled on a Forbes article on BitCoin and whether or not it was following a classic "bubble" line. Who knew there was such a thing? I didn't -- so I have to keep reading and found that by golly there is such a thing!


Check it out! Remember what I've said about when EVERYONE is talking about "it"? Well apparently they can actually track that! See the part labeled Media attention in the "Public" time line -- then "Enthusiasm" -- Those are on the way up -- that when I'm saying to run like hell!!! HAHAHAHAHAHAHA

That is an awesome graph... I should set that as my desktop background.

[GregWeld]

The amazing part to me is that there is an actual chart of such events!


Here's the problem with "stuff" like this... and it's exactly the same every time. Most folks don't get in until near the very top. That is when the most people are discussing "it" - and that's when the TV talking heads are all over "it".... and the problem is not making money as "it" is going up --- the problem is nobody knows when "it" is going to blow like a popped balloon. When that happens it comes so suddenly that almost everyone looses. That's when the old turtle catches the hare and continues on to the finish line.

Money - as we all know - is difficult to earn - let alone hang on to. It's difficult to earn and save 10 grand or 30 grand... and it's far far easier to lose that than it is to keep it and have it start making money for you.

This isn't to say we should all only be in Kimberly Clarke... That's not what I'm talking about at all... I'm really just trying to get everyone to be able to recognize the difference between a good solid investment and the next latest "craze" of investment --- and the key element always seems to be the same -- when everyone (tv - magazines - grocery store clerk) is talking about whatever "it" is.

[SSLance]

Originally Posted by GregWeld

12/10/2013 Cash Dividend JNK
SPDR BARCLAYS ETF HIGH Y...
$3,020.24
12/06/2013 Cash Dividend HYG
ISHARES TRUST IBOXX $ HI…
$4,500.14

Hey Greg,

I'm just curious, if you don't mind sharing, how long have you held these two? And if for a while do you have, or can you easily press a button to get a report on the earnings ROI % on them for a recent time period?

I did very well with some High Yield bond funds for a long time in a certain scenario, then saw them get hammered in the CDO debacle in 2008...so I'm very familiar with how they work. I just haven't paid any attention to them since we sold them and got back into equities in late 2008.

Looking at the charts, these two seem to have leveled off after that period and I'm curious if the returns are pretty much like they were before the debacle or better or worse? 2005-2006 for example we were returning 7.5-8.0% tax free on our muni bond funds.

Don't put a lot of effort into it, only if you can get an easy answer report or something similar.

BTW, I've started a dedicated Google portfolio and am adding symbols to it and looking at data... Baby steps...ya know.

[SSLance]

Might have answered my own question...still finding my way around google finance.


This is according to most recent annual report


Valuation Dividend Operating metrics
Company name Price Change Chg % d | m | y Earnings per share Mkt Cap Dividend Dividend yield Return on investment

JNK SPDR Barclays Cap... 40.58 0.00 0.00% 9.76B 6.09

HYG iShares iBoxx $ H... 93.00 -0.05 -0.05% 9.19 15.54B 6.15 6.13 9.76

[GregWeld]

These are ONLY cash positions never to be thought of as investments. They are just used by me as a place to park cash because for the most part they're relatively stable. And the dividend is paid MONTHLY so I don't have to be in them more than just long enough to pick up the cash.

Originally Posted by SSLance

Might have answered my own question...still finding my way around google finance.


This is according to most recent annual report


Valuation Dividend Operating metrics
Company name Price Change Chg % d | m | y Earnings per share Mkt Cap Dividend Dividend yield Return on investment

JNK SPDR Barclays Cap... 40.58 0.00 0.00% 9.76B 6.09

HYG iShares iBoxx $ H... 93.00 -0.05 -0.05% 9.19 15.54B 6.15 6.13 9.76

[sik68]

Made $27 MORE in dividends than I did last quarter. If I get a $27 raise 4 times a year, I will be rich in no time!

[SSLance]

Originally Posted by GregWeld

These are ONLY cash positions never to be thought of as investments. They are just used by me as a place to park cash because for the most part they're relatively stable. And the dividend is paid MONTHLY so I don't have to be in them more than just long enough to pick up the cash.

See that is interesting to me, They didn't have bond fund ETFs back then...it cost to get in and out of fund positions.

So you dump the dividend income into the bond fund ETFs, collect the monthly dividends in the meantime, and then invest out of them the next time you are ready to buy something else? Do I have that right? Pretty effing crafty I must say.

I'm used to where a typical fund, when going ex-dividend...the share price drops by the comparable amount of the dividend to keep people from trading into and out of the funds just for the dividend pay days.

[GregWeld]

Originally Posted by SSLance

See that is interesting to me, They didn't have bond fund ETFs back then...it cost to get in and out of fund positions.

So you dump the dividend income into the bond fund ETFs, collect the monthly dividends in the meantime, and then invest out of them the next time you are ready to buy something else? Do I have that right? Pretty effing crafty I must say.

I'm used to where a typical fund, when going ex-dividend...the share price drops by the comparable amount of the dividend to keep people from trading into and out of the funds just for the dividend pay days.

That IS NOT why the share price drops -- the share price drops by the amount paid out - no different than your checking account drops when you right a check - the share price must reflect the outgoing cash.


No I do not have anything going into or out of JNK or HYG automatically --- I just always usually have a couple million in cash on hand -- and this is just where I store it until I find another home for it. The dividend paid is better than I can get sweeping the cash into a money market tied into my accounts. So why not get 5 or 6% instead of .025%


I can do things just a bit differently than "most" because of my asset base. If I need the cash to do something - and let's say we're only a week away from collecting that months dividend - I can either wait - or use other cash I have parked elsewhere.

I have warned and warned that these are extremely INTEREST RATE SENSITIVE and should only be used by savvy investors that are keeping a keen eye on what's going on in the market. They're NOT park it and forget it names.

[GregWeld]

Lance,



So I had to go into the account I always use for discussion here on Lat G


For instance -- currently I'm holding 25,000 shares of JNK -- and I have as of today an unrealized gain of about $2,600 --- on top of that I picked up the first of the Decembers dividend payment of $3024.00 (depending on what I held for the EX date at that time)


I like that -- right now I have an unrealized gain -- and in the meantime I'm being paid to sit on it. The trick is not to let the dividend on a name like this lull you into a false sense of security - since this is purely a placeholder - it's not a company that makes products etc -- it's nothing but a JUNK BOND ETF



Now -- on HYG --- I'm currently holding 10,000 shares and I have a unrealized loss of about $2200.... but I also just picked up $4500 for the first of December dividend. HYG is nothing but a high yield CORPORATE BOND ETF... high yield being the key word here -- so their credit quality would be higher than the JNK (JUNK BOND ETF) but still high interest rate risk!

If I blend the two holdings together -- I'm "fine".


I hold these for the previous posted reasons. They ARE NOT INVESTMENTS -- they're just places to park cash which I frequently move in and out depending on whether or not I see something I'd rather own... and if I SELL something -- and don't have my eye on something else to buy --- or the buy sell spins off excess cash - this is where it goes. Real simple.