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| The Yield Hunter Let's Make some money and sleep well at night In our 7th Year |
We Have Let Go of 500 Shares of Petrobakken on Large Share Jump (4/9/2013 10:30 am)
With a gain of over 5% today we have lightened our Petrobakken position by 500 shares. This position has been a thorn in our side---and like
Whiting Trust II has more volatility than we care to endure. This leaves us with 1000 shares in the Model. The model remains 79% invested
and we await a market setback.
Time to Let General Mills Common Shares Go (4/1/2013 8 am)
With a gain of 19% in General Mills (ticker:GIS) we will be letting go of our 200 shares today. While our long term outlook for General Mills
has not changed - it is clear that some gains get overdone in short periods of time and should be sold.
As we have mentioned before we prefer not to trade in and out of securities it is the only way we can garner portfolio gains above the model
target (7%)--lock down great gains and look for re-entry at lower levels.
We will be looking for a re-entry in General Mills at a price 10% lower than the current price of $49.31.
We Have Added a 1/2 Position in LTC Properties (3/28/2013 7 am)
Yesterday we added a 1/2 position (200 shares) of LTC Properties (ticker--LTC)--a REIT to the model portfolio.
We have been mentioning that we were looking for REIT and MLP securities to add to the model---we had hoped for a market setback
before purchase--but who knows if that will come anytime soon.
LTC is a REIT that deals primarily with assisted living and nursing homes--they have a portfolio of 178 facilities and have had good growth.
We are most interested in Long Term Senior Care because of the demographics of the United States (rapidly aging).
LTC pays a monthly dividend--another feature we find desirable---a 'bird in hand' is better than 'two in the bush'. The yield is just 4.6% and
while there are higher yielding REITs available we find it more desirable to purchase mid-range yield REITs as opposed to high yield REITs
that are stretching to pay out every available penny leaving no money in the til.
You can check out LTC here.
We Will Add a PURE INVESTMENT GRADE Super Conservative Portfolio (3/20/2013 10:30
pm)
We just can't stand it with only one model.
We will add a Investment Grade Portfolio composed of only investment rated preferred stocks and exchange traded debt issues. While this
isn't truly a cash replacement type option the idea is simply to buy and hold investment rated securities (that we follow) and see if it remains
as stable as we hope it does---for some of us a almost fully invested portfolio at 5.5% or so holds a lot of appeal.
We will start with the same starting balance as the 2013 Model Portfolio that we now run and we will populate it with issues starting on
January 2, 2013 (we will back date the starting time so we can get the full year). We will price our buy price on the closing price of the
securities on January 2nd.
We don't know what the portfolio yield will be (probably around 5.5%), but the idea is to have the safest possible portfolio that one doesn't
have to worry about day and night. Obviously a 'black swan' event murders all portfolio's, but it is our experience that the best quality
securities bounce back quickest after an event.
We will invest 90% of this portfolio immediately and then hold 10% to be invested as new issues come out. We will generally not sell
securities out of this portfolio, but will certainly have some called over time.
We expect to have this out within a week.
We Have Sold TC Pipelines (a MLP) From The Model Portfolio (3/19/2013 10:15 am)
As noted below we had been looking for an opportunity to sell out last 200 shares of TCP from the model portfolio. This locked in a nice 21%
profit. Remember if we don't lock in an occasional nice profit the returns we can garner will be less than satisfactory--we need the
occasional outsize gain to pump up our end results.
This adds to the cash stack and we are looking for MLP's and REITs when the market sets back (when?--who knows).
NEVER FORGET - This Market Will Setback (3/17/2013 10 pm)
Coming off a very good week in our portfolios we look around and wonder when we will be able to reasonably move into some decent MLP's
and REITs---both areas that we are shying away from as they are way overvalued and seem to never setback. We are just 80% invested and
have plenty of dry powder to pick up some values when they appear.
We must remind ourselves continuously that there are major economic issues both domestically and globally that will flair up and create
tremendous opportunities. Europe is a huge mess yet--there is really no improvement over there and their recession has the possibility to
get deeper and broader---and this will affect the U.S. and the globe. The U.S. has done little to fix the fiscal matters at hand and the federal
government continues to borrow 40 cents on the dollar. Yes the official government numbers say the economy is improving--but we are
sceptical (we are always sceptical).
Thus we will look for an opportunity to unload our 200 shares of TC Pipelines MLP and then wait for an opportunity to move back into a
couple MLP's and REITs when we get the setback---and we will get a setback it is just a question of when.
Preferred Stock Closed End Funds 'Hammered' Today (3/15/2013 11pm)
In a very interesting development today we have seen our index of Preferred Stock Closed End Funds fall by 1% today---while the Preferred
Stock ETF Index held about even.
While we have not totally analyzed the situation as of yet I think it is fairly clear that after rising for months and months the party in Preferred
Stock Closed End Funds is probably over. Does this mean that Preferred Stocks are a bad holding now?? NO, although it may be an
indication that income investors are moving more into common stocks or some other type of security. Additionally, it may mean that Closed
End Fund investors are not willing to pay the Net Asset Value for a fund and that it may move to a discount to NAV---or maybe it was a 1 day
event.
What we believe is absolutely true is that the days of getting great bargains by buying on the OTC market prior to NYSE listing and figuring
you will have a 2-4% capital gain in the next week or two are coming to a close. Both our Preferred Stock Closed End Fund Index and our
Preferred Stock ETF Index have not moved higher for the last 8 weeks (nor have they have they fallen much)---see the latest charts of these
2 here.
Model Portfolio Changes for 3/15/2013
March 15, 2013 8:00 am
We will make the following changes in the model portfolio for today.
We will sell 1000 shares of PetroBakken (ticker PBKEF). Our long term outlook on Petrobakken has NOT changed---but during the recent
fall we loaded up on shares (to 2500 shares--around 4% of the total portfolio) and we would be more comfortable with a smaller position. It
is helpful that the shares have run over 10% in the last 2 days giving us a good spot to lighten up.
We will add 500 shares of Armour Residential REIT 7.875% monthly pay preferred (ticker:ARR-B). This is a low quality preferred not suitable
if you do not have a well diversified portfolio.
These 2 moves will leave the model at 78% invested where we are comfortable for now. We would like to add 1 or 2 MLP's, but will wait for
a market setback when MLP's will almost certainly get hit hard
We Will Purchase MVC Capital 7.25% Senior Notes Today
March 5, 2013 8:30 am
MVC Capital is a Business Development Company--which in general we are careful with (they can be very volatile) we don't have a problem
owning their debt. MVCB is trading at 25.15 and we think it has a chance to move up toward $26 in the weeks ahead so we will add it to the
Model Portfolio today--probably 500 shares. This is a decent buy for income investors except for the most conservative. There are few
decent issues available where we can get over 7% yield.
Details are here.
We Will Lock in Profits on MLP's TC Pipelines and Northern Tier Energy
March 3, 2013 11 pm
We have decided that we will lock down some profits in 2 MLP's that we own, 1st off we will sell 200 shares of our TC Pipelines (ticker:TCP)
tomorrow---we currently own 400 shares. While we have great confidence in TC Pipelines we have less confidence in the general
economy. We have a gain of approximately 17% on our shares and it never hurts to lock down a nice profit. We would consider adding
back the shares if they were to settle back a couple bucks.
Additionally we will unload our final 200 shares of Northern Tier Energy (ticker:NTI). We have a nice 20% gain on these shares and we don't
expect too much more upside to these shares for the foreseeable future. Recall that we locked down a gain of 15% on a previous sale of
some shares. Again we would be open to re-buying at a lower level.
These sales will raise our cash position again, but MLP's are very vulnerable to any market downdraft--and this could happen at any time as
the global economy remains very tenuous.
We are Pondering Repurchasing Some Whiting USA Trust II
February 25, 2013 10 am
We had bought 400 shares of WHZ at $14.96 in December and sold 200 this month for a nice gain--shares have fallen back now to where
we originally purchased them and we think the next distribution will be better as the price of crude has taken off.. The tendency of these
trusts is to rise into the ex dividend date and then sell off. The last ex date was 2/14 so we would expect a rise into 5/14/13.
If we buy today/tomorrow it will be 300 shares.
Further Model Purchases on Hold
February 21, 2013 7 am
These market look kind of scary at this time and we had planned to purchases more issues this week for the model--composed of some
MLP's and Trusts---these are on hold. The markets are 'getting real' on the economic situation, in particular in Europe, and this coupled
with the sequestration in Washington make buys now especially dangerous. We are now at 77% invested and will have to be satisfied with
this for a week or two.
Additionally we are worried about PetroBakken. Again we have reviewed all their numbers and think that this sell off is quite overdone. We
reviewed some other Canadian oil and gas companies and they have all gotten hammered--although none as bad as PetroBakken. For now
we are holding---but it is possibly that we could sell a part position if the downward trend continues.--we have very mixed feelings on this
though as we look at the little bit of production they sold last year (2,500 bpd) for 427 million and look at their book value and it is hard to
believe that this won't be good some months or years out.
Additions to the Model Portfolio for 2/20/2013
February 19, 2013
We will be adding the following 4 issues to the model portfolio tomorrow.
We are now going to rush to get one more buy this week for 4-5 issues as 'time is money'----by being cash we have already likely lost
$2,000 to $3000 in dividends/interest in the last 2-3 months. In our previous models we had the same issue of not getting invested--the
models did well--but should have done better.
Seaspan 7.95% Cumulative Redeemable Preferred Stock (ticker:SSW-D). 500 shares.
Discover Financial Services 6.5% Non Cumulative Preferred Stock (ticker:DFS-B). 600 shares.
Cedar Realty Trust 7.25% Cumulative Redeemable Preferred Stock (ticker:CDR-B). 400 shares
Ship Finance Common Shares (ticker:SFL). 500 shares.
These 4 issues will bring the model up to 75% invested and are a good blend of risk levels. We would expect no capital gains out of the
preferred stocks but if the economy worldwide would get some growth there is decent opportunity with SFL. Ship Finance is the only ocean
shipping company we would own in the ship owner field. They have been around for years and have always paid a tasty dividend.
We will have 4-5 more buys before the week is out---bringing us up toward 90% invested--we will then leave 10% cash around for buying
issues that go on 'sale'.
With a gain of over 5% today we have lightened our Petrobakken position by 500 shares. This position has been a thorn in our side---and like
Whiting Trust II has more volatility than we care to endure. This leaves us with 1000 shares in the Model. The model remains 79% invested
and we await a market setback.
Time to Let General Mills Common Shares Go (4/1/2013 8 am)
With a gain of 19% in General Mills (ticker:GIS) we will be letting go of our 200 shares today. While our long term outlook for General Mills
has not changed - it is clear that some gains get overdone in short periods of time and should be sold.
As we have mentioned before we prefer not to trade in and out of securities it is the only way we can garner portfolio gains above the model
target (7%)--lock down great gains and look for re-entry at lower levels.
We will be looking for a re-entry in General Mills at a price 10% lower than the current price of $49.31.
We Have Added a 1/2 Position in LTC Properties (3/28/2013 7 am)
Yesterday we added a 1/2 position (200 shares) of LTC Properties (ticker--LTC)--a REIT to the model portfolio.
We have been mentioning that we were looking for REIT and MLP securities to add to the model---we had hoped for a market setback
before purchase--but who knows if that will come anytime soon.
LTC is a REIT that deals primarily with assisted living and nursing homes--they have a portfolio of 178 facilities and have had good growth.
We are most interested in Long Term Senior Care because of the demographics of the United States (rapidly aging).
LTC pays a monthly dividend--another feature we find desirable---a 'bird in hand' is better than 'two in the bush'. The yield is just 4.6% and
while there are higher yielding REITs available we find it more desirable to purchase mid-range yield REITs as opposed to high yield REITs
that are stretching to pay out every available penny leaving no money in the til.
You can check out LTC here.
We Will Add a PURE INVESTMENT GRADE Super Conservative Portfolio (3/20/2013 10:30
pm)
We just can't stand it with only one model.
We will add a Investment Grade Portfolio composed of only investment rated preferred stocks and exchange traded debt issues. While this
isn't truly a cash replacement type option the idea is simply to buy and hold investment rated securities (that we follow) and see if it remains
as stable as we hope it does---for some of us a almost fully invested portfolio at 5.5% or so holds a lot of appeal.
We will start with the same starting balance as the 2013 Model Portfolio that we now run and we will populate it with issues starting on
January 2, 2013 (we will back date the starting time so we can get the full year). We will price our buy price on the closing price of the
securities on January 2nd.
We don't know what the portfolio yield will be (probably around 5.5%), but the idea is to have the safest possible portfolio that one doesn't
have to worry about day and night. Obviously a 'black swan' event murders all portfolio's, but it is our experience that the best quality
securities bounce back quickest after an event.
We will invest 90% of this portfolio immediately and then hold 10% to be invested as new issues come out. We will generally not sell
securities out of this portfolio, but will certainly have some called over time.
We expect to have this out within a week.
We Have Sold TC Pipelines (a MLP) From The Model Portfolio (3/19/2013 10:15 am)
As noted below we had been looking for an opportunity to sell out last 200 shares of TCP from the model portfolio. This locked in a nice 21%
profit. Remember if we don't lock in an occasional nice profit the returns we can garner will be less than satisfactory--we need the
occasional outsize gain to pump up our end results.
This adds to the cash stack and we are looking for MLP's and REITs when the market sets back (when?--who knows).
NEVER FORGET - This Market Will Setback (3/17/2013 10 pm)
Coming off a very good week in our portfolios we look around and wonder when we will be able to reasonably move into some decent MLP's
and REITs---both areas that we are shying away from as they are way overvalued and seem to never setback. We are just 80% invested and
have plenty of dry powder to pick up some values when they appear.
We must remind ourselves continuously that there are major economic issues both domestically and globally that will flair up and create
tremendous opportunities. Europe is a huge mess yet--there is really no improvement over there and their recession has the possibility to
get deeper and broader---and this will affect the U.S. and the globe. The U.S. has done little to fix the fiscal matters at hand and the federal
government continues to borrow 40 cents on the dollar. Yes the official government numbers say the economy is improving--but we are
sceptical (we are always sceptical).
Thus we will look for an opportunity to unload our 200 shares of TC Pipelines MLP and then wait for an opportunity to move back into a
couple MLP's and REITs when we get the setback---and we will get a setback it is just a question of when.
Preferred Stock Closed End Funds 'Hammered' Today (3/15/2013 11pm)
In a very interesting development today we have seen our index of Preferred Stock Closed End Funds fall by 1% today---while the Preferred
Stock ETF Index held about even.
While we have not totally analyzed the situation as of yet I think it is fairly clear that after rising for months and months the party in Preferred
Stock Closed End Funds is probably over. Does this mean that Preferred Stocks are a bad holding now?? NO, although it may be an
indication that income investors are moving more into common stocks or some other type of security. Additionally, it may mean that Closed
End Fund investors are not willing to pay the Net Asset Value for a fund and that it may move to a discount to NAV---or maybe it was a 1 day
event.
What we believe is absolutely true is that the days of getting great bargains by buying on the OTC market prior to NYSE listing and figuring
you will have a 2-4% capital gain in the next week or two are coming to a close. Both our Preferred Stock Closed End Fund Index and our
Preferred Stock ETF Index have not moved higher for the last 8 weeks (nor have they have they fallen much)---see the latest charts of these
2 here.
Model Portfolio Changes for 3/15/2013
March 15, 2013 8:00 am
We will make the following changes in the model portfolio for today.
We will sell 1000 shares of PetroBakken (ticker PBKEF). Our long term outlook on Petrobakken has NOT changed---but during the recent
fall we loaded up on shares (to 2500 shares--around 4% of the total portfolio) and we would be more comfortable with a smaller position. It
is helpful that the shares have run over 10% in the last 2 days giving us a good spot to lighten up.
We will add 500 shares of Armour Residential REIT 7.875% monthly pay preferred (ticker:ARR-B). This is a low quality preferred not suitable
if you do not have a well diversified portfolio.
These 2 moves will leave the model at 78% invested where we are comfortable for now. We would like to add 1 or 2 MLP's, but will wait for
a market setback when MLP's will almost certainly get hit hard
We Will Purchase MVC Capital 7.25% Senior Notes Today
March 5, 2013 8:30 am
MVC Capital is a Business Development Company--which in general we are careful with (they can be very volatile) we don't have a problem
owning their debt. MVCB is trading at 25.15 and we think it has a chance to move up toward $26 in the weeks ahead so we will add it to the
Model Portfolio today--probably 500 shares. This is a decent buy for income investors except for the most conservative. There are few
decent issues available where we can get over 7% yield.
Details are here.
We Will Lock in Profits on MLP's TC Pipelines and Northern Tier Energy
March 3, 2013 11 pm
We have decided that we will lock down some profits in 2 MLP's that we own, 1st off we will sell 200 shares of our TC Pipelines (ticker:TCP)
tomorrow---we currently own 400 shares. While we have great confidence in TC Pipelines we have less confidence in the general
economy. We have a gain of approximately 17% on our shares and it never hurts to lock down a nice profit. We would consider adding
back the shares if they were to settle back a couple bucks.
Additionally we will unload our final 200 shares of Northern Tier Energy (ticker:NTI). We have a nice 20% gain on these shares and we don't
expect too much more upside to these shares for the foreseeable future. Recall that we locked down a gain of 15% on a previous sale of
some shares. Again we would be open to re-buying at a lower level.
These sales will raise our cash position again, but MLP's are very vulnerable to any market downdraft--and this could happen at any time as
the global economy remains very tenuous.
We are Pondering Repurchasing Some Whiting USA Trust II
February 25, 2013 10 am
We had bought 400 shares of WHZ at $14.96 in December and sold 200 this month for a nice gain--shares have fallen back now to where
we originally purchased them and we think the next distribution will be better as the price of crude has taken off.. The tendency of these
trusts is to rise into the ex dividend date and then sell off. The last ex date was 2/14 so we would expect a rise into 5/14/13.
If we buy today/tomorrow it will be 300 shares.
Further Model Purchases on Hold
February 21, 2013 7 am
These market look kind of scary at this time and we had planned to purchases more issues this week for the model--composed of some
MLP's and Trusts---these are on hold. The markets are 'getting real' on the economic situation, in particular in Europe, and this coupled
with the sequestration in Washington make buys now especially dangerous. We are now at 77% invested and will have to be satisfied with
this for a week or two.
Additionally we are worried about PetroBakken. Again we have reviewed all their numbers and think that this sell off is quite overdone. We
reviewed some other Canadian oil and gas companies and they have all gotten hammered--although none as bad as PetroBakken. For now
we are holding---but it is possibly that we could sell a part position if the downward trend continues.--we have very mixed feelings on this
though as we look at the little bit of production they sold last year (2,500 bpd) for 427 million and look at their book value and it is hard to
believe that this won't be good some months or years out.
Additions to the Model Portfolio for 2/20/2013
February 19, 2013
We will be adding the following 4 issues to the model portfolio tomorrow.
We are now going to rush to get one more buy this week for 4-5 issues as 'time is money'----by being cash we have already likely lost
$2,000 to $3000 in dividends/interest in the last 2-3 months. In our previous models we had the same issue of not getting invested--the
models did well--but should have done better.
Seaspan 7.95% Cumulative Redeemable Preferred Stock (ticker:SSW-D). 500 shares.
Discover Financial Services 6.5% Non Cumulative Preferred Stock (ticker:DFS-B). 600 shares.
Cedar Realty Trust 7.25% Cumulative Redeemable Preferred Stock (ticker:CDR-B). 400 shares
Ship Finance Common Shares (ticker:SFL). 500 shares.
These 4 issues will bring the model up to 75% invested and are a good blend of risk levels. We would expect no capital gains out of the
preferred stocks but if the economy worldwide would get some growth there is decent opportunity with SFL. Ship Finance is the only ocean
shipping company we would own in the ship owner field. They have been around for years and have always paid a tasty dividend.
We will have 4-5 more buys before the week is out---bringing us up toward 90% invested--we will then leave 10% cash around for buying
issues that go on 'sale'.
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