Today I finished selling Alpine Total Dynamic Dividend Fund (AOD) and American Capital Agency Corp (AGNC). AGNC is an mREIT, and I think mREITs are not good for investment right now. AOD strategy doesn't work good in rising market.
First phase of reducing fixed income is finished. I still have several CEFs invested in muni bonds in my portfolio. I will sell them when I need extra cash. Currrently I have plenty of cash waiting for better investment, so no hurry here.
Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.
Additional disclosure: I have long positions in muni CEFs: BTA, CEV, MZF, NMO. Positions can change any time.
Friday, March 30, 2012
Monday, March 26, 2012
Buying Retail
I was thinking about two months what retail company to buy. Fact is, in a bull market you have to own retail. My problem was, most of retail companies I know are either not good, even my former favorite Kohl's (KSS), or overpriced. After some research, I made my choice.
Welcome DSW Shue Warehouse (DSW). Not the first appearance in my porfolio, I made a quick trade couple of years ago. Now I'm buying it for long term. There are serveral reasons to buy.
Company has good fundamentals, growing, has a lot of cash and no debt.
I am a long term customer and like the stores. This is a very important thing for me, I would never buy retail company I don't like as a customer.
Company is recommended by Jim Cramer. Sometimes I follow his recommendations and they (recommendations) made me more money than lost.
I am a long term customer and like the stores. This is a very important thing for me, I would never buy retail company I don't like as a customer.
Company is recommended by Jim Cramer. Sometimes I follow his recommendations and they (recommendations) made me more money than lost.
Disclosure: I am long DSW.
Additional disclosure: I have no positions in KSS. Positions can change any time.
Friday, March 23, 2012
Reducing Fixed Income More
Today I sold part of my position in Alpine Total Dynamic Dividend Fund (AOD). This is in line with my strategy of reducing fixed income positions in my portfolio. Another reason: last 6 declared distributions have a big (about 40%) portion of return of capital. Which means that real dividend is only about 60% of what you see in the press releases.
Disclosure: I am long AOD.
Additional disclosure: Positions can change any time.
Disclosure: I am long AOD.
Additional disclosure: Positions can change any time.
Wednesday, March 21, 2012
Reducing Fixed Income Positions
According to plan outlined in my Annual Portfolio Review, I closed two positions today.
Annaly Capital Management (NLY): REIT with a huge dividend, which lately is coming down. Stock price is coming down as well. I think this dynamic is unavoidable. Annaly is an agency mREIT, making money by buying mortgage notes supported by government agencies. mREITs have been able to buy these notes at a big discount during crisis, and used low yields to borrow cheap. Now a lot of mortgages were refinanced or defaulted. mREITs are forced to buy current notes, yielding less and at a smaller discount. Today stock popped because dividend reduction was smaller than expected. Good time to sell.
Helios Multi-Sector High Income Fund (HMH). Last corporate bond closed-end fund I had in my portfolio. Yield became too low (so low that muni CEFs have better yields, taking taxes into account). Besides, stock trades close to net asset value.
Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.
Additional disclosure: I have positions in several muni closed-end funds and in one more mREIT: AGNC. Positions can change any time.
Annaly Capital Management (NLY): REIT with a huge dividend, which lately is coming down. Stock price is coming down as well. I think this dynamic is unavoidable. Annaly is an agency mREIT, making money by buying mortgage notes supported by government agencies. mREITs have been able to buy these notes at a big discount during crisis, and used low yields to borrow cheap. Now a lot of mortgages were refinanced or defaulted. mREITs are forced to buy current notes, yielding less and at a smaller discount. Today stock popped because dividend reduction was smaller than expected. Good time to sell.
Helios Multi-Sector High Income Fund (HMH). Last corporate bond closed-end fund I had in my portfolio. Yield became too low (so low that muni CEFs have better yields, taking taxes into account). Besides, stock trades close to net asset value.
Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.
Additional disclosure: I have positions in several muni closed-end funds and in one more mREIT: AGNC. Positions can change any time.
Friday, March 16, 2012
Bonds Off The Cliff (It's Embarrassing)
Yes, it is embarassing. I wrote in my "Accual Portfolio Review", that I'm planning to reduce fixed income part and increase stocks. Well, I increased stocks positions, but failed to reduce bonds. More to the point, I added to BlackRock Long-Term Municipal Advantage Trust (BTA) position. The idea was to move money from Nuveen Municipal Market Opportuninty Fund (NMO) to BTA, taking advantage of higher yield and better fund management.
Well, I was wrong. Very wrong. The idea in portfolio review was right, I just failed to implement it. Besides, I missed the fact that muni CEFs had parabolic charts lately. All of them. You don't buy parabolic chart, you sell it.
It looks like all bonds (starting with Treasuries) are down because of increased inflation expectations. I still don't see where inflation might come from (China?). And I think 10 year Treasuries will be back to 2% this year. I don't want to sell any muni CEFs now, price is too low and yield is good.
The lesson: I need to act on my plan, and act fast. Markets are faster nowadays, and if you are too late to act, you missed opportunity, or even worse, you lost money.
Disclosure: I am long BTA, CEV, MZF, NMO.
Additional disclosure: Positions can change any time.
Well, I was wrong. Very wrong. The idea in portfolio review was right, I just failed to implement it. Besides, I missed the fact that muni CEFs had parabolic charts lately. All of them. You don't buy parabolic chart, you sell it.
It looks like all bonds (starting with Treasuries) are down because of increased inflation expectations. I still don't see where inflation might come from (China?). And I think 10 year Treasuries will be back to 2% this year. I don't want to sell any muni CEFs now, price is too low and yield is good.
The lesson: I need to act on my plan, and act fast. Markets are faster nowadays, and if you are too late to act, you missed opportunity, or even worse, you lost money.
Disclosure: I am long BTA, CEV, MZF, NMO.
Additional disclosure: Positions can change any time.
Friday, March 9, 2012
Crazy Week
Week started with a crash and ended with a rally. I am still convinced that we are in a huge bull market right now. Corrections are inevitable, sure. In a bull market, each correction is an opportunity.
Didn't have much time to write this week. Was busy at home, doing big home improvement project. However, did some trades.
Bought Banco Santander (STD) on Tuesday and sold on Thursday, cashing on gap filling.
Added to BlackRock Long-Term Municipal Advantage Trust (BTA) position. I'm planning to replace Nuveen Municipal Market Opportunity Fund (NMO) position with BTA. BTA has better yield and increased payouts twice in the last 12 months. NMO actually reduced payouts last year.
Additional disclosure: Positions can change any time.
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