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BLOK ‘HEADIN TO VEGAS’ PLAY

January 17, 2018

We have not offered up a “headin to Vegas” idea for a long time.  But BLOK appears to be a good candidate for this risky and speculative category.  We do not assume to know much of anything about blockchain tech other than what we read and hear from our favorite analysts.

So, we are taking a SMALL position in BLOK Amplify Transformational Data Sharing ETF, the new ETF in the category.  The price right now is $20.06.

This is NOT an income/dividend play.  We are looking for growth.

The BLOK ETF also focuses on companies that are developing blockchain or blockchain-related technology. Holdings include companies researching, implementing and profiting from blockchain technologies. It also includes companies with blockchain-related partnerships that could prove financially beneficial. Amplify classifies each company included in the index as either “core” or “secondary” based on how closely-tied the company’s business is to blockchain development.

 
Amplify has said it plans to be particularly active in managing the BLOK fund to make sure it stays on top of the rapidly-changing blockchain landscape. The fund’s holdings and balance could potentially be adjusted on a daily basis. Subadvisor Toroso Investments will select the fund’s holdings and manage its investment strategy, while Exponential ETFs will construct the portfolio and execute trades.

According to the Amplify website, top holdings include Taiwan Semiconductor Mfg. Co. Ltd. (ADR) TSM 1.86% , DIGITAL GARAGE OTCDLGEF and SBI HOLDINGS INC
SBHGF 4.67%
.
Blockchain Could Be The Real Cryptocurrency Winner
Cryptocurrencies like bitcoin and Ethereum have generated a lot of excitement among investors, but some experts say the underlying blockchain technology, not the cryptocurrencies themselves, is the real gold mine for investors.
“This is an industry that we think that over several decades will be as revolutionary as the internet. We’re going to have several million people working in this industry, if not tens of millions,” Antonis Polemitis, blockchain expert and CEO of the University of Nicosia, said this week, according to CNBC.
Gartner estimates that blockchain technology could add $3.1 trillion in value to the global business world by 2030.

https://www.benzinga.com/markets/cryptocurrency/18/01/11040824/first-blockchain-etfs-debut-heres-what-you-need-to-know

https://www.computerworld.com/article/3191077/security/what-is-blockchain-the-most-disruptive-tech-in-decades.html

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SELLING LOW YIELD BONDS

January 17, 2018

We have sold two Corporate Bonds that were contained in the Core Portfolio.  They offered very small yields (under 3%) and we are selling in order to make funds available for potential purchase of some new positions that pay above 7%.  There is nothing inherently wrong with the bonds so you can continue to hold if you are happy with the yield.

We have been buying ‘funds’ that hold Corporate Bonds, but we have NOT been buying ‘individual’ corporate bonds due to the very low interest rates.  We are still looking to buy a bond that pays north of 4% but it is difficult to justify buying positions where yields are this low.  It was not that many years ago that the majority of our portfolio consisted of corporate bonds.

Crown Castle

Phillip Morris 

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Here is a positive article on the Ventas Corporate Bond that we hold.

https://seekingalpha.com/article/4137552-ventas-fits-bill

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LOOK AT NEWTL AGAIN

December 16, 2018

We own NEWTL in the Core Portfolio.  Here is come discussion from http://www.dividendinvestor, one of our favorite sites.  If you do not own NEWTL, it is a buy BUT it may pull back to $25.30 if you wait.  Go to the link below for the full article.

Newtek Business Services 7% Notes (NASDAQ: NEWTL). This baby bond issue closed recently at $25.41 after rebounding from $25.30. Like the Arbor Realty issue, the recent low was on the ex-dividend date. Shares have traded in the $25.30-$25.80 range during the last year as the baby bonds became callable on 4/22/2017. That means the share price should remain in the $25.30-$25.80 range in the coming months, although there is always a possibility of a call in which case a small capital loss could be incurred. These shares mature in 2021, which means the share price should trade with low volatility.

https://www.dividendinvestor.com/reviewing-favorite-high-yield-holdings/

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Who to believe?  Fake news everywhere.

About 2 in 3 American adults say fabricated news stories cause a great deal of confusion about the basic facts of current affairs, according to a Pew Research Center report last month. The survey found that Republicans and Democrats are about equally likely to say that “fake news” leaves Americans deeply confused about current events. Despite the concern, more than 8 in 10 feel very or somewhat confident that they can recognize news that is fabricated, the survey found.

Here is link to full article:

https://apnews.com/c1d5df2ffe2144c2ab75b3dd052632b3/Trust-in-news-media-takes-a-hit-during-Trump-presidency

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Seen on the Web:

the limits of what has been historically observed in terms of market performance. Should the S&P 500 have another week of gains, it would be the longest period in its recorded history that there has not been even a 5% pullback in the index throughout a Bull cycle. These moves are atypical

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TAKE A GANDER AT IRM

January 12, 2018

There have been so many positive articles on Iron Mountain IRM (a REIT) recently that we decided to suggest you look at this Company.  (Most investors have probably never heard of this company.)

NOTE:  We already own an Iron Mountain Corporate Bond in the Core Portfolio.  So we are not buying the stock.  There is an Iron Mountain bond available but it does not mature until 2024 so we would not buy it.

Iron Mountain is basically involved in the paper storage business for large companies that want to store records.  It pays over 6%.  Can you believe Iron Mt has been around since 1951.  Before buying IRM look at the article and the link is below.

Since then, the company has become the world’s largest record management storage solution provider, with 1,433 facilities in 53 countries on six continents. It serves 230,000 customers, including 95% of the global Fortune 1000.

https://seekingalpha.com/article/4132281-6_2-percent-yielding-industry-dominating-blue-chip-28-percent-undervalued?uprof=46&isDirectRoadblock=false

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Highly respected Kiplinger is once again making a recent issue of their income newsletter available.  We have never been a subscriber, but it makes interesting reading.  You may find some good investment ideas.

https://www.kiplinger.com/store/samples/kv_recent_issue.pdf

 

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BUYING FALLEN ANGEL

January 8. 2018

We have been following FIV First Trust Senior Floating Rate 2022 Target Term Fund since we saw an article (link below) on SeekingAlpha.com way back in November.

This is a fallen angel where the price has plunged.  Our philosophy is to buy when positions are on sale……in the bargain bin.

The price is the SAME as when the article was first published.  But it is stable, the technicals are looking very good, and we think the price ($9.26) is due to start climbing.  FIV pays 5.4%.

85% of the fund is in senior secured loans, which is the highest ranking security in the capital structure. Even if an issuer is rated in high yield categories, senior secured loans tend to perform better since they are first in line for repayment. In default scenarios, senior secured loans typically recover 60-70% of the loan value on average, while high yield bonds often get nothing or very little (often 0-10%). The other key positive of senior secured loans is that they are floating rate, which means that they are insulated from interest rate spikes. Rising rates actually can benefit senior loans.

https://seekingalpha.com/article/4126492-earn-7-percent-yield-2022-term-closed-end-fund

BUY:  FIV

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The new book Fire and Fury (mentioned here last week) is creating quite the shit storm.  The author is claiming Trump will be kicked out:  hey…. outlandish claims make good promotion.

If you hate Trump you will love it.

If you love Trump you will hate it.

We picked up the book on Saturday and are probably a third of the way thru.  Yes the author hates Trump and is doing everything in his power to destroy el Presidente but so far there is no news that we haven’t already read in prior books.  Trump is a self-centered narcissist but at least he is getting things done.

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We could not help ourselves:  we just love this pic of Crooked Hillary.  With all the new interest in investigating her maybe she WILL end up in jail after all:  tho we are not holding our breath.

 

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REVIEWING CURRENT HOLDINGS

January 5, 2018

YYY has been in the Core Portfolio since inception of this blog.  It pays over 8% and has been “relatively” stable for the last 18 months.  (We got hit on this one several years ago when they screwed around with the mix of funds.)  To the best of our recollection we have never updated our thoughts on YYY.

We noticed some articles on SeekingAlpha that prompted us to re-visit this position.  If you have not purchased YYY, NOW is the time to buy a small amount.

YYY is essentially a ‘fund of funds’:  a collection of closed end funds which gives you tremendous diversification.  It has been under-going it’s annual re-balancing:  cutting and adding positions.  As CEF’s use leverage, they carry increased risk so just beware when evaluating YYY. 

YYY pays 8%.

RA is another holding in the Core Portfolio.  If you do not already own, now is the time to buy.

RA pays 10%.

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BUYING MORE IHIT. ANOTHER POLITICAL BOOK TO CONSIDER.

January 4, 2018

We suggested you review IHIT on December 27.  Just today we noticed an excellent review of IHIT by one of our favorite financial sites:  https://www.dividendinvestor.com/term-trust-closed-end-fund-added-portfolio/

(Their portfolios are publicly available.)  Pasted below is some content:  go to the link above for the full discussion.  We will be ADDING to our holding. 

While we are always skeptical of owning closed-end funds (CEFs), we do on occasion stumble upon one that fits our needs in almost all respects.

Meeting our needs means that the share price appears to have limited downside, the issue has a satisfactory current yield and the security has a relatively short duration to maturity. Very few CEFs can meet our needs in all these regards.

An issue that we have determined fits the above needs is the Invesco High Income 2023 Target Term Trust (NYSE: IHIT). Many of you may be familiar with Term Trusts, even though I very rarely find closed-end funds worth buying. However, the timing seems right to purchase this CEF. IHIT appears to be one of those rare issues that works even for conservative investors like us. It is helpful that most of the holdings in the trust are investment grade.

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We thought we were done with the political books.  But this new one, evidently very critical of Trump, is due out soon.

Fire and Fury: Inside the Trump White House, reportedly based on more than 200 interviews with the president, his inner circle and players in and around the administration, is one of the most eagerly awaited political books of the year. In it, Wolff lifts the lid on a White House lurching from crisis to crisis amid internecine warfare, with even some of Trump’s closest allies expressing contempt for him.

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