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August 2, 2017

Go to Core Portfolio for current positions.

DividendInvestor.com talks about a new fixed to floating rate preferred from Annaly.  We ARE buying a small position.  The coupon of almost 7% is appealing.

The symbol is:  NLY-F (which is NLYPRF at Fidelity:  check with your broker for the symbol)

The giant of the mortgage real estate investment trust (mREIT) universe, Annaly Capital Management (NYSE: NLY), has sold a huge fixed-to-floating rate preferred with an initial coupon of 6.95%.
Proceeds from this offering of 28 million shares will be used to redeem the company’s 7.875% preferred issue, which is one of four preferreds that Annaly has outstanding. The 28-million-share issue also includes a brokers’ overallotment option of an additional 4.2 million shares.

The proceeds of almost $780 million is massive for a mortgage REIT and just $185 million will be needed to redeem the NLY-A issue with the balance going to acquire additional residential and commercial mortgages. The new issue will have a fixed coupon until September 30, 2022, and then will float at a coupon rate of three-month LIBOR, plus a base fixed rate of 4.993%.

Since the three-month LIBOR is currently at 1.32%, if the issue were floating today, the coupon would be 6.3%. It should be noted that the majority of fixed-to-floating-rate preferreds issued recently have a 10-year period until going to a floating rate coupon versus the five years for this issue.


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GBAB is in the Core Portfolio.  We happened to see a current article talking about this holding and pasted below are some comments.  For the full article go to the link below.  At this point we are HOLDING GBAB, but we would NOT buy it as it new position….. as rising rates will hurt.  If we do ANYTHING we would sell if rates spike.

So… absolutely, without a doubt the Guggenheim Fund has been the best performer in the recent past and virtually tied overall with the BlackRock fund for the best performance out of our five-some of “BAB” funds.

Am I surprised? Not anymore.

While I have been fully following the two Nuveen Funds, I have not up until now taken a deeper dive in GBAB. Prior to doing this, I was actually intrigued as to how you can generate “alpha” in a fairly commoditized Build America Bond market.

Looking deeply into the fund you get your answer. That answer is you invest in lower quality, AND bonds OTHER than Build America Bonds.

While the two Nuveen Funds and the PowerShares ETF are more or less “pure,” the Guggenheim and BlackRock funds can invest 20% or more in assets other than Build America Bonds.
So there is our answer to the question.

Bottom line, it is a pretty good fund and up till now the managers have been able to generate incremental returns over its pure peers by adding non-core assets as well as being generally lower quality to the tune of 10% or more.



POLL:  Tell us what you think of this blog.

Starting this blog five years ago, we have always listed a link to Rezny Wealth which has an excellent financial radio show on Sunday mornings.  They are offering a free report which you need to read when thinking about hiring a financial advisor:  “Suitability vs Fudiciary”.  Even if you are currently using an advisor, we suggest you read this report.


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July 31. 2017

(Update:  Tuesday MDLX is dropping again.)

We bought Medley MDLX about a year ago and it has been in the Core Portfolio ever since.  MDLX spiked up to $24.90 then went ex-dividend last week and is currently priced at $24.60.  Historically it drops to around $24.00 after ex-div. which is a buying opportunity.  It can take a week or MORE to drop in price. 

If you do not own MDLX or want to add to your position, place a buy limit order around $24.00 and WAIT.  You may get filled at a nice price.  Do NOT but right now at this higher price.


The new “Dunkirk” movie is a huge bore.  Stay away.


The entire world is watching “your fired” The Apprentice with a new episode-and firing-everyday…it’s like a daily reality show.  We don’t watch the Kardashians but THIS current political environment has to be better.  Well I guess we will find out-in due time-if Trump eventually destroys himself.  Will he really drain the swamp.  Of course not.  But one thing we know for sure:  everyone is fixated on the circus.


Here is a link to an article on the major accomplishments of Trump so far.  If you watch fake news, you would think absolutely nothing has been done since he was elected…..which is not true.  btw we DO know the author is controversial and a huge Trump supporter, but we liked the writing style of his article…..there are numerous similar stories out there on accomplishments if you care to Google them. 


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July 26. 2017

The American Public is learning what it’s like having a drama queen as a President.  Talk about melodrama.  Between caustic tweets, firings, and the fake news media….it just doesn’t get any better.  Everyday you have a Saturday Night Live skit in the media.

And now, believe it or not, you have Kid Rock entering the fray.  And the Dems are concerned!!  If Trump can get elected, you have to believe Kid can win as a Republican.  (he identifies as a Libertarian but would run as a Repub).  According to the one poll that has been done, he is LEADING over the democratic Senator.

With America collapsing under Trillions of debt, rampant obesity, drugs killing our kids, individual States like Illinois going bankrupt, ten of millions on food stamps and disability, Social Security running out of money:  we have the House and Senate corrupt queens in Washington DC who cannot get anything done.

TRAVESTY.  How did we get to this point?  Americans voted for change by electing Trump. 

It remains to be seen if change comes.


If you listen to the fake media, you would think Trump is dead.  According to Reuters, MORE voters would vote for Trump again, an improvement.  The link to the full article is below:

Eighty-eight percent said they would vote for Trump again, a slight improvement over the May figure of 82 percent. Taken together, the polls suggest that Trump’s standing with his base has improved slightly over the past few months despite his Republican Party’s repeated failures to overhaul the healthcare system and multiple congressional and federal investigations into his campaign’s ties to Russia.



Can you believe this???  Over 42 MILLION on food stamps.  And they tell us the economy is so great.  Lets say that again:  your taxes are paying for 42 MILLION.

USDA statistics on Supplemental Nutrition Assistance Program (SNAP) participation showed that 42,609,852 people in the U.S. took part in the food stamp program in fiscal year (FY) 2017, the lowest level it has been since 2010 when 40,302,000 people enrolled in the program.

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July 21, 2017

The rains continue here in Northern Illinois and now the rising flood waters are in the boat house.  This is starting to get serious.  Even the bike path that we follow everyday is now flooded. 

As the concerns with approaching waters are scary, we continue evaluating the Core Portfolio positions.

So far this year through June we have just a hair under 5% Total Return on the Core Portfolio….which is portfolio appreciation AND dividends.  We could anticipate a 10% return for the year, which is not bad.  So we continue to work diligently in keeping those dividends coming in.

Searches this week for potential new positions have resulted in…..one buy.

We had some positions going ex-dividend this week which can give us the opportunity to add or buy.  Those possibilities did not open up as we had hoped.

We continue in the Summer doldrums, altho we did make the one purchase this week.  Several dividend payments rolled in, so as we often say, dividend investing is really no fuss, no muss.  Just buy…..and wait for the money to roll in.  No need to watch the stock market every minute. 

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July 18, 2017

BXMT has been a very steady performer this year.  The price in January was $30.91 and today the price is $30.96….basically flat.  It got ahead of itself in June getting up to $32.00 but then paid a huge dividend and the price has now come back down….this presents you the opportunity to BUY.  The 8% yield is very attractive!!!!!

Here is some copy from an article that we saw in SeekingAlpha.com.  You can also go the link below to read the entire article.

Blackstone Mortgage Trust, Inc. (NYSE:BXMT) makes a compelling value proposition. The real estate finance company has strong core earnings originating from its investment portfolio, and Blackstone Mortgage Trust has had robust dividend coverage for a high-yielding income vehicle. What’s more, Blackstone Mortgage Trust should be able to grow its net interest income in a rising interest rate environment based on its large exposure to variable-rate loans.



Did anyone watch Game of Thrones?  What a snore-fest.  This hass has to be the most boring Games episode we have seen.  On the other hand the movie The Planet of the Apes is pretty good.  The special effects (for face movements) is what everybody is talking about and the story line is ok.  We are NOT huge fans of the Apes series but the flick is worth seeing.


Can you believe those idiotic Republicans can’t even pass the healthcare bill.  What a bunch of losers.  Why don’t they just let ObammerCare fail, and try to do something next year.  As big supporters of Trump, we are very sad to see him failing so badly.

Speaking of failing, we are reading that the Illinois pension plans will fail in 4 years.  Another sad illustration of corrupt government.


Is anyone surprised at this???……………..

The «Monthly Harvard-Harris Poll: June 2017» is the latest poll in that series, and it scientifically sampled 2,258 U.S. registered voters, of whom (as shown on page 30) 35% were «Democrat», 29% were «Republican», and 30% were «independent»).

It indicates (page 24) that 37% «approve» and 63% «disapprove» of «the way the Republican Party is handling its job».
It also indicates (page 25) that 38% «approve», and 62% «disapprove», of «the way the Democratic Party is handling its job».


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July 14, 2017

We recently suggested you look at CLNS and it is in the Core Portfolio.  Yesterday we saw this very positive article on CLNS from http://www.moneyshow.com.  We had held this position for a long time (before adding to the Core Portfolio) and really took a beating as they went through some bad times.  In fact we are still underwater.  But it appears things are turning around.  (Scroll down for a second review.  You can buy these OR add to positions.)

Colony NorthStar (CLNS) is a better value today than when we initially recommended it was last month; the he quarterly dividend was recently raised 12.5% and the REIT now offers a 7.7% dividend yield, explains Ian Wyatt, editor of High Yield Wealth.

Colony NorthStar owns a global real estate portfolio composed of industrial, health care, and hospitality properties. Colony NorthStar also has an investment arm.

The investment business holds $56 billion of assets under management. It invests in public securities, private-equity partnerships, single-family rentals, commercial loans, and direct property and net-lease assets.

Given that Colony NorthStar has existed in its current incarnation for only six months and it’s revamping the business, year-over-year comparisons offer little direction. With that said, management appears to be moving in the direction to create value.

REITs are valued on their dividends, and dividends are supported by funds from operations (FFO) — the key cash-flow metric. Colony NorthStar pays a $1.08-per-share annual dividend, which offers a 7.7% yield.

Management expects FFO to land between $1.40-and-$1.58 per share in 2017. Given the present FFO coverage, Colony NorthStar has the financial wherewithal to not only maintain the dividend but to increase it generously.

We can say that Colony NorthStar shares are cheap -– absolutely and relatively.  They trade at less than 10 times the forward FFO multiple. Cheapness has attracted a lot of institutional buyers in recent months.

Notable buyers include Vanguard Group, which bought 68.5 million Colony NorthStar shares; Baupost Group, led by value-investor guru Seth Klarman, bought 29.2 million; BlackRock bought 23.2 million shares to increase its holdings to 30.9 million.

A lot of institutional investors have boarded the Colony NorthStar bandwagon. In the first quarter, 222 institutions bought new positions in Colony NorthStar stock.

It is time for us to join the institutional crowd. Colony NorthStar shares are cheap, and that attracts smart institutional investors. It should also attract smart individual investors.

Once news of Colony NorthStar’s cheapness reverberates with the general investing public, you can be sure they won’t remain cheap for long. Suggested Action: Buy Colony NorthStar shares up to $15.


We ALSO saw another review of Core Portfolio holding MIC.  Go to this link if you want to read it.


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July 13, 2017

We have been flooded here in the Chicago area and yesterday we were scrambling to save our little 14 footer.  Located on a river and having experienced this many times in the past, we have learned to live with it.  But it does make you appreciate the tragedy of the many friends and relatives who have experienced nature’s wrath in New Orleans and Florida.


We get so sick and tired of listening to the Old Grey Haired Lady at the FED talking about “full employment”.  Here is the real status.  If you want to read the detailed and boring report, click on the link below.

Graph 1 reflects headline May 2016 U.3 unemployment at 4.69%, versus 4.98% in April 2016; headline May 2016 U.6 unemployment at 9.73%, versus 9.71% in April; and the headline May 2016 ShadowStats unemployment estimate holding at 23.0%, up from 22.9% in April.



Illinois kicks the can down the road, again.

As expected the Illinois corrupt ultra liberal politicians and even some of the Republicans, raised the taxes to avoid a financial collapse.  Do the citizens react?  Of course not.  The sheep will only riot in the streets when the State cannot give them their pensions and disability payments.  That may not be too far off.  What a disgrace.  Illinois leads the nation in people moving OUT:  maybe we need to join the exodus.


Biased pollsters still pushing out biased polls:

Rasmussen, for example, since Jan. 20, 2017, has tracked Trump’s approval ratings between 42 to 57 percent, based on “likely voter” responses. By contrast, Gallup, polling “adults,” has reported Trump’s approval numbers hovering between 35 to 46 percent, a difference of as much as 11 percent.


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