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BUY GBAB—AGAIN—FOR IRA

November 20, 2017

BEFORE BUYING ANY POSITION, REVIEW THE CORE PORTFOLIO FOR CURRENT HOLDINGS.

(Update:  Partial fill at $22.48.  Changed to $22.51)

We have bought and sold GBAB several times over the years.  Most recently we sold it in early October when the technicals looked poor.  It dipped a little, but is now on the upswing.  In hind-sight we should have just kept the position, and not sold.

We are going to get back into GBAB and buy a new small position in Guggenheim Taxable Municipal GBAB today.  This is suitable for your IRA account.  Yield is 6.7%

We are placing a limit order at $22.48…….and will watch it today.  For some reason the price is already up ten cents so we will just wait and watch.  

FUND DESCRIPTION: Guggenheim Taxable Municipal Managed Duration Trust, formerly Guggenheim Build America Bonds Managed Duration Trust, is an exchange-traded closed-end fund or a closed-end ETF that is officially described as a diversified, closed-end management investment company.

INVESTMENT OBJECTIVE: The Guggenheim Taxable Municipal Managed Duration Trust seeks to provide current income with a secondary objective of long-term capital appreciation.

FUND/TRUST STRATEGY: The Trust seeks to achieve its investment objectives by investing primarily in a diversified portfolio of taxable municipal securities known as Build America Bonds (BABs), Under normal market conditions, the Trust will invest at least 80% of its Managed Assets in BABs, and may invest up to 20% of its Managed Assets in securities other than BABs, including taxable municipal securities that do not qualify for subsidy payments, tax-exempt municipal securities, asset-backed securities (ABS), senior loans and other income producing securities. Under normal market conditions, at least 80% of the Trust’s Managed Assets will be invested in securities that, at the time of investment, are investment grade quality. The Trust may invest up to 20% of its Managed Assets in securities that, at the time of investment, are below investment grade quality. Securities of below investment grade quality are regarded as having predominately speculative characteristics with respect to capacity to pay interest and repay principal, and are commonly referred to as junk bonds.

Here is a link to an article which gives you detail on this position.

https://seekingalpha.com/article/4090674-gbab-best-performing-build-america-bond-portfolio

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From http://www.realinvestmentadvice.com:

Last week, I discussed the potential year-end setup for a January correction. To wit:
“It is the turn of the calendar where I see the potential for a bigger correction. Come January, I think there is a high-likelihood of ‘tax selling’ by fund-managers to lock in gains, particularly if ‘tax reform’ legislation has passed, as taxes won’t be due for 21-months (assuming late filing.)

That selling, combined with concerns over the Fed’s rate hike in December and reduction of the balance sheet, could facilitate a deeper correction of 3-5%.”

 

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DIVIDEND GROWTH STOCK BUY FR

November 17, 2017

First Industrial FR is paying a lousy 2.6% yield:  it really sucks.  But we are not looking at this REIT for high dividends:  think of it as a dividend growth stock.

FR is a turn-around play:  back in 2009 the stock price was $5.00 (today it is $32.00) and they did not start paying dividends until 2013!!!  The short story is this:  they converted properties into warehouse facilities, and as such, are feeding the demand from Amazon and on-line sellers for the growing e-commerce boom.

We do anticipate both a higher stock price and higher yields going forward.  Below is a Company description and also a link to an article on SeekingAlpha.com that describes FR in detail. 

BUY (a small position to start) at $32.14 or lower.

BUSINESS: First Industrial Realty Trust, Inc. provides industrial real estate solutions for every stage of a customer’s supply chain, no matter how large or complex. Across major markets in the United States and Canada, their local market experts buy, (re)develop, lease, manage and sell industrial properties, including all of the major facility types – bulk and regional distribution centers, light industrial, manufacturing, and R&D/flex. They continue to receive leading customer service scores from Kingsley Associates, an independent research firm, and in total, they own, manage and have under development 97 million square feet of industrial space.

https://seekingalpha.com/article/4124005-first-industrial-underfollowed-underappreciated

GO HERE FOR REVIEW OF PCI, CURRENT CORE PORTFOLIO POSITION

BOOKS:  We have not read a novel in, well, FOREVER.  We have just never been that interested in reading fiction.  BUT, we were reading about the new book ORIGIN by Dan Brown, who,, you may recall, is infamous for The Da Vinci Code.  So we decided to try it our.

If are into fiction, we strongly recommend this book.  We were amazed as to how we got sucked into the story line.  Good reading!

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BUY JHD

November 14, 2017

(UPDATE:  RA went ex-dividend today:  this is a BUY)

Nuveen High Income Target Term Fund JHD

JHD is going ex-dividend today….it is a ‘target maturity’ fund that will close and disburse funds in 2019.  So you have a definite maturity date, in contrast to the ‘usual’ open-end bond funds that most people are familiar with….the fund will act like the individual corporate bonds that we own.  We like the short duration, closing in two years. 

Buy at $10.03 or below.  This CEF holds approx. 123 high yield (junk) bonds, so we are taking on risk.  Yield is 5.8%.

FUND DESCRIPTION: Nuveen High Income December 2019 Target Term Fund is an exchange-traded closed-end fund (CEF) or a closed-end ETF that is officially described as a diversified, closed-end management investment company.

INVESTMENT OBJECTIVE: The Nuveen High Income December 2019 Target Term Fund seeks to provide a high level of current income and return the original $9.86 net asset value per common share on or about 12/1/2019.

FUND STRATEGY: The Fund invests in a portfolio of primarily below investment grade corporate debt securities. The Fund may invest in other types of securities including senior loans, convertible securities and other types of debt instruments and derivatives that provide comparable economic exposure to the corporate debt market. At least 80% of its managed assets will be in corporate debt securities and separately, at least 80% in securities that, at the time of investment, are rated below investment grade or are unrated but judged by the advisers to be of comparable quality. No more than 15% will be in securities rated CCC+/Caa1 or lower at the time of investment. Up to 30% may be in securities of non-U.S. issuers, including up to 20% in emerging market issuers, and up to 10% may be in non-U.S. dollar denominated securities. The Fund seeks to identify securities across diverse sectors and industries that the advisers believe are undervalued or mispriced. In seeking to return the original NAV on or about the 12/1/2019, the Fund intends to utilize various portfolio and cash flow management techniques, including setting aside a portion of its net investment income, possibly retaining gains and limiting the longest maturity of any holding to no later than 6/1/2019. The Fund may use leverage through Borrowings or by issuing Preferred Shares or other senior securities.

FUND MANAGEMENT: Nuveen Fund Advisors serves as the Fund’s investment adviser. Nuveen Asset Management serves as the sub-adviser to the Fund.

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READY FOR A CORRECTION?

November 13. 2017

There are indications that we are headed for a 5% correction/pullback.  The banks, XLF, are the most important indictor and they are turning down.  Volume is low.  Seeing weakness in the semiconductors and big tech.  More declining stocks vs advancers.  And most importantly, the proposed tax-cut may NOT get passed.

If the current environment gets you nervous put in some close sell limit orders.  BUT we do not expect a huge correction, and in fact, the long term bullish momentum seems to be intact.  So that would present the opportunity for buying at ‘on-sale’ prices.

Last week we suggested EHT at $25.10—as it went ex dividend and we looked for a small pullback.  The limit order was in and we got filled.  So that turned out pretty much as we expected. 

We continue watching numerous positions for potential buys…..but we do NOT want to over-pay.  There is a new position that may be purchased this week……and some buys of current holdings that are going ex=dividend.

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The last thing you want to do is read another BORING article on bonds and interest rates….and we are in the same boat.  Nothing could be more mind numbing.

BUT the Core Portfolio contains a huge number of bond positions, and if you are following us, you MUST keep up to date on what’s happening.  Or for that matter anyone managing their own money, which most of our readers are doing, you have to stay current.

The following article from our favorite financial advisor is must reading:  why interest rates are not going up.  If you read the liberal fake news press and listen to CNBC you would be convinced rates are heading higher.  WE ENCOURAGE YOU to read this article:

https://realinvestmentadvice.com/bond-bears-why-rates-wont-rise/

 

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BUYING MORE EHT TOMORROW

November 9, 2017

Image result for veterans day

We bought Eaton Vance High Income Trust back in June 2017:  EHT

It pays just under 6% and is going ex-dividend on November 10.  So this is an opportunity to buy at a price of $10.10……….after it pulls back on Friday.  Below is a link to our post and some additional info.  We are going to be ADDING to our Core Portfolio position.

EHT holds approx. 112 corporate bonds all maturing in 2021 at which time the fund will liquidate the portfolio and all monies are returned to the investors.  This is DIFFERENT than the typical bond fund which goes on ‘forever’.  So in effect, EHT acts similar to the numerous individual corporate bonds that we hold in the Core Portfolio, but giving you the diversification of numerous bonds.

……..

GO TO ORIGINAL POST

FUND DESCRIPTION: Eaton Vance High Income 2021 Target Term Trust is an exchange-traded closed-end fund or a closed-end ETF which is officially described as a diversified, closed-end management investment company.

INVESTMENT OBJECTIVE: The Eaton Vance High Income 2021 Target Term Trust seeks high current income.

STRATEGY: The Trust seeks to achieve its investment objectives by investing, under normal circumstances, at least 80% of its Managed Assets in corporate debt obligations and separately at least 80% of its Managed Assets in corporate debt obligations that, at the time of investment, are rated below investment grade (BB+ or lower) or are unrated but deemed equivalent, commonly referred to as junk bonds. To limit the Trust’s exposure to interest rate and reinvestment risk, the longest maturity of any Trust holding will be not more than six months beyond the Termination Date. The Trust intends to utilize a limited duration strategy, which declines over time. Such strategy seeks to be less sensitive to high yield interest rate risk than longer duration funds. The Adviser monitors the credit quality of instruments held by the Trust and other instruments available to the Trust. Although the Adviser considers ratings assigned by the rating services when making investment decisions, it performs its own credit and investment analysis utilizing various methodologies including both bottom up and top down investment analysis and consideration of macroeconomic and technical factors. The average maturity of the Trust’s holdings is generally expected to shorten as the Trust approaches its Termination Date, which may reduce interest rate risk over time but which may also reduce amounts otherwise available for distribution to Common Shareholders.

FUND MANAGEMENT: Eaton Vance Management serves as the investment adviser to the Fund.

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The Edward Klein book All Out War (that we talked about last week) is out and we just picked up our copy from the local Library.  We are taxed so heavily by the library that we are determined to get our money’s worth lol—-have you looked at your tax bill to see how much money flows to the library????

So far the book is just a rehash of what we already know, so it is somewhat of a disappointment.

JUST IN

According to a POLITICO/Morning Consult poll conducted on the eve of the first anniversary of Trump’s historic election, 82 percent of those who say they supported Trump last year would vote for him again if they had to do it over. That’s slightly more than those who say they would vote for Democrat Hillary Clinton again — 78 percent — if they had the chance.

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BUY ABRN

November 7, 2017

We purchased ABRN in August.  They just went ex-dividend and it is a buy today at $25.37….you can add to the position or buy more.  Pays a nice 7.2%.  Here is the link to the original post: 

https://luvthosedividends.com/2017/08/29/buy-abrn-7-3-woohoo/

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Here is a link to another positive article on one of our Core Portfolio positions.

GLOP Article

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AMLP HOLDING ON DESPITE DECLINE

November 6, 2017

THANK YOU TO OUR READERS:  COMPLETING OUR 5TH YEAR!!

GO TO CORE PORTFOLIO TO SEE A LIST OF CURRENT POSITIONS

We hold AMLP in the Core Portfolio.  It has been a loser, down 15% since our purchase.  But we are getting over 8% in yield so we have held on hoping for better days.

Well as it turns out we noticed yesterday that the leading financial writer on SeekingAlpha.com is writing a very positive article….some copy is pasted below as well as a link to the article.

If you are a technician and follow the charts, AMLP is still not a buy.  BUT If you believe the author is correct and you are willing to take a little risk, you could buy a small position now, or wait for some indication that AMLP is heading higher.

If you own it, just HOLD on.

Based on improving fundamentals both at the macro and micro levels, we believe MLPs have rarely been more attractive as an investment. A shift in sentiment should happen anytime and will drive positive fund inflows into this sector as valuations remain deeply discounted versus historical levels. MLPs continue to place multi-billion dollar projects into service, enhancing their cash flow and growth prospects. They are also set to be among the biggest beneficiaries from the recent increase oil & gas production volumes in the United States. Increasing utilization of existing assets will drive earnings and distribution growth with minimal investment needed. Midstream management teams learned valuable lessons throughout the downturn in the years 2014 and 2015, which has led to stronger balance sheets and a much more solid sector overall. Within the sector, many stocks and securities currently offer investors yields well above 10% and the opportunity to lock these yields at very attractive valuations.

https://seekingalpha.com/article/4119243-high-yield-investing-midstream-mlp-sector-offers-compelling-opportunity-yields-10-percent

(NOTE:  A reminder that a single position should NOT represent more than 4% of your portfolio:  it will help minimize your losses like we have with the decline in AMLP)

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NEW TAX BILL A FARCE

The idiotic and moronic Republican Party should be kicked out.

While the original House budget balanced on paper and offered some real savings, the Senate’s version accepted today by the House fails to reach balance, enacts a pathetic $1 billion in spending cuts out of a possible $47 trillion, and allows for $1.5 trillion to be added to the national debt.

Make no mistake – this is a defining moment for the Republican party. After years of passing balanced budgets and calling for fiscal responsibility, the GOP is now on-the-record as supporting trillions in new debt for the sake of tax cuts over tax reform and failing to act on the pressing need to reform our largest entitlement programs.”

More Funny-full article

One of the central tenants of our investing strategy has been, and will continue to be, cautioning people to take what they hear/read in the financial news media with a grain of salt. We have likened CNBC to financial pornography as the cable news operators struggle with relevancy. Financial news hasn’t been immune to that trend. In addition, the addition of Fox News Business added another competitor to CNBC and Bloomberg taking away a subset of eyeballs in a rather small total population of watchers of market news. The need for attention-grabbing headlines in a world of cable-cutting and more competition is more important than ever.

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Positive article on Iron Mountain a position in the Core Portfolio.

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