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RISK IS HIGH

July 19, 2014

 ********Go to “Core Portfolio” for current holdings.**********

Depending on which methodology you use, the market is currently 20% to 33% overvalued.

The highly respected Ned Davis Research pegs the median P/E ratio over the long term at 16.7. At a current P/E ratio of 20.7, a fair valuation for the S&P 500 is 1553.  The S&P 500 is at 1940, suggesting the market is more than 20% overvalued.

But….the decline in interest rates this week suggest that the stock market will continue higher……why would anyone buy bonds when they are paying 2.46%??  (Individual corporate bonds are ok and we own several in the Core Portfolio, along with a short term bond fund.)

Even though the low rates suggest that the US economy is CRAPPY the big institutions are buying into stocks….not bonds.  The upward action on Friday illustrates this.

There is no question we are in a bubble.  And it will blow-up.  We just don’t know when.  This market is sky high.  So……. what to do.

I am staying with all positions in the Core Portfolio….for now.  I want to continue earning the dividends while the gettin is good.  It would not be shocking to see a small correction altho with the elections in November we should see continued upward action.  BUT……….if you are risk averse you should think about raising your cash position to 50%.  Or at the very least put in sell stops to protect your positions.

I am looking at Teekay LNG Partners LP. (NYSE:TGP).  If it continues to drop closer to $44.00 I will buy.  Here is a link:

http://seekingalpha.com/article/2323115-finding-value-and-safety-in-two-6-percent-yield-plays

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NPT Nuveen Premium Income Municipal Fund 6.5%

July 13, 2014

********Go to “Core Portfolio” for current holdings.**********

I have never been interested in municipal bonds.  And with the disaster in Detroit going bankrupt I was even less interested.

Except for owning an individual municipal bond from the city I live in (the bond has done well) I do not own this sector.

One of the advisors I follow recently suggested buying municipals.  I do not buy mutual funds in general-due to the high costs- so that was not an option.  I looked at individual issues but they are paying virtually nothing, maybe 2-3%.

I also started reading articles on some leveraged municipal closed end funds and they started to look appealing.  NPT is paying over 6%.

I am not suggesting you buy NPT right now but we are looking at it.  The momentum is Down but we may get a buying opportunity.

Floating rate bond funds that are listed in the Core Portfolio look appealing.

Recommended Book:  Blood Feud The Clintons vs The Obamas Edward Klein.  The New York Times today called this a mudfest.  Well I guess if slinging S _T at Obama and Clinton is a mudfest, this book IS IT.  Once you start reading this gossipy tome you will not be able to stop.  What Fun.  I just love this book.  You will read stuff that the lamestream press like NBC would never print in a million years.  Blood Feud just hit Number ONE on the New York Times Book List.

U.S. NATIONAL DEBT CLOCK

The Outstanding Public Debt as of 10 Jul 2014 at 01:33:56 PM GMT is:

$ 1 7 , 6 0 0 , 3 3 2 , 0 0 9 , 1 9 4 . 8 4

The estimated population of the United States is 318,585,889
so each citizen’s share of this debt is $55,245.17.

 

 

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PRH BUY Exchange Traded Debt 5.8%

July 9, 2014

********Go to “Core Portfolio” for current holdings.**********

Buy at $24.75 and under $25.00

Prudential Financial 5.7% Junior Subordinated Notes PRH is debt that trades on the stock exchange.  It trades like a stock.  The income is distributed quarterly.

http://finance.yahoo.com/q?s=PRH

PRH gives provides you a good investment at low risk which is why you are seeing a somewhat low yield BUT its certainly better than a CD or Treasury.  PRH can be called in 2018 at $25.00 which is HIGHER than what you are going to pay…what a great deal.

I really like Exchange Traded Debt and have had good luck over the years.

Can you believe this number:  $747 Billion in assets.  Wow.  Prudential Financial, Inc. is an insurance and investment management organization headquartered in Newark, New Jersey. As of March 31, 2014, the company had total assets of $747 billion and total shareholders’ equity of $39 billion.

Bottom Line:  Unless Prudential goes belly up which is most unlikely you have very little risk and a pretty good yield.  We also hold VZA and JMPC which are debt issues, in the Core Portfolio.

It is very important that you understand this:  From Marketwatch.com:  In short, stocks have become more attractive not because of a surging economy or strengthening corporate profits, but because they are the last-place finishers in an ugly contest. That’s a significant difference with boom markets of the past.

According to a recent new poll from Quinnipiac University, Obama is considered the worst president since World War 2.

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FREE ACCESS TO FORBES FINANCIAL NEWSLETTERS

July 8, 2014

Forbes is offering free access to their entire list of financial newsletters.  This is a great opportunity to get loads of free investment suggestions.  And you may decide to subscribe to one of them.  (They are all first rate, I used to subscribe to several.)

Load up the paper tray and download to your hearts content…………before this offer expires.

http://www.forbes.com/newsletters/all/

If this goes to a Google page, hit the top listing.

(Just for the record I have NO affiliation with Forbes.)

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SELLING KYE

July 8, 2014

We hit a home run with KYE.

We have nice gains.  I don’t like the way this thing is acting, and am SELLING right now.  OR you could put in a stop at $31.12

KYE has a history of spiking and then diving back down.  That may be happening again, so I want to take profits and get out of Dodge.

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GREAT FINANCIAL WEB SITE

July 2, 2014

********Go to “Core Portfolio” for current holdings.**********

There are half a dozen web sites and financial advisors that I follow.  The sites are free and the advisors dish up free and valuable info on their sites.  There is only one service that I actually pay for.

One of the most valuable and free sites that I would like to suggest to readers is http://www.seekingalpha.com.  This site is similar to a peer reviewed medical journal in that all submitted articles are open to praise and criticism from readers.  So over time, the excellent authors gain a following and the bad or non educated authors drop out.

I look at this site several times a day and I strongly recommend it.  They discuss literally all investment methodologies including dividend paying strategies.  You will eventually identify those authors that meet your needs.

Funny Quotes Dean Martin-famous singer and former sidekick to Jerry Lewis:  I don’t drink anymore.  I freeze it and eat it like a popsicle.  Go here for more.

Quinnipiac found 45 percent of voters say the country would have been better off if Mr. Romney, the 2012 GOP nominee, had been election, while just 38 percent say Mr. Obama remains a better choice. Even Democrats aren’t so sure — just 74 percent of them told the pollsters Mr. Obama was clearly the better pick in the last election.

Voters also rate him the worst president since World War II, topping even his predecessor, President George W. Bush, who had left office with terrible ratings.

Movies:  Transformers.  Two and a half hours of constant explosions and special effects is just WAY TOO MUCH.  Skip this mess.

Book:  The Amateur by Edward Klein.  This is a must read.  If you want the REAL story of what’s going on in the White House, read this.

Former Secretary of State Hillary Clinton‘s fumbles and bumbles in the rollout of her latest memoir, Hard Choices, has knocked the wind out her easy sail to the White House and put her support in key 2016 presidential election matchups below 50 percent for the first time.

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General Finance Corporation 8.125% Senior Notes Due 2021 GFNSL

June 25, 2014

********Go to “Core Portfolio” for current holdings.**********

General Finance is offering Senior Notes at 8.1%.  We are taking a SMALL position today.  Do NOT overpay on this one.

http://www.generalfinance.com/companies.html

I really like Senior Notes and suggest all readers buy a little.  This offers a very nice yield.  Here is a description:

A debt security, or bond, that takes precedence over other unsecured notes and must be repaid in the event of bankruptcy. Senior notes are relatively secure because of their priority status in the event of liquidation. With this added security comes a reduced interest or coupon rate as compared to junior bonds.

Update:  The market continues up.  As one advisor put it, The trend’s your friend…don’t fight it.

GGN which is primarily gold and some oil has been heading up for months.  You should be in this.

We have huge gains in KYE and you should place a stop in case this thing tanks for some reason.  I do NOT expect a decline but you dont want to lose profits.  It is going ex-dividend Juy 1, so you can expect a small decline but that is no reason to sell.

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