CASSANDRA'S HYPOTHESIS

In Greek mythology, Cassandra was the daughter of King Priam and Queen Hecuba of Troy. Her beauty caused Apollo to grant her the gift of prophecy. However, when she did not return his love, Apollo placed a curse on her so that no one would ever believe her predictions. In any case, Cassandra sees a lot of controversial things happening during the next few years. As Cassandra so aptly says...."Forewarned is Forearmed."

This Day in History

Wednesday, October 29, 2014

Gold: Making The Most While Avoiding The Risks - A Strategy For Income Investors??? - SPDR Gold Trust ETF (NYSEARCA:GLD) | Seeking Alpha

In May of this year, I wrote about a way for conservative investors toearn superior rates on their emergency reserve liquid cash (or near-cash) assets using gold and covered option writing. In this article, I will review the strategy's results to date and explore some of the current myths surrounding gold, including a factual rebuttal to a recent gold article that provides an example of the misleading, inaccurate, and unreliable information being written about gold which you must be wary of when reading any reports and advice about investing, yes - even my advice. This is true especially about investments with traditional allure, such as precious metals.   

Monday, October 27, 2014

Oil Companies Sensitive To The Oil Price Decline And Those That Are Not | Seeking Alpha

Summary

  • Oil price has declined about 25% since June 2014.
  • Let’s see which oil companies were more sensitive to the oil price decline.
  • Let’s see which oil companies weren’t as sensitive to the oil price decline.
  • Now maybe a good time to start dollar-cost averaging into quality oil companies for a higher starting income after the price decline.    

Friday, October 24, 2014

How Did High-Yield Dividend Champions Do During The Great Recession? Part 1 | Seeking Alpha

Many investors use the Dividend Champions as a starting point for selecting dividend growth stocks. The lists provided by David Fish (thank you, David) consist of stocks whose dividends have risen every year for 25 years or more.
In this article and the articles to follow, we will examine the dividend champions that have fallen off the list. The list is released every month. To make the data more manageable, this article only uses the lists released in January from 2008-2014 and the September 2014 list.
The great recession lead to a large number of Dividend Champions falling of the list. Did the market give us warnings about which dividend champions were most at risk?   

Thursday, October 23, 2014

7 Higher-Yielding Stocks With A Low Price To Book | Seeking Alpha

When looking for value-priced stocks, the Price-To-Book (P/B) ratio is one that I like to consider. P/B is calculated as share price divided by book value per share. Book value is most often calculated as Assets less Liabilities.
Some people conservatively calculate book value as Assets less Intangibles less Liabilities. I prefer this calculation since it excludes goodwill and other intangibles which might be difficult to recover in a liquidation, and that is what I will use in the calculations below.

Tuesday, October 21, 2014

Gold and the Upcoming Deflation Cycle?? | Casey Research

Gold has been in a secular bull market since 2001, when it began rising from a low of $250. It had been in a bear market for the prior two decades after peaking out at $880 in 1980. Disinflation and the end of the Cold War dampened gold’s appeal through the 1980s and 1990s, as did the strong returns generated by bonds and stocks.
Then 9/11 happened, followed by the Iraq and Afghanistan wars. Once again investors began looking at gold as a potential beneficiary of increasing world strife. We started to see both money and credit expand, and investors began considering the implications this could have for future inflation. Gold soared to $1,900 in 2011, and one analyst after another predicted ever-higher prices for gold—$2,500, $3,000, $5,000, and higher.

Thursday, October 16, 2014

Vanguard Natural Resources Puts Oil Price Decline Into Perspective - Vanguard Natural Resources, LLC (NASDAQ:VNR) | Seeking Alpha

As a group, the upstream E&P MLP unit values have been hit hard with the drop in crude to the low $80s per barrel. Unit prices have dropped by 30% or more over the last couple of weeks. To possibly put a stop to the selloff, Vanguard Natural Resources (NASDAQ:VNR) issued a news release outlining the company's distributable cash flow sensitivities to a range of natural gas and crude oil prices. The announcement seems to have helped the VNR unit value and may be of use to understand where some of the other upstream MLPs stand.

Wednesday, October 15, 2014

Mailbag Monday: Marshall Islands | Seeking Alpha

The Marshall Islands are located in the Pacific Ocean, east of the Philippines. Most shipping MLPs are considered foreign private issuers and are organized as Marshall Islands LPs.

Sunday, October 12, 2014

I.M.F. Warns of Global Financial Risk From Fiscal Policies - NYTimes.com

As global leaders sounded the alarm about a slowing world economy, a more immediate concern drew the attention of policy makers at the International Monetary Fund’s semiannual meetings last week: inflated asset prices and increasing levels of debt overseas.
Bond markets in the eurozone are booming, debt in China is at historic highs and the United States stock market, even with its sharp fall last week, has been on a tear.

Friday, October 10, 2014

Steady Income, But No 'Icing On The Cake' In 3rd Quarter For Savvy Senior IRA | Seeking Alpha

Summary

  • "Savvy Senior IRA" portfolio continued to churn out cash income at a 9.3% annual rate.
  • But third quarter downdraft removed any capital gains accrued during first half of 2014.
  • So I had to remind myself over and over: "It's the Income, Stupid!".
  • Meanwhile, I realized that OXLC isn't the only "ultra-high-yield" game in town, and diversified into some other ultra-high-yielders as well: CEFL and MORL.
  • Is that jumping from the frying pan into the fire???? You decide!!

Thursday, October 9, 2014

3 Income Stocks With Dividend Yield + Share Price Upside | Seeking Alpha

Income-oriented investors looking for an attractive dividend yield to support them during retirement should seriously consider these 3 stocks. Using our screen for attractive opportunities, these stocks have a meaningful yield >3%, a conservative payout ratio <60%, and an opportunity for share price upside. With these factors as the primary consideration of attractiveness, we have identified 3 stocks that stand out as clear winners.

Monday, October 6, 2014

Regression to Trend: A Perspective on Long-Term Market Performance

About the only certainty in the stock market is that, over the long haul, over performance turns into under performance and vice versa. Is there a pattern to this movement? Let's apply some simple regression analysis (see footnote below) to the question.  Below is a chart of the S&P Composite stretching back to 1871 based on the real (inflation-adjusted) monthly average of daily closes. I've using a semi-log scale to equalize vertical distances for the same percentage change regardless of the index price range.

Friday, October 3, 2014

3 Safe Stocks For An Uncertain Market???? | Seeking Alpha

In case you haven't noticed yet, the stock market this year has been a lot different than in 2013. Not only have we seen much lower overall returns so far, we have experienced more volatility too.

Wednesday, October 1, 2014

Major Stock Market Selloff Looms As The Fed's QE3 Ends?? | Seeking Alpha

Since early 2013 the US stock markets have done nothing but rally, levitating thanks to the Fed's oft-implied backstop. This incredibly unnatural behavior has left sentiment dangerously unbalanced, with hyper-complacency and euphoria running rampant. Only a major selloff can restore normal psychology. And with the Fed's third quantitative easing campaign ending, odds are high such a big downside event looms.

Monday, September 29, 2014

Bill Gross PIMCO Exit Creates Unprecedented Value In CEFs ??? - PIMCO Dynamic Income Fund (NYSE:PDI) | Seeking Alpha

Summary

  • Bill Gross has departed PIMCO today, following the dramatic exit of Mohamed El-Erian earlier this year.
  • This and other recent negative press has caused capital flight, which has pared PIMCO assets under management this year.
  • PIMCO is a global asset management firm with ~$2 trillion under management and currently employs the top fixed-income managers in the country.
  • Unprecedented value has been created in closed-end funds (CEFs), which marks a buying opportunity in several funds that investors should note.
  • Market pundits view this news as a move that will harm PIMCO, however this bashing only serves short-term interest.

The Financial Crisis is mainly an Energy problem | GoldSwitzerland

On behalf of Matterhorn Asset Management, financial journalist Lars Schall talked with the Dutch economist / oil analyst Maarten van Mourik about the book “The Misunderstood Crisis: It’s the energy stupid!”

Sunday, September 28, 2014

Should we Maintain Our Buy Rating On Canada ETFs After 29.77% Gains ?? Seeking Alpha

Our positive expectation for growth in Canada is based on the economic indicators remaining relatively strong. Thanks to reasonable growth figures, firm readings from corporate earnings, and ongoing healing in consumer sentiment, we think that the key decision for investors for the next twelve months is likely to involve backing the improvement.

Saturday, September 27, 2014

A Rational Look at Gold?

The fundamentals that drive gold prices higher are in full force and improving. Central banks are buying more of the precious metal (to add to their reserves), while countries that are known to be big consumers of gold bullion post increased demand.

Thursday, September 25, 2014

7 MLP Closed End Funds On Clearance Sale? | Seeking Alpha

Summary

  • Closed end funds focusing on the MLP sub-sector are currently trading at extreme discounts to net asset value and represent a very attractive buying opportunity.
  • The recent declines in price have coincided with announcement of the Kinder Morgan reorganization, which has been generally seen as a positive factor for the MLP sector.
  • Particularly attractive opportunities exist within seven MLP closed end funds.

Wednesday, September 24, 2014

Lithuania Feels Squeeze in Sanctions War With Moscow - NYTimes.com

 In the sanctions war between Russia and the West, Kasia Jankun’s 80 dairy cows seem to be losing.
The sanctions, which are taking a toll on Russia’s economy, cut both ways. And Ms. Jankun and other small farmers in this Baltic nation of three million people are bearing an overwhelming share of the pain from a Russian ban on European dairy products.
Former Soviet bloc countries that, like Lithuania, are part of the European Union and the NATO military alliance might seem safe from the Russian strong-arming that made Ukraine so vulnerable. But in economic standoffs, it is often the most vulnerable that suffer most.

Retired Investors: Learn The Success Secret Of All Great Value Investors: Part 2 | Seeking Alpha

Summary

  • The secret revealed that all great value investors possess.
  • Avoid the great investment mistake.
  • When in a highly charged emotional state, common sense and rational thought are often abandoned.
  • The most accomplished value investors are able to recognize the difference between intrinsic value and market price.

Thursday, September 18, 2014

What's The Safest Investment Strategy? | Seeking Alpha

Many investors with little appetite for risk think cash is the safest asset class. After all, if you have no investments, you have no investment risk. That’s true enough, but it’s reassuring only if you ignore inflation and taxes. And of course, most individuals do pay taxes and everyone experiences inflation.

Wednesday, September 17, 2014

Post-Lehman, Money Market Fund Protections Still Weak - NYTimes.com

Jennifer Taub is a professor at Vermont Law School. Her book “Other People’s Houses” was published in May by Yale Press.
Filed before dawn on Sept. 15, 2008, the bankruptcy of Lehman Brothers Holdings Inc. spread panic through the financial system. Within hours of the filing that Monday morning, what should have been the contained demise of a venerable investment house turned into a widespread financial crisis.

Tuesday, September 16, 2014

Deflationary Spiral Nonsense; Keynesian Theory vs. Practice???

The idea that falling prices are bad for the economy is ridiculous? Taking out insurance against falling prices is even more absurd.  Ask any consumer if he wants lower gas prices, lower food prices, lower hotel prices, lower computer prices, or lower prices on any consumer items and the answer will be yes.  Next, ask any consumer who needs a coat, computer, TV, or any other needed item if he would he wait a year to buy one because prices were falling.   Assuming the consumer had enough money to buy any needed item, he would buy that item now.

Friday, September 12, 2014

Building An Income Portfolio With Closed-End Funds. Part 2: MLPs | Seeking Alpha

  • This is the second in a series on using closed-end funds for the core of a retirement-income portfolio.
  • The article explores CEFs for energy master limited partnerships with regard to distributions, total-return parameters, discounts and relative tax-efficiencies.
  • More than 20 funds are covered.

Thursday, September 11, 2014

A Basic Lesson In Stock Picking With Examples | Seeking Alpha

Summary

  • This article shows by example how the author drills down into stocks to attempt to find winners.
  • Suggestions include the use of a screener to narrow the universe of stocks.
  • After narrowing down to a few stocks, drill down deeper using recent reports from the company and from other sources.
  • Finally look at other stock rating agencies and the authors on SA to see if they confirm the findings.  

Wednesday, September 10, 2014

10 Clean Energy Stocks For 2014? September Update And Thoughts On The Finavera Deal | Seeking Alpha

Clean energy stocks and the market in general rebounded strongly in August. My broad market benchmark of small cap stocks, IWM, rose 4.5%, returning to positive territory up 1.7% for the year. My clean energy benchmark PBW also jumped back into the black with an 11.1% gain for the month and 10.8% for the year to date. The less volatile defensive stocks in my 10 Clean Energy Stocks for 2014 model portfolio rose 1.9%. For the year to date, the model portfolio is up 6.2%.

Monday, September 8, 2014

Asia's Fabulous 50 Companies For 2014 | Seeking Alpha

Forbes Asia has published its annual list of Asia's Feb 50 firms for this year. The companies in this list are selected from publicly-traded companies. Here is the selection criteria from the Forbes article:
The Fab 50 is chosen from a pool of 1,300 companies in the region that have at least $3 billion in market cap or annual revenue. Since only public companies are considered, hot privately held outfits such as Alibaba Group and Huawei Technologies are out. We screen for a long series of performance measures, analyze the outlook for each company and throw out any that carry a lot of debt or are more than 50% state-owned. Companies that are more than 50% owned by listed parents are also culled. The result is the region's best of the best.  

Sunday, September 7, 2014

Strong Performance And High Distributions Are Available In Healthcare Closed-End Funds | Seeking Alpha

Summary

  • Healthcare is the top performing sector this year.
  • The Affordable Care Act or Obamacare is driving increased healthcare utilization.
  • Healthcare CEFs offer diversification and active management with industry specific knowledge.
  • Closed end funds are available with distributions as high as 8% and discounts up to 10.9%.

http://seekingalpha.com/article/2465345-electric-utilities-the-american-way-vs-germany-and-australia?ifp=0

Summary

  • Critics of the US solar boom point to soaring electricity costs in Germany as a major risk of subsidies for renewable energy.
  • These sensationalist claims ignore salient differences between the US and European electricity markets.
  • The Australian experience serves as a reminder that the end of US solar subsidies could deal a major blow to some high-flying renewable energy names.

Friday, September 5, 2014

John Paulson Bids Good Riddance to Summer - NYTimes.com

The hedge fund magnate John A. Paulson seemed to be enjoying himself at the United States Open on Wednesday night, watching Novak Djokovic defeat Andy Murray.  But over all, this summer has not been kind to Mr. Paulson. In July, his $23 billion Paulson & Company suffered across-the-board losses. August was marginally better, according to the latest numbers, disclosed in a monthly update letter sent to investors on Friday.

http://seekingalpha.com/article/2465445-equity-cefs-dont-judge-a-cef-by-its-yield?ifp=0

Summary

  • Yield is the most common factor that investors use to buy CEFs. The higher a fund's yield, the more popular the fund and typically the higher the valuation.
  • Though CEFs generally offer some the highest average yields of any asset class in the financial markets, income investors can easily fall into a yield trap.
  • And if interest rates eventually rise, investors should be placing even less emphasis on CEF yields and more emphasis on a fund's yield stability and NAV growth.

Wednesday, September 3, 2014

Thornburg On Understanding Your Real Real Returns | Seeking Alpha

Thornburg Investment Management says that most investors don’t appreciate the importance of expenses and taxes on long-term portfolio performance.
It’s easy to get caught up in day-to-day market movements, but as most successful investors tell us, long-term success boils down to avoiding big losses and unnecessary costs. Between taxes, fees, and inflation, impressive nominal returns can be reduced to almost nothing pretty quickly. To help investors get a sense for just how important it is to take those costs into account when building a portfolio, Thornburg Investment Management (H/T Cullen Roche of PragCap) has calculated the "real real return" for every major asset class, and the results are much lower than you might expect.

Tuesday, September 2, 2014

New U.S. Bank Rules A Boon For Bond Investors??? | Seeking Alpha

US banks have come a long way since the financial crisis, and that's good news for fixed-income investors. We think better fundamentals and stricter regulations are creating a good formula for banks' preferred securities.
In our view, these securities offer an alternative to more traditional credit-related investments, which in recent years have left many income-seeking investors wanting more. As banks rebuild their capital and reduce risk, the market for these securities-which are subordinate to many pure bonds-is set to grow.

Saturday, August 30, 2014

Divisions Grow as a Downturn Rocks Europe - NYTimes.com

Six years after being struck by economic crisis, Europe is facing a fresh downturn, with few new ideas on the table for reigniting growth and deepening political divisions over the austerity policies that many blame for worsening the malaise.
Even as the United States economy rebounds from its worst recession since the 1930s, Europe is heading in the opposite direction. A halting recovery that took hold in the 18-nation euro currency bloc in the last year has now gone into reverse as Germany, France and Italy, its three largest economies, stumble anew. Some analysts say the region could be headed for another full-scale recession — a slowdown that could have ramifications in the United States, Europe’s biggest trading partner. For American companies that do business in Europe, profits would suffer.

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