I am a private individual investor working to build a long lived portfolio to support my wife and I in retirement and one day pass to my children.
Unfortunately, the largest position in my portfolio is RSO. I understand in investing in high yielding securities of companies such as RSO, it is not primarily or even at all sometimes a capital gain play, though I was hopeful for some small kind of value gain over the next 10 years.
If I could put in to words my disappointment with RSO over the last two years, but even as an above average intelligence person, I cannot find the words. I have listened to all the conference calls, religiously read and study the 10-Qs (I am a credit analyst by trade so not unfamiliar with financials), and listen to the words spoken and promises made, maybe promise is not the right word as no one can promise the future, but encouragements made about their constantly being a “robust” pipeline, etc.
I have watched my yield cut down by 20% and watched my value decline by 33% as I have remained hopeful based on what I hear in the conference calls that a corner will soon be turned.
Alas, once again a quarterly report so disappointing, I again do not know the words.
We all live with regrets, one of my main ones is having RSO be a large position in my portfolio to large to just take the loss and get out, the other regret is that I have not heard even one shareholder call for changes in upper management who are very successful in value destruction, while being paid very heftily to do so.
There are decisions in life that are driven by anger (those usually turn out bad), then there are decisions driven by reason, logic, and facts; those usually are the better ones that produce better results.
The facts are the leadership and management team have successfully created a high yielding mirage that excels at destroying value on a consistent basis and are paid very well do to so. Simple reasoning would say to any sane individual that if you have a person, however sincere they may be in wanting to do their job, simply are unable to do it. This appears to be the case. Logic, in this case, provides the only logical course of action….the immediate resignation of senior management and the board so that RSO can again benefit us shareholders (who are little guys with barely enough to retire and families that depend on us for food and electricity and a bed to sleep in).
I am not here, nor am I qualified in any way to question your sincerity in what you do with and for RSO or how you do it. I simply state the facts that your team has destroyed wealth and with it hopes and dreams of many shareholders…..that is a fact….and if your performance produces those results, your performance fails to meet the basic standard for what the job needs. In my world of normal people, if I fail to meet the basic standards of job performance, an new candidate is needed.
I hope, there is one decent person on the board that can take note of what your and managements actions are doing to many small individuals out there and hope that to, at least one of you, it matters.
Sometimes it is best to recognize a loss and move on. There are better investments than RSO and I finished selling my last share today. (I have been reducing my position since last summer).
I have been buying the following stocks/funds and would suggest that you might find one or two of them better suited to your investing objectives than RSO currently is.
I have given reasons under the thread on this board labled PSEC that logicaldeduction began today.
You may find something more to your liking, I did.
Wishing you the best
lunco, thanks for the advice, I do have a small position in GABUX, watch out, value trap, you'll get div but consisently give up NAV to get it......BDCL is good, I had a good postition and sold out for a 30% gain, reason, read the fine print, if for any reason BDCL loses 25% of market value on last day of month vs first day of month BDCL will be closed and it is leveraged to swings are magnified....it paid me good when I had it, but the fear of a crash and an easy 30% (think 15%x2) swing scared me off.....I will at some point recognize and move on, but can't do it now....thank you again!
Winter, I am in a similar situation, retired, and with 34% of my portfolio in RSO at average purchase price of 6.03. With the dividends and ROC, still a decent return. Fortunately I had large REIT positions in NRF and NCT over the last several years which saw very nice PPS appreciation. But I'm not giving up on RSO, have not sold any shares, and considering the financial melt down we went thru, many REITS did a lot worse than RSO. As far as earnings go, we'll see, but they are still optimistic they will cover the dividend with AFFO by year end, so there's the glass half full, not half empty. Kind of interesting that all of NRF's 2013 dividends were 100% Return of Capital, so let's not give up yet on RSO. Best of Luck.
Hey, did you know that the actor Tony Curtis' real name was Bernie Schwartz ... maybe he's a relative. Heck, he's dead now ... you could claim him as a cousin ... who's to know.
Your points are somewhat valid. Read the transcript of the CC and one of the analyst essentially ask Cohen the questions your are posing regarding not creating shareholder value and lack of share appreciation. I understand your pain and particularly if your average cost per share is significantly under water on a relatively large position. That said RSO has and continues to pay a healthy and steady dividend. If your investment objectives are short term PPS appreciation this is the wrong stock. If your investment objective is relative low risk and income generation this is a pretty decent place to camp a portion of your portfolio. From what I take away from the CC ,past year o performance and big picture going forward, RSO is in a transitional timeframe. I think the dividend is safe for the next couple of quarters. If over the next 6 months there is no improvement in AFFO it may very well be time to bail. In the meantime collect your dividend and perhaps consider selling a portion of your holdings here, swallow the loss and move ahead. Good luck
Point well taken, I am by no means a trader, I am long term and remain very cautiously hopeful that 3-5 years from now RSO is in a much better position.....able to slowly grow NAV, maintain and possibly slowly increase div.....I am very frustrated with the lack of delivery on all the robust pipeline BS.
Good post. On the CC, Cohen said that he expected to cover the divy by the 3rd qtr, and that they would continue the divy through the end of 2014.
I totally agree that they are in a transition. They survived the fall, however, and paid substantial - albeit lower - divies throughout. There were companies that did not make it at all.
I used to be getting a 13% dividend, that has been reduced by 25% and it appears likely to be reduced in the future......my point is this, emotional decisions rarely make for good long term decisions....decisions based on facts and logic make for the best long term decisions.....if a person or persons are incapable of doing their job successfully then another candidate who can do the job must be found....that is how it works....they have FAILED to increase value or increase income, they have destroyed both....that is not wha the management and leadership of a company are hired to do or paid to do.....20% of my income from the position has been destroyed, 33% of the value of my position.....again, I understand capital gains are secondary in this space, but competent management can slowly grow NAV over long periods of time.....by every metric this managmenet team has failed....unless you look at the metric of their compensation......that is poor performance by any standard and I am very dissappointed in what they have done.