I am actually amazed at the civility of this message board especially coming from the dusts of tech wreck. Great job folks and thanks for all the good advice here. (not that i look for advice on message board. no one should) The discussion is quite stimulating for the brain. I actually came across SJT when I was snooping around ACAS,a company with 7-8% yield. (Watch out! We techie investors are now looking for yield after getting burnt by growth) While SJT is interesting, I can't force myself to invest on any one stock or bond or trust in the current economic environment. My best pick is GNMA's!(A good proxy for CASH)
The type of people that buy gas trusts are pretty sophisticated and expect 25%. I know I do and I seriously overpaid. (11.80) BUT, yesterday may have changed a lot of things. The middle east is a complicated place. Don't expect a lot of sympathy from there. For all of the politically correct hubris you hear out of China, Arafat, the Teleban, etc, etc, they still need to be anti-american to stay in power. The Bombing of sudan, the election of Hillary Clinton and the pardon of Mark Rich only add legitamacy to their hatred. On this side, moves to reduce dependence on the miffle east will surely increase. The thought of sending money to people that support the killing of innocent american families will be morally repugnant to most well meaning americans. Pat Buchanan is dead, long live Pat Buchanan.
We could see a serious escaalation in energy prices.
Good morning jdbsd It isn't "gloom and doom" at all. If you want to invest your money in a wasting asset that over the life of the trust, according to latest reserve numbers(which will fall with the falling prices) for that return then go for it. If you do the math, you should get about half of what 10yr T's will provide. I would prefer not to take the risk's and make a little more on other options. Have a nice day.
Sorry guys, I just dont get it. Given current market and interest conditions, spending $12.40 to get (by someone's estimate) $1.00 in annual return (and tax considerations) sounds like a pretty good return.
Why all the gloom and doom on SJT?? Some folks must still be used to the 25% annual return days.
Good morning Jordanite I can't fault your wisdom but be aware, that GNMA's do carry some risk right now. The fed is about finished with lowering interest rates. The dollar is going to go lower to stimulate exports, leading to a little more inflation here. The result is the fed will be back raising rates, and mortgage backed securitys will go down. IMO have a nice day.
Appreciate your caution Nomowk. I have been in GNMA's for a year now, mainly using my tax free account. It has done great so far without the extent of volatality on some of the high yield issues like SJT. I have had some capital appreciation to go along with the yield in GNMA's. I am less worried about dollar right now as investors have no where to run from US. Europe is doing worse than US. Forget about Asia, LAtin America and Japan. My two main worries on GNMA are 1)the dissapearance of surplus 2)Still relatively high levels of real estate prices across the country and especially in California. I am getting increasingly intrigued by SJT. Still can't make up my mind because investing in SJT goes against my priority of maintaining free cash (GNMA) and having a high degree of diversification right now.