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American Capital Agency Corp. Message Board

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  • arwen_imaginary arwen_imaginary Jan 18, 2013 5:23 AM Flag

    OT ....$$$...EVEP

    Doc, with your knowledge , why these goofy mlps? Why not other sectors?
    I know that you mentioned , trade what you know...

    I know oil is a 79 to $ 105 rollercoaster.
    Have you see the option premuims on vehicles such as SCO ? Soon to be the first no brainer trade of 2013.

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    • Hey Arwen,

      Real easy answer...I like predictability. The most predictable vehicle, I have found, in the market is the rise and fall around high yielding security's EX dates.. I have combed and combed the market and that first brought me to AGNC three years ago, which has historically had the most predictable pattern of all high yielding securities( 10% yields). No other mReit compares.

      There are a few MLP's which come close. like KMP. A few BDC's like FSC. I do not like sleepless nights with roller coaster stocks like SCO. It does not have dividends so it is a non starter for me. With predictability I am encouraged to make larger and more confident bets with options, leveraging my belief in historical precedence impacting future outcomes. It also allows for precise surgical incisions over brief time periods allowing most of my capital to be safe, in cash, and not exposed to the vagaries of the marketplace, 100% of the time. Huh?

      Well, I only trade with 20% of my capital and only 5% of that capital on any one trade, so the most(80%) of my capital is always protected in cash equivalent vehicles.

      So now you know...;-)


    • Arwen,

      How are you playing SCO then, since it is a no-brainer? Were you aware it has been as high as 295 pre-split, and its current PPS is at a 1:5 split adjusted price of 7.40? I think it will continue to sink further into the mire and probably split again to bolster the PPS, much like VXX.

      What do you think??


    • Stern!!! You don't like KMP? The PPS moves from $78 to $90 on a regular basis back and forth. I hold in a IRA, if held long in a taxable account the big dividend is a non taxable "return of capital" in the US. By the way does your girlfriend have a mother?

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