Be careful here, Stetson is the guy who screwed up USV in the first place. Now he's in charge again, trouble on the way. Hidden problems to be disclosed over time. Still have to complete big securitization of last financing.
Never a bad idea to take a profit and diversify but the usual dilemma is where to reinvest assuming already diversified. Sometimes where you are is the right place to be.
I've had to adjust thinking what a good high yield is with a reasonable principal risk as rates continue to drop and many have reduced or eliminated dividends. Secure dividends of 10% plus are rapidly fading from the scene as share prices rise to reflect the payout in relation to general interest rates,although some flyers will always exist. Of course 10% plus with dividends and cap gain sales is with us still for those who like to cash out now and then. Good Luck
Excellent post! I must say the quality of the dialog in the REIT message boards far exceeds what is found in the other market segments. I suppose it is because here are found real investors looking for serious returns and not hackers and punters.
Anyhow, mtgguy, you've given me some real help in deciding how to deal with cap apprec. on these stocks. One question though, if you took a position when it was yielding 10% and then got 20% appreciation, why close the entire position? You've obviously picked a winner and your investment is still yielding 10% at the price you paid. Therefore, why not sell, say, 25-50% to reinvest and let the rest ride?
Nothing wrong with your approach,subscribe to similar method(s) on many different shares and agree perfect timing is difficult to achieve.
The difficulty today is maintaining a high yield requirement while what were acceptable double digit risks are now in the single digits with few exceptions. Regards
I have to admit I am wavering on whether to hold USV longer or to close out the position. Usually, when I am uncertain, I hold until things get clearer, especially since all the news has been good, recently. Prospects for USV in near future look neutral to better than average...which argues for holding a little longer. I do appreciate the civil exchange of ideas and opinions...so many boards are all vitriolic exhanges of juvenile nonsense. Good luck to your group.
It took me a long time to convince myself that an invested sum of money was yielding a return not on what I paid for it but what it was currently selling for...so I think I can invest "new money or recycled money" in securities yielding higher returns today than USV is at its current dividend and price.
My thought process says when I invest in XYZ at 10% annual yield that if I get 20% capital appreciation ( 2 years of income) sooner than 2 years, I should sell the position and reinvest the initial investment plus appreciation in something yielding 10%(or hopefully better), because XYZ is now yielding something like 8.75%. It's not a hard and fast rule with me...sort of depends on what the quality of the alternative investments are at any moment. At the moment, I have two or three possibilities that I am tracking as an alternate for USV.
In recent weeks, I have taken this approach with EPR, NHP and MHX...all reaching new 52 week highs. Closed out those positions and bought more USV, CWN, RVT, BLU, ASG, and SGL...some of those close outs have gone on to higher market levels...but as part of the discipline, I never second guess myself on what might have been...it never shows up in my monthly account statement. I closed out of several O & G royalty trusts last year before receiving the first distribution, realizing as much as 30% appreciation...others I held through several distributions and 20%+ capital appreciation...then exited. Left tons of money on the table as they moved significantly higher, but....that recycled money last July is what I used to start my USV position as well as others. If something I own doesn't appreciate, I am usually content to let it ride for the income until it does or until it begins to disappoint...then I am prepared to recognize a loss and move on. Your observation about yield chasers in a declining short term interest environment potentially pushing USV to even higher highs has merit...I try not to time things since I can't do it proficiently...I work at meeting my total portfolio annual income goal and not being too greedy. Regards.
your opinion is noted and appreciated both for the others on the board and our group.
we are very happy with what USV is up to and will hold on thru the balance of the year.
one of our "research" items we hung our hats on was the continued reduction in interest rates and this has also hit of late. this obviously has impacted USV and it related bump in price.
if you are up in appreciation i would just put a stop loss in and ride this play as we see nothing but continued good news -- no sense to sell a winner that pays 10-11% per year in this environment.
anyway, thanks for the note and i am glad you wrote as we do agree that those on the board need to understand the diff between choc and vanilla.........
As to the stock price only: Would not likelyhood of continued dividend and the yield be the large factor in stock price today, aside from your capital appreciation X annual income criteria?
With generally lower interest rates, it's obvious a monthly dividend payer is going to be attractive to yield chasers, especially since prior USV dividends were a return on capital and tax deferred. Today the stock price should be reflective of a low 9%, high 8% yield.
The time to cash out is when general rates start to move higher.
First of all, I am an owner of USV (3500 shares) and have been for nearly a year...I am pleased with the dividend, the capital appreciation, the business plan (as I understand it) and the current management.
I keep on top of my investments, as much as I can, including USV...but I am not a cheerleader...my investments have to work for me and when they don't or I can't make sense any longer of what they are doing or what is happening to them, I have learned to move on. The change in ownership and management created a new level of uncertainty for me; albeit as time unfolds my comfort level is returning.
But in the current economic climate, there are a lot of forces at play that could cause USV to experience financial problems. I have offered my opinion that potential investors need to be cautious. I have opined that having 48% of portfolio in one security is not prudent by my standards: but that's why there is chocolate and vanilla and a zillion other flavors of ice cream. And I can imagine that individually, your group members may be well diversified...but your cheerleading may lead some who read these boards and are short on doing their own research to over invest in USV; so I took the opportunity to throw some caution into the dialogue.
I do most of my own investment research, but have used "investment counselors" and "financial planners" in the past. None of my peers are owners of USV. That doesn't make them wrong and me right or vice versa...it just makes them different. Right now I am looking pretty good on this one. I have had no advice on Lone Star capabilities, other than what I have been able to read about them. Your group is managing a little less than $300,000 by my calculation...with about half in USV...you could be earning the same return, in ten or more securities with no more than 10% in USV. Personally, I currently own 26 things and have 48% in cash equivalents with no more than 6% in any one of them...thats down from 36 positions that I owned about 6 weeks ago...took profits and recognized some losses.
In conclusion, I am still pleased with my USV investment...but I am evaluating whether I should sell it...my general rule with respect to capital appreciation on income producing investments is to sell when the capital appreciation is equal to or greater than 2 times the annual income...I am way past that threshold, presently. Good luck with your group and continued good luck with USV.
going back to your reply to our group dated june 15 you made mention of "financial planners"..........
1--do you use them ?
2--if so, what do they say about USV ?
3--do they know anything about lone star ?
4--our group manages our money with no fees to the group; our account balance is substantial. please look at this reit in a new light.
very much on point from out research........
have a good weekend all
there will be no better REIT to play for the balance of the year re monthly yield and appreciation..........we can easily support a much higher number than $14 with the plans Lone Star brings to the table.........have confidence and do your own research like we have but don't wait too long.