I would like to project Mr. "T" the winner, based on my mathematical projection algorithm.
.22/mo x 12 = $2.64 not much to compensate for the principal loss. Since, June 2014, stock has dropped 12-13 dollars. It will take five years to recoup principal for $2.64 x 2 = $5.28 of dividends. If you add in the income tax you have to pay on the dividends, it is an enormous loss this past two years.
If you want to ignore time ranges and just look statically at todays price and dividend.....YOU ARE DRASTICALLY IGNORING REALITY. As rates rise, share price should fall, and the dividend will stay static at .22/mo. This is a decline related investment with very low to negative returns going forward, "NEGATIVE YIELD SPEAD".. You have got to calculate your annual amortization of principal loss, which is twice or three times higher than the dividend rates being paid. You are not compensated at all for the risk. NO BRAINER, TERRIBLE INVESTMENT IF YOU ASK ME.
Oh my gosh,,,,,,lots of discussion. You are discussing symptoms in our economy brought about by many factors. A large one is demographics. Raising wages of the working poor bringing them into the middle class. There are lots of variables, lots of ways to divided and label the aggregates of working folks. But working folks is just part of the equation. In your discussions, you seem predisposed to "Working Folks" but you are ignoring the "non-working folks". Demographics studies show a "MASSIVE CHANGE" is occurring (RE: Harry Dent). This has to be considered, because we are transforming from a large work class to a large non-working class economy. I define non-working as (none employed (out of work or disabled folk), under-employed, self-employed, retired, and folk who don't work and collect paychecks, or more simply government folk.
The problem isn't with just raising minimum wage for one class of people like the working poor it is about 'INCOME INEQUALITY" brought about by policies of the government and special interest. A prime example is "Zero %" interest rate policy has stolen enormous wealth from all the classes I listed above, inflated wealth for the top 1% and created mal-investment into capacity and businesses we don't really need or want.
(s0rry accidentally cut myself off)
......assets. Borrowers issued massive amounts of low grade debt to MLP's and M-REIT's all to create SPO's to fill this insatiable demand for yield, I call all this the QE BUBBLE. It encouraged mal-investment in oil production, oil transport, and other unproductive projects that will only make sense in a short horizon and would never get funded with massive issuance of low-grade debt at a very very low hurdle rate, remember the IRR of a project is a hurdle rate for the long term, 20-30 years not 1-3 years. You know how the housing bubble ended, this one will end too and not so nicely.
Loss of fiscal control will result in inflation, as the value of assets are very questionable when valued in real dollars, hence more dollar to purchase. Right now global bankers were playing a game of who can create the most psychotic variant of quantitative easing, Ben Bernanke's grotesque brainchild, which should lead to irretrievably destabilizing the global financial system once again. It was an incorrect understanding of the Phillips Curve which overlooked the relation between quantitative easing provokes neither inflation, neither unemployments, neither industrial production, nor real investment, nor consumption. The entire operation involves buying up income-producing bonds and replacing them with zero-interest money, the goal was to produce discomfort with the form in which investors are forced to hold their savings, which doesn't encourage people to save less, they just look for alternative forms of savings in more wildly distorted investment theme, such as MLP's in energy, Highly Levered Mortgage REIT's. etc/. So investors splurged into very SPECULATIVE/RISKY
I would like to be the first person of all the mortgage REIT message boards to introduce the subject of "REVERSE YIELD SPREAD" or "NEGATIVE YIELD SPREAD".
Unlike positive yield spread, which was popular during the FED distortion of "ZERO PERCENT" monetary policy, I would like to introduce the mortgage REIT message board community to negative yield spread.
It is spreading in Europe negative yields......but this is the endgame in Europe, which will end soon, last weeks action by the ECB is evidence of increasing panic. Other economies are not far behind. The greatest risk is that Mario Draghi may get their wish for higher inflation, but not at all as they intended. All of this distortion may finally create inflation by provoking a loss of fiscal control. I believe a lot higher inflation is coming with a bang and along with is "NEGATIVE YIELD SPREAD".
I WOULD INVEST IS DECLINE RELATED etf's and bet on total loss of control. I loaded up on TBT at 36, there is not much downside only can go up of stay same. UUP is solid too.
Why do you seem surprised. As interest rates rise (FED), book values of Treasuries will drop, all maturities. That is a widely held truism in the investment world. We had 7 - 8 years of lower rates and now rates will slowly rise and book values will slowly decline. When AGNC dropped from mid 20's to 16, that is what the market was telling you. This temporary blip up is just traders. The market is made up of positives and negatives, investors are constantly fine tuning valuations. Hence, 18/21 is 85.7% of book is very very high for a decline related stock. For those who want safe yield, the preferred like AGNCB which I loaded up at 23-24, is a very very very safe investment in a rising rate environment, 8 - 9% nominal yield, taxed at regular income tax rates (doesn't qualify for qualified dividends).
If you want a tad more risk, I bought some TBT at 36, figuring it was at the bottom and with spring here, oil and gas always move up due to seasonal driving demand so the traders are bidding up oil, along with inflation which will give the FED's a green light to do the second rate hike. I think TBT can go to 45-48 by May, if it goes higher, better for me.
Hello, getting ready to go to the other side. Out of TBT for a solid $2 gain and back into Drip at 57. Last sale was $128.
My hope is DRIP flips up over $200 in a few days. Please, lets all pray for this, think positive.
All those short oil stock Marathon Petroleum, pat yourselves on the back along with Dr. Klumps who told you to short oil stocks that haven't gone down last August-September. MRO is one that is fairly valued now with the cash infusion from equity sold at $8.00, there may be more selling but I don't see this going under $7.00 in the short term. COVER.......enough said, book profits from the short at $20.
All of those were good entry points. TBT between 38-42 has very very almost "ZERO" probability of going lower.. But very high probability of moving higher. Hence, you should go into advance related investments and steer clear of decline related investment ideas.
THIS IS A GOOD BET AT 36-37, pick up some easy money for the SPRING economic boost, everything seems to bloom and grow in Spring, along with cars sales and the economy. People start eating out more, spending, Good time for an Easter Bunny rate hike by the FED.
TBT looks real good at 35-36, if you bought at my huge buy tip, 38-42, you have very minimal downside and a lot of upside potential. Now with inflation coming back big time TBT could SOAR here for a really nice gain.
They FED used a model that has in the past predicted the future rate of inflation given an assumed path of oil prices. They backtested this model from July 2014 through December 2015, and the model predicted future inflation almost perfectly:
So the authors decided to insert the market’s future inflation expectations, using the premium paid for Treasury inflation-protected securities (TIPS) to figure out where future oil prices will go.
As you can see from the above chart, the Fed model’s implied oil price by mid-2019, given the market’s inflation expectations, is zero. That’s far different than what the futures market says will happen to the price of oil, which expects a rebound to around $50 in three years. Of course, oil traders have been consistently wrong about the future price of oil too. Just last year, they were predicting that a barrel of WTI would cost around $60, whereas its actually selling for around $30.
o be clear, the St. Louis Fed economists are not predicting that oil will be free in three years. That just makes no sense given the importance of oil to nearly every economic activity one can think of. But it does underscore how contradictory economic data is today, and how much financial markets are out of whack. The markets expectations for future oil prices and future inflation just don’t make a lot of sense when you put them together.
This dynamic has posed a problem particularly for the Federal Reserve. When Fed governors meet next, which will be in mid-March, to decide what to do with interest rates, they’re going to have to discount one or another of these variables. Either the market is overestimating inflation, or underestimating the future price of oil. It’s Janet Yellen’s job to decide which is which.
Klumps take is oil will decline, labor inflation will rise, capital asset prices will decline. Doesn't make much sense, historically speaking, but the markets are out of whack BIG TIME, we need to TRUMP everything to greatness.
I am trading DRIP due to higher highs, higher lows. Period, I am making a splash in this. TBT I made a fortune in that too. If you read my commentary, these are short term trading vehicles. I said the trading on this is long term or if I was misinterpreted, I said you can trade this for the next 10 years the trend is up. The market downturn this past two months is a fundamental that can't be ignored, it is like kryptonite to an ULTRA SHORT TREASURY etf. Hence, if you are not experienced in this you shouldn't be in it. I abandon trades in ultra short treasuries when there is a "FLIGHT TO SAFETY". Money moves into treasuries en-mass and will eventually move out when the market drops enough and the fear of overpriced assets has settled. Right now, the fear of overpriced assets is very high and there is massive distribution into these rallies, notice the volatile swings in a day. I expect a VERY MEAN CORRECTION or VERTICAL AIR POCKET down to relieve all these sale orders on the sidelines and all the risk off little folks trying to unload and capture the easy gains before they are all gone.
I'm here. Busy with my Buddy Trumps who may be the next prez. Sorry about the absence, but this campaign has just skyrocketed, I mean this is going to be HUGE.........75-90 % of the vote will go to TRUMP, this is going to be a CONTANGO of a win, historic.