I liquidated the majority of what I had in morl today pending a very risky fed announcment in the next 3 months.
I read the whole thing and used to have the same opinion. I think once the interest rate jitters are shaken out it could be a good investment again. I am just saying I beleieve the magnified risk currently is not for me on this one so I sold it today. I also think I could buy back into it cheaper in the next 60 days than the dividend I will collect on it so from that perspective I would come out ahead and not have held the risk during a time that could get really weird. no one knows how individual investors will react to a rate hike. also the financing cost will go up and eat into profits if they raise the fed rate and libor goes up. read the prospectus on it. I think I have a good grip on this investment. I would also venture to say I was probably one of the top 2 or 3 holders of this investment that have made comments on this message board. I would also tell you that I think there are some other investments that havea lot more upside and cumulative returns in the next 120 days than this one and this can be had for cheaper shortly.
maybe it will ahve a beheading when the rate hike is announced and the infdividual investors that mainly make up this note will all panic sell and I will be happy to buy their shares for some stupid price. thats another issue with this investment. its mainly individual investors.
Plus what is your opportunity cost for not putting it in an oil stock or a biotech etc that should see some healthy gain by next spring.
This thing will probably dive down to 14.50 again within the next 10 days based on its current trajectory. Maybe I will buy back in 10 or 20k shares then.
Oh well. It keept on sinking. I am glad I dumped it before it kept going down. Who would have thought. Not sure why you doubt my story. I held 135k shares at one point. I am sure I am or was not the largest holder either. There is always a bigger fish out there
Just because you haven't owned as much as I have doesn't mean it wasn't true. I still have some that I will keep for we but its play money.
I feel like the bottom is in for this fund. oil looks strong. good eia announcement today on oil poroduction falling in the usa and several opec members are demanding an emergency meeting likely due to budget problems from low oil. as well buffet and icahn just place multi billion dollar bets in the sector so smart money is moving in. this will be a boon for this fund. 20-30% up in the next 6 months?
just got finished selling 40,000 shares. needed to do some tax loss harvesting and reduce a little risk before the fed meeting. I am sure this pressure on the price this morning was not welcome....sorry
I will be getting back in after some rate direction clears up but I think its going to take a hit over the next 30 days and the interim dividend isnt worth waiting for
to be more specific until the yield spread widens and it offsets and additional margin cost of the fund due to the increase in libor that is coming.
quit fretting over interest rates and hope for higher oil. they are highly correlated to oil due to the debt in them amd the oil industry represmtation . if you dont believe me run a comparison of cefl and bdcl to CVX . LOR is also highly correlated and tracks CVX which tracks the other majors like
Sentiment: Strong Buy
btw - I think we take one more hit in september when the refineries do turn arounds and oil inventories build. after that I think you see corrective action sometime next year by opec as well as the production finally starts to fall in the us from all the rig cutbacks this year and the final tailing off of the existing wells. then it should get a nice leg up next summer. if you cant be patient till then and take one more 5-10% down before it moves up then sell it into the current market strength before mid september and buy it back as soon as you hear oil is heading back up.
quit fretting over interest rates and hope for higher oil. they are highly correlated to oil due tothe debt in them as well as the heavy equity focus. if you dont believe me run a comparison of cefl and bdcl to CVX . LOR is also highly correlated and tracks CVX which tracks the other majors like COP and XOM. so I dont particually think there is a lot more risk in this leveraged etn than in the oil majors stocks. the only difference in CVX and CEFL in the last year is that CEFL paid over 20% dividend while cvx paid less than 5. all the posts on here about the sky is falling and interest rates will kill it etc are silly. if you beleive oil is bottomed and will go up eventually then stick with this ETN and when oil pops you will be rewarded handsomely. check out the correlation today to the single day price action as well. I know there will be some in depth super technical mumbo jumb but the chart doesnt lie. i think oil turns around in the next 18 months and this ETN gains 30 -40% and pays 20% dividend along the way. there is my prediction.
Sentiment: Strong Buy
I agree with you. most people dont understand that this fund is indexed to funds that hold a great deal of stock so it is highly influenced by market moves in equity prices. it also has a good bit of foreign edbt in emerging markets. the duration of most of the debt is 5 years or greater from what I have seen. with the market going to be heading up (if history has anything to say about it) then this will head up as well over the next 90 days. the bonds in the portfolio being longer to mid duration averages will not be affected by interest rate increases since a rate increase will strengthen the $ and make it more atrractive for foreigners to sned money to the usa. that will put a lid on long term rates which will be good for longer duration instruments like the underslying securities mostly hold. there will be some increased costs of the leverage since it is tied to libor but overall I think this fund has upside at this point (there could be some choppy trading over the coming weeks) and should see a stable dividend stream since there is no underlying financial risk in the general market to speak of that would impact corporate dividends or debt payments. the underlying index funds are all very solid great CEF's and I would not worry about it if you have a long term horizon and can ride out the ups and downs.
someone tried to dump a huge amount at the close and it killed it. if you look at the indicative value on the ubs site you will see that it is actually about 50 cents higher so it will open higher in the morning barring a market drop. same thing happened to bdcl. not to worry
morl held up quite well today with the 10 year rate falling. that narrowed the spread a bit. I wonder if it will roll back up to the mid 16;s again for the next ex date approaching.
the main thing that worries me currently is the 10/2 spread continuing to narrow. the 10 went down today in reaction to the markets and if the fed raises then surely the spread will get narrower - worse. hopefully not inverted but you never know. any other thoughts on this? its been narrowing for the last few months from 1.69 to 1.4 today. that will show up eventually in results. plus this fund and the underlying constiutents really should not have had much movement today since they are interest rate instruments. it seems like the market sold them as well in general. my other investments like HYLD did not fare as poorly as this. thoughts?
after today and friday I agree with you. they will crush the economy and slam it into recession or worse if they do it. people will quit spending if their portfolios go down too much.
nice buy! I was tempted but to be honest was to afraid of another down day to do it. 14 is smoking though. nice job. I didnt sell though. but yes I thought the same thing - how many fools out there were submitting mass market orders to sell . ughhh
UBS is one of the largest private wealth managers in the world. that would be a huge black eye for them. not something they want to happen as it tarnishes their image. they make a lot of money by doing well by their clients.
Be prepared for another big day down. Maybe another 3%. I would suggest that it should have most sellers cleared out by then. 16300 is 10% down so it may go a bit more in panic over reaction. Remember seat time is what makes you money not market timing. Will be a good time to buy some more stocks shortly when the selling is finished. Likely by the end of this week