My thought is the search for yield has driven up riskier assets but I don't fear a technical correction from overbought (although that's a possibility) as much as an economic slowdown which would really hurt the BDC area as well as my floating rate funds and even junk bond funds.
Bud, I don't have any opinion on CODI. Like I said before, these BDCs (or in this case, private equity) firms are difficult to understand because their clients tend to be privately held. That's why I'd rather go with established 'best of breed' or a fund in this area.
FGB was up Monday after a favorable Barron's article. I like the idea of holding a basket of these companies in a fund as BDCs are rather opaque because they deal with mostly private corps. It also eliminates stepping on a land mine as I did with ACAS. I also have smaller positions in MAIN and PSEC.
My thought is it depends on one's current exposure to BDCs. ARCC seems like one of the old line steady eddies in this field. Neither outperforming nor underperforming others like PSEC. I'm not going to chase it as I'm already pretty heavily into FGB, a fund of BDCs, with 45 different companies and ARCC at 9.5% is their largest individual holding. So the FGB management seems to like it. If one has no exposure to BDCs this might be a good place to start. Did anyone see mention of an offering price for the new shares?
I can speak well of owning COP. It is one of only two stocks I hold in my IRA ( the other being PBA ). Both have given nice appreciation and yields. My experience with COP would have been even better had I held the spin off shares of PSX instead of converting them into more COP.
Huff, Ever have one that you just can't get right? That's me with PSEC. As for margin buying: after our friends were wiped out because of their margin positions in 2008, I promised my wife 'no margin buying' , otherwise she'd be looking over my shoulder for every purchase. That also includes shorting because of the margin component. Domestic tranquility comes at a price but it's worth it.
Bob, that's still the case. My stock account is only about 1% cash. The self-imposed 31 day exile from PSEC will end soon but I'm not going to chase it into overbought territory where it now resides. Boy that was one bad idea. Can't help but feel there will be market pullbacks down the road. We've come too far too fast. OT no sense going to the shore this weekend. The waves churned up by Arthur will keep everyone (including me) out of the water.
Keebon, you're looking at it from an objective view. I doubt the Russians see it that way. Their economy seems to be held up by only one thing- oil and gas sales. Any economic sanctions over the Ukraine will only make them even more dependent on selling those commodities. I think their announcement with NADL a while back says it all. I put it on my watch list. I think it will come back down to earth once people realize they aren't going to make a ton of money immediately from this deal. And if I miss out on NADL, I've always got SDRL.
Greenpeace. Now there's an impartial arbiter for you. They'd have us riding bicycles to work to forestall "climate change" I don't think they'd support drilling anywhere at anytime.
Ex dividend means you don't get the dividend. From the Latin prefix ex which means out of or without. So if you buy on the ex day you will get the stock cheaper. Some people do this intentionally if the stock drops more than the dividend. I can't be bothered to play that game.
Sorry to sound like a wet blanket but when I hear "there are more ships coming on line so profitability is bound to increase", I cringe. Those of us who have been through the dry bulk and oil tanker bubbles feel we've seen this movie before and we know how it ends. My advice to anyone piling on is there's money to be made but stay aware of shipping history. This is not a buy-and-hold area. I'm going to sit this one out for now.
Gambler, for all closed end funds you want a site called cefconnect. You can add the .com (you know how Yahoo is about putting web addresses into messages) I use it for all my CEF research. There's even a screen so you can find the type of fund you're looking for.
Huff, I knew I'd be in trouble if you saw my BAC options post. Lol. I figured you'd improve on my plain vanilla approach. Some day I'll try it your way but BAC just doesn't light my fire.
Gambler, if I believed BAC was going to return to $20 in the next year and a half (I'm not at all sure) I'd just buy the $15 calls that mature in January 2016 for about $2.50. This provides a bigger % gain and ties up less money. The gamble is that if BAC doesn't cooperate by that time the loss will be severe, approaching 100%.
Too risky for me.
"Do you have to pay 15% Canadian tax on your dividends?" The answer is Yes, No and Maybe. Yes, you pay it up front in a taxable account (it's automatically deducted) but you may be able to get a tax credit for it when filing your income tax. The No answer refers to any Canadian stocks held in your IRA. That's one of the reasons I put PBA, a Canadian pipeline, in my IRA. Also, PBA is a regular corporation so there's none of the tricky tax issues from holding partnerships in an IRA.
Thanks Sarge. Not familiar with AMBN. BAC has been a world class disappointment for the last 5 years and I'm not patient enough to wait for the turnaround. NYCB is on my list but I'm chronically short cash in that account as I try to keep it fully invested. The top of my list is to finish my position in APU and to start buying back PSEC after the 30 day waiting period is over. Selling PSEC just before the announcement wasn't one of my best moves.
As for pipelines, I already own KMP, PAA and TYY in a taxable account and PBA in my IRA and have no intention of increasing my exposure in this area and can't rotate the first 3 into other pipelines without running into a capital gains tax problem.
As for the grandkids, we also spend 2/days a week minding them at their house. Glutton for punishment. Grandchildren are a reward from God for not killing your kids.
Ed, I do own a lot of U.S. bank stocks but they're all preferreds ( JPMprA, USBprO, BBTprG, PNCprQ, WFCprP )and are in my or my wife's IRAs which are heavily skewed toward fixed income. Almost all were bought at nice discounts so besides a decent yield, I expect a capital gain when/if called. I did preliminary looking at H2O stocks a while back but decided at that time they didn't pay enough. Will look again if I get the time. Grandkids are coming by for a cook out today. Will not get much of anything done.