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Arlington Asset Investment Corp. Message Board

lunco 97 posts  |  Last Activity: 1 hour 52 minutes ago Member since: Sep 3, 2008
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  • Reply to

    Bottom

    by johnsonjoel1 Apr 11, 2014 9:28 AM
    lunco lunco 1 hour 52 minutes ago Flag

    ray...
    First of all, my post above was addressed to johnsonjoel1 and was a response to a specific question he asked. I was making the point that RSO has not been that good of an investment over the past several years.
    As to you response to my post; RSO has had five dividend decreases since 2008, 5 years ago. The average is one decrease per year. They have gone from .41 per quarter in 2008 to .20 per quarter, a 50% decrease in 5 years. Total Dividends paid by RSO since 2010 have been $3.80 so if you bought RSO on January 2, 2010 you would have paid 5.63 and collected $3.80 in dividends for a total return of $3.65 as of today's closing price, a 68% return for four years. If you had bought SFI (STAR) on January 2, 2010, you would have paid $3.39 per share. SFI has paid no dividends, so its total return with today's closing price being $14.48 would be $11.09, a 327% return. If you had bought NRF on Jan. 2, 2010 you would have paid $4.19 and would have received $2.37 in dividends for a total return at today's close, ($15.01) of $13.19, of 315%.
    My point was and still is that there are much better investment alternatives to RSO at the present time and that there will continue to be better alternatives, IMO, until RSO management demonstrates that they have turned the company around. The most recent announcements of loans made is reminiscent of last spring when management made a similar announcement. However, not much else happened the rest of the year. I hope that this year is different and I do wish you and other RSO investors the best.

  • Reply to

    Bottom

    by johnsonjoel1 Apr 11, 2014 9:28 AM

    A Tale of Three Stocks:
    johnsonjoel1
    Once upon a time, (2009-10) there were three stocks of somewhat similar companies trading below $3.00 a share
    The first stock, SFI stopped paying dividends on their common stock and is currently selling over $14.00 per share.
    The second stock, NRF started to look for ways to increase shareholder value and to grow their dividends, and is currently selling close to $15.00 a share while paying $1.00 in dividends a year.
    The third stock, RSO, continued to make promises and continued to realize a steady decrease in "core" earnings followed by annual decreases in their dividends. It is currently selling for $5.50 a share.
    My question to you, which company would you sooner own?

  • Reply to

    NSAM--amended registration statement

    by dar200 Apr 14, 2014 5:09 PM
    lunco lunco Apr 15, 2014 4:03 PM Flag

    Dar...
    Having a memory is sometimes a challenge for some of us and so that is why I write things down.
    Thanks for researching and sharing the information
    Wishing you the best

  • Reply to

    Prospect upgraded to buy 12.00 target

    by get_this_money Apr 10, 2014 7:49 AM
    lunco lunco Apr 14, 2014 9:56 PM Flag

    general...
    I put pennyone... on ignore many months ago; you may want to consider doing the same. I found it a whole lot less aggravating to just ignore him/her rather than trying to explain to someone who doesn't want to understand. Just a suggestion
    Wishing you the best

  • lunco lunco Apr 14, 2014 12:48 PM Flag

    fooledbyrandomness4;
    I was always taught that Plagiarism is just like stealing. It would appear that your posts are nothing more that copying and pasting from a comment made to a SA article this morning. To share the information is appropriate, to post what another has written without giving them credit is not.
    The SA article is "Prospect Capital: A 12.30% Yield With 15% Upside Potential" by Albert Alfonso
    The article can be viewed at:
    http://seekingalpha.com/article/2139623-prospect-capital-a-12_30-percent-yield-with-15-percent-upside-potential?ifp=0
    The Comment being copied is by invest2befree

  • lunco lunco Apr 14, 2014 12:34 PM Flag

    fooled...
    Your annalysis looks a lot like the comment to this mornings SA article posted by invest2bfree
    http://seekingalpha.com/article/2139623-prospect-capital-a-12_30-percent-yield-with-15-percent-upside-potential?ifp=0
    "If you look at pure theoretical finance based valuation it should be at $17.07.
    Dividend Discount Model Valuation = $17.07 per share
    Assuming Growth of Dividend is Zero-
    DDM Valuation = Dividend / Required Rate Of Return
    Required Rate of Return = Rf+(Rm-Rf)B
    Rf= Risk Free Rate = 10 year yield = 2.64%
    Rm= Cost of Equity Capital = 8%
    B= Beta = PSEC beta= 0.95
    RRR= =2.64+(8-2.64)*0.95 = 7.732%
    DDM Value = (.11*12)/0.07732 = $17.07 per share
    For price of 10.82 all else remaining equal implies a beta of 1.75.
    So basically market is expecting psec to 75% more volatile than the market even though historically it is less volatile than the market."
    Quite a coincident wouldn't you say

  • Reply to

    Bottom

    by johnsonjoel1 Apr 11, 2014 9:28 AM
    lunco lunco Apr 11, 2014 11:07 PM Flag

    johnsonjoel1
    I fully agree with coochy.cooty, and have done so for years. There are few that have a more solid grasp of RSO and who have disciplined approach to investing and so I listen to what she has to say. I have no interest in purchasing RSO at any price above $5.00 until their core earnings improve. It really doesn't matter what their historical pps has been. What does matter is the amount of their dividend and, IMO, a dividend that is above "core" earnings is very suspect. With RSO I am at the point that I want to see results before I invest again.
    Wishing you the best

  • Reply to

    If anyone was watching CNBC earlier this morning

    by bobdbeck Apr 11, 2014 8:51 AM
    lunco lunco Apr 11, 2014 10:55 PM Flag

    bob...
    I find myself asking one primary question; is the US economy getting better or not. If it is, that companies that will benefit from a better economy are the companies I want to invest in. It is my belief that the US economy is continuing to improve, (although not as fast as I would like), and that BDCs in general and PSEC in particular will benefit from that improvement. I look at the current weakness in BDCs as temporary; caused by an external factor, ( the removal of BDCs from various indexes), and that the current "sell-off" in the market is also temporary because neither is being caused by fundamentals, IMO Dividend paying stocks such as BDCLs will, I believe, continue to pay healthy dividends and to me that matters far more than the pps.
    Wishing you the best

  • Reply to

    Bought 85k @ 10.84

    by fooledbyrandomness4 Apr 11, 2014 12:46 PM
    lunco lunco Apr 11, 2014 10:46 PM Flag

    nedelkay
    Many years ago in a finance class my professor taught me the difference between actual profits/losses and paper profits/losses. While I am sure you know what the difference is, I find that I benefit from being reminded from time to time that paper profits/losses only exist on paper. They are not real and it is a mistake to act as if they were real. For a profit or loss to become actual, a sale must occur, again something I'm sure you know. I would like to have PSEC move up in price, it makes me "feel" good. But if it does or if it doesn't, what really matters to me is the continued payment of the dividend. That is why I bought the stock and that is why I hold the stock. Even if the price should drop to zero but the dividend is maintained, I will be doing very well. Therefore, I would suggest that the question that matters is not what the stock's pps is day by day, but whether the dividend will be maintained. If the dividend is maintained, then the pps will take care of its self. If not, that is another story. As of now, there is nothing that I know of that would imply that the dividend is at risk in any degree. In fact, I would suggest just the opposite is happening.
    Wishing you the best

  • Reply to

    Ex Dividend Sell-off

    by lunco Apr 9, 2014 8:43 PM
    lunco lunco Apr 10, 2014 5:20 PM Flag

    Thanks Kel for the invitation. I just might take you up on it. I sold out of FSC some time ago, after a SPO, and sold my TICC last week. I am very long in PSEC and look to BDCL for additional exposure to BDCs.
    Wishing you the best.

  • Reply to

    Ex Dividend Sell-off...

    by lunco Apr 9, 2014 8:53 PM
    lunco lunco Apr 10, 2014 5:16 PM Flag

    ninja...
    where was it suggested that drop in price on the ex-Dividend dividend date had anything to do with short selling or short covering? Did I miss something?
    Thanks

  • Reply to

    Ex Dividend Sell-off...

    by lunco Apr 9, 2014 8:53 PM
    lunco lunco Apr 10, 2014 5:12 PM Flag

    ninja...
    What I was trying to point out is that although the price of the stock is adjusted after the market close to reflect the amount of dividend paid, it does not always open at the adjusted price as happened yesterday with CEFL. At no time during the day did the stock sell for the adjusted price but rather opened higher and remained higher which meant that a person who sold before Ex dividend hoping to buy back in at a price lower than the adjusted price on Ex dividend would not have been able to do so with CEFL yesterday.
    That being said, I agree that "dividend harvesting" is risky and for me not worth the risk.
    Wishing you the best.

  • Reply to

    Ex Dividend Sell-off

    by lunco Apr 9, 2014 8:43 PM
    lunco lunco Apr 10, 2014 11:37 AM Flag

    What a difference a day makes...
    Down $.40 this morning along with the general market but it will be back.

  • Reply to

    $20m new shares being issued

    by davejfrompa Apr 9, 2014 3:51 PM
    lunco lunco Apr 9, 2014 9:56 PM Flag

    More dilution? Probably not. Issuing stock is how a BDC grows and PSEC has demonstrated its ability to utilize funds raised to increase core earning by a greater amount than the issuance of stock costs them in additional dividends paid. In short, it is the issuance of new shares that enables management to make more money for ALL of us.

  • Reply to

    Wells Fargo frustration

    by beefcakebrock87 Apr 8, 2014 1:43 PM
    lunco lunco Apr 9, 2014 9:43 PM Flag

    invest...
    I use both IB and Scottrade. The only reason I use IB is because of the interest rates on margin accounts. However, I find the platform difficult to work with and often the information is several minutes old and so I do little trading in my IB account. Scottrade, on the otherhand has been great to use and there are real people there when I want them. They give me a 3% interest rate on my margin account and all the free trades I can use, but they will only give me 50% for a maintenance percentage for NRF but 35% on other securities. (I think they feel I own too much NRF and they are probably right). I also have a cash account with Scottrade where I have started keeping some of my stocks that pay a qualified dividend or a substantial part of the dividend is ROC, so they won't be loaned out on margin.
    Wishing you the best

  • Reply to

    MORL's ex-date

    by alnollan Apr 9, 2014 8:16 PM
    lunco lunco Apr 9, 2014 9:19 PM Flag

    Today, Wednesday April 9 was the Ex-dividend date. However, you are correct that anyone selling yesterday will not get the April Dividend. Why did they sell? Each individual will have there individual reasons but here are a couple of what I would think would be the more common reasons:
    1. It is a logical assumption that the price of a stock will be at its highest just before Ex-dividend. Therefore if a person wants to maximize any gains (or minimize losses) just before Ex-dividend would be a logical time to sell.
    2. The seller believes that they can sell before Ex-dividend and buy back in at a price that will be less than the amount of the dividend that they will not get. (That did not happen today)
    3. The seller believes that the value will go down because of various market factors that will outweigh the dividend to be received by waiting for Ex-dividend. This may be what was happening with the recent sell-off. The entire market had been selling off and it is quite possible that sellers were expecting the sell-off to continue after Ex-dividend date. Said another way, people panic when the market goes down as sharply as the general market has done over the past several days and dividends are not a significant part of the sell decision.
    Regardless of what factors motivated individual sellers to sell, there was not a corresponding motivation for buyers to buy and therefore price declined in the recent sell-off happened.
    Today, however, there were many more buyers than sellers, even though they will not get the April dividend, and the price went up. Why were people buying today? It wasn't because of the dividend. I will suggest that it is a good practice to not only ask yourself why there is selling but also why there is buying. The market is two sided and it helps to understand the arguments for both buying and selling and then make up your own mind which argument is more persuasive.
    For what it is worth, yesterday I was a buyer.
    Wishing you the best

  • ...did not happen today. Those who sold before Ex-dividend and were hoping for a large decline before buying back in I am sure were surprised that there wasn't a larger decline in price as usually happens. I would suggest that the lack of more of a sell-off was because CEFL, and especially the CEFs that it represents were too "over-sold". It might also suggest that CELF's value is more closely tied to the underlying funds value than to its own interest payments. If this is so, and I think that to some degree it is, I I look at it as a positive because I really don't like the large pps drops that occurs on Ex dividend dates for the CEFs I have owned.

  • lasted for just about an hour this AM. Those who sold before Ex-dividend and were hoping for a large decline before buying back in I am sure were surprised that there wasn't a larger decline in price as usually happens. I would suggest that the lack of more of a sell-off was because BDCL, and especially the BDCs that it represents were too "over-sold". I think we will soon see the end of "index restructuring" and rising prices for BDCs and for BDCL.

  • Reply to

    Dividend Declared

    by lunco Apr 2, 2014 9:08 PM
    lunco lunco Apr 7, 2014 10:34 PM Flag

    erikcs1...
    Very good question, one that I have also been asking myself. CEFL, another exchange traded note also traded down. My conclusion is that these two ETNs, at least for now, trade more in sympathy with the note's NAV than they trade based on dividend. In any event, IMO, it is oversold and while it may go down more, BDCL is a good "buy" today at its current price. It will also be interesting to see how fast the price rebounds Ex-dividend; maybe faster than we think.
    Wishing you the best

  • Reply to

    dividend

    by bobonup Mar 31, 2014 9:05 AM
    lunco lunco Apr 4, 2014 7:11 PM Flag

    April 9th is Ex-dividend.

AI
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