They already aren't keeping the five cent dividend. They have 13.5 pennies to distribute from income, and take 1.5 pennies from return of capital, as they've stated past couple quarters. A secondary may need offering, to raise cash, to invest and keep the dividend flowing at 15%. Secondaries in MREITS do not dilute, but, since most folks don't know that, the stock may take a hit when that announcement happens, probably end of December first quarter '15. Other than reentering the 30 year market, expanding leverage, there isn't any other way mathematically to do the job.
One final note, Friday the 5th of December, all MREITS took big hits, and ARR was the least damaged of the group to include the one's you mentioned. Again, the decrease of divvy to a 4.5 penny a month scenario? It's already baked in, and other MREITS will be offering single digit returns when ARR is at 12% rate of return. "Nuf said.
The big news was the quality of jobs has increased, probably for the first time in about seven years. Wages are still at a creep though, so those pundits I see on the yahoo financial funny papers touting a Fed change to the language in December expect the Grinch this XMAS--it's not going to happen. On the other hand, January is looking more and more like the month for language changes.
Meantime Europe is getting on the currency devaluation QE bandwagon, as if a 15% decline in their currencies vis a vis the US isn't enough to kick start their economies. And gas and oil will continue to get cheaper weighing on the inflation picture, as if cancer of the currency were a good thing.
The lesson learned here? You can't have half the world loosening, while the other half tightens, without huge imbalances. We're either all Austrian, or Keynsian, to have effect worldwide. You may not like the effect, but at least we all move in the same direction.
It is what it is, however, and it still is no environment for silver and gold. Yet.
In the meantime, after seven lean years in the retail arena, it's looking like a C+ B- year for the economy. That will get you a diploma, but not the big job offers you get if you're magna cum quickly.
Sell-f fulfilling prophesy. ARR was early to the hedge market and pays the price of too cautious. Add in self-ful-fillment, and nickel dime investors, and you have the bargain of the century.
Are job numbers skewed by part timers, as no doc loans skewed real estate sales numbers circa 2002--7? With seasonality skewing jobs numbers, XMAS by January is not in the offing, but January when truth be told who is still employed, is so next year to many. For now sales and cars take the spotlight, along with declining oil with an occasional dead cat bounce in the oil patch, I think we're in for a flat week anticipatory first week before holidays in the general market. Barring some world calamity, I don't see how gold and silver get a bounce. $2.65 a gallon gas seems assured.
I also don't see how our Central Bank, the repository of meddling confused white folks get to flail and harangue about low inflation, but that's not this week's show. Inflation is cancer of the paper currency, how a little bit cancer is "good" escapes me. Destroying the value of the medium of exchange is insanity, but this madhouse is run by the inmates, and what would poor mediocre giant firms do? Innovate and produce a better mousetrap? Fates forbid!
Dec 9 10:00 AM Wholesale Inventories Oct - NA NA 0.3% -
Dec 9 10:00 AM JOLTS - Job Openings Oct - NA NA 4.735M -
Dec 10 7:00 AM MBA Mortgage Index 12/06 - NA NA -4.3% -
Dec 10 10:30 AM Crude Inventories 12/06 - NA NA -3.689M -
Dec 10 2:00 PM Treasury Budget Nov - NA NA -$135.2B -
Dec 11 8:30 AM Initial Claims 12/06 - NA NA 297K -
Dec 11 8:30 AM Continuing Claims 11/29 - NA NA 2362K -
Dec 11 8:30 AM Retail Sales Nov - NA NA 0.3% -
Dec 11 8:30 AM Retail Sales ex-auto Nov - NA NA 0.3% -
Dec 11 8:30 AM Export Prices ex-ag. Nov - NA NA -0.9% -
Dec 11 8:30 AM Import Prices ex-oil Nov - NA NA -0.2% -
Dec 11 10:00 AM Business Inventories Oct - NA NA 0.3% -
Dec 11 10:30 AM Natural Gas Inventories 12/06 - NA NA -22 bcf -
Dec 12 8:30 AM PPI Nov - NA NA 0.2% -
Dec 12 8:30 AM Core PPI Nov - NA NA 0.4% -
Dec 12 9:55 AM Mich Sentiment Dec - NA NA 88.8 -
The announcement for this quarter was released on 2 October, ninety days thereafter brings us to Friday 2 January with an outside chance for Monday the 5th of January. That's how I interpolated 2 January. Anybody else with better please chime in.
I think with the ARR (premature?) hedge and withdrawal from 30 year paper, and all that positioning for next year's rate hike done almost a year ago, all of that hedging could have been put off a year--as rate hikes seem to be likewise put off till 2015 (and some say with the middle class evaporating and being exported jobwise to the fourth world--forever)
SO--unless ARR stretches its leverage or temporarily shifts its hedged positions and takes more risk, we're looking at 13.5 cents of income, and 15 cents of distribution, with 1.5 pennies return of capital for every quarter forseeable. I suspect without repositioning, ARR is going to run out of alternatives to dropping the divvy to 4.5 pennies a month. I think the share price already reflects that, but there is no use telling the lemmings that will dive if such an announcement is forthcoming.
I have laid cash aside to be predatory if the share price drops 10% or so to the $3.60's. FWIW
lrwer gas prices means lower costs this Christmas season for UPS. Even with a flat year over year performance based on retail buying habits we can take things don't reflect entire quarters devotion to bargain hunting just by concentrating on a few formerly key days ----the lower costs for gasoline r going to have a tremendous impact this year-- word to the shorts---watch out.
Bitter short now flung this way and that. should have tripped the dividends or saved the 30% as part of his double down at these discounted prices. what's the old song? A fool and his money are soon parted.
--others it takes a little longer.
If you're still in the growth stage, you have a different scenario. I am in the retirement get your income while it's hot stage. At $3.94 a share average, I don't care if the principal dwindles, because I am drawing 4-6% off and dripping the rest even in a retirement account, where the average price is less than $3.94, or waiting for opportunity
Just when we were headed for a plus Tuesday in the general market (silver and SLW is doing fine thanks) silly things like dwindling consumer confidence, flat housing prices (you ain't seen nothing yet if they play with overnight rates, screw up the ten year, and mortgage rates soar causing housing price DEFLATION).
The market has turned around, and dropped overall into negative territory pre lunch. It will take a lot of turkeys to buy these dips, but watch them gobble us into break even by end of day.
I didn't say buy for the dividends in a vacuum. I said buy in an IRA when you're close to retirement and the principal almost doesn't matter, compared to an ANNUITY, in which you surrender ALL the principal for an 8.8% rate of return. Here in ARR you are getting close to 15%--your $7 investment is actually yielding you about the same 8.8% on your original investment. Nevertheless, it is $20K come hell or high water. There's no substitute for buy low and sell high, my advice is for ARR at current prices, and if you're that far away from retirement, keep dripping. You may want to double down at these prices if you aren't already all in which would put your average per share closer to $4.5.
My average price per share is $3.94. I have cash to make further investments at double down at $3.86 and $3.66. I may adjust those to $3.76 and $3.52. In any event, $45-60K a year allows me to draw minimum IRA of about $30K, and leave the rest to compound.
Usually the low point for ARR, ramp up of share price, maybe a dime's worth, will start after Thanksgiving IMHO. Then the ever popular dilemma, do I sell my $3.94 cent shares for a dime profit, or get the divvy and start all over again?
Most of the talk about my approach compare their recent success in some other stock investment, I'm sure if I invested in ALIBABBLE or GORGLE and hope and wish the outcomes would be different. I am talking to a retiree situation, in which growth is secondary, and income is primary. My two examples within the scope of the discussion I started are on the one hand an annuity and the other hand, ARR. The age of the purchase of ARR is age 66. It's in an IRA. There's $400K there.
100K shares of ARR. I keep my principal. I get 12-15% yearly $45-60K. Downside to principal, maybe 25%,
$400K buys an annuity. My principal is gone. I get 8-8.8% yearly. There is no downside, my principal is already ZERO.
This is not hard.
Traditionally an up week, plenty of juice to study below on a shortened schedule that has us traipsing to dysfunctional families country wide. Housing and mortgages will inch forward, claims will be down in Walmart nation, but the Fed is confusing velocity of money causing inflation they think they need (can't pay borrowed money with money that's not being degraded, it's their favorite fraud in slo mo).
The big deal really won't happen till the weekend, when Black Friday guestimates trickle in, but there's plenty starting tomorrow to make excuses about which way the wind blows. With no news being paid attention to 24 Nov, the rest of the week promises to show a one ish percent upchuck, as the East Coast starts the week in record high temperature, and end the week with snow flurries!!!
Apocalyptic weather or no, CYBER everyday will rescue Black Friday, again.
Nov 25 8:30 AM GDP - Second Estimate Q3 - 3.0% 3.2% 3.5% -
Nov 25 8:30 AM GDP Deflator - Second Estimate Q3 - 1.3% 1.3% 1.3% -
Nov 25 9:00 AM Case-Shiller 20-city Index Sep - 4.2% 4.6% 5.6% -
Nov 25 9:00 AM FHFA Housing Price Index Sep - NA NA 0.5% -
Nov 25 10:00 AM Consumer Confidence Nov - 96.0 96.0 94.5 -
Nov 26 7:00 AM MBA Mortgage Index 11/22 - NA NA 4.9% -
Nov 26 8:30 AM Initial Claims 11/22 - 285K 288K 291K -
Nov 26 8:30 AM Continuing Claims 11/15 - 2350K 2348K 2330K -
Nov 26 8:30 AM Durable Orders Oct - -0.7% -0.6% -1.3% -
Nov 26 8:30 AM Durable Goods -ex transportation Oct - 0.3% 0.5% -0.2% -
Nov 26 8:30 AM Personal Income Oct - 0.5% 0.4% 0.2% -
Nov 26 8:30 AM Personal Spending Oct - 0.3% 0.3% -0.2% -
Nov 26 8:30 AM PCE Prices - Core Oct - 0.1% 0.1% 0.1% -
Nov 26 9:45 AM Chicago PMI Nov - 65.0 63.0 66.2 -
Nov 26 9:55 AM Michigan Sentiment - Final Nov - 90.5 90.0 89.4 -
Nov 26 10:00 AM New Home Sales Oct - 450K 470K 467K -
Nov 26 10:00 AM Pending Home Sales Oct - 0.5% 0.5% 0.3% -
Nov 26 10:30 AM Crude Inventories 11/22 - NA NA 2.608M -
Nov 26 12:00 PM Natural Gas Inventories 11/22 - NA NA -17 bc
All those ETF's like GLD and AGQ etc which have ZERO hard assets to verify, or lease them (!) drain off the supply of cash from dolts that think they are investing in hard tack. They're not.
So for every dollar that could be invested in the real stuff, 2/3 of the SUPPLY of cash dwindles, until the DEMAND is so underwhelmed, it defeats the purpose of gold and silver as appreciating assets. You'd do better investing in gold paint, but don't tell the lemmings, they're too busy ignoring fourth grade math, Putin invading Eastern Europe, a Europe dead on its butt economically, and the US the cleanest shirt in the dirty laundry hamper.
Think GOLD and SILVER ETC investment is like granting a mortgage to a dead person. You may make the sale, and we've been there 1993-2008, but it is hard to get any activity past the signing of the contract with autopens, unless somebody needs to get on the phone to Daryl.
See how that works? Don't need of a conspiracy. The numbnuts in charge get it, read goat_frank findings about what countries are REALLY doing.
First assumption, I want to care about the "principal" in retirement in an account. All I have to worry about is how much cash it throws off.
100,000 ARR shares at $4 versus in an IRA versus buying an annuity for $400,000 same IRA--the best the immediate annuity will get me is 8.8% or 35,200 a year. The cash value to me of my annuity unless I take 6.2% with right of survivorship and a 50% payout to my heirs and assigns of $16,000 a year for their life, or ten or twenty years.
My cash value under the annuity situation is ZERO. The cash flow is $35,200 as long as I am breathing and about $24,000 for me and $16,000 for my "heir" for 10 or 20 years certain.
The cash flow from 100,000 shares of $4 ARR is at 4.5 cents 2015 suggest per payout period now, $60,000. If the shares sink to $3.00 I still have $300,000 left. Assuming the same scenario as 2008, the payout will be closer to 15% still, so the payout sinks to $45,000. The declination to $3 is about five standard deviations above the norm for declination this investment.
I'd rather have the $300K in my pocket, and the $45-$60K a year, thanks. You want a more aggressive scenario, you have the leave the MREITS behind and go into stocks.
Othewise, your comparison is like apples and gonads. They're both round but be careful which you take a bite out of.