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.
it compares favorably with an annuity, in which I have to surrender 100% my principal for a 8% divvy, even if it sinks to $2 a share. How much cash does it throw off is all that matters then for about ten years.
The FOMC notes showed how reluctant the Fed is to pull the rug out from under the manufactured stock market highs--they've just seen this week what adding taxes to Japan did on top of their trillions of printed yen--pulled the rug out from under their recovery so badly Abe has to ask for another vote of confidence, and conveniently delay part two of his value added tax upchuck scheduled this December.
It doesn't matter whether general taxes as in FDR's aborted 1937 tax pop, or adding to the cost of goods and services via value added taxes, you pull money out of worker's pockets, there's no where to go with stagnant wages and high underemployment to pull the cash to go out and buy buy buy. VAT is particularly pointed to consumption, joesixpac doesn't have the juice, he can' buy $3000 washer dryers, or in this case sake. Does nobody get that?
Apparently not, and investors put a pin in it yesterday, as air left the market balloon, with small caps like the Rustled 2000 stampeding for the door. PPI rattschitted up a notch, and we can expect CPI to follow, but we're well below the 2% inflation "target" (gag) because the government neatly pulls food clothing shelter and fuel out of the equation (sarcasm). 20 Nov today, the govt will talk claims, but nobody has talked to the holiday retail hiring season yet and how much that skews the employment stats these days.
Everything I have has covered calls sold against my position. In a flat market, a dollar stock generating a penny a week in call premium pays for itself in two years. I can only hope it stays flat.
For someone with a mouthful of water you sure talk a lot.
Breathe deeper and faster, I can't wait for the silence.
Thank Nixon for the last gasp of silver as currency and petro dollars, trading this country's freedom for slavery to oil interests in the Middle East. The last finger of fate to the Hebrews from the biggest anti Semit to hit the big time.
10 days ago Japan stimulates trillions, markets roar, today's in recession, market fades-as if 10 days of stimulus was supposed to cure instantly, for the "I want it now" generation. (look where Freddy Mercury is today and where he got it NOW). FOMC Minutes should be released on DVD. Investors always look for alternate endings.
But the biggee is the anticipated return of "baby it's cold outside", last year's answer to fading this, lower that. There's evidence to show retail, after 7 lean years, might be turning up, as goyim rush to buy holiday presents, marking time till they're all dead basking in make believe Valhallas. Personally, I like Vikings, girls are prettier, I just wish they had deodorant then.
PPI/CPI, profits thin but that's why PPI/CPI are tame. Housing? Marginal increases. New construction? Last gasp till "baby it's cold outside". Silver safe haven? Meh-bee.
Nov 17 8:30 AM Empire Manufacturing Nov - 12.0 12.0 6.2 -
Nov 17 9:15 AM Industrial Production Oct - 0.0% 0.2% 1.0% -
Nov 17 9:15 AM Capacity Utilization Oct - 79.2% 79.3% 79.3% -
Nov 18 8:30 AM PPI Oct - -0.2% -0.2% -0.1% -
Nov 18 8:30 AM Core PPI Oct - 0.1% 0.1% 0.0% -
Nov 18 10:00 AM NAHB Housing Market Index Nov - 54 55 54 -
Nov 18 4:00 PM Net Long-Term TIC Flows Sep - NA NA $52.1B -
Nov 19 7:00 AM MBA Mortgage Index 11/15 - NA NA -0.9% -
Nov 19 8:30 AM Housing Starts Oct - 1000K 1025K 1017K -
Nov 19 8:30 AM Building Permits Oct - 1050K 1040K 1031K 1018K
Nov 19 10:30 AM Crude Inventories 11/15 - NA NA -1.735M -
Nov 19 2:00 PM FOMC Minutes 10/29 - - - - -
Nov 20 8:30 AM Initial Claims 11/15 - 285K 285K 290K -
Nov 20 8:30 AM Continuing Claims 11/08 - 2375K 2375K 2392K -
Nov 20 8:30 AM CPI Oct - -0.2% -0.1% 0.1% -
Nov 20 8:30 AM Core CPI Oct - 0.1% 0.1% 0.1% -
Nov 20 10:00 AM Existing Home Sales Oct - 5.10M 5.17M 5.17M -
Nov 20 10:00 AM Philadelphia Fed Nov - 15.0 18.0 20.7 -
Nov 20 10:00 AM Leading Indicators Oct - 0.6% 0.6% 0.8% -
Nov 20 10:30 AM Natural Gas Inventories 11/15 -
They've already announced a nickel a month in perpetuity, even if it means return of capital. Yahoo regulars Blodget and Trask have already commented that the junk business is usually the canary in the mine, but "this time may be different". DUH!! with the Fed leaving the building, the rate pop to a whopping 2% overnight rate is already baked in. Like I said, I double down my 34000 shares with another 68,000 come $3.86. This is not hard. And yes, I do own 34,000 share at about $3.95.
MA sheds alligator tears at his "huge responsibility" to shareholders, and today there is another BOND offering on top of the outstanding shares!!! Talk about being FOS!!! Isn't a quarter trillion dollars company value enough?
Market takes a breather, but tomorrow is another day. Oil is crashing, and my price for No 2 is down from $4.17 to $3.90, and headed next delivery for $3.70. Time to barbeque the dog--can afford the fuel, can't afford the beef.
Markets continue to enjoy goldilocks economic numbers. Claims has to be near unchanged, to keep perception the Fed bear is still hibernating. Even silver gets a bounce this morning 13 Nov PM. The Russell 2000 and S and P 500 are neck and neck past couple weeks. Even my dentist thinks the inevitable 2% pop in overnight rates will tresult in exaggerated downward pull. This is easier than it thinks.
Europe just got loosy goosy with liquidity, and Japan trumped everyone with another round of stimulatum
excretatum that has me investing in printing press futures. Nevertheless, sky's the limit on "growth" as Goldilocks prevails, expansion without hitting the higher numbers mean the Fed hasn't excuse to hit the brakes. Wage inflation, the audacity of the worker to gain traction after fifteen years of contraction, is key. With XYZ gen low paid folks replacing the boomers playing their swan song, I don't forsee any meaningful hike in the pittance called hourly wages. Blood's all gone, we're soaking in turnip juice as industry squeezes and squeezes, or just exports jobs to the fourth world. But if you're in the gen market, you're screaming for another 25% pop this year and to my mind most of it will happen between now and Jan, when the June irate pop guesses get played. Until then. wheeee! For gold and silver? Oyyyyyyyyyyyyyyyyyyyyyyyy....
Nov 12 7:00 AM MBA Mortgage Index 11/08 - NA NA -2.6% -
Nov 12 10:00 AM Wholesale Inventories Sep - -0.1% 0.2% 0.7% -
Nov 13 8:30 AM Initial Claims 11/08 - 285K 281K 278K -
Nov 13 8:30 AM Continuing Claims 11/01 - 2350K 2355K 2348K -
Nov 13 10:00 AM JOLTS - Job Openings Sep - NA NA 4.835M -
Nov 13 10:30 AM Natural Gas Inventories 11/08 - NA NA 91 bcf -
Nov 13 11:00 AM Crude Inventories 11/08 - NA NA 0.460M -
Nov 13 2:00 PM Treasury Budget Oct - NA NA -$90.6B -
Nov 14 8:30 AM Retail Sales Oct - 0.6% 0.3% -0.3% -
Nov 14 8:30 AM Retail Sales ex-auto Oct - 0.6% 0.3% -0.2% -
Nov 14 8:30 AM Export Prices ex-ag. Oct - NA NA -0.2% -
Nov 14 8:30 AM Import Prices ex-oil Oct - NA NA -0.1% -
Nov 14 9:55 AM Mich Sentiment Nov - 87.5 87.5 86.9 -
Nov 14 10:00 AM Business Inventories Sep - 0.0% 0.2% 0.2%
Go listen. ARR will maintain the five penny dividend even if it means dipping into return of equity. The advantage in a cash account, that part of the nickel isn't taxed. (if you hold this stock in a traditional IRA everything is taxed if you pull it out of the IRA). So the income may falter because of the massive hedge position taken too early, or the loss of 30 year and substitution of shorter term yield, etc, but the nickel divy stays.
How that affects share price is a judgement call by investors who may pinch the stock share price for the penny and a half a quarter, or not given the BV is 130% share price already.
That's the way ARR rolls, and I will be buying more on share weakness. I already own a boatload at $3.95.
Drops to $3.86 I double down. Yup, that means I may have to wait for a couple days ex dividend.