Sarge the next divy on SFL is not until Dec so you have awhile to wait . Even with stocks with divies in the near future, some will take the divy and then sell, so there's going to be added selling pressure.
I think it is too early to buy anything that is selling off. SFL broke its 50 dma and its 100. It may be getting painted with the same broad brush as its sisters, SDRL and NADL, but there's no need to try to be a hero and catch a falling knife. Even temporary oversold conditions can become even more oversold.
Stagg is right for part of the answer in that it is seasonal, due to funds booking gains before their year's end. Remember, for most funds, their year end at the end of October, not December. Second, the dealers kept the market up to make sure the BABA ipo was successful, so now that it is done, they are free to resume taking profits. But not all of the selling is indiscriminate. There are some companies who have questions about their current business -- including SDRL and the other drillers and PSEC. That doesn't mean that these are bad companies or that they won't fix their problems, but their stocks are being sold until they become better values. And better bargains are when the stocks reach lower levels. Yield is not always the best metric of when a stock has reached a bargain because a dividend can always be cut. That's why technicals can be better guides because you can "see" where there is support (it doesn't mean it has to hold however, if further bad news comes).
The S&P is still above the 50 dma which is at 1975. If it breaks 1975, then it will go to the 100 dma at 1951. Below that is the 200 dma at 1894. It might be time to start buying some inverse ETFs just to be safe.
Even with the Fed meeting behind us, there is always another Fed meeting lurking in the future which I think is contributing to the mREITs trading below book value. It would almost be better for the sector for the Fed to go ahead and raise rates and get it behind us. There's an article in today's WSJ about the mechanics of how they will actually try to raise rates (the old tools are somewhat useless since there are so many excess reserves). Anyway, it looks like the 10 year may have run into resistance around 2.6% which is about where it was at the end of Q2, so mREIT book values should hold up. Waiting for WMC's divy announcement which should be this week.
Per our earlier discussion. Article says they will try to use interest on excess reserves and reverse repos.
That would be a taxable transaction to the stockholder (if you hold in a retirement account it would not be taxable until you sold and withdrew the money). Tax-free spin offs can only be accomplished if the business spun off was operated by the parent for a certain number of years. Since YHOO did not operate BABA as a sub, the distribution would likely be taxable. That's why they are studying ways to make it tax-free by putting the shares with some line of business , but they may need a private letter ruling from the IRS before they can pursue such action with certain tax consequences. Many stories how John Malone at Liberty Media did several spin offs of their different stock holdings.
I think "accounting tomfoolery" is a loaded mischaracterization. Yes the company ended up having more tax gains on swaps last year that necessitated the distribution of a larger dividend, but that is quite different from alleging that they are overstating their earnings. I would think that they spend extra attention in this area now as a result of last year.
rogers, this is one of the biggest risks with high-yield investments in the MLP, BDC, mREIT and other specialty groups. This is why they trade at high yields % even with a history of paying their dividends. If the business hits a speed bump, the perception is that the dividend is at risk. So when holders brag about how well they have done with different high-yield holdings, they don't talk about the risk that they have undertaken to achieve those returns because there isn't a widely quoted statistic that measures the risk. It's an analogous concept to investing in high-growth/high p.e stocks versus lower growth/lower p.e. stocks. More return comes with more risk. Risk is fine not to talk about until someone loses an eye.
It certainly seems like Yahoo is trading cheap. As for getting to $71, that depends on them doing some type of transaction to spin-off their BABA shares without incurring taxes. That will take some time, although they mentioned that they are currently looking at different options. There's timing and uncertainty so Yahoo will trade at a discount to this end value, probably at least 10% and closer to 20%, so that would make a best short term target of the mid $50's. Then you have the BABA valuation. It probably spikes from the IPO price, but most of these famous IPO's tend to come back in price after peaking once the euphoria wears off, until they start to report earnings. Who really knows if BABA turns out to be the next google
len, you really should look at the Congressional Budget Office website to review the stats on the budget. Here's a summary.
First, the deficits started in 1975 and ran until 98. The surplus years were 98,99,2000 and 01. The deficit returned in 02. the change in defense spending from 01 to 02 was 306b to 349b.
Let's look at spending and revenue from 2001 to 09.
Spending went from 1862 to 3517. Revenue 1991 to 2105. Defense went from 306 to 656.
Before you conclude that the increase in spending was all due to defense, note the following on entitlements (01 to 09):
Social sec: 429 to 677
Medicare: 129 to 500
Medicaid: 129 to 250
Income sec: 143 to 350
Other retirement: 92 to 137. All told, that's 870b more in spending on entitlements which is more than the 350 increase in defense.
There's a Barrons article with the math of the sum of the parts on Yahoo. Regular business plus their cash and Yahoo Japan is worth $16 plus $6 for the BABA shares net of taxes that they are selling in the IPO =$22. They will still own BABA shares worth between $27-30b (at $70-80 per Baba share) = $27 per yahoo share before taxes which could be as much as 35%. So that's $49 total. The article is about tax-efficient waysfor yahoo to spin off the BABA shares like Liberty Media has done for some of their interests.
So the regular business (minus the cash, BABA and Japan) is valued at $8 and has EBITDA at 772mm, meaning it is selling at about 10 times EBITDA. Competitor AOL trades at over 7 times.
Even if BABA shares go to $100, that would only be another $7+ in yahoo value (before taxes). Based on that, Gambler, your hopes are a little high. But enjoy the ride. Just remember "pigs get fed, and hogs get slaughtered."
When considering govt statistics, it is always helpful to remember those great words from Mark Twain: "there are statistics, damn statistics and lies."
On the CPI, it's not so much the products and services that are captured, but the "adjustments" in the name of "product quality improvement" that are factored in keep the reported prices down.
Finally, there is a difference between disinflation and deflation. As long as the stock market stays up, there is no way the Fed reconsiders the taper decision.
Sarge, I got tired of listening to Gambler pump Yahoo so I decided to play along. I bought a call with a $43 strike for $2+ and sold a $48 call for 1+. I can make a maximum of $5 per option if Yahoo goes above 48 or lose the $1+ if it doesn't go above $43. It sounded like a good bet with Yahoo trading at $42 when I put the play on. It's only play money.
I wouldn't worry about the yhoo trade. Better for it to rise after the Baba IPO then to rise before and then sell off on disappointment Based on a recommendation, I have a spread play where I bought Nov 43's and sold Nov 48 calls. I've never done spreads before so I hope it works out.
Just read 2 stories that are turning the markets green. First, WSJ Fed reporter Jon Hilsenrath is saying that the Fed is leaving put their language that it will be a "considerable time" before they raise rates, although in the press confernence that follows they will qualify that somewhat. It's pretty sad that trading decisions are based on two words in a Fed statement, but it is what it is. Second, China started a QE program.