Moving money year by year to a Roth is a great idea. IRAs and 401ks have tax consequences most folks do not think about. Mandatory distributions reduce your ability to manage your taxable income, and increase each year as you get older. Further, once inherited (beyond your spouse), the recipient has to immediately begin taking withdrawals. If they are have income (from work or otherwise) their marginal rate increases. That lower tax rate in retirement might turn out to be a higher rate to your inheritors.
A good approach is to convert some each year to a Roth, perhaps enough to fill out a certain tax bracket when your income allows. This is particularly effective for early retirees who may have low income before a pension or social security kick in. As noted, each conversion reduces future mandatory distributions, giving you more tax flexibility. Retiring with most of your assets in tax deferred accounts has consequences folks don't think through until they get there.
You do have to watch your modified AGI. 170k for married, $85k for single and you get Medicare premium increases, and there are multiple income levels (steps) above that where additional increases kick in (at 214k for example). For what it is worth, budget proposals if enacted could mean half the population pays incremental Medicare premiums over time, so this trap will become harder to avoid.
Inherited Roths (beyond your spouse) also require immediate distributions over the recipients lifetime, but are tax free, rather than stacked on top of their income. Roths were never intended to be vehicles to allow for multiple lifetimes of tax free income, so I suspect at some point they will require inherited Roths to be withdrawn in a five year period.
I suspect most of the US does not support Statehood. I would be surprised if this bill ever passes in the US. Bills gets introduced all the time, never go anywhere. Often done to appease certain folks and say they tried. A similar bill was introduced a year ago in the House. Where did it go?
Ask yourself - would adding PR as a state be a fiscally responsible move? Then look at the makeup of the House and Senate and figure out its chances.
The govt is on record as saying they will not bail out states. (Of course they will if it comes to it, but for now anyway. Just like companies say their dividends are sound, until they cut them.)
What is that about?
I looked at the earnings report. Seems FBP has played out the net interest margin increase. Still generating enough new bad loans that reserving is not making progress, just holding even. Key thought is they have $725mm of bad loans not earning anything. Somehow getting that dead asset into an earning asset is how they increase earnings. Pretax, preprovision earnings have been essentially flat for 5 qtrs now. Still a ways away from being able to start reversing the tax loss carryforward of over $500mm.
Due to the stress tests through end of May, it will only be after that they get more of an idea about the consent order being lifted (analysts asked - when can you return capital?). The capital ratios, strong, have been deteriorating. Book value has dropped quite a bit - now $5.30. To me the better question is when will the capital ratios start improving and the nonperforming assets coming down from other than chargeoffs or sales with addl losses.
More losses in the bad loan portfolio? Losses from PR govt exposure? ($71mm in investment portfolio, $450mm overall. Well, that plus $205mm govt related. They say fine, we will get to see.)
No doubt the investors who bought in the offering (high 6s?) are happy... TH Lee and Oaktree sold down ownership in same offering. Treasury share overhang, too, so more fun at some point.
Turnarounds always take longer than you think. Not quite sure what to think. My gut says they have some more damage in the portfolio - be it new bads, existing bads, or out of left field items. Not huge amounts, but enough to not be good and inhibit progress. Just a gut.
I have several stocks with partial, or whole, return of capital distributions in a taxable account. The last two years my broker has reported the distributions properly. Has the basis been adjusted properly? I have not sold any of them in my taxable account,so while they appear to have been adjusted properly, until I get a 1099 with a sale I will not know.
So I keep my own basis calculations. Not hard.
One consequence: you have to keep up with it, check your documents, and may have to file an attachment to your tax return if the broker reports incorrectly and you report it correctly. I have done that before. They have messed up spin-offs, recaps, etc - but are getting better at it.
I also hold off filing, even extending, knowing more amended 1099s are coming when I can see the errors.
The market simply remembers last January when SUI guided FFO up significantly, then followed it up with an equity offering which brought the FFO per share way back down. The distribution increase is different this time, and very welcome, but does anyone think Shiffman is going to stop his aggressive buying binge as long as interest rates remain low? I certainly do not. Will another equity issuance be required? At some point.
Not a big deal though - it is all about deferred gratification. The per share increases will just be deferred, but will come.
I have no idea. However, the stock is down significantly more than the market today. When that happens on the day or day before an earnings release, it is often a bad sign as to what earnings will be.
The market is getting chippy, though, and index fund redemptions could be the catalyst given little buying interest in Puerto Rico. We will get to see!
Finally they are dropping some extra cash flow on a per share basis. Unless they do another equity offering.
Last year they similarly gave strong guidance, then did an equity offering which then lowered per share guidance. There is one big difference this year - they are raising the distribution and I have no doubt they will maintain it even in the face of an equity raise. This may be a prelude to another equity raise (see, market, we told you our acquisitions would be accretive, now give us more money to do it again).
Low interest rates are hanging around, I suspect the acquisition machine will be rolling again big time. With debt projected to be increasing - 6.9x EBITDA at end of year - another equity raise would not surprise me, though I will not look closer until they have reported. Personally, I like less leverage, not more.
All that said, this is good news. First distribution increase in 9 years.
Actually, im, there is some correlation if you look closely. Possible those shorts who covered in the 4th quarter are putting their positions back on in the new year? We will find out! Stay tuned!
Earnings leaks are always a concern. In my experience, price movement the day or two before earnings, and not further out, are most indicative if there has been a leak.
Another possibility is the leak of a secondary following earnings to lighten US Treasury shareholdings.
Good info, dar. I cannot provide any insight about Hamo's trade or motivation, but I do know that the 10b5-1 plans have holes in them big enough to drive a truck through. I do not believe the plan has to be filed with the SEC, and the plans can be amended or terminated, though supposedly only when there is no material inside information. Execs can have multiple 10b5-1 plans as well. The SEC is looking into them (for all the good that will do) because some suspiciously well timed 10b5-1 transactions have gotten some press.
Kudos to you dar, great call on NRF. I did buy some in the high 9.30s not long after my post, but wanted to really dig in before buying more or taking it to a oversize position. Time is my scarce commodity - some of that lack falls on me as I have lots of interests and lots of ideas. Do you have any ideas of the % of upside remaining over the next year or two?
Back to SUI, I ran into someone who knows Shiffman and the industry. I got a lot of diplomatic non-answers. Hmmmm. I have some concerns about SUIs rapid expansion and their increased RV park business, which is slightly different and more management intensive.