A more pressing question:
Why oh why are you posting such an off topic post on an INVESTMENT; specifically KMI equity, message board?
My answer: you are seeking attention; something I unfortunately just gave to you (for all of eight seconds-- you are now out of my mind)
I love the fact that Kinder insists that he won't sell any of his KMI shares, but here's some perspective:
KMI's quarterly dividend was increased by a penny. Based on Kinder's KMI holdings A/O 12/2/14, that one penny increase equals an additional $2,448,460 into Rich's hands! Total quarterly payment to Rich: $110,181,100. Although KMI represents most of Rich's wealth and it is prudent to be diversified, when one is at the level of wealth such as Rich, diversification may be a moot point given he must have a few hundred million bucks in cash type holdings or other investments. The only meaningful downside if KMI were to disappear is that the recipients of his estate will receive less.
Well done, Rich!
You beat me to it; what a contradiction in that poster's posts!
Loved your earlier statement: "Usually if something looks like it's wrong in the market, you'll find out what by looking in a mirror."
You consistently write great posts--Cheers.
Actually FBIOX has outperformed.
Perhaps you made the same HONEST mistake I did a few months ago. A particular poster tar and feathered me for doing so, even after I acknowledged my mistake and provided ACCURATE return numbers.
If you simply did a comparison of FBIOX & IBB on YahooFinance, you'd only be seeing a share price comparison that does not include any distributions.
I just did a three year comparison on a Bloomberg for 2/24/12 - 2/24/15.
First figure is simple price appreciation; second is Total Return (this includes distributions):
FBIOX 148.08% 195.00%
IBB 180.55% 182.50%
KMI's next dividend will be paid in February; it has yet to be declared. For perspective, KMI's Feb div was paid 2/18 with 1/29 ex date; declared 1/15.
A great resource for dividends is the Nasdaq site. Easy way to get there is to Google "KMI dividend" or whatever company you are interested in and hit the first result.
Mutual funds are actively managed; meaning the portfolio manager actively buys and sells the fund's holdings. If one is willing to accept YahooFinance's info, FBIOX has annual portfolio turnover of 35% (about 1/3 of the holdings are sold per year). IF a fund has more NET short term and or long term capital gains, it will pay out most of those gains via either a short term or long term capital gain distribution. (If a fund's holdings earned dividend income, that would be paid out as "income". Most equity funds pay distributions once a year, near year's end, whereas bond funds typically pay out income more frequently.
We all know that FBIOX has done well this year, as well as the past several years. It is not surprising that profits were taken from some positions during 2014. Since the gains outweighed any losses taken, the gains were recently distributed. Note: no short term gains were distributed.
Investors have the option to either take the distribution(s) in cash or to have the distribution(s) reinvested into more shares. If the latter, this is actually a purchase of shares. The NAV is adjusted down by the amount of the distribution. Since most people want to remain fully invested, the opt to reinvest the distribution(s).
Investors get more shares, but at a lower NAV. IAs others and I have previously noted, f the position is held in a taxable AC, the distribution(s) are taxable that year.
There is no financial magic associated with capital gain distributions, but given human nature, from an emotional perspective, most people prefer to have more shares at a lower NAV!
It is great that you have taken an active interest in investing given your relative young age.
You didn't ask, but here's a few suggestions:
If you have access to a 401K, try to contribute as much as you can; particularly if your employer has a match (that's FREE money).
Consider investing in a ROTH IRA
Consider investing in a Total Stock Market Index Fund
Not a dumb question and you seem to have the correct perspective.
It is a wash, but the event may have tax consequences!
I have read some posts where the poster seems to think receiving a rather large distribution is wonderful.
I own a number of individual equities. In a TAXABLE AC, when I sell a position at a profit, I don't only reinvest my original principal, but I also invest the gain. I have to pay capital gains taxes on my gain. This is similar to a fund that has taken more gains than losses the past twelve months. FBIOX netted out a capital gain, and by law, must pay out most of the gain. Most fund investors reinvest their distributions (similar to investing gains in individual stocks). By reinvesting distributions, investors keep their EXPOPSURE the same, but they have to come up with funds at some point to pay capital gains taxes. When they reinvest the distribution, they are BUYING additional shares at the post NAV share price.
Distributions show that a fund's assets have appreciated, but we all knew this simply by watching FBIOX's NAV increase. (Of course, there have been some years when a fund's NAV is down for the year and a distribution is still made!)
Distributions make mutual funds not so tax efficient. Many pundits suggest putting less tax efficient investments in a tax deferred or tax free account and holding more tax efficient investments (index funds for example) in a taxable account. I hold my biotech position in my ROTH. It is also recommended, if one is investing in a taxable account, to wait until a large distribution is paid, before buying shares in a fund.
"The high short interest makes me think large funds are still betting against this for some reason."
The November month end short interest will be released soon and I expect a huge decline.
IMO, A LOT of the short interest was related to selling KMI short and going long the MLPs; MLPs were then exchanged for KMI (and cash) and those KMI shares were used to cover the initial short of KMI.
Please remember mutual funds are LONG TERM investments.
It would be nice if every time an investor bought shares, the share price would only go up. But we live in reality and in reality, it doesn't work that way. I entered into biotech over ten years ago and in hindsight, my timing was terrible given my position dropped around 50% and hung down in that area for a few years. I did sell a small portion last spring.
There is no need to micro watch a mutual fund; in your case, by doing so, it appears you become even more jittery. This may affect rational thought resulting with an unwise decision.
Again, what weighting does your biotech exposure have relative to all your investments?
To state the very obvious, biotech is volatile.
"If you can't stand the heat...."
Bottom line: to each his/her own.
Although emotions have no place in the investing equation, that is easier said than done!
One must feel comfortable with their portfolio; otherwise, they will take actions they may regret.
It seems that many believe the slump in oil's price will be with us for years, I'm not convinced just yet.
I bought just less than 1% of my holdings today (not including the shares I added on Monday) via div reinvestment!
"Woog, buy and hold only works when the market trends."
When I read this statement, I immediately called "FOUL"!
Buy & Hold means exactly what it sounds like; if one tinkers when the "trend" changes, they are no longer adhering to buying and holding!
I do sell, but I have found over many years that the less transactions I make, the better off I am; less tax events and lower costs--besides the challenge of finding a "better" investment than the one I sold. Speaking of low costs, for my equity positions, my total commission charges for 2014 equal 1/3 of a basis point (compared to my default holding VTSAX's--Vanguard Total Market Index Fund--5 bps).
You cite risk and there are many risks associated with investing.
Over the really long run, I'd say one of the biggest risks is to pick and choose WHEN to be invested rather than BEING invested!
A risk I took for many years was being fully invested in equities with not much cash on the sidelines; if I had to sell in a down market, I would have suffered. My plan was once I hit a certain age, I would start to divert some of my funds into cash or fixed income. I'm taking a risk by solely having multiple online savings accounts for "fixed income" (that pay 80bps - 100 bps); I'm losing, but my principal is 100% safe.
As far as 2008, yeah, I lost "big", but all of my holdings lost 3.51% LESS than VTSAX. I added approximately 8.5% new funds to equities that year.
2009, VTSAX beat my return by 29 bps; 28.83% v 28.54%. I added 5.4% new funds to equities that year.
My goal has been to beat VTSAX's returns; I've been long VTSAX since 1992 and have reinvested all but a few quarterly payments. Some years I have beaten VTSAX and others I have not, but every year has been close either way. This has allowed me to conclude that if I could do it all over, I'd simply be 100% invested in VTSAX--but I do have FUN investing in individual positions; VTSAX represents approx. 28% of all my holdings and that number will only increase.
"Last time we shared a thread you had posted about how IBB was doing much better than FBIOX when you tried to prove your point by using Yahoo's and you premium 'borrowed from work' Bloomberg charts. I told you the charts you used omitted the reinvested distribution. You then went on for days saying nothing but blah, blah, blah"
Yes, I WAS WRONG when I solely referenced the YahooFinance chart AND I NOTED THAT I WAS WRONG. (why you keep harping on this is beyond me; perhaps a ploy to divert from the real FACTS?)
I then ran TOTAL RETURN numbers on a Bloomberg, but you didn’t like the results. I stand with the Bloomberg info; for example, YTD through yesterday’s close (total return) FBIOX is up 35.02% and IBB is up 38.44% (If you have an issue with these numbers, I suggest you contact Michael Bloomberg)
Of course you have demonstrated countless times that you are challenged when it come to computing percentages…on 9/4 you posted this:
“But if a share quadruples in price then it went up 400%. That is the way all analysts judge the performance of equities. Again, FBIOX went from $59 to $226 including dividends over the past five years for an increase of 383%.”
Actually 59 to 226 equals a 283% increase.
if 2 "quadruples, it will become 8, right? 8-2 = 6 6/2 = 3 or 300%
“Rather than bashing FBIOX, its distribution and false tax liabilities trying to inject scare tactics while everyone else tells you the distribution and additional shares are a good thing…”
I am NOT bashing FBIOX, just attempting (and apparently not to well) to clarify the “benefits” of a mutual fund cap gain distribution. “false tax liabilities”?? In a TAXABLE AC, if you receive a mutual fund distribution, that distribution is taxable for the year it was paid—regardless whether one takes the distribution in cash or reinvests it. Period.
Nice perspective. Bottom line: as long as an actively managed fund's total returns exceed an index / ETF based on an index (like IBB), it makes sense to "hire" a specialist and go with the actively managed fund. Kaul has done very well managing FBIOX for years. For the past five years, FBIOX's total return has been greater than IBB:
310.9% v 292.6%.
How about ten years?
378.3% v 338.2%
We all know, riddleone being the exception, that "total return" includes price appreciation and all distributions paid.
Yes, FBIOX has been a great holding; this fund and its sector have been on fire the past few years.
"Alex: May I have Frequently Spammed Stocks on Yahoo Finance Message Boards that have ZERO posts on their own boards for $200"
Alex: "This is a junk company"
bevubucyfij: "What is Start Scientific?"
More like 24%.
Perhaps CVX got ahead of itself when it was trading mid 135.
Perhaps CVX's decline has been overblown as well.
At its high, CVX's RSI was around 87 (overbought)
CVX's current RSI is approx. 29 (oversold)
The above is all well and good, but who knows where CVX will be trading in two, five, ten years!
I'm in the camp of holding for the foreseeable future and reinvesting my dividends.
It will be interesting to see what the JUNE div payment will be; it will be announced around the last week of April (right around the corner--using long term parlance!)
Does your "chart" tell you this LOL???
You're quite the rabble-rouser! Nice silly post on the KMI board.
Why not just invest, reinvest divs and hold some stocks instead of posting National Enquirer type posts?
Sure is FUN! to post, isn't it?