I am sure I have mentioned that I write occasional articles for DividendInvestor.com. These are the folks that bought the original ‘Yield Hunter’ website, which for all practical purposes has disappeared.
Here is a article from late last week–maybe helpful to some newer income investors, that went on that site–although I see Ned forgot to list me as the author–normally he does, but must have zoned out.
DividendInvestor.com pays me to write an occasional article–based on per article (not on traffic) and me putting this link on this site is simply because I can’t copy something I wrote for them onto this site.
As I have mentioned to some folks I have had offers to write for some of the Seeking Alpha ‘teams’–at pay rates WAY above what anyone pays for any normal article–no thanks!! I continue with an occasional article for DividendInvestor.com because I like them–can’t say the same about many SA authors.
39 thoughts on “Newer Article On DividendInvestor.com”
The article link seems to be broken. I get a 404 error.
Someone had posted a couple of weeks ago that it was possible to read the comments on SA articles that had gone behind the paywall. Frequently the comments are more important (to me at least) than the articles. I can’t figure out how to do so. Any advice would be appreciated.
I think you have to make a comment under the article before it goes behind the paywall. SA will then track all comments for you and allow you to see them even if you are not a paid subscriber. So if interested in an article, best thing to do is to make a comment.
That is true. If you make a comment before it goes behind a pay wall, you will continue to see the entire article even after it goes behind the wall. Note that if you stop “following” the article, you will be locked out from seeing the comments. And yes, I agree that the comments are the most important part of any article on SA.
Randy, I replied but I think Tim has an auto block on website mentions…If you pull up the article and then right after the https: type in outline.(com) with one backslash it will pop up the article. Delete the parentheses and eliminate one of the backslashes. It will not pull up comments though. You have to track comments by either posting as Ken said, or just hit the tracking comments icon.
That is good info, thanks Grid.
Outline is also in FF and Chrome as an app and works on other sites as well like Barrons and Financial Times, although Barrons has become nothing more than a tout sheet imho.
Financial genius hunched over a keyboard trying to churn out another click bait article on the internet for a measly $200. I’d wouldn’t bet my money on it.
P—yes I think you paint it right.
Tim, it’s an irony to me. Someone making their own financial decisions, rather than trusting a “certified” financial planner, should want to be educated enough to do so. Yet some willingly forfeit making their own decisions in favor of following someone else’s ideas, someone who is less qualified or successful than the financial planner they didn’t trust in the first place. That’s a little crazy but it describes me too when I started investing my money myself years ago. I persevered through countless mistakes and eventually prospered on my own. Your site is a wealth of information and you and your contributors provide great food for thought, I love it.
Thank you Tim – excellent article!
You’re welcome SunnyFlorida. I wish I was in sunny Florida right now as we expect a foot a snow in the next 48 hours.
I feel for you Tim! Sending you warm wishes. If its any consolation its already high 80’s, muggy, and we are recovering from a major freak “golf ball size” hail storm that created a wide path of damage here the past week– but yes its very Sunny:).
Tim, this is why there will never be FULL DISCLOSURE on SA. Let’s see all these “professional writers” REAL track records in real time from a data base that everyone can access easily. This will NEVER happen as we would all see the “king” has no clothes on. Warren Buffett stated “Only when the tide goes out do you discover who’s been swimming naked.” Why would that be any issue and who could find fault with FULL DISCLOSURE? This will 🛑 stop the deception of recommending a stock and writing a glowing review to everyone on SA, then telling only your subscribers to sell the same stock you told everyone to buy. It’s duplicity in a deceitful magic act that all of us know the true secret before the trick is done. Shame on any of this foolishness with bait and switch articles and recommendations… In Latin we say Abbati, medico, patrono que intima pande…
Not all those who wander are lost, Nomad
You got it Nomad–it is not for me.
Tim-I have a general question/comment. You often indicate a preference for preferreds with shorter initial call dates. However, if interest rates increase, then the value of these preferreds will fall and are not likely to be called. Therefore, the investor will not have these funds to invest at the higher rate–unless one sells at a loss. If interest rates fall, then the value of the preferreds will hold (or increase), and are likely to be called. Then, the investor will be faced with investing in preferreds at a lower interest rate. If above is true, then why would one not want to buy preferreds with longer initial call dates. What am I missing?
Larryl – I’ll take a stab at an answer to your inquiry. My interest in short call dated preferreds would have to be of the combo of a short call AND a preferred trading at a premium…. What makes that interesting is if you are willing to buy at an appropriate yield to the call, one that equates to or beats the going rate for an equivalent maturity as the call date (not current yield). If the issuer does not call at the first call date, then the yield you achieve goes up dramatically in relation to your expectations the longer the preferred remains outstanding. In addition to that, if you’re buying a short call date preferred with a high coupon, then the existence of the short call date has given you great downside protection should interest rates go up. To give you an example, some people around here have been buying ALL-E which is a 6 5/8 coupon (thanks, Grid!)….. As we know from all the recent preferred issues it would be safe to say that the going rate for a comparable new issue preferred is probably in the 5 3/4% range or less… If ALL-E was non callable, with 5 3/4% being the going rate for a new issue, ALL-E would most likely be trading at or near a current yield of 5 3/4% or a price of 28.80. Because of the short call, it’s trading at 25 1/2. So what would happen to ALL-E if interest rares went up 75 basis points? All-E would still be worth 25 1/2 approx. But if it had been a non-callable issue, that price would have fallen from 28.80 to to 25 1/2. So obviously we’re not talking about scoring on a big price swing. We’re talking about downside protection and the possibility of doing far better than you had hoped if the early call date just comes and goes without any action from the company….BTW, the ALL-E buyers have already won as ALL did not call and now they remain outstanding for at least another 3 months as they are only callable on interest payment dates….
2whiteroses—yes another method to add a little safety at a reasonable price. The method you outline for ALL-E I use often–many times just for a short term ‘capture’. I like those issues that are at the 1st call date (or near it) right around $25 and folks are worried about a potential call–makes them pretty reliable holdings.
New investors can now get burned on ALL-E for example. In the prospectus, there is a 30 days notice. This can be called in 30 days. And it is trading at 25.60, so new investors will lose money.
Yes, Mr. Lucky, 2WR, is coming from a different perspective. He bought right before it went exD at purchase price of around 25.40. So he basically bought at par and can let it play out. A newbee would have to survive a divi and a half to break even now. They were drumbeating about saving capital costs with a mention of last redemption in conference. The rope is too short here for a new purchase at this price I believe.
Mr. Lucky – ALL-E can actually be called on as little as 10 days notice, not 30, HOWEVER, it’s also old school… It cannot be called at any time, only on dividend payment dates… Still, your math applies because current pricing implies that ALL-E will survive beyond the next dividend payment date…. That’s not a bet to make imho, though for now, I’ll continue to hold..
wwhiteroses. I have read the prospectus, and i believe it says 30 for a written notice. The last one they called, I believe they gave 45 days notice. The below is all that i could find. I ran this by Preferred Stock Trader as well and this is what we both came up with.
I too got in before the dividend at 25.36 and 25.38. But I would not be a buyer right now.
We will mail notice of every redemption of the Preferred Stock by first class mail, postage prepaid, addressed to the holders of record of the Preferred Stock to be redeemed at their respective last addresses appearing on our books. This mailing will be at least 30 days and not more than 60 days before the date fixed for redemption (provided that if the Preferred Stock is held in book-entry form.
Mr. Lucky, 2WR and perused it pretty tight and we see it as having to be redeemed on its pay date. This is not a totally unusual term for some preferreds. Here is the part from prospectus…Look at S-6 page of prospectus.
in whole or in part, from time to time, on any dividend payment date on or after April 15, 2019 at a redemption price equal to $25,000 per share (equivalent to $25 per Depositary Share), plus any declared and unpaid dividends, without regard to any undeclared dividends, to, but excluding, the redemption date.
Mr. Lucky – It’s in at least 3 different places in the prospectus that it’s callable on pay date only with the exception of some narrowly defined circumstances, but darned if I can see now where I came up with that callable on as short as 10 day’s notice parameter. 30 vs 10 is academic now, however I was certain it was there when sweating out the call provision right after buying, but I sure can’t find it now.
Hey it is early in the morning now… But can’t they call ALL-E for the next dividend payment period? Regardless of the notification… then they would pay you $25.00 per share, and give you .4141 dividend payment. So that is $25.41. What happens to the investor, that has been buying at $25.60?
Am i missing something?
Mr. Lucky, no you are very correct. 2WR, was speaking through perspective of our trade (I have since sold) when we bought. I can see why he holds because his goal is different than mine. But I am done and over this…..PST has intuitive price movement feels that is why he is a good trader, I certainly believe. But doesnt seem to dig for details much, I notice.
Ah. thx for clarifying Grid! I still hold my ALL-E as well. I have no idea what new investors are doing :-). I am sitting way too much in cash, and sold most of the Dec buys. Will have more cash when SSWN is called.
LarryL—this is just a personal preference – everyone is different. I learned quite a while ago that I am too affected by movements in my net assets–meaning I worry too much–lay awake etc. Mostly needless worry, but it is what it is. If I had millions beyond my needs I wouldn’t worry so much, but I am almost 66 and the time to recover from a strong downdraft grows shorter.
When I talk shorter dated maturities I usually am talking term preferreds or baby bonds–I like that ‘date certain’ for maturity–I am quite happy with the 6 or 7% if I can get it (actually already have it for this year).
Only in recent years have I personally become more comfortable holding some perpetual preferreds.
Thanks for your honest response. At age 71, I share similar concerns.
Tim – I could have written what you wrote only not as concisely…. and I think you’re ahead of me in getting comfortable with some perpetuals…. They’ve always been a categorical no no to me but I’m finding ways to get more comfortable with some just as long as they’re not plain vanilla.
Tim – I find your comment about SA interesting. Sure others do, too.
In my mind SA represents some of the best and some of the worst you get in a market economy, in financial “journalism”. There is some great stuff there but also a great deal of financial pornography. From comments there, it is very clear that many of the people who rely upon SA for financial “advice” have very little in the way of financial acumen. They don’t know good advice, from bad advice, from self-serving advice. They sign up with groups who dispense terrible advice with amazing regularity.
Some of the authors with the biggest followings also do the most damage. We know who they are. Today, as example, I read the glowing review of “O” (Realty Income). Doubtless, a bunch of people will go out an buy it based on the review.
Yes, it’s a great company but at present price it’s selling at about the lowest yield of the last decade? Why would you be a buyer in these circumstances?
Identifying good companies isn’t that hard, in most cases. Identifying good entry points is much more important.
Same for preferred. I cringe when I see the SA bunch come out with a recommendation for an issue based on current yield, while ignoring that the YTC may be 2-3%, and it’s likely to be called.
This situation creates opportunities for people who understand investment math but is bad for many of those who blindly follow advice from SA.
I would not have the strength of stomach or weakness of character to do what many SA authors do. Lucky that I don’t need the money. Probably better than bagging groceries at Trader Joe’s but not by much.
Bob-in-DE, you pretty much sum it up. Some people don’t have any confidence in their own ability–they prefer to buy what ‘someone’ recommends so when they ‘buy high and sell low’ they have someone other than themselves to blame.
Yes I saw the never ending drumbeat Realty Income article today. He is a pretty good sales person–investments we will never know. A number of items he does drive me crazy. Remember last year he was moving his empire to ‘themaven’–I conveyed to him at the time to stay away from Jim Heckman (my wife worked at one of his companies)–then he signed up and found out what a mistake it was and he left there as quick as he went there. And on and on.
I couldn’t write successfully for SA because you have to ‘recommend’ buys to be successful and I just don’t do that–it’s a hangover from the ‘olden days’ when there was something called ‘suitability’. Just present the info and let folks do what they will–but that doesn’t draw followers.
I think SA started off good, but at some point investors want to make money and thus we had the marketplace, then a subscription to see old stuff and now we have teams of people acting as 1. The marketplace must be fairly lucrative for some because of the offers I have had at up to $200/article–thats real money for freelance writing on the internet. Like you I am glad I don’t have to avail myself of some of this stuff.
And FWIW, your old SA articles on CEF preferreds, although they needing a refresh now to show the newer issues, were what got me started in this area.
The “further information on this issue” pages referenced in the article (both dated last September, while your article is dated 4/4/19), say that NCV-A and NCZ-A “will” pay QDI. Was this copied from QOL at the time? We know that’s incorrect now.
What are “some of the Seeking Alpha ‘teams'”? Are those the “Marketplace” pay services who hide several anonymous authors behind a cutesy name? I applaud you for refusing to particpate in that mess.
Hi Larry–you are correct we know that of the CEF preferreds pay a mixture of dividend types of distributions–qualified, unqual, ROC etc.
Yes the ‘teams’ I refer to are the marketplace folks–up to $200/article they offered–they must be doing pretty well. But I can’t dance to the tunes of those folks–I would puke.
A little projectile vomiting now and then ain’t so bad!
Hi Tim, Good article. No level of experience will inure me to the value of reading your articles – and have re-read some of your past postings multiple times. Straight-forward as a row of corn in late July. Of course, if the re-reads start looking like new material to me…lol
Alpha–can’t tell how many times I have reread some of my very old articles–like you when the rereads looks good what does that say?
Glad to have you here.