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Open Thread: What Have You Been Buying/Selling/Pondering
Added to RIT Capital Partners in London. Added to Canadian National Railway. Added to T Rowe Price Cap Ap (PRWCX). Sold more of Pimco Equity Dividend (PQIDX) and Pimco L/S (PMHDX)
No changes since last report. If BAC gets slammed tomorrow, may add to it. Otherwsie, steady as she goes. Think the recent tech earnings, and honestly earnings in general, as well as recent order report, will help steady the bull. Ukraine remains worry.
Sorry to see that PMHDX did not work out. And, PQIDX? Something going on here with PIMCO and you?
My last nerve got worn out on PAUDX and I replaced it with RSIIX. This was in a taxable account, and I'm using it as a holding in my pre-retirement bucket 1 build-out. I've held the same in retirement account for a bit, and have been pleased.
As an aside, my plan was to purchase ICMUX, but it seems that Schwab has a $100K minimum, which was a bit surprising. I need to sort through the other noteworthy 1* funds for a good alternative.
No changes since last report. If BAC gets slammed tomorrow, may add to it. Otherwsie, steady as she goes. Think the recent tech earnings, and honestly earnings in general, as well as recent order report, will help steady the bull. Ukraine remains worry.
Sorry to see that PMHDX did not work out. And, PQIDX? Something going on here with PIMCO and you?
PMHDX actually did well, I just am dismayed with Pimco. I'm not usually someone to sell due to the fund company actions (not that there's anything wrong with it), but management changes at two Pimco funds (two co-managers of established teams departing within months of each other, the equity fund head leaving to run for governor, how badly the whole Gross/El Erian thing was handled, etc.)
What a great call back at the beginning of the year to buy FIATY. I didn't make it, but I have followed it...up over 100 % over the last 12 months and 44% YTD. Nice call here at the "Scott Market".
For me MINDX, PRLAX, TRAMX has performed well enough to reallocate small profits of 10% since taking these positions.
A fund that I have become impressed with and seems to be cut from the same cloth as GASFX and TOLSX (High Sharpe Ratio, High Alpha, and Low Beta) is GLFOX which holds small to medium size global (mostly foreign) infrastructure companies (with a concentration in Industrial and utilities).
If you are unfamiliar with GLFOX, GASFX or TOLSX make it a point to research them. I add to them with short term profits from other funds and hold them through thick or thicker.
Thanks for the heads-up, bee. GLFOX is really interesting. I didn't realize the range of approaches infrastructure funds use. There was an article from WSJ in Feb (which quotes David, by the way) with a survey of i-funds. (It came up in full for me on a google search, so try that if the link doesn't penetrate the pay wall.)
The article mentions the TRP i-fund that's being merged away. With a mix of utilities and industrials like GLFOX and others, it was pretty much a failure, apparently in the execution rather than the strategy.
We're in cash since 01/22/14 with a look towards a possible position in long bonds in July .. we have to occasionally review the long term body of evidence of our method's performance statistics in order to keep our goals on course. http://stockmarketmap.wordpress.com/
bee- we have some GASFX and it's been the #1 performer (+10% !!) in our stuff YTD by a long shot. Thanks again to Scott for his many posts re GASFX.
Thanks!
I just think you can't go wrong (long-term) owning vital infrastructure/strategically located real assets. Major pipelines, rail and other assets (I think water-related is going to be big - China: 60% of underground water is polluted - http://sinosphere.blogs.nytimes.com/2014/04/24/report-finds-widespread-water-pollution-in-china/?_php=true&_type=blogs&_r=0) , as well. In many of the categories, I think it's already difficult enough to build new competition and it's only gotten/will get more difficult with regulations and other issues.
Australian company Graincorp (which I bought again and again after Archer Daniels Midland's purchase of it was denied by the Australian government - and I was a little bummed when I sold it on the original announcement 'cause I wanted to keep owning it) is a favorite example. Graincorp owns grain silos, rail transport and port operations in Australia. (Plus, nice div.) The railroads in the US are also an excellent long-term choice, and not bad at all short-term, either.
With infrastructure investments, I remain "get it and forget it", just reinvesting divs.
Considering selling PRBLX and just buying individual dividend stocks a la Josh Peters. DE, MAT, F, COH, CSX, CVX, AMNF, BBL, APAM, TROW, INTC, CA, CSCO, ESV, TUP, HCP on research list.
There is still time to talk me out of this foolishness, so fire away...
@Scott, so what are your favorite ways to play infrastructure? Is it through funds or stocks, ie BIP? I agre on the water front have been considering CFWAX, which is load waived through Fidelity.
Considering selling PRBLX and just buying individual dividend stocks a la Josh Peters. DE, MAT, F, COH, CSX, CVX, AMNF, BBL, APAM, TROW, INTC, CA, CSCO, ESV, TUP, HCP on research list.
There is still time to talk me out of this foolishness, so fire away...
It's what I do to some degree. Despite a mixed Q I like QCOM and would say QCOM or maybe, dare I say, even a Ballmer-less MSFT. I own COP, but CVX is a fine choice. I don't own CSX, but own nearly all of the other rail companies (nothing wrong with CSX, just haven't gotten to adding it yet. I probably will eventually add CSX and the other I don't own sometime in the next year or so.) I'd stay away from MAT, COH. I've thought about BBL many times, but have wound up sticking with Glencore.
Some other things worth a ponder are things like NSRGY (Nestle), BAYRY (Bayer - it's a health care co, an ag companies and a materials company - a threefer), JNJ (Johnson/Johnson), UN (Unilever), ABT (Abbott), DEO (Diageo - booze, very decent dividend), BF.B (Brown Foreman - booze again) and maybe one name from the private equity space (BX, APO, OAK, KKR), although keep in mind with the private equity names you wind up with a K1 at tax time.
There's also a lot of great Canadian names, some of which pay a monthly div: Pembina (PBA), Enbridge (ENB), Vermilion Energy (VET), Gibson Energy (GBNXF.PK), Inter-Pipeline (IPPLF.pk), Bell (BCE), Keyera (KEYUF.PK), Enbridge Income (EBGUF.PK) and others. Freehold Royalities (FRHLF.PK) is a volatile, but high yield oil royalty play run by the Canadian Nat Rail pension fund. (http://www.freeholdroyalties.com/index.php?page=governance)
HCP is a good choice, but I also think VTR is well worth a look in the same space.
@Scott, so what are your favorite ways to play infrastructure? Is it through funds or stocks, ie BIP? I agre on the water front have been considering CFWAX, which is load waived through Fidelity.
My position in BIP is a long-term one, although noticeably smaller than it was a year or two ago. I don't own it, but a company somewhat similar to BIP is Cheung Kong Infrastructure (CKISF.PK), which is a subsidiary of the giant Cheung Kong conglomerate.
I own INF, which I just continue to reinvest the monthly divs on.
I own a wide variety of energy infrastructure, although a favorite is Gibson Energy (GBNXF.PK), which is an enjoyable mix of infrastructure (including pipeline, rail loading and storage) as well as various oil services. They are the largest independent for-hire truck hauler of crude in the US and have an environmental business as well.
I think agricultural infrastructure is highly appealing, but options are limited. I own Graincorp in Australia, as well as a speculative position in Ceres Global Ag (CERGF.PK). The latter is really speculative, but owns both ag infrastructure, as well as rail and is building a commodity logistics center on the Canada/US border that will hook up to the BNSF rail line. Graincorp is somewhat volatile as well, but has a terrific dividend policy.
The Andersons (ANDE) is a US stock that is similar to Graincorp in a number of ways, but the volatility on that stock is enough to make one need dramamine. The Andersons has great assets, but the stock is too exceedingly volatile for me. There's also Archer Daniels Midland, although I think that's run up a bit much.
The railroads are a favorite and really something that I own and don't think about - very much a long-term investment. The railroads continue to do very well, whether it be frac sand or oil or the massive grain harvest in Canada.
The pipelines are also worth exploring, but I do think that there's names both in the US and north of the border. It's clear that Keystone is probably not going to be approved this year (if ever), so other Canadian/US pipelines will continue to be popular, such as Kinder's Transmountain pipeline, which is pushing to expand. Enbridge and Plains All American (PAA) are other companies with exposure and there are a number of others.
I think most people can (and are probably best) playing infrastructure via a position in a fund such as TOLLX or GLFOX. I focus on individual names primarily because of my interests and a desire to focus on specific segments.
Considering selling PRBLX and just buying individual dividend stocks a la Josh Peters. DE, MAT, F, COH, CSX, CVX, AMNF, BBL, APAM, TROW, INTC, CA, CSCO, ESV, TUP, HCP on research list.
There is still time to talk me out of this foolishness, so fire away...
I can't speak to the qualities of PRBLX, but I certainly wouldn't try to talk you out of a sleeve of good divi payers. I started accumulating these types of equities, also known as "the things my dad would buy" about 5 years ago. They now comprise about 20% of my total portfolio. Frankly, I wish I would have started this 20 years ago. My plan is to reinvest the divi's until I turn on the Social Security spigot, and then let the divi's flow.
Current holdings include AEP, HCN, RPM, JNJ, NGG, PAYX, O, KMI and WCP.
I am thinking of adding another member to my fixed income sleeve and raise the sleeve's fund count to seven. The fund is LIGRX and it will become fund number 52 within my well diversified portfolio which consist of twelve asset sleeves. This fund carries a M* rating of five stars and has earned a gold medal ranking. This fund has a wide asset base consisting of about cash (5%), stocks (4%) , bonds (83%) and other assets (8%) which are comprised of mostly convertible and some preferred securities. It currently has a duration of 4.6 years with an average credit quality of BBB. I have linked its M* report for those that would like to have a look.
I am currently of the mind set I'll be cutting this sleeve back to six funds and adding to my equity holdings should equities experience a good pull back in the near term. The current members of this sleeve are ITAAX, LALDX, THIFX in the short term section and LBNDX, NEFZX and TSIAX in the multi sector income section. With the addition of LIGRX the duration of the sleeve as a whole will become about 3.8 years, up from 3.6 years.
Thanks guys. I haven't done the math yet, but it makes sense to me that even with commissions I'd be saving money and collecting more of the dividend stream over PRBLX, VDIGX or even VIG.
Just at a glance I really like the QCOM rec. Solid expansion of dividends and earnings for a decade witn low payout. Is there something specific about MAT you don't like?
Since I happen to own both PRBLX and a number of individual stocks, since the 1970,s and 1990,s, why not own both? It has served me well and now I'm 80 and my wife and I have enjoyed our retirement with a portfolio that will take me to age 95+ but don't expect to make that age. good luck. I like my stocks but also that PRBLX portfolio and management, who is the best there is
Thanks guys. I haven't done the math yet, but it makes sense to me that even with commissions I'd be saving money and collecting more of the dividend stream over PRBLX, VDIGX or even VIG.
Just at a glance I really like the QCOM rec. Solid expansion of dividends and earnings for a decade witn low payout. Is there something specific about MAT you don't like?
Thanks much for the feedback.
Happy to help!
Qualcomm remains a fairly significant holding for me, with a long-term view. I believe the company can make inroads into new areas, such as retail (their beacons, which I think have a lot of potential for a wide variety of uses) and health. They recently raised the div quite a bit.
As for Mattel, I just don't really love the industry. I grew up as a kid in the '80's with Transformers and GI Joes and Starting Lineup and all those things. A kid today doesn't want an action figure, they want an IPad/Iphone and an XBOX One (or Sony PS4). Kids today probably don't know GI Joe, but are more than aware of "Halo" and Master Chief (which is owned by Microsoft/MSFT, which are coming out with more "Halo" games (see below) and a "Halo" series produced by Steven Spielberg.)
Board games? I don't know, it would seem those are on the way out, as well. Although, EA games is happy to sell you various Monopoly games on mobile, as well as other board games. Either the game is for sale, or it's difficult to get far in the game without buying additional in-game money online.
Microsoft also has money rolling in (it certainly does from me) for XBOX Live subscriptions. XBOX Live also has money coming in from users streaming media and buying downloadable content for games. Obviously, XBOX is not a large part of Microsoft as a whole, but when it comes to discussing what kids want these days, they want XBOX (and Playstation.) Additionally, Microsoft's handling of the "Halo" franchise (they created a studio to handle video games, novels and other products) is an example of how video game companies will likely to continue to have successes that will roll into other products (toys, books, movies, etc.)
When I was a kid, I loved going to the arcade. Then I went to an arcade where you could play against other people in the same room and that was amazing. Now I can play on XBOX Live against someone in another country. I think online gaming and mobile are just huge pulls away from the traditional toy industry as I knew it when I was a kid.
The video game industry was - I think - revolutionized by online gaming. The video game business is going to continue to do well with new avenues, especially micro transactions.
Game company Take Two has said that these transactions are "the gift that keeps on giving." "For Take-Two's quarter ended December 31, the company reported that net revenue from digitally delivered content grew 42 percent year-over-year to $132.8 million. This was led by GTA Online, Zelnick said at the time."
"GTA V has shipped 32.5 million copies and some 70 percent of all users have played Grand Theft Auto Online. Take-Two is keeping the all-important ARPU (average revenue per user) figure a secret, but from the enthusiastic way in which Zelnick talks about GTA Online, it wouldn't be surprising to learn that the online mode is performing quite well monetarily."
From MSFT's latest quarterly conference call: "Xbox Live members continued to embrace the service with transactional revenue growing 17%."
Hasbro and Mattel will probably keep doing fine - there's certainly licensing money for these companies - but you really have to hope that these companies continue to innovate and understand the changes in the way that they have to reach their target audience as times change and technology has really taken attention away from physical toys that dominated for so many years. Browsing through Hasbro's 2013 annual report, they at least seem to be saying the right things.
Long-term though, I guess I just don't think the toy industry is very compelling.
"Toys R Us" has not done well at all, although that's certainly due to a good degree from Amazon competition.
No arguments from me either mrdarcey. I started the same transformation roughly 8-10 years ago and couldn't be happier about it. Since I've initiated the plan my annual total return on my individual holdings has been 2-4x greater than my mutual fund portfolio ever was. I'm down from 24 funds to 6 today.
Basically I became disenchanted and discouraged by the low returns from 'income' or 'equity-income' or dividend' termed funds and so I went about building my own. While yield was most certainly high on my criteria list for inclusion I also leaned heavily toward companies that have been paying dividends for a long time and have an equal history for raising those same dividend payments on a regular basis, I also went looking for companies who I felt, given the currently available information, might still be in business when my heirs took over.
Interesting choices you listed for initial inspection I must say. I'm sure (at least I hope) you have a plan and that you're not just picking companies blindly. If you decide to let MAT go maybe DIS might be worth a look. Note to Scott - as the grandparent of a 4-yr old I can tell you that Mattel and board games aren't dead yet judging by the collection at his home.
Scott, Thanks for listing various infrastructure investments. I might be interested in TOLLX or GLFOX, although I'm wondering if I might be late to the game by initiating positions in them now. Since they may be grouped in with the utility/higher yielding sectors, do you think these infrastructure funds will be more negatively affected by an increase in interest rates compared to other sectors? Thanks.
The changing attitudes towards stocks vis-à-vis mutual funds is interesting. The case for mutual funds has always been one of diversification that an individual investor cannot realistically achieve. This reduces total returns or dividends relative to a small basket of stocks (more than anything fees erode). This hasn't changed.
I wonder if this change towards owning stocks is a reflection of better data and tools available now to manage risks or perhaps a belief that funds are more diversified than necessary. Hopefully, it isn't just another reach for "yield", taking on more risk than realized or desired.
* I have edited my original post to reflect my misreading of cman's post above.*
cman, while I won't speak for the others I can tell you that my portfolio is diversified across a wide spectrum of industries and categories and has increased rather than decreased my returns far, far beyond what any mutual fund returns regardless or in spite of the fees. We (I and the mutual fund industry) are just going to disagree on those points. However, my brokerage statements will back that up. I also have not reached for yield although everyone of my individual holdings yields more on it's own than any income or dividend paying mutual fund or ETF collectively shells out annually.
One of my primary investment tenets is knowing what I own. I dare say that I for sure, and everyone else most likely, do not have that information with a mutual fund. Holdings are reported anywhere from 3-6 mo after the fact with no guarantee that those holdings are current as of the date you receive them. Furthermore I have always questioned holding a large number of positions within a fund on the premise of diversification when ones best ideas, if diversified, should suffice. Again, we (me and the funds) shall have to agree to disagree although Mr. Buffett and Mr. Munger and Mr. Berkowitz would agree. By the way, that is precisely why they have a good chunk of my spare change.
And lastly, to be fair, I do still have that handful of mutual funds to provide some degree of backup should my thought process be proven wrong. I will never reach the pinnacle of questionable diversification old skeet sits on top of but I'm fine with that.
@mark, I am not disagreeing with anything you have said. I have no position on this. It was meant to promote discussion with introspection not trying to challenge your decision.
I have always believed you can get higher returns with a basket of hand picked stocks, just wasn't sure of the risk-adjusted returns because of the potential effect of an error in analysis/judgment. Mutual funds dampen this at the cost of returns.
When a number of reasonable people shift allocations to individual stocks, it is a good thing to re-examine the raison d'etre for mutual funds and see if anything has changed and if perhaps mutual funds are not serving the purpose they came around for. Nothing remains constant in this world. Your thoughts and experiences on this would contribute.
For example, one thing that came to mind after I posted is the possible effect of asset growth creating over-diversification in mutual funds. Sure, we can compare to index funds and rest assured that the funds we own haven't suffered much but it may have broadened the returns gap relative to a basket of stocks sufficient for managing risk.
Have the previous barriers to owning a basket of stocks directly - research and diversification logistics - been sufficiently tamed by internet, data gathering and analysis technology and convenient transaction platforms that mutual funds have reached the point of diminishing returns on the higher diversification without reducing risks?
More questions than answers. Thoughts welcome from anybody.
@cman, yes I realized that right after I posted it upon re-reading your original comment. My apologies.
My experience(s) in this arena has undeniably been enhanced by dare I say computerization of research, data gathering and transaction convenience for sure. I have instant access to tools never before available as well as sometimes absurd levels of insight and information. What once required phone calls to traders/brokers, days of waiting for snail mail deliveries an so on can now be handled in a matter of seconds or minutes from any comfortable or uncomfortable outpost in the world. Life is good in that respect.
However, I will also say that it took a great deal of learning, practice, confidence and maybe most importantly investable wealth accumulation in order for me to take the steps toward individual management. I simply did not have the capital starting out that would have enabled me to build a portfolio of individual holdings at a reasonable cost. There is simply no getting around that. Where trading costs were once based on the number of shares traded one can now flip shares on a whim practically free. That's got to help the bottom line.
So I guess I did need mutual funds initially for diversification and to provide all the necessary background research on companies and other investment instruments. I don't feel quite the same level of need or level of reliance today. I don't kid myself by thinking that I've tamed all of the investment risks out there or that I'm even near the level of professionals who do this day in and day out but I do believe that I am much more aware of them and possibly even accepting of them than I was when I first began investing.
Got snow yesterday in the winter that seems like it will never end. Since burning cash for heat is highly inefficient I went even sillier and took down a position in GLPAX. Load free and NTF at Fidelity.
Comments
Sorry to see that PMHDX did not work out. And, PQIDX? Something going on here with PIMCO and you?
As an aside, my plan was to purchase ICMUX, but it seems that Schwab has a $100K minimum, which was a bit surprising. I need to sort through the other noteworthy 1* funds for a good alternative.
Press
For me MINDX, PRLAX, TRAMX has performed well enough to reallocate small profits of 10% since taking these positions.
VDE seems to be having a hard time maintaining the "golden cross" (50 dma crossing 200 dma with upward trend), but is up sharply over the last month. Ted referenced this dynamic here:
mutualfundobserver.com/discuss/discussion/13089/a-not-so-golden-cross#latest
A fund that I have become impressed with and seems to be cut from the same cloth as GASFX and TOLSX (High Sharpe Ratio, High Alpha, and Low Beta) is GLFOX which holds small to medium size global (mostly foreign) infrastructure companies (with a concentration in Industrial and utilities).
If you are unfamiliar with GLFOX, GASFX or TOLSX make it a point to research them. I add to them with short term profits from other funds and hold them through thick or thicker.
The article mentions the TRP i-fund that's being merged away. With a mix of utilities and industrials like GLFOX and others, it was pretty much a failure, apparently in the execution rather than the strategy.
Regards,
Ted
I just think you can't go wrong (long-term) owning vital infrastructure/strategically located real assets. Major pipelines, rail and other assets (I think water-related is going to be big - China: 60% of underground water is polluted - http://sinosphere.blogs.nytimes.com/2014/04/24/report-finds-widespread-water-pollution-in-china/?_php=true&_type=blogs&_r=0) , as well. In many of the categories, I think it's already difficult enough to build new competition and it's only gotten/will get more difficult with regulations and other issues.
Australian company Graincorp (which I bought again and again after Archer Daniels Midland's purchase of it was denied by the Australian government - and I was a little bummed when I sold it on the original announcement 'cause I wanted to keep owning it) is a favorite example. Graincorp owns grain silos, rail transport and port operations in Australia. (Plus, nice div.) The railroads in the US are also an excellent long-term choice, and not bad at all short-term, either.
With infrastructure investments, I remain "get it and forget it", just reinvesting divs.
There is still time to talk me out of this foolishness, so fire away...
Some other things worth a ponder are things like NSRGY (Nestle), BAYRY (Bayer - it's a health care co, an ag companies and a materials company - a threefer), JNJ (Johnson/Johnson), UN (Unilever), ABT (Abbott), DEO (Diageo - booze, very decent dividend), BF.B (Brown Foreman - booze again) and maybe one name from the private equity space (BX, APO, OAK, KKR), although keep in mind with the private equity names you wind up with a K1 at tax time.
There's also a lot of great Canadian names, some of which pay a monthly div: Pembina (PBA), Enbridge (ENB), Vermilion Energy (VET), Gibson Energy (GBNXF.PK), Inter-Pipeline (IPPLF.pk), Bell (BCE), Keyera (KEYUF.PK), Enbridge Income (EBGUF.PK) and others. Freehold Royalities (FRHLF.PK) is a volatile, but high yield oil royalty play run by the Canadian Nat Rail pension fund. (http://www.freeholdroyalties.com/index.php?page=governance)
HCP is a good choice, but I also think VTR is well worth a look in the same space.
I own INF, which I just continue to reinvest the monthly divs on.
I own a wide variety of energy infrastructure, although a favorite is Gibson Energy (GBNXF.PK), which is an enjoyable mix of infrastructure (including pipeline, rail loading and storage) as well as various oil services. They are the largest independent for-hire truck hauler of crude in the US and have an environmental business as well.
I think agricultural infrastructure is highly appealing, but options are limited. I own Graincorp in Australia, as well as a speculative position in Ceres Global Ag (CERGF.PK). The latter is really speculative, but owns both ag infrastructure, as well as rail and is building a commodity logistics center on the Canada/US border that will hook up to the BNSF rail line. Graincorp is somewhat volatile as well, but has a terrific dividend policy.
The Andersons (ANDE) is a US stock that is similar to Graincorp in a number of ways, but the volatility on that stock is enough to make one need dramamine. The Andersons has great assets, but the stock is too exceedingly volatile for me. There's also Archer Daniels Midland, although I think that's run up a bit much.
The railroads are a favorite and really something that I own and don't think about - very much a long-term investment. The railroads continue to do very well, whether it be frac sand or oil or the massive grain harvest in Canada.
In terms of frac sand, "U.S. frac-sand shipments jumped more than fourfold to 20.9 million tons in 2012 from 4.9 million tons in 2007, according to Freedonia Group, a Cleveland-based market researcher. Demand is expected to more than double to 52.1 million tons by 2022, Freedonia said" (http://www.bloomberg.com/news/2014-04-17/fracking-sand-spurs-grain-like-silos-for-rail-transport.html)
The pipelines are also worth exploring, but I do think that there's names both in the US and north of the border. It's clear that Keystone is probably not going to be approved this year (if ever), so other Canadian/US pipelines will continue to be popular, such as Kinder's Transmountain pipeline, which is pushing to expand. Enbridge and Plains All American (PAA) are other companies with exposure and there are a number of others.
I think most people can (and are probably best) playing infrastructure via a position in a fund such as TOLLX or GLFOX. I focus on individual names primarily because of my interests and a desire to focus on specific segments.
Current holdings include AEP, HCN, RPM, JNJ, NGG, PAYX, O, KMI and WCP.
I am thinking of adding another member to my fixed income sleeve and raise the sleeve's fund count to seven. The fund is LIGRX and it will become fund number 52 within my well diversified portfolio which consist of twelve asset sleeves. This fund carries a M* rating of five stars and has earned a gold medal ranking. This fund has a wide asset base consisting of about cash (5%), stocks (4%) , bonds (83%) and other assets (8%) which are comprised of mostly convertible and some preferred securities. It currently has a duration of 4.6 years with an average credit quality of BBB. I have linked its M* report for those that would like to have a look.
http://quotes.morningstar.com/fund/f?t=LIGRX®ion=USA
I am currently of the mind set I'll be cutting this sleeve back to six funds and adding to my equity holdings should equities experience a good pull back in the near term. The current members of this sleeve are ITAAX, LALDX, THIFX in the short term section and LBNDX, NEFZX and TSIAX in the multi sector income section. With the addition of LIGRX the duration of the sleeve as a whole will become about 3.8 years, up from 3.6 years.
I wish all ... "Good Investing."
Old_Skeet
Just at a glance I really like the QCOM rec. Solid expansion of dividends and earnings for a decade witn low payout. Is there something specific about MAT you don't like?
Thanks much for the feedback.
Qualcomm remains a fairly significant holding for me, with a long-term view. I believe the company can make inroads into new areas, such as retail (their beacons, which I think have a lot of potential for a wide variety of uses) and health. They recently raised the div quite a bit.
As for Mattel, I just don't really love the industry. I grew up as a kid in the '80's with Transformers and GI Joes and Starting Lineup and all those things. A kid today doesn't want an action figure, they want an IPad/Iphone and an XBOX One (or Sony PS4). Kids today probably don't know GI Joe, but are more than aware of "Halo" and Master Chief (which is owned by Microsoft/MSFT, which are coming out with more "Halo" games (see below) and a "Halo" series produced by Steven Spielberg.)
Board games? I don't know, it would seem those are on the way out, as well. Although, EA games is happy to sell you various Monopoly games on mobile, as well as other board games. Either the game is for sale, or it's difficult to get far in the game without buying additional in-game money online.
Microsoft also has money rolling in (it certainly does from me) for XBOX Live subscriptions. XBOX Live also has money coming in from users streaming media and buying downloadable content for games. Obviously, XBOX is not a large part of Microsoft as a whole, but when it comes to discussing what kids want these days, they want XBOX (and Playstation.) Additionally, Microsoft's handling of the "Halo" franchise (they created a studio to handle video games, novels and other products) is an example of how video game companies will likely to continue to have successes that will roll into other products (toys, books, movies, etc.)
When I was a kid, I loved going to the arcade. Then I went to an arcade where you could play against other people in the same room and that was amazing. Now I can play on XBOX Live against someone in another country. I think online gaming and mobile are just huge pulls away from the traditional toy industry as I knew it when I was a kid.
The video game industry was - I think - revolutionized by online gaming. The video game business is going to continue to do well with new avenues, especially micro transactions.
Game company Take Two has said that these transactions are "the gift that keeps on giving." "For Take-Two's quarter ended December 31, the company reported that net revenue from digitally delivered content grew 42 percent year-over-year to $132.8 million. This was led by GTA Online, Zelnick said at the time."
"GTA V has shipped 32.5 million copies and some 70 percent of all users have played Grand Theft Auto Online. Take-Two is keeping the all-important ARPU (average revenue per user) figure a secret, but from the enthusiastic way in which Zelnick talks about GTA Online, it wouldn't be surprising to learn that the online mode is performing quite well monetarily."
(http://www.gamespot.com/articles/gta-5-s-online-mode-is-the-gift-that-keeps-on-giving-take-two-says-about-its-monetary-opportunity/1100-6418882/) Whether gamers like it or not, I think there will be more of "you buy the game, but if you want xyz, that's another cost."
From MSFT's latest quarterly conference call: "Xbox Live members continued to embrace the service with transactional revenue growing 17%."
Hasbro and Mattel will probably keep doing fine - there's certainly licensing money for these companies - but you really have to hope that these companies continue to innovate and understand the changes in the way that they have to reach their target audience as times change and technology has really taken attention away from physical toys that dominated for so many years. Browsing through Hasbro's 2013 annual report, they at least seem to be saying the right things.
Long-term though, I guess I just don't think the toy industry is very compelling.
"Toys R Us" has not done well at all, although that's certainly due to a good degree from Amazon competition.
http://blogs.reuters.com/great-debate/2013/02/20/why-the-toy-industry-isnt-having-any-fun/
Halo 5:
Basically I became disenchanted and discouraged by the low returns from 'income' or 'equity-income' or dividend' termed funds and so I went about building my own. While yield was most certainly high on my criteria list for inclusion I also leaned heavily toward companies that have been paying dividends for a long time and have an equal history for raising those same dividend payments on a regular basis, I also went looking for companies who I felt, given the currently available information, might still be in business when my heirs took over.
Interesting choices you listed for initial inspection I must say. I'm sure (at least I hope) you have a plan and that you're not just picking companies blindly. If you decide to let MAT go maybe DIS might be worth a look. Note to Scott - as the grandparent of a 4-yr old I can tell you that Mattel and board games aren't dead yet judging by the collection at his home.
Thanks for listing various infrastructure investments. I might be interested in TOLLX or GLFOX, although I'm wondering if I might be late to the game by initiating positions in them now. Since they may be grouped in with the utility/higher yielding sectors, do you think these infrastructure funds will be more negatively affected by an increase in interest rates compared to other sectors? Thanks.
I wonder if this change towards owning stocks is a reflection of better data and tools available now to manage risks or perhaps a belief that funds are more diversified than necessary. Hopefully, it isn't just another reach for "yield", taking on more risk than realized or desired.
cman, while I won't speak for the others I can tell you that my portfolio is diversified across a wide spectrum of industries and categories and has increased rather than decreased my returns far, far beyond what any mutual fund returns regardless or in spite of the fees. We (I and the mutual fund industry) are just going to disagree on those points. However, my brokerage statements will back that up. I also have not reached for yield although everyone of my individual holdings yields more on it's own than any income or dividend paying mutual fund or ETF collectively shells out annually.
One of my primary investment tenets is knowing what I own. I dare say that I for sure, and everyone else most likely, do not have that information with a mutual fund. Holdings are reported anywhere from 3-6 mo after the fact with no guarantee that those holdings are current as of the date you receive them. Furthermore I have always questioned holding a large number of positions within a fund on the premise of diversification when ones best ideas, if diversified, should suffice. Again, we (me and the funds) shall have to agree to disagree although Mr. Buffett and Mr. Munger and Mr. Berkowitz would agree. By the way, that is precisely why they have a good chunk of my spare change.
And lastly, to be fair, I do still have that handful of mutual funds to provide some degree of backup should my thought process be proven wrong. I will never reach the pinnacle of questionable diversification old skeet sits on top of but I'm fine with that.
I have always believed you can get higher returns with a basket of hand picked stocks, just wasn't sure of the risk-adjusted returns because of the potential effect of an error in analysis/judgment. Mutual funds dampen this at the cost of returns.
When a number of reasonable people shift allocations to individual stocks, it is a good thing to re-examine the raison d'etre for mutual funds and see if anything has changed and if perhaps mutual funds are not serving the purpose they came around for. Nothing remains constant in this world. Your thoughts and experiences on this would contribute.
For example, one thing that came to mind after I posted is the possible effect of asset growth creating over-diversification in mutual funds. Sure, we can compare to index funds and rest assured that the funds we own haven't suffered much but it may have broadened the returns gap relative to a basket of stocks sufficient for managing risk.
Have the previous barriers to owning a basket of stocks directly - research and diversification logistics - been sufficiently tamed by internet, data gathering and analysis technology and convenient transaction platforms that mutual funds have reached the point of diminishing returns on the higher diversification without reducing risks?
More questions than answers. Thoughts welcome from anybody.
My experience(s) in this arena has undeniably been enhanced by dare I say computerization of research, data gathering and transaction convenience for sure. I have instant access to tools never before available as well as sometimes absurd levels of insight and information. What once required phone calls to traders/brokers, days of waiting for snail mail deliveries an so on can now be handled in a matter of seconds or minutes from any comfortable or uncomfortable outpost in the world. Life is good in that respect.
However, I will also say that it took a great deal of learning, practice, confidence and maybe most importantly investable wealth accumulation in order for me to take the steps toward individual management. I simply did not have the capital starting out that would have enabled me to build a portfolio of individual holdings at a reasonable cost. There is simply no getting around that. Where trading costs were once based on the number of shares traded one can now flip shares on a whim practically free. That's got to help the bottom line.
So I guess I did need mutual funds initially for diversification and to provide all the necessary background research on companies and other investment instruments. I don't feel quite the same level of need or level of reliance today. I don't kid myself by thinking that I've tamed all of the investment risks out there or that I'm even near the level of professionals who do this day in and day out but I do believe that I am much more aware of them and possibly even accepting of them than I was when I first began investing.