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Strategies & Market Trends : Value Investing -- Ignore unavailable to you. Want to Upgrade?

To: Jurgis Bekepuris who wrote (41078)	1/17/2011 7:16:27 AM
From: Bocor	2 Recommendations Respond to of 78748

I think that the yield is not high enough to justify the risk in a less than transparent company. Reaching for yield? Although I don't own it, NLY seems like a decent candidate. For a 5% yield you can get O, a high quality REIT, tons of quality MLP's, utilities like FE with a 5.7 yield, and a few banks like BXS. MO has a 1/2 percent less yield, and no one has any doubt about the consistency of their business or yield. Looking for yield pre-supposes you are also looking for some level of safety, and I'm not sure the yield is high enough for the risk. What I watch for are the secondaries, acquisitions like recently with BMO, and buy in on the dips, wait until I have made my dividend for the year in capital gains, and then begin to sell covered calls to enhance the yield. Worst case is that the stock gets called away and you have a year to buy it back cheaper, during the inevitable correction that simply must come unless "things are different this time."

To: Jurgis Bekepuris who wrote (41078)	1/17/2011 7:56:14 AM
From: Bocor	Read Replies (1) \| Respond to of 78748

One other area of high tax free yield is the much beaten down muni market. Unless you believe all is well and rates are going to rise quickly, despite a housing market circling the drain, there are some good opportunities out there. I have actually been trading BPK due to the large price swings, but am in it again. It has always sold at a slight premium to NAV as it still does, but I like the portfolio, and a 9.44 taxable equivalent yield provides a decent reason for reaching out a little on risk. Also, pays monthly which I like. Share Price NAV Premium/ Discount Current $15.25 $14.21 7.32% 52 Wk Avg $15.88 $14.86 6.88% 52 Wk High $16.52 $15.39 10.13% 52 Wk Low $15.05 $14.21 1.27% Distribution Rate 6.14% Distribution Amount $0.0780 Distribution Frequency Monthly Taxable Equivalent Yield† 9.44%