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

To: MCsweet who wrote (51619)	5/24/2013 12:24:37 PM
From: E_K_S	Respond to of 78774

Note that with the 10 year term, you can assume that you will earn the discount if you hold to maturity. I like this option in an investment but prefer 3-5 years maturity terms. I suspect at some point I can build back up my ladder of bonds. My last T-Bills w/ very nice yields (just under 5%) mature in 2014 and 2015. I bought these many years ago and since the low rates starting in 2005, have not rolled any of the monies over. Many of the bonds I have looked at sell at a premium to PAR now and any discounts (some as much as 30% discounts in 2007) have disappeared. I did buy some of this distressed debt. Many are selling above Par. Do you book the gain(s)now and/or just hold to maturity and give up the slight premium for the guaranteed payoff at maturity and just book the attractive coupon? My current strategy is to let the bonds mature. I also have some preferreds that will be paid off and looking for a place for those monies. I probably will deploy those funds into equities on any significant sell off (10% or more). I am finding some good value in beaten down resource companies and in integrated big oil. I may even move some of that money into one or more rental properties if I can find something at/near my other properties at a bargain price. I do find w/ real estate especially those w/ deferred maintenance you can build value into the asset and have a bit more control than w/ an equity. However, you must buy it at the right price. As far as equities, I have been looking at those companies that provide productivity gains. This includes gains in manufacturing, computing, distribution and commerce. ATS AUTOMATED TOOLIN(OTCMKTS:ATSAF) is one I just added to my watch list and like them at $8.00/share or lower. They got out of their solar business and now focus on their worldwide factory automation solutions. I also like Grommits's "cloud computing" REIT plays and have slowly been building up positions there. EKS

To: MCsweet who wrote (51619)	5/24/2013 1:25:03 PM
From: MCsweet	Respond to of 78774

Consider ETUA and ETUB These have 4% discounts to NAV or so and wrap up next year (ETUA in January, ETUB in May). They are tied to the S&P 500. Originally they were like owning a covered call with a put feature (and then selling an out of the money put). These type of complicated structures are bad initial investments (IMO), but are reasonable to scoop up at a good discount to NAV. With the rise in the S&P, they are now pretty much equivalent to selling a put, so you get a nice capped return (I estimate 8% for ETUA and 10% for ETUB) if market is flat or up at maturity. I actually have bought several times starting early this year. I would have posted this early, but they can be very hard to buy, and I didn't want to create competition (although it is unclear whether anybody looks at my picks). I still think they are reasonable investments here for lower-risk money with a bit of beta exposure. MC