Friday, November 16, 2012

Time to buy REITs

REIT stocks such as AGNC, ARR, MTGE, and other dividend stocks are responding to better news on negotiations about the Fiscal cliff.
At 1:20 pm Here are the prices and the book values:
                                               Book value:
AGNC   $30.91                        32.49
ARR      $ 6.79                         $7.91
MTGE   $24.22                        22.08
  ( non- REIT)                                         Net asset value:
PSEC    $10.38                           10.88   
GNT      $14.27                          13.42

The FED is bidding up the mortgage backed securities which tends to raise book value of the REITs but interest rates cause pre-payments which reduces earnings. This should cause the stock to hold value despite lower dividends. The stocks may actually go up. I expect PSEC to go up as well, they had a favorable quarterly report.

Insiders have been buying AGNC and ARR stock in the last 2 or 3 days. I think we have seen the bottom of the REIT market.

Thursday, November 8, 2012

PSLV offering

Today after the close PSLV did an offering. They are buying more silver bars so they can issue more shares. PSLV often trades above Net Assett Value so the aftermarket price is down to $13.13. The NAV is $12.47. Silver was up today but the gains of the day will be lost due to the offering and I suspect the open tomorrow will be somewhere around $13.13 plus any larger move in silver if there is one. Take this as an opportunity to buy more because Sprott seems to buy just before silver goes up. The last offering was in the summer when silver hit the low for the year. This will take more silver off the market for the long term which is bullish for something there is a limited quantity of.
   The RNDY stock will not do well, they had a poor earnings and will have to cut the dividend in half. I took the money out and put it into silver- that is how I found out about the offering in PSLV.

PSEC has a good earnings report with extra income to both pay the dividend and reinvest some into more investments.  The book value is up $.05 from last quarter to $10.88. They closed at $10.58 but was trading at $10.64 after market.

AGNC is up .72% to $30.95; most REITS seemed to go up today.

Silver is $32.41 at 7:41 pm Gold is 1734.95.

Wednesday, November 7, 2012

Bad day in markets

All stocks were down except FNMA which was up 9% due to a profitable quarter. There are fears of gridlock between Republicans and democrats on the budget and taxes. There are also the Euro debt problems. It is a good time to buy silver, gold and stock. Silver will outperform gold and 2013 will be a good year for markets. All portfolios should have silver or gold or both.
   I recommend silver dimes for bullion and PSLV for silver in your brockerage account. Be careful about buying larger denominations of silver such as bars or silver dollars because China is counterfeiting bars and larger and older coins that have larger values. I also recommend avoiding numismatic coins because you will pay extra for the rarity and may not get that back. Jewelry generally is not a bullion investment; always be aware what you are paying per ounce and where spot is before buying.
   A nice gold related stock which I already hold is GNT, a Gebelli Closed End Fund. They pay a 10% annual  dividend and the pay is monthly. Much of what they trade in is gold and natural resources. This is not a speculative play, it is better held for the dividends. GGN is related to GNT and pays similar dividend based on gold and natural resources.
       PSEC is also a nice monthly payer with a 11% annual dividend. They recently had an offering a few days ago plus down again today.PSEC is not gold related; they are something like a BDC or closed end fund that works with loans to businesses.They are at a good entry point.
   REIT stocks have been down lately because of refinancing fears and I think the better ones will eventually turn around. I do not know how far they will go down but some are buying their shares back to keep values from dropping so much. AGNC is in my opinion the best run of the mortgage REITS and they have a book value of $32.49 but closed at $30.73 today. Book values are up but earning are down. I think AGNC and MTGE are a good value to enter now but maybe as part of a portfolio of unrelated stocks.
   An interesting stock to buy in small amounts is a grocery stock called RNDY or Roundys which is based in Milwaukee. They report earnings tomorrow after the close. They have paid a $.23 dividend in the past but the stock is down from the $10 range to $5.44 today with a book value of $5.61. RNDY may be down due to competition with Walmart but they have a superior brand called Our Family as well as they own Marianos stores which is premium quality like Whole Foods.
    As I have said before I believe oil and car gas will go down in price so I do not recommend investing in gas or oil.  Interest rates will also stay low; between these two people will have more money to spend and employment should improve.


Monday, November 5, 2012

Romney vs Obama

If Romney wins he will make many large mistakes and no money will be made in the markets. He does not have a plan. He only knows he wants to dismantle what Obama did. He will hurt America and we will lose prosperity. He may have all of the goood will in the world but if we vote him in we will look back on it as a big mistake and one of our worst presidents. I wouldn't make a good president either.  if Obama wins we will have good markets for the next 2 to 3 years. We will be pulled down some by world events or natural disasters in 2016 and we will have a few years to prepare ourselves for it if Obama wins. I also think Obama will be the better man to handle adverse conditions in 2015-2016.  The race is close but I think and hope Obama will win. astrologically speaking astrologers from Vedic astrology think Obama will win but the race is very close. This will be a very intense week coming up. I do think markets will respond adversly if Romney wins if not in the short term definitely in the long term.