attack my high-yield investing

[youbet]

You are confused because vxp036000, the poster you responded to, is not the OP and is not the one that presented a high-dividend yield investment approach to discuss and debate. I am, Alex in Virginia.

VXP036000 is the day trader, and what he does and says has absolutely nothing to do with my investing approach. Nothing.

Don't feel bad. A LOT of people participating in this thread have done the same thing.

Yep.

I'm late to this thread and just invested almost 15 minutes reading the whole thing........ I think reading the thread straight through highlights the confusion that is taking place.

The OP is Alex who wanted comments on his high yield bond and high yield stock investing style. Another poster, who likely should have started his own thread, VXP036000 jumped in talking about having a portion of his portfolio set aside for short term equity trading where he says he is doing very well.

Alex and VXP036000 are being confused and comments misdirected in many cases.


Alex - You seem to understand the risks you're assuming with your committment to a high yield / high div investment approach. Someone wins the lottery despite the tough odds and it might be you. Or it might not. You sound like a big boy who will deal with the consequences as necessary. Good luck and enjoy!


VXP036000 - Your strategy, when separated from Alex's and looked at alone, isn't that unusual even here on this board. I too set aside a portion of my RE portfolio for short term equity trading. I'm glad you have been enjoying some success and wish you the best. Like everyone who actively trades a portion of their portfolio, you'll likely experience good times and bad times and I'm sure you're ready to deal with both. Good luck.

If you'd like a focused discussion on short term equity trading, why not start your own thread instead of injecting your unrelated comments into this thread on high yield / high div investments that Alex started?

 

[NW-Bound]

Yep.

I'm late to this thread and just invested almost 15 minutes reading the whole thing........

The OP is Alex who wanted comments on his high yield bond and high yield stock investing style. Another poster, who likely should have started his own thread, VXP036000 jumped in talking about having a portion of his portfolio set aside for short term equity trading where he says he is doing very well.

Alex and VXP036000 are being confused and comments misdirected in many cases.

Alex - You seem to understand the risks you're assuming with your committment to high yield / high div investment approach. Someone wins the lottery despite the tough odds and it might be you. Or it might not. You sound like a big boy who will deal with the consequences as necessary. Good luck and enjoy!

VXP036000 - Your strategy, when separated from Alex's and looked at alone, isn't that unusual even here on this board. I too set aside a portion of my RE portfolio for short term equity trading. I'm glad you have been enjoying some success and wish you the best. Like everyone who actively trades a portion of their portfolio, you'll likely experience good times and bad times and I'm sure you're ready to deal with both. Good luck.

If you'd like a focused discussion on short term equity trading, why not start your own thread instead of injecting your unrelated comments into this thread on high yield / high div investments that Alex started?

+1

So many people confused the two posters. Big thanks to youbet for setting the record straight, and to provide the above summary.

The above bold-faced words were mine. And I turned them red to highlight, but I also borrowed the idea from the Chinese that red is a lucky color, and not to signify danger.

And talk about luck, I need it too. Can one ever have too much luck?

 

[donheff]

Anyone with an ounce of brains can see that Alex and VXP are one and the same troll riffing of each other and us. Makes for an amusing thread.

 

[Htown Harry]

Alex,

You started the thread by saying you had found few professionals who were willing to endorse your method. Several recent Wall Street studies on "dividend investing" are mentioned here:
Why Invest In Dividend Stocks? A Review Of Recent Research - Seeking Alpha

Seems to me the study by Northern Trust describes a similar investing style and provides support for a high-yield, high-quality portfolio:
http://www-ac.northerntrust.com/con...duct_profile/1204/document/qdf_paper_0312.pdf

Northern Trust published a very thorough white paper describing their process and rationale, sans some key details, for developing a high-yield, high-quality portfolio. They began by looking at these two characteristics in isolation, dividing stocks into quintiles and analyzing the excess return in each group. They then created an intersection of these two traits; the results are in the table below.

I think it would be enlightening for you to compare their method to yours. Perhaps then the responses could provide greater clarity between critiques of your method vs. potential deficiencies in your execution of the strategy.

 

[NW-Bound]

Anyone with an ounce of brains can see that Alex and VXP are one and the same troll riffing of each other and us. Makes for an amusing thread.

I may be naive to take people's words at face value, but the site owner has a way to verify the above allegation. It's not fool-proof, but I hope at least it got exercised.

 

[Gumby]

Anyone with an ounce of brains can see that Alex and VXP are one and the same troll riffing of each other and us. Makes for an amusing thread.

That does not appear to be the case. (Yes, we check)

 

[youbet]

Anyone with an ounce of brains can see that Alex and VXP are one and the same troll riffing of each other and us. Makes for an amusing thread.

Ouch! That's exactly how my DW starts out conversations when she thinks I'm not tuned in..........

If I wanted abuse, I wouldn't have to post here. I'd just go into the kitchen and ask why dinner isn't ready yet!

 

[NW-Bound]

My wife keeps asking me why I spend so much time on this forum. I have gotten quite a few financial tips from this site, but the recreational value is also fantastic for the price.

 

[donheff]

I may be naive to take people's words at face value, but the site owner has a way to verify the above allegation. It's not fool-proof, but I hope at least it got exercised.

A mundane troll would simply use two email addresses and post as separate identities. I would not expect the admins to pursue that unless the poster was disrupting the board. This poster is not. Even if he was it would seem fairly easy to get around admin tricks. How are they to monitor identities, IP addresses of the posters? Once banned on any site, a malicious troll would have the sense on other sites to use devices with alternate addresses, e.g, a 3G phone and a PC. But, again, I don't see this guy doing anything that would stir the admins up.

If I am wrong, I only begrudgingly apologize. The poster has been pretty obnoxious, after all.

 

[NW-Bound]

Even if the [-]two[/-] one poster is trolling, the thread can only go on as long as people find it amusing. Yes, a determined troll will find a way, but a thread can only go on for so long.

It takes two to fight, and so far look how many have entered the fray. I tried to stay out, but kept getting drawn in.

 

[Major Tom]

So what's everyone having for dinner today?

 

[REWahoo]

I'm risking a high-yield meal.

Go ahead, prove me wrong.

 

[NW-Bound]

High-yield after digestion?

I really do not want to know. No argument at all from me.

 

[Major Tom]

I'm not sure if I even want to know what a high-yield meal is. I just hope it doesn't result in too great a loss of any liquid assets.

Oh Lord. I can't even believe I just said that.

 

[veremchuka]

I have to admit I find this thread interesting.

I too have suspected that these 2 user names are either the same person or a pair of friends/spouses that are jerking the group around. Why is the OP asking people to dispute his methodology? Maybe he/she wants to stir up trouble? To me it's a pointless thread because the OP is confidient they are wise enough to make a go of this and many of us that are passive/indexers shake our collective heads at this so what's the point of this? You (the OP) are happy doing this so good for you. Many of us think this is dangerous and bound to end badly and Jack Bogle would agree. I think Mr. Bogle is wiser than the OP but that's my opinion.

The other poster is even more annoying than the OP! It's rather amusing. Hopefully this won't get visited by Porky Pig, I'm enjoying this.

 

[brewer12345]

It's vxp036000 that's the day trader, not me.

If you take the time to check back on some -- or any -- of my posts (posts by Alex in Virginia), you'll see soon enough.

And I've got to say this, Brewer. Again, you respond but again you shed absolutely no light on what you do to evaluate companies, what criteria you look at, or where your buy/no buy thresholds are -- whether based on company financials or a risk-reward assessment or whatever.

But that's okay. I'm done waiting.

Alex in Virginia

Sorry, I keep mixing up you and the other troll.

I like cheap, CHEAP stuff that the market has tossed out or ignored. I gravitate toward names with headline risk, fixable problems, industries out of favor, etc. If its in the news with people screaming about what a scandal there is, I am immediately interested (watching HLF right now). Once I locate a disfavored name I start doing my digging on the fundamentals, prospects, leverage, structural ability to improve cashflow generation as times improve, downside risk, and any gotchas. I also try to figure out if whatever people are fixated on that they do not like can be fixed or sorted out given some combination of time, money, change in management, or sale of the company. I also like to see a key stakeholder that has a vested interest in sorting things out pronto. This can be a large insider owner, activist investor, etc. If it all checks out, I ideally want to buy the equity if EV/EBITDA is 6 or less (and we are not at peak EBITDA levels), and I like buying bonds at a discount to par where I can get at least a 10% YTM.

All of the above applies only to reasonably normal market conditions (like now for equities). There are two other market cionditions. First, there are crashes in which case you want to buy reasonably broadly and pick the most leveraged names that you are confident will survive the bad stuff (more leverage = better upside). Second, there are excessively overvalued markets (like junk bonds right now) where you don't really want to buy anything and should be thinking about selling.

 

[braumeister]

If I wanted abuse, I wouldn't have to post here.

Actually, this is abuse. If you want an argument, that's in 12A, next door.
Argument Clinic

So what's everyone having for dinner today?

I'm having a glass of forex. Guaranteed returns, don't you know.
XXXX - Wikipedia, the free encyclopedia

XXXX is the most widely available beer throughout most of Queensland

 

[H2ODude]

Delightful thread! Thanks to the many who are far more financially sophisticated than I in pointing out the fallacies. Things I know - high reward potential comes with proportionate risk. If someone claims exception, run! I have ~30 years of investment experience based primarily on AA and index funds. Retired with about 15 years of last income in portfolio. Plus a pension. I'll close echoing the question....if this method is great, why aren't you running a fund? Best of luck assuming the posts represent reality.

 

[Gumby]

If you're willing to dive deep enough into your research on the company, you can even make money with companies teetering on the edge of bankruptcy. You just need to be in the right position within the capital structure when they finally fail. (99.99% of the time, that position is not the common stock).

To do this successfully, you need to understand the company's assets and liabilities in excruciating detail, which will require reading every bond indenture, all bank loan agreements and any other documents that evidence an obligation or claim on the company's assets, including claims based on statute -- such as environmental claims, pension claims and the like. You need to know precisely where each claim stands within the payment waterfall, which requires knowing where the claim exists within the corporate structure, what assets are available to satisfy the claims at that level and who else can claim against those assets. This, of course, requires a full understanding of priority of different claims under bankruptcy law, every actual subordination agreement, the relevant facts and legal arguments for and against equitable subordination and the facts and legal arguments for substantive consolidation.

If all this research show a mis-pricing for a particular debt instrument in the current market and you are confident that you will recover more in the bankruptcy, then you might consider investing. And even then, there is a non-trivial possibility that you will be wrong. The number of people who can do this successfully is very small, but some of them have become very wealthy doing it.

 

[Alex in Virginia]

Anyone with an ounce of brains can see that Alex and VXP are one and the same troll riffing of each other and us. Makes for an amusing thread.

I can't think of anything to say. What an idiotic waste of time and effort it would be to play that two-poster game. I have better things to do.

And those are the last words I'll have on that particular subject.

Alex in Virginia

 

[REWahoo]

Has anyone seen both Alex and vpx at the same place and same time? Didn't think so...

 

[JPatrick]

If I wanted abuse, I wouldn't have to post here. I'd just go into the kitchen and ask why dinner isn't ready yet!

I feel your pain....I once asked my wife when she was going to wash my favorite sweatshirt..You can't imagine the terror of seeing that giant bottle of Tide coming my way at warp speed.
It worked out OK though, I've been able to pass off the scar as either a war wound or football injury, depending on who is asking..

 

[donheff]

I can't think of anything to say. What an idiotic waste of time and effort it would be to play that two-poster game. I have better things to do.

And those are the last words I'll have on that particular subject.

Alex in Virginia

The troll doth protest too much, methinks.

 

[ejman]

My wife keeps asking me why I spend so much time on this forum. I have gotten quite a few financial tips from this site, but the recreational value is also fantastic for the price.

+1 I don't really post much (I'm in awe of the financial expertise of a lot of the posters and feel I don't really have a lot to add) but the entertainment value of this forum is right up there so I keep coming back...

 

[ejman]

If you're willing to dive deep enough into your research on the company, you can even make money with companies teetering on the edge of bankruptcy. You just need to be in the right position within the capital structure when they finally fail. (99.99% of the time, that position is not the common stock).

To do this successfully, you need to understand the company's assets and liabilities in excruciating detail, which will require reading every bond indenture, all bank loan agreements and any other documents that evidence an obligation or claim on the company's assets, including claims based on statute -- such as environmental claims, pension claims and the like. You need to know precisely where each claim stands within the payment waterfall, which requires knowing where the claim exists within the corporate structure, what assets are available to satisfy the claims at that level and who else can claim against those assets. This, of course, requires a full understanding of priority of different claims under bankruptcy law, every actual subordination agreement, the relevant facts and legal arguments for and against equitable subordination and the facts and legal arguments for substantive consolidation.

If all this research show a mis-pricing for a particular debt instrument in the current market and you are confident that you will recover more in the bankruptcy, then you might consider investing. And even then, there is a non-trivial possibility that you will be wrong. The number of people who can do this successfully is very small, but some of them have become very wealthy doing it.

I believe Max Heine and subsequently Michael Price built up the Mutual Shares series of very successful funds based on the type of analysis you describe. I still have a couple of them from long, long ago and even with management changes continue to do reasonably well, particularly in down markets. Unfortunately greed has taken over and their current fee structure is not encouraging.