Genester,
He was definitely referring to me. You are correct some of the yield traps can be played in a variety of ways. You have to look at charts going back through a couple of down cycles. It's also good to update yourself on the CURRENT situation. Almost all of them are too expensive to take a chance on now. When they do get hit, you can buy one that pays 7-8% and well managed instead. You'll still get some capital appreciation and sleep better knowing the management isn't playing excessive leverage games that could take the fund to BK or nearly so. Ken owns some of them. He paid way more than I did, but they are good when they get a 20% haircut, and they will at some point even though they are good. Investors just run them up way too high when the market gets too bullish. Zero yiloeds are aggravating the situation and causing desperation for yield chasing. But I don't disagree with you, there is a time and place NLY is worth a bet. I just don't prefer believe the drama is worth the extra 2% yield you get for a little while. With RQI, ARCC and a few others Ken now owns you won't get destroyed if you avoid buying the last 20% of the SP peak. You can swing in and out of NLY but you have 6-12 months to do it. Is a couple extra percent of yield you'll get if they don't blow up worth it? For me it isn't. In hindsight you can cherry pick times when it works out.
Don't ever be afraid to launch a thread on any subject here. That is what the place is for.
He was definitely referring to me. You are correct some of the yield traps can be played in a variety of ways. You have to look at charts going back through a couple of down cycles. It's also good to update yourself on the CURRENT situation. Almost all of them are too expensive to take a chance on now. When they do get hit, you can buy one that pays 7-8% and well managed instead. You'll still get some capital appreciation and sleep better knowing the management isn't playing excessive leverage games that could take the fund to BK or nearly so. Ken owns some of them. He paid way more than I did, but they are good when they get a 20% haircut, and they will at some point even though they are good. Investors just run them up way too high when the market gets too bullish. Zero yiloeds are aggravating the situation and causing desperation for yield chasing. But I don't disagree with you, there is a time and place NLY is worth a bet. I just don't prefer believe the drama is worth the extra 2% yield you get for a little while. With RQI, ARCC and a few others Ken now owns you won't get destroyed if you avoid buying the last 20% of the SP peak. You can swing in and out of NLY but you have 6-12 months to do it. Is a couple extra percent of yield you'll get if they don't blow up worth it? For me it isn't. In hindsight you can cherry pick times when it works out.
Don't ever be afraid to launch a thread on any subject here. That is what the place is for.