In Search of the Perfect Investment

This  “turn-down” chart is one we’re seeing more often.

Chart what you own over the last ten days. There’s a clear signal that cash, gold make  increasing sense.

Groupon is coming public. Twist your broker’s arm for an allocation. It’s free money.

Commodities fund semi-sucks. To June 3, my old commodities fund is up 3.92%, versus about 8.5% for gold.

Good news: I’m out of the fund, into gold — through SGOL and GLD. I think gold is going higher this year as we see more gloom and doom — see yesterday’s column.

I don’t why know why mortgage REITs yield so much.I’m still mulling.But I’m happy with owning them. Note this chart. These stocks tend to fall with their dividend payout and bounce back later. Otherwise they don’t bounce around much.

NLY fluctuates even less. Note the scales on these charts exaggerate movements. Not deliberately. It’s the way Fidelity charts them.

Meantime it’s worth reading this:

A Deeper Look at American Capital Agency Corp and Its 18.4% Dividend Yield. (from Seeking Alpha)

Launched in mid 2008, American Capital Agency Corp. (AGNC) is a relatively new mortgage REIT. Investors have been attract to the name due to the attractive dividend yield of 18.4%. We recently wrote an article comparing eight of the largest mortgage REITs highlighting valuation, leverage and asset composition to help investors understand the nuances of the increasingly popular asset class.
We believe investors who are interested in the mortgage REIT space should own a portfolio of mortgage REITs in order to balance the risks. The management teams of mortgage REITs manage credit and interest rate risk as well as deploy different leverage profiles.

Outlined herein, is a more in depth look at AGNC. While we continue to remain positively disposed to Annaly Capital Management (NLY) and MFA Financial Inc (MFA) given the tenure of the businesses despite the lower yields, we have recently added a small position of AGNC. Unlike NLY and MFA, AGNC is a relatively new REIT, thus before becoming aggressively bullish on the name we would like to see a few more quarters of performance. AGNC has aggressively grown its asset base over the last 24 months as it has ramped up operations.

Company Description:

American Capital Agency Corp. is a mortgage REIT that invests in agency securities for which the principal and interest payments are guaranteed by: (i) a U.S. Government agency (such as the Government National Mortgage Association, or GNMA), or (ii) a U.S. Government-sponsored entity (such as the Federal National Mortgage Association, or FNMA, and the Federal Home Loan Mortgage Corporation, or FHLMC).

Portfolio Composition as of March 2011:

Financial Performance:

Historical Price/Book Value:

Historical Dividends:

Top Holders:

Disclosure: The author, Parsimony Investment Research, is long AGNC, NLY, MFA.

For the entire article and the 22+ comments, click here.

Friend refinances his mortgage. His 5-year adjustable ARM mortgage was 5.5%. He changed it (with a new lender) to 4.25%. Only cost was an appraisal of $450. No closing costs.  No points.

The Roman Coin Chart That Doomsayers Love To Pass Around.

People who focus on the decline and fall of the dollar are really into passing this chart around. A version of it was in the latest Martin Armstrong note, and SocGen’s Dylan Grice used it in a recent presentation.

It shows, basically, that currency debasement is as old as currency itself, as Romans gradually chipped away at the amount of silver in their coins.

The further lesson, from history, says Business Insider, is that in addition to currency debasement being a characteristic of great empires, total collapse is, too. Good times.

Travel tips:

+ Call your bank / credit card company to tell them you’re traveling. Otherwise they’ll block your card — whether you’re a good guy or a deadbeat.

+ The American Express Platinum is the best travel card.  It can do a two-for-one business class on many airlines. The savings will pay off the card many times.

+ Always ask for a hotel upgrade. Threaten with moving.

+ Don’t rent a car at an airport, if possible. The taxes and fees will eat you alive.

+ Renting a car for a week is often cheaper than renting for three days.

Verizon FiOS is great. Four reasons.

+ Its Internet speed is orders of magnitude faster than anything you can get from anyone else.

+ Its reliability is first rate — much better than I ever experienced with cable TV from Time Warner/Manhattan Cable.

+ Their equipment is far more flexible. In particular, they have two unbelievably useful gadgets:

— An Ethernet coax bridge — which allows me to grab wired Ethernet anywhere on the coaxial cable that snakes through my apartment. Saves re-wiring.

— An Ethernet wireless access point, which allows me to have multiple WiFi zones. I now have three. These three cover my apartment brilliantly. I needed the three, not because my apartment is that large, but because our building has thick walls and metal (not wooden) studs in the walls.

+ Verizon’s DVR (digital video recorder) can play its recorded stuff on any TV in the apartment. Better yet, the thing records in high-def (HD). My DVR came free for life, because I bought a “qualifying bundle.” In August, Verizon will release new software to allow me to tether an external hard drive and add additional storage. This way I can record every tennis match every played. The DVR allows me to rewind live TV. Useful for getting the exact words people say.

Get Verizon’s FiOS if you can. This is a no-brainer.

Favorite latest New Yorker magazine cartoons.

Harry Newton who marvels at the old aphorism that we get the politicians we deserve. Remember this guy?

His name is Anthony Weiner. At one point he was considered one of the Democrats’ shining lights in Congress. Now comes this:

In a press conference this afternoon, Rep. Anthony Weiner tearfully admitted that the infamous Twitter pic that he denied showed his penis really did show it and he had sent out the photo.  The announcement comes after more than a week of media frenzy surrounding it.

He states that he was embarrassed during the whole fiasco, and first and foremost apologizes to his wife and family, and then to his constituents and supporters. “It was a destructive thing to do,” he said during the press conference. Among the other “dumb things” he’s done is, in the last three years, carrying on sexy text-based exchanges with about six other women, having racy conversations over “Facebook, Twitter, email, and occasionally over the phone.” He denies ever having met with them personally, though.

Weiner spent the last ten days denying his connection to the image up and down, which naturally means it drew a lot of attention (including and especially on Jon Stewart’s Daily Show). He does not, however, plan on resigning or ending things with his wife, who’s got to be mighty embarrassed.

From the New York Post, “[I’m] dying of boredom over here. Plus my tights really itch, I need a distraction,” the hot, bothered — and very married — Rep. Anthony Weiner shot off to sexy Vegas blackjack dealer Lisa Weiss in one of more than lewd 220 sexts and Facebook messages between the revved-up pair since Aug. 13. … You don’t want to read the rest. It gives boredom (and tastlessness) a whole new meaning. And, to think that you and I pay this guy’s salary. Yuch.