Gold does well when turbulence is high. Here’s the last ten days:
The more gold I own in these turbulent times, the healthier my portfolio looks.
We’ve had eight days of stockmarket declines. They will reverse.
Pick up some gold and some NLY. (See below.)
A reader pointed out yesterday that if you owned a million dollars of gold on December 31, 2000, as of July 31 it would be worth over six million dollars, compared with the S&P which actually incurred a loss over the past 10 1/2 years. In short, gold is doing much better than equities.
I bought a little NUS yesterday. It’s called Nu Skin Enterprises. It makes my beloved new skin — the first aid antiseptic liquid bandage.
Financials and growth are really strong. Had I known that New Skin was public, I would have bought a while back. Dumb me.
The moral of this stupid story is CHECK. CHECK. CHECK.
Check that the product you love is made by a public company that’s doing well.
Annaly (NLY) holds a conference call. NLY’s management comes across as a little smug, but competent. You can read the transcript here.
Every broker and his uncle has weighed in with reports on Annaly — nostly saying higher interest rates and a Federal debt downgrade could hurt. No one seems to be looking for any capital appreciation in the stock — bu then neither am I. I’m perfectly happy with the 14% dividend yield. Typical of brokerage reports is one from Citi Research:
Of the agency mortgage REITs we cover, our confidence level is highest for NLY.
However, investors should brace for modestly higher volatility in the stock, until we
get better clarity on a potential U.S. downgrade and the resulting macro impact.
This came in late this morning from Lazard:
We are again moving out the timing of when we expect the Fed to begin raising
short-term interest rates and when we anticipate a meaningful flattening of the
yield curve. The implication for the Agency Mortgage REITs we believe is more
sustainable dividends, which should drive higher valuations for many of these stocks.
Although we believe substantial dividend growth is likely to remain a challenge
throughout the sector, we believe greater expected dividend sustainability could drive
lower required dividend yields for these stocks.
We believe those Agency Mortgage REITs that are best positioned to take
advantage of this expected environment are taking on more duration risk through
a combination of asset selection, leverage, the portion of repo debt that is swapped, and
the duration of their swap books. We believe such Agency Mortgage REITs’ current
prices imply greater risk; however, we believe the stocks should provide greater riskadjusted
returns.
We now assume that the Fed does not begin to increase the Fed Funds rate until
1Q13 and that the yield curve remains at historically steep levels for at least the
next 18 months whether the economy continues to grow at a below-trend pace or falls
back into recession. We believe that is the range of reasonable economic outcomes
during that timeframe. We now anticipate the 2-year/10-year Treasury yield spread to
be at or exceed 200bps at least through the end of 2012.
As a result, we are raising our rating on NLY shares to BUY from NEUTRAL
and introducing a price target of $19. In addition, we are raising our price target on
BUY-rated CYS to $15 from $13.50. Our price targets for AGNC ($30) and HTS
($29) are unchanged. For all of our BUY-rated stocks, we have raised required yields
on forward dividends to reflect the impact of the pote
Personally, I’m not looking for a major capital gain on any of these mortgage Reits. I’m happy with the high dividend yield.
More great Hollywood Squares:
Q. Which of your five senses tends to diminish as you get older?
A. Charley Weaver: My sense of decency..
Q. What are ‘Do It,’ ‘I Can Help,’ and ‘I Can’t Get Enough’?
A. George Gobel: I don’t know, but it’s coming from the next apartment.
Q. As you grow older, do you tend to gesture more or less with your hands while talking?
A. Rose Marie: You ask me one more growing old question Peter, and I’ll give you a gesture you’ll never forget.
Q. Charley, you’ve just decided to grow strawberries. Are you going to get any during the first year?
A. Charley Weaver: Of course not, I’m too busy growing strawberries.
Q. It is considered in bad taste to discuss two subjects at nudist camps.. One is politics, what is the other?
A. Paul Lynde: Tape measures..
Q. If you were pregnant for two years, what would you give birth to?
A. Paul Lynde: Whatever it is, it would never be afraid of the dark.
Q. Who stays pregnant for a longer period of time, your wife or your elephant?
A. Paul Lynde: Who told you about my elephant?
Q. When a couple have a baby, who is responsible for its sex?
A.. Charley Weaver: I’ll lend him the car, the rest is up to him
Q. Jackie Gleason recently revealed that he firmly believes in them and has actually seen them on at least two occasions. What are they?
A. Charley Weaver: His feet.
Q. According to Ann Landers, what are two things you should never do in bed?
A. Paul Lynde: Point and laugh.
Harry Newton who played 1 1/2 hours of aggressive tennis yesterday, had a great dinner, a great sleep and feels great this morning. The employment numbers look a bit better this morning.
Harry,how about denouncing Mr.O and the huge mistake you made by voting for him.
I've done that a million times in this column. But, remember the choices were very, very limited.
Do you realize that the “deficit reduction plan” that was signed into law yesterday calls for the deficit to rise from its current $14 Trillion to $26 Trillion over the next 10 years? The government gets away with calling it a “reduction” because without the plan, it would grow to $28 Trillion!How many Americans do you think understand that the plan calls for an increase in the debt, not a decrease?
Larry, I just saw that on the news too and hadn't really understood. It's dumbfounding. Not sure if I have this right, but the economy would have to grow at 7% per year to be a $26tr economy by 2021 to keep the debt at 100% of GDP. That's a lot more debt to issue, and a lot of interest payments to make. Wow.
Government thinks that increasing its rate of spending more slowly than it would like is a budget cut. Spending less next year than this year is not an option.
All this is ultra-depressing. But, we're not Greece, or Italy or Spain or Portugal. We can, with luck and a modicum of intelligence in Washington, actually pull ourselves out of this. Entitlements are the big long-term problem. They just keep accummulating. And no one wants theirs cut. thjis could be ultra-depressing for stockmarkets in the long-term.
Harry you are certainly not the first or alone in repeating the ” Entitlements are the big long-term problem” mantra, as if it's obvious. Not obvious to me, especially when I look at the growing list of endless wars and “entitled” contractors who suck from this teat. And I wonder what the reaction would be if insurance companies began to call the returns on premiums “entitlements”. All this reminds me that what's more important than balancing budgets is balancing priorities. What does it say about a civilized nation when it challenges health care, education, and care for the elderly as if they are impossible burdens? And then pours its wealth into bogus wars as if they are sacred cows.
Veruch…….clearly the U.S. and for that matter the entire world would be far better off is Saddam was still in power. Liberals have done such a wonderful job controlling education so now obviously the liberals should have control of the entire health care industry……..by the way did anyone see Newt bitch-slap Cramer today on CNBC……..as the saying goes “priceless”.
The world? USA first!
I am not a liberal, I don't carry a liberal ID. Being in possession of a heart/mind/soul now makes one subject to being labeled a liberal, as if it's shameful. It's not shameful to be a thoughtful conservative but the fringe crazies now hide behind that mask. And I don't need to respond to baiting based on name-calling, demonization, and mindless broad brush generalizations- absurdities such as “liberals control education”.
It is an open question whether the world is better off without Saddam when you consider what replaced him,
when you consider the American and Iraqi lives lost and when you look at the absolute reality that to this day the US supports dictators as long it's politically and economically expedient. And lastly, the bill for the last ten years has arrived; now we're all responsible for paying it- care to see how much of it was for “defense”?
Mindless broad brush generalizations – absurdities such as “liberals control education”…….if you don't understand that liberal democrats control the education system from pre-school through college than you live in a different country than I do. By the way, you can call me a far right wing conservative any time you want and I won't feel demonized one bit. I love it when liberals remind me of their heart, mind and soul…….take a walk through the middle of Bridgeport Ct. and look at what you and your fellow liberals heart, mind and soul has done to that once great city….. thoughtful conservative my ass. Clearly having Saddam in power now would be would be far better than the tyrants currently running the country…..your the only conservative I've ever herd even entertain that as an “open question”……get lost.
“Liberals control education?” Liberals didn't give “No Child Left Behind” to the nation along with a frenzy of testing to interrupt instruction. Obama's “Race to the Top,” far from a liberal program, is nothing but an extension of Bush's program, which he adapted from his “gift” to Texas.