A Crazy Crazy Idea

I do mean crazy. But exploring nutty ideas can help in the process of assembling a very sane strategy. I read an article about the Alpine Dynamic Dividend Fund (ADVDX). The fund was created out of the changes in tax laws that made dividends more favorable. In a nutshell the fund will buy a stock in such a way as to capture the quarterly dividend, keep it long enough to get the favorable tax treatment and then sell the stock to do the same thing with another name. I am way over simplifying what they do but there is a good article in Kiplinger’s if you want to pay for it (BTW Kiplinger’s actually charges per article, could be a topic for another post) that explains in much more detail. The fund has done very well but it has been the right time for dividend paying stocks (top down look). The question is how well can it do when growth is clearly in favor, maybe it will do great then too but that is the obstacle it will face. If you use the link above to go to the fund’s website you will see a couple of interesting things. First is in the top holdings section, the three largest holdings listed are all oil shipping stocks, comprising 7.27% of the fund. I like the idea of the shipping stocks very much. I own one for clients and wrote about another one for Motley Fool, I’m a fan. But these stocks are hot potatoes. And while the holdings listed may be out of date and all three names may be...

The Big Picture for the Week of January 30, 2005

I received an email from a friend (I’ll call him Jeb) that works on an institutional desk on the west coast. A big topic of conversation was the threat of the NYSE to open an hour or two earlier. That would mean 4:30 or 5:30 am. I can remember when the market went from a 7 am open to the current 6:30. Jeb has to get in for a 5 am morning call. In my time our morning call was at 5:30 am. Jeb wanted my two cents on what this might mean for the industry if/when we do start opening earlier. John Thain said in an interview one hour earlier might be closer to the mark but that such a change would still be many months away. One catalyst for an earlier open is to capture more of the trading that goes on during European trading hours. Currently most European markets close two hours after US markets open. More overlap might mean more business done on the NYSE and other US markets. No one will be surprised that it will become easier to access foreign markets. Improvements in technology and communication along with investor demand will cause capital to flow all over the planet with fewer and fewer obstacles as time goes on. This will be one more manifestation of a global economy. This may cause some difficult adjustments for market participants of all sorts. I believe this will trigger a wave communications upgrades at many Investment Banks. A small investment in letting personnel access some portion of the network from home along with some sort of phone...

Newsletter Update

I wanted to let subscribers to my newsletter know that I emailed the first issue on Saturday afternoon. If you have paid for your subscription you should have received the email by now so please let know if you have not. If I received your payment I sent an acknowledgement to you. If you have not received such an email it means I did not receive your payment. There were a few people that did express interest in subscribing but I never received payment from. While that is clearly to be expected, I want to reiterate that I am only sending the newsletter to people that I have received payment from. Good two way communication will let this run smoother for everyone. If I made any mistakes with the distribution of the letter I’d obviously like to get that resolved as soon as possible. Subscription is open any time. You can paypal me at randomroger@yahoo.com or email me for check mailing...

SPX 1000?

This morning on Bulls and Bears there was a hedgie named Jeff Mackay who thinks the S&P 500 will go down 15% due to overstated earnings. There was not really time on the show to explore his thesis so I don’t really have details nor do I know care a whole lot whether he is correct. What interests me is the extreme nature of his call. There are some pundits that always make very extreme market calls. While easily dismissed by a lot of people I think the work behind these out there predictions can be worth reading. A nugget or two of good data could still be a part of the work done by someone you think is a crackpot. The point here is that we can learn from anyone. I heard a very funny one liner on Bulls and Bears from Gary B. Smith, fallout shelter stocks. I laughed out loud at that one. We are having a big snowstorm and the lights just flickered, uh...