Wednesday, December 24, 2008

Chris Cox: Medal of Freedom?/Massive Dividends for Proshares ETFs/TBT add

Some of the dividends recently declared by Proshares short ETFs surprised me by the amounts. A dividend of $30.5363 was declared for the ultrashort Russell 2000 (SJH), over $50 for the Ultrashort Russell Midcap (SJL), and several more above $30, with numerous ones at $10 and above. ProShares ETFs – Distributions (Hubpage) – – OverviewDividends - Markets Data Center -  Mostly, the dividends are short term capital gains. Personally, I would consider this to be a negative for using this product.  TBT, the only one that I am considering now, did not declare anything.  I went ahead and started my position as a hedge against my over-weighted position in long corporate bonds. This will not look so hot if the long treasury continues to rally with the yield falling to 1% as some predict.  The reasons for buying TBT are discussed in prior posts. Rally In Long Term Investment Grade Corporates/TBT/BTE/AVY/REITS My maximum hedge would consist of 200 shares which will need to be managed as long as I maintain an overweight position in long corporate bonds.  

It would be reasonable to expect jobless claims, which reached a 26 year high in the latest week, to continue setting records into the first quarter of 2009.  Yahoo! Finance
The downturn now has its own momentum, with lost jobs creating more foreclosures. Some of the stimulus plan will apparently include middle class tax cuts which will help.  But what will restore confidence?  Most of the jobs created by spending money for infrastructure projects might take a year or so to appear, just due to the lag time inherent in putting these large projects out to bid and performing necessary engineering and planning work.    On the good news side, for those who qualify for a mortgage, the 30 year rate has now fallen to a 37 year low, with the average currently at 5.14% MarketWatch

The best thing about this year is that it will soon end.  

Chris Cox takes pride in his accomplishments as SEC Chairman. Yahoo! Finance  Maybe W will give him a Medal of Freedom like he did George Tenet for his fine job as CIA
Cox did his job almost as well as Brownie.  I am giving Cox the benefit of the doubt by saying he almost did his job as well as Brownie.  Some of his accomplishments are summarized in this article Seeking Alpha
 Then you have the elimination of the uptick rule that allowed hedge funds to engage in market manipulation.
Other forms of market manipulation allowed by Cox include naked short selling, which is another practice that harms the market and destroys the confidence of individual Possibly, the victims of scams, with Madoff just being the latest, will not feel so charitable to giving Cox kudos for ignoring warnings.   If Tenet deserves the Medal of Freedom, then so does Brownie and Cox, so just give it to them W before you go back to the ranch. 

Some of the REIT preferred issues that I have recently bought will go ex-dividend soon, including BDNPRC FRIDAY and GRTPRF in a a couple of days. I suspect that many holders of these securities are a very nervous lot and will start worrying about the next dividend payment as soon as the current one goes ex dividend.  So, I would not be surprised by a sell-off in these issues that goes beyond the price adjustment for the dividend. 

I jettisoned most of my small caps last year.  I generally monitor about 200 small caps and 100 mid caps for possible inclusion into my portfolio.  Many of the mid caps are now small caps and a large number of small caps would be more appropriately labeled as micro caps.  I am going to start buying small companies whose success or failure have minimal correlation to the economy and I may nibble on a few others sold last year for nice profits which have since been decimated.


  I am not a financial advisor but an individual investor trying to navigate my way through a difficult market. In these posts, I am acting as an unpaid financial journalist and an occasional political commentator.   I am also aggregating financial news stories that I view as important and providing any reader of these posts, assuming there are more than a couple, with links to those articles, sort of a filtered, somewhat intelligent, free search engine.  Any discussion made by me of particular securities  is not a recommendation to buy or to sell.  Trade at your own risk.  Consult with your financial advisor prior to making any purchase or sale. I will try to identify my sales too but it may take a few minutes after I implement them to create a post explaining my reasons.  The sale may before or after the post.  Before buying or selling any stock, even one recommended by a trusted financial advisor,  please research it and make up your own mind which is what I always try to do.  Research would include reading reports, reviewing financial records, earnings estimates, sec filings and prior earnings releases and news.  In this post, and all others by me, I am merely describing my reasons for purchasing  or selling securities, and the potential pitfalls that I identified prior to purchase or the reasons for a sale.  The securities mentioned in this and all posts written by me may not be suitable for others based on their unique financial position and risk profile.  Always read the prospectus before buying a Trust Certificate, bond, preferred stock or other bond or bond like investments.  Information contained in my posts has been obtained from sources believed to be reliable but cannot be guaranteed.  These posts by me do not constitute investment advice, nor shall they be construed as a guarantee of future results, or as an offer of any transaction in securities.   All content in these posts is provided for informational and entertainment purposes only, and it is a form of entertainment for me. 

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