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   Strategies & Market TrendsValue Investing


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To: Paul Senior who wrote (30194)2/29/2008 8:31:43 PM
From: Debt Free
   of 70587
 
I am trying to find out if there is an ETF that will profit when treasury rates go up. I have found RYJUX - Inverse Government Long Bond Strategy so far but have had little luck else where. I think that it is only a matter of time before the 10 year Treasury rates start to go up and reflect the current environment. I would like to find one that is leveraged if possible

TIA

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To: Debt Free who wrote (30196)3/1/2008 8:03:05 AM
From: Wallace Rivers
   of 70587
 
Not quite what you are looking for, but I've owned in the past, and am currently looking at some floating rate closed ends again. FRA, FRB are the ones I've owned before, and I believe FRA was the one Bill Gross pounded the table on 1-2 years ago.
I also own a very small amount of VVR in an income oriented account.
There are a lot of these funds out there, they have very nice yields, and generally trade at a discount to NAV. Prices typically well off the highs. And, typically, the interest paid resets with the environment at the time, with some lag.
If this might be something of interest, you can perform DD on www.etfconnect.com

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To: Debt Free who wrote (30196)3/1/2008 10:39:13 AM
From: Paul Senior
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I've had Pimco's FRA and FRB upon Bill Gross's recommendations in Barron's. Lost money on both.

Holding now a decent-size position in similar PFN. Losing money on this one as well.

The penalty I guess for me for chasing yields/seeking safety/making wrong decisions.

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These closed-end funds invest in floating-rate debt instruments.
The funds are diversified in their debt holdings, and the debt resets quickly. The idea is that a fund holder doesn't take on much default risk with the underlying securities. When general rates rise, the interest on the cef's debt holdings increase, and eventually the dividend paid to stockholders should too. That's how it works as I understand it. (And of course when interest rates come down, it goes the other way.)

Like many cef's, they use some leverage. That's bit them a bit with the recent failed auction of their Auction-Rate Preferred Shares (not significantly or substantially, Pimco(Alllianz Global) says).

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To: Debt Free who wrote (30196)3/1/2008 10:56:25 AM
From: RockyBalboa
   of 70587
 
Value Investing: I put some fun money into a famous company - Beate Uhse (DE:USE). Stock heavily discounted trading at E1.30 to 1.35. The company might be in a crisis but its stuff will always be useful for a whole lot of folks. Currently a secondary with rights is placed which depresses the stock price (the price for the secondary is 1.10). Once the placement is finished the company is in much better shape. I think it could be worth more.

de.finance.yahoo.com

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From: Paul Senior3/1/2008 11:15:12 AM
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Cover story in latest Barron's highlights several stocks recently discussed here: BONT, IAR, GTN, FCH. Barron's saying they might be buys now based on their high leverage (high d/e, low stock price) - if they can survive in this economy.

Some snippets:

FCH: "Despite the company's good financial results, FelCor stock is depressed because of concerns about the impact of a weaker economy on the lodging business. FelCor, however, should benefit this year from extensive renovations of its hotels in 2007...One reason that Hawks of Brigade Capital is bullish on FelCor is that growth in the supply of hotels is very limited."

IAR: "Any stock trading with a P/E ratio of two and a dividend yield of 25% is worth a closer look. Verizon Communications spun off its yellow-pages business as Idearc...Verizon put $9 billion of debt on Idearc, effectively creating a public LBO. That debt is proving a millstone amid a sudden weakening in phone-directory industry trends. The company's CEO resigned for health reasons last week, just a week into the job. Idearc's shares, which hit $38 last spring, now fetch under $5, valuing the company at less than $1 billion. At issue is whether recent troubles merely reflect a weak economy or a permanent shift by advertisers away from print directories."

GTN: "Gray is highly leveraged with a market cap of $300 million, against debt of $900 million. 'Our stock is extremely undervalued,' says Gray President Bob Prather, who lately bought 11,500 shares in the open market. 'Wall Street is down on Old Media and we've been dragged down by newspapers and radio. TV has some issues, but they're nothing like those industries.' ...If TV can hold its own in the face of the Internet advertising threat, Gray should do well.

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I have been considering following Spekulatius and switching into FCH from AHT. I have been adding to GTN as stock has dropped. With IAR...ouch! I started to buy at $9.27/sh. and have added in $8, $7, $6 range, and yesterday a litte more under $4.

The Barron's article also says this: "We've shown a sampling of levered equities but there are many more out there. Those with market values of more than $5 billion are scarce. Some larger outfits include Hertz Global Holdings (HTZ), Virgin Media (VMED), Rite Aid (RAD), Dean Foods (DF) and Level 3 Communications (LVLT)"

I've sold some RAD as it's moved up from under $2/sh; I've recently looked at DF and decided to pass on that one. I will likely take a few shares of Hertz. I've bought Dollar-Thrifty recently, and given my propensity to buy a package of stocks within a downtrodden sector, I will likely take on a few shares of Hertz too. I like Hertz for its dominance in the sector and for its profitable (I believe) equipment rental business.

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To: Paul Senior who wrote (30200)3/1/2008 11:35:48 AM
From: RockyBalboa
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IAR drew my interest so I looked further. It seems that a whole industry succumbs to new media. The fall of IAR competitor RHD makes me wary and RHD is in a much better shape than IAR.

As you mentioned Hertz, there´s also its large competitor, CAR / Avis which was a part of the old cendant plus budget which they bought out of bankruptcy a few years ago.

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To: RockyBalboa who wrote (30199)3/1/2008 11:39:09 AM
From: Madharry
   of 70587
 
re use.de:do you have an analysis of this company you could provide us with a source to find it in english. we all love a bargain but its hard to find sources in english to do due dilligence on foreign companies sometimes. thanks.

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To: Madharry who wrote (30202)3/1/2008 11:42:41 AM
From: RockyBalboa
   of 70587
 
As a starter, look here: en.wikipedia.org

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To: Paul Senior who wrote (30200)3/1/2008 1:53:46 PM
From: RockyBalboa
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A more defensive way would be YPG. It suffered recently, also pointing to a slowdown in the business. So far it paid all dividends, amounting to a yield of 10%

finance.yahoo.com

biz.yahoo.com

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To: Paul Senior who wrote (30172)3/1/2008 3:56:42 PM
From: Spekulatius
   of 70587
 
SIL, since they appear to have a large derivative position in Silver and Zink, a short position in those metals to presumably offset pricing risk for the mining assets we can only assume that they will show a gigantic loss for the next quarter (silver has almost doubled during the last 2 month). Their mine is not producing much due the water problem (if i remember correctly) that sounds like it will take another 6 month to solve. I wonder if they are still liquid by the time the mine starts. Shareholder equity is already negative and the huge short position at some point will cause margin cause, IMO. And we do not even know if those derivative losses are tax deductable in Bolivia.

SIL will have to raise capital (which is very difficult right now) or sell some ownership in their mine (to Sumitomo, i presume) to stay afloat.

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