<![CDATA[Sensible Speculation - Blog]]>Fri, 16 Mar 2018 12:47:47 -0400Weebly<![CDATA[FERC changed the rules..... It's time to accept a small loss]]>Fri, 16 Mar 2018 11:44:58 GMThttp://sensiblespeculation.com/blog/ferc-changed-the-rules-its-time-to-accept-a-small-lossOn 12/20/2017 I introduced a contrarian portfolio consisting of 3 pipeline MLP closed-end funds (Link to original post). On 3/15/2018, the U.S. Federal Energy Regulatory Commission (FERC) ruled that oil and natural gas pipeline firms will no longer be allowed to recover an income tax allowance as part of the fees they charge to shippers under a “cost of service” rate structure. As expected, this was not well received by MLP investors.

​In keeping with my rule to "never pick a fight with the government", I closed the portfolio this morning (3/16/2018) and accepted the small loss. It is a shame that the "game changed", but it would be a bigger shame to watch hard earned capital continue to erode.

<![CDATA[A contrarian MLP closed end fund investment for 2018]]>Wed, 20 Dec 2017 16:49:36 GMThttp://sensiblespeculation.com/blog/a-contrarian-mlp-closed-end-fund-investment-for-2018
<![CDATA[Replacing GER with TTP as a possible 2018 closed-end MLP contrarian speculation]]>Tue, 28 Nov 2017 17:57:41 GMThttp://sensiblespeculation.com/blog/replacing-ger-with-ttp-as-a-possible-2018-contrarian-candidate

After carefully reviewing the portfolio comparison between DSE, GER, and KYN I have decided that there isn't enough pipeline exposure in the current candidate list. GER is being replaced by the Tortoise Pipeline & Energy Fund (NYSE:TTP) to correct the imbalance. In spite of a "less than desirable" 11.5% allocation to oil & gas production TTP offers superior exposure to the pipeline industry.

Information on the  Tortoise Pipeline & Energy Fund can be found at this link

Information on the other possible closed-end MLP contrarian candidates are at these links:
Duff & Phelps Select Energy MLP    DSE  
Kayne Anderson MLP                          KYN

I'll keep you posted as I continue the process of choosing the 2018 MLP closed-end fund contrarian portfolio.

<![CDATA[A possible opportunity for a 2018 contrarian speculation]]>Tue, 21 Nov 2017 14:53:36 GMThttp://sensiblespeculation.com/blog/a-possible-candidate-for-a-2018-contrarian-speculation

2017 has been a brutal year for master limited partnership (MLP) closed-end funds. Year to date, no closed-end MLP is showing positive returns. While I will steer away from energy exploration and producing MLPs I am growing interested in the MLPs that concentrate on pipelines and mid-stream assets. Near the end of 2017 I will look to see if tax loss selling has created an even better buying opportunity.

At this point I am most closely watching DSE, GER, and KYN as possible investments.

Till then, cash is a position too!

<![CDATA[Can a Sensible Speculator beat the S&P 500 over the long haul?]]>Tue, 07 Nov 2017 15:36:54 GMThttp://sensiblespeculation.com/blog/can-a-sensible-speculator-beat-the-sp-500-over-the-long-haulBuy and hold investors will tell you it's impossible to beat the market, so just buy a cheap index fund and sit back and watch.

The problem with that is while you'll likely increase your portfolio value, the odds are slim that you'll reach a comfortable retirement without investing significant additional capital. The following chart shows that $10,000 invested in 1995 in a well known S&P 500 index fund (VFINX) resulted in $85,011 (If compounded in a tax deferred account). That's a nice sum, but if you're really frugal it might get you through a year of retirement in 22 years.

On the other hand, using a simple relative strength timing model in conjunction with the T. Rowe Price International Discovery Fund (PRIDX) and the Rydex 1.2x Government Bond Fund (RYGBX) turned $10,000 into $1,003,698.

Will the next 22 years produce the same results? Probably not! The returns could be higher or lower. But, wouldn't you rather work with a plan that has a 22 year history of significant out performance? I'll post how it was done right before Christmas.

<![CDATA[60/40 Investing in Emerging Markets]]>Thu, 19 Oct 2017 11:12:23 GMThttp://sensiblespeculation.com/blog/6040-investing-in-emerging-markets30% T Rowe Price Emerging Markets Bond Fund (PREMX)
30% T Rowe Price International Discovery Stock Fund (PRIDX)
40% Rydex Government Long Bond Fund (RYGBX)
Re-balance annually
11.57% CAGR since 1995      Maximum drawdown (monthly basis) -20.53%

<![CDATA[60 / 40 Investing (on steroids)]]>Sun, 24 Sep 2017 13:37:04 GMThttp://sensiblespeculation.com/blog/60-40-investing-on-steroidsThe 60/40 investing rule says you should have 60% of your portfolio in stocks and 40% in bonds. For those who can stomach the drawdowns, how about 60/40 investing on steroids? Using 2x leveraged ETFs 60% SSO / 40% UBT (Re-balanced annually)

21.44% CAGR since inception, 13.33% maximum drawdown.

<![CDATA[Wilshire 5000 Total Market Index©/Gross Domestic Product is now 20% higher than it was at the peak of the dot com boom.]]>Fri, 25 Aug 2017 14:44:47 GMThttp://sensiblespeculation.com/blog/wilshire-5000-total-market-indexcgross-domestic-product-is-now-20-higher-than-it-was-at-the-peak-of-the-dot-com-boom]]><![CDATA[The S&P Small Cap 600 Index closed below its 200 day simple moving average on Friday. Small caps aren't the place to be! I'm a "perma bull", but cash is a position too!]]>Fri, 11 Aug 2017 13:13:45 GMThttp://sensiblespeculation.com/blog/the-sp-small-cap-600-index-closed-below-its-200-day-simple-moving-average-on-friday-small-caps-arent-the-place-to-be-im-a-perma-bull-but-cash-is-a-position-too]]><![CDATA[The lazy person's way to trounce the S&P 500 (and most hedge funds)]]>Fri, 21 Jul 2017 14:35:14 GMThttp://sensiblespeculation.com/blog/the-lazy-persons-way-to-trounce-the-sp-500-and-most-hedge-funds
  • 1/3 real estate via the CGM Realty Fund (CGMRX)
  • 1/3 stock market via the Vanguard 500 Index Fund (VFINX)
  • 1/3 U. S. treasury bonds via the Vanguard Long-Term Treasury Fund (VUSTX)
  • Equally weighted allocation, re-balanced annually