In This Issue. Riding Out the Energy Price Correction. September 2015 Vol. 2 Issue 4. Fellow Investor,

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Ginger Curtis
5 years ago
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Riding Out the Energy Correction Fellow Investor, T he decline in the benchmark West Texas Intermediate, or WTI, crude price to below $40 put all of the energy sector 30 Day Dividends positions

We definitely do not sell into the teeth of a market correction, so I plan to stand pat on most of the open positions. However, 30 Day Dividends focuses on shorter term trading opportunities.

1 Riding Out the Energy Correction Fellow Investor, T he decline in the benchmark West Texas Intermediate, or WTI, crude price to below $40 put all of the energy sector 30 Day Dividends positions slightly to quite a bit under water. As I write this, WTI has started to recover, so some of those position should soon be back into positive territory. We definitely do not sell into the teeth of a market correction, so I plan to stand pat on most of the open positions. However, 30 Day Dividends focuses on shorter term trading opportunities. So I will be looking for opportunities to close out positions as they get at or near break-even. I want to get some of the open trades off the books so we can move on to opportunities with higher profit probabilities as the state of the markets changes. In This Issue Why I Don t Like Stop Losses... 2 Portfolio Update... 3 Open Positions... 4 Closed Positions... 5 As we move out of August and into September, the stock markets should stabilize. The fear factors of slowing growth in China, crude dropping to some stupid number, and an interest rate increase all seem to be overblown by the financial media and in the minds of the investing public. Also, summer trading tends to be thin, resulting in more volatility on less news. Most of the dividend paying stocks I track operate only in the U.S. and would not be affected by the Chinese economy. On the interest rate front, I really don't understand how a quarter or half percent increase after seven years of zero interest rates would have a measurable effect on the results of most businesses. Crude oil refining is the one sector where profits should provide positive surprises when Q3 results are announced. The crack spread between crude oil prices and refined fuels prices continues to get larger as WTI drops. The crack spread indicates the gross refining margin a refiner will realize. Gains in the spread/margin fall almost entirely intact to the bottom line. The two refining positions in the current 30 Day Dividends open positions are Northern Tier Energy (NYSE:NTI) and Western Refining (NYSE:WNR): both should have great quarters and those results are not price in. NTI is 5% below the unit price when the trade was recommended on August 17th. The near $31 target price is very doable based on the profits and distribution the refiner will report for the quarter. Land, fly or die, Tim Plaehn Editor 30 Day Dividends 1

2 Why I Don't Like Stop Loss Orders, and You Shouldn't Either This section was also included in my other newsletter, The Dividend Hunter. I think the topic is important enough that I am also including it in 30 Day Dividends for September. Some funny things happened when the stock market had a mini-crash on Monday, August 24th. Pre-market open, index futures were pointing to a big drop at the start of the trading day, and that's what happened. The Dow Jones Industrial Average was down over 1,000 points in the first five minutes of trading. Through the rest of the day, stocks swung up and down again, but that is not what this discussion is about. As the market opened, I was watching my usual bunch of stock prices and noticed that Blackstone Mortgage Trust (NYSE:BXMT), one of our holdings with The Dividend Hunter, was trading for $22 and change, compared to about $29 at the close on the previous Friday. I was shocked, and more so later in the day, when I saw how the price had recovered. Here is the one week chart price chart for BXMT starting on the 20th. Note the Monday morning price drop and quick recovery. A stop-loss order on BXMT set at say, $27.00, would have been triggered and probably filled at around $22 per share. The drop was too fast to get an order executed near the stop-loss price. The very large, but short duration share price declines were triggered by some sort of computerized robotrading algorithms. During the week I heard news reports of regular investors in index ETFs getting stopped out of their positions at close to 50% losses compared to the Friday closing values and the ETF prices in effect just a few minutes later. These investors ended up with very large losses on a day when the positions would have closed down a few percent. 2

3 Open orders such as stop-loss orders are very visible to the market players that use computer programs to make quick profits in the market. It is not difficult for these programs to take advantage of open sell orders to trigger those sales and then reap the profits when the share prices bounce back up. In many cases a falling stock market takes down the share prices of almost every stock, good, average and bad. My investment philosophy is to ride through these fear driven drops, and maybe pick up some shares on the cheap. Stop-loss orders are just a way to make sure you lose money. As dividend stock investors, we are looking at multi-year holding periods in most cases, and those steady and growing dividend payments will help stabilize share prices in the long run. In the short run, just avoid fear selling and watch the financial news "experts" try to explain this one compared to what they were saying a few days previously. Portfolio Update Closed positions in August: Tallgrass Energy Partners LP (NYSE:TEP) closed on August 3rd for a 19.26% return after 369 days, or 19% annualized. The position was replaced with Tallgrass Energy GP LP (NYSE:TEGP), which is the newly public general partner company of TEP. On August 12th, Western Refining (NYSE:WNR) hit our target price for a 11.67% gain in 19 days, or 224% annualized. The Hercules Technology Growth Capital (NYSE:HTGC) position was closed on August 12th before the stock went ex-dividend. A 2.97% gain was recorded after 54 days open, for a 20% annualized return. New Opened Positions TEGP was added on August 3rd to replace TEP. This should be a very high dividend growth rate stock at roughly 10% per quarter. On August 17th a new position in Northern Tier Energy LP (NYSE:NTI) was initiated to profit from the high gas prices in the upper Midwest. NTI pays out all profits as quarterly distributions. The unit price is currently below the $27.49 entry, with a target price of $ On August 27th a new position in WNR was initiated. The entry price was $43.02, 14% below the $50.25 close on the last WNR position. New target price is $48. 3

4 Current Portfolio Ticker Date Recent Target Total Return Notes WNR 08/27/15 $42.23 $43.02 $ % Long term position. NTI 08/17/15 $27.49 $25.80 $ % Long term position. TEGP 08/03/15 $29.97 $28.60 $ % Long term position. SWAY 07/14/15 $25.11 $24.09 $ % Long term position. LGCY 07/07/15 $8.75 $6.51 $ % Long term position. STWD 07/02/15 $21.76 $21.28 $ % Short term position. NRZ 06/11/15 $16.04 $14.16 $ % Short term position. TRGP 06/02/15 $92.69 $66.06 $ % Long term position. LNCO 05/19/15 $10.77 $3.05 $ % Short term position. CNNX 03/19/15 $18.35 $11.43 $ % Long term position. INN 02/27/15 $13.13 $12.13 $ % Long term position. TLLP 10/21/14 $55.50 $52.81 $ % Long term position. PBFX 08/29/14 $24.96 $20.75 $ % Long term position. 4

5 Closed Positions Ticker Date Close Close Date Annualized Return Total Return Notes: HTGC 06/19/15 $11.78 $ /12/ % 2.97% WNR 07/24/15 $45.00 $ /12/ % 11.67% TEP 07/30/14 $40.00 $ /03/ % 19.26% EXR 04/28/15 $66.85 $ /21/ % 6.01% BDCL 05/07/15 $20.86 $ /08/ % -2.83% NGL 03/06/15 $27.04 $ /19/ % 14.1% CTR 09/30/14 $23.03 $ /19/ % -7.4% NTI 12/01/14 $23.00 $ /08/ % 16.3% MEP 12/31/14 $13.68 $ /05/15 4.3% 1.5% EROC 01/28/15 $2.28 $ /05/ % 13.6% MCC 04/13/15 $8.98 $ /27/ % -39.4% LNCO 03/10/15 $10.14 $ /14/ % 17.3% LNCO 10/14/14 $21.34 $ /14/ % 5.23% WNR 12/23/14 $37.41 $ /09/ % 24.5% KCAP 01/16/15 $6.71 $ /02/ % 13.7% OKE 12/01/14 $51.95 $ /24/ % -12.0% TCPC 01/21/15 $15.22 $ /17/ % 8.1% MCC 12/15/14 $8.90 $ /10/ % 6.0% COPA 12/31/14 $ $ /21/ % 7.4% MEP 06/27/14 $22.15 $ /30/ % -35.3% HASI 10/30/14 $13.84 $ /19/ % 5.5% ARCC 09/30/14 $16.16 $ /10/14 3.1% 0.06% MCC 09/17/14 $12.40 $ /18/ % -5.8% RLI 08/29/14 $44.70 $ /14/ % 9.3% NRZ 06/27/14 $ 6.28 $ /24/ % -2.9% MCC 05/30/14 $12.39 $ /22/ % 5.4% NEWM 05/30/14 $13.97 $ /05/ % 11.0% LNCO 05/30/14 $27.82 $ /30/ % 13.3% Entry price is determined by the last "Ask" price at the closing of the market on the day before publication. Recent price is determined by the last "Ask" price at the closing of the market on the day before publication. Total Return includes share price appreciation and dividend payments to provide a more accurate assessment of returns in that investment. Annualized Return represents what the stock would have returned at the same rate if held for a year; this is a way to balance returns on stocks held for different periods of time.we make no guarantee that any company in the portfolio will continue dividend payments. Updated 08/31/ Investors Alley Corp. All rights reserved. Any reproduction, copying, or redistribution, in whole or in part, is prohibited without written permission from Investors Alley Corp., 41 Madison Avenue, 31 st Floor, New York, NY or For complete terms and conditions governing the use of this publication please visit 5

In This Issue. Let s Make Some Money This Summer. July 2015 Vol. 2 Issue 2. Fellow Investor,

In This Issue. Let s Make Some Money This Summer. July 2015 Vol. 2 Issue 2. Fellow Investor, Let s Make Some Money This Summer Fellow Investor, It's hot where I live, and the market has gone cold. With no real news against which to react, the market seems to be beating down higher yield stocks