High-Yield Investing

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21 Comments
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Smokey
Guest
Smokey
February 25, 2009 12:41 pm

A two-person show. They ferret out high yields that are pretty uncommon–but they underestimate the risk, or at least don’t explain the risk. Like everything, high risk is high reward–and in this market you’re likely to go bust. But I compliment them on finding some pretty unusual situations. Buyer beware.

Bob
Guest
Bob
February 26, 2009 10:11 am

I have read this letter for years. I am retired and need
this data. Carla had a BA, MBA, Phd and teaches and used to
write annual reports. He husband also writes a newsletter
of a go-go sort.

She is very thorough and analytical. She keeps tracks of her
recommendation and has added stop points in last 6 months.

This is the best High Yield letter I get and the total is about 6. There is a first of the month letter and a mid month
update.

For only $99 a year this is a steal.

(Carla is in Calgary and knows the Canadian market very well.)

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R Fraser
Guest
R Fraser
March 8, 2009 3:49 pm

I agree with Smokey as to the risk of her picks. I subscribed to her newsletter for a year, but did not renew it, nor would I subscribe again. I bought several of her suggested picks and in general they had poor overall performance, as prices on average went down. She seems to pay little attention to price, and does not have a problem with recommending things that have already had a dramatic run-up in price. Especially in the fixed-income arena, this seems to increase the risk, as prices tend to mean-revert. Overall, a disappointing newsletter.

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Bud
Member
Bud
March 20, 2009 7:00 pm

I have subscribed and bought a couple of her picks and they promptly lost====big time. They were not good choices and if anyone has followed her, they will notice that most of her picks from last year lost @ 40 to 50%. I just quit. Watch them though, they debit your credit card every quarter and the rest of the Street Authority gets your e mail and you get inundated with their terrible picks.

Paul
Guest
Paul
March 22, 2009 7:52 am

To summarize, I had approximately five problems:

(1) She picked shipping and Business dev corporations on the eve of a major recession, which I think was insane.

(2) She mentions underlying volatility in her wripte-ups, but there have been additional factors such as people dumping because of yield freezes and cuts, or recession-sensitive sector picks

(3) Compounding (1) & (2), she claims to be writing this for really cautious investors looking for the safest picks, including actually her mother and is supposed to have twenty something years of experience in market analysis, but if I were a little old lady right now, I’d probably be having a coronary based on these picks.

(4) The happy talk continues blithely on in March, as though in denial that anything really happened to the market during February. Or, she is not writing this for people who actually follow the market, or she is hoping you didn’t notice if she sounds up-beat enough. She sent out a kind of urgent update in March suggesting dumping just ONE pick because of a div rate cut, while I was actually sitting in the middle of a graveyard of her picks.

(5) The write-ups are not very analytical. They read a bit like a review of a private school sporting event or amateur dramatic performance.

In more detail now:

I am a very new investor. I subscribed to HYI in December 2008 because I thought the yields might render the underlying instruments resistant to loss. However, several of Carla Paster-Knacker’s picks dropped like stones during February.

Her picks that I think were unforgivable were business development corporations (during a recession ! eg. AINV, ARCC, HTGC). “Invest like a venture capitalist !”. These corpses are still in my portfolio, down 50 – 80%, and not tracking back up with the rally. If I had had more than a couple of weeks experience investing at the time, I would probably have thought twice about the utter insanity of these picks. The other insane ones were in shipping. The streetauthority folks have blathered a fair amount about the Baltic Dry Index being at an all time low and due for a spring back, but their shipping picks (eg. FRO, DAC, etc) did the same lousy downward plunge of 50 – 75% and stayed low).

I assumed the above picks would come back and simply had a lot of volatility as she had mentioned in newslatters from around December, but about half of the picks I purchased (mainly the above plus some globals with a lot of european exposur) did not, and I jettisoned them at significant loss after realizing (too late) that everyone else was dumping because of concern about dividend cuts, sending them down into a deep-death zone.

At this point I canceled my subscription.

However, I kept 3 or 4 pipeline/energy picks such as MGG, ERF, NSH , which seem to have come back or not dropped. Moreover, two picks that I had jettisoned (AOD and AGD, actually came roaring back during the rally, from minus 40% or more, to + 8% of purchase price, outperforming the S&P during the rally. Moreover, AGNC seems to be holding, along with Capestead. So I actually reinstated my subscription, because for SOME of the picks it really is looking like volatility only, though the longevity of the yields I is anybody’s guess. Moreover, I was interested what she might have to say about the bond market, which is still relevant. However, I may cancel again within 3 months 🙂

Another thing is that when you subscribe, you get about five past newsletters as a kind of gratitude gesture, and it is probably a mistake in volatile times to purchase, like, November 2008 picks during December, since there was a sizeable market dip in November that sent yields high temporarily.

She could have emphasized that energy picks are likely to be more recession resistant than some of the others (so far at any rate).

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JohnnyHeck
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JohnnyHeck
April 25, 2009 7:07 pm

After trying many many other newsletters over the last year and a half I have just started to give Carla a chance.

To me what distinguishes Carla the most is that she really never over hypes one of her featured picks. She presents them more as “food for thought”. She warns you to do your own due diligence before investing to determine yourself whether the risks seem reasonable to you. But she sure does come up with intrigueing possibitlities that I have never uncovered on my own through simple stock screening.

Similar to all letters, if you jump on the latest rec your sure to be disappointed as too many subscribers just act before checking. I suppose if your a day trader this might work out if you sell right after the rec. And if Carla is “front running” here latest, it sure can explain why some of her more obscure research can be had at such a reasonable subcribtion price.

In sum: I think Carla has some good ideas but you are on your own to make the right decision as far as risk and timing are concerned. What else do you want for this price?

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s pylyshenko
Guest
s pylyshenko
June 1, 2009 9:09 am

The information included in this letter is well presented. Carla covers in fairly good detail many aspects of high-yield investing, letting an investor pick according to their needs. A good value for the money. I noticed that all who reviewed the letter before April give it a very tepid or negative review. That is the time most investments lost money, particularly high-yield investments, as they were considered at high risk, and risk was out. Now that the market has gone up, so have the investments.

The one serious problem with this letter is its accuracy, particularly in the Dividend Capture Dates section. I have found two errors in two months. RUS interest as printed in the April letter and TKG dates (and probably interest rate) in her May letter. My email regarding the April problem was noted, but not addresses at all. I suspect it is a very thinly staffed operation, thus one should take their admonition to do your own due diligence seriously, and confirm all dates and rates from other sources.

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imguyo
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imguyo
July 17, 2009 12:48 pm

After cancelling my initial subscription, I commenced the second subscription to this letter 6 months ago on a teaser rate. Sadly, the content quality is still sub par to other publications. I already own most of the recommendations meeting my criteria, and the dividend capture selections are ridiculous. The ex-div date of some listings are before receipt of the newsletter, and most of those listed are so thinly traded they are not worthy of additional research. I did submit this and other suggestions in a survey, but no response. I will not renew as there are many better choices for my subscription dollars.

Ted
Ted
December 8, 2009 9:27 pm

I took the 3 mo subscription for $40; one of those auto renewal schemes I hate. Marked my calendar for the final week of service so I could cancel if I chose to do so. Lo and behold, my credit card was charged several weeks early. When I contacted them, they gave a lame excuse, but did quickly refund my money.

Their service does contain some advice not ea