GNE - Genesis Energy

[winner69]

Peat/Beagle

The spread between GNE divie and Govt 5 yr stock has average 5% points since they floated.

That spread last year ranged from 3.6% points to 4.2% points and then 'spiked' to 6% points in March

Isee this spread as a measure of how punters see the 'market risk' in holding GNE equity

Seems that we are heading back to that spread becoming sub 4% points again - which would imply punters happy with a 4% yield (net)

That implies a share price of $4.30 sometime soon ....and even higher if there is an increased divie.

So Peat, in my mind I terminated the GNE term deposit early the other day and kept the bonus increase in capital .....and then took out another 3 year GNE term deposit at current rates and fully expect to terminate that some time after Christmas to keep the bonus capital gains.

So maybe quasi bonds or whatever but at the end of the day we are playing the capital gains game .....like beagle not many in it 'just for the divie' which still seems a dangerous game to play

[Beagle]

https://www.interest.co.nz/bonds/107...7+October+2020

Bonds are not without risk either. REIT's have been the "go to" quasi bond alternative but I think with many trading at substantial premium's to NTA, Gentailiers still offering a good and extremely reliable and growing yield, (GNE has a multi year track record of increasing its dividends every year) are next cab off the rank when it comes to safe yielding opportunities.

I think GNE still has a lot of room to run. TA looks good to Winner. A lot of TA guys reckon the best way to be a winner is to get out of your losers and let your winners run, makes sense eh Winner

[winner69]

https://www.interest.co.nz/bonds/107...7+October+2020

Bonds are not without risk either. REIT's have been the "go to" quasi bond alternative but I think with many trading at substantial premium's to NTA, Gentailiers still offering a good and extremely reliable and growing yield, (GNE has a multi year track record of increasing its dividends every year) are next cab off the rank when it comes to safe yielding opportunities.

I think GNE still has a lot of room to run. TA looks good to Winner. A lot of TA guys reckon the best way to be a winner is to get out of your losers and let your winners run, makes sense eh Winner

You think GNE will get down to a 3.5% net yield?

[Beagle]

You think GNE will get down to a 3.5% net yield?

Excellent question. 3.5% net yield with 80% imputation = 4.51% gross yield. In post #2879 I postulated that a 5% gross yield = $4.57 and I certainly think if there's a deal on Tiwai point and interest rates head even lower that's possible. Could it go even lower, who knows ? We seem to be headed into completely uncharted territory with a negative interest rate OCR environment.

I was chatting with a senior partner at PWC on the weekend and we certainly agreed that there's a real rush on to find safe dependable yield with banks already offering nothing better than negative interest rates already on term deposit after taking into account inflation and tax.

4.5% gross yield would suggest a share price of as much as $5.08 is possible.

[dibble]

Excellent question. 3.5% net yield with 80% imputation = 4.51% gross yield. In post #2879 I postulated that a 5% gross yield = $4.57 and I certainly think if there's a deal on Tiwai point and interest rates head even lower that's possible. Could it go even lower, who knows ? We seem to be headed into completely uncharted territory with a negative interest rate OCR environment.

I was chatting with a senior partner at PWC on the weekend and we certainly agreed that there's a real rush on to find safe dependable yield with banks already offering nothing better than negative interest rates already on term deposit after taking into account inflation and tax.

4.5% gross yield would suggest a share price of as much as $5.08 is possible.

I cant get my head around how negative interest rates will do more good than damage (if we assume increasingly overpriced housing isnt ideal) but Orr's comments a while suggest he is merely waiting for all parties to sort out their IT systems before he gives it a whirl.

With that in mind surely anything yielding over 3% from a reasonably governed cash cow starts to look tasty to a pension fund.

[Beagle]

I cant get my head around how negative interest rates will do more good than damage (if we assume increasingly overpriced housing isnt ideal) but Orr's comments a while suggest he is merely waiting for all parties to sort out their IT systems before he gives it a whirl.

With that in mind surely anything yielding over 3% from a reasonably governed cash cow starts to look tasty to a pension fund.

We live in very "interesting" times that's for sure ! As to negative interest rates and why ? I can't fathom it and can't recall anything about negative interest rates from my economics studies back in the 1980's. It seems bizarre.

[arekaywhy]

We live in very "interesting" times that's for sure ! As to negative interest rates and why ? I can't fathom it and can't recall anything about negative interest rates from my economics studies back in the 1980's. It seems bizarre.

I don't think it is something to be "fathomed" as such, unless you are the one benefiting from it. I think it is merely a way for Them to take wealth away from the middle classes. Part of Their reset agenda...which is slightly off topic...

[Cyclical]

I cant get my head around how negative interest rates will do more good than damage (if we assume increasingly overpriced housing isnt ideal) but Orr's comments a while suggest he is merely waiting for all parties to sort out their IT systems before he gives it a whirl.

With that in mind surely anything yielding over 3% from a reasonably governed cash cow starts to look tasty to a pension fund.

If we consider NZ in isolation, I personally don't think we need negative interest rates to spur things along, those that borrow are already pretty stoked with the current cost of such. I think the possibility of going negative is only there in the war chest just in case our main trading partners go there, or things become really dire on the domestic front and the RBNZ get backed into a corner. I wouldn't expect us to go there unless it looked like the RBA was headed that way too. Meanwhile the RBNZ have the make noises about the possibility to make sure the banks get ready for it and also to encourage them to sharpen up on the lending rates. Just my 2C.

Russian and Mexican central banks have it set at a very attractive 4.25%...who's keen?

https://www.global-rates.com/en/inte...ral-banks.aspx

[Cyclical]

I think it is merely a way for Them to take wealth away from the middle classes.

Pretty good chance it would do the opposite I would have thought...those that are mortgaged up to the eyeballs, or plenty leveraged for their investment portfolio will be loving it, while making it hell of a difficult for those looking to get on the ladder...oops, off topic.

[peat]

one day Sxxx will Hit The Fan. And we never know when that might be.

love to quote myself so soon.

in my mind w69 you will lose the profits on the previous bond trade as well as any you might have had on the follow up trade. but you acknowledged its all about the cap gains.

so no more mention of bond proxies huh, coz its BS.