IN THE NEWS

In the news this week, Ron Paul wants to create competition for the Federal Reserve by allowing U.S. citizens to use gold in place of the dollar.  I've a feeling that won't really catch on anytime soon, but I do agree with his thinking on the Fed's "monopoly" like control of U.S. currency and would like to see a little more restraint on the free wheeling printing of dollars.

Obama invited Bill and Melinda Gates and Warren Buffett to the Oval Office for a meeting to discuss their charitable giving.  Could it be that he's thinking we might all be in need of some charitable support by the time the Democrats are through spending?

Speaking of Warren Buffett, his company Berkshire Hathaway has done a great deal of selling in the past quarter.  There is speculation it is to raise cash for the incoming investment manager at Geico after the retirement of Lou Simpson at the end of this year.  I think it might just be a move to collect capital gains in an up market.

As for my own trading, I pulled out my original investment in Centerpoint energy (CNP:NYSE) and reinvested it in Invesco Mortgage Capital (IVR:NYSE).  My stake in CNP was up over 28%, so I kept the remaining shares and will continue to draw the dividends on those.  At the same time I'll triple the dividend income I was earning on my investment in CNP by putting the money in IVR shares which currently yield 17.77%.  Like Annaly Capital (NLY:NYSE) I do not consider this a long term holding, it's purely a dividend play as long as interest rates are low.  Since a rising interest rate could drastically affect earnings for REITs, I'll be watching this one closely and move to trade out if interest rates should begin to rise.  Not expecting that to happen anytime soon, so I'll collect the dividends in the mean time.