We’ve written before about the big disconnect between the rising stock market and (ridiculously!) negative media coverage we’ve seen over the last 16 months. Well, the media is at it again, this time with the whole First Republic Bank (FRC) fiasco.

And we contrarians are going to keep using overtorqued coverage as our guide to grabbing big discounts and steady dividends in closed-end funds (CEFs) and other assets.

Before we go too far, there are a couple things we need to keep in mind with this FRC mess: first, as was the case with other troubled banks, including SVB and Credit Suisse, a buyer (or the government) swooped in and managed the problem.… Read more

Hey kid, want some candy?

Don’t worry about the wrapper. It, um, came like that.

No? No candy for you? You’re sure?

OK fine. Maybe you’re not hungry, but how about this 31% dividend?

Don’t worry. The stock made its last dividend payment of $0.27 just fine.

No? No 31% yield for you? You’re sure?

OK fine. And, honestly, smart move. I would imagine that January dividend payment is the last one we ever see from First Republic Bank (FRC).

Fundamentally, FRC (and other banks, for this matter) are flawed, perhaps fatally so. They are not paying competitive rates.… Read more

We’ve got a once-in-5-year buy window open to us in one of the highest-yielding investments out there.

And (for once) we can thank the Fed for these cheap 8%+ payouts!

I’m talking about closed-end funds (CEFs), a corner of the market where rich 8%+ yields (and monthly payouts) are the norm.

These (too) often-ignored funds are set to spike because the last time Powell & Co. acted like they are now, CEFs’ prices soared—and they handed their lucky investors big price gains to go along with their huge dividends.

If 2023 Is 2019 Redux, CEFs Will Explode Higher

To see what I’m getting at here, think back to late 2018.… Read more

With the recent pullback from the market’s high this year, we’ve got a nice second chance to buy some terrific dividend stocks cheap. But don’t waste your time with lame payers like General Mills (GIS), with its 2.5% yield. Or the miserly 2.1% you get from a so-called “Dividend Aristocrat” like McDonald’s (MCD).

Even though inflation is trending downward, it’s still at 5%. That’s well ahead of these pathetic blue-chip yields—and with the economy still performing well, it could be a while yet before it slows meaningfully from here.

Bottom line: We just can’t afford to own low payers like these any longer.… Read more

Select bank stocks may be cheap, but why settle for 2% to 3% yields?

Let’s really bang on the bargain bin and for dividends between 8.3% and 9.4%. These yields are available thanks to the current banking fears.

Fortunately, these payouts are more secure than vanilla investors appreciate. Hence, the dividend deal.

A Better Way to Play Banks

I wrote a few weeks ago about how mainstream investors are trying to time a bottom in banks.

Fair enough. Banks are extremely cheap right now by a well-known measure of long-term value: CAPE (cyclically adjusted price-to-earnings), which is the price divided not by the past year of earnings, but the past 10 years.… Read more

If you’ve missed out on this market’s roughly 6% gain this year, don’t worry. There’s an easy way to grab that same 6%—and more–and do so in safe dividend cash.

The key, of course, is closed-end funds (CEFs), our favorite high-yield vehicles, specifically the 8%+ payouts these funds offer.

Before we get to a couple of high-yielding CEF tickers (yielding 8.8% and 10.2%), let’s dive into the market’s gain and go sector by sector, because it tells a clear story of how some investors have seen that 6% rise and some have seen even more (or less!).

First up, if you’re not holding a significant amount of tech, you’re likely already behind, as the sector, a laggard last year, is up 16% so far in 2023.… Read more

We’re heading towards the most telegraphed recession of all time. At least in recent memory.

So should we sell everything? Not exactly. Granted, recessions are usually bad for stocks. Vanilla investors who own nothing-but-ETFs are in a tough spot.

But since you’re reading this, I assume:

1. You pick stocks better than a robotic ETF.
2. You’re not scared of a stinkin’ recession. You’re here looking for high-yield exceptions to the “sell everything” rule.

I appreciate that about you, my fellow contrarian. If I thought rules applied to me, I would have made it past age 26 in Corporate America! This is why we get along so well.… Read more

I’m not going to lie to you: this market is headed for a fall. And if you’re caught holding the wrong dividend payers, you could be in for some serious losses indeed.

How serious? Well, the worst of the four stocks we’re going to delve into below—Cracker Barrel Old Country Store (CBRL)—plunged 26% last year, much further than the S&P 500. If you hold this one, or the other dangerous dividend we’ll discuss below, it’s time to cut your losses and get out now.

Cracker Barrel Plunged in ’22—a Sign of Things to Come?

But we’re not only going to sell today—we’re going on offense, too.… Read more

We’ve got a sweet opportunity to grab a 14% dividend sitting in front of us, and we can thank the ongoing sale on bonds for this deal.

This double-digit payer—which has held that huge payout steady for years—holds junk bonds, or corporate debt that falls below the investment-grade line.

Isn’t there more risk here? Sure. But we’re well-compensated by the big yields junk bonds pay. Heck, even the yield on the benchmark SPDR Bloomberg High Yield Bond ETF (JNK) is a healthy 5.8% now.

But JNK really is for novice investors. When we go with CEFs like the one we’ll delve into in a moment, we can boost our payout by more than double, to 14%—and get paid monthly.… Read more

Private equity (PE) is a rich guy and gal favorite. PE firms find deals and deliver outsized dividends.

They don’t like dealing with common folk. So, PE shops typically set a minimum of a few hundred thousand dollars or so to invest.

But we contrarians have a better way! By tapping BDCs—or business development companies—we can toss as little as $20 into a PE payer.

Better yet, we can secure yields between 8.5% and 13.1%. We’ll discuss three examples today. Including one that is trading below book value!

If you’ve never heard of business development companies (BDCs), you’re not alone. There are only a few dozen publicly traded BDCs, and even the largest one would be a minnow in the S&P 500.… Read more