Investment Performance Guy

Most managers don’t control the property themselves, as Bernie did: Bernie acquired a one stop shopping operation (brokerage, management, trading, custody, reporting, all covered into a single bundled service: how nice). Most managers rely on custodians which, oftentimes, are selected by their clients. Managers typically receive reviews (either written or electronic) from custodians. Custodians, of course, could be offering fake information, though to my knowledge no one has suggested that this practice is available. Are managers to consider a little extra steps to ensure that the guardianship reviews are, in truth, correct? That the assets actually exist?

Since stock certificates are virtually a thing of the past, with most possession done in electronic fashion by organizations such as DTC, can we expect managers to want to validate that the DTC’s information match the custodians? The Securities and Exchange Commission (SEC) is needing registered firms to provide additional reporting and subjecting Madoff-like firms (not “like” as in committing fraud, but “like” as with they control your client resources) to periodic, unannounced audits.

No doubt, some of their requirements will be looked at as utilizing a sledgehammer: penalizing the countless honest firms because of the actions of the few bad apples. Performance measurement departments typically don’t take part in validation of asset ownership: they are in the mercy of the back office accounting folks, who reconcile positions typically. Does this reconciliation count? But is this reconciliation truly making sure lifetime and ownership? What lengths are these departments (or the firm) to go to validate and ensure ownership? And, can’t we expect that the bad apples will still be bad, since it’s them that are doing the improper things? Self-checking won’t stop their actions. In addition, verifiers will be required to validate that companies have such procedures in place. So far, there is absolutely no requirement that the verifiers themselves take part in such tests; ideally this won’t be coming. I am hoping this doesn’t appear to be criticism, because it isn’t designed to be.

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63.60-69.96. Plus, I will continue to receive higher semi-annual dividends from VOD. Finally, I will see further capital understanding of my VOD stocks likely. The deal is expected to be completed and the Return of Value realized in the first quarter of 2014. Overall, it sounds like a pretty good deal for VOD shareholders.

Once the deal is completed, I’ll hold my VOD and VZ stocks likely, unless I find persuasive reasons to sell either or both positions. Posted by Dividend Growth Machine at 6:46 PM 27 comments: Email ThisBlogThis! Today I bought stocks of HCP, Inc. (HCP), a genuine estate investment trust (REIT) that has a diversified stock portfolio of health care properties. I composed about HCP in a recently available article at Seeking Alpha soon before starting a posture in the stock last week. This week The sell-off among REITs continuing in a strong way, giving me a good opportunity to average down on my nascent position.

39.25 per percentage plus share, offering me a 5.33% produce on cost. 84.00 to my annual dividend income. I am content with how big is my HCP position (stock portfolio weight of 3.3%), therefore i will never be thinking of buying more shares anytime soon. However, I am closely watching other REITs and would like to diversify with the addition of a non-healthcare REIT to my portfolio.