Dear Mr. Berko: I made the mistake of writing a $198 check to Weiss Research for Larry Edelson’s stock market advice. Weiss promised to return my money if I wasn’t satisfied, but the publisher won’t respond to my requests for a refund. I can’t find a workable email address for Weiss Research or Martin Weiss. Please help me.
Secondly, my stockbroker recommended Granite Point Mortgage Trust, which is a real estate investment trust. He thinks it’s a good income stock paying 9 percent and says the dividend will increase again this year. I told my broker that you said that when interest rates go up, bonds and income stocks go down in price. He said that you are right but this is a special situation because when rates go up, this REIT’s dividend also rises. If this is so, I’ll invest $10,000. Please explain this to me. — CT, Wilmington, N.C.
Dear CT: I’ve looked and I’ve checked. And I’ve rechecked and I’ve inquired. But apparently, I didn’t do it well enough, because I can’t find one workable email address for publisher Martin Weiss, whose innumerous financial publications litter sewer floors like losing ticket stubs at a racetrack. I called Weiss Research’s Florida office and was put on hold for over 10 minutes three times and then gave up.
The Weiss people are extraordinarily successful, marketing various dazzling financial publications, the advice from which (my opinion) is extraordinarily abominable. Go to Google, and type in “Weiss Research.” Then click around and glimpse the comments. It won’t take you long to feel unclean. You’ll also see that despite the money-back promises, lots of people haven’t gotten their money back. And most should, because the many publications I’ve read haven’t been worth a bucket of river mud to me. Stay away from anything that has to do with Weiss Research or any Weiss co-conspirators. Their market comments and claims read like magnificent fairy tales.
Founded in 2015, Granite Point Mortgage Trust (GPMT-$18.36) came public in June 2017 at $19.50 a share and was then promptly listed on the New York Stock Exchange; one could probably list a pregnant camel on today’s Big Board. GPMT originates, invests in and manages senior floating-rate commercial mortgage loans, plus other debt and debtlike commercial and real estate investments in the United States.
As iterated in its 2017 annual report, GPMT’s investment portfolio includes 61 commercial real estate debt investments, totaling $2.4 billion. A tad over 98 percent of GPMT’s well-managed, high-quality portfolio is composed of floating-rate loans tied to Libor. The London Interbank Offered Rate is the benchmark interest rate that many of the world’s leading banks stick one another with for short-term loans. In October, Libor was 1.79067 percent; today it’s 2.29521 percent, an increase of 50 basis points. Such an increase in Libor translates to an almost 9-cent increase in GPMT’s dividend. As you can see, when interest rates rise, so will the rates on GPMT’s commercial portfolio, translating to higher shareholder dividends. Remember that REITs must pay out 90 percent of their income. The current $1.52 dividend, yielding 8.3 percent, could be raised to $1.61 this year and pay a swell 9 percent. Because GPMT’s portfolio of floating-rate assets is larger than its floating-rate debt, net interest rate income should continue to benefit from the higher Libor.
Resultantly, J.P. Morgan, Raymond James, Goldman Sachs, Citigroup and Keefe, Bruyette & Woods have “buy” recommendations on GPMT. These firms and GPMT’s management believe that new investments in commercial real estate mortgages, increased leverage and a higher Libor will propel earnings growth this year. And some brokerages believe that by this year’s end, GPMT will be paying a quarterly dividend of 41 cents. So, considering that there may be continued strong commercial transaction volumes, appreciation in the value of commercial properties, fewer companies offering commercial mortgage-backed securities coming public, and reduced competition from the banking industry, GPMT’s market has strong demand and room to expand. And new investments should continue to drive portfolio and revenue growth, plus higher dividend income. Go for it.
Please address your financial questions to Malcolm Berko, P.O. Box 8303, Largo, FL 33775, or email him at email@example.com. To find out more about Malcolm Berko and read features by other Creators Syndicate writers and cartoonists, visit the Creators Syndicate website at www.creators.com.
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