LETTERS

Easy Rider I'm sure your intent was not to insult anyone by the title of your article (When that Bundle of Joy Grows Up to Be a Biker Chick, November), but being a biker chick myself, I was a little put off. Not all bikers or biker chicks are trouble. I make a good living, love to ride and hang out with a lot of decent bikers. Just thought I'd give you a heads up on the stereotype. Anyway, great article

Easy Rider

I'm sure your intent was not to insult anyone by the title of your article (When that Bundle of Joy Grows Up to Be a Biker Chick, November), but being a “biker chick” myself, I was a little put off. Not all bikers or biker chicks are trouble. I make a good living, love to ride and hang out with a lot of decent bikers. Just thought I'd give you a heads up on the stereotype.

Anyway, great article beyond the title.
Susan Lamphere, registered sales associate
Robert W. Baird
Muskegon, Mich.

Danger Signs?

One cannot disagree with the fundamental premise of Aaron Edelheit's article (When High Dividend Yield is a Danger Sign, October), but I believe he is seriously off-base with his criticisms of Allied Capital and American Capital, two business development companies (BDCs) sporting extraordinarily high yields.

The article suggests that these companies are likely to have to cut their dividends because they do not generate sufficient operating income to meet their dividends, but rather use capital gains and equity raisings to top up income.

In fact, the BDC model calls for ongoing capital sales. And since BDCs must pay out their income in dividends, they need ongoing access to capital in order to grow. So in and of themselves, these are not danger signs.

In the case of Allied Capital, for example, about 80 percent of this year's dividend will come from ordinary income, with the remainder from capital gains. In its 39-year dividend-paying history — during which time (including recessions, credit shocks, inflation and war) the annual dividend has not once been cut — realized gains account for 37 percent of the total dividend. So this year's mix of income and gains is not out of the ordinary. It is part of the BDC model.

Of course, prior to the concerted and distorted attack by shorts on these companies, which has driven down stock prices, the yields were not so high, so it has been a little of a self-fulfilling event.
Adrian Day, president
Global Strategic Management
Annapolis, Md.

No More Golf Balls

I've been in the wholesaling business for nearly 20 years and want to take exception to Aldo Blackthorn's Five Things Your Wholesaler Will Never Tell You article (November). I've either known or been associated with many of the best professionals in this business (as well as the others) and know that his assertions need correcting. In the interest of accuracy and brevity, the fifth item, “I have no reason for dropping in on you today, other than I need to make my weekly meetings quota,” should have been listed first.

Brokers, FCs and FAs need to push their wholesalers and take advantage of all their resources and experiences, not just the golf balls and cocktails. Only the customer can stop others from using him/her as quota filler.
Wick Barfield
Baton Rouge, La.

A Reader Writes…

Registered Rep. has become an important part of my reading in the last year. I noticed an obvious content change a while back, and the magazine became relevant and indispensable, even edgy and provocative — tackling tough subjects. I'm glad, too, that you decided to send it to home offices, instead of just broker/dealer offices. I have been independent and home-officed for 13 years now.
Rick Louderbough, registered representative
1717 Capital Management
Albuquerque, N.M.

Ravaged; Not Ravished

In your November issue, the cover line reads: The markets have “ravished retirement accounts.” I think the headline writer meant to use the word “ravaged.” To ravish means to rape. To ravage means to destroy or devastate. On second thought…
Bob Callaway, vice president, wealth management
Investment Centers of America
Grand Junction, Colo.

Editor's Note: D'oh! What were we thinking?

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