Monday, October 30, 2017

What's next for November?

October has certainly been the roller coaster during earnings season.  My total profits from stock valuation dropped about 1%, but still in the black.  The good news is my dividends haven't dropped a bit :)

I bought AT&T a few days too early.  Two days after I bought in to increase my position, they announced their cord cutting news, and coupled with their earnings my flat position is now in the red.  I still have confidence in T, and their more attractive looking yield, but I'm going to step back a bit because the weight of my staples has dropped below discretionary (again).  This is also because last Monday I bought into my smallest holding, the financials.



I bought 15 shares of Main Street Capital Corp. (MAIN).  It has been on my watchlist for some time, and is quite attractive.  Why I hadn't bought in sooner is because of it being at its 52 week high.  This hasn't changed for quite a while.  Great *monthly* yield, P/E, dividend record, etc etc.  They also have a semi-annual dividend which I will get in December, and my spreadsheet and broker don't know how to handle or record it.  My broker had it on the list for December, but then took it off and had not included the June one.  I added a little calculation in my spreadsheet with the current semi-annual valuation which I will need to keep tabs on if it changes in the future.  I know Jim Cramer was asked about MAIN in his lightning round, and he stated that he doesn't like financiers in a specific market.  The main reason people don't like MAIN (ba-dum ching) is because it is a BDC (Business Development Company) and it has a low yield compared to 5 other BDCs.  However, it has good coverage of its dividend, and BDCs either do great - or don't.  They tend to make risky lending decisions hoping they pan out.  MAIN seems to be conservative in this manner, or at the very least, has some reliable companies owing them for a long time.  I will probably add more into ORI before revisiting MAIN due to risk, but after the hurricanes possibly affecting ORI, MAIN is a good place to be right now.

It is no secret that the worst valuations in my portfolio are my consumer staples.  Thanks in part to Amazon playing halloween scare tactics on the food staples, HRL and GIS are deep in the dumps.  I am not even sure if averaging them down is worth it right now, because they possibly haven't hit the bottom.  While I have confidence in HRL, GIS is on relatively shaky ground, and is a prime candidate for being bought out.  The other black hole in my portfolio, other than AT&T, is Philip Morris.  I am confident they are going to pull through one way or another but I am so overweight on tobacco right now in staples and my portfolio in general thanks to averaging down Altria.  Averaging down Altria, incidentally, really paid off.  It is tempting to do the same with PM, but I would rather diversify right now.  Which is why I am looking at Proctor & Gamble with a suddenly 3%+ yield, Colgate-Palmolive, and Clorox.  The former because of the yield opportunity, the latter two because they don't primarily sell food.  Because of my $1k goal for 2017 and staple shortages, I am looking real good at PG over the other two.  My next purchase will be a week from now in November, and earnings will be in for many of my other holdings which could change all this.  Before the end of the year I would like to buy more AT&T, Old Republic, Realty Income, and maybe a utility or two.  Once January hits I'm going to be buying some more under 3% yield staples which will hopefully be bargains.

Thursday, October 12, 2017

AT&T

Bought 15 shares of AT&T on Tuesday.

My deposit was delayed due to Columbus day.  It gave me the chance to observe the effect of  the Monday purchase vs. Tuesday purchase.  Since Monday was down as it should be, Tuesday morning was right before the market took off.  I am considering moving my deposit to Tuesdays for a morning purchase, although it is hard enough to wait through the weekend for the deposit to drop.  I know when I get to the $500+ point per month on dividends, thus having more cash on hand,  I will be able to make better choices on purchases (i.e. buying in when CMP's salt mines experienced an earthquake).

AT&T has been largely flat in my portfolio.  However with my previous purchase of the low yield Hormel, I wanted to offset that yield with a higher yielding one.  Since it is harder and harder to find high yielding stocks due to the market going up, I looked inward to my own portfolio.  I had considered MAIN or ORI before bank earnings are released, but since I don't know much about the financial sector's effects after earnings, I decided to err on the side of caution.  I will be observing this unique sector and it's earnings ramifications this month.

I am having more difficulty finding stocks that fit my criteria for purchase, but there are a few gems out there, although not in every sector.  I am happy to see Altria (MO) recover after I averaged them down, and now they are positive in my portfolio.  I hope Philip Morris (PM) is able to do the same.

I will update charts at close today.  On the plus side, my profits have reached $1k, which is a 4% gain.  This gives me a lot of room to make some mistakes and takes some remorse pressure off me.  I am aggressively pursuing the goal of $1k in annual dividends by the end of this year, ergo I probably won't be looking into low yield stocks for some time.