Year End Wrap-Up, Rebalancing and Review

This has been a difficult year for many including myself with investing. I have witnessed my capital decrease 1.75% even with dividends and options premiums. I was unable to call the bottom in oil and took a huge loss on Kinder Morgan and Cummins. I'm lucky I still have a pair of pants on! My passive dividend income has increased throughout this whole fiasco though and that was the purpose-a safe reliable income stream. Now as I approach retirement I must decrease risk. I am going to stay clear of speculation and barely investment grade companies bordering on junk credit ratings(KMI). I am reviewing my portfolio for companies with lower credit ratings (there won't be many) and will work to swap them out. I also do not intend to put any more capital to work in 2016 in stocks. I am considering I-bonds and municipals. I currently hold T, JNJ, PG, PEG, AAPL, BA, F, GE, GILD, KHC, OHI, XOM. I also hold an iShares fund and a health care fund, I use options once or twice a month, selling puts and calls.

Have a Merry Christmas, Happy Kwanza, Happy Festivus or whatever else you may celebrate! Take care of your health as it pre empts everything else-spend time with people you like and doing things to help others. Keep a gratitude list and read/edit it often.

September Update

My philosophy is to not follow the herd - please see below to determine what the herd is focused on right now;

I am bargain hunting. Here is a quote that may help;

My strategy is simple, watch for %ticker% to make a 52 week low and begin to accumulate shares when it moves 5% off it's 52 week low. Then hold until it begins to make a new 52 week highs and begin to sell when it falls 5% from the new 52 week high. If you accumulate say 1,000 shares at $65 / share ($65,000 investment) you will receive about $4,600 / year dividend (at current 4.6% yield) income for the next few years. Then if you sell at say $110 you would have a $45,000 capital gain. Thats a 70% gain in capital plus you get $4,600 per year while you wait.

Timing the market is a risky business but the above is worth considering.

August Update

Stocks of interest are;


RAI Reynolds American, tobacco, PPS 86.16, PE 16.1, Div Yield 3.08%, est 1 yr eps growth 16.8%, payout ratio 18.46%, DGR 8.29%

F Ford, auto manufacturer, PPS 14.80, PE 16.1, Div Yield 4.05%, est 1 yr eps growth 14.93%, payout ratio 31.67%, DGR 24.57%

DOW Dow Chemical, chemicals and materials, PPS 45.50, PE 13.0, Div Yield 3.61%, est 1 yr eps growth 14.02%, payout ratio 49.82%, DGR 22.87%

July Update

Stocks of interest are;

 CMI (Cummins), manufacturer of diesel/nat gas engines, 130.50/share, PE 13.96, div yield 3% (after dividend raise), est 3 yr eps growth 11.23%, payout ratio 32%, DGR 20-25%-source yahoo finance. sold put option on 7/16.

COP (Conoco Phillips), oil E and P, 57.95/share, PE 14.4, div yield 5% (just raised).

GE(General Electric), manufacturer medical equipment, jet engines, 27.04.share, forward PE 17.45, div yield 3.5%, est 5 yr eps growth 7.96%

GILD (Gilead Sciences), biopharmaceutical, 118.85/share, forward PE 10.75, div yield 1.5%, est 5 yr eps growth 20.6%

Jason Zweig

"The market is a pendulum that forever swings between unsustainable optimism (which makes stocks too expensive) and unjustified pessimism (which makes them too cheap). The intelligent investor is a realist who sells to optimists and buys from pessimists."- Jason Zweig

April - May Activity

Welcome back. These last few weeks I have sold a covered call on CAT trying to protect against downside after I picked it up at around 81/share. Turns out all the estimates claiming losses into 2016 didn't matter, shares still gained. I made a minimal amount and left money on the table. Still I went with the lower risk and higher probability scenario. That was the correct risk exposure for me.
I was lucky on KRFT and GE. KRFT and Heinz merged to form a huge food staples conglomerate and my shares took off. GE is selling off their financial arm which was met with a $3/share boost. Just goes to show patience + owning solid companies with wide moats + luck = investing success.
Picked up some CELG on solid growth and buyout rumors.


We are entering May and the 'sell in May and go away' segment of the year, where money will be even more scared than usual. Lots of people with their finger on the sell button. I am thinking stop losses on stocks that are not major income producers.

March Activity

I have no transactions to report except for dividends hitting the account. In the month of February about $468 in dividends was reinvested.

Here is a great video from the Oracle of Omaha. He speaks about Ted Williams, the strike zone and investing. It is excellent.

https://www.youtube.com/watch?v=_5VQPIeZhMc