Dec 2016 Update

December was a continuation of the Trump effect with significant  reassessment underway in many portfolios.  The DOW continued its march to 20,000 before failing and pulling back at month end.  While consumer optimism is at multiyear highs, this has not resulted in holiday sales records probably due to the inability of a President-Elect’s posturing to translate  into tangible policy change.  This month The S&P gained 1.82%.  My portfolio recorded a gain of 3.92% largely reflecting my overweight position in the Financial sector which has been a beneficiary of election sentiment.  This increases my lead over the S&P for the year to 19.83% achieving one of my 2016 goals of besting the S&P index.

Headlines impacting my portfolio:

  • 12/7 – CIBC/PVTB merger vote postponed
  • 12/13 – WFC fails ‘Living Will’, BAC passes
  • 12/14 – Fed raises .25%
  • 12/20 – BAC sells UK MBNA assets to Lloyd’s
  • 12/20 – AMC receives last approval for CKEC merger
  • 12/21 – KO buys BUD African, El Salvador and Honduras bottlers
  • 12/21 – MET financing for spin secured (BHF)

Blog Updates:

Basically chose to be a slug through the holidays

Portfolio Updates:

  • Added to HAS
  • Added to HWBK
  • New position – CNDT (XRX spin)
  • Added to CVLY (stock dividend)
  • Added to LARK (stock dividend)
  • Added to CBSH (stock dividend)

Dividends:

  • December delivered an increase of 24.0% over December 2015.  This was due about evenly between dividend increases (Y/Y) and October purchases from merger proceeds.
  • December had a 5.4% increase over the prior quarter.
  • Dividend increases averaged 12.3% with 74.5% of my portfolio delivering at least one raise.
  • Dividends received exceeded total 2015 dividends by 29.3%.

Spinoffs:

The MET spin (Brighthouse Financial – BHF) secured financing.

Mergers:

LSBG/BHB expected to close in January 2017.

Rolling Unabridged Update #3

The fourth month of the Rolling Unabridged Monthly Portfolio (RUMP) is in the books with the results posted a few days ago.  A few were added and more removed.  The only item of note was that KO has tied JNJ in the overall rankings.  The update cycle remains at an eight month lag which is within the desired 6-9 month window.  Following are the highlights, findings, questions and issues identified.

Blog Composition

Bloggers with online portfolios that are not dormant numbered 266 this round.  Roughly 4 were added and 22 dropped due to dormancy, one by making their portfolio private and one by becoming subscription only.

Data

As alluded to earlier, there were no significant changes in the rankings, however both KMI and PM were replaced by OHI and WFC respectively, both of which were recipients of blog chatter leading into the US election.

Strategy

One thing that has caught my attention with these analyses is the multiple strategies employed whether singularly or in combination.  One that I hadn’t seen since 2000 was concentrated IPO investing.  As both dividends and profits rare in this space, his decision to eject his DGI safety net and go ‘all-in’ is one gutsy call.One can only hope his success – or timing -is better than my dabbling at the height of the dot-com bubble.

A Deeper Dive

I have come to the conclusion that this type of analysis – although interesting – is meaningless.  Adam’s data (I Want to Retire Soon) is distorted by frequency while mine is distorted by weighting (or lack thereof).   Meaning in my data, one share of JNJ is equal to 100 shares as the holding – rather than quantity – is paramount.  Therefore I miss weighting changes as the company is either owned or not.  Since a clearer picture cannot emerge, I’ll continue to periodically update the data but only post on major events such as dividend cuts.

Isn’t the Election Over Yet?

Following the most divisive and cantankerous election I’ve ever seen, I – along with many others – were likely longing for a return to normalcy.  A day where markets are driven by earnings, GDP, or other useful metrics rather than tweets and soundbites.  A time when logic dictates norms rather than bluster and berating.  The ability to take a deep collective breath followed by attempting to figure out how our respective investing strategies need to be tweaked to profit from the new regime.  I’m not referring to the recounts as I suspect they will result in no significant change with Clinton winning a majority of votes cast but Trump winning the Electoral College – and therefore the election.  What I’m referencing is the ability to cipher a meaningful direction that the President-Elect (PE) is going to take the economy.

Three diverse events occurred this week that gave me pause.  On the surface these are likely one-off issues but looked at in total generate more questions than they answer.

Continue reading

Nov 2016 Update

November was a wild month with a downward trend leading into the US elections and what is being referred to as the ‘Trump Rally’ following the widely unexpected result.  All major indexes achieved record highs on November 21st.  Fortunately I was able to redeploy the majority of the merger funds prior to the election.  This month The S&P gained 3.42%.  My portfolio recorded a gain of 11.49% (no normalization) largely reflecting my overweight position in the Financial sector.  This increases my lead over the S&P for the year to 17.74% with one month to go.

Headlines impacting my portfolio:

  • 11/2 – EPR acquires CLLY properties in liquidation
  • 11/8 – XRX spin (CNDT) set for 12/31/16, ratio 1:5
  • 11/14 – Maine is final approval for the BHB/LSBG merger.  Closing expected Jan 2017.
  • 11/15 – BMO designated as Canadian clearing firm for renminbi trades
  • 11/16 – AMC gets EU approval to for Odeon & UCI merger

Blog Updates:

I chose not to do an October portfolio update due to all the activity which distorted the results a little, especially the XIRR column.  The November data has been compiled and should be posted in the next couple of days with the goals update later in the week.  The Unabridged portfolio should be next week as per normal.

Portfolio Updates:

  • Added to DIS
  • Added to UL
  • Added to PEP
  • Added to TD
  • Added to KMB
  • Added to NJR
  • New position – IRM
  • Added to TRP
  • Added to KOF
  • Added to CCE
  • Added to FLIC (they chose to round up fractionals on a split)

Dividends:

  • November delivered an increase of 29.1% over November 2015.  This was due about evenly between dividend increases (Y/Y) and late 2015 funding.
  • November had a 2.1% increase over the prior quarter.
  • Announced dividend increases currently average 12.5% with 71.81% of my portfolio having at least one raise so far this year.
  • Through November, dividends received exceeded total 2015 dividends by 13.8%.

Spinoffs:

The XRX spin (Conduent – CNDT) is on track to complete 12/31/2016.

Mergers:

LSBG/BHB expected to close in January 2017.