Jan 2018 Update

The market came out of the chutes and barely looked back this month, the catalysts being the realization of the tax plan’s impact on corporate earnings and few earnings reports being significant disappointments.  The lower tax rates started trickling  into paychecks (average about 3.5%) but the average gas price nationwide increased by roughly 5% primarily due to the weakness in the US dollar  (caused in part by the prospects of increased deficits from the tax plan that haven’t been offset by jobs, productivity or GDP gains yet).  At least we can watch commercials touting unrealized benefits even though it is way too early for any tangible impact to  be realized.  Kind of makes me wonder a little.  For the month, the S&P index increased by 5.62%% while my portfolio value increased by merely 3.81% putting me behind by 1.81% to start the year.Selected Headlines impacting my portfolio (bold are owned):

  • 1/5 – AKO.B to buy Comercializadora Novaverde from SIEMEL.CL
  • 1/6 – BX unit to acquire PDTRF in all cash deal
  • 1/16 – ENR to buy SPB’s global battery and lighting business
  • 1/17 – BEN to acquire Edinburgh Partners Limited
  • 1/19 – LNC acquires Liberty Mutual’s group business
  • 1/22 – AIG to acquire VR for $68 per share cash
  • 1/22 – ADP acquires WorkMarket
  • 1/23 – DGX to acquire MedXM
  • 1/29– NDAQ sells Public Relations Solutions and Digital Media Services divisions to West Corp.
  • 1/30 – BX consortium to acquire 55% of TRI’s Financial & Risk business

Portfolio Updates:

  • initiated position in Compass Group (CMPGY)
  • Added to RY (moving from taxable to IRA)
  • Sold fractional share of KMB (moved whole shares from DRIP to broker)

Dividends:
Over the last couple of years I’ve been asked what my dividend breakdown is by source.  This is my first attempt to answer the question – and if successful might migrate this type of table to the  to the portfolio value section.  Let me know your thoughts!

DIVIDEND BREAKDOWN

CATEGORY MONTH $ NOTES YTD $
Regularly Scheduled 93.65%
Recent purchase 0.86%
Increases/Cuts 1.71% GE – cut
Special Dividends 3.77% CME,SGAPY
Stock Dividends
  • January delivered an increase of 32.53% Y/Y fueled by dividend increases and special dividends.
  • January delivered a 9.52% increase over last quarter (October).
  • Dividend increases averaged 9.93% with 22.28% of the portfolio delivering at least one increase (including 1 cut (GE).  .
  • 2018 Dividends received were 9.67% of 2017 total dividends putting us on pace to exceed last year in early November.

Spinoffs:

Spirit Realty Capital (SRC) – Nov 21, Form 10 was filed confidentially with spin completion targeted for 1H 2018.

Mergers:

AGU/POT (Nutrien-NTR) – completed 1 Jan 2018 resulting in a booked gain of 25.1%

Jan 13 – DST announced it was merging with SS&C for $84 cash per share

Jan 31 – XRX announced a merger with Fujifilm for stock and $9.80 in cash

Summary

All in all a good month but my strategy has shifted a little, yet again.  My broker rewarded me with 20 free trades so I’ll consider adding to selective overweight holdings to bring them in line to round lots (100 share multiples).  Motif announced free trades for bulk (next morning) trades.  I will give this a try in an attempt to eliminate fractional shares (like getting one from 10.22 shares to 11).  It’s not worth paying a transaction fee for, but when it’s free … I might attempt a reduction in the clutter – based on market conditions of course.

Since I became more vocal regarding cryptocurrency on December 14th and initiated further positions in blockchain, saw peak bitcoin (this round anyway) on December 17th and renewed scrutiny of this space by others, I’ll leave you with this nugget of January performance:
RELATIVE PERFORMANCE JANUARY 2018

BITCOIN S&P INDEX THE SR INDEX
-26.7% +5.62% +7.25%
The SR (Seeking Returns) index is equal weight 58 owned companies with some level of stated interest in blockchain technology.
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5 thoughts on “Jan 2018 Update

  1. Hey SR, Overall, I think you do a great job with this monthly recap so take this comment only as constructive, not criticism.

    I understand why you use percentages from past posts (privacy for yourself and comparative purposes for readers), but I’m not sure the percentages offer much value on the dividend breakdown. It’s my expectation the recurring % will always be by far the largest and not tell your readers much overall.

    Food for thought: could you set a baseline index value (say 100), then tell us how your baseline index grew: new capital, dividend cuts or increases, portfolio re-engineering, addition or reduction from one timers, dividend reinvestment?

    Your writing is all good, so just something to consider as you develop this new metric. Have a good one…. Tom

    Liked by 1 person

    • Good points. An index might address some additional issues as well. Since I don’t post my options activity (separate account) a couple of years down the road I may need to restock from this account which would be clearer via an index. I didn’t consider the fact that barring Armageddon the scheduled will always be higher. One surprise for me was that my Special Dividends were greater than my Dividend Increases.

      On the Crypto post, perhaps I should have conjured up my inner Elmer Fudd and said, “If you can figure out the ‘rascally rabbits’ you could make some money”.

      Thanks for the comment.

      Like

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