March 2019 Update

With it being tax time in the US, closing out the first quarter and a yield curve inversion – this week’s installment has plenty to offer. With the market generally on the rise for the month I decided to maintain a cash heavy (for me) position while putting the finishing touches on my tax return. My general attitude has been one of caution for the past several months with the markets finally putting a yield curve inversion on display. Larry Kudlow was making the rounds this morning maintaining this is an aberration – and it very well could be. But it easily could be an omen of a looming recession – perhaps as early as late this year. Meanwhile, the S&P rose 1.76% while my portfolio rose 1.05%. For the year, I’m slightly behind the benchmark by -0.71%.

PORTFOLIO UPDATES

  • Increased my ETF position (CUT,VGK,EWA,EWW,JPMV)
  • added WSFS and lost BNCL (merger)

DIVIDENDS

While my primary focus resides on dividends with the goal being a rising flow of dividends on an annual basis, I’m placing less emphasis on the quarterly numbers as the number of semi-annual, interim/final and annual cycles have been steadily increasing in my portfolio.

  • March delivered an increase of 8.34% Y/Y, the largest impacts being dividend cuts and a couple of cycle changes offset by increases.
  • March delivered a 23.3% increase over last quarter (Dec) – basically a return to normalcy.
  • Dividend increases averaged 6.19% with 34.55% of the portfolio delivering at least one increase (including 4 cuts (two being OMI)). This is off last years’ pace and I believe a new personal record for dividend cuts in a single year since about 1980. The most recent one being UNIT whose largest customer declared bankruptcy.
  • 2019 Dividends received were 27.12% of 2018 total dividends putting me on target to exceed last years’ total in late October.

Note: I updated my Goals page to provide a visual of these numbers.  Based on Mr All Things Money’s instruction set with a conversion to percentages.  My code only updates when the monthly Y/Y number is exceeded.  Otherwise, the prior year actual is used.

SPINOFFs

NVS spin of Alcon (ALC) scheduled for April 9th, 1:5 ratio

On Oct 4,2018 MSG filed a confidential Form 10 to spin the sports business

MERGERS

XRX merger with Fujifilm cancelled (still being litigated).

BNCL merger into WSFS completed March 1st

BHBK to merge into INDB

TRUMP TAX PLAN IMPACT

This is a brief preview of the tax changes at a personal level. Headlines have previously reported that early filers were seeing lower average refunds – my guess is most of these did not adjust their withholding. Since then, the IRS has reported that the refunds have begun to ‘normalize’. As one who itemizes, my sense is that many filers are beginning to identify their own impact. In my case, I have a tax increase – not a cut – primarily due to being just below the new threshold for itemization. The standard deduction coupled with the tax brackets did a little number on me – which is what I was expecting so I wasn’t caught unaware. Adding salt to the wound was another change that disallows my minimal IRA contribution (as a non W-2 wage earner). On the bright side, my foreign taxes paid on dividends can still be applied as a tax credit. Bottom line – only in Trump World would the path to Making America Great Again run through the field of non-US stocks – assuming one wants as low a tax liability as possible.

SUMMARY

The blog data conversion to 2019 is almost complete still being worked on. The most significant error is my cost basis (dividend date screen) which doesn’t yet account for all DRIP additions or additional purchases. At this rate it may be 2020 before I finish this update.

Hope your month/quarter was a good one!

February 2019 Update

The markets continued the rise with major averages finishing higher now 3 of the last 4 months. I did deploy the excess cash from January but still remain a little cash heavy due to the GE sale. The S&P rose 2.89% while my portfolio rose 4.11%. For the year, I’m slightly ahead of the benchmark by 0.41%. Yes, it’s still early in the game but I choose to heed Warren Buffett’s advice in last week’s annual letter: Focus on the Forest – Forget the TreesYes I have a few trees that are diseased and a couple that could be pruned but in the main my forest remains healthy.

PORTFOLIO UPDATES

  • Increased WBS position
  • Sold entire GE position

DIVIDENDS

While my primary focus resides on dividends with the goal being a rising flow of dividends on an annual basis, I’m placing less emphasis on the quarterly numbers as the number of semi-annual, interim/final and annual cycles have been steadily increasing in my portfolio. This month presents a great example of this rationale.

  • February delivered an increase of 22.7% Y/Y, the impacts being dividend increases, special dividends and reinvesting merger cash proceeds into the portfolio.
  • February delivered a 5.94% decrease over last quarter (Nov) – the impact being: Five of my companies pay in a March, May, Aug, Nov cycle in line with their AGMs (Mar), one changed to a Jun, Dec interim final cycle. This impact should be normalized next quarter.
  • Dividend increases averaged 8.59% with 32.27% of the portfolio delivering at least one increase (including 3 cuts (two being OMI)). This is somewhat off last years’ pace for the same reasons outlined by Bert.
  • 2019 Dividends received were 14.73% of 2018 total dividends putting me on target to exceed last years’ total in late October.

Note: I updated my Goals page to provide a visual of these numbers.  Based on Mr All Things Money’s instruction set with a conversion to percentages.  My code only updates when the monthly Y/Y number is exceeded.  Otherwise, the prior year actual is used.

SPINOFFs

NVS proposed spin of Alcon scheduled for shareholder approval Feb 2019

On Oct 4,2018 MSG filed a confidential Form 10 to spin the sports business

MERGERS

XRX merger with Fujifilm cancelled (still being litigated).

BNCL to merge into WSFS

BHBK to merge into INDB

SUMMARY

The blog data conversion to 2019 is almost complete. The most significant error is my cost basis (dividend date screen) which doesn’t yet account for all DRIP additions or additional purchases.

January 2019 Update

The new year began with a flourish shrugging off the December selloff and recovering most of the losses. With the month exhibiting minimal turbulence outside some earnings misses, my purchases were essentially toppers to existing holdings (except one) – all in the first week. The S&P rose 7.29% while my portfolio lagged a little rising 6.48%. In reality, I was probably even but my cash position was abnormally high as I failed to deploy the cash received from a merger (I exclude cash from my investing positions). I expect this will normalize during February.

PORTFOLIO UPDATES

  • Lost GBNK, GNBC and SHPG via mergers
  • Added TAK and regained IBTX via mergers
  • Added new position BDXA
  • Increased VGK, MSCI, SF, JPMV, HTH, GNTY, EBSB, EWA, DGX, CUT, CL, BNCL and BHBK positions

DIVIDENDS

While my primary focus resides on dividends with the goal being a rising flow of dividends on an annual basis, I’m placing less emphasis on the quarterly numbers as the number of semi-annual, interim/final and annual cycles have been steadily increasing in my portfolio.

  • January delivered an increase of 19.63% Y/Y, the impacts being dividend increases, special dividends and reinvesting merger cash proceeds into the portfolio.
  • January delivered a 0.83% decrease over last quarter (Oct) – the impact of two dividend cuts.
  • Dividend increases averaged 8.84% with 20.81% of the portfolio delivering at least one increase (including 2 cuts (GE, OMI).
  • 2019 Dividends received were 9.33% of 2018 total dividends putting me on target to exceed last years’ total in October.

Note: I updated my Goals page to provide a visual of these numbers.  Based on Mr All Things Money’s instruction set with a conversion to percentages.  My code only updates when the monthly Y/Y number is exceeded.  Otherwise, the prior year actual is used.

2019 conversion remains pending

SPINOFFs

GE‘s rail unit to spin then merge with WEB. This was restructured in January to generate more cash for GE – end result being a taxable event for shareowners

GE to spin 80% of the health business

NVS proposed spin of Alcon scheduled for shareholder approval Feb 2019

On Oct 4,2018 MSG filed a confidential Form 10 to spin the sports business

MERGERS

XRX merger with Fujifilm cancelled (still being litigated).

BNCL to merge into WSFS

BHBK to merge into INDB

SUMMARY

To escape January’s dividend cuts relatively unscathed is monumental. Back in October my expectation was for the effects to linger through the first quarter. Now I can just put my head down and focus on the long game.

Dec 2018 Update and Year End Review

he fourth quarter swoon continued in earnest this month resulting in an annual loss for the markets.  While the final trading day closed higher (DJIA up 265, NASDAQ up 51 and the S&P up 21) it was nowhere near close enough to avoid the worst December since 1931.  Though surprised by the resiliency of the US dollar, last year’s intent to migrate further into foreign equities was largely preempted by tariff uncertainty. My other 2018 concern of rising federal deficits stifling the economy did not manifest itself as yet – though I remain skeptical of  administration claims that growth can outpace the deficit. For the month, the S&P index dropped by 9.18% while my portfolio dropped by ‘only’ 8.44%. For the year the S&P posted an unusual loss of 6.65% while my overall loss was 3.57%. In an otherwise ugly ending to the year, my primary goal of exceeding the S&P’s return was attained marking the 33rd year (of 38) that I’ve been able to make this claim.

Continue reading

November 2018 Update

To my surprise, the S&P shrugged off the headlines last weekend finishing the month positive.  While I agree with  Joseph Calhoun’s assessment:

There have been a litany of one-off events over the last year that made GDP growth look better than the underlying trend. We should call the last year – with rebuilding from four hurricanes, front running of tariffs and a federal budget blowout – the Potemkin economy. It looks okay on the surface but there isn’t any depth to it. And I think we’re about to find out what it really looks like behind the facade as those three big artificial stimuli wear off.

We will probably have to wait until the first quarter to be able to get a peek behind that curtain.  So November was kind to the index, allowing it to recover a little from October’s nasty drop – settling up 1.8%.  Meanwhile my portfolio outperformed the index again, registering a gain of 2.54%.  YTD I’m ahead of the S&P by 2.1%.

Portfolio Updates:

  • initiated new position: AFG (in time to collect the special dividend)
  • added to WEC (missed to ex-div)

DIVIDENDS

My main focus resides on dividends.  Market gyrations are to be expected but my goal is to see a rising flow of dividends on an annual basis.  I’m placing less emphasis on the quarterly numbers as the number of semi-annual, interim/final and annual cycles have been steadily increasing in my portfolio.

  • November delivered an increase of 46.72% Y/Y, the impacts being dividend increases and especially special and merger dividends.
  • November delivered a 5.13% decrease over last quarter (Aug) attributable to semiannual cycles.
  • Dividend increases averaged 15.38% with 77.58% of the portfolio delivering at least one increase (including 2 cuts (GE, SRC).
  • 2018 Dividends received were 111.48% of 2017 total dividends exceeding last year’s on October 19th.

Note: I updated my Goals page to provide a visual of these numbers.  Based on Mr All Things Money’s instruction set with a conversion to percentages.  My code only updates when the monthly Y/Y number is exceeded.  Otherwise, the prior year actual is used.

Spinoffs:

GE‘s rail unit to spin then merge with WEB

GE to spin 80% of the health business (maybe)

NVS proposed spin of Alcon scheduled for shareholder approval Feb 2019

On Oct 4, MSG filed a confidential Form 10 to spin the sports business

Mergers:

XRX merger with Fujifilm cancelled (still being litigated).

SHPG to merge into TKPYY (regulatory approvals received, pending shareholder vote)

GBNK to merge into IBTX (shareholders approved)

GNBC to merge into VBTX (semi-reverse)

BNCL to merge into WSFS

BHBK to merge into INDB

Summary

This month should be fairly benign on activity with a couple of rebalances planned on about 5% (perhaps less) of the portfolio.  End result will be an increase in some holdings – and perhaps one new – as part of my excess cash will be deployed.

Hope your November was equally as good – or better!

 

October 2018 Update

Octobers carry the weight of history on their shoulders and this year was true to form with some wild swings.  Though some sectors touched bear market territory (think housing), basically this month was a mere – but tumultuous – correction.  As we head towards this years’ finish line, there is no room for complacency as my fear is that storm clouds are forming heading into 2019 – basically a tale of two economies.  At the forefront of my mind are the two companies delivering notice of dividend cuts effective January.  I’ll dive into them in more detail next week but Owens & Minor  (OMI) a soon to be former Dividend Achiever which will probably be sold (-71.15% cut) and General Electric (GE) which will cut for the second year in a row this time by -91.67% to which I’ll probably add.  At least I have two months lead time to execute a strategy on my terms as the losses are already baked in.  October saw the S&P of drop 6.96% while my portfolio outperformed the index by decreasing 5.8%. YTD I’m ahead of the S&P by 1.36%.

Portfolio Updates:

  • lost COBZ, added additional BOKF as stock/cash merger completed
  • initiated new position: CL
  • initiated new position: BHBK
  • initiated new position: BNCL
  • initiated new position: HTH
  • initiated new position: SF
  • rebalanced and added to my ETF group (CUT, EWA, EWW, JPMV, VGK)
  • averaged down on OZK
  • added to CLX prior to ex-div

DIVIDENDS

My main focus resides on dividends.  Market gyrations are to be expected but my goal is to see a rising flow of dividends on an annual basis.  I’m placing less emphasis on the quarterly numbers as the number of semi-annual, interim/final and annual cycles have been steadily increasing in my portfolio.

  • October delivered an increase of 32.12% Y/Y, the impacts being dividend increases, special dividends and reinvesting merger cash proceeds into the portfolio.
  • October delivered a 10.52% increase over last quarter (Jul).
  • Dividend increases averaged 15.56% with 74.77% of the portfolio delivering at least one increase (including 2 cuts (GE, SRC).
  • 2018 Dividends received were 104.04% of 2017 total dividends exceeding last year’s on October 19th.

Note: I updated my Goals page to provide a visual of these numbers.  Based on Mr All Things Money’s instruction set with a conversion to percentages.  My code only updates when the monthly Y/Y number is exceeded.  Otherwise, the prior year actual is used.

Spinoffs:

GE‘s rail unit to spin then merge with WEB

GE to spin 80% of the health business

NVS proposed spin of Alcon scheduled for shareholder approval Feb 2019

On Oct 4, MSG filed a confidential Form 10 to spin the sports business

Mergers:

XRX merger with Fujifilm cancelled (still being litigated).

SHPG to merge into TKPYY

GBNK to merge into IBTX (shareholders approved)

GNBC to merge into VBTX (semi-reverse)

BNCL to merge into WSFS

BHBK to merge into INDB

Summary

My repositioning was completed and my 2018 dividends pretty much locked in.  I’ll  now focus on 2019 as it appears I need a head start with the dividend cuts looming.   🙂

Hope your October was equally as good – or better!