The news cycle appears to be churning ever faster. Whether as a reaction to events, an attempt to manage the narrative or obscure the message is a debate that will occur for some time with the real answer becoming apparent in the hindsight of history. Not to minimize the Charlottesville tragedy or the headline grabbing Bannon ouster, but these stories are playing out in several flavors depending on the source. As one who attempts to discern the impact of issues on my investments, two (possible) financial headlines crossed my desk amid the other events that intrigued me.
January saw DOW 20,000 being attained before dropping under once again. The post inauguration euphoria beat a hasty retreat in the wake of record protests, a wave of executive orders and a record number of lawsuits filed against a president in his first eleven days. In finance terms, this uncertainty translated into concerns about the the ability or time required to effect change through the legislative process – in particular tax reform. This month The S&P gained 1.79%. while my portfolio recorded a gain of 3.51% largely due to the final significant merger completing. After a great 2016, I’m making some changes in my 2017 strategy that will (hopefully) accelerate performance in 2018. Meanwhile I’ll be content with a slight win versus the S&P this year.
Headlines impacting my portfolio:
- 1/5 – WMT ends V ban in Canada
- 1/9 – SBUX discontinues Evenings concept
- 1/10 – NWBI divests MD assets to SHBI
- 1/13 – LSBG/BHB merger completes
- 1/17 – ADP acquires Marcus Buckingham Co.
- 1/20 – IRM acquires Kane Office Archives LLC through BK court
- 1/23 – AMC acquires Nordic Cinema
- 1/24 – Executive order moving Keystone (TRP) forward signed
- 1/25 – DOW 20,000
- 1/25 – BLK moves 1T$ from STT to JPM
- 1/26 – JNJ to acquire ALIOY then spin R&D unit to ALIOY shareowners
- 1/30 – GDOT buys UniRush (RushCard)
- 1/31 – BX prices INVH IPO
posts under consideration for Feb are Methods to my Madness Pt 3 update, Anti-Trump strategy, My Coca-Cola strategy and The Commonality Between Trump and Me
- Added to CLX
- New position – CCLAY
- New position – BHB (LSBG merger)
- New position – SWRAY
- January delivered an increase of 15.46% over January 2016. This requires normalization due to PEP and WRE paying in January rather than December, KO paying in December rather than January and BUSE paying in February. On a normalized basis, this represents a Y/Y increase of 3.1% which is attributable to dividend increases (Y/Y). This means my October purchases from merger proceeds were successful in maintaining my Jan,Apr,Jul,Oct income stream.
- January had a 3.0% increase over the prior quarter.
- Declared dividend increases averaged 7.44% with 19.65% of my portfolio delivering at least one raise (1 cut – YUM).
- Dividends received were 9.2% of total 2016 dividends and if the current run rate is maintained would exceed this total around October 15th.
The MET spin (Brighthouse Financial – BHF) remains pending.
Agrium/POT, JNS/HGG.L remain pending
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.
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.
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.
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.