The upward trend continued this month with catalysts being the tax plan and holiday sales. My guess remains that the first half of 2018 will be good for corporations (i.e., dividends and buybacks) with a shift in focus later with deficits and mid-term elections playing a leading role. I remain convinced the yearlong weakness in the US Dollar will continue and expect to allocate more cash into foreign equities during the first half 2018. I will review this plan as my personal tax implications become clearer. For the month, the S&P index increased by .98% while my portfolio increased by 3.29% largely fueled by Financials (again). For the year the S&P increased by a stellar 16.26% while I came in at +20.58%! The S&P return with all dividends reinvested adds about 2.41% which my hybrid approach still beat.
This month for my portfolio was choppy to say the least. Impacts were the start of calculating hurricane damage, data breaches, fears of a primary tenants’ possible bond default, continuing geopolitical fears and a strengthening of the US dollar at month end (again). With a portfolio currently weighted 15.35% pure international and a little overweight towards Texas it’s not too surprising the S&P index outperformed by increasing 1.93% versus my 0.36% increase. For the year I’m still ahead by 2.9%. On the other hand, dividends received set a new monthly record.
Headlines impacting my portfolio (bold are owned):
- 9/7 – SQ to apply for UT banking license as an industrial loan co.
- 9/7 – BANF acquires First Wagoner Corp and First Chandler Corp
- 9/7 – EFX announced massive dB hack
- 9/11 – UNH makes formal offer to acquire BANMEDICA.SN
- 9/11 – Cdn approval for POT/AGU merger received. awaiting US, India and China.
- 9/14 – MMP forms JV w/ VLO for marine termimal in Pasadena, TX
- 9/21 – GBL (Mario Gabelli) increases stake to 7.74% in BATRA
- 9/25 – GE sells industrial solutions unit to ABB
- 9/28 – DGX acquires Shiel Medical Laboratories from FMS
- 9/28 – IVZ buys Guggenheim Ptnrs ETF business
- 9/29 – AIG sheds SIFI designation
- added to FFIC prior to ex-div on market weakness (N. Korea)
- added to NWFL (stock split)
- added to AROW (stock dividend)
- added to HOMB and lost SGBK (merger)
- September delivered an increase of 47.56% Y/Y with the about half of the increase being attributable dividend increases and the other half purchases with an assist from a merger premium.
- September delivered an increase of 16.87% over last quarter (June). Semi-annual payers, a purchase and dividend increases being the reasons.
- Declared dividend increases averaged 10.98% with 65.54% of the portfolio delivering at least one increase (including 2 cuts and 1 suspension)
- YTD dividends received were 92.61% of total 2016 dividends which if the current run rate is maintained would exceed last years’ total in late October.
Spirit Realty Capital (SRC) has been announced.
AGU/POT (Nutrien) remains pending, SGBK/HOMB completed September 26th.
With the primary goal of exceeding last year’s dividends in sight, my focus turns to developing a strategy for 2018 – which will likely hinge on the degree of success – if any – to be expected in Year 2 of this administration. Otherwise I’ll probably continue with the current adding to the underweight holdings unless news erupts.
Periodically I piece together thoughts based on my internet browsing or events garnering recent headlines. Some may have an impact on my portfolio or strategy, others are only food for thought. For your entertainment, I present my latest installment.
Previously I wrote on Cuba themed investing . Yesterday’s headline delivered the news of Fidel Castro’s death. Regardless of individual feelings on the Cuba issue, the fact remains the current trajectory is for further easing of sanctions. It will, however, be an interesting first test for the new president pitting his stance on increasing exports versus his campaign rhetoric on rolling back Obama’s executive actions and the promises made to the Cuban Americans in Florida. At the very least, the Canadians are likely chuckling at Trump’s conundrum as they never had an embargo to begin with. A couple of articles are linked below.
28 November 2016, Mastercards (MA) issued by Banco Popular (BPOP) and NatBank (NA.TO, NTIOF) are currently valid by Executive Order (Obama) as well.
Also in the headlines this past week was the school bus tragedy in Chattanooga, TN. Knowing there are four bloggers invested in school bus transportation services, I figured it was time to perform a little research. There appear to be three major players in the space, two from the UK and one from Canada. The largest is apparently First Student (FGP.L), followed by National Express Group (NEX.L), with Student Transportation (STB) in third. First Group’s dividend has been suspended for a couple of years and National Express has been flirting with being acquired but with suitors leaving her at the altar. National Express has Durham School Services as a subsidiary which was involved in the accident. Our four blogger friends are all invested in STB.
The New Healthcare?
One of the bigger questions surrounding the new administration is the direction to be taken with healthcare. In all likelihood changes are coming but to what end? Outside my fondness for HSA/FSA managers, a plausible argument has emerged pertaining to Medicare insurers.
(Long: UNH, HUM)
One blogger displays the fact that he is a philanthropist. Now this got me thinking. I’m old school and think of the likes of a Carnegie (public libraries) when considering the term. My opinion is that this title is earned by – or bestowed upon – individuals based on works and deeds over a significant period of time. Considering my net worth is greater than his (but his growth trajectory is increasing) and his portfolio has performed similarly to mine, left me scratching my head. I do consider myself charitable but think philanthropy takes charity to another level. Thinking that perhaps I’m operating in the past, I looked at the Urban Dictionary‘s definition which says, “one who gives money to charity, often associated with the wealthy and given a negative connotation by people who have never donated more than a dime at McDonald’s.” Hmm … perhaps we are all (or most of us) philanthropists.
Until next time.
Last year I published Methods To My Madness Pt 2 where I presented part of my non-core investing strategies. One section has seen some activity in the broader market recently to the point I figured an update was warranted. The section in question:
Not so obvious are Webster, UMB Financial, Health Equity, UnitedHealth and Xerox. Each of these companies operate Health Savings/ Flexible Spending Plans.