Thursday, December 8, 2016

Recent Buy: Medtronics


Today on December 8, 2016, I bought 50 shares of Medtronics at $71.89 for a total of $3.601.35.

Description

Medtronic plc manufactures and sells device-based medical therapies worldwide. The company’s Cardiac and Vascular Group segment offers pacemakers, implantable cardioverter defibrillators and cardiac resynchronization therapy devices, AF products, diagnostics and monitoring devices, and remote monitoring and patient-centered software; and heart valves, percutaneous coronary intervention stent products, surgical valve replacement and repair products, endovascular stent grafts, peripheral vascular intervention products, and products to treat superficial and deep venous diseases. 

Rationale: Rewards>risk

  1. Yield 2.4%
  2. Payout ration: 53% 
  3. P/E
    1. TTM: 23.95x
    2. Forward: 14.27x
  4. Why is it down? 
    1. From buying Covidien. 
    2. And slowing down of rising price of medical reimbursement. 
  5. Fair Value or discount?
    1. Simply Wall St 
      1. Fair value: $87.82
    2. S&P capital: 
      1. 4 star buy, 
      2. fair price $86. 
      3. One year target $87.
    3. Thompson Reuters: 
      1. Neutral 4 buy, 
        1. Low: $80
        2. Mean: $85.5
        3. High: 96
    4. Edward Jones: 
      1. Buy rating
      2. Fair Value: $80.58
    5. Yahoo Finance:
      1. One year target: $85.50
Tax issue

"Beginning with the dividend payable on April 15, 2015, payments will be subject to an Irish withholding tax of 20% of the amount of each dividend unless the shareholder that is beneficially entitled to the dividend is a resident of the United States or a resident of a country listed as a “relevant territory”, and has ensured that the required information is on file with their broker, bank, qualifying intermediary or transfer agent (see below for more detail). With these rules, the vast majority of Medtronic shareholders and beneficial owners are entitled to an exemption from DWT."

This increased my forward dividends by $76.00 to $1,374.42. My next buy will probably be more UL or another 50 shares of MDT at $70 to complete my position. I also have a 100 share buy order on JNJ at $100. If the JNJ buyout goes through we might see that $100 again. 

Disclaimer: these are my opinions. Also updated my portfolio page. I really need to learn how to do that google docs thing. 

Wednesday, November 23, 2016

Dec. 4, 2016: Auxit/Italy's referendum. Europe in Chaos. Buying Time!



Enough hating Donald Trump. Let's talk about hating the EU.

On December 4, 2016, two major decisions will be held in Europe: the Italian Referendum and the Austrian Election.

Italy

Italy has something called a bicameral system meaning two houses of equal power. Imagine two large but equally in size and power nations. Italy call these the Chambers of Deputies and the Senate of the Republic. For a law to be passed both nation has to agree ON THE EXACT BILL WORDING AND ALL. Which in other words mean laws move slower than the US congress. So the Prime Minister of Italy, Matteo Renzi, decided to reform the Italian parliament to allow for faster legislation approval. Under the new guidelines
  1. The Senate loses power. Instead of deputies and senate it will be "local and central institutions."  
  2. The Senate goes from 315 to 100 and the senators are picked from regional council (no longer elected)
  3. Pro
    1. Less power to senate means bills are quicker to pass
    2. Centralize power to the central govt 
  4. Con
    1. Basically destroys the senate.
    2. People only vote for half of the Parliament, the other half is based on nepotism. 
    3. Local govt have less say and centralize power to the central govt 
So why does this affect the EU?
  1. Italy has been growing at an anemic pace (sometimes negative)
  2. Renzi is a pro-EUer and stated that if this referendum fails he would step down.
  3. His absence would create a huge power vaccum.
  4. There is strong support for NO from both the democrat and republican.
  5. But I have a feeling the vacuum will be filled by the 5 star party/movement
    1. 5 stars is a proenvironmental, anti-establishment, anti-globalist, and euroskeptic party
    2. the 5 stars represent their beliefs of 1) Public water, 2) Sustainable transport, 3)sustainable development, 4) right to internet access, and 5) environmentalism.
  6. The 5 star has captured 2 mayoral positions (including rome) and is the biggest threat to the left-right parties of the EU. It's basically the populist movement as we've seen in the UK and US. Anyone but a politician.
  7. Last year the 5 star were seen as a far right fringe group. But with the rise of Brexit and Trump I have a feeling the populist movement is gaining momentum. Stagnated economy, false inflation/gdp growth by the central bank, and no wage growth is starting to make the masses angry. Perfect rich environment for a populist. I think this was the reason for Brexit and Trump rising. The economy is booming, GDP is growing, and stock market is higher! But it benefits little for the average person.
  8. Filipino President Duertes came into power the same way.
Austria Election

Norbert Hofer (Freedom party of Austria) vs Alexander Van Der Bellen (Austrian Greens)

On April 24, 2016, Alexander Van Der Bellen was elected as the new president by 30,000 votes. But there were numerous arguments of voter fraud and improper counting. Such as a 147% turnout Waidhofen an der Ybbs and an impossible turnout in Linz. 

On July 1, 2016, the Constitutional Court ruled that the election was improperly handled. 30,000 votes were prematurely tallied, 50,000 votes were counted by unauthorized personnel, and 500,000 votes were invalid. The Court ordered a new election which is now Scheduled Dec. 4, 2016.

Why it matters

  1. Hofer is an anti-EU skeptic like the 5 star party.
  2. Hofer is narrowly leading the polls as of today.
  3. Although Hofer said he would not leave the EU he has indicated his desire for Austria to regain autonomy from Merkel and Brussels,
 
Investment Strategy

  1. Foreign stocks have been dropping lately in anticipation of these votes. 
  2. If the referendum loses and Hofer wins the Euro will crash and the dollar will skyrocket.
  3. Stocks that relies largely on the euro or foreign monies will crash
  4. Buy list:
    1. Unilever (UL) 
    2. Phillip Morris (PM)
    3. Nestle (NSRGY)
    4. Diageo (DEO) 
    5. National Grid (NGG) 
    6. Multinational American Stocks like we saw after the Trump Election.
Good Luck Everybody.

Monday, November 14, 2016

Recent Buy: UL



On November 14, 2016, I bought 12.6968 shares of Unilever (UL) for a total of $500 in my loyal3 account.

This is probably my last buy until the rate hike (except for maybe DEO).

Forward dividend is $1,049.73. 


Thursday, November 10, 2016

Buy: FLO



On November 10, 2015, I bought 100 shares of Flowers Food (FLO) at $15.50/share for a total of $1557.00. This will increase my forward dividends by $69.00 to a total of $900.19.

Thinking back it might have been a good idea to sell off all my stocks and go 100% cash. If I knew Trump was going to win and crash the multinationals I would have rigged the elections myself.

Trump 2016! Making my portfolio rich again!

Watch List: PM, MO, DEO, UL, CL, CLX, HRL, KO, SO, WTR, VTR, PEP, GIS, CHD, and BGS.

Wednesday, November 9, 2016

Recent Buy: ABT, UL, and T



To celebrate making America great again. 

On November 9, 2016, I bought 100 shares of ABT at $40.00 a share for a total of $4007.00, 100 shares of T at $37.40 for a total of $3,747.00, and 24.2372 shares of UL for $1000. Total this adds $236.19 to my forward account (i also added my regular FCISX). 

I'm looking at CAH (even at a discount after this rally), UL, KO, MO, FLO, HASI, LTC, OHI, and O. It's nice to have dry powder. 

As an aside I am old enough to remember when X won the white house

Reagan won: Democrats said that he would destroy the US and cause WW3

Bush 1 won: Democrats said that he would destroy the US and cause WW3

Clinton 1 won: Republicans said that he would destroy the US and cause WW3

Bush 2 won: Democrats said that he would destroy the US and cause WW3

Obama won: Republicans said that he would destroy the US and cause WW3

Now Trump wins: Democrats are saying he will destroy the US and cause WW3

I'm not old enough to remember carter, LBJ, JFK, Ford, etc but I bet it's the same thing.

Take a blast in the past look at our old political parties. People forget that the US has one of the strangest dictatorship in the world. Every four to eight years our dictator steps down and let another dictator step up. Only difference this time is our new dictator came out of no where.  


Tuesday, November 1, 2016

Recent Buy: A boatload of stocks



This is my first ginger harvest. It was a plant I grew a while back and finally decided to uproot on Halloween. Spooky Ginger.

Besides that here are my stocks as of October 31, 2016. I am only making small loyal3 buys for now and the rest goes to my bank. Now for the good, bad, and ugly.

Ticker # of shares1Q Dividannual Contribution
AMZN0.01230$0.00
BUD0.0782.00608$0.31
DIS0.10980.71$0.16
DPS0.11430.53$0.24
FB0.07680$0.00
FCISX4,725.780.009$510.38
GOOGL0.01220$0.00
HSY0.10380.618$0.26
K0.13310.52$0.28
KHC0.11260.6$0.27
KO15.81580.35$22.14
MCD0.08850.94$0.33
MDLZ0.23780.19$0.18
NKE0.19490.16$0.12
PEP0.09350.7525$0.28
SBUX10.50390.2$8.40
UL8.54550.3546$12.12
VFC0.18470.42$0.31
WMT8.87970.5$17.76
YUM10.06140.51$20.53
YUMC10.06140$0.00
Total$594.08

Good news!
  1. I got a "promotion." Instead of 35 hours a pay period for OT I now work 60! I hate working OT but the money is too good (especially for the upcoming recession)
  2. The seller took $5000 off the land and $5000 off the home because I paid in cash! I don't have a mortgage anymore! Hooray!
  3. I put 3,500 into the market and the other 6,500 went to the bank.

Bad News
  1. My mom's surgery had complications and required multiple trips to the hospital and ER.
  2. That 6,500 is gone now.
  3. to be honest I kinda expected this but I'm surprised of how cheap it was. I was expecting 45k or so but it only cost me $6,500. (that's why when I sold off my old portfolio and bought the house I had that 45k left in the bank)
  4. To Summarize: I planned for something and it happened but it wasn't that bad 

Ugly News
  1. 10-20% drops after missing earnings. The market is going nuts

Rationale:
  1. The market is still going to bust. We've seen reits getting hammered as bond yields goes up.
  2. I am using this opportunity to remake my portfolio. There were several stocks I didn't like in my old portfolio like TROW, TIS, GILD, NRZ, etc. I bought those on a whim and didn't do my due diligence. As a more experienced investor I'm starting to get it (well some of it).
  3. Instead of being a full dividend investor I'm going full total return. My goal is to add some high cash flow stocks that will eventually pay dividends. 
  4. Instead one or two brokers I want several. A bunch of them for different things
    1. Loyal 3 for my free trades.
    2. Scottrade for my common buys.
    3. Vanguard for my etfs.  
  5. Here is what I want in my future portfolio. 
Consumer Defensive

KO, PEP, DPS, UL, PG, CHD, CL, KMB, K, GIS, KHC, MDLZ, HSY

Sin Stocks

MO, PM, DEO, RTN, BUD 

Consumer discretionary 

YUM, YUMC, SBUX, CBRL, NKE, DIS, VFC, WMT, MCD

Utilities 

SO, WEC, WTR

Healthcare

JNJ, AMGN, CAH, MCK, ABT (ABT/CAH/MCK might be getting close)

Industry 

EMR, not sure what else 

Telecom 

T

Financials/Insurance

ORI

Reits 

HASI, VTR, OHI, O, STAG

Growth Stocks with dividend potentials

AMZN, GOOGL, FB

Speculative Stocks

TIS, BGS, FLO, TEVA

Vanguard ETFs

VTI, not sure what else. 


If you have any suggestion I'm all ears. I'm not investing in oil or commodity stocks anymore. I'm getting too old.

Friday, September 30, 2016

Sell: Everything


Time to make a bold move in an uncertain world.

On Friday, September 30, 2016, I sold all the stocks in my taxable accounts. Both Loyal3 and Scottrade.

Total cash after sell: 79,363.62

Buy: 6.5 acres of farmland and timber for $35,000 paid in cash.

Buy: A nice country home factory built for $50,000 (30 year loan for 1.8% interest)

Rationale:

  • Markets are at all time high. And yes Donald Trump is right, we are in a big bubble. 22 countries in negative interest rates, everyone freaking out about .25% interest rate hike, Japan now enforcing bond yield curve not fiscal monetary policies, and the feds hinting that they would buy equities if everything went wrong? Yes, we're in a giant bubble.
  • Many dividend stocks are increasing or paying more than their fcf is growing. I think we might be entering a dividend bubble soon. The hunt for yield is on.
  • This is not an investment property. This is my retirement home and with a 1.8% over 30 year loan for 50k I might as well start my dream of living off the land. I could have bought land instead of timber but the trees will keep the home cool in the summertime.
  • I still have 45K on the sideline. Don't count me out yet. I'm still investing for the long haul but sometimes it's best to take some chips off the table and pursue your dreams. I mean what's the point of investing if you can't enjoy it, amirite?

Long: Whatever is left in my roth.