Monday, January 11, 2016

Recent Sell: CVX and COP



One of my goal for this year was to stop selling and start accumulating...well that failed.

On Monday January 11, 2015, I sold 19 shares of CVX at $82.15 and 7 shares of COP at 42.52. Total combine with my existing cash equals $1845.24.

Rationale: The water heater in our basement exploded and it's -6 outside...apparently you need to replace those things every 20 years or so. Of all my stocks CVX and COP were the two to likely cut their dividends this year (or the next). I would use the money from my bank but at the rate oil stocks are dropping I might end up with $5 a share next week. I was meaning to reduce my stake in oil and this provided a good excuse. 

This sell reduced my dividends by -$102. Ouch. But I still have $1845.24 to make a buy.

My forward income is now 2097.62+FCISX distribution + SCHD distribution.  

For those wondering what I'm going to buy wait for January 26, 2016 when JNJ and PG release their earnings report. I think both will have a bad quarter due to forex but the market will kill PG. I expect PG to drop to $70 or even the low $60s. Imagine that $60 for PG. that's a 4% yield!!!!

6 comments:

  1. Sorry to hear about your water heater, I replaced mine a couple years ago. It's not too hard to do at least. I have been thinking about adding more JNJ at these prices and a 3%+ yield. I don't know how earnings will be, you may be right but currency headwinds should be no surprise to investors at this point. If PG hit $70 again that would be nice buying opportunity indeed.

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    1. hi CD, this doesn't feel like a buyers market but a short and trader's market. PG's current price might have Forex built in but I'm sure the shorts will be out trying to make a buck or two

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  2. We had to replace our water heater last year which was a pain. Luckily though we didn't have to deal with any water damage which would have made it that much worse. I closed my COP position at the end of last year on dividend cut concerns and a desire to reduce my O&G exposure. I also closed my KMI position but I wouldn't be opposed to adding that back to the portfolio in the future. There's a lot of values that I'm finding in the markets although a lot of the consumer staples still aren't where I'd like to purchase at but they're working their way down there.

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    1. hey JC, I hear you. We are still paying fair value or a premium for many of these stocks. Like CD said, PG at $70 would be really good. JNJ at $90 would be a steal. I'm actually interested in CL. that's a stealth stock in the making

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  3. The "joys" of home ownership. It's just one of those things that has to be taken care of. Funny how things break always at the worst possible times. I was surprised to read your title about these two sales. As you know, sales are quite rare among the DGI community. Though I don't hold any oil stocks I think that CAVX and COP are still relatively safe in terms of divvy payouts. I would have held on to those shares. Thanks for sharing and hope you get hot water ASAP.

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    1. Hi DH, I would have kept those shares if I had a 10-20 year horizon. Oil will always come back but this portfolio is to help my parents retire so I need to shift from dangerous commodities to the good old bread and butter stocks. Maybe someday in the future when I break the 200k mark will I go back to more commodities and risk stock.

      As of now my parents would like to retire in 2-3 years. Both have no retirement accounts so I'm paying for the whole thing. I've calculated that it will be $1500 (from my pay) + $500 average from monthly dividends +$825 from social security (for both). Since they own their own home and have no debt they can live comfortably on $2825 a month. If my dividends are higher by then I'll reduce the monthly stipend.

      But I'm not sure how long these companies can keep their dividends at $30 oil and Iran hasn't even entered the market yet

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