Posting from my beloved Florence, September has been a very interesting month, the aftermath of the market correction in August is still pretty strong at the time of writing, volatility has hit the markets and we still see very weak markets hovering between 1 year losses and almost break even situations.
To the Long Haul portfolio this means opportunities to continue averaging down on the stocks held, hoping for better periods for potential capital gains, but still focused on the dividends.
I have recently added a new function to my PF tracker, a system that warns me of the coming “ex-dividend” dates, this is a useful tool when deciding where and what to invest in the stocks as I can choose an equity that is closer to ex-div in order to make an immediate return from the dividends.
This is valid especially for the European stocks where normally dividends are paid once an year and opportunities of reaping the dividends need a special attention if it’s possible to maximise them.
At the same time I am devising a system that (in time) will allow me to place sell orders if the stock hits a certain valuation, let’s call it a “last ditch take profit”, I still have to study on the mathematics to this system (so that I can devise a formula that I can adapt to all stocks), but the rationale is reap “some” earnings when there is a major correction, in August I have seen +30% becoming -10% and the “automagic” system should prevent that lost opportunity. This is not a philosophy that is very much in touch with DI, it’s more of a trader’s approach, but with the high taxes that I am facing I need to reclaim every possible chance to bring some return home.
Ok enough about future plans, these are the movements in September:
Nothing was sold this month 😛
Added positions to: SIE (81.90 EUR), HSBA (4,950 GBP), EMR (45,50 USD), PG (67.90 USD), RDSB (16,20 GBP)
New addition to the Portfolio:
One OK Inc – I have decided to buy into OKE after a very long monitoring of this company, of course judging from the huge slide that it took in the last year I did the right thing biding my time, but the real reason is that in the construction phase of the portfolio I thought that it was a bit too bold to invest in two stocks that are facing a touch challenge and that are not giants. The other stock is BBEP (where I am sporting an hefty -50%!!). So after 9 months and thanks for the drop of 30% YTD I have decided to join the fray and risk my chip with this company which is half between a commodity and an energy stock. OKE has an extensive gas pipeline in the southern states of the US, and basically they are responsible to take gas from point A to B. Pretty much like highways they get paid a toll for this. I like this aspect of the business, unfortunately their revenue goes also together with gas prices and this means that when oil is depressed, gas is depressed and revenues for OKE are depressed too. This brings up the costs of maintaining and expanding the infrastructures (pretty much like utilities), hence pressure on the stock valuation and risks of dividend cuts and so on. Currently yielding 6,5% gross, I thought that it was a good (risky) opportunity. My take on current state of affairs in the energy business is that a rise in interest rates in the US will happen when some of the energy sector has recovered a little, as a rate hike now could be catastrophic for companies that are relying on cheap debt to stay afloat (and the energy sector is one that is tapping into this source of finance quite heavily).
The month is not over yet, so there might be other opportunities that I will take but right now I am not studying new addition to the PF, so most of the work would be in re-balancing fallen stocks.
Disclaimer: LONG all the stocks mentioned above