September Movements

IMG_0074Posting 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:

SOLD

Nothing was sold this month πŸ˜›

BOUGHT

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 –Β 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,Β 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 USΒ 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

 

 

 

 

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15 thoughts on “September Movements

  1. Good to see that you start to develop a strategy that suits you…

    It is funny, at work someone spoke me about EMR as a dividend stock. I will look into this one. My RDSA position has now the size I want it to be, time for a second play stock

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  2. Ciao ATL,

    Well, I got in EMR right at the start of the portfolio, the price came down quite viciously (pretty much like Walmart) so I started adding into the original position to rebalance. They are in the “loosing end” of the business cycle, so I do not expect the stock to do marvels, but dividend is now good and surely things will pick up again for them in the future, if there are no major shocks. Energy sector… Might push my share to 30% of the PF, but no more than this, yields are great (and dangerous), opportunity of a rally in the future are all there… Thanks for stopping by!

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  3. Ciao! Just wondering why you’re investing into the American and European stocks right now? The exchange rate is very bad! Also it’s better from a tax perspective to buy London-listed stocks isn’t it?

    Cheers

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    1. Ciao TV,

      First of all let me thank you for stopping by, really appreciate it! πŸ™‚
      Let me explain my foreign currency investments a little:
      I work on “averages”, that means that I try to exchage a lump sum of Euro into Dollars when the exchange rate is favourable (weak dollar). Last time I bought dollars was in August, I was lucky to get it at 1.16 euro. My “average exchange rate” is around 1.15. My bank records the exchange rate of the “day” when I buy a stock, then the day I sell the stock they also calculate if I had a capital gain from the exchange rate and tax me for it (or give me a capital loss to compensate later). But when I sell I get dollars, not euro. The capital gain/loss doesn’t happen if I do not exchange the currency back. Right now I have some dollars at 1.15 average exchange rate, so buying stocks with a stronger dollar doesn’t really matters to me, it’s like if I am buying at 1.15. I hope the explanation is clear. Same applies for UK, where I am actually planning to invest more in the near future both for tax prospective, asset allocation and diversification. My target is to have a 40/40/20 split (US/UK/EU).

      Ciao ciao

      Stal

      Liked by 1 person

      1. True, but since I have started investing in December 2014 I had no choice if I wanted to start getting some dividends… Luckily I did not go “all in” and now I am buying the fall… Hoping that it will stop soon because I am running out of extra cash! πŸ™‚

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    1. Ciao Bert, thanks for posting! πŸ™‚ Well EMR is a strange case, they did loose a lot of value this year, almost as much as an oil company would do. When I investigated further it comes out that they produce a lot of components for that industry so that’s partly a reason for the fall… Still seems a solid company, so let’s see what happens, although I am not adding anything more because I am already quite exposed to them, if I have to choose I prefer 3M in the industrial sector…. πŸ˜›

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  4. Keep busy with quality buys. You picked up some nice current yield with those purchases. EMR is my top pick for October. I have seen buys in that one stock a lot, among the dividend bloggers. It’s for good reason. Solid long term dividend payer that has fallen on hard times. Of course, that’s the best time to pick up more shares when price, value and yield are all more attractive. Beautiful Firenze. Been a long time since I visited there. I have family in Milan. Grazie per aver condiviso.

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    1. Ciao DH,
      Thanks for stopping by and for the compliments to Florence πŸ™‚ Milan is a city where I happen to go quite often for work, I also lived there for 5 yeas, but eventually came back to my hometown πŸ˜›
      So far I have been following the “buy low” rule, I wonder when I will start seeing the “greens” on my Portfolio, although this investment form is not so much focused on capital gains. Thanks for stopping by!

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      1. The “greens” will come if you stick with the high quality names and not buy junk. If you would have seen my portfolio in 2009 you would every stock I had was red. I mean everything I owned was down. I just held, bought more as I still believed in every company I was invested in. Today, my portfolio is largely in the “green.” Can’t get shaken out when things turn down.

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      2. Well, that’s what I have been doing so far this year, fortunately I did not go “all in” in December and now I have a few bullet to shoot in order to decrease my avg.cost. I am pretty sure that results will come, I am making huge mistakes (see previous posts for laughs), but hopefully I am learning from them… πŸ˜›

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