Year end review

BCO member report;

This has been a difficult year for many including myself with investing. I have witnessed my capital decrease 1.75% even with dividends and options premiums. I was unable to call the bottom in oil and took a huge loss on Kinder Morgan and Cummins. I'm lucky I still have a pair of pants on! My passive dividend income has increased throughout this whole fiasco though and that was the purpose-a safe reliable income stream. Now as I approach retirement I must decrease risk. I am going to stay clear of speculation and barely investment grade companies bordering on junk credit ratings(KMI). I am reviewing my portfolio for companies with lower credit ratings (there won't be many) and will work to swap them out. I also do not intend to put any more capital to work in 2016 in stocks. I am considering I-bonds and municipals. I currently hold T, JNJ, PG, PEG, AAPL, BA, F, GE, GILD, KHC, OHI, XOM. I also hold an iShares fund and a health care fund, I use options once or twice a month, selling puts and calls.

Have a Merry Christmas, Happy Kwanza, Happy Festivus or whatever else you may celebrate! Take care of your health as it pre empts everything else-spend time with people you like and doing things to help others. Keep a gratitude list and read/edit it often.

September Update

Our philosophy is to not follow the herd - please see below to determine what the herd is focused on right now;

We are bargain hunting. Here is a quote that may help;

My strategy is simple, watch for %ticker% to make a 52 week low and begin to accumulate shares when it moves 5% off it's 52 week low. Then hold until it begins to make a new 52 week highs and begin to sell when it falls 5% from the new 52 week high. If you accumulate say 1,000 shares at $65 / share ($65,000 investment) you will receive about $4,600 / year dividend (at current 4.6% yield) income for the next few years. Then if you sell at say $110 you would have a $45,000 capital gain. Thats a 70% gain in capital plus you get $4,600 per year while you wait.

Timing the market is a risky business but the above is worth considering.

August Update

Stocks of interest are;


RAI Reynolds American, tobacco, PPS 86.16, PE 16.1, Div Yield 3.08%, est 1 yr eps growth 16.8%, payout ratio 18.46%, DGR 8.29%

F Ford, auto manufacturer, PPS 14.80, PE 16.1, Div Yield 4.05%, est 1 yr eps growth 14.93%, payout ratio 31.67%, DGR 24.57%

DOW Dow Chemical, chemicals and materials, PPS 45.50, PE 13.0, Div Yield 3.61%, est 1 yr eps growth 14.02%, payout ratio 49.82%, DGR 22.87%

July Update

Stocks of interest are;

 CMI (Cummins), manufacturer of diesel/nat gas engines, 130.50/share, PE 13.96, div yield 3% (after dividend raise), est 3 yr eps growth 11.23%, payout ratio 32%, DGR 20-25%-source yahoo finance. jmc sold put option on 7/16.

COP (Conoco Phillips), oil E and P, 57.95/share, PE 14.4, div yield 5% (just raised).

GE(General Electric), manufacturer medical equipment, jet engines, 27.04.share, forward PE 17.45, div yield 3.5%, est 5 yr eps growth 7.96%

GILD (Gilead Sciences), biopharmaceutical, 118.85/share, forward PE 10.75, div yield 1.5%, est 5 yr eps growth 20.6%

Jason Zweig

"The market is a pendulum that forever swings between unsustainable optimism (which makes stocks too expensive) and unjustified pessimism (which makes them too cheap). The intelligent investor is a realist who sells to optimists and buys from pessimists."- Jason Zweig

Ford into high gear?

http://finance.yahoo.com/news/strong-sales-could-shift-ford-003145009.html

If you have a desire for a 4% yield...

Good advice from the Oracle

Here is a great video from the Oracle of Omaha. He speaks about Ted Williams, the strike zone and investing. It is excellent.

https://www.youtube.com/watch?v=_5VQPIeZhMc