Monday, August 15, 2016

Using Morningstar and The Chump Watch List

I use Morningstar to monitor my various portfolios.  I've also added a couple of watch lists to M* for monitoring.  I pay for the "premium" service which costs me around $500 per year, but I feel its worth it.  When I research a stock, I can find almost unlimited financial data at the M* site.  In addition, they have a great stock screener program, and most importantly, I can monitor my holdings and choose from hundreds of metrics to watch for each portfolio, including future buy and sell prices.

I have accounts at Fidelity, Vanguard, and TD Ameritrade, but they are all TERRIBLE for monitoring your holdings.  In most cases, you can't even select any metrics to monitor.  Sheeesh.

Well, anyway, shown below is my current watch list for the Chump IRA.  If there is a correction, its nice to have a list handy for action.  I'm continuing to do research when I have time on these names, and change the list frequently.  But with M*, its easy, and have these right at my fingertips....
For each name, I've listed a possible entry point price, which I've calculated using FASTGraphs as the price where I'd be comfortable starting a position.   Of the stocks shown here, DIS is my best recommendation.  In fact, I've started a position, and will add if it dips below the buy price shown.

Best regards,


Tuesday, August 2, 2016

Quick Post-Brexit Shopping Update

On 6-27-16, I posted that I was adding several stocks that looked attractive...

  • CELG (taxable account)
  • BIIB (taxable account)
  • AMGN (IRA)
  • GILD (Should be IRA, but it's in my taxable account)
  • Also love CISCO at these prices, but I already have an outsized position..
  • DIS (Adding to my IRA, good diversity, great company)
  • SCHW (Charles Schwab, adding to taxable IRA, still a bit pricey, but really good growth)

Happy shopping....don't be afraid, make some purchases!"

On that day, it felt like the market was going to crash and we were in for some real trouble.  But for those who ignored the "fear" being espoused in the media, and bought good companies that day, the returns have been excellent.  How were my picks that day?

Here is a summary table:

The top three biotech stocks have done well, and are getting a bit pricey for an entry now.  The others on the list, while up a bit, are still priced attractively today.

I added some DIS to my father's account today, and if drops a bit from here, I'll add more to the Chump IRA.

GILD, CSCO and SCHW are still at or below fair value, especially GILD.



Wednesday, July 13, 2016

Tweaking My Energy Holdings - XOM, CVX, PSX

XOM and CVX have been on a nice run, and are both way overpriced for their current earnings.  I'd like to keep my exposure to the energy sector, but want to de-risk a bit.

To do this, I've trimmed XOM and CVX, and have added PSX, Phillips 66.  PSX has a 3.3% yield is trading near fair value, and is upstream from oil a bit, with less direct exposure to the price of oil....

Below is a snapshot of PSX from FG:

This move reduces my overvaluation risk, and increases my margin of safety, while keeping me invested in energy at about the same total $.



Monday, June 27, 2016


Adding to my big biotech names:

CELG (taxable account)
BIIB (taxable account)
GILD (Should be IRA, but it's in my taxable account)

Also love CISCO at these prices, but I already have an outsized position...

New Names I like:

DIS (Adding to my IRA, good diversity, great company)
SCHW (Charles Schwab, adding to taxable IRA, still a bit pricey, but really good growth)

Happy shopping....don't be afraid, make some purchases!



Friday, June 17, 2016

Tilting a bit Towards Biotech and Healthcare

When I summarized my 2015 activity, I noticed I was underweight healthcare.  To that end, I've been nibbling and adding in the healthcare biotech sectors, which have been beat up a bit in 2016.

I'm finding some good values in the following names:

ABC (Amerisource Bergen)
BIIB (Biogen)
AMGN (Amgen)
CELG (Celgene)
GILD (Gilead)
MCK (McKesson)
AKRX (Akorn)
ANTM (Anthem)

For the Chump IRA, which is more focused on income growth in the long run, I'm adding ABC, AMGN (more), ANTM, and possibly some GILD

For my taxable account, I'm adding the low or no dividend payers for more growth, and no dividend taxes:  BIIB, CELG, MCK, AKRX.  In addition, I own AMGN and ANTM in both accounts, though I may sell them out of the taxable, and just keep them in the Chump IRA.....

To create a bit of cash, I closed my position in Toyota and CMI, both of which are highly cyclical, and dependent on economic growth, which is in short supply these days...

Just a quick update.



Friday, March 18, 2016

Thoughts on Multi-Tasking from Charlie Munger

I came across a great article today.

The contents are copied below.....

Multitasking: Giving the World an Advantage it Shouldn’t Have

Echoing the comments of William Deresiewicz, Charlie Munger offers somesage advice on multi-tasking:
I will say this, I know no wise person who doesn’t read a lot. I suspect that you can read on the computer now and get a lot of benefit out of it, but I doubt it will work as well as reading print worked for me.
I think people that multitask pay a huge price. They think they’re being extra productive, and I think they’re (out of their mind). I use the metaphor of the one-legged man in the ass-kicking contest.
I think when you multi-task so much, you don’t have time to think about anything deeply. You’re giving the world an advantage you shouldn’t do. Practically everybody is drifting into that mistake.
Concentrating hard on something that is important is … I can’t succeed at all without doing it. I did not succeed in life by intelligence. I succeeded because I have a long attention span.
It sounds counter-intuitive but if you want to increase discretionary time and reduce stress you need to schedule time to think. The tiny fragments of time many of us find ourselves with have a negative effect on our ability to think deeply about a problem. Furthermore they impede our ability to learn — we stay at a surface level and never move into a deep understanding.
Deresiewicz warns: “You simply cannot (think) in bursts of 20 seconds at a time, constantly interrupted by Facebook messages or Twitter tweets, or fiddling with your iPod, or watching something on YouTube.”
The opposite approach is to focus on a problem or subject and try to achieve a deep fluency. How many of us, however, have time? We don’t do the work required to have an opinion. Instead we operate with surface knowledge. We tackle problems with the first thought that comes to mind. Because we make a poor initial decision, we spend countless hours attempting to correct it. No wonder we have no time to think. We’re not heeding the advice of Joseph Tussman and letting the world do the work for us.
We sound good and yet and we fail to learn — in part because everyone else is doing the same thing. Well, when you do what everyone else does, don’t be surprised when you get the same results everyone else gets.
If you want to get off the same track that everyone else is on, start schedulingtime to think. That’s what Munger did when he sold himself the best hour of his dayStructure your environment in a way that promotes thinking and reduces interruption. And match your energy to your task.

Wednesday, March 9, 2016

2016 Strategy - Trimming MO, KO, adding QCOM

Looking at my sector weightings, shown below, my strategy for 2016 is to add more in healthcare and technology, and possibly trim my exposure to industrials.  Below are my recent valuations for the entire portfolio:

    Looking at this list, all of my industrials are fairly-valued or under-valued, so I'd prefer not to sell any of these at this time.   DOV and EMR had very weak dividend increases, but they are both facing energy sector headwinds, so a small increase was perhaps inevitable.  Both are dividend Champions, so I'm inclined to keep them for another year.  The others listed still have room to grow, and are all solid businesses.

    Using the valuation column, my consumer defensive names MO, PM, and KO are all trading at a steep multiple.  In the materials sector, BBL is over-priced, and in energy both XOM and CVX are over-priced, based on forecasted revenues and earnings growth.  In the real estate sector, O is over-priced.  These valuations are based on projected earnings for the next year, and historical PE ratios these past 5 years.   If today's blended PE is higher than the average PE the past 5 years, I tag them as over-priced.  

    The second valuation metric I have listed is ROR to 2019.  This is measure of estimated return on revenue based on earnings forecast from the company and analysts out to 2019.  A combination of higher than average price today, combined with declining or slow growth going forward, leads to a negative ROR to 2019 for 5 of my stocks:  MO, KO, XOM, BBL, and O (source:  FASTGraphs). Both PM and CVX avoided the negative return list, just barely, by virtue of higher forecasted growth in the future.

    Acting on the above information, I've decided to trim both MO and KO.  Good defensive stocks, but both have grown into more than full positions in the portfolio, especially MO.  Here is a FAST Graph for each:

    Again, trimming both due to overvaluation, not due to size of the holding.  If these stocks were at fair value or better, I'd let them run.  But as can be seen from the black price line, both are well above their historical average PE ratios, so I'll redeploy the $ from these trims to what I believe to be a better opportunity for growth in income, more income, and capital appreciation.

    As discussed earlier, I'm somewhat underweight in Technology, so I've been keeping an eye on Qualcomm (QCOM).  Here is a FASTGraph for QCOM:

    Qualcomm has been facing some headwinds with the loss of business last year at Samsung, and recent licensing disputes with the Chinese government.  However, the stock has been crushed the past two years, and now trades at a PE ratio that is historically low for this company.  Further, they have plenty of cash, have been paying a growing dividend for over 10 years, and recently announced a 10% dividend increase not reflected in the graph above.  The yield for QCOM going forward will soon be 4.1%, and if they can turn things around this year or next via new R&D breakthroughs, where they spend over $5B/year, or acquisitions, growth should resume driving some great stock price appreciation.  I'm happy to wait for this and reinvest the excellent dividend while I do.

    That's all for now,