Friday, January 6, 2017

2016 Stats, New Rules, Selling IBM

I'm starting the review of my portfolio to position for 2017.  A few statistics:

  • the value of the Chump IRA is now slightly more than $700k (a double since I started tracking this closely in 2012)
  • there are 37 stocks in the portfolio, which I think is too many.  I'd like to be around 30, but will try and get down to 35 soon.
  • if I keep 10% cash, that's $70k, at present, I only have $43k cash or 6.2%
  • if I achieve the 10% cash goal, that leaves 630k to invest in 37 stocks, so the average full position should be around $17,000.
  • at 35 stocks, the average position is $18,000
  • at 30 stocks, the average position is $21,000
Actions
  • Establish definition of "Full" position as $18k, Morningstar 3* or better
  • Establish definition of "Full +" position as $22k, Morningstar 4* or better
  • Establish definition of  "Full -" position as $12k, Morningstar 2* or worse
  • Establish starting 1/2 position as $9k
Of course the Morningstar ranking are just guidelines, in some cases I may disagree a bit on the valuation or reason for owning the stock.

My first action today is to sell IBM.  I bought IBM a couple of years ago, held it through a multi-year swoon, watched it gain around 26% in 2016, and am now at a profit of a whopping 4.5% since my purchase.

Among my reasons for selling:
  • Questionable business model and future
  • 5 straight years of declining revenues
  • 5 straight years of rising long term debt (to pay the dividend)
  • Currently overvalued, 2* rating at Morningstar
I'm going to add $16.5K to my cash position with this sale, and have one fewer name in the portfolio, taking the total from 37 to 36 stocks.

Best,

Chump

Tuesday, January 3, 2017

2016 Year End Performance and Holdings

Happy 2017 to all my (very quiet) readers, here is a quick summary of the Chump IRA for 2016. Turned out to be a nice year for the portfolio, here are the numbers vs. the benchmark:

  • Chump IRA up 19.13%
  • S&P 500 with dividends up 11.96%
Thus, Chump outperformed the benchmark by 7.17%, not too shabby.

Here are the holdings in the portfolio today (courtesy of Morningstar, where I track these):


The holdings are sorted by 2016 full year return.  This gives a sense of where the performance for the year came from, though it isn't perfect.  Some of these stocks were purchased later in the year, and others not listed were sold during the year to capture gains.

I've also included the M* ratings for each stock, and the target buy and sell prices that I have set for each holding.  These are super useful, and add discipline to my process.

I printed this summary on Tuesday, January 3.  Interestingly, as I suggested late last year, many poorly performing healthcare stocks were sold by institutional traders for tax purposes, and hide the fact that they were holding poor performing stocks.  These actions created a nice value buying opportunity in healthcare, and many of these same institutional investors are now loading back up on these names, thus the rally in healthcare today ;-)

Thats all for now,

Chump




Wednesday, December 14, 2016

Selling BBL, Adding to ABC

I put in a limit order to sell BBL today.  After cutting their dividend awhile back, I re-evaluated my reasons for owning the stock.  Since that cut, I decided to wait and see if the stock would recover some from the devastating 2015 oil shock...and it has.

Today, the stock is up 52.63% YTD, so it's time to say goodbye.  Without an interesting dividend yield, now only 1.74%, and pretty paltry growth forecast, the stock is not worth owning in my estimation.  I will revisit my watch list for something in the same industry Materials/Oil, but that provides a better outlook.  BBL FastGraph below....



On the buy side, I'm adding to my position in ABC today.  The stock, along with competitors ESRX and MCK, are down today based on comments from the Express Scripts CEO about drug pricing down the road.  This presents a nice dip, and good time to fill out my full position in the stock.

Best,

Chump

Wednesday, November 9, 2016

Thoughts on the Trump Election - Hello Healthcare

Donald Trump has been elected President.  I'm very relieved for our country and my children.  Off the top of my head:
  • Antonin Scalia, RIP, Supreme Court is saved
  • Federal judges for the next four years
  • Let's embrace the constitution, and not try to rewrite it
  • Fire Comey, Loretta Lynch, heads of IRS, SEC, EPA and on it goes
  • Secure the borders, build the wall
  • Rebuild the military
  • Cut the heck out of taxes, watch the economy take off!
  • Flip the finger to political correctness
  • Stop giving money to bad actors around the world
  • Govern with common sense
Should be a much improved next four years.

Regarding the markets, good day today, especially for the health care and biotech into which I've been rotating and recommending.  The Hillary price control discussion is over, and getting rid of Obamacare should have a positive effect on the sector.  Stocks I own (both the Chump IRA and my Taxable Brokerage Account included)

CELG AKRX MCK AMGN BIIB GILD ESRX ABC ABBV BMY CVS JNJ MDT




And back to politics....

Here is a nice article from Todd Starnes of FOX that describes my sentiments pretty well:


Our long national nightmare is over and the Republic has been saved.
I’m originally from the Deep South. My father, who passed away in 2006, was a blue-collar worker. We lived paycheck-to-paycheck. We went to church on Sunday. We lived a quiet life – just like many families in so-called “Fly-Over Country.”
My father was a member of the Silent Majority and had he been alive he would’ve cast his vote for Donald J. Trump.
I’ve lived in New York City for more than a decade now – and I’ve seen firsthand the contempt for country folks like my father – people from rural America.
As I wrote in my book, “God Less America,” I feel like a “Duck Dynasty” guy living in a Miley Cyrus world – where right is wrong, wrong is right – it’s as if our values have been turned upside down.
President Obama called us bitter. He said we were the kinds of people who cling to guns and religion.
Time and time again he stood on foreign soil and apologized for our nation. And to this day it remains unclear whether he believes the United States is the most exceptional nation on Earth.
Hillary Clinton called us deplorable – irredeemable.
"To just be grossly generalistic, you can put half of Trump supporters into what I call the 'basket of deplorables. Right? Racist, sexist, homophobic, xenophobic, Islamophobic, you name it."
The only thing deplorable was Hillary Clinton's basket of grossly generalistic comments.
"And unfortunately, there are people like that and he has lifted them up," she went on to say. "He has given voice to their websites that used to only have 11,000 people, now have 11 million. He tweets and retweets offensive, hateful, mean-spirited rhetoric."
Her campaign portrayed Conservative Catholicism as a “bastardization of the faith” and seemed to imply that Evangelicals are a bunch of impoverished country bumpkins.
We were mocked by Hollywood and dismissed by academics. We were marginalized by the media – bullied and belittled by sex and gender revolutionaries.
But all that changed on Election Day – when Donald Trump became a champion for the Silent Majority. He gave us a voice.  And now the Silent Majority is silent no more.
We the People have decided that it’s time to drain the swamp.
It’s time to restore traditional values. It’s time to protect the Constitution. It’s time to defend our sovereignty. It’s time to save unborn babies.
It’s time to stand up for the American working man and bring jobs back from China and Mexico. It’s time to eradicate the scourge of ObamaCare.
And it’s time to hire the bricklayers so they can start building that giant wall.
The Deplorable Americans have spoken – and on the eighth day of November in the Year of Our Lord Two Thousand Sixteen – we have decided to Make America Great Again.

Wednesday, October 26, 2016

Stocks I'm Looking at Now: ABBV, CVS

As I mentioned a few weeks ago, ABBV looks very attractive, and has pulled back a bit from my initial purchase.  After I make an entry buy, usually 1/3 position or 1/2, I set a new buy price at 5% below my entry price...ABBV has been hovering down 4% or so, but hasn't yet hit the 5% threshold. It's tempting to add some more here...

Here is a snapshot of ABBV:



Note the 3.7% dividend yield, A- credit rating, and below normal PE of 13.1, and forecast EPS growth of 12% and 18% the next two years... good stuff!

I've also been watching CVS.  Ever since I bought WAG years ago (sold last year), I've also had CVS on my watch list.  Lately, the price has been getting close to fair value, tempting me to start a position, though I haven't yet.  Here is a snapshot:


My buy price is $85, so very close now....

Best,

Chump


Tuesday, October 18, 2016

A Political Message

Please watch these undercover videos showing how our White House, the DNC, and the Hillary campaign win elections.  They are stunning.  I knew politicians were often corrupt, but this is worse than I could have ever imagined.

https://youtu.be/5IuJGHuIkzY

Regardless of your feelings for Mr. Trump and his integrity, we cannot allow this corruption to continue in our government, and electing Trump may have a positive impact on these activities.

Further, and most importantly, it is imperative that the vacant Supreme Court seat be filled by a conservative in the vein of the late Justice Scalia to keep our constitution in-tact.

I'd prefer four years of Mr. Trump to 25+ years of a liberal Supreme Court.  Our country will not recover from a liberal Supreme Court.

My humble opinion,

Chump

Friday, September 30, 2016

Stock Swap...Selling ANTM, buying ABBV

I sold ANTM today due to the ongoing uncertainty around their proposed mega-merger with Cigna Healthcare.  I decided to drop this stock and add Abbvie, the spin out from Abbot six years ago. ABBV is currently undervalued, and pays a healthy 3.6% dividend (ANTM was at 2%).

I filled a limit order at $63 today for a 1/2 position in the stock.

Given the uncertainty of the merger for ANTM, the upcoming election, Obamacare, etc..., I'm not really thrilled to own a major healthcare provider.  Instead, I like the drug companies and distributors better.

Here is a snapshot of ABBV today via FastGraphs: