Monday, May 30, 2016

Dividend Income: May

Another month has come and gone and now it's time to collect the dividend payments that were made to my account in the month of May. All in all, it's been a great month for dividend income. My key player, AT&T (T) has made a payment and some of my other holdings have as well. I was also able to make a great collection of new buys that supplemented income in the future.

Unfortunately however, May did hold a sell off. It was only one but it's very unfortunately whenever even one needs to happen. As you all know, I like to hold my stocks as long as possible (forever if possible) but sometimes it's just not possible. The sell off was of course the sell off of Kohl's (KSS) as it had not even mildly performed as I would hope and there numbers were showing that it did not seem that would be changing any time soon.

This did come with the chance to buy new holdings. In the Month of May I was able to purchase three new holdings - RAI, LB, and GME. Granted, I never thought in a million years that I would be adding GME but it came at a time where I had been proven wrong. The company appears to be doing much better than my initial take on them and I have high hopes for them in the future. With all of this being said, let's compile the dividends for May and see how it all stacks up.

STAG: $1.74
ABBV: $5.70
YUM: $3.22
T: $14.88

Total for May 2016: $25.54
Total for 2016: $96.21

Unfortunately it just wasn't enough to break the $100 total for the year but it's still on track to do very well for the total of 2016. With a few big payments coming next month, there is almost no way that the portfolio won't break $100 for the year by the end of next month. Moving forward, I hope to continue making great stock choices, collecting dividends, and x'ing out any companies that decide that they know better what to do with their money than to pay dividends. 

Friday, May 20, 2016

Recent Buy: Reynolds American Inc.

I'm like a kid on Christmas morning this week. My budget finalized, I sold a stock, and I obtained my revenue from SA published articles all in the same week. That means there is moolah (money?) to invest in all that I wish (if only that were really the case)! Therefore I have purchased another holding for the portfolio.

Today's purchase was in Reynolds American Inc. This is the holding company that brought Camel, Newports, and Pall Mall to your friendly neighborhood gas station and Walmart (WMT). They are even responsible for American Spirit (if you smoked that natural stuff). I may no longer be a smoker but I once was and my brand of choice was Camel. Without trying to sound too big on advertisements and plugs, the reason that I chose Camel over the other brands was for the taste and the price in relation to it. The taste was just perfect for the budget that I was looking to buy my smokes for. On the other hand, when I had very little available for smokes, I would reach for Pall Malls. It was no different for all of the friends I hung out with that smoked. Everyone preferred Camels or Pall Malls - not a single one smoked Marlboro. Maybe this was a case of you are who you hang around with but all the same, it all just seemed to depend on how much cash you had at the time of purchase.

I guess what I'm trying to get at is that these two brands alone made up the bag or pocket of almost everyone I met who smoked. After taking a look at the numbers released in both Reynolds American Inc.'s 10-K and Phillip Morris's (Marlboro), it appeared that I was not far off. The two makers comprise almost 100% of the market of cigarettes in the United States. The big difference between the two was that Reynolds American had a far greater profit margin (just above 55%) and their P/E has been on the rise rather than falling. Pair this with a better PEG ratio (1.73 for RAI) and a more comfortable D/E ratio and you've got yourself a better bet in the tobacco industry.

I may not smoke anymore but because I have in the past (a little more than I would care to admit), I have a great background for the product and the market they are trying to appeal to. This gives me a pretty good level of confidence that this will be a good long term investment. Granted, it's definitely not the healthiest or society friendly stock but I believe the company still has quite a future ahead of it and that makes it a good buy for the portfolio. Final compilation below:

Purchased 14 shares of Reynolds American Inc. (RAI) on 5/20/2016 @49.71/share
**This adds $23.52 in annual dividends to the Dividend Scythe

Thursday, May 19, 2016

Avoiding Investing Stasis

Investing stasis - it's what happens when all investors reach a point where they are burnt out looking at a portfolio that is moving... but maybe not moving fast enough. Don't worry, it happens to all of us (or at least everyone that I've talked to about investing who manages their own investments). It's a natural way to feel when you put as much work as most of us do into researching the companies we invest in.

Tuesday, May 17, 2016

New SA Post: Macerich Company

I've published another premium article with Seeking Alpha. This time I have posted my review of the retail REIT, Macerich Company (MAC). I really enjoyed reviewing it. 

They are one of the better retail REITs in my opinion. Even though they have had some downs in the last few years, they have brought themselves back up. It appears largely due to the fact that they have been selling off various parts of their holdings for what I can only expect are future troubles. 

I like to see this with REITs because it shows that they can take initiatives when cuts need to be made through their holdings. There is not a whole lot of point in keeping around a dying calf. If it needs to be shot or sold, it's got to be done. Regardless, take a look if you're interested in a retail REIT for a tax-differed account. 

Monday, May 16, 2016

Recent Buy: L Brands

Back to back buys! Yeah baby! Very groovy! I love Mondays because they bring together quite the great storm of great stocks that offer themselves up for purchase. This morning I have finalized my purchase of now two different stores that I feel have gone on discount and will very likely continue to be on discount for at least a little while. The first was Game Stop Corp Com (GME) and the second is my purchase of L Brands (LB).

I've already spoken about Game Stop Corp Com (GME) in my last post that was centered around the purchase of their company so I want to use this post to exclusively talk about L Brands (LB) and why the buy signal has flashed in my head. The reasoning for the purchase of L Brands (LB) centered around the psychology of the current dip in price. Where only a short few months ago the brand was trading for over $100/share, a change in management and direction has left a lot of investors running for the hills. I would argue however that a shift in management in this case is hardly reason to worry.

L Brands (LB) holds so much attractiveness that I believe it's hard for anyone to really put a price tag on it. I imagine going up to my wife and telling her that she will no longer be able to buy anything from Victoria's Secret. I feel like I would sooner have something chucked at my head than be successful in telling her to avoid the store. Women (and men for good reason!) have a great view of the store because it has such a great history of providing wear that makes women feel sexy. For women (largely due to society being a douche and training them to be this way), feeling sexy is of great importance. Since Victoria's Secret does such a great job at it, seldom would their sales drop unless they were to completely turn away from the styles that they have been so successful with in the many years they have been in business.

Granted, this is only half the business - there is the Bath and Body Works side to the business as well. I don't know about you but I work in an office building. I would be lying if I said there were ever a single day that I've walked about the office and not smelled at least a handful of their products floating around the office. That side of the business is alive and well.

This was an easy buy. Their brand has an incredible name for recognition and a simple change in management and styles of advertising will hardly impact what they take in on the bottom line. I simply have to wait for the next earnings release to confirm this. Q2 has historically been very good for L Brands (LB) and then a small drop in Q3 before a HUGE jump in Q4 thanks to a certain holiday that would be a lot less amazing without Victoria's Secret. The final summary is below:

Purchase of L Brands (LB) - 8 shares @ 66.943 points - total price: $545.534

Recent Buy: GameStop Corp Com

There are going to be a lot of folks who ask me immediately after posting this as to why I finally cracked and grabbed up a piece of Game Stop Corp Com (GME). Quite simply put, I could no longer continue wasting time continuously doubting myself as to whether or not the company was a good use of my money. Where the core business I feel is moving out the door a little (selling used games), I feel that the board is moving the business in other directions that so far have proven to be excellent for income.

Where there is excellent income, there is seldom much reason for worry. There are few of life's troubles that cannot be purchased by good old fashioned cash. As you all know, I like to aim for companies that have very little debt or at least enough capital to pay off that debt if the worst were to come. GME is not unlike these past picks. Their current debt is 350.40M and they have a working cash flow of 450.40M - more than enough to cover if they needed to use it.

A lot of their new income comes from their telephonic branch off. Where GME game stores have taken a hit as of late and slowed sales, their telephonic business is booming. This should help to buffer their game stores while they move those to a more merchandise based model. With this being said, I will summarize my purchase below:

Purchased GameStop Corp Com - 20 shares @ 28.81 points - total investment: $586.19

Friday, May 13, 2016

Life: Container Garden Update

It's time for the second update to the container garden. I'll admit, after a few weeks of absolutely nothing coming from the seeds I put down, I was beginning to worry. My worries were however unjustified as the saplings suddenly sprung from the seed starter only two weeks ago.

I'm now happy to announce that I've obtained almost 100% germination in the seed starter this year. The only one that has yet to come up of my original set is the basil that I put down. For whatever reason, it's being stubborn and not wanting to break the top soil. I don't know if it's a case of putting too much soil on top of it or just maybe not providing enough moisture or what but it's just not giving in to the growing season!

With what I have already sprouting however, the harvest this year should easily dwarf what I put down last year. Even though this year I've only been aiming at a few species of plant, I think this year I have properly put down what will actually be used in abundance rather than only really eating the jalapenos that I put down last year. There were far too many unused plants last year.

Thursday, May 12, 2016

Investment Essentials: Starting Your Portfolio

Now that you've gotten 90% done with the essentials, it's time to start thinking about starting your own portfolio. In order to start a portfolio, you will have to open a brokerage account with one of the many brokers that are available to you either at your bank, online, or at trading manager offices. The most popular however is the online brokerage because they are the least likely (in my opinion) to charge you various fees. They can also be best used through online management so you don't need to pay someone else to do any of your investing for you.

Investment Essentials: Fundamental Analysis

Now that we are making our way to the end of the investment essentials series, we can now get into the best part - picking stocks to purchase. One of the best ways to do so is by using a process that is referred to as fundamental analysis. It is probably one of the most widely accepted ways of evaluating a stock.

Sold: Kohl's

I'm always sad when I have to sell a piece of the portfolio but sometimes you need to know when to get out of a losing battle. If you remember, I acquired Kohl's when I moved out of my position with The Gap a few months ago. Thankfully I dodged the huge bullet that hit The Gap just a few days after I sold it but I was not as lucky with Kohl's.

I had thought that even with the weak Q1 results that even if they were marginally higher than their previous results that it might drive the price up and it would preserve the dividends but I was wrong. The stock has gone the complete opposite direction with the horrid Q1 results that were released. As the dividend appears that it may be in trouble soon, I sold my position at around a 25% loss this morning to preserve what was left of the stake.

At this time I am unsure where I will be putting the left overs from the sale of the stock but I will make sure to do just that much more homework on my next pick to try to ensure this doesn't happen again. However, as an investor it is very important to learn from the losses more than you learn from the gains. If there is no learning, one can hardly hope to get better for the future. The final results are as follows:

Sold Kohl's (KSS) - 12 shares - @35.21 - total price: $412.52

Wednesday, May 11, 2016

Investment Essentials: Stock Splits

Stock splits are something that I have been burned by in the past. That being said, I want to make sure to share what information I have about them so that all of you can learn what to look for when one is announced in a stock that you may own. Overlooking one could mean losing a large chunk of money in the future if you're not careful about what type of split is happening.

Investment Essentials: Diversification and Specialties

I have written about this many times in the blog before but I cannot state just how important diversification is and why it should also be taken with a grain of salt when you yourself have an expertise. Diversification, if you don't know, is the idea that you are better protected if you spread out your investments into many different areas. This could be diversification through different stocks, different sectors, or even different investments such as mutual funds, ETFs (exchange trade funds), or others.

Tuesday, May 10, 2016

Investment Essentials: Dividends

Income stocks are the bread and butter of any defensive investor's portfolio. When I talk about income stocks, I of course point towards dividend paying stocks. If you don't know what dividends are however, you may be a little confused.

Dividends are payments that are made to investors on behalf of the company they invest in. These payments are paid to the investor without the investor having to actually sell any part of their shares. By collecting these dividends, your portfolio can grow without having to worry about making capital gains. It can make gains just by the dividend payments that are issued.

How To Be Great At Anything

My wife knows that I love podcasts. They are definitely my newest obsession. My morning workouts just aren't the same without them. This morning I was listening to the Freakonomics Podcast that was reviewing the idea of talent - whether it really is a God given thing or if it is something that can be acquired. More specifically they discussed the idea of deliberate practice and how it can create what others see as talent.

Friday, May 6, 2016

Investment Essentials: Market Cap

Stock can be classified further than simply growth, value, etc. Most of the time, they are also classified by their market capitalization. It's a fancy term that means size. If you ever hear someone talking about a large cap or a mid-cap or even a small cap, this is what they are referring to.

A large-cap stock is a stock in a company that is worth over $10 billion. These are generally harder stocks to get a piece of for a value because they are generally stocks of well-known track record proven companies. Most believe that because a company has been around for a long time and because they are a large-cap, they are unsinkable. However, one only need remember the history of the Titanic to know that there is no such thing as unsinkable. I would however argue that they are harder to kill than a small-cap.

Investment Essentials: Stock Types

It is quite often that stocks will be categorized as either growth stocks, income stocks, or even value stocks. What these terms mean however can be quite confusing for someone who thinks that stocks are simply just stocks. That being said, let's go over what they are and how to use the terms if we want to use them in the future to describe prospective stocks.

A value stock is essentially a stock that is currently selling for far less than it is actually worth. Keep in mind however that this term can be used loosely as each stock is evaluated differently by each type of investor. What I may deem as a value stock may not necessarily be what another investor who has looked at the stock deems to be a value stock.

Thursday, May 5, 2016

Investment Essentials: Market Directions

Bull market, bear market, sideways market - terms that are often referred to when investors are trying to describe what the market is doing. Like with all activities, terms that are unique to that specific activity are created over time. That is exactly where bull, bear, and sideways have sprung forth. 

When someone says that the market is very bullish, they are stating that we are in a bull market. This generally means that prices are going up and "charging" forward like a bull. Investors are throwing more and more money into the market. By doing so, the market goes up and investments generally look really good. This is a great time to already have your investments in place because you can simply watch your money go up, seemingly with any investment. Even the bad investments can still see small upward mobility in a bull market. 

New SA Post: GGP REIT Review

Another post has been made by yours truly on Seeking Alpha. This time I chose to review a competitor of my last review. In this article, I review General Growth Properties (GGP).

General Growth Properties (GGP) is another retail REIT that could potentially represent a future investment. They are a much smaller scale operation than Simon Property Group Inc. but with the smaller scale can come a price advantage when buying into it.

The stock unfortunately offers a smaller yield than the REIT that I last reviewed but remember that diversification is the name of the game if you don't want to get stung.

If you don't want to read the full article, understand the General Growth Properties offers a solid purchase idea if you are looking for a retail REIT with a much smaller NAV ratio than Simon Property Group Inc. (SPG). As the yield is lower than SPG however, it would be important that the investor who chooses to add GGP to their portfolio would probably best find it used in a tax differed portfolio as the tax advantages would be well used with a yield as small as SPG offers at current rates. Full article linked below:

Tuesday, May 3, 2016

Investment Essentials: Status of the Market

We know what the market is and we know that stocks are sold there but how does one actually gauge how the market is doing? And what are points? Aren't we trading dollars? 

These are common questions for new investors. Just like anything else, there is a score kept on Wall Street. One just needs to know where to find it. For Wall Street, the easiest way to find your gauge of how the market is doing is to look towards the Dow Jones Industrial Average - often referred by the acronym DJIA. Or, if you don't like the DJIA, you can look towards the S&P 500 (which is what I like to use instead). The DJIA includes some of the most well known companies in the United States. There are 30 companies in the DJIA all together. It is a collection of these stocks that are brought together to tell investors how the market is doing on any given day as it is supposedly seen as an average. 

New SA Post: SPG REIT Review

I have made another post recently on Seeking Alpha. As it is an exclusive article published through their site, I will simply leave a link below.

This time I have chosen to write a full review of Simon Property Group Inc (SPG). The RIET is intriguing and my review goes into good detail of the entire business as whole. I go over their price, yield, net asset value, funds from operations, and of course debt to equity ratio.

If you have ever been interested in owning a piece of a retail REIT, it may be good to become aware of Simon Property Group Inc (SPG) as it is one of if not the biggest of them out there. This does of course come with a premium price but the stock still does boast some good FFO. Full review at the link below:

Monday, May 2, 2016

Investment Essentials: The Stock Market

It has come to my attention through emails that were sent to me that my investing 101/102/103 "courses" that I put on the side of my page weren't quite basic enough for a starting investor to learn bit by bit. That being said, it appears that I really need to back up to square one - the basic of the basics. If you have absolutely no interest in knowing the basics step by step, I will label them as "investment essentials" when a post is going to be discussing them. I will also be removing the investing 101/102/103 series and replacing it with a much smaller link that will contain a page for investment education specifically.

**Note: please read the disclaimer listed before continuing**

Investment Essentials: The Stock Market

What is the stock market? The stock market for all intents and purposes is a place where traders and businesses buy and sell stocks and other forms of investments. Different stock of different companies are listed on the exchange under ticker symbols which are basically just short forms of the company name in most cases so that buyers can locate them. For example, General Electric trades under the ticker symbol of GE. If you were looking to buy a portion of GE stock, one only have to search GE on a stock exchange and place a bid for however many shares you want.