Many people know my personality is similar to my investing style...I tend to go against the grain. As a techie, I don't love the Apple phones for a technical reason it's a closed source ecosystem. Unlike open source devices, Apple prefers that you use only their software and products. I have to remind people that Apple did not invent putting things in the cloud, sending files/messages should be something you should be able to do to any phone, and chargers are meant to be universal.
But in order to be a good investor your personal preferences should NOT interfere with buying stocks. While I don't own the phone, I don't dismiss many people around me use the phone. Or the fact that iTunes gift cards are a normal gift around the holidays without even asking me if I am an iPhone owner. But these aren't the reasons why I decided to stake a claim in the value play a few years ago. Many forgot back in 2016, Apple was trading under $100 dollars and there was fear they wouldn't be able to break into China and growth had stalled. But as Apple continued to reinvent itself, I saw value in a company starting to pay a dividend, expanding internationally, and growing a profitable services and payments business. So when there is fear in the water you stake a calculated claim on an old dog that still has a few tricks. Being in Risk Management, I had fun analyzing this stock and pulling the trigger when everyone was saying I got in too late. At an average of roughly $93 dollars, I was betting on a growing dividend, growth in China (maybe India), apps being the future (including iTunes), and logical determination that Apple phones would become larger as I knew people would share my frugal sensation over phone/tablets or phablets if you prefer (why have one of each when supersized phone does the trick). I am not placing a big bet on Payments yet because I tend to know a little bit about this space. While people love the technology...I think there needs to be one wallet that can travel with you as you change from an ApplePay, SamsungPay, GooglePay....and merchants are CHEAP so it will be a very long time until every store and gas station pay for upgrade technology that supports these new types of payments.
Many say value is dead but I argue, you have to look in the right places. I just read an article about how Warren Buffet and Berkshire are enjoying the amazing gains of Apple. I laughed because I'm wondering if the pupil is finally learning from the teacher...looking back I bought Apple prior to when Berkshire made their purchase:
Post Mentioning Apple:
https://urbanomics.blogspot.com/2016/10/how-to-invest-in-clinton-trump-election.html
Wall Street Journal: Buffet Bet Big on Apple
This has also happened with Teva Pharmaceuticals recently so I hope to keep the streak alive and maybe may a few future recommendations...one Oracle to another. :)
Saturday, August 04, 2018
Wednesday, August 01, 2018
RADISYS - Still Room Before the Buyout
Radisys (NASDAQ:RSYS) -- This is a stock that I've followed and blogged about for many years and for FULL DISCLOSURE: I OWN SHARES OF RSYS
If ya don't know now ya know: Radisys is getting purchased by the largest cell phone provider in India, Reliance Jio.
I quickly knew something was brewing because my portfolio was up sharply that day and my brother even called and asked if I had heard the good news. While he was talking about RSYS, I was thinking about the fact that he had actually been listening and occasionally reading stocks I track and blog about. Most investors LOVE an acquisition...and I'm no different. Oddly, because I've owned RSYS for awhile I have a little HATER in me because I've bought in at higher prices in the past so I will have a loss on some older positions in my portfolio.
Breaking Down the RadiSys Arbitrage
Arbitrage...I know technical trading language. So to keep things simple, playing the Arbitrage is like betting on whether the top college football player will get drafted with the 1st pick in the NFL draft. We all know that it likely to happen BUT every now and then...it doesn't happen.
RSYS is the like the top draft pick and they are being purchased for $1.72 in cash as stated in new releases and in the latest earnings conference call by the CEO. The stock traded today at the $1.48 level EVEN THOUGH we all know they will be purchased (drafted with the top pick) for $1.72. Buying the stock now is like getting in on a poorly kept secret -- "The Arbitrage". But before I pull the trigger on a 16% gain, I have to weigh the risks (ughh sounds like I'm still working):
Geopolitical (Country) Risk: Believe it or not, I had to consider whether either company's government may get involved in nixing the deal. RSYS (American), Reliance Jio (Indian) - I think it's unlikely to get nixed but it should be considered as the proposed deal of NXP Semi & Qualcomm got the backhand from China likely due to their beef with the Trump Admin over tariffs (their deal never got approved).
Financial Risk: I see limited risk here, as it's a very small deal ($74M) and it's all CASH. Reliance being the largest cell provider in India seems to be able to easily close this deal.
Timing Risk: It was announced the deal will close in Q4 2018. It's August, so 1 quarter is not too lengthy in the corporate world for an acquisition.
Upsides: Another buyer could cause a bidding war but this scenario seems unlikely as no one else has come forward. Surprisingly, the latest earning report was very positive so you wonder if the deal could be sweetened. It's unlikely as RSYS was a penny stock prior to the acquisition.
It's hard to call the last indicator Upside risk but I did want to point out that the CFO bought a large share of stock a few months back which was a very bullish sign. It's what caused me to follow this stock closely over the last months but sadly I had analysis paralysis and didn't follow my gut which was telling me to load up after that recent indicator. My final thoughts are this all cash deal will go through and a 16% spread is an opportunity for a moderate gain with limited risk.
If ya don't know now ya know: Radisys is getting purchased by the largest cell phone provider in India, Reliance Jio.
I quickly knew something was brewing because my portfolio was up sharply that day and my brother even called and asked if I had heard the good news. While he was talking about RSYS, I was thinking about the fact that he had actually been listening and occasionally reading stocks I track and blog about. Most investors LOVE an acquisition...and I'm no different. Oddly, because I've owned RSYS for awhile I have a little HATER in me because I've bought in at higher prices in the past so I will have a loss on some older positions in my portfolio.
Breaking Down the RadiSys Arbitrage
Arbitrage...I know technical trading language. So to keep things simple, playing the Arbitrage is like betting on whether the top college football player will get drafted with the 1st pick in the NFL draft. We all know that it likely to happen BUT every now and then...it doesn't happen.
RSYS is the like the top draft pick and they are being purchased for $1.72 in cash as stated in new releases and in the latest earnings conference call by the CEO. The stock traded today at the $1.48 level EVEN THOUGH we all know they will be purchased (drafted with the top pick) for $1.72. Buying the stock now is like getting in on a poorly kept secret -- "The Arbitrage". But before I pull the trigger on a 16% gain, I have to weigh the risks (ughh sounds like I'm still working):
Geopolitical (Country) Risk: Believe it or not, I had to consider whether either company's government may get involved in nixing the deal. RSYS (American), Reliance Jio (Indian) - I think it's unlikely to get nixed but it should be considered as the proposed deal of NXP Semi & Qualcomm got the backhand from China likely due to their beef with the Trump Admin over tariffs (their deal never got approved).
Financial Risk: I see limited risk here, as it's a very small deal ($74M) and it's all CASH. Reliance being the largest cell provider in India seems to be able to easily close this deal.
Timing Risk: It was announced the deal will close in Q4 2018. It's August, so 1 quarter is not too lengthy in the corporate world for an acquisition.
Upsides: Another buyer could cause a bidding war but this scenario seems unlikely as no one else has come forward. Surprisingly, the latest earning report was very positive so you wonder if the deal could be sweetened. It's unlikely as RSYS was a penny stock prior to the acquisition.
It's hard to call the last indicator Upside risk but I did want to point out that the CFO bought a large share of stock a few months back which was a very bullish sign. It's what caused me to follow this stock closely over the last months but sadly I had analysis paralysis and didn't follow my gut which was telling me to load up after that recent indicator. My final thoughts are this all cash deal will go through and a 16% spread is an opportunity for a moderate gain with limited risk.
Sunday, July 08, 2018
Fitness Tracking to Slimmer Pants & Bigger Profits
What's the point of these Urbanomics Pillars: “Spiritual”, “Financial”, “Physical”, and “Mental” if I am not applying the tools that have made me successful in business and in the stock market to my health. Are you going corporate on me??....Quite simply, yes :) When I sit back and reflect on what things made me college recruited football player, I circle back to one word: DISCIPLINE..not a fad or a diet or a quick fix. I'm getting OLD but the one thing every gym rat had in his or her hands before phones and fitness trackers took over...was a WORKOUT SHEET. This sheet tracked my progress and told the story if I got stronger, faster, and more agile. I still used a spreadsheet up until a few years ago because it was built into my DNA. But with a very busy schedule at work I noticed I was declining into a part-time gym rat, I'd go for a few months...then stop because of work or life imbalances.
I decided to stop making excuses and use the same tools that I use to track my investments:
Health Goal: While I would like to retire financially fit and early...let's add physically fit
Budget: While I have a financial budget, I needed to have a health budget (Higher Calories Burned minus Calories Being Eaten = Healthy Rewards. Keep it simple
Risk Management - In the stock market, Warren Buffet has 1 rule...never lose money. So why not transform this rule simply to: Don't Gain Weight. If I stick to my budget (above) some days I might not lose weight but ultimately I won't gain unhealthy amounts of weight. If I am thoughtful, I can CHOOSE to just eat a little less OR more of something healthier. I choose to not invest in RISKY Penny Stocks so why not cut back on risky foods :)
Benchmark: You're not managing your money wisely IF you don't know what the average market returns. So to understand the averages, I purchased a Fitbit health tracker and used their baseline. 8-10K steps (3-5 miles), climbing 10-20 stairs a day, walking at least 3-10 minutes an hour (during the 8 hr workday). I added in basic government calorie consumption guidelines and ATTEMPT sleeping 8 hours a night.
Tracking: I have an fitness tracker that tracks my portfolio because I need to BEAT the benchmark to be financially fit. My goals are set to the benchmarks above and it creates a "no excuses" culture. I couldn't believe early on what the reader was telling me. Sometimes with work, I might not move within an hour...what!!! I've lost over 10% of my body weight, wear clothes that didn't fit, decreased the waistline, and more importantly watched things like my resting heart rate drop.
The path to bigger pockets is being active and clear: mind, body, and soul, so get moving and don't let unhealthy habits drain your riches in your later years. I share my health goals with others so its no longer weird when I excuse myself for a 10 minute walk/break, jog at random times in my house to reach my goals, look forward to cutting the grass each week to pad the ole stats. I'll tell you more about my eating adjustments later but a low carb/Keto/S.Beach like lifestyle has grown on me and even allows me to FAST now for multiple hours in the morning, still feel great, and many times I feel sharper when making business and investment decisions. If you've cheated yourself...get back in balance and slimmer pants and a calmer mind could mean bigger pockets.
I'm Tracker Agnostic so tell me if you're a fan of Fitbit, Apple Watch, Samsung Gear, Garmin, AND more importantly what you track. For now, I'm gonna "Walk It Out" to my goals:
Walk It Out
I decided to stop making excuses and use the same tools that I use to track my investments:
Health Goal: While I would like to retire financially fit and early...let's add physically fit
Budget: While I have a financial budget, I needed to have a health budget (Higher Calories Burned minus Calories Being Eaten = Healthy Rewards. Keep it simple
Risk Management - In the stock market, Warren Buffet has 1 rule...never lose money. So why not transform this rule simply to: Don't Gain Weight. If I stick to my budget (above) some days I might not lose weight but ultimately I won't gain unhealthy amounts of weight. If I am thoughtful, I can CHOOSE to just eat a little less OR more of something healthier. I choose to not invest in RISKY Penny Stocks so why not cut back on risky foods :)
Benchmark: You're not managing your money wisely IF you don't know what the average market returns. So to understand the averages, I purchased a Fitbit health tracker and used their baseline. 8-10K steps (3-5 miles), climbing 10-20 stairs a day, walking at least 3-10 minutes an hour (during the 8 hr workday). I added in basic government calorie consumption guidelines and ATTEMPT sleeping 8 hours a night.
Tracking: I have an fitness tracker that tracks my portfolio because I need to BEAT the benchmark to be financially fit. My goals are set to the benchmarks above and it creates a "no excuses" culture. I couldn't believe early on what the reader was telling me. Sometimes with work, I might not move within an hour...what!!! I've lost over 10% of my body weight, wear clothes that didn't fit, decreased the waistline, and more importantly watched things like my resting heart rate drop.
The path to bigger pockets is being active and clear: mind, body, and soul, so get moving and don't let unhealthy habits drain your riches in your later years. I share my health goals with others so its no longer weird when I excuse myself for a 10 minute walk/break, jog at random times in my house to reach my goals, look forward to cutting the grass each week to pad the ole stats. I'll tell you more about my eating adjustments later but a low carb/Keto/S.Beach like lifestyle has grown on me and even allows me to FAST now for multiple hours in the morning, still feel great, and many times I feel sharper when making business and investment decisions. If you've cheated yourself...get back in balance and slimmer pants and a calmer mind could mean bigger pockets.
I'm Tracker Agnostic so tell me if you're a fan of Fitbit, Apple Watch, Samsung Gear, Garmin, AND more importantly what you track. For now, I'm gonna "Walk It Out" to my goals:
Friday, April 20, 2018
The Plan - Can the Economy Grow Forever?
I often talk about the Pillars that act as a beacon
guiding my life, business, and financial decisions so I like to revisit those
from time to time.
Urbanomics Pillars: “Spiritual”, “Financial”, “Physical”,
and “Mental”
We often preach about balance and diversification in the financial
world but how often do people consider this in their day to day loves.
Financial –
I’ve been moving
comma’s so don’t start no trouble with me…
I hear you Drake, keep moving those commas. My mission is
to do the same while helping people in the process. But before I get started I’d
like to remind people of the incident at Starbucks this past week. Can you
imagine getting kicked out of a coffee shop just because of the color of your
skin…and my response is YES. Those young
gentlemen were having a business meeting, trying to move comma’s but trouble, haters…and
risk interrupted their lives. This is
not an isolated incident for many of us so I ask for them to stay strong and
rely on their other Pillars for balance and keep pushing forward. Here are my views on all things financial:
Stock Market - Again, you won’t find me writing much
about the stock market these days because things are steady. I said a few years ago, when Mohammed El-Erian
described this economic period that we are in as the “New Normal”, that I thought we would continue to bump along higher and higher coming out of the near depression period of 2008. So the goal has been to find amazing stocks at discounted values and when they rise, part way above your target level...part ways with them. Why because we are in the 9th YEAR of an economic rally (soon
to be the longest in history). I’ve learned over time from Mohamed, Warren Buffett, and others to try to keep it simple. So find stocks you like, determine what is the ideal price you would buy it at…sometimes take another 5% of that
number and wait to see what happens J
Remember Lululemon recommended in the 40s, Apple in the
90s, Alibaba in the 80s, Caterpillar in the 80s, Manchester United @ 14 if not use the search tool and track these old friends of mine down. I
still holding Apple, Alibaba, and Manchester United as core holdings and am learning how to protect these holdings as they've appreciated nicely. So to the many people that say growth has dominated the market in
recent years I agree but I remind them…for me it’s the long game and how much
you bought something for and amazing even a few growth stocks like Apple and Alibaba will fall into your lap.
And for the people that trust in the process, support
others, call out injustice when they see, and pay it forward here’s what I’ve
been trading. It’s my way of giving back…my
free and very simple knowledge. A chart is included below and simply represents prices where I’ve had success trading these stocks over the last three to six months. The Column on
the left are shares I've owned and traded options in. The column on the right I’ve
just traded options only. The asterisk means I still own the stock:
Note: Please find the correct spelling for Qorvo
More to come on how I'm planning for the future (real estate, biz development, taxes) as the soon to be longest economic rally history WON"T last forever. And yes...I was channeling Drake’s hit song God’s Plan when I was
developing this post and was equally inspired by Kendrick Lamar and Jay-Z’s
recent projects and social consciousness. Many blessing to them and to you
all. And if you haven’t seen the video, of course I recommend that you check it out here:
Saturday, September 23, 2017
Stock Investing - Reality TV Style
I began looking at my blog posting over the last few years and my posts are wayyyyy down. Now there are simple reasons for this but as one takes on more responsibilities at work and family needs grows I have less and less time for writing. Oddly enough, I do want to address one thing with this post and that is that my time put towards doing my homework doesn't waiver but gets more efficient. It can't waiver because this is your lifeline into financial freedom...one of the pillars that I often blog about. Now I'll give you the second reason why my posts have diminished a bit (little bit of a cop out)...the markets keeps streaking HIGHER and the HIGHER it gets the HARDER it is for me to find VALUE. I'll give you an example...I won't give you my age but I grew up in an era where a standard candy bar was usually $0.50. and one could enjoy a Snickers, Reese's PB Cup, and even a pack of M&Ms for less than a dollar and if I I felt like a king...the king size was probably $1.00. My search for value never waivers so in today's world so when I visit a store I don't bother looking at the candy bars...can't do it! I do the simple math and if I don't see a merchant getting close to my value threshold of 50 cents then I don't give in. Nice thing for me is I don't have a sweet tooth but when I find the occasional deal, I enjoy my Reese's cups. Similarly, the stock market keeps shooting higher and I'm not finding very many candy bars to choose from. I keep looking but I don't give in unless on my terms.
Now for the Reality TV portion of this blog. I hope over the course of the next few months to change my blog up a bit. Instead of writing, I'd love to simply post a video blog and just talk to you about what I'm seeing. I have to be efficient with my time. I'm still researching a lot so I can't wait to share with you my thoughts on areas I want to invest in NEXT but only at candy bar prices.
I always tell people to start with what you know and venture out to areas you don't mind reading about. So my areas, which I've been keeping up with are:
CYBER SECURITY - Think Palo Alto Networks, FireEye, Cisco, Symantec, F5 Networks, Checkpoint, Cyberark, Fortinet
TECHNOLOGY - Apple, Alibaba, Google, Facebook, Netflix, Qorvo, Amazon, Qualcomm
FINANCIAL PAYMENTS - Paypal, Visa, MasterCard, Square, Stripe, Vantiv,
I'm not great at these areas but I also follow Retail, Pharmaceuticals, Telecom.
Name Names: Over the last 12 months that small group of stock that have popped up on my radar have been: Verizon (Telecom), Teva (Pharma), Gilead (Pharma), Hertz (Retail-Auto), Paratek (Pharma), Nuance (Tech) and I own all of these names.
Buyer Beware: Then there are names that I watch and watch because it's like buying Fireworks after the 4th of July OR candy bars that have past expiration dates. Is it worth the risk and Are they still good often come up. Who might that be: Twitter, Snapchat, BlueApron, Kroger, Under Armour, Dicks Sporting Goods, Foot Locker. For these names I often don't buy at $.50, it's not worth the risk so I have to recalculate and see will they hit $.25 and is it worth it or will I get a stomach ache. For a select few I might bite, think Jack Dorsey (Twitter), Kroger (feeds middle class), and Under Armour (they have Steph Curry, enuff said).
I'm out.
Full Disclosure: I own Verizon (Telecom), Teva (Pharma), Gilead (Pharma), Hertz (Retail-Auto), Paratek (Pharma), Nuance (Tech) and for a number of them my candy bar prices are near their lowest price ranges in the last 52 weeks.
Now for the Reality TV portion of this blog. I hope over the course of the next few months to change my blog up a bit. Instead of writing, I'd love to simply post a video blog and just talk to you about what I'm seeing. I have to be efficient with my time. I'm still researching a lot so I can't wait to share with you my thoughts on areas I want to invest in NEXT but only at candy bar prices.
I always tell people to start with what you know and venture out to areas you don't mind reading about. So my areas, which I've been keeping up with are:
CYBER SECURITY - Think Palo Alto Networks, FireEye, Cisco, Symantec, F5 Networks, Checkpoint, Cyberark, Fortinet
TECHNOLOGY - Apple, Alibaba, Google, Facebook, Netflix, Qorvo, Amazon, Qualcomm
FINANCIAL PAYMENTS - Paypal, Visa, MasterCard, Square, Stripe, Vantiv,
I'm not great at these areas but I also follow Retail, Pharmaceuticals, Telecom.
Name Names: Over the last 12 months that small group of stock that have popped up on my radar have been: Verizon (Telecom), Teva (Pharma), Gilead (Pharma), Hertz (Retail-Auto), Paratek (Pharma), Nuance (Tech) and I own all of these names.
Buyer Beware: Then there are names that I watch and watch because it's like buying Fireworks after the 4th of July OR candy bars that have past expiration dates. Is it worth the risk and Are they still good often come up. Who might that be: Twitter, Snapchat, BlueApron, Kroger, Under Armour, Dicks Sporting Goods, Foot Locker. For these names I often don't buy at $.50, it's not worth the risk so I have to recalculate and see will they hit $.25 and is it worth it or will I get a stomach ache. For a select few I might bite, think Jack Dorsey (Twitter), Kroger (feeds middle class), and Under Armour (they have Steph Curry, enuff said).
I'm out.
Full Disclosure: I own Verizon (Telecom), Teva (Pharma), Gilead (Pharma), Hertz (Retail-Auto), Paratek (Pharma), Nuance (Tech) and for a number of them my candy bar prices are near their lowest price ranges in the last 52 weeks.
Tuesday, May 02, 2017
If Stocks Were Like My Playlist...
My playlist would go something like this:
a) Hold classic stocks for the long haul - Like a good wedding playlist (Kool and the Gang, Black Eyed Peas, Jay Z, Notorious BIG, Montell Jordan) these tracks will not disappoint as they are loved across generations. Apple, Verizon, Manchester United, Coach are often the most used technologies, watched sports teams, and worn jewelry items in the world. They may fall out of love briefly...so buy them when they do and press play and enjoy the ride.
b) Keep Watch for Young fiery stocks - These names take the industry by storm and rise to the top very quickly. In the music world, they are often associated with one name: Drake, Kendrick, J Cole, etc. In the stock world think Facebook, Amazon, Netflix, Tesla, Google. The only problem is these stocks or albums are almost never on sale. If you find a dip, get in while you can.
c) Flip Through Old & New Songs - This is the most important category for me. I'll listen to anyone, especially if you have Lil in front of your name: Lil Wayne, Lil Uzi Vert, Lil Yachty. Old and new artists like ASAP Rocky, Travis Scott, Joey Badass, Gucci Mane, Bruno Mars, The Weeknd. These are the songs that when played someone absolutely loves, hates, or admits they've never heard of the artist. I try to find stocks with this profile. These songs must be listened to over and over again to determine do they still have it, are they hot, or ready to flop. If they were stocks, would you bet $10K on the following:
Take this approach, follow the news and make educated decisions. For me, I would bet on all of these scenarios above. Lil Wayne's come back story would be worth a buy, Bruno bringing R and B back, Lil Yachty giving us fun rap (sorry rap purists), and Joey keeping conscious rap alive.
I have a number of big winners in the past few years making some educated calls:
Apple - bought when ppl said they couldn't make new products or sell phones in China
Alibaba - everything on the site is counterfeit and sales would not grow
Coach - all the purses are being sold in outlet stores and no one will pay full price
Whole Foods - Whole pay check has no value because everyone sells organic
The calls for early demise in these household names were great opportunities to get in. The hardest thing is to be the only person not selling when things don't go right. I'll list my new playlist here but feel free to share yours:
Verizon - losing every wireless carrier to TMobile and Sprint
Lululemon - somehow the stock I sold last year is BACK down to the levels I bought during their last crisis
Synchrony - not so great earnings and people are starting to default on credit cards again
Gilead Sciences - they have no drug pipeline and earnings will keep getting crushed
a) Hold classic stocks for the long haul - Like a good wedding playlist (Kool and the Gang, Black Eyed Peas, Jay Z, Notorious BIG, Montell Jordan) these tracks will not disappoint as they are loved across generations. Apple, Verizon, Manchester United, Coach are often the most used technologies, watched sports teams, and worn jewelry items in the world. They may fall out of love briefly...so buy them when they do and press play and enjoy the ride.
b) Keep Watch for Young fiery stocks - These names take the industry by storm and rise to the top very quickly. In the music world, they are often associated with one name: Drake, Kendrick, J Cole, etc. In the stock world think Facebook, Amazon, Netflix, Tesla, Google. The only problem is these stocks or albums are almost never on sale. If you find a dip, get in while you can.
c) Flip Through Old & New Songs - This is the most important category for me. I'll listen to anyone, especially if you have Lil in front of your name: Lil Wayne, Lil Uzi Vert, Lil Yachty. Old and new artists like ASAP Rocky, Travis Scott, Joey Badass, Gucci Mane, Bruno Mars, The Weeknd. These are the songs that when played someone absolutely loves, hates, or admits they've never heard of the artist. I try to find stocks with this profile. These songs must be listened to over and over again to determine do they still have it, are they hot, or ready to flop. If they were stocks, would you bet $10K on the following:
- Lil Wayne - will the Carter 5 come out, does he still have it??
- Bruno Mars - is he the next greatest thing since MJ?? #24karat
- Lil Yachty - he's been hated on by ever hip hop purist but was just in a Target commercial...is he about to break out or break down?
- Joey Badass - Can a lyricist make it big without big crossover hits?
Take this approach, follow the news and make educated decisions. For me, I would bet on all of these scenarios above. Lil Wayne's come back story would be worth a buy, Bruno bringing R and B back, Lil Yachty giving us fun rap (sorry rap purists), and Joey keeping conscious rap alive.
I have a number of big winners in the past few years making some educated calls:
Apple - bought when ppl said they couldn't make new products or sell phones in China
Alibaba - everything on the site is counterfeit and sales would not grow
Coach - all the purses are being sold in outlet stores and no one will pay full price
Whole Foods - Whole pay check has no value because everyone sells organic
The calls for early demise in these household names were great opportunities to get in. The hardest thing is to be the only person not selling when things don't go right. I'll list my new playlist here but feel free to share yours:
Verizon - losing every wireless carrier to TMobile and Sprint
Lululemon - somehow the stock I sold last year is BACK down to the levels I bought during their last crisis
Synchrony - not so great earnings and people are starting to default on credit cards again
Gilead Sciences - they have no drug pipeline and earnings will keep getting crushed
Friday, October 28, 2016
How to Invest in a Clinton / Trump Election Year...
First, I'll address where I've been since my posts have dried up for about a year. My answer is: "Still Right Here". As we all know for the last few years, people continue to have to do more with less and that extends to companies. With unemployment pretty low for most big companies, they have to squeeze more out of every employee. Good old fashion hustlin', and I got the memo and have been very busy at work and in my personal life. The other reason, I haven't written much is because as a country and in the stock market things appear to be in a holding pattern. I had a feeling a little over a year ago that the stock market was reaching its tops and I took my ball and went home. For my portfolio, that meant I decided to sell some of the stocks that had been big winners. If you need a reminder flash back to this post: http://urbanomics.blogspot.com/2014/08/marketsno-longer-starting-from-bottom.html
I never like selling but if life you can't get too greedy so I parted ways with names like:
I felt a little over a year ago we were closing in on the top and I was just a bit early, but by planning then I was starting to set myself up for what's to come. A market near its highs, a Hillary Clinton and Donald Trump election year, and other surprises like the UK leaving the European Union have kept the markets a little uneasy. So I'll tell you what I've been quietly doing as I've sold my winners over the last few months:
Buying Top-Tier Companies (when they reached Low Prices):
These bigger names anchor my portfolio and should grow in good times and fingers crossed, the bad times. They all pay a dividend so they will pay you to wait :)
I then decided to begin thinking about how I wanted to thin my portfolio out to and hold higher quality names. I've been making hard decisions and here are some of the mistakes I think I have made:
I never like selling but if life you can't get too greedy so I parted ways with names like:
- Allergan - maker of botox (Allergan was acquired Actavis for a nice price) :)
- Lululemon - athletic wear (bought when it was in the low 40s, after some of their pants were showing too much skin and when the CEO ranted he didn't want bigger sized women wearing the clothes, and waited for them to correct their missteps)
- Caterpillar - big equipment maker (bought early and they fell, then I acquired more shares over time through patient dividend investments and they rallied above my purchase prices...just sold in the last few months for a small gain)
- NovaGold - gold miner (bought over 3 years ago and they dropped by over $50 percent; my old mentor reminded me if the fundamentals make sense buy when they are on discount. At roughly $3 I bought more and sold a good portion of it this year at just under $7.
I felt a little over a year ago we were closing in on the top and I was just a bit early, but by planning then I was starting to set myself up for what's to come. A market near its highs, a Hillary Clinton and Donald Trump election year, and other surprises like the UK leaving the European Union have kept the markets a little uneasy. So I'll tell you what I've been quietly doing as I've sold my winners over the last few months:
Buying Top-Tier Companies (when they reached Low Prices):
- Apple (bought in the low $90s)
- Verizon (bought in the low $40s)
- Manchester United (bought b/w $13-14 range)
- Gilead (bought b/w $73-74)
- Alibaba (low $80s)
These bigger names anchor my portfolio and should grow in good times and fingers crossed, the bad times. They all pay a dividend so they will pay you to wait :)
I then decided to begin thinking about how I wanted to thin my portfolio out to and hold higher quality names. I've been making hard decisions and here are some of the mistakes I think I have made:
- Gold - NovaGold (I still own a small portion and should have sold it all when it hit its highs)
- Oil - There is too much oil around the world and oil stocks are NOT going anywhere anytime soon. I own (British Petroleum(BP), Oasis Petroleum, Cheniere Energy) and the only good thing is the latter two, I don't hold big positions. BP pays a nice dividend so I use that to buy more shares and love that this is a long-term cornerstone of my portfolio at these levels.
- Non-Dividend Stocks, Not Growing - Lastly, I have a few stocks that don't pay a dividend!! I've held them for quite some time and they are just sitting there taking up space. For me names like: St. Joe's Company (real estate), Nuance Communication (voice services like Siri), Hertz, and a few others just are not bringing much to the table. So I'll likely be parting ways with these names in the future.
I'm reminding you to go Vote, go Cubs, for me...go focus on higher quality names in this crazy election year.
~ Get Ur Urb On
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