Ted Fischer – Pág. 2

Foros Estrategia Ted Fischer - Pág. 2

Este debate contiene 37 respuestas, tiene 9 mensajes y lo actualizó  Luis G. hace 3 días, 15 horas.

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  • #46978

    Luis G.
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    Acerca de JNJ tras el varapalo del viernes.

    “JNJ is a great company. It is trading at or below fair value today. They will weather the litigation concerns, one way or another. I’m not concerned. If you like the company, then go ahead and buy. Can’t imagine why anybody wouldn’t want to own it, but everybody has to decide that one for themselves.

    The cost basis for our original shares of JNJ is under $30. If I could go back to being 28 again, maybe I would buy more? But I can’t, and JNJ won’t see those prices again. Today is is trading between $130 and $135 — still a good price on a great company.

    So what’s stopping people? It is already twice the size of our next-largest oversized position, and even so I’m wishing I could make room in my portfolio to add more!”

    ENG, GAS, MAP, REE, REP, SAN, AAPL, BEP, CAH, CVS, D, DIS, ENB, FLO, GIS, HRL, IBM, JNJ, KHC, LB, MMM, MO, O, PEP, PG, PM, QCOM, SO, T, TGT, VFC, XOM, DGE, GSK, IMB, NG, RDS-B, RIO, VOD, AD, BMW, ENGI, VIE, AzValor internacional FI, Cobas internacional FI, Magallanes Microcaps Europe, True Value.

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    #46979

    Luis G.
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    “Putting it all in perspective…

    JNJ is by far our largest position. It crashed over 10% yesterday, a devastating blow to our portfolio given the amount of money involved!We are still up for the year. Overall our financial assets gained 3.72% (and that will bump higher when I enter the year-end accounting in a couple weeks), in addition to new savings. This reminds me in some ways of 2015, a year of volatility in which our accounts overall traded sideways. The difference? In 2015 we were looking at ~$30k in dividends+interest. We have already passed $40k for 2018, and our (minimum) goal of $60k is within reach. We could reach it tomorrow (by selling lower-yield and buying higher-yield) if we had to do so, but I expect that another ten years of increases, reinvestment, and savings will do it for us.

    Does red bother you? Think on this one a minute. Would you trade your dividend income in exchange for a guarantee that your portfolio will not lose money? Depending on your portfolio structure, the actual cost of that insurance might vary. For the S&P500 as a whole you would need to sacrifice your dividend income and as much as 40% of the gains. For a more defensive portfolio, sacrificing the dividends alone might suffice.

    To me, that is a sucker’s deal. You will find plenty of annuity brokers who make a buck from selling FUD to people so that they will pay for insurance they don’t need. Heard a recent radio ad threatening people with the “Deep State” if they don’t do this. HORRIBLE!!!

    I own stocks because they represent ownership in profitable companies that churn out earnings year after year. Some substantial portion of those earnings (30% to 60% depending) gets sent my way, and the rest presumably is reinvested in ways that grow the value of what I own. I’m a total return investor because I believe in income AND growing fundamental value. Others who value similar things see that as DGI. In neither case is this impacted by market swings, or overreactions such as we saw in JNJ yesterday.

    If you have been invested in defensive companies, you have likely done well this year. I know the S&P500 and Dow are down, but the dividend value companies I own have (overall) produced a positive return. Staples are doing well. Utilities are up. REITs are up. Those who are focused on market value and capital gains are badly scared right now. Those who believe in income and fundamental value are in a good place, because that is not impacted by the red.

    Which are you? Would you trade your income to guarantee against the red? Or do you keep the income for yourself, knowing the red is immaterial? No sitting the fence on that one!”

    ENG, GAS, MAP, REE, REP, SAN, AAPL, BEP, CAH, CVS, D, DIS, ENB, FLO, GIS, HRL, IBM, JNJ, KHC, LB, MMM, MO, O, PEP, PG, PM, QCOM, SO, T, TGT, VFC, XOM, DGE, GSK, IMB, NG, RDS-B, RIO, VOD, AD, BMW, ENGI, VIE, AzValor internacional FI, Cobas internacional FI, Magallanes Microcaps Europe, True Value.

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    #47063

    Luis G.
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    “Another day of downdraft, again targeting Discretionary and Industrials. The defensive sectors today seem to be perking up a little, but I wouldn’t place much confidence in that. This feels like a “bear market” adjustment in which those who are playing risk-off are looking for places to put their money. Utilities (D, WEC), Staples (PEP, GIS, DEO), and with mixed results in Healthcare (JNJ up, MDT down). Those are the three Defensive sectors, in order of their defensive nature.

    T is down sharply. It definitely isn’t a utility, though I’m fine if somebody wants to put it lower down in the Defensive spectrum.In any case, the overall trend of the market continues to be strongly negative. We’ve lost 10% off the SPY in three weeks, and that was off a peak that was already 5% below the September highs. I’ve said all along that this feels like 2007. SPY peaked at $157 in October 2007, then fell to $131 in January 2008. The market fell 17% over a period of three months. But that was basically it for a while! It bounced around for the next six months, a little higher and a little lower, but in August 2008 it was still hit that same $130.

    That is where I feel the market is at right now. Red volume will eventually be followed by green volume — and if you buy on those green weeks you stand a decent chance of catching a short-term bottom. Right now we are looking at three consecutive red weeks, on volume, and the last green week that WASN’T light volume was at the end of October. Which was a decent time to buy for a quick one-month trade.

    But those are momentum signals, meaningful only to traders. It tells you nothing about the valuation of the stocks you might be considering, and nothing about their long-term prospects. I’m not seeing anything yet that calls into question the future of high-quality holdings.

    That said, I’m focusing on defense until I see evidence of at least a near-term bottom. I will then consider putting a little more cash into the sensitive sectors, either as a long-term value buy or (if the market delivers) as a short-term trade. I see no rush to add to Industrials or Technology until the selling pressure eases.”

    ENG, GAS, MAP, REE, REP, SAN, AAPL, BEP, CAH, CVS, D, DIS, ENB, FLO, GIS, HRL, IBM, JNJ, KHC, LB, MMM, MO, O, PEP, PG, PM, QCOM, SO, T, TGT, VFC, XOM, DGE, GSK, IMB, NG, RDS-B, RIO, VOD, AD, BMW, ENGI, VIE, AzValor internacional FI, Cobas internacional FI, Magallanes Microcaps Europe, True Value.

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    #47064

    Luis G.
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    “Should not be shocking that the Fed raised rates again. As I wrote a day or two ago, that is the correct decision and supported by the current data. The Fed is not in charge of keeping bull markets running in perpetuity. Nor is it responsible for keeping the Tweeter-In-Chief happy.

    The market seems to be taking this as a threat to the US Consumer. The Discretionary stocks continue their slide — it is hard to believe that NKE was trading over $86 recently. Now it is under $70. Similar pressure on VFC and AAPL (which is caught atween two sectors, Tech and Discretionary). SKT seems to be taking it on the jaw, though utilities and other REITs seem to be holding up okay.

    I added to GIS today. Might be adding a little to utilities in a few weeks. I’m at least open to the idea of adding to healthcare, and like the current value in both CVS and JNJ.

    I know other people are seeing bargain prices in the Industrials, but I’m not looking to add to cyclic stocks at this point. (Not selling out of them either, just holding and waiting.) It is important to me to maintain the Defensive posture of my portfolio, with 45%-50% in the Defensive sectors and the rest in companies with long-term brand strength. If I were buying Industrial companies today, I would focus on financial strength and brand strength first and foremost, largely disregarding P/E.Remember that P/E as a value indicator is only as good as the estimates of forward earnings. There is a general principle in computing — garbage in, garbage out. If you are computing a ratio based on an unreliable number, then the result of that ratio is unreliable.”

    ENG, GAS, MAP, REE, REP, SAN, AAPL, BEP, CAH, CVS, D, DIS, ENB, FLO, GIS, HRL, IBM, JNJ, KHC, LB, MMM, MO, O, PEP, PG, PM, QCOM, SO, T, TGT, VFC, XOM, DGE, GSK, IMB, NG, RDS-B, RIO, VOD, AD, BMW, ENGI, VIE, AzValor internacional FI, Cobas internacional FI, Magallanes Microcaps Europe, True Value.

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    #47065

    Luis G.
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    “The bottom is defined by momentum, not value. I sold off pieces of my AAPL position on position size and value:
    7/28/16 @ $104
    4/21/17 @ $142
    5/15/17 @ $155
    12/13/17 @ $173
    12/19/17 @ $175
    1/22/18 @ $178

    Since then I’ve been maintaining the position, nibbling around the edges:
    buy: 2/9/18 @ $152
    sell: 8/13/18 @ $227 (this reversed the buy)
    buy: 11/2/18 @ $207
    buy 11/12/18 @ $194

    Now it is down to $160… If I liked it at $200, then I love it at $160. Nothing fundamentally has changed about the company or its long-term outlook. But at this point the downtrend is undeniable, and the upside movements are on light volume. I have space in the position to add again. I have cash in the account to add again. But I’m not going to add again until I see some hint that the momentum has shifted. It does look like a bottom might be in, but I want to see an upside move first before pulling the trigger on what might be my last AAPL buy.I won’t catch the bottom that way. In fact I’ll probably miss it by $10/share. But I stand a decent chance of avoiding the downdraft.”

    ENG, GAS, MAP, REE, REP, SAN, AAPL, BEP, CAH, CVS, D, DIS, ENB, FLO, GIS, HRL, IBM, JNJ, KHC, LB, MMM, MO, O, PEP, PG, PM, QCOM, SO, T, TGT, VFC, XOM, DGE, GSK, IMB, NG, RDS-B, RIO, VOD, AD, BMW, ENGI, VIE, AzValor internacional FI, Cobas internacional FI, Magallanes Microcaps Europe, True Value.

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    #47066

    JordiRP
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    “La parte inferior está definida por el momento, no por el valor.

    Vendí piezas de mi posición AAPL en tamaño y valor de posición: 7/28/16 a $ 104

    4/21/17 a $ 142

    5/15/17 a $ 155

    12/13/17 a $ 173

    12/19/17 a $ 175

    1 / 22/18 @ $ 178

    Since then I’ve been maintaining the position, nibbling around the edges:

    buy: 2/9/18 @ $152

    sell: 8/13/18 @ $227 (this reversed the buy)

    buy: 11/2/18 @ $207

    buy 11/12/18 @ $194

    Ahora ha bajado a $ 160 … Si me gustó a $ 200, entonces me encanta a $ 160. Nada ha cambiado fundamentalmente sobre la compañía o su perspectiva a largo plazo. Pero en este punto, la tendencia bajista es innegable, y los movimientos al alza son en volumen ligero. Tengo espacio en la posición para agregar de nuevo. Tengo efectivo en la cuenta para agregar nuevamente. Pero no volveré a agregar hasta que vea un indicio de que el impulso ha cambiado. Parece que podría haber un fondo, pero quiero ver un movimiento al alza antes de apretar el gatillo en lo que podría ser mi última compra de AAPL. No atraparé el fondo de esa manera. De hecho, probablemente lo perderé por $ 10 / acción. Pero tengo una buena oportunidad de evitar la corriente descendente “.

    Me ha hecho mucha gracia esta última parte. Desde que Apple perdió los 180 Dólares tengo una liquidez guardada para entrar. Y al contrario de lo que suelo hacer con la mayoría de mis acciones DGI, ando esperando a que me dé señal de que la caida ha acabado. También es bastante probable de que no acierte con ello. Pero me parece muy interesante lo que dice este hombre.

    Voy a ponerlo en seguimiento en SA.

    “Trato de invertir en empresas que puedan ser manejadas por cualquier idiota, porque, tarde o temprano, algún idiota va a manejarlas”

    #47067

    Luis G.
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    Jordi, te pongo lo que ha escrito acerca de CVS.

    Suele ser muy cauto con sus compras y apuestas. Esta es una de ellas.

    “Judge Leon hasn’t yet given the final stamp of approval for the CVS/Aetna merger, however the company offered a slate of proposals to alleviate his concerns, and he appeared to view them favorably. It doesn’t sound like the merger will be derailed (or forcibly separated) at this point, and the shares are the cheapest we’ve seen since August. Remember, this is a defensive company with a yield pushing 3% (and the potential for large dividend increases once they clear the debt). There are definitely credit and integration risks, but an attractive buy at these levels — along with so many other stocks. When defensive stocks are this cheap, I feel less urge to chase the cyclicals”

    ENG, GAS, MAP, REE, REP, SAN, AAPL, BEP, CAH, CVS, D, DIS, ENB, FLO, GIS, HRL, IBM, JNJ, KHC, LB, MMM, MO, O, PEP, PG, PM, QCOM, SO, T, TGT, VFC, XOM, DGE, GSK, IMB, NG, RDS-B, RIO, VOD, AD, BMW, ENGI, VIE, AzValor internacional FI, Cobas internacional FI, Magallanes Microcaps Europe, True Value.

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    #47091

    Ruindog
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    Hablando de “Accidental High Yielders” (Companies taken down solely by market sentiment, not lack of earnings and revenue. Not for lack of guiding future performance higher”). No deja de ser sorprendente que un americano meta tres empresas suizas en el listado

    Yields over 5%: GIS, IBM, T
    Yields between 3.5% and 5%: NVS, RHHBY, UPS, ETN, QCOM, XOM
    Yields between 3.0% and 3.4%: NSRGY, CVS, GPC, CSCO, PG, ITW, KO, PEP, UL, EMR, KMB

    I don’t follow them all, and I believe the first three are speculative and bear watching, but those are some pretty good companies at pretty good yields. My top names for five-year total return are (in order from best down to 12%): IBM, CVS, T, AAPL, INTC, AXP, ETN, UPS, QCOM, WBA, LOW, UNP, XOM, BA, EMR, CSCO, UTX — all appear to have the potential to deliver 12%+ gains if the economy stays healthy. Given that all of the above appear to have the potential to generate excellent forward returns from this point, I would filter this list by quality and fundamental performance, NOT buy whatever appears to be cheapest.If you reach for something that calculates to a 15% return and then it knocks estimates down by 20%, you will end up with a lower return than something that projects to 12% and delivers a beat-and-raise. Buy strength from this list!

    FWIW, the next two on my chart are JNJ and GIS. Those are also the two best valuations on truly defensive stocks (depending on how you see CVS and WBA). Buying JNJ today promises a 11.5% annual return over the next five years. Hard to go wrong with that recipe!

    Un optimista es un pesimista mal informado

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    #47092

    Mr.J
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    Me parecen muy interesantes las opiniones de Ted Fischer. Esperemos que esta corrección, en caso de que no tengamos un cambio de tendencia bajista, aguante lo suficiente para poder ir generando más liquidez e ir comprando estas excelentes compañías.

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    #47116

    Luis G.
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    “As a value investor myself, I’m going to push back on valuation!

    Valuation isn’t simple, it isn’t straightforward, and it isn’t the same for every investor. It is a matter of choosing between A and B, of aligning a portfolio with your personal goals, and of emphasizing the elements that you wish to emphasize! My valuation formula has changed over the years, partly in response to market conditions and partly in response to what I wish to emphasize. Nothing wrong with that! An investor who can’t keep up with changing markets and succeed in both bull markets and bear markets is a poor investor.

    Quality is a key aspect of valuation. It also isn’t simple, isn’t straightforward, and isn’t the same for every investor. Quality tends to be more constant than share prices (anything is more constant than share prices!!!), but it does change over time.

    The flip side of Quality is Risk — and risks are constantly changing. A year ago, the major risk for GIS was flagging sales. Now the major risk for GIS is the massive debt load taken on to address flagging sales. Perhaps in another year or two their major risk will be inflationary input costs? Who knows?

    Mr. Miller’s writes, “When you think about it, the view that a particular stock is undervalued can only be seen as sheer arrogance.” Yet the logic that leads him to that conclusion is deeply flawed. It implicitly assumes that all investors share the same goals, the same concerns, and the same time frame. Anybody who writes a line like that should logically invest only in index funds — because it is sheer arrogance to believe that you are any different from anybody else. Happily I am a highly arrogant person, so I can own that comment and do my own thing.

    Understand that the stock market doesn’t consist of a secretive cabal that determines the daily price of each security. It is driven by buying and selling. If there are 3B share of JNJ outstanding, then the price will adjust until it finds buyers for those 3B shares. Any time there are more buyers than people willing to sell, the price will rise. Any time there are more sellers than people willing to buy, the price will fall. The point is that there are ALWAYS investors good for 3B shares of JNJ at the current price. And there are always plenty of other potential buyers who have chosen to put their money elsewhere. JNJ represents just 1/60 of the total market cap (rough ballpark, I don’t care enough to get the number exact), so $59 out of every $60 invested in US stocks is NOT invested in JNJ.

    Now valuation is constantly changing, right? Over the last 10 quarters, it has traded at anywhere between 14x and 18x forward earnings. It has never carried the lowest P/E in my portfolio. It has never had the highest yield in my portfolio. Nonetheless, I’ve consistently seen it as fairly valued or attractively valued over that time frame. I like the business structure, with diversified revenue streams across pharma, devices, and consumer products. I love the pristine credit rating and high earnings quality. I admire the consistency and predictability over the years, even when marred by scandal. As a result, I place a much higher personal valuation on JNJ than I do on other companies. That doesn’t mean that I believe I am smarter than anybody else, that everybody else is wrong. It means that I believe I am better able to determine what is right for me.

    And that is what it comes down to. What do you value? Fat current earnings? Then look at P/E. Fat dividends? Then look at yield. Growth? Consider the business plan and future prospects of the company. Quality? Look at credit ratings or quality scores. Safety? Consistency? Those can be incorporated as well. Your valuation metric will be different from mine. I try to be open about my approach, not because I desire to convert anybody else but because that information is essential for you to properly interpret what I say. Everything is filtered through my personal point of view.

    Finally, recognize that the market can (very loosely) be characterized as a tension between value and momentum. Value investors want to own what is cheap (by whatever yardstick they choose). Momentum investors want to own what is hot (again by varying yardsticks). Chowder leans more towards Momentum than I do. I’m definitely in the Value camp, though I’ve learned to incorporate a little balance into what I practice. To the extent that a stock is driven by Momentum investors, it will not be a good value. When it is attractive to Value investors, it will not be riding a wave of success. If you want to buy good values, accept that you will be owning a lot of companies that are going through transitions and struggles. Turnaround stories. You can make good money that way, but it comes with risks if taken too far. You don’t want to pack your portfolio with weakness. The *BEST* time to be looking for value is when a broad market action is pulling everything down, both strong and weak. You still are buying into negative momentum, but the momentum is defined by broader political and economic fears rather than necessarily indicative of specific company weakness.”

    ENG, GAS, MAP, REE, REP, SAN, AAPL, BEP, CAH, CVS, D, DIS, ENB, FLO, GIS, HRL, IBM, JNJ, KHC, LB, MMM, MO, O, PEP, PG, PM, QCOM, SO, T, TGT, VFC, XOM, DGE, GSK, IMB, NG, RDS-B, RIO, VOD, AD, BMW, ENGI, VIE, AzValor internacional FI, Cobas internacional FI, Magallanes Microcaps Europe, True Value.

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    #47119

    Faemino
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    Muy buen hilo Luis G.

    Los novatos aprendemos enormemente con estas cosas.

    Gracias mil.

    ITX / IBE / MAP / EBRO / REE / P&G / T / GIS / BEP / BATS / MO

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    #47190

    Luis G.
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    Ayer publicó en SA su cartera.

    Pongo el enlace, pero como los artículos dejar de ser accesibles a los 15 días, lo copio y pego aquí.

    https://seekingalpha.com/instablog/996169-ted-fischer/5253483-surveying-portfolio-domestic-equities-2018

    Surveying My Portfolio: Domestic Equities 2018

    Summary

    A survey of what we hold and in what size.

    A brief summary and explanation of trading activity over the year.

    A review of those eliminated from the portfolio.

    It has been over a year since I last laid out our portfolio in a series of blog posts. How has it evolved since then? Our domestic equities (excluding utilities and REITs) were listed here.

    8%+ positions: JNJ, AAPL, DIS

    JNJ continues to be our largest and oldest holding, and one that I have neither bought nor sold since 2015. It once again takes the lead spot, again with a 10%+ weighting. If I had available cash, I would consider increasing that further.

    While we have traded AAPL more frequently, with four purchases matching four sales, it remains solidly in the #2 position. We have added 200 shares in the last two months, and believe it to be a terrific bargain at the current price. I have a high conviction in the future of the company that reaches well beyond the current quarter’s device sales.

    Disney has been a key piece of our portfolio since 2014, and with a purchase in June has now cemented itself in the #3 spot. I am willing to trim this one a little, if it reaches full value, but thus far have been content to write call options on the last 100 shares, for a net gain this year of a little over $500 — a nice “dividend” for owning a stock while waiting for it to reach my trim price.

    5% positions: PG, KMB, MMM, CVS

    As with J&J, I am slow to trade PG. We have held this position since 2009, and neither bought nor sold in the last year. It is not an exciting company, but one that I am comfortable holding in size under any market conditions. I have been tempted to trim a little, to be sure, but where else can I find a company this reliable to stabilize my portfolio?

    KMB is a similar company, in some ways, but new to my portfolio as of last December. Since our initial purchase (in two chunks a month apart) we have simply held and collected dividends, again not tempted to trade this steady giant. In theory, anything is for sale at the right price. In practice, it is unlikely that anybody would offer me enough to part with this one. (I would need to see a price north of $140.)

    While CVS remains one of our largest positions, the path has not been smooth. We trimmed the position by 50% in January, at $79/share, due to concerns over credit quality and merger uncertainty. Those fears have eased over the past year, as the company has continued to turn in solid revenue and earnings, and as the merger has proceeded more or less according to plan, while the shares have retreated more than 20% from my sell point. This remains a speculative position, but one where I believe management has a clear plan to lead the company forward. Thus we restored 2/3 of the trimmed shares, at an average price of $63/share, and I would at least consider adding back that final third if I had cash available (and if no other shiny bauble catches my eye).

    4% positions: MSFT, GIS, INTC, UNP, HON

    As I discussed last year, I continued to build out our position in MSFT with two additional purchases followed by a small trim. Microsoft is a great company, in the middle of a strong growth spurt, but the stock is pretty expensive. I hesitate to trade these shares, due to what I see as a bright future for the company, but the current position is as large as I am willing to hold for a company with these characteristics. If it were to appreciate substantially from here, I would need to trim it back even further (and in fact this is what happened to last year’s growth darling, NKE).

    A year ago, I wrote that I’m not sold on GIS as a “core” holding (and thus held it as a 2.5% position). To address the growth concerns that I identified at the time, they acquired Blue Buffalo in a hugely expensive deal that devastated their credit rating. I sold on the announcement at $52.67, locking in a $1500 loss, but have since repurchased  an even larger position at an average cost of $42. As with CVS the price makes a difference, and a 20% discount can be the difference between a sell and a buy. As with CVS, the added information from a few quarterly reports and a detailed operational outlook has given me confidence in the direction of the company that was lacking at the time of the sale. To me, these companies are worth MORE today than when I sold them, yet the price is much lower. Go figure!

    We previously owned INTC for a little over a year in 2013-2014, selling on valuation concerns after the price ran up. I consider it a high quality company, though admittedly in a volatile industry, and thus the recent dip in valuation was too much for me to pass up. Like MSFT the position size will be capped, forcing trims if it appreciates by 25% or more from here, but it is a company I am comfortable to hold long-term at this size.

    Little to say about UNP and HON. They are both held in our taxable account, and thus not subject to trading at this point. (Though we did gift some of the UNP shares and then repurchase them.)

    3% positions: SBUX, AMGN, HRL, NKE, ITW

    SBUX was built according to the plan described, and is now at a full/permanent position. AMGN has not been traded over the past year. Not much to say about either one…

    HRL has been traded actively. We closed out the position a year ago, with two sales at an average price of $36.50, then reopened the position over the next two months with two purchases at an average price of $34. We have since trimmed it back with two sales at an average price of $40. I never owned HRL before 2017, so I do not have strong feelings or an especially high degree of comfort with the company. Thus I am open to buying on dips and selling on spikes, as the trading activity suggests. What remains here is likely a permanent position — but I say that with less conviction than some of the companies I have held longer.

    NKE has been a substantial holding of ours since 2016, and was briefly one of our largest, however I am uncomfortable keeping max positions of a company with a P/E over 25, and trimmed in three sales at an average price of $70. No matter how successful they are or how strong their brand, it is a poor fit for my portfolio parameters and skews the overall averages. That said, I am comfortable holding a 3% position while ignoring the valuation, and I will happily add more if the price retreats to a level where I am comfortable again.

    ITW is new to our portfolio, a company that I have long admired but which never previously made the cut. I find the dividend attractive after the recent bump, and am happy holding it at this level while I learn more about their operations.

    2% positions: PEP, VFC, UTX, SYY, T, GPC, XOM, CSCO1% positions: BRK.B

    Not much to say here… PEP and BRK.B are new additions, ones I will likely build over the next year. CSCO is another that I would like to build a little further. VFC, UTX, and SYY were all trimmed due to valuation at prices well above their current levels, though I have no concerns about their operations. T is now considered in this category, while previously I had it classified as a “utility”.

    Eliminations

    Notable in their absence are the five stocks you saw last year that are no longer listed: BDX, MKC, LOW, IBM, and GE.

    I sold BDX on credit quality concerns. It may be a great company, but it was selling at a premium valuation that entirely discounted the credit risk from the massive debt load it took on. I will consider it again once the debt moderates, but the combination of very low credit quality and high valuation made it a clear sell for me.

    I sold MKC strictly on valuation. I saw no way to possibly justify $155/share, and in fact trimmed it twice even before that level. It is a strong company, one of the key Consumer Staples, but there is a price for everything — and I won’t even look at that one again until the forward P/E falls below 24.

    LOW is a fine company, one that I’ve owned for three short (profitable) stints, but it is not a core holding for me and not likely to become one. I would continue to treat it as a trading position if the opportunity arose.

    IBM was a bad mistake. I bought a year ago at $153, then sold following the debt-funded acquisition of Red Hat at $118. I am willing to patiently own a company that is working through challenges, but not willing to ride that pony once the managers start stacking on debt. As with GIS, I might be willing to re-enter at the right price, if it were possible for me to develop any confidence in management’s ability to operate the company. At this point that would likely require a new CEO.

    GE was also a bad mistake, though happily a little less expensive (because I bought less in the first place). I grossly underestimated the severity of their problems, buying at $18.90 and selling at $15.40. I guess I could consider buying back in today at $7.50, but I would rather own companies that are successful rather than speculate that this piece of junk might be worth a little more than nothing.

    Conclusion

    As you can see, I am a sucker for value traps… Happily I seem to do well enough with QUALITY companies to make up for those bad mistakes, and I’ve learned to be quick enough on the trigger that I no longer ride my mistakes all the way down the slide. Overall, our “domestic equities” listed above have delivered a 2.20% return YTD and a 5.57% IRR since the last blog of this category, published 11/25/17. The S&P500 has delivered a -5.99% return YTD and -3.96% return 11/25/17, so it seems that my holdings have “beat the market” over that period? That is likely due to the emphasis in the portfolio on quality and defense, that should generally hold up well in weak markets.

    I am comfortable with my portfolio as it stands. There are several positions I would like to build further, either to bring them up to size (PEP, BRK.B, CSCO) or due to value at this time (JNJ, AAPL, CVS), but our ready cash has already been spent and thus further purchases will be gradual. I could in theory look for something to sell, but for now am inclined to watch how things develop. The quarterly earnings season, and revised outlooks, will inform that process.

    Disclosure: I am/we are long MMM, AMGN, AAPL, T, BRK.B, CSCO, CVS, DIS, XOM, GIS, GPC, HON, HRL, ITW, INTC, JNJ, KMB, MSFT, NKE, PEP, PG, SBUX, SYY, UNP, UTX, VFC..

    ENG, GAS, MAP, REE, REP, SAN, AAPL, BEP, CAH, CVS, D, DIS, ENB, FLO, GIS, HRL, IBM, JNJ, KHC, LB, MMM, MO, O, PEP, PG, PM, QCOM, SO, T, TGT, VFC, XOM, DGE, GSK, IMB, NG, RDS-B, RIO, VOD, AD, BMW, ENGI, VIE, AzValor internacional FI, Cobas internacional FI, Magallanes Microcaps Europe, True Value.

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    #47191

    Ruindog
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    Topics: 29
    Replies: 1082

    Y esta era su cartera internacional a finales del 2017. Lo de MDT y ETN es un poco extraño ya que pese a tener residencia fiscal en Irlanda (retención del 20%), cotizan en el NYSE sin ser ADRs

    20% positions: MDT, DEO
    16% positions: UL, NVS
    12% positions: NSRGY
    8% positions: ETN, RHHBY

     

    Un optimista es un pesimista mal informado

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    #47260

    Luis G.
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    Replies: 350

    “I don’t want to dissuade young folk from learning and practicing DGI. Our personal investments have always followed a similar style, even if I originally learned it as “Growth and Income” investing. The idea of buying quality companies that pay stable dividends is not new!

    On the other hand, both Growth and Income matter to the young investor. The Income becomes very important when you start needing it in retirement, but up until that point there is more than one way to grow the income stream. You can contribute new money, reinvest dividends, or benefit from growing dividends. Best if you do all three!

    You’ve seen the various calculations comparing higher initial yield and higher growth. You know that it will take 20 years for Microsoft (yielding 1.83% and growing at 10% per year) to pass IBM (yielding 5.55% and growing at 4% per year) in yield-on-cost. After which people reasonably conclude, “How likely is it that Microsoft will sustain a rate of dividend growth that high for that long?” And thus determine that they prefer the “bird in hand” to the one that might be in the bush 20 years from now.

    But I believe this is only half the equation. As a total return investor, who is not yet drawing dividends, my growth factor is equal to the sum of the dividend yield and the growth rate. That is certainly the growth rate of the dividend income when reinvesting, but if the yield is constant then it also becomes the growth rate of the underlying investment. In the above scenario, using those numbers, Microsoft might be expected to grow at a rate that is 2% greater than IBM. And that difference adds up over time!

    Yet that brings us back to the fundamental question. Do we want to maximize the dividend payment in 20 years? Or maximize the portfolio value in 20 years? Again using the assumed numbers, an investment of $10k today in MSFT might generate $1700 in annual dividends after 20 years. An investment in IBM might generate $3400 in dividends. But (again assuming a constant yield), that MSFT position would grow to a value of $94k while the IBM position would only grow to a value of $62k.

    Now I definitely want those dividends! My intention is to fund our retirement from the dividends, without needing to sell shares. Yet this is also exactly why I am a total return investor! Because the best way to enjoy fat dividends is not to invest in something that pays a fat dividend today — it is to invest in something that grows over time, then trade it for something that pays a fat dividend in 20 years! Chowder does this all the time with the older folk he helps, trimming some of the lower-yield positions, buying higher-yield positions, and thus generating the requisite income.

    I have been doing that as well, almost without realizing it, shifting slowly from growth to income over the last five years. I noticed that our dividend income bumped up over 20% last year. The dividend income from our brokerage retirement accounts (for cleanest comparability) increased by 27% last year! A one-time exception? I thought so at first, yet the five-year average DGR for those accounts is a ridiculous 20%!!! And I could continue this for a few more years if I really wanted — we still have a third of our money in stocks yielding less than 2.5%.

    So I’m definitely not arguing that you should ignore dividends. They are a key part of long-term investment success for almost any strategy, the element that makes stock investing more than just a casino. Nor am I arguing that Utilities and Consumer Staples are only for the old. Individual investors should begin with defense, the rocks on which the rest of their portfolio depends. But don’t neglect growth, and (especially in a tax-advantaged account) acknowledge the potential to shift towards greater income production in your 40s and 50s. Even in a taxable account this shift can be achieved through a combination of judicious trimming and reinvestment of dividends into different securities.

    Chowder may disagree with much of the above, arguing that it is too complicated to learn one style of investing and then shift to another, however for me it has neither been a dramatic shift nor a rapid one. It has been more of a gradual change in emphasis than anything else, an evolution rather than a revolution.But the one point he and I absolutely agree on — don’t let anything get in the way of owning great companies. Don’t be swayed by P/E or yield or market volatility. Buy quality, buy strength, and build those winners over time!”

    ENG, GAS, MAP, REE, REP, SAN, AAPL, BEP, CAH, CVS, D, DIS, ENB, FLO, GIS, HRL, IBM, JNJ, KHC, LB, MMM, MO, O, PEP, PG, PM, QCOM, SO, T, TGT, VFC, XOM, DGE, GSK, IMB, NG, RDS-B, RIO, VOD, AD, BMW, ENGI, VIE, AzValor internacional FI, Cobas internacional FI, Magallanes Microcaps Europe, True Value.

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    #47261

    Luis G.
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    Replies: 350

    A raíz del último comentario, conversación Chowder-Ted:

    CHOWDER:

    “The problem here is that most people engaging in the dividend growth investing strategy have not been through a recession yet. I’ve been through 3 of them, and each time lost almost half of my portfolio value, that growth that people so often chase. I got tired of fighting for the same ground twice.

    After I went through the second recession, I was ready for the third. In my greed to chase portfolio value growth, what I finally realized was that when the market corrects your share price, it doesn’t correct your share count.

    The amount of dividend cash flow a $100K portfolio generates, is the same amount of dividend cash flow when the market corrects the portfolio value to $60KThe market does not correct share count and it’s the number of shares that you own that determines how much cash you can generate to reinvest.

    Share count! … Build it! … We can’t control portfolio value, we can only hope. We can control share count and with that it means we can control how much cash we can raise for reinvestment. Work with what you can control.”

    TED:

    “there is a reason I emphasize quality, strength, and defense! I’m also not talking about the usual crowd of high-fliers. I’m talking about established companies with outstanding histories — yet people are passing them by because they don’t yield over 3%?!? No MCD. Toss JNJ on the trash pile. Eliminate “low yielding” MMM from your portfolio. Sure, you can find companies with a 5% yield today, but if you pass over quality in the chase of current yield, are you really doing yourself a favor? Even in a recession?

    And yes, I am also talking about including a few companies like NKE, MSFT, and AAPL in the mix. Quality companies with strong brands, if a bit more volatile than some. I haven’t noticed anybody correcting my share count in those either…I know you do not make this mistake in the portfolios you manage. Even if you are focused on income, you understand the value of a lower-yielding company that is growing the income successfully over decades. You have mentioned some of those for your son. Yet I see others confusing the emphasis on income with an emphasis on CURRENT income, ending up with lower-quality portfolios (with weak growth prospects) in the process. That will not serve them well, or grow their income stream through a recession.

    Remember that “growth” does not necessarily refer to portfolio value. It can refer to DIVIDEND growth or EARNINGS growth as well, two things that the market does not take away in a correction. Dividends are a piece of cash flow, but there are strong companies with strong cash flow that choose to spend much of it in other ways rather than paying a high yield. A younger investor can benefit from some of those.

    I absolutely agree with the focus on the fundamentals. A young investor is buying, not selling. Build share count and grow your ownership in world-class companies and you will be rewarded. A market correction is an opportunity, not an obstacle.

    CHOWDER:

    “I agree with your statement that I highlighted in this comment and have shown that the younger folks should not focus on yield, but to be sure any company they purchase at least pays a dividend and is considered a high quality company. It was one of my 4 criteria for purchasing a company, and moments ago I added that I was going to purchase more shares of NKE either today or tomorrow and its yield is just 1.2%. Next purchase after that will be HD with a yield of 2.4%.

    I try to create balance when working with young folks. I try to take advantage of both higher yielding companies, those above 3%, with some of the lower yielding companies that seem to have higher dividend growth for now. I don’t know how long it will last which is why I sprinkle in some higher yielding companies.”

     

    ENG, GAS, MAP, REE, REP, SAN, AAPL, BEP, CAH, CVS, D, DIS, ENB, FLO, GIS, HRL, IBM, JNJ, KHC, LB, MMM, MO, O, PEP, PG, PM, QCOM, SO, T, TGT, VFC, XOM, DGE, GSK, IMB, NG, RDS-B, RIO, VOD, AD, BMW, ENGI, VIE, AzValor internacional FI, Cobas internacional FI, Magallanes Microcaps Europe, True Value.

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    #47275

    Mr.J
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    Replies: 306

    Muy bueno el debate entre estos dos grandes.

    Me ha recordado al hilo que creo hace tiempo Lluis sobre “Bajos dividendos muy crecientes VS altos dividendos poco crecientes“.

    Sigo pensando lo mismo que ya pensaba hace un tiempo. Prefiero acciones con un rendimiento medio/alto (>4%), moderados incrementos (<10%) con un gran negocio pero maduro a empresas con un rendimiento bajo (<4%), incrementos elevados (>10%) y un negocio todavía por crecer.

    Esto no quita que deseche las acciones de bajos rendimientos, de hecho, en esta bajada solo he comprado ese tipo de empresas porque tiene niveles muy difíciles de ver. Amén de que prefiero hacer un mix de ambos tipos de empresas puesto que me da más seguridad.

    Cuando se empieza en el mundo de la inversión, y más concretamente en la inversión en dividendos, puede llegar a frustrar mucho ver lo despacio que va todo, más todavía si se compran acciones con RPDs <3%, ya que tras pasar por hacienda, el resultante es bastante ridículo. Tampoco creo que lo más inteligente sea comprar negocios que dan rendimientos superiores al 7%, 8,%, 9%, solo porque sí, sin ver que tipo de negocio o coyuntura tiene la empresa actual, ya que puede darnos más de un disgusto.

    De manera totalmente personal, estoy más cómodo cuando hago un mix entre empresas que dan altos rendimientos y bajos aumentos de los mismos (y también de su principal), a empresas con bajos rendimientos, altas subidas de dividendos (y altos aumentos del principal), porque, como bien han dicho, el factor común de ambos tipos de empresas tienen que ser un gran negocio y además, en las crisis el principal se deteriora mucho (que no el negocio en si), mientras que la cartera de dividendos sufre menos (sé que esto también tiene replica, pero bueno…).

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    #47319

    Luis G.
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    Replies: 350

    El hilo de Lluís y el que comentas de “Bajos dividendos muy crecientes VS altos dividendos poco crecientes“ son de obligada lectura cada cierto tiempo.

    Te doy toda la razón. En la cartera hay sitio para ambos tipos de empresas, primando la calidad.

    ENG, GAS, MAP, REE, REP, SAN, AAPL, BEP, CAH, CVS, D, DIS, ENB, FLO, GIS, HRL, IBM, JNJ, KHC, LB, MMM, MO, O, PEP, PG, PM, QCOM, SO, T, TGT, VFC, XOM, DGE, GSK, IMB, NG, RDS-B, RIO, VOD, AD, BMW, ENGI, VIE, AzValor internacional FI, Cobas internacional FI, Magallanes Microcaps Europe, True Value.

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    #47930

    Luis G.
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    Replies: 350

    “After a busy December, I’ve been sitting back a bit the last few weeks. Our last portfolio purchases were AAPL on December 21 and CVS on December 24.

    I find that I am reluctant to add to our larger positions at this time, as they are already substantial. Thus I will be taking a closer look at our smaller positions, possibly eliminating some while adding to the rest.

    We have 11 positions that are less than 2.0% of the portfolio at this time. From smallest to largest: BRK.B, RHHBY, CSCO, XOM, GPC, SYY, T, PEP, VFC, NSRGY, UTX.

    BRK.B — presently 1% of the portfolio, will look to add to this gradually over time until it is in the 3% range.

    RHHBY — I have limited knowledge and spare analysis on this one. I like the company okay, and it has turned in a small profit over the last year and a half, but I don’t understand the business dynamics enough to build this one further — and thus will consider eliminating it entirely.

    CSCO — this falls into the, “how the heck haven’t I built it yet?” bucket. I need to push some money this way soon.

    XOM — Own it because I feel I’m supposed to own at least one energy/resources stock. Solid company, the industry leader. Not interested in building it, but if I sold it then I would likely feel compelled to buy it again.

    GPC — Solid company but not really something I want to build. It can remain for now, but I’m willing to sell if I get a good price. I might sell before then to raise money to add elsewhere. 30 minutos más tarde pone “Sold out of GPC. I was actually thinking of doing so in November, and wrote options to that effect, but then the market correction got in the way. A nice 12% IRR over a 13-14 month holding period, so I’m obviously pleased with the results. It is a good company. But I don’t love retail/distributors in general and have other Industrials that I would preferentially own if I could find space in my allocation for them. ”

    SYY — One of my favorite companies. If T is a utility because its revenue is stable, then SYY is an uber-utility. Steady growth and a 2.5% dividend, promising a ~9% forward total return that you can bank on. May add to this when we make our Roth contribution.

    T — A cheap stock, but not one I have a heck of a lot of conviction in. They seem to be doing the right things. I own enough of this one.

    PEP, VFC, NSRGY, and UTX are all intentionally held at/around the 2.0% level. I would be willing to build PEP further, but do not feel any urgency to do so. VFC is not a great fit for my style and so is limited to this level. NSRGY is a fine company, but like RHHBY I have limited data on it. UTX is on freeze until the spinoff (and likely for at least half a year after).

    Thus I intend to add to BRK.B, CSCO, and SYY as funds permit. I will consider selling RHHBY and GPC, though neither is urgent. The rest can stay as they are.”

     

    Respuesta de Chowder acerca de GPC

    “In a young folk portfolio, I consider GPC a “must have” for the long term. I plan on increasing this position in not only my son’s account, but I do have it in some older folk portfolios as well.

    I love having access to the consumer dollar and that means I have to have exposure to retail. It’s those NAPA auto parts stores that are recession resistant, and I love owning recession resistant businesses, especially since I have been through 3 recessions.

    Since you Ted are a more active investor, I have to set portfolios up for those who will be more passive once I’m not able to manage their portfolios for them, so I have to think about companies that do better than others during poor economic times.

    New car sales go way down during recessions, people fix up their cars and hold them longer as a result. thus GPC is one of my favorite consumer discretionary companies, right there along side of VFC”

     

    Contesta Ted Fischer

    “I may be a more active investor, but that does not enter into this one. I am not selling GPC as a trade and do not believe it is overvalued at this time. I have no quality concerns. It simply isn’t a conviction position for me.

    Like you, I want “access to the consumer dollar”. I emphasize both Consumer Staples and Consumer Discretionary, believing that you can find some superior brands with staying power in that latter category. My Consumer Discretionary stocks include a large position in DIS and ~2% positions in SBUX, NKE, and VFC — all of which I believe have top-notch brand strength. AAPL also has some characteristics of a Consumer Discretionary company.

    We also own SYY, which (regardless of categorization) shares many of the same characteristics of GPC. Our first purchase of SYY was 6.5 years ago. Our first purchase of GPC was just over 1 year ago. Partly for that reason, and partly because I believe SYY is somewhat more defensive in nature, I am more comfortable with SYY and intend to build it — while I do not see GPC as one of my top five ideas in the sector.Nothing against GPC. If I were to own ten stocks in the sector, it would likely be one of them.

    I suppose I should note that I have different expectations for different sectors. When looking at Consumer Discretionary stocks, my foremost concern is the long term strength of the brand. I accept that the share price might get hammered in a recession (the sector tends to be somewhat volatile) but that doesn’t bother me.

    My overall portfolio weighting is sufficiently defensive that it will tend to hold up better than average in a recession. That is good enough for me, so I don’t need to push that trait further.

    I’m not looking for growth in Consumer Staples. I’m not looking for recession resistance in Consumer Discretionary. I’m not looking for dividend yield in Healthcare. Though I do try to consistently look for quality. :)”

     

    ENG, GAS, MAP, REE, REP, SAN, AAPL, BEP, CAH, CVS, D, DIS, ENB, FLO, GIS, HRL, IBM, JNJ, KHC, LB, MMM, MO, O, PEP, PG, PM, QCOM, SO, T, TGT, VFC, XOM, DGE, GSK, IMB, NG, RDS-B, RIO, VOD, AD, BMW, ENGI, VIE, AzValor internacional FI, Cobas internacional FI, Magallanes Microcaps Europe, True Value.

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