OT: Stock and Investment Talk

[rutgersdave]

Added a few shares of BRK.B, BDX, and UNH.

Brought today Pru 5%, O 4.6%, BEN 4.9% all at 52 week low yesterday. BEN and O are dividend aristocrat.

Building my portfolio 50% dividend stocks(averaging 5%) and 50% growth mainly large techs and medical.

Still waiting for the 25% probably in July when earnings come out and I guess lower projections for second half. I will have to hold the stocks for several years 3-4 to get a decent return.

 

[T2Kplus20]

Building my portfolio 50% dividend stocks(averaging 5%) and 50% growth mainly large techs and medical.

Very good strategy, common sense for the long hold.

 

[coloradoknight]

O 4.6%

O actually has "raised" their dividend every month for the last 10 years.

 

[rutgersdave]

O actually has "raised" their dividend every month for the last 10 years.

2024 Dividend Aristocrats List | Updated Daily | All 66 Analyzed

Immediately get a spreadsheet of all 66 Dividend Aristocrats now. The Dividend Aristocrats are stocks with 25+ years of rising dividends.

www.suredividend.com

The dividend aristocrats increased their dividend every year for 25 years. I use this site for reference for my dividend buys. I like to buy them when they get close to their 52 week low.

 

[RUinPinehurst]

Brought today Pru 5%, O 4.6%, BEN 4.9% all at 52 week low yesterday. BEN and O are dividend aristocrat.

Building my portfolio 50% dividend stocks(averaging 5%) and 50% growth mainly large techs and medical.

Still waiting for the 25% probably in July when earnings come out and I guess lower projections for second half. I will have to hold the stocks for several years 3-4 to get a decent return.

BDX seems expensive. P/E of 37.22
???

 

[rutgersdave]

BDX seems expensive. P/E of 37.22
???

It’s never goes down much and it’s getting close to 52 week low. I use to work there. I always want it to come down but it seldom does.

FXD PE is 19.5. In the past, PE use to be always 15-18.

This stock is like AAPL in the long term, look at its graph. $2 in 1985 now $238 in 2022. It’s a dividend aristocrat.

 

[FastMJ]

Well rates are affected by QT too, the biggest buyer of MBS and treasuries suddenly stops and reverses it's going to have a big affect on rates.

I know that. I was referring to the Fed Funds Target rate as opposed to the pacing of QT/FOMC tactics.

 

[rutgersguy1]

Millionaires are raising cash on fears that the Fed can't tame inflation and stave off recession

Millionaires surveyed by CNBC ranked inflation as the top risk to both the economy and their personal wealth.

www.cnbc.com

 

[rutgersdave]

Millionaires are raising cash on fears that the Fed can't tame inflation and stave off recession

Millionaires surveyed by CNBC ranked inflation as the top risk to both the economy and their personal wealth.

www.cnbc.com

Kind of late to be raising cash. Should have moved into cash before April 2022 when the S&P moved up to 4,600.

 

[rutgersguy1]

Kind of late to be raising cash. Should have moved into cash before April 2022 when the S&P moved up to 4,600.

It is late but you have no idea what cost basis of any particular security is and if we go lower to 3200 (my possible target) or even lower then you’ve saved yourself bigger losses possibly.

 

[RUinPinehurst]

Millionaires are raising cash on fears that the Fed can't tame inflation and stave off recession

Millionaires surveyed by CNBC ranked inflation as the top risk to both the economy and their personal wealth.

www.cnbc.com

CNBC is FOS....

"Millionaires own about 90% of the individually held stocks in the U.S. So far, they aren’t panicking or selling, according to the survey.

"But most are raising more cash and moving more money into short-term fixed income investments given rising interest rates.

"Nearly 40% of millionaires said they plan to make changes to their portfolio or have already made changes due to inflation, 44% said they have kept more money in cash, and 41% say they have purchased more fixed-rate investments. Of those surveyed, 35% said they have purchased equities and 31% said they have sold equities due to inflation and its impact on certain sectors and stocks."

Spare yourself from the mindless nonsense of CNBC, the ESPN of the financial world. Ask any investor with a sizeable portfolio: "Are you panicking"? You expect anyone of them to respond in the affirmative?

And they are selling, obviously. "31%" per the "survey."

 

[RU-05]

Brought today Pru 5%, O 4.6%, BEN 4.9% all at 52 week low yesterday. BEN and O are dividend aristocrat.

Building my portfolio 50% dividend stocks(averaging 5%) and 50% growth mainly large techs and medical.

Still waiting for the 25% probably in July when earnings come out and I guess lower projections for second half. I will have to hold the stocks for several years 3-4 to get a decent return.

Current % invested vs Cash?

 

[rutgersdave]

Current % invested vs Cash?

Still about 75% in cash moving to equity slowly. Most of my buys are at 52 week low for the stocks. There’s no hurry in buying, I still expect #S&P to go down to at least 25-30% when all stocks will continue to move lower. Maybe I’ll be at 50% cash at 30% and 30-40% cash at 35% down. I wouldn’t be surprised at 40% down because It’s going to be difficult to control inflation.

I am wondering about other posters % of cash vs equity. I know T2k and RUinPinehurst % but the % will tell the commitment to the market. Let’s see all those buy and hold investors say they are 80-100% in the market.

 

[RU-Hunter]

0.75 points it is

 

[Barnaby&Neill]

CNBC is FOS....

"Millionaires own about 90% of the individually held stocks in the U.S. So far, they aren’t panicking or selling, according to the survey.

"But most are raising more cash and moving more money into short-term fixed income investments given rising interest rates.

"Nearly 40% of millionaires said they plan to make changes to their portfolio or have already made changes due to inflation, 44% said they have kept more money in cash, and 41% say they have purchased more fixed-rate investments. Of those surveyed, 35% said they have purchased equities and 31% said they have sold equities due to inflation and its impact on certain sectors and stocks."

Spare yourself from the mindless nonsense of CNBC, the ESPN of the financial world. Ask any investor with a sizeable portfolio: "Are you panicking"? You expect anyone of them to respond in the affirmative?

And they are selling, obviously. "31%" per the "survey."

Good example of the psychology of the market. If you move to cash or fixed income right now, you’re essentially guaranteeing yourself negative returns on those moves. So why do it? Fear of equities.

Everyone’s situation is different, but if you’re in a position to take risk, these are typically the environments to take advantage of fear.

 

[RUinPinehurst]

0.75 points it is

It'll take the market a day or so to process this. After that, a further downward pattern begins. The Fed's next move will have to be at least another 75 bps. But 100 bps may be in order.

 

[rutgersdave]

It'll take the market a day or so to process this. After that, a further downward pattern begins. The Fed's next move will have to be at least another 75 bps. But 100 bps may be in order.

I want the market to move down to 35% as fast as possible so I can buy as much as possible. I’m not that patience. I think AAPL, MSFT, NVDA, AMZN, and ADBE still have to come down some more but The current prices aren’t bad.

 

[jtung230]

Good example of the psychology of the market. If you move to cash or fixed income right now, you’re essentially guaranteeing yourself negative returns on those moves. So why do it? Fear of equities.

Everyone’s situation is different, but if you’re in a position to take risk, these are typically the environments to take advantage of fear.

Or the market moves down another 5 to 10% and you just saved that much by staying in cash.

 

[rutgersdave]

Good example of the psychology of the market. If you move to cash or fixed income right now, you’re essentially guaranteeing yourself negative returns on those moves. So why do it? Fear of equities.

Everyone’s situation is different, but if you’re in a position to take risk, these are typically the environments to take advantage of fear.

I asked RUinPinehurst back in January his % in equity and he mentioned 10% but I just reviewed his answer and he also mentioned he had 20% funds/ETF which I didn’t see. At that time, I moved from 30% to 10% equity. The market didn’t feel good to me already. I did trade from Feb to today going to 20% back to 10% and again to 20%. My motto was always I take advantage of emotional investors when someone cries fire in the theatre and everyone is running out, I‘m running in.

 

[Barnaby&Neill]

Or the market moves down another 5 to 10% and you just saved that much by staying in cash.

The cash is getting negative real returns. I too would prefer to hold cash (eating those negative returns for a bit) until the exact bottom and then shove it all in. Typically psychology prevents that from happening (the people who say they’ll buy at -25%, don’t like what they see when they get there, and keep waiting)

Right now you can find quality businesses at a 20% - 25% discount. They may drop further, they may not. But history suggests there is more risk to under-allocation.

 

[RUinPinehurst]

I want the market to move down to 35% as fast as possible so I can buy as much as possible. I’m not that patience. I think AAPL, MSFT, NVDA, AMZN, and ADBE still have to come down some more but The current prices aren’t bad.

AAPL is interesting per its support level. Strong company, product line, and pipeline. But consumers may simply not have the $ to spend, so AAPL's #s may not be what they should be or could be thru 2023-24. Berkshire's next 13F: will it reveal an AAPL buy, sell, or hold this month?

While I had a position in AAPL, I sold it off at a slight loss but did add more BRK-B, which holds AAPL.

I have been buying recently, value and dividend equities. Defensive with two exceptions: AMZN and GOOG. But am now done for the time being, likely until late summer.

Every investor needs to proceed at his own pace and risk tolerance and per his own plan and means, and age.

 

[rutgersdave]

AAPL is interesting per its support level. Strong company, product line, and pipeline. But consumers may simply not have the $ to spend, so AAPL's #s may not be what they should be or could be thru 2023-24. Berkshire's next 13F: will it reveal an AAPL buy, sell, or hold this month?

While I had a position in AAPL, I sold it off at a slight loss but did add more BRK-B, which holds AAPL.

I have been buying recently, value and dividend equities. Defensive with two exceptions: AMZN and GOOG. But am now done for the time being, likely until late summer.

Every investor needs to proceed at his own pace and risk tolerance and per his own plan and means, and age.

Here’s my list of dividend stocks with their %, many are dividend aristocrats. I have about half of them already But need to increase number of shares.

DVN
7.2%DEA
5.68%MPW
6.4%VZ
5.17%BEN
5.03%LEG
5.12%VFC
4.4%IBM
5.14%WBA
4.75%C
4.44%PRU
5.1%MMM
4.14%GILD
5.05%MS
3.7%USB
4%ABBV
4.1%O
4.72%EPD
7.16%MRK
3.2%BTI

8.37%

 

[T2Kplus20]

0.75% as expected
Market up as expected

The market is extremely oversold. The slightest good news and the rally will be violent (and missed by most bears). Keep buying and plan for the turning of the tide.

 

[RUinPinehurst]

Shiller PE ratio for the S&P 500...

Current: 29.64 +0.43 (1.46%)
4:00 PM EDT, Wed Jun 15

Mean:	16.95
Median:	15.87
Min:	4.78	(Dec 1920)
Max:	44.19	(Dec 1999)

.

 

[phs73rc77gsm83]

Still about 75% in cash moving to equity slowly. Most of my buys are at 52 week low for the stocks. There’s no hurry in buying, I still expect #S&P to go down to at least 25-30% when all stocks will continue to move lower. Maybe I’ll be at 50% cash at 30% and 30-40% cash at 35% down. I wouldn’t be surprised at 40% down because It’s going to be difficult to control inflation.

I am wondering about other posters % of cash vs equity. I know T2k and RUinPinehurst % but the % will tell the commitment to the market. Let’s see all those buy and hold investors say they are 80-100% in the market.

82% equity, retired. Long term investor.

 

[jtung230]

82% equity, retired. Long term investor.

May I ask why such an allocation in equities?

 

[T2Kplus20]

82% equity, retired. Long term investor.

^^^^^ One of the best investors on this board. Steady, common sense, sticking to the plan. Well done.

 

[T2Kplus20]

FYI - The S&P Oscillator hit -7.0 yesterday. The most oversold market in 6 months. The market rarely gets this out of whack. Hope everyone is taking advantage of this.

 

[RUinPinehurst]

May I ask why such an allocation in equities?

Famous bank robber, Willie Sutton, when asked by a reporter "Why do you rob banks?" replied: "Because that's where the money is."

 

[phs73rc77gsm83]

May I ask why such an allocation in equities?

I have 10+ years expenses in debt (mostly short term but also longer term and cash) so I can ride out a long term down turn. If it went longer than I can cut back on discretionary spending. The equity is largely for legacy purposes.

 

[tom1944]

My wife wants to open a CD

When will CDs see the higher rate?

 

[jtung230]

My wife wants to open a CD

When will CDs see the higher rate?

You can get 2 yr CDs around 3%

 

[T2Kplus20]

My wife wants to open a CD

When will CDs see the higher rate?

Look at Ally. They have Raise Your Rate CDs that allow you to reset your rates once every 2 years.

 

[rutgersdave]

You can get 2 yr CDs around 3%

My bank, Valley National, just offered 2% 2 yr. I think 3% is high.

 

[Barnaby&Neill]

Shiller PE ratio for the S&P 500...

Current: 29.64 +0.43 (1.46%)
4:00 PM EDT, Wed Jun 15

Mean:	16.95
Median:	15.87
Min:	4.78	(Dec 1920)
Max:	44.19	(Dec 1999)

.

The multiple compression will depend on how steep they go with the rate hikes.

Right now, the ten year pays 3.49% while the earnings coupon on a 29.64 valuation is 3.37%.

1980-2020, average P/E was 21.92x (4.56%) and average 10-yr yield was 6.03%.

A textbook would probably suggest that the 10-year should be a little lower more often than not (suggesting equities pay a bit more for risk than government paper), but broader point is that the historical averages have to be viewed in the context of rates, and the current multiples aren’t particularly frothy relative to the 10-year.

 

[jtung230]

My bank, Valley National, just offered 2% 2 yr. I think 3% is high.

I bought GS 3 yr CDs at 2.95% a few weeks ago. Fairly certain it’s around 3% now.

 

[Steve91562]

Good example of the psychology of the market. If you move to cash or fixed income right now, you’re essentially guaranteeing yourself negative returns on those moves. So why do it? Fear of equities.

Everyone’s situation is different, but if you’re in a position to take risk, these are typically the environments to take advantage of fear.

Or maybe they're looking around the corner to see how increased rates and high inflation effects demand, and demand destruction lowers earnings. Inflation's not going to disappear overnight, so rates will remain elevated for the foreseeable future ('22, '23, ect). Not sure the market has fully taken into account the likely reduction of current earnings, and just how long rates will have to remain elevated. We now know the terminal rate will likely be higher this year too. No one has a crystal ball, and I did buy some bank stocks yesterday, but I expect another 10-15% leg down as earning get slashed and bonds yields go up. Just as happy to be wrong though, as I remain a good percentage in equities.

I'm morbidly curious to see the effect of QT. Think I read it was mid-month when the bonds/assets get rolled off the fed's balance sheet and the money goes "poof!" Maybe not right away, but eventually that'll drive yields up a bit. Think there's a lot of inflation in the pipeline too.

 

[phs73rc77gsm83]

It took 4-5 years after the 2008 crash to recovered to the old high levels. I‘m not criticizing or questioning your investment decisions but many posters question my decisions. The market has to go up 54% to recover to the old high from a 35% drop. If you time it right and move to cash before the market crashes you can be ahead with this method. The problem is the average person isn’t aware of the nuances of the market. There were plenty of signs the market was dropping. So many articles, including Buffett, about billionaires keeping a huge amt of cash. BrotherSkinny, RuinPinehurst, and myself moved to cash before the drop. Cali also hinted he was in cash.

I fully respect your strategy. I just don’t try to time the market. I’ll rebalance my asset allocation but I don’t try to time it. I have/had been involved in equity offerings, M&A, and the investment company community for decades and have a background in corporate finance but just stay with my long term plan. Lots of ways to get “there.”

 

[rutgersdave]

I fully respect your strategy. I just don’t try to time the market. I’ll rebalance my asset allocation but I don’t try to time it. I have/had been involved in equity offerings, M&A, and the investment company community for decades and have a background in corporate finance but just stay with my long term plan. Lots of ways to get “there.”

Plenty of ways to make money.

 

[Barnaby&Neill]

Or maybe they're looking around the corner to see how increased rates and high inflation effects demand, and demand destruction lowers earnings. Inflation's not going to disappear overnight, so rates will remain elevated for the foreseeable future ('22, '23, ect). Not sure the market has fully taken into account the likely reduction of current earnings, and just how long rates will have to remain elevated. We now know the terminal rate will likely be higher this year too. No one has a crystal ball, and I did buy some bank stocks yesterday, but I expect another 10-15% leg down as earning get slashed and bonds yields go up. Just as happy to be wrong though, as I remain a good percentage in equities.

I'm morbidly curious to see the effect of QT. Think I read it was mid-month when the bonds/assets get rolled off the fed's balance sheet and the money goes "poof!" Maybe not right away, but eventually that'll drive yields up a bit. Think there's a lot of inflation in the pipeline too.

Yeah, when pondering the combined impacts of higher rates / QT drying up liquidity, I’m thinking the leveraged loan market and the borrowers who rely on it for capital are most at risk (I briefly discussed in post 17,927, pg 449)

I don’t disagree about the possibility for more downside from here—even extreme downside. There’s also a small possibility that the market has already bottomed. But I think the biggest cluster of probabilities suggest that the downside isn’t far enough away that buying into the present market is a grievous error. (On the other hand, there’s a mindset that takes hold with some investors that expects it’s always going to get worse…they never deploy until we’re already setting new highs. that can turn out to be a grievous error).