DGI Adventure – 12-19-2015 Week In Review

This was a busy week. I was very busy with my day job, which
meant I didn’t have time to write much. But there was some genuine excitement
in our investing world, which bears mentioning. Rather than try to
retroactively write individual posts about the notable events, I’ve decided to
summarize them today. What all happened?

12/14/15 Limit Order Executed – Valero Energy
Corporation (VLO) $66.40/share

12/14/15 Limit Order Executed – Plantronics,
Inc. (PLT) $47.85/share

12/16/15 Payday – Barrick Gold Corporation (ABX)

12/18/15 Day of Reckoning – ROTH Competition

So without further ado, here’s some commentary on the week that was:

LOE – Limit Order
Executed (VLO)

I worked up an investment
thesis for Valero
last week, and put in the discussed limit order of
$66.40/share. It got very close to executing on Friday 12/11, but just missed.
Some whacky robot shit went down at the opening bell on Monday 12/14 and VLO set
an intraday low of $65.04. Since this was the garden variety robot shit during
market hours (rather than pre-market robot shit), my limit order was executed
at the limit price. Oh well. The difference between my limit and the absolute
lowest point of the day is only 6 basis points of invested yield. It closed
slightly up that day, and it closed today at $70.33/share. I’ll take it.

LOE – Limit Order
Executed (PLT)

If there were people who actually followed this blog, those
people would probably say WTF? Where did Plantronics come from? And those
hypothetical people would be right to ask that. PLT is my wife’s idea. She
really likes their headset products, did some research about the company, and
decided to buy the stock in her ROTH. It’s been mostly up this year, but
started to come back down a bit. She decided if it got down below her initial
purchase price she would average down. So she set a limit order for $47.85. I
forget what her original purchase price was exactly. I think it was around $49?
I have no idea how she came up with $47.85. I haven’t done a full-blown
investment thesis
on Plantronics, but I did do a quick quantitative analysis:

I feel pretty good
about the cash flow. Maybe this price is “cheap” maybe it isn’t. PLT might very
well be a dividend growth stock in the making. They’ve consistently paid a
dividend since 2005, but only just started raising it in 2012. But those recent
raises are so dramatic that the annualized DGR is 20% over 10 years. The 3 year
DGR is 66%…Not too shabby.

Pay Day – Barrick
Gold Corporation (ABX)

On 12/16 I got $2.53 in dividends from Barrick Gold, which
is my right since shareholders get $0.02/share, and I own 126.64 shares. Of course
since Barrick is a Canadian company, the payment is subject to a 15% foreign
tax withholding, so my account only sees $2.15. Woo hoo?

Why Barrick bothers to pay a dividend at all baffles me. They’re
not making any money right now. They really ought to use the cash they generate
to pay down their debt. Whatever.

Someday, children, I will tell you the story of how I came
to own 126.64 shares shares of ABX and  601.4117
shares of AUY. They do not fit my current investment strategy at all, yet they linger in
my portfolio. For now, suffice it to say that I keep ABX and AUY in my portfolio for the
following three reasons:

1) It isn’t a loss until you sell.

2) To remind me not to make stupid investments without adequate

3) Whether it’s a good idea or not, they both continue to
pay dividends, so I am being “paid to wait” for the share prices to recover.
I’m not being paid very much to wait, and it will probably be a long time
before the share prices recover. But I’ll bet they recover eventually.

Of the gold miners, these aren’t the worst. That doesn’t say
much, but it says something.

Day of Reckoning –
ROTH Competition Update

All the hypothetical followers of this blog are probably
really confused today. Right now they’re asking themselves…what ROTH
competition? And they would be right to be confused. My wife and I have a bit
of a competition going. It was a ploy to try to get my wife interested in
investing. It halfway sort of worked. Anyway, once a quarter, we compare our
ROTH portfolios using three metrics

Total Account Value

Total Quarterly Return

Total Return

My wife has an edge on total account value, because I put
$1,650 into a traditional IRA in 2014, so I could only fund the ROTH that year
with $3,850. The idea is that whoever “wins” 2 out of the 3 metrics, “wins” the
quarter. Loser is responsible for cleaning the aquarium. Scorecard is published here
back at the mothership.

She pretty much kicked my ass this quarter…primarily by just
holding on to the 2015 contribution as cash except for an extremely well
timed investment
in Whole Foods. Her DSW
limit order
is still waiting in the wings, possibly marking one of the few
times she’s absolutely refused to by shoes unless they were on sale at a massive discount,
and she still hasn’t figured out her 4th purchase yet. Patience, as
they say, is a virtue.

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