Mrs. Wizard and I went on vacation last week, so I didn’t
write anything. But stuff sure happened. No shortage of stuff. Mr. Market took
the day off today, so I thought I’d take the opportunity to try to cover the
highlights from last week before the fun starts again tomorrow.
For one thing, the poop storm at Wall and Broad didn’t lose any
of its momentum. In fact you might argue that it picked up some steam. It’s
just two weeks into the year and we’re almost back to where we were in August,
which wasn’t a particularly warm and fuzzy place.
We took advantage of the volatility with a couple of buys.
As usual, my wife’s purchase seems to have been much better executed, with
better timing. We also got paid. Woo hoo!
Monday January 11 –
Limit Order Executed Gilead Sciences Inc (GILD) 18 shares @ $96.00/share
Last weekend I hatched a brilliant plan to move my GILD
stake into the taxable account rather than hold it long term in the ROTH. The
theory being that the dividend is relatively small (for now) so I don’t get
much of a tax advantage by holding shares in the ROTH. The share price has been
up and down quite a bit, and was getting within range of my original cost
basis. If I bought the same number of shares in the taxable account at or
around that original price, I could then sell the shares in the ROTH once the
price bounces back, and the net result would be a share transfer plus I realize
a little bit of tax-free capital gain in the ROTH.
There is a risk to that strategy. It’s captured by the
phrase “once the price bounces back”. If the price just keeps going down, then all
I’ve managed to do is lose twice as much imaginary cost basis bucks.
I was okay with this risk, because I felt like the investment
thesis for GILD was so strong. Even if it takes 6 months or a year…or more…for
that price to recover, I’m pretty sure it eventually will recover. And the
current price is well below the stock’s intrinsic value.
Well the limit order that I wrote on Sunday, executed pretty
much first thing Monday morning. And then the share price just kept going down.
It closed the week at $91.84.
Could have, should have, and would have bought more at a
lower price point. After re-reading that investment thesis, maybe I will buy
Thou can’t time the market so thou shall not try to.
Wednesday January 13 –
Limit Order Executed DSW Inc (DSW) 66 shares @ $22.80/share
in November I decided that DSW looked like an attractive stock and I wanted
to own some. My wife likes to shop at DSW, so she decided she wanted to be the
one to buy shares in her ROTH. At the time, shares were going for about
$23/share which was up from recent lows. They were about to report earnings,
and I was thinking there might have been a gaff fishing opportunity on the
I was wrong about further downside, but there also wasn’t a
lot of upward movement either. The stock didn’t do anything.
DSW vs S&P 500: Daily Chart – 11/24/15 – 01/15/16 –
Chart from Google Finance
Of course that “nothing” was pretty good in contrast to
seemingly every other stock on the planet, but it was hovering well above our
target price. Almost like it was taunting us.
At some point in December my wife put in a limit order for 66
shares at $23.00/share to try and catch the dividend. DSW didn’t bite. The
ex-dividend in December came and went, so her good-till-cancelled order was
reduced by the quarterly dividend amount to $22.80.
Well all the pressure in the market finally got
it back in range, and the $22.80 order executed on Wednesday of last week.
DSW Daily Chart – 11/18/15 – 01/15/16 – Chart from Google
Here’s hoping they had a good Christmas. They should report
earnings in February. It’d be nice to see a dividend increase.
Thursday January 14 –
Dividend Increase Announced – Omega Healthcare Investors, Inc. (OHI) – 1.9%
last time I got paid by OHI, the quarterly dividend was $0.56/share. When I
get paid next month it will be $0.57/share. Woo hoo!
While a 1.9% raise may not seem like a lot at first, you
need to keep in mind that is an ~8% annualized rate. Since they’ve raised the dividend
14 consecutive quarters, there’s a solid chance they do it again next
I still wish I had waited for a better price. This raise
would have been that much bigger if I owned more shares. But life, as they say,
goes on. I’m very happy to get a raise in the middle of a tough week for the
Friday January 15 –
Pay Day! – VEREIT Inc. (VER) – $55.00
If I were a braver man, I might be looking to average down
on VER right now. It’s down about 10%
for the year. The question is if this has anything to do with the company
itself, or if it’s just caught up in the general sell off. They are doing
exactly what they said they would: deleveraging the balance sheet by selling
assets. They knew this would affect their FFO, which is why the dividend payout
ratio is so low compared to peers. It’s all part of the plan, yet the stock
price is getting crushed.
The money spends the same as any other dividend though, and
it’s nice to have it in the bank. Woo hoo!
That was the week that was, and I wasn’t even paying a lot
of attention. We were tuned out on vacation, and the world kept right on