Dividend Growth Forum

(06-16-2020, 09:15 PM)divmenow Wrote: [ -> ]I went 70% cash today. Sold a lot of names near the highs of the day. Market is becoming way too frothy for me. Better opportunities around the corner. The Fed will stop pumping up the market soon. This can't go on too much longer. The fact that AAPL is at a 52 week is a joke lol. I will be patient and wait for a better opportunity. No need to jump in for a while. I'm quite content going into the summer with cash and knowing I had my best year ever. And I'm not giving it back lol

My goal is to just add to my top 10 holdings on correction and take my picks on companies I like at a big discount.

From a 30,000ft view, here is what I see:

1. Fed is buying almost any kind of debt it can get its hands on, with unlimited funds for purchases and a stated intention to keep debt markets liquid. There is a seller on the other side of those transactions happily receiving dollars for the sale. A few months ago, before unlimited QE, that would have been an unlikely transaction, and the seller likely would have been facing steep losses on the debt due to default risk. That money is now out there, in the markets. 

2. There are three principal methods of reducing sovereign debt:
    (1) Default. Section 4 of the 14th Amendment to the Constitution makes this unconstitutional in America.
    (2) Massive economic growth (this seems unlikely given present circumstances)
    (3) Increasing the money supply to pay down the debt (inflation)

3. UUP is down bigly from its peak. We have printed more money than other developed nations, and the weakened dollar reflects this. 

4. Equity prices tend to inflate to match increases in the money supply. 

5. The Venezuelan stock market is near all-time highs, denominated in its own currency. 

Until I see evidence that the Fed is turning off the firehose of newly created cash, I'm not going to fight them. Much smaller rounds of QE managed to inflate us from an SPY intra-day low of 67 in March, 2009 to over 339 just a few months ago (510%+). Real economic growth over the same period was nowhere close to that. 

A deflationary crash at a time when a majority of Baby Boomers are retiring risks complete societal breakdown. It also puts the security and assets of the owner class at risk. It won't be allowed. Jay Powell didn't exactly face a hostile audience when he began his testimony yesterday. He is doing exactly what the moneyed interests who control our government through lobbying want him to do.

(06-17-2020, 09:45 AM)Otter Wrote: [ -> ]

(06-16-2020, 09:15 PM)divmenow Wrote: [ -> ]I went 70% cash today. Sold a lot of names near the highs of the day. Market is becoming way too frothy for me. Better opportunities around the corner. The Fed will stop pumping up the market soon. This can't go on too much longer. The fact that AAPL is at a 52 week is a joke lol. I will be patient and wait for a better opportunity. No need to jump in for a while. I'm quite content going into the summer with cash and knowing I had my best year ever. And I'm not giving it back lol

My goal is to just add to my top 10 holdings on correction and take my picks on companies I like at a big discount.

From a 30,000ft view, here is what I see:

1. Fed is buying almost any kind of debt it can get its hands on, with unlimited funds for purchases and a stated intention to keep debt markets liquid. There is a seller on the other side of those transactions happily receiving dollars for the sale. A few months ago, before unlimited QE, that would have been an unlikely transaction, and the seller likely would have been facing steep losses on the debt due to default risk. That money is now out there, in the markets. 

2. There are three principal methods of reducing sovereign debt:
    (1) Default. Section 4 of the 14th Amendment to the Constitution makes this unconstitutional in America.
    (2) Massive economic growth (this seems unlikely given present circumstances)
    (3) Increasing the money supply to pay down the debt (inflation)

3. UUP is down bigly from its peak. We have printed more money than other developed nations, and the weakened dollar reflects this. 

4. Equity prices tend to inflate to match increases in the money supply. 

5. The Venezuelan stock market is near all-time highs, denominated in its own currency. 

Until I see evidence that the Fed is turning off the firehose of newly created cash, I'm not going to fight them. Much smaller rounds of QE managed to inflate us from an SPY intra-day low of 67 in March, 2009 to over 339 just a few months ago (510%+). Real economic growth over the same period was nowhere close to that. 

A deflationary crash at a time when a majority of Baby Boomers are retiring risks complete societal breakdown. It also puts the security and assets of the owner class at risk. It won't be allowed. Jay Powell didn't exactly face a hostile audience when he began his testimony yesterday. He is doing exactly what the moneyed interests who control our government through lobbying want him to do.

Good post.  The bottom line is there are too many moving parts to consistently time.  We can't know if the market runs 20% higher, but it's very clear they will stop at nothing to keep it from crashing before the election.  I always keep some cash for the inevitable dips, but you don't have long to decide whether you buy into it.  2021 looks dangerous if the economy doesn't bounce off the bottom we haven't seen just yet.  I'll stay mostly invested but my stocks will be somewhat defensive.  I am not going to get stuck in any large positions where a 30 PE and extremely low growth is a likely outcome for several years.  The risk reward is just not there.  

Nothing wrong with Divmenow protecting a lead though.

Added to ORCL.

Rolled some PRU dividends back into PRU

(06-18-2020, 09:21 AM)Otter Wrote: [ -> ]Rolled some PRU dividends back into PRU

did the same

Added on BMY…because why not.

Not adding any new names. But I did add to BMY which is in my top 10 lol. But wow this has been a POS of late lol

(06-19-2020, 09:13 AM)divmenow Wrote: [ -> ]Not adding any new names. But I did add to BMY which is in my top 10 lol. But wow this has been a POS of late lol

A lot of the big pharma stocks are flat.  It's probably a sector thing.  Elective procedures are still dead.  That explains the companies with Med device exposure which is most of the majors.  Probably need to get a bad quarter out of the way.

(06-19-2020, 10:50 AM)fenders53 Wrote: [ -> ]

(06-19-2020, 09:13 AM)divmenow Wrote: [ -> ]Not adding any new names. But I did add to BMY which is in my top 10 lol. But wow this has been a POS of late lol

A lot of the big pharma stocks are flat.  It's probably a sector thing.  Elective procedures are still dead.  That explains the companies with Med device exposure which is most of the majors.  Probably need to get a bad quarter out of the way.

You cant tell me BMY isn't better then UAL, CCL, and all those other dogs that are making no money and yet going up daily. I will take my chances with BMY and the bright future they have.  CELG and BMY = Long term money $$ maker 

(06-19-2020, 12:37 PM)divmenow Wrote: [ -> ]

(06-19-2020, 10:50 AM)fenders53 Wrote: [ -> ]

(06-19-2020, 09:13 AM)divmenow Wrote: [ -> ]Not adding any new names. But I did add to BMY which is in my top 10 lol. But wow this has been a POS of late lol

A lot of the big pharma stocks are flat.  It's probably a sector thing.  Elective procedures are still dead.  That explains the companies with Med device exposure which is most of the majors.  Probably need to get a bad quarter out of the way.

You cant tell me BMY isn't better then UAL, CCL, and all those other dogs that are making no money and yet going up daily. I will take my chances with BMY and the bright future they have.  CELG and BMY = Long term money $$ maker 

I wouldn't even try to tell you that.  Forward PE is about 10 and that is with some flat quarters projected near term (which I expect may come true).  BMY is a better value than most of the sector.  I've had 2-3 puts sold against it for months.  That would be 200-300 more shares which is a lot for me so I am a believer.  The income has been nice but another week or so of this and I am just going to go for it and buy the extra shares.  For now I just add 10 here and there.  I got lucky and caught it 2 cents from the bottom today.  I was waiting around for the DEMs to hate on pharma, (Trump isn't exactly a fan either). They are distracted for now though.  I'll be surprised if BMY isn't good for 20% return in the next 12 months.  IMO better risk reward than practically anything in my port right now.  It should be my largest position and it may be soon enough.

Added to JPM, GD, C, BAC, BMY, and CFR.

Trimmed some MSFT and rolled the proceeds into BMY and MRK