What I Am Buying Today.

[ken-do-nim]

We should start a topic on ideal retirement port yield. It would be great if I could make it all work while staying invested in JNJ, STX, AVGO, CSCO and all the other 2.5 - 3%ers.

[crimsonghost747]

what is this obsession with these old dinosaur tobacco companies? I get that the yield is nice but what is the long-term investment thesis? Suddenly smoking will become cool again? Or are we expecting Asia (where I believe smoking is still growing when measured in $$$) to just keep growing and not to follow the west like they do in so many other social trends? Won't be more than 10 years before Europe will be seriously pushing to ban smoking. I told you guys to sell these companies like a decade ago but you're still buying more??

Nicotine may not be a bad business at all but smoking is going out of style. This is a long term trend, especially in the west. And buying a struggling over-hyped e-cigarette company for billions only to see the whole thing fall flat on it's face isn't exactly the answer.

If you must have nicotine in your portfolio, check out swedish match. Pretty much the market leaders in anything smokeless (which I believe to be the trend going forward) and now they are actually planning on divesting their cigar business so the company will be pretty much smoke-free after that. Good growth, decent dividend, overall a good company... some regulatory risks obviously and I'm not up to date on the valuation. They have significantly overperformed MO/BTI over the long-term and I don't see that stopping anytime soon.

[fenders53]

Total return solves this provided you have some income tucked away safe for the next few years.  Being forced to sell shares while the market is depressed early in retirement years is what must be avoided.  

And high yield will always draw a crowd.  Tobacco, midstream oil, telecom etc.  They all have a fierce fan base.  The hope that this is the time the share price will no longer trend downward.  The hope their business model evolves.  They will never be a huge part of my portfolio.

[NilesMike]

(09-30-2021, 08:21 PM)fenders53 Wrote:

(09-30-2021, 04:43 PM)Kerim Wrote:

(09-30-2021, 03:05 PM)fenders53 Wrote: My port isn't large enough to do that with dividends unless I put much of it in yield traps. 

I think you just described my whole DG strategy...

I'd like to thank you all for paying your taxes and funding my generous pensions lol.    

My stock port is respectable but three milly was never going to happen.  I mostly invested in SPY and small CAP growth.  A few years ago it occurred to me the SPY Div yield was dropping like a rock.  To get $30K after taxes per million in port value you need an average yield exceeding 3 1/2%.  Now subtract some out for a cash bucket as you should in retirement and this starts looking desperate.  You are stuck chasing too many yield traps to make the average work.

.............. and this is when I knew I had to learn how to steal option premiums from millennials who throw down after watching a 20 minute youtube video.  I didn't make them do it.  




About a third of my retirement port will be in a mix of DGI, UTEs and yield traps.  An option trick allocation until I tire of babysitting it. Add in some safish growth with low dividends and hope for the best.  I like MO and XOM well enough, but I am not going to buy 5000 shares and hope the government doesn't wreck their business model because at times that seems to be the goal.

We have very similar stories (less the government pension). I have always maintained that multiple income streams are the key to enjoying retirement. Real Estate, Dividends, Option premium and capital growth.

My best returns are smaller town multi units. Cheap, little competition and my cash flow is 12% unleveraged. Little to no appreciation however. Need more cash flow? Use leverage.

Option premiums are next in line and probably will be my final retirement job. Trade as much as I like, make as much money as I like. I don't see that ending, we know my style. No babysitting, no rolling. Nearly all of it is defined risk, directional trades. I do want to become more proficient in market neutral option trades.

Good luck to all.

[crimsonghost747]

(10-01-2021, 06:23 AM)NilesMike Wrote: My best returns are smaller town multi units. Cheap, little competition and my cash flow is 12% unleveraged. Little to no appreciation however. Need more cash flow? Use leverage.

That is a very nice cash flow, especially from unleveraged real estate. I imagine this is yield on cost? or are you using the current estimated value? And if you don't mind me asking, how many units do you have or are planning to have in total?

I would love to do real estate but I'm never around so I would have to buy someone to manage it anyway, so I figured REITs are an easier option for me. But as we all know the cash flows don't even come close to these levels.

[fenders53]

This is one of the most important topics discussed on this forum. Diversity in your income stream is VERY good. Real Estate has been solid for centuries. Being a landlord is not for everyone. Maybe it doesn't fit one's personality? I was glad I did it but my career required I keep it small. You can hire out property management as well if you do it on a larger scale. I am convinced a side hustle of some sort is important if you don't have a huge and secure wage. Even then things can change. Mike and I lived through the 70s-80s. Major employers just went away on fairly short notice. More than one way to get along in the world is smart. Just find something you find interesting. I repaired cars on the side when I was in my 20s. Wages seem silly now, but I invested half of it so not so silly with decades of compounding.

Just depending on a DGI port for the bulk of my income would not give me comfort. I've seen the rug pulled too many times.

[ken-do-nim]

(10-01-2021, 07:37 AM)fenders53 Wrote: This is one of the most important topics discussed on this forum.  Diversity in your income stream is VERY good.  Real Estate has been solid for centuries.  Being a landlord is not for everyone.  Maybe it doesn't fit one's personality?  I was glad I did it but my career required I keep it small.  You can hire out property management as well if you do it on a larger scale.  I am convinced a side hustle of some sort is important if you don't have a huge and secure wage.  Even then things can change.  Mike and I lived through the 70s-80s.  Major employers just went away on fairly short notice.  More than one way to get along in the world is smart.  Just find something you find interesting.  I repaired cars on the side when I was in my 20s.  Wages seem silly now, but I invested half of it so not so silly with decades of compounding.

Just depending on a DGI port for the bulk of my income would not give me comfort.  I've seen the rug pulled too many times.

I live in a 1 family that started out as a 2 family.  One thing I've been wrestling with is when I move out (min 4 years), should I convert it back to a 2 family first before I start renting it?  I'll have to figure out how much rent I'd collect with it as it is vs. doing the conversion job ($150k?).

I'd love to spend my retirement publishing gaming supplements that people can print on demand and get passive income from that as well.

[stockguru]

Wow thanks to MRK... MRNA is down $55. Looks like $230 area is coming next. The entire sector is getting hit.

I did add JNJ, MO, AVGO, and a few DE shares

[MrFortune]

(10-01-2021, 09:16 AM)stockguru Wrote: Wow thanks to MRK... MRNA is down $55. Looks like $230 area is coming next. The entire sector is getting hit.

I did add JNJ, MO, AVGO, and a few DE shares

That's why I don't invest in companies like MRNA, BNTX ext. Once the shoe drops it can drop $50-100 in a day. I dont have the stomach for that at my age 

But yeah the chart is saying $200's now. Lets hope those who held it sold at $450's a few weeks back.

Lots of great buy in the market right now. Have to take advantage on the big dips. I added AOS, BX, JNJ, APD, TROW, WPC, AEP and OHI

Also bought some tech SOXL, AVGO and GOOG

[fenders53]

(10-01-2021, 09:13 AM)ken-do-nim Wrote:

(10-01-2021, 07:37 AM)fenders53 Wrote: This is one of the most important topics discussed on this forum.  Diversity in your income stream is VERY good.  Real Estate has been solid for centuries.  Being a landlord is not for everyone.  Maybe it doesn't fit one's personality?  I was glad I did it but my career required I keep it small.  You can hire out property management as well if you do it on a larger scale.  I am convinced a side hustle of some sort is important if you don't have a huge and secure wage.  Even then things can change.  Mike and I lived through the 70s-80s.  Major employers just went away on fairly short notice.  More than one way to get along in the world is smart.  Just find something you find interesting.  I repaired cars on the side when I was in my 20s.  Wages seem silly now, but I invested half of it so not so silly with decades of compounding.

Just depending on a DGI port for the bulk of my income would not give me comfort.  I've seen the rug pulled too many times.

I live in a 1 family that started out as a 2 family.  One thing I've been wrestling with is when I move out (min 4 years), should I convert it back to a 2 family first before I start renting it?  I'll have to figure out how much rent I'd collect with it as it is vs. doing the conversion job ($150k?).

I'd love to spend my retirement publishing gaming supplements that people can print on demand and get passive income from that as well.

Not a bad thread topic if there isn't one already.  Converting it back to a duplex would probably be a great idea.  Doing it well in advance of your move might make sense.  Learning how to do a few things for yourself is good.  A helpless landlord spends a lot of money when a water pipe breaks at 10PM, or you want to install a new water heater some evening.  My water heater died a few days ago.  A quality water heater is only about $450.  HD will install it for $1100.  Trust me that's insane.  It's an evening project for a non Pro.  

Just nibbled some HAS.  Still waiting for the bad news.  The chart says something is up and it's probably supply chain related.  Anything plastic is a potential issue as well.  I see that at HD now.  I like HAS sub $90 though. 

Going to buy small portions today so I don't get caught sucking my thumb while some stocks are down pretty hard.  Keeping some dry powder but I have missed the bus on dips before.  Feels better when you bought at least a little.

[fenders53]

(10-01-2021, 09:29 AM)MrFortune Wrote:

(10-01-2021, 09:16 AM)stockguru Wrote: Wow thanks to MRK... MRNA is down $55. Looks like $230 area is coming next. The entire sector is getting hit.

I did add JNJ, MO, AVGO, and a few DE shares

That's why I don't invest in companies like MRNA, BNTX ext. Once the shoe drops it can drop $50-100 in a day. I dont have the stomach for that at my age 

But yeah the chart is saying $200's now. Lets hope those who held it sold at $450's a few weeks back.

Lots of great buy in the market right now. Have to take advantage on the big dips. I added AOS, BX, JNJ, APD, TROW, WPC, AEP and OHI

Also bought some tech SOXL, AVGO and GOOG

Biotech is hard on an old man's heart lol.  The supply trouble isn't over but I like your buys.  Chips are worthy of a nibble now. I requested a mid-day bloodbath today so I can get in. IMO the chance of an infrastructure bill passing today is approximately zero. The market will settle down some once this is solved. Maybe next week.

[NilesMike]

(10-01-2021, 06:48 AM)crimsonghost747 Wrote:

(10-01-2021, 06:23 AM)NilesMike Wrote: My best returns are smaller town multi units. Cheap, little competition and my cash flow is 12% unleveraged. Little to no appreciation however. Need more cash flow? Use leverage.

That is a very nice cash flow, especially from unleveraged real estate. I imagine this is yield on cost? or are you using the current estimated value? And if you don't mind me asking, how many units do you have or are planning to have in total?

I would love to do real estate but I'm never around so I would have to buy someone to manage it anyway, so I figured REITs are an easier option for me. But as we all know the cash flows don't even come close to these levels.

I will be 62 on the tenth, been doing the real estate thing since I was 12 and could be trusted to paint an apartment (trusted by Dad), so I have literally a lifetime of experience.

Right now it's 64 units under 8 roofs, self managed but I have an exceptional network of people that I sub things out to. Mowing, painting, repairs, plumbing or electric. I can do most of it myself but don't anymore, except last weekend I had a unit turnover and my go to guy had a Covid scare with his kids and needed to quarantine so I did it. Usually everything works from my phone and I'm no techie by anyone's definition.

Yield is on today's value which doesn't change much with these properties.

Management style is easy going but firm. I don't brow beat tenants but I get my rent. I have even paid tenants to leave instead of evicting, the excellent payers get get a gift card around Thanksgiving, I give my main crew a bonus as well. I treat it as a business with the tenants being my customers. Makes it much less frustrating with that mindset