What Did You Buy Today?

[fenders53]

(05-04-2020, 03:34 PM)Otter Wrote:

(05-04-2020, 03:28 PM)fenders53 Wrote:

(05-04-2020, 03:22 PM)Otter Wrote:

(05-04-2020, 03:14 PM)fenders53 Wrote: Hindsight is always fun to second guess.  It looks clearly overvalued now but if you sold it early 2018 when it was overvalued you just missed a double. Nobody said this was easy.  

Past earnings and stock price are the only hard data we have. By P/E ratio, DG is presently valued above forecast 2023 earnings, using its historical averages. 

Chuck Carnevale's consistent position on looking for value within the DGI space has always resonated with me. If all that mattered to me was the dividend going up each year, I'd just sell my entire portfolio and buy VDIGX.

Eric and I both give respect to Chuck's data and use it for buy decisions.  Above average growth is about the only thing that makes it tough.  As you are well aware the market assigns a huge premium for that, and we never know what year order is restored,  but it will be restored.  Fast graphs is better at telling when it's safest to buy, rather than when to sell.  Selling always the hardest part IMO.

I find selling very hard, unless the dividend gets cut or is at serious risk of being cut. GE needs 400% gains from where it is today just to get back to where it was before the first big cut in 2017 was anticipated by the market.

I bail within 24hrs on a dividend cut.  Sometimes it pays to wait for the opening dive to recover.  I recall exactly zero times when I didn't have a chance to re-enter later at a better price.  I re-evaluate like it's a brand new position.  I rarely see a good reason to re-enter.  I've been re-evalutating a re-entry into KMI for about five years now.  I'm still good, or maybe I'm just bitter lol.

Seriously though, this crisis might be that one time when you take a time-out and re-enter a position when the price is right.  It's not reasonable to expect a company to fully prepare for this.  But if you were in trouble in a week I got no time for your bad balance sheet management.      

Selling decisions are tough.  I've left a lot of profits on the table over the years, but those were good companies I just thought had outrun their valuation and the market said I was wrong.  Lately I've sold CBRL, DAL, FUN and DOW in my flight to quality.  I'll buy them back cheaper if it makes sense.  Or make income trying to enter on my terms with a put sale.