Friday, November 30, 2018

November Review / December Preview, 2018

Cold Air Gremlin here to talk about last and next months.  In the DC area it has been fairly cold recently, skipping fall and heading straight into winter.  As I just got over a cold, this has made running and biking outside a lot more interesting - and disgusting according to my wife.  Still its good to stay in shape, and I enjoy leaving the parking lot at the train station on my bike, getting out of there long before those in the car lines even exit the parking deck.  Speaking of sports, having a 1 year old is a real lesson in not being able to keep up with the news and current events.  Ironically, it does not feel like I have missed anything - and it is always easy to get back into something if I choose to.  This appears to be a year for that, at least because my Eagles are trying real hard to take a year off and not make the playoffs.

In terms of investing, this has been another good month.  All of my accounts have already surpassed their dividend output of last year, so next month will be a real profit maker.  Looking even further down the line, next year will even bigger, I cannot wait to push harder for FI that I have before.


This month I made one purchase, acquiring shares of Eastman Chemical (EMN) in my taxable portfolio.

Last month I brought in a total of $294.85 in dividends ($82.22 taxable, $63.75 Roth, and $148.88 IRA).  This is an increase from last year (240.04 total) by 22.8%.

In terms of dividend increases, I realized* three raises from American Express (AXP), Royal Bank Canada (RY), and Verizon (VZ).  The increases are from 2% to about 11%.  I have now realized 46 raises thus far this year.

Next month I will realize five raises from McDonald's (MCD), Microsoft (MSFT), VF Corp (VFC), YUM China (YUMC), and Emerson Electric (EMR).  The increases are from about 1.5% to about 16% (all but EMR are higher than 9%).

* I only count increases when realized, because until that money is delivered any statements or declarations are simply conjecture.


The mortgage continues has started to see more cash flowing towards the principal - not a huge number, but every little bit counts. Our debts currently outstrip our assets (I choose not to count the house as an asset).  Outside of our house, we still have very low interest auto debt (1.9 and 1.5% for our cars).  My car is getting paid at doublish time, and I suspect I can finish it off within 9 months from now - which will be nice because I plan on keeping that car for 20 years.  Debt is being eliminated, and we are still building and assets.  A second income goes a long way.

My next purchase will be in December, which makes for 6 consecutive months of buys going back to July (sweet).

Next month should produce around $400 in dividends, which is a 14% YOY increase.

My portfolio page is currently up to date.

Hope everyone has a great December.
- Dividend Gremlin
- Long all stock tickers mentioned

Tuesday, November 20, 2018

Recent Sale / Recent Buy, November 2018

Caffeinated Gremlin here to discuss a recent sale and buy (I never used to drink coffee, then I became a dad... so it happens sometimes).  I have mentioned the sale before, but I am going to give it a brief discussion here.  The proceeds of the sale, combined with new capital, fueled my new stock purchase.  I like to think of the new stock purchase as my Thanksgiving Day gift, to myself.  The spirit of the holiday is being appreciative for everything around you, so I am just showing some love to the portfolio that will build wealth and passive income for me.

The Sale:

I sold out of my General Electric (GE) position about two weeks ago.  GE.  GE has been on a spectacular downward slide, presenting a cautionary tale for both investors and company executives.  The first lesson is to not over expand beyond logical competencies.  The second is do not load up on debt or buy back shares at terrible valuations.  The third is that any company cannibalizing its holdings to pay off debt has major problems.  GE did all three.

Those lessons are generalizations to an extent, but think about a couple of ludicrously stupid red flags that GE presented the world.  The biggest being flying two corporate jets, you know in case one breaks down.  This company is literally known for its jet engines, so this totally inspires confidence.  GE's aviation group, along with healthcare, is one of their strongest arms; but still it is so dumb.  Then the CEO claimed he did not know about the practice; good job.

The other issue was that of GE's TV ads.  Their ads featured a young girl who has a knack for engineering and grows up to be a GE engineer OR a guy explaining all the coding he does for GE locomotives and wind turbines.  Why on earth is a company that sells jet engines, wind turbines, power systems, and large health machines advertising on regular TV?!  People who are buying those items are not influenced by watching TV.  "Ohh I like the GE turbofan, lets put that on our next plane," said Joe the Aircraft designer - approximately zero times.

If you're going to do things like that, what are the odds your company is installing continuously running toilets in the C-Suite so they can flush money down the drain faster?  So I sold out, and put the cash in a better place.

The Purchase:

Yesterday*, I added to an existing position by purchasing shares of Eastman Chemical (EMN) in my taxable account.  I bought 13 shares, with a total cost of $1,067.75 ($82.12 / share, includes commission).  The current yield is 2.7%. For a detailed summary of their history, etc. please visit: EMN's Seeking Alpha Profile.  This is my second purchase of EMN this year, and I am now at approximately 6% of my portfolio in basic materials between EMN, SON, and WLK.  At this point I am maxed out in this sector, but its one that is clearly underrated.  For all the reasons in that earlier entry, plus a better price, I added to EMN.  My total share count now stands at 25 for EMN.

This purchase will add $29.12 to my forward 12 month dividend income, the sale will decrease my forward income by $21.52.  Net is $7.6 gained.

I will update my portfolio page at the end of the month.

What do you think of EMN?

Happy Thanksgiving!
- Gremlin
- Long EMN, SON, and WLK
* - had I waited a day, the price would have been even better.  Time in, not timing, the market.