Had closed out amat at 19.44 si 19.3 nvs 72 abb 21.4 at various times.
Teva at 57.23. For 44.8 pct gain.
Will assume 0.5 pct adv wrt dividend over snp500.
Snp500 at 2052 today. ALL TIME HIGH.
It beat our portfolio to date by 5.4 pct. Including dividends it beat our portfolio by 4.9 pct. In 2 years.
Considering we started.selling at various times and have raised cash, we will take it.
In a rip roaring market, it is difficult to beat the mkt using value stocks. The fact that it has barely beaten us 8 a vote for buying undervalued stocks when they r out of favor.
Here is the Shiller CAPE ratio. Only two times it has been higher?
1929. Before mkt crashed by 80 pct
2000 jan. Before mkt crashed by 50 pct. If u count the 2009 March low mkt was down by 55 pct AFTER 9 YEARS.
In 2007 sep just before the 59 pct drop the ratio was same level as now. Is it overvalued. Yes. What will happen in next few months. No clue. Time to rebalance. I think so. Any time is good to rebalance. This is especially good time.
As mentioned earlier in this thread, the purpose of the individual stock portfolio is to act as a counter balance to the market. Since Total market and s&p500 index funds is where investments are concentrated.
I am acutely aware of the flaw with the snp500 index. Buy more of higher mkt cap. Cause it is mkt cap weighted. So APPLE GOOGLE MSFT FB BABA et al r all heavily represented. When I picked these stocks they were underrepresented. Esp drug stocks. So if mkt tanks these would tank less.
Now that they have appreciated, I sold most of them to raise cash. To get ready for a downturn.
If downturn does not come that would be fine too. All.abt risk management. And having a plan.
Today crude prices fell 4 to 5 pct. I think related to opec stating it won't decrease production. Shale oil has already increased supply. So this is huge headwind for e&p cos. Conoco Philips is pure e&p.
Rest of big boys also do downstream - as we mentioned in one of our sister threads. This has supported their stock prices so far. Today they got a spanking.
I have no idea how far they have to go. BP now is at 52 week low. Pays 5.75 pct dividend. Royal dutch she'll 5.25 pct dividends. Balance sheet not great. But ok
If at end of year there is tax loss selling, I may pick up some shares. FOR THE LONG TERM.
As mentioned earlier the objective of this stock portfolio is not necessarily to beat the mkt. But to buy stocks undervalued and hence under represented in the mkt cap weighted index. These oil stocks appear to fit that bill. Time to watch for further moves down to take advantage - if that opportunity presents itself.
Why? These are now at multi year highs. When we bought pharmacy few yrs back pharmacy underrepresented in snp500. No longer the case. Objective achieved.
Eyeing PFE. If it hits 32.5 from current 31.5 time to unload 30 pct of holdings.
Note that mrk pfe and lly were not part of the stock list in this thread. That is cause when thread opened I felt those 5 stocks were undervalued. So did a study on their performance wrt mkt.
TEVA acquired generic arm of Allergan for 40 billion. When I saw the news, it was up 10 pct today. Didn’t think twice. Just sold it at 68.62. Well, it finished at 72. No regrets. The return was pretty good. Not to mention the approx 3m5 pct div yield. Per this post, return shoukd have been 53 pct. But overall return was higher. At around 68 pct. In I think 2.5 years. Don’t know why.
Anyway, when I had first bought TEVA, it went down I think 10 pct. Bought some more. Dropped I think another 10 pct. Bought some more. Then did nothing. Waited 2.5 years. I think it is more than full valued. Got out. Because the reason I bought this stock was it’s valuation. Reason getting out - it is becoming huge. And not sure from these levels the gains Will be great.
This.closes out all the value stocks I selected for this thread. Will post returns relative to the market as of today’s close when I have some time. (Not that I am very busy now).
I think it was last wednesday. Both pfe and lly were up big time. Sold 33 pct of PFE at I think 35.2, a multi year high. It is now at 34.
LLY was at 86. And 52 week high was I think 89. So placed limit at 86.6. But stock came very close (based on what I could gather after the day), but didn’t hit the limit! It is now languishing I think at 84. Oh well. No problems. Sometimes you miss out. Now will forget about it. If it hits the limit, good. If not, fine. It’s a good company.
The next sector I am eyeing - big oil. Had bought some XOM about 1m6 yrs ago at I think 85. Now at 83 I think.
Bought a little of TOT and RDS.A last Oct when oil tank. Both are down about 5 pct.
May buy some more.
Remember the TEVA buy. Took losses into ally as bought more as stock when down. Plan to do same with Big oil. But focus on strong balance sheet.
You may recall had sold AMAT at 19.5 a year or more ago. It’s at 17.3. Considering wading back in. But want a more attractive proce. Say 14. Patience. No hurry.
Actually when I checked LLY had disappeared from portfolio. Then found LLY position got sold out at 89.01. Either my memory about proce at which limit order placed is hazy. Or stock must have spiked up at the open on July 23.