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Stock Banter http://stockbanter.com Banter about Stocks Mon, 01 May 2017 17:29:32 +0000 en-US hourly 1 http://wordpress.org/?v=4.2.15 Retirement Risk Revisited http://stockbanter.com/2017/04/21/retirement-risk-revisited/ http://stockbanter.com/2017/04/21/retirement-risk-revisited/#comments Fri, 21 Apr 2017 14:51:24 +0000 http://stockbanter.com/?p=1295 [Read more...]]]> I just turned 60 years old. So this is a particularly important subject to me and many of my friends and family.

I manage about half of the retirement savings for our household. The other half is managed by the experts at American Funds. We also have other non retirement portfolios including stocks, real estate and other investments. For this discussion I will focus on a ‘closed’ investment that was really started in the mid 1990s and evolved to what we have today. ‘Closed’ meaning that no new money will be added to this retirement investment I call the RetirementJS Portfolio.

retirement risk reward

The RetirementJS portfolio return calculated by Schwab Client Services indicates our portfolio has returned an average of 13.08% per year. In that same period the moderately aggressive benchmark returned 11.62%.

Schwab considers my portfolio risky with a standard deviation of 13.43. I have added no new money and allowed all dividends to be reinvested back into the security. 90.6% of the portfolio is US based Large Cap Equity 8.5% are US Based Small Cap Equity. 0.9% is in cash.

Here are my 17 highly risky investments in order of holdings value.

1. MO – Altria Group  13.97% of portfolio
2. CVX – Chevron Corp  9.45%
3. INTC – Intel Corp  8.58%
4. PG – Procter & Gamble 7.76%retirementjs
5. ED – Consolidate Edison  7.71%
6. LLY – Eli Lilly & Company  7.47%
7. VLO – Valero Energy  6.87%
8. NLY – Annaly Capital Mgt    6.53%
9. BRK.B – Berkshire Hathaway   6.30%
10. CAT – Caterpillar Inc.   4.64%
11. GE – General Electric    4.46%
12. WFC- Wells Fargo       4.44%
13. MCD- McDonalds Corp  3.94%
14. MRK – Merck & Co Inc.    3.49%
15. T – AT&T   2.37%
*16. NCR – NCR Corporation  1.50%
*17. CST – CST Brands  0.52%


To bring down the risk (and reward) Schwab recommends that I reduce my Large Cap Equity holdings by nearly 30% and also reduce my Small Cap Equity holdings by 17%. Schwab recommends I increase my International Equity by 10% and fixed income by 35%! Schwab also recommends I keep a little more cash on hand.

Despite the high standard deviation compared to less risky securities, the bulk of these securities pay a high dividend rate. MO pays 3.42% CVX pays 4.12%, Intc pays 3.01%, PG pays 3.09%, ED pays 3.53%, LLY 2.54%, CAT 3.25%, GE 3.17, T 4.86%… One notable exception , BRK.B pays no dividend at all.

I believe the old model for risk and reward analysis is no longer as relevant as perhaps it once was.

-Having 35% in fixed income during this low interest rate environment is foolish and won’t even keep up with the rate of inflation!

-The rule that you have to have so much international exposure has’t held up over the past 2 decades.

-Solid American companies with good management, good products, and good dividends was what I was looking for as I developed the RetirementJS portfolio.

The goal is to keep this portfolio closed until needed unless there is some compelling reason to get out of an investment.

Let the dividends grow and let stock appreciate over the next decade.


61 Short Term benchmark was composed of 60% Citigroup 3 Month T-Bill, 40% Bloomberg Barclays U.S. Aggregate Bond.

61 Conservative benchmark was composed of 50% Bloomberg Barclays U.S. Aggregate Bond, 30% Citigroup 3 Month T-Bill, 15% S&P 500, 5% MSCI EAFE (TRN).

61 Moderately Conservative benchmark was composed of 50% Bloomberg Barclays U.S. Aggregate Bond, 25% S&P 500, 10% Citigroup 3 Month T-Bill, 10% MSCI EAFE (TRN), 5% Russell 2000.

61 Moderate benchmark was composed of 35% Bloomberg Barclays U.S. Aggregate Bond, 35% S&P 500, 15% MSCI EAFE (TRN), 10% Russell 2000, 5% Citigroup 3 Month T-Bill.

61 Aggressive benchmark was composed of 50% S&P 500, 25% MSCI EAFE (TRN), 20% Russell 2000, 5% Citigroup 3 Month T-Bill.

61 Moderately Aggressive benchmark was composed of 45% S&P 500, 20% MSCI EAFE (TRN), 15% Bloomberg Barclays U.S. Aggregate Bond, 15% Russell 2000, 5% Citigroup 3 Month T-Bill.

Note: (1010-6129) Standard Deviation (%): A measure of the dispersion of a set of data from its mean. The more spread apart the data, the higher the deviation. Standard deviation is calculated as the square root of variance. Beta: This is a measure of the volatility, or systematic risk, of a security or a portfolio in comparison to the stated benchmark.


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Bullish On US Oil and APA http://stockbanter.com/2016/12/27/bullish-on-us-oil-and-apa/ http://stockbanter.com/2016/12/27/bullish-on-us-oil-and-apa/#comments Tue, 27 Dec 2016 20:59:24 +0000 http://stockbanter.com/?p=1284 [Read more...]]]> Today I am upping my investments to 7% in the Energy Sector. I have chosen Apache Corp NYSE:APA as a first time purchase to my portfolio for 2 reasons:

1. I believe the price of a barrel  of oil has bottomed
2. The US will become energy independent and APA will be a beneficiary.

A new United States Geological Survey (USGS) assessment of the riches of the Permian Basin, released just last month, showed that in just the Wolfcamp shale in the Midland Basin portion of the Permian alone, there are still 20 billion barrels of undiscovered, technically recoverable oil. That’s an assessment that will necessarily trouble OPEC.


Not only is this newest discovery three times bigger in terms of recoverable oil than North Dakota’s Bakken formation, but it’s all also the largest “continuous” oil discovery in the entire U.S. So, the rush to both get a foothold here and to employ new recovery technologies is on, with spending close to $20 billion year-to-date in 2016, according to new analysis from IHS Markit.

For APA, more than 3,000 future drilling locations have been identified in the Woodford and Barnett formations alone. “Our announcement today represents a significant addition to our already deep and highly economic Permian Basin position. With the contribution of Alpine High to our global portfolio of world-class international and North American assets, Apache clearly has more profitable-growth opportunities than at any other time in the company’s 60-year history.” – Source: APA Investor Relations release 988060


Additionally, the current technical condition for APA is strong and the chart pattern suggests that upward momentum should continue. Over the last 50 trading days, when compared to the S&P 500, the stock has performed in line with the market. MACD-LT, an intermediate-term trend indicator, is bullish at this time. Over the last 50 trading sessions, there has been more volume on up days than on down days indicating that APA is under accumulation, which is a bullish condition. The stock is trading above a rising 50-day moving average. This validates the strong technical condition for APA. The stock is above its 200-day moving average which is pointed up indicating that the intermediate term trend is bullish.


Oil will remain the world’s primary energy source, fulfilling 1/3 of all demand.
Oil will continue to play a leading role in the energy mix, driven by demand in transportation and feedstock for the chemical industry. – ExxonMobile 2017 Forecast

Cramer is a buyer of Schlumberger Limited (NYSE: SLB), Magellan Midstream Partners, L.P. (NYSE: MMP) and Apache Corporation (NYSE: APA). He advised a viewer to hold these stocks if they are a part of a big diversified portfolio.

The stable production and free cash flow from Apache’s international and offshore segment were just what the company needed this year to help it manage through lower oil prices. Those factors clearly made that segment the company’s best performer this year after North American onshore suffered from lower margins and production declines. That said, just because North American onshore had a down year, does not mean it has a dim future. Quite the contrary; that segment has the potential to drive the company’s results for years to come due to its enormous untapped resource base.- Matthew DiLallo Motley Fool

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Looking for BPS/USD Parity? Buy FXB at $100 http://stockbanter.com/2016/10/07/looking-for-bpsusd-parity-buy-fxb-at-100/ http://stockbanter.com/2016/10/07/looking-for-bpsusd-parity-buy-fxb-at-100/#comments Fri, 07 Oct 2016 15:36:22 +0000 http://stockbanter.com/?p=1271 [Read more...]]]> fxb

Could the British Pound Sterling (BPS) reach parity with the US Dollar (USD)?  I am willing to put in a trade to pickup FXB at $100 per share. This would likely occur if the pound did indeed strike parity with the dollar.

Joseph Adinolfi agrees. He wrote article published earlier this year he titled,

“British pound could hit history-making dollar parity by end of 2016″

In the article Shaun Osborne, the chief currency strategist at Scotiabank said, “We think investors should be prepared for the risk of [pound] weakness extending quite significantly in the next few months, while uncertainty surrounding how the U.K. moves forward persists. There appears to be little in the way of technical support to stop the currency from returning to those lows in the months ahead, Osborne said. A break below the $1.30 level—nearly where the U.K. currency is presently trading—could send the currency back to these all-time lows in the months ahead.”

According to this graph by Mike Todd, the closest the BPS and USD have ever reached parity was $1.05 in 1985.


So as of today, I have a gtc order for FXB at $100.


FXB seeks to track the price of the British Pound Sterling, net of trust expenses. The fund seeks to reflect the price of the British Pound Sterling. The sponsor believes that, for many investors, the shares represent a cost-effective investment relative to traditional means of investing in the foreign exchange market.


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Election Strategy: Stay the Course with DRIPS but… http://stockbanter.com/2016/09/20/election-strategy-stay-the-course-with-drips-but/ http://stockbanter.com/2016/09/20/election-strategy-stay-the-course-with-drips-but/#comments Tue, 20 Sep 2016 13:28:22 +0000 http://stockbanter.com/?p=1252 [Read more...]]]> Uncle Gary asks,

Do you plan on changing your investment strategy if it looks like Trump or Hillary will win?  Staying the course?”

Here is my response:

Trump could win.  Still Hillary is the odds on favorite according to John Stossel, whom I respect greatly. His site https://electionbettingodds.com/ has Hillary up 65 to 31 in a four person race.


As for investing…..

Right now I am only allowing my DRIPs to reinvest. Otherwise I am not contributing any new money to my stock portfolio only to real estate.


I am holding steady with my current investing strategy…. diversification.



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XLF off by 18% but not really http://stockbanter.com/2016/09/19/xlf-off-by-18-but-not-really/ http://stockbanter.com/2016/09/19/xlf-off-by-18-but-not-really/#comments Mon, 19 Sep 2016 19:47:01 +0000 http://stockbanter.com/?p=1248 [Read more...]]]> xlf

From the look of the chart XLF appears to be falling off a cliff, actually it’s not. It’s all due to the 11th sector: Real Estate, being born from the Financials Sector.

XLF will be shedding its current real estate holdings in the form of a special dividend, which will be paid to XLF shareholders in shares of XLRE, as well as a small cash residual that will solve for the fact that fractional shares in XLRE cannot be issued. The ex-date for XLF is Sept. 19, 2016. Buyers of XLF on that date will not be entitled to the special dividend. On Sept. 19, XLF’s share price will drop by an amount that will approximate the value of the special dividend. The record date for the dividend will be Sept. 21 and the pay date Sept. 22.

From SPDJI: The dividend distribution may be characterized as both return of capital and income for tax purposes. As of Sept. 9, 2016, the amount of the dividend that will be treated as return of capital is estimated to be between 70% and 80%; the remaining 20%-30% is expected to be taxed as ordinary income. The amount of return of capital is an estimate and subject to change based upon multiple factors including fund performance, shareholder activity, and general market movement up until the payable date of the distribution.

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Now there are 11 and it’s Real http://stockbanter.com/2016/08/22/now-there-are-11-and-its-real/ http://stockbanter.com/2016/08/22/now-there-are-11-and-its-real/#comments Mon, 22 Aug 2016 18:32:19 +0000 http://stockbanter.com/?p=1242 [Read more...]]]> According to the Schwab Newsroom dated today, beginning September 1, there will be a new sector added to the major classification system.

The current GICS started in 1999 as published byt the S&P.  There are 10 (or were 10 if you are reading this after Sept 1) classifications: Consumer Discretionary; Consumer Staples; Energy; Financials; Health Care; Industrial; Information Technology; Materials; Telecommunications; and Utilities. The 11th sector will be Real Estate.

10 Sectors


Formerly Real Estate was part of the Financial Sector. With current investing opportunites limited to stocks and bonds, real estate has been a new focus for many investors looking for better returns on invested capital. According to Schwab:

The new real estate sector will mostly be made up of equity real estate investment trusts (REITs), with some real estate development companies included. Equity REITs own physical property—such as apartment buildings, office property or shopping malls—and typically receive rental income. (Mortgage REITs, which own mortgages instead of physical property, will remain in the financials sector.)

For more information visit: http://www.schwab.com/insights/personal-finance/introducing-newest-sector-real-estate?cmp=em-QYD

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EPD’s Secret Sauce (EPD:NYSE) http://stockbanter.com/2016/04/03/epds-secret-sauce/ http://stockbanter.com/2016/04/03/epds-secret-sauce/#comments Sun, 03 Apr 2016 19:25:03 +0000 http://stockbanter.com/?p=1225 [Read more...]]]> epd

I like EPD:NYSE, here’s why.

Morningstar had this to say about Enterprise Products Partners LP

EPD’s secret sauce is in its ability to aggregate supply from multiple sources and deliver it to multiple end-user markets, whether that involves export markets or the petrochemical industry.

EPD’s top cash flows

1. NGL transportation and services
2. crude oil pipelines
3. petrochemical facilities
4. exports


Some major projects adding to cash flow diversity: (Source)

1. the Seaway reversal
2. the PDH unit,
3. ethane export facility.


EPD is in position to benefit any NGL growth, domestic or international.

Economic Moat

Analyst Peggy Connerty notes:

EPD operates within a niche segment of the energy
midstream value chain and has a natural economic moat
surrounding its operations

Here are some snippets of Peggy’s analysis of EPD
… The location of EPD’s energy infrastructure, including its proximity to refining centers along the Gulf Coast and pipeline connections to every ethylene steam cracker in the country.

…Extensive regulatory oversight of Enterprise’s assets acts as gateway for new entrants with many federal, state and local agencies involved in permitting, siting, pipeline rate setting/increasing, pipeline new build and abandonment
and power of eminent domain.

…Near monopoly status for many of its pipelines coupled with a fully integrated system, which connects multiple sources of supply with multiple end user markets…

Dividend Yield 6.45%

I consider this pullback on this stock as a buying opportunity even though the energy market is suffering losses and will likely continue to suffer losses for the foreseeable future. However in the long run, if I’m still alive, EPD is well positioned with integrated assets and geographic diversification.

Some estimates put real value at around $32, however that has been recently lowered from $36.


I am adding more shares if price hits $23.75, current price is $24.19 (Friday market close). I will monitor this buy and make price changes based on short term market data and stock movement. I hope to capture more stock below $24 before the stock goes Ex-Date. Last Ex-Date was Jan 27, 2016 so the next ex date will be around April 27th.

Full disclosure: Bought Shares on 10/6/2008, stock is up 111.36%  the dividend has been re-invested. This will be my second limit buy of EPD.

There is significant risk with this stock. Interest rates could go up, current legislation changes could affect EPD and all MLPs by making it more difficult to attract investors, raise capital and execute growth strategies. Plus there are weather risks such as hurricanes, spills, fires, and of course the ever loving explosions.

These are my ideas, always consider the source and make your own judgement.

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Oil at 1950’s Prices http://stockbanter.com/2016/01/20/oil-at-1950s-prices/ http://stockbanter.com/2016/01/20/oil-at-1950s-prices/#comments Wed, 20 Jan 2016 20:17:06 +0000 http://stockbanter.com/?p=1218 [Read more...]]]>

Chart of the day, Oil in the mid 20’s, the same price as the 1950’s. Some speculate that oil may fall as low as $18. If and when that happens we will have reached an investible bottom in Energy investments. My top energy holdings are CVX, VLO, OXY, KMI, EPD. Only VLO has outperformed the market and the sector.

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Change in Sector Investing 2012-2015 http://stockbanter.com/2015/12/26/change-in-sector-investing-2012-2015/ http://stockbanter.com/2015/12/26/change-in-sector-investing-2012-2015/#comments Sat, 26 Dec 2015 20:19:36 +0000 http://stockbanter.com/?p=1204 [Read more...]]]> The 2015 Beaglefolio

The Beaglefolio invests in 13 Sectors providing  both conservative capital appreciation through rents, royalties and dividends and medium risk growth investments at as core investment strategies.

ETF’s, Real Estate and BTFs (Bonds, Treasuries and Funds) are top three sectors in the YE 2015 Beaglefolio. In 2012 BTF, Tech and Energy were the top three sectors.


Energy made up 15% of total Beaglefolio assets in 2012. Due to loss in value and some selling of energy sector assets current holdings are just 6.4% of total assets.  CVX , VLO and OXY are core energy assets. Energy is ranked #7 of all Beaglefolio Assets.

2015 ETFETFs and Real Estate
The biggest swing in investing was starting to aggressively invest in ETFs in 2013 and new Real Estate investments were made in 2014 and 2015 .  Both investment sectors are at the top of the investment pyramid and both realized sizable increases in percentage of portfolio value over the past 3 years. ETF investments increased from 3% in 2012 to over 18% in 2015. All ETF and stock investments reinvest the dividends.

Below is a list of the Beaglefolio ETFs in order of total value as of 12/26/2015.

etfMorningstarHealthcare sector ETF: PJP was added to the Beaglefolio on 10/8/13. Morningstar rates PJP 5 stars. This ETF is up 56%. PJP has been a top performer since August 1, 2015 despite the volatility in the market.

Also in the healthcare sector PPH was added on 4/3/2014 and again on 7/7/2014.  It has returned 9.4%.

Food and Bev ETF: PBJ was added on 12/13/2013, returning a 28% return.

Small Business Sector ETF: SCHA was added on 6/4/2014 and Financial Sector EFT: XLF was added 3/20/2014. These EFTs have returned  1% and 7% respectively.

World AG EFT: CROP was initiated on 4/12/11 and 7/11/11. No further investments have been made to this EFT as it has languished at 6%. Morningstar now rates CROP a one star. Top CROP assets held by Japan, China, Australia, the US and Indonesia. With top food production plants in Canada, US, China, Thailand and New Zealand. Top fund holding is Nisshin Seifun Group

Going Forward
Additional real estate, EFT and stock investments will be considered during 2016. Stock sectors currently under evaluation are Tech, Financials, Discretionary and Health.

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I’m Buying Stocks $DIS $AAPL http://stockbanter.com/2015/08/24/im-buying-stocks-dis-aapl/ http://stockbanter.com/2015/08/24/im-buying-stocks-dis-aapl/#comments Mon, 24 Aug 2015 14:17:06 +0000 http://stockbanter.com/?p=1187 At 9:41 I bought more $AAPL at $100/share and on Friday at 2:46 pm I started a new position in $DIS at $99/share.

Stocks are going on sale. With 10%, 20% even 30% discounts there are some good opportunities out there.

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