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TMFLegendPhoenix (< 20)

September 2013



Luke, the Force runs strong in your family.

September 08, 2013 – Comments (4)

Hello there.  Come here, my little friend.  Don't be afraid.
It's been a while since I posted (not counting last week's post) and so I think a summary is in order.  Without further ado, I'd like to introduce you to the youngest member of the LegendPhoenix clan.  Perhaps regular readers of the blog would guess that her name might be "Leia".  Well, it's not.  But you will appreciate that we have named her Hanna!

Back in December I announced that I would suspend my investment activity for a year or so (until the financial dust from the new baby has settled).  Since then, I've learned quite a bit about college 529 plans and even got one started for little Hanna.  I've also become an expert at the awful and limited 401k options that my company offers and I've taken a more active role managing that. 
While researching retirement options I was introduced to the concept of the IRS's "Required Minimum Distributions".  That's when you have money in a tax-deferred retirement account (such as a traditional IRA or 401k), the IRS makes to take some cash out whether you need it or not so that you can pay taxes on it.  I was speaking with my dad about this and it inspired me to write this, which was syndicated by
After exhausting all the interest I could from those exercises I decided to re-interpret the rules of my own moratorium to become "suspend funding of investment activity".   The difference is subtle, but if I'm not allowed buy anything, I'm still allowed to do something. 
This summer I've decided to take a critical look at my portfolio and figure out to which companies I'm truly committed.  I'd like to pare the number of companies I'm following and reinvest to build up my positions in the rest.  So far I have jettisoned Vodafone and have put Apple and Brookfield on the chopping block.  I also plan to sell the small amount of Dominion that I bought through my discount broker since I've been buying directly through Dominion ever since that first purchase. 

Here's the performance of my portfolio with dividends and commissions factored in:
Dominion, +30%
Aflac, +68.1%
Flower Foods, 71.6%
Costco, 28%
CVR Partners, -1%
Apple, +28.2%
Brookfield Infrastructure Partners, +37.7%
Terra Nitrogen Company, L.P., +67.9%
Vodafone, +18.5% (SOLD)
ExxonMobil, +4.5%
Diageo, +48.4%  [more]



I suggest a new strategy, Artoo.

September 02, 2013 – Comments (0) | RELATED TICKERS: AAPL , VOD

Yikes: this is my first blog post of 2013.  Happy 2013!  It has been an eventful year so far and I'll fill you in on the big details in my next blog which will be a summary.  First I'd like to discuss the latest events regarding my "Stock of the Month" portfolio.  It has been two years since I proclaimed "I'm not looking for a friend, I'm looking for a Jedi master."  I received a lot of great advice in the comments generated by that post; TMFBabo noted how this exercise could improve my investment process over time, chk999 offered some great books for a beginner and shamapant warned about investing in too many different companies.
Since then I started very small positions in
Dominion Resource  (NYSE:D) "It surrounds us and penetrates us. It binds the galaxy together."
Aflac (NYSE:AFL)  "If you strike me down, I shall become more powerful than you could possibly imagine."
Flower Foods (NYSE:FLO)  "Patience! For the jedi, it is time to eat as well."
Costco (NASDAQ:COST)  "Excuse me sir, but that R2-D2 is in prime condition, a real bargain."
CVR Partners, LP (NYSE:UAN)  "Traveling through hyperspace ain't like dusting crops, boy."
Apple (NASDAQ:AAPL)  "Where did you dig up that old fossil?"
Brookfield Infrastructure Partners (NYSE:BIP)  "With our combined strength, we can end this destructive conflict and bring order to the galaxy."
Terra Nitrogen Company, LP (NYSE:TNH)  "Great, Chewie, great! Always thinkin' with your stomach."
Vodafone (NASDAQ:VOD)  "Sir, l am fluent in six million forms of communication."
ExxonMobil (NYSE:XOM)  "Master, moving stones around is one thing. This is totally different."
Diageo  (NYSE:DEO)   "Chewie here tells me you're looking for passage to the Alderaan system."

Here and there I would add to one or more of my holdings when it made sense.  Now, after two years, I can look back at the companies I chose not to add on to and re-evaluate their story.  For the near term, I think I'd like to pare down these eleven small positions and add more shares of less companies.  I did not buy and additional Apple, Vodafone, Brookfield nor Dominion Resources and I'm going to sell these and double down on some of the other companies in my portfolio.

Time for me to Sell
Apple - When I picked up this one, Steve Jobs had just stepped down as CEO.  Since then, the major events affecting the company's technology output have been the passing of Mr. Jobs and not much else.  Sure they've sold tons of gadgets, entered new markets, introduced SIRI, but the unexpected innovations that we've come to expect include: a smaller version of their iPad and painting their iPhones gold.  Now we have activist investors eying Apple's huge cash hoard and introducing ways of "unlocking shareholder value."  It seems that the goose who laid the golden eggs is gone and once the vultures have divvied up the remaining egg-money, what will be left of the company itself?  Share buy-backs and dividend increases aren't why I invested in Apple, and the reason I did doesn't seem to apply any longer.  I'm more interested in companies who have a business model that will carry them beyond the foreseeable future, not just until the back account has been drained.  I have not yet sold my Apple, but I probably will in the next few weeks.  

Vodafone - When I bought Vodafone, it was just before the ex-dividend date for a special dividend from their venture in Verizon Wireless.  As Vodafone owned 45% share of Verizon Wireless, I was hoping to see this type of special cash on a regular basis (at least once per year).  Verizon (NYSE:VZ), the owner of 55% of Verizon Wireless (and the one that controls the wireless venture's dividend payouts), was playing games with this dividend in an attempt to pressure Vodafone to sell its stake; a stake that Vodafone values to the tune of $130 billion.  Where's Verizon going to come up with that kind of scratch?  They plan to borrow $60 billion from a slew of banks, generate $10 billion from "small transactions" and give Vodafone $60 billion in Verizon stock.  I believe this, ironically, makes Vodafone the largest single shareholder of Verizon.  At any rate, I decided this soap opera was too much for me to keep track of and I split, selling at $31.26 / share (after factoring commission). 

Brookfield Infrastructure Partners - I like this company. But in the last two years, for whatever reason, I never bought any more since the initial purchase.  And even now as I look at this company, I'm lukewarm to the idea of increasing my shares.  I'm not necessarily in a hurry to sell BIP, but this will most likely end up a casualty when an opportunity arises to increase one of my other holdings.

Dominion Resources - After my initial purchase of this company from my discount broker, I started buying directly from the company so although I have continued increase my stake in Dominion, my first few shares are not lumped in with what I'm currently adding to.  I looked into simply moving my small amount from the discount broker to SunGard (the company that manages Dominion's shareholder services) but unlike moving shares from one discount broker to another, this process was going to be pain in the butt.  I've decided to sell this small amount and pool the cash from the other sales to bulk up something else.  For the purpose of clarity, once I sell, I will remove Dominion from this portfolio.  I have plans for portion that I've been buying directly from their website, which I will reveal to you at a later date.  [more]

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