Playing Defense, New Dividends and Split Companies - A Year-end post

It has been a while since I posted something substantial concerning the portfolio.

 

I have been busy with work, co-planning (more like following) the honeymoon and multiple life events that will not be discussed in this post.  Suffice to say, I have been delinquent with my posts and for that, I apologize.

 

Now, with that out of the way, let's get on to business.

 

These days, the Market has been pummeled by the whole Fiscal Cliff discussion.  For those not in the know, if the US Government fail to come up with a deal to fix the budget deficit, there would be a catastrophic sequence of events that might bring the US back into a recession.  Automatic cuts in services, Defense and across the board tax hikes would probably spell disaster not only for the US but for the global economy as well.  That is why we've seen a lot of CEOs, insiders cashing out their stocks to take advantage of the current capital gains tax rate which in my opinion explains why high-flying stock such as Apple (AAPL) dropped so much in recent weeks.

 

Nonetheless, I think playing defense against a possible sell off/crash would be a prudent course of action which brings me to my last move for the year.

 

As you may know, I stocked up on my cash position in preparation for a possible Mitt Romney win in November.  I wanted to be in a position to buy GOP/Wall St-friendly stocks such as Defense Stocks (Lockheed Martin) and the Financials (the banks).  However, Mr. Obama managed to sneak in a win (good news/bad news, I'll leave that to you.  This is not a political blog) and the current status quo was maintained.  I left my cash reserves alone until after my honeymoon while I collect and analyze the data, news and trends from afar. 

 

Now, I have made my decision, I decided to use the $500 I have from the reserves to buy the GLD ETF.  The order was executed today (12/18/2012) and with the $4 fee (automatic investment), I got 3.0255 shares of GLD at $163.94/share.  The GLD is my hedge in case the US does go off the so call Fiscal Cliff where taxes would go up, the economy would go back into recession and stocks would drop.  The GLD would be my firewall in case my portfolio would take a hit and it would also be prudent to bring up my GLD position closer to the recommended 20% of my portfolio (It is currently at 16.7% including today's purchase).   Eventually, I want my AAPL position at around 10-15% of my portfolio (currently at 23%) and the rest of my positions at roughly 10-15%  so that I would not be heavily affected by the now "volatile" Apple stock.

 

In other news, I have received dividend payments since my last post.  It is safe to say, at least my portfolio was "working" on it's own.  Here's the breakdown:

 

Altria (MO): 10/10/2012 = $4.65 -> 0.1387 shares at $33.53.

Ex-Dividend Date: 12/21/2012 and Dividend Date: 01/09/2013

 

Waste Management (WM): 09/21/2012 = $4.19 -> 0.1287 shares at $32.56

                                           12/14/2012 = $4.24 -> 0.1260 shares at $33.65

 

Xilinx Inc. (XLNX): 08/29/2012 = $1.98 -> 0.0585 shares at $33.85

                               11/28/2012 = $1.99 -> 0.0584 shares at $34.08

 

Energy Transfer Partners (ETP): 08/14/2012 = $9.71 -> 0.2223 shares at $43.68

                                                 11/14/2012 = $9.91 -> 0.2354 shares at $42.10

 

Apple (AAPL): 08/16/2012 = $5.69 -> 0.0090 shares at $632.22

                        11/16/2012 = $5.71 -> 0.0106 shares at $538.68

 

Kraft (KFT -> KRFT + MDLZ): 07/17/2012 = $3.39 -> 0.0854 shares at $39.70

                                                   10/15/2012 = $3.42 -> paid to the cash fund which is possibly taxable.

 

Kraft did something special this year.  It broke up the company into 2 different companies which resulted in me having the following stock positions:

Kraft Foods (KRFT) = 3.9261 shares

Mondelez International (MDLZ) = 11.7784 shares

 

KRFT Ex-Dividend Date: 12/27/2012 and Dividend Date: 01/13/2013

MDLZ Ex-Dividend Date: 12/27/2012 and Dividend Date: 01/13/2013

 

KRFT will be the North American Grocery Division which will carry the Velveeta, Miracle Whip and Oscar Meyer brands.

MDLZ will be the Global Snacks Division which will carry the Cadbury, Milka, Oreo and Nabisco brands.

 

So far, both companies are performing well and upon further review, I would decide which of the two I would focus on. 

 

That's it. 2012 is over and the portfolio has survived the Elections, a Tech downturn and even the Apple sell off.  Not at all bad even though I could have locked in my Apple gains 3-4 months ago.  But there is no use reviewing the past.  I am still bullish on Apple and next year could be a big one for Apple with China, the rumored Apple TV set, the iPhone 5s and a possible refresh of the iPad.  If there is one thing I want Apple to deliver for next year it would be a more innovation iOS 7.  In as much as I love the iOS software, it would not hurt to have more innovation in the software and increase their lead from the Android OS.

 

With that, I would like everyone to have a happy holidays.

I'm not gone. I'm just busy.

Hey,

I know I have been absent for some time.

I've been busy at work among other things.

Anyway, since my last post, AAPL has paid me dividends and I think XLNX did too.

I'll be back with more updates soon.  I'm currently building up my cash position in preparation for the results of the US Presidential Elections in November.

See you soon!

Being Wrong and Owning Up

I was wrong with my LULU prediction from last week.

LULU closed at $54.40 today.

Oh well, I never said I'm a Wall Street expert.  Besides, even if I did the automatic investment plan, there is no guarantee at what price it would execute.  Also, it would only gain me maybe a quarter of a share more.

No regrets.

What makes me feel better is that I still see a lot of women wearing Lululemon apparel on the street.  So I am good. :P

Smoking Hot Dividends and the Hot Summer

The good old Big Tobacco company Altria (MO) just paid me a dividend.  I got paid $4.28 which I then reinvested to get 0.1217 shares at $35.17.  

As much as I was disappointed that Prop 29 failed, it is nice that I still profited from Big Tobacco's win.  For the uninformed, Prop 29 would have imposed a $1.00 tax on each pack of cigarettes sold in California.  Supporters claim that the additional tax would have paid for cancer research, tobacco law enforcement and smoking reduction programs.  As one might expect, Big Tobacco spent $46.8 Million (Altria/Philip Morris alone spent $27,531,416 - full disclosure).  Far outspending Prop 29 supporters' $12.3 Million.  The silver lining for anti-smoking supporters is that it was a tight race: 50.3% No vs. 49.7% Yes. The fact that the difference of 0.6% was all the extra $34.5 Million could buy, perhaps they'll be more successful next time. 

Now I bet I'm confusing some people with my 2-sided position.  How can I own tobacco stocks (MO) and yet support a ballot measure that would severely affect the Tobacco Industry?  Simple, I want a cure for cancer.  If the additional $1.00 tax would bring us closer, then so be it.  I also believe that smokers would not stop smoking even if they have to pay an additional dollar per pack of smokes.  They are too addicted to smoking and it would be a hard habit to break.  Either way, I'll still profit for the habit of addiction.  

In other news, I just posted a LIMIT order for 5 shares of Lululemon.  Yes, I did a limit order instead of my usual Automatic Investment tactic.  So what did I get for the extra $5.95 in fees?  Well, I got 5 shares of LULU at $55.90 (currently LULU is at $55.85 - 8:36AM).  I do not think waiting till next Tuesday for the order to post would have made the difference.  I believe LULU will be higher than $55.90 by next Tuesday. I would rather pay a bit more in fees to catch the downward movement now than save the $5.95 only to ride the possible rally next week.  I'd rather be wrong and next week and still end up with 5 shares of LULU than be right and end up with less than 5 shares of LULU.

So here is my Lululemon thesis:

LULU peaked at $80.30 on May 3, 2012 (52-week high of $81.09) and has been moving down since then.   I believe LULU has been dragged down by the Euro crisis.  I believe this decline would reach the bottom soon and LULU, along with it's athletic retail competitors would experience a boost during the summer months and of course, the Olympics.  I am confident this would happen because of what I've been seeing on the streets and at the gym.  People are out and about walking in the streets, working out and trying to get fit.  I still see a huge number of LULU gear on women and some men.  LULU's business model and their steady expansion in North America would be enough for them to keep growing and put money back in my pocket.

The summer Olympics would be another catalyst I'm looking at.  Fans would be watching the world's best athletes and would be "inspired" to buy some athletic apparel.  Sure, Nike, Reebok and Addidas would take the lion's share of the new active wear purchases but I believe the Lululemon brand would start capturing new customers.  If LULU managed to sponsor at least 1 medal winner, this could be big boost for LULU.  Even if the athlete wore Nike or Reebok during the events, if those athletes start wearing Lululemon for their other activities... like yoga sessions perhaps, LULU would be poised to benefit from this.  Only time will tell.

One more thing about LULU.  I have noticed that the women who wear Lululemon yoga pant also wear those pants as part of their daily apparel.  It is almost like what happened to UGGs (Deckers - DECK).  I would not discount the possibility that Lululemon apparel would become more than just yoga pants and workout gear.  It may even become an UGGs-style phenomenon.  However, unlike UGGs, LULU yoga pants look great and even if the yoga wear as daily wear trend dies down, people women would still need to buy yoga pants for their yoga sessions.  

With these points in mind, I predict LULU would do the head and shoulders movement and would rise back up to it's $80-$90 mantle within the next 12-16 months.  So yes, I am long term investor of LULU.

Dividends and the Europe Recession

First some portfolio updates:

Since my last post, I have received dividend payments from Xilinx Inc. and Waste Management.

Xilinx Inc paid me a total of $1.97 in dividends which I reinvested and bought 0.0618 shares at $31.88.

Waste Management paid me a total of $4.14 in dividends which I reinvested and bought 0.1277 shares at $32.42.

On deck is Kraft (KFT).  Tomorrow is their Ex-Dividend date (06/27/12) and I'm speculating a dividend date sometime in July or August.

I recently became aware of a Real Estate Investment Trust (REIT): Realty Income Corporation (Ticker symbol: O).  What struck my fancy was the monthly dividend payments this REIT pays.  It's current dividend yield pays at 4.40% and has been up about 3 points since I got introduced to it.  

On the surface, this looks like a great investment but I still have to do my homework (and accumulate enough capital to buy a sizable position) to see if the monthly dividend is worth having another position to manage.

Meanwhile, Europe has been pulling the global economy down... at least it feels that way.  Spain and Greece are currently experiencing what the US had gone through in 2008.  Basically, all the US can do is wait and hope that Europe would figure out a way to fix this recession.  

I'm just happy that my portfolio and retirement accounts have managed to survive this Euro situation.  I'm sad that I currently don't have enough capital to double down on my positions and mutual funds (car repairs would do that).

Hopefully this would be an opportunity for me to keep buying while everyone seems to be selling.  Good times for the bullish!

Dividend Payments and the Facebook IPO Fizzles

My favorite natural gas position just paid me a dividend.

ETP paid me $9.53 (May 15, 2012) which I reinvested back to get 0.2065 shares at $46.15.

I really love dividends.

Just an update, XLNX's Ex-Dividend date was May 14, 2012.  Dividend date is on June 5, 2012.

Now for the news of the day...

Unless you've lived under a rock for the past few weeks, you would know that the Market has been tanking due to the reported European woes that focused on austerity measures and the possible Greek bank defaults.  

A lot of people may be worried and panicking while I am grinning from ear to ear because this massive sell-off may just give me another chance to buy more stocks for our stock portfolio.  It also inspired me to get more shares of my mutual funds for my Roth IRA.  Europe may be in trouble but as long as the USA does not collapse along with our European brothers and sisters, I'm very optimistic that this "bear" market is the second chance I've been praying for some time.

In other news, there's this small social networking company that went IPO today.  

Facebook (FB) was priced at $38/share and opened at $42.  The initial pop went up as high as $45 but that quickly dropped to just over $38.

Currently, FB is holding steady at $40-$41 (as of 11:41 am PST).  

My brother asked me if I'll buy FB today.  He even told me he can spare $10,000 to buy at the opening only to sell it at the end of the trading day.  I declined his offer and told him that I think FB was overpriced and that I do not invest in companies that does not show a positive cash flow (FB has yet to report their financials publicly... I'll check again later).  

With only an hour of trading left, I think I just saved my brother $10,000.  Can you imagine if I took his $10,000 and bought FB at the opening price of $42?  I would have lost him $476!  I guess I turned out to be a financial genius this time.  

Jim Cramer had warned his viewers to avoid FB in the after market (at the opening $42 valuation).  He also said that at $38, FB was way overpriced and that they should have kept the price at around $28-$30.  

Comparing FB to LinkedIn (LNKD).  LNKD opened at $45 and closed at $94.25.  LNKD outperformed FB's performance on IPO day.  There was even a time that LNKD was over $100 (Today, LNKD is at $100.18).  

What went wrong with Facebook?

Here a short video from the LA Times: 

I think the delay of the initial trading (I checked at 7am today and there was no info on any FB trading), high IPO price, GM pulling out of Facebook ads, Eduardo Saverin renouncing his US Citizenship to allegedly avoid taxes and the high amount of stocks being sold (trading volume) hurt Facebook (FB).  I guess the massive hype did not help FB and it probably disappointed a lot of investors.  I took a bet that the upside of getting the IPO will not make up for the downside of the IPO disappointing Wall Street.  I could not afford losing that much over a profit so insignificant the fees and taxes alone would eat it.  

This time, I was right. 

Automatic Investment Plan for May 1, 2012 Results

The Markets closed up today.  

The DOW Jones Average at 13,279.32 up 65.69 (+0.50%).

The NASDAQ is at 3,050.44 up 4.08 (+0.13%)

The S&P 500 is at 1,405.81 up 7.91 (+0.57%)

It is safe to say that my automatic savings plan purchase would be up a bit.  Here are the results of today's trading:

ETP   = 3.9240 shares @ $49.95

XLNX  = 2.6490 shares @ $36.24

WM    = 6.4473 shares @ $34.28

As you can see ETP was around $2 up from when I set-up the purchase.  Luckily, WM and XLNX were a few cents down which made up for the "pricier" ETP.

In other news, AAPL was down a lot today.  

I bet the stock is still reeling from the New York Times article that exposed how companies like Apple manage to avoid Billions of dollars in taxes by leveraging tax loopholes that primarily benefit huge corporations.  As you can imagine, public opinion on such practices have driven the stock price down.  However, I am not concerned for Apple.  If at all, I wish I had $1,000-$2,000 extra to buy more shares of Apple.  

To support my bullishness on Apple, here are some Apple news:

Apple just released and sold out tickets for their WWDC event in June and speculations are building up that the new iOS 6 software would be released at the event.  Let us also not forget that the Apple earnings call proved that sales of the new iPad, iPhones and Macs are strong.  So I expect Apple to take in more record breaking earnings numbers in the near future.

Dividend Payouts, Apple (AAPL) Worries and Automatic Investment Plans

April has been mostly good for our portfolio.  

We got paid dividends twice in April.  First, Altria (MO) paid me $4.23 in dividends on April 9, 2012.  With my Dividend Reinvestment Plan, I was able to purchase 0.1358 shares of MO at $31.15.

Second, Kraft (KFT) paid me $3.36 in dividends on April 15, 2012.  Again, my Dividend Reinvestment Plan bought me 0.0900 shares of KFT at $37.33.

This may seem peanuts to the untrained eye but that's $7.59 of free money.  Plus, I got more shares of a company which can increase in value over time.  Besides, $7.59 will not pay my bills so it might as well work harder for us in the stock market.

On top of that, WM, MO and LULU have been pulling their weight with the appreciation of our portfolio.  Apple still owns the bulk of our growth but the Cupertino company has been beaten up these past few days.  Rumors of supply issues and that mobile carriers were sick of Apple plagued the stock price which  dropped to $560 from an all-time high of $644 (04/10/2012).  I'm not worried.  It's just some profit taking and rumor-mongering (although that patent infringement judgement against them can be an issue).

Now, I have some cash to spend and I'm looking to buy more shares to add in our portfolio.  

Currently, I'm looking at Xilinx Inc (XLNX) and Waste Management (WM).

XLNX looks tempting because of it's upcoming Ex-Dividend date (May 14, 2012 with a dividend date of June 5, 2012).  I also expect XLNX to increase their net profits due to the upcoming technology purchases by consumers (back to school/college CPU purchases for example) in the near future.  Intel has also launched their IVY Bridge chips which would spur a new line of products that would come from Xilinx and it's competitors.

However, the trend of XLNX and the possible competitive arms-race may not bode well for my stock position.  Also, Wall Street's estimates does not give me confidence either.  In addition, if I buy more XLNX, my asset allocation would be heavy on Tech ahead of the summer Tech Sector slow down.  Furthermore, the PEG ratio of 4.89 would suggest XLNX would be an expensive stock to buy (AAPL is at 0.66 - my cheapest stock purchase).

Given my concerns and with Analysts' HOLD recommendation, I would seriously reconsider my plan of buying more XLNX.

On the other hand, WM has been showing better news than XLNX.

WM has seen profits grow at the average of 1.2% year-over-year.  WM has managed to capture the methane gas from their landfills and transformed it into energy for their trucks and possibly households.  Also, WM has E-Waste recycling services contracts with electronic companies such as Sony.  I've been an environmentalist even before being "Green" became cool and this news caught my attention and made me feel better with my investment. Besides, worse case scenario, people would still need WM to get rid our their trash... a sustainable business if you ask me.  Furthermore, I'm a bit underweight with my WM position (Business Services Sector at 5.83%) at $187.99 (4.6% of total portfolio).

So perhaps, I'll use the $525.00 dollars I have in cash to buy some WM...  or perhaps split it with some Energy Transfer Partners ETP as part of my Natural Gas/Greener Fuel play.

All right, I have decided:

ETP = $200 - $4 fee = $196/$47.72 as of 04/24/12 1:15pm = 4.1072 shares

WM = $225 - $4 fee = $221/$35.98 as of 04/24/12 1:15pm = 6.1423 shares

I'll leave the $100 cash in the sidelines and wait for more opportunities to get in the stock market.

Update: I've decided the use the $100 to get as much XLNX as possible.

XLNX = $100 - 44 fee = $96/$36.67 as of 04/27/12 9:38am = 2.6179 shares

Aside from the upcoming dividend payout, something tells me that XLNX will be key yo the increase of data use by smartphone users.  Especially the 4G LTE group...  perhaps, a new 4G phone from a Cupertino company?

The Automatic Investment Plan will execute on May 1, 2012.

Let us wait and see.

Automatic Investment Plan for March 27, 2012 And Some Updates

I was able to beat Kraft's (KFT) Ex-Dividend date of March 28, 2012.  My order of $350.00 worth of KFT stock posted on March 27, 2012.  I locked in 9.0937 shares at $38.49 a piece.

Also, on March 23, 2012, Waste Management (WM) paid a dividend to their investors.  I received $1.84 and reinvested it to get more shares.  The dividend bought me 0.05727 shares at $34.91.  It is so nice to get paid just by investing in a company.

To recap, our portfolio looks like this:

AAPL  = 2.1473 shares   = $1,331.11 (Market value as of 10:45 am 04/04/2012)
ETP     = 6.7367 shares   = $313.12 (Market value as of 10:45 am 04/04/2012)
GLD    = 2.1581 shares   = $338.77 (Market value as of 10:45 am 04/04/2012)
KFT    = 11.6030 shares = $443.47 (Market value as of 10:45 am 04/04/2012)
LULU  = 7.3301 shares   = $548.36 (Market value as of 10:45 am 04/04/2012)
MO     = 10.3151 shares = $321.83 (Market value as of 10:45 am 04/04/2012)
WM    = 5.2271 shares   = $182.69 (Market value as of 10:45 am 04/04/2012)
XLNX = 6.2860 shares   = $221.90 (Market value as of 10:45 am 04/04/2012)

Cash available = $225.68
Total Portfolio Value = $3,926.92 (Market value as of 10:45 am 04/04/2012)

If I were to play Jim Cramer's Am I Diversified Game where I look at my top 5 positions:
1. AAPL - Tech
2. LULU - Retail
3. KFT - Consumer Staple (Food)
4. GLD - Gold ETF
5. MO - Consumer Staple (Vice)
You will see that KFT and MO are overlapping sectors.  Normally I would have to switch out the weaker stock and replace it with either an energy, biotech of financial stock.  However, I can argue that KFT is more of a food and household pantry play and MO is more of my consumer vices play.  Also, both positions pay healthy dividends and are great recession plays.  People would still eat food (probably pre-packed like Kraft's Mac & Cheese) and addicted smokers will still smoke (as shown by my brother and sister).  So perhaps, I can get away with the overlapping sectors.

A small note:
Last week's Mega Millions Lottery price peaked at $656 Million dollars.  As millions of hopefuls lined up for hours and spent hundreds (some even thousands) of dollars on tickets with the hope of winning that record prize.  In spite of the lousy 1 to 176 million odds, people still hoped and prayed that they win the lotto.  Majority spent most of their disposable incomes (or worse, borrowed money) to gamble where the odds just plain suck.  If only they used some of the money to invest in a ROTH IRA or buying stocks, they would probably beat 99.9% of the Mega Millions hopefuls and made some money.

I for one, made some real money and only "lost" $1 in a Mega Millions Office Pool (Hey, it doesn't hurt.. All I needed was to be the 1 in 176 million).

Uncle Sam's Cash Back, Apple Goodness, Promos and Some Cheesy Dividends

Our household recently received our State and Federal tax refunds.

After spending $1000 to help pay down my wife's car payment, we decided to split the remaining cash equally between the two of us.  Then my wife asked me: "What would you buy with your share of the refund? An iPad?"  I answered: "I'll buy more mutual funds for my Roth IRA and some stock for our taxable investment account."

She smiled.

For the past four years, I have used my tax refunds to invest in my Roth IRA.  I figured, why spend money and pay more taxes (sales tax) when I can just make more "tax free" money in my Roth IRA?  The answer is a no-brainer.  Reinvesting my tax refunds in my Roth made me more money and gave me more satisfaction compared to whatever gadget I would have bought.  I love making (easy) awesome decisions.

So what did I buy with the money?  I checked our portfolio and checked which stock had the closest Ex-Dividend date.  It turns out Kraft (KFT) would have their ex-dividend date on March 28, 2012 (next Wednesday).  I then transferred money to the account and set-up the Automatic Investment Plan for Tuesday, March 27, 2012.  This should be enough time for me to get the stock before the ex-dividend date and be eligible for the dividend.

Here is a breakdown of my transaction:

1. I transferred $350 to the account (the rest of the money will go to my ROTH).

2. I set-up the automatic investment plan.

3. I'll buy $350 worth of KFT shares - Potentially 9.1217 shares @$38.37 (as of 9:47am today).

4. There is no fee this time due to a promo (Thanks!)

5. I'll potentially own 11.6310 shares of KFT.

6. KFT currently pays a $0.29/share dividend - $3.37299 potential payout.

Thanks to Kraft, I'll have a nice and "cheesy" dividend. LOL

In other news, last Monday, Apple announced that they would pay a 1.8% dividend ($2.65/share quarterly, $10.60/share annually) to its investors.  Apple will also spend $10 billion to do a stock buyback.  This will reduce the number of stocks outstanding which would mean every remaining investor would own more of the company.  This obviously is good news for me.

The dividend payout would allow "value-oriented" mutual funds to invest in Apple.  In my opinion, this is both good and bad news.  The good news is that Apple would be exposed to more mutual funds and the bad news is that this opens Apple to more volatility as mutual funds' dollars goes in and out of Apple depending on how the stock and the market performed on a given day.  This also makes diversification a bit tougher as I expect a flood of new mutual fund investors.  I suggest checking your mutual funds' holdings and try to be as diverse as possible.

The dividend is a welcome bonus for me as an investor.  Although the dividend yield is not as huge as HP, Microsoft and the others but the growth rate and performance of Apple more than makes up for the comparatively "small" dividend.  Besides, I'm more bullish of Apple than HP.

Tempting as it is to get more Apple stock, I'll keep my emotions in check and keep our portfolio as balanced as possible.  We still have a long way to go.

Chasing Altria's (MO) Ex-Dividend Date, Dodging Yelp, Xilinx Inc. (XLNX) and Energy Transfer Partners (ETP) Pays Me Some Dividends and Can Anyone Stop Apple (AAPL)?

I just bought 7 more shares of Altria (MO).  

I executed a limit order for $30.41 which bumped my shares of MO to 10.3151.  It cost me $222.82. I bought 7 shares for $212.87 plus the transaction fee was $9.95.  This order was $5.95 more than what it would have cost if I had waited for the Automatic Investment Plan.  I did not wait for the AIP because it would buy the shares on MO's Ex-Dividend Date (Tuesday, March 13, 2012) which would make me ineligible to receive the dividend (per SEC definition of the Ex-Dividend Date).  This would have been a loss of $2.87 (7 x $0.41/share).

Where would I gain the $3.08 difference?  That would come from stock price appreciation (MO's chart has been trending up and today it closed at $30.46) and yield (I'll be paid dividends for 10.3151 shares instead of 3.3151).  I would be able to use the $4.22 ($4.2291 rounding down) to reinvest in MO pushing my yield higher.  

The dividend would be paid on April  9, 2012.

Speaking of dividends, Energy Transfer Partners (ETP) and Xilinx Inc (XLNX) just paid me some nice dividends.  XLNX paid $1.19 and ETP paid $5.91.  These dividends were reinvested in the stocks my yields.  I love dividends.

In other news, Yelp (YELP) went public recently.  Just like LinkedIn (LNKD), Zynga (ZNGA), Pandora (P) and Groupon (GRPN), I avoided these new IPOs since I did not get any shares pre-IPO and I do not have enough cash (and time) to get in the deal at the moment of the IPO.  With the exception of LNKD and in some way, ZNGA, these new tech IPOS have no profits to speak of.  Their business models rely heavily on Online Advertising and "Eyeballs" while their costs are going up (content licensing, customer acquisition and labor).

Although I'm not a total Bear on these tech stocks, I am not risking my hard earn cash investing in companies that make no money.   I am even on the belief that even Facebook would fail to satisfy Wall Street post-IPO.

Only time would tell.

Finally, Apple (AAPL) just announced their first major product launch since the death of Steve Jobs.  The new iPad is poised to keep Apple's lead in the tablet market and is targeting the market share of laptop makers.  During the keynote presentation, Apple CEO Tim Cook declared the iPad as the major leader  of the  Post-PC era.  Mr. Cook and company did really well during the keynote and even though it lacked the Steve Jobs Halo Effect, the recent keynote was filled with oohs and ahhs from the crowd and the tech community.  The new iPad boasted the new Retina Display, 4G LTE, a faster graphics processing chip and an amazing battery life all in the same "low" starting price of $499.  Apple also kept the iPad 2 at a lower $399 price.  Tech pundits and analysts predict AAPL would sell at least 10-15 million units on the first weekend.  I'm even willing to bet they would sell up to 20 million units.  My only fear with this prediction is whether Apple has enough iPads to sell that weekend.  I'm sure the workers at FoxConn worked double/triple overtime since November producing these magical devices.  

AAPL's stock price played around $528-$536 during the announcement.  Normally, an Apple event brings down the stock price low enough for a nice re-entry but this time, the stock price held its own.  Perhaps Tim Cook symbolized stability in the company and not seeing a frail looking Steve Jobs made investors "feel" secure about Apple.

Although Apple fans including me would have preferred seeing Mr. Jobs work his magic on stage, his presence, in spite of his health issues, was sorely missed.  As for AAPL's future, I am bullish that this company would keep printing money for years to come.  Their stock price though high, is cheap compared to it's competitors.  The PEG ratio is at 0.66, making it the cheapest of my positions (believe it or not).  The product line, high profit margins and brand equity would keep AAPL on top for a while.  As long as the company continues to innovate and execute, I would keep investing in Apple (and buy a product or two).

Updates and the Current Bull Market

So just a brief update.

AAPL just had their Greatest Of All Time (GOAT) quarterly earnings report.  This earnings call put Apple 4th out of the top 10 best quarterly earnings of a companies of all time... most of the top 10 are Oil and Gas companies.  As expected, this boosted the stock up to $493.17 today.  Just 7 points shy of Jim Cramer's $500 price mark.  In as much as I want to get more Apple stock, I want to do more research whether or not the stock still has room to run.  Pending any new product launch in the next 2-3 months, I think I'll wait for a pull back before getting more AAPL.

My LULU position also did well since my last post.  Being up 27% makes me consider to take some profits.   If only I had more than 7 shares of LULU.  After fees and taxes, my profits would be under $20.  So I think, I'll let it ride a bit more or get some more shares.  My thesis is still solid.  I still see a lot of Lululemon customers in the gym and even the new active wear line from the GAP (GPS) only solidifies my theses:  The Healthy Mind and Body movement has some wings besides, bikini season is just 3 months away.  It also helps that the unusually warm winter helped more people work out more.

Finally, XLNX might be giving me a well deserved profit.  Finally give me a 0.43% appreciation.  Of course I can't sell it at that price... fees and taxes.  Plus, it's new hardware season.  I bet XLNX would be part of it.

All in all, my portfolio is up 16.43% ($397.46).  Mainly due to Apple, LULU and GLD.

some might even say we're in a Bull Market.  I think now is the time for some cautious investing optimism.

Upcoming Dividend pay outs:
XLNX - EX-Dividend date Feb 6, 2012.  Dividend date:  Feb 28.
ETP - EX-Dividend date Feb 3, 2012 Dividend date: Feb 13.

Auto Investment Plan for January 17, 2012 Results

The market was in general up today and here are the results of my Auto Investment plan that triggered today:

ETP  = 2.4459 shares @ $47.43
KFT = 2.5093 shares @ $38.26
MO  = 3.3151 shares @ $28.96

I was just pennies off the 01/10/12 prices so it's no big deal.  Unfortunately, the new positions did not show how it it did for my fund after the closing bell.  However, ETP showed well today and is one of the 3 positions that are up today which brings my fund up 14%.

Oil Prices Go Up... so I getting more ETP

There's a labor strike in Nigeria which would threaten oil supplies in the near future.  I do not have positions in the oil but I have ETP in my energy sector play.  I'm also counting on an increase of natural gas usage as the winter progresses.  Therefore, here's my plan:

Along with next Tuesday's Automatic Investment Plan,  I'm investing an additional $120.00 in ETP.  After the $4  fee, I'll probably end up with 2.4462 shares (at $47.42 as of 9:03 am 01/12/12).  This would bump up my Oil and Energy position and along with my Consumer Goods plays (KFT and MO), would balance out my asset allocation.

The DOW and the Market are ticking downward since the rally earlier this week.  Profit taking as expected.  This is good since I'll be getting my purchases on the pullback.

New Year, New Stock Positions

One of my New Year's Resolutions is to find new companies to invest in.  Even though my portfolio did well in 2011 in spite of the end of year Euro woes, I still need to have more diversity that would shore up my performance and hedge my bets from volatility.

In 2011, I noticed most of my gains came from AAPL and at times, LULU.  I am grateful but I believe I need something that would perform well and would take the load off AAPL and LULU.

Therefore, I'm looking for companies that would be a great fit in my portfolio.

I am currently looking at Altria (MO). This company is in the Consumer Goods sector where it is in good company with Pepsi (PEP, General Mills (GIS), Clorox (CLX) and Kraft (KFT).  Basing on the PEG rations, only KFT beat MO in terms of being "cheap" in an apples-to-apples comparison.

Looking at the charts, both MO and KFT trended closely together throughout 2011.  Both outperforming the S&P 500.

MO's financials looks solid according to their latest 10-Q filing and they are cash flow positive this last quarter thanks to a debt refinance that was done in the previous quarter.  MO had a pre-tax judgement made against them, however, they have been proactive in lowering their yearly guidance and enacted some cost-cutting measures in order to preserve the dividend yield and business did well enough to off-set the additional expense for this quarter.  Even though there was a slight decrease of market-share among smokers, the success of the e-cigarette helped boost MO's earnings.  As sad as I am to say this, as long as people smoke, I would remain bullish with MO.  I'll just watch out for government regulations, additional taxes and class-action lawsuits against MO.

Altria's Numbers: Jan 10, 2012 end of trade day
last trade = $28.91
day's range = $28.78-$29.00
52 week high = $30.40 low = $23.20
P/E = 17.30
EPS = $1.67
Div & Yield = $1.64 (5.70%)
PEG = 1.74

Kraft's Numbers: Jan 10, 2012 end of trade day
last trade = $38.02
day's range = $37.90-$38.15
52 week high = $30.21 low = $38.05
P/E = 20.74
EPS = $1.83
Div & Yield = $1.16 (3.10%)
PEG = 1.66

Kraft is in the diversified foods industry and keeps MO company in the consumer goods sector.  It would be almost impossible to not find a KFT product in a typical household pantry.  In the Nov 4, 2011 10-Q filing, KFT proposed to spin-off its businesses into 2 independent public companies: 1) The Global Snacks Business and 2) The North American Grocery.  Of course, this would be subject to regulatory review and it would probably cost the company a lot of money and might trigger some sell-off from nervous investors.  KFT posted an increase in net revenues and is expected to keep growing as the operating costs would go done as soon as the integration of Cadbury is complete.

Not everything is rosy in KFT as they have a legal dispute with the Starbucks CPG Business over breach of agreements concerning the control of the Starbucks packaged coffee products in the grocery store.  This dispute can be a distraction and legal fees might eat in the gross profits of KFT.

KFT's income statement looked solid although the cash flow statement made me a little uneasy.  As I mentioned before, I am wary of companies who have a negative cash flow.  Although KFT can explain this by the Cadbury acquisition and the spin-off proposal, I still worry about debt repayments that are due and interest payments from these loans.  I'm sure management would refinance and pay down these debts but the prospect of not having enough cash could mean a cut in the dividends or massive lay-offs just to keep the stock price from dropping.

My worries were alleviated a bit by the knowledge that Berkshire Hathaway and the Vanguard Group are invested in KFT.  Cramer also recommended getting some KFT along with wallstreet analyst giving it a strong buy.  If I were to buy KFT, I would base it it's growth estimates and customer mind share.  Besides, packaged food is not a cyclical product as people would still eat in spite of the recession.

Here's what I'll do:

I'll buy MO and KFT.  I'll put in $100 in each position which after fees would yield me 3.32 share of MO and  2.52 shares of KFT (est based on today's closing prices).  My target to ride the current upward trend of these stocks and to keep buying if these stocks end up in a sell off.  I'll use these positions as my recession defense stocks which I expect would take the load of my AAPL and LULU stocks.