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.