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. 

New Stock Purchases... And It's NOT Groupon (GRPN)

I got some spare change around $300.  So I decided to put it in our Investment fund.  I'm almost done with my ROTH $5,000 limit so now, it's time to double down on our stocks.

Here are my picks for next Tuesday's trading day (via Automatic Investment Plan - lower fees): prices as of 11/042011 at 9:48 am

GLD = $200 - $4 (fee) = $196.00/$170.53 = 1.1494 shares
WM = $100 - $4 (fee) = $96.00/$31.31     = 3.0661 shares.

The Market in general has been a roller coaster these past few weeks.  Europe still has the Greek debt issues while the US Unemployment rate went down a bit. So you can imagine how some days the market is down and some day it's up.  Here's my view, whatever short term news/events that affect the markets in the near future should not affect how I view my investments (unless, these events are specifically about my portfolio positions).  In fact, the more the Markets put fear into the masses, the more I should invest (after due diligence of course).

So why GLD and WM?  Well GLD is easy.  It is a Gold ETF that would serve as my hedge against inflation and government catastrophes that can weaken the dollar or the US's credit rating.  I want more share of GLD to help shore up my portfolio.  WM on the other hand is a waste disposal play that I believe would be busy in the upcoming holiday season.  It would haul millions of pounds of trash and perhaps even clean up after snow storms and other weather-related events.  Plus, they just paid their dividend in Sept 2011 so I expect the next dividend date to be in December.  So I'm putting in more shares to get that juicy dividend.

All in all, I'm just balancing my portfolio and building up my positions so that I can eventually sell shares to recoup my initial investment and play with the house's money (pure profit play).