Stocks Update

For some reason, I have always tried to highlight the bad news rather than the good. I suppose it keeps me humble, but really, I do it to ensure a sufficient amount of fear. Mark Cuban, owner of the Mavs, was once asked why, after making billions, he kept going. His answer: "Fear." In that vein, I am going to provide a "stocks update" on a day when the Dow and Nasdaq went down over 3%:

Open Positions
CNB = 0
EQ = 0
EWM = (slightly negative; 150 shares)
GE = 0 (slightly negative; 179 shares)
IF = -2.1
PFE = -6.4
PPS = +0.1
WYE = -2.6

Total: losing/negative 2.75%

I am not worried. Except for IF, these are all good dividend plays (meaning, they have enough cash flow or cash to pay their dividend over the next year). Even if Pfizer (PFE) has to "repatriate" (bring some money to its U.S. operations from abroad, thereby taking a tax hit) some cash to pay its dividend, I am guessing it will still do whatever it takes to pay the dividend.

Here is what my friend, who is a tax lawyer, said about repatriation--and it sounds like good news, rather than the bad news the general media is making about the possibility of repatriation:

I took international tax in law school but I am fuzzy on the subject not having reviewed it in awhile. The only thing I remember about repatriation is that foreign earnings of controlled foreign corporations were not subject to tax until they were brought back into the U.S. When the funds were brought back to the U.S., or repatriated, a corporation could then file some sort of election to exclude up to 80 - 90 percent of the repatriated funds from income.

I would guess that PFE would try and take advantage of that generous tax break on repatriated earnings if they did not want to risk cutting their dividend to U.S. shareholders.

If the tax hit is only 10 to 20%, that isn't so terrible. My hunch is that Pfizer's board sees its stock as a "widows and orphans" stock and won't cut the dividend for another year a half at least.

(Today, I bought 100 GE @ 30 and change; also, on June 9, I bought 29 more shares of GE at around 30.)

Overall, I am down about 1400 dollars since I sold off almost all of my holdings earlier. Most of the 1400 dollar loss is because of my recent large buy of Pfizer. My prediction last month or so was correct; i.e., that the market would suffer a large hit. For the most part, I heeded my own advice; otherwise, the damage would have been more severe.

Closed Positions:
Daytrades: PFE (0.5%)

MMM (0.5%), MRK (0.1%), SCUR (15%) (held less than seven days; record in this category is a 5.2% average gain)

The information on this site is provided for discussion purposes only and does not constitute investing recommendations. Under no circumstances does this information represent a recommendation to buy or sell securities or make any kind of an investment. You are responsible for your own due diligence.

Stocks Update

Last week, I bought MMM, IF, and SCUR on May 23, 2008.

I sold MMM this week, making around 0.5%.

SCUR was much better. I sold today, making a 15% gain in less than a week (May 23, 2007 to May 29, 2008).

IF is basically flat so far. No worries--that is a long term hold.

So here is my track record thus far in terms of round-trips:

MMM = 0.5% (less than seven calendar days)
SCUR = 15% (less than seven calendar days)
IF = (bought on May 23, 2008--not sold yet)

Keep in mind, most of these trades were in a Roth IRA, so I won't pay taxes on the transactions until I withdraw the money in my (hopefully) old age. My trades will not generally incorporate any tax analysis.

The information on this site is provided for discussion purposes only and does not constitute investing recommendations. Under no circumstances does this information represent a recommendation to buy or sell securities or make any kind of an investment. You are responsible for your own due diligence.

Stocks Update

Today, despite my concerns about the economy, I bought 50 shares of GE, 330 shares of MMM, 100 shares of IF, and some shares of SCUR.

GE: I don't believe I can completely time the market, so I will average down if GE drops to the mid-20's.

MMM: I missed the ex-dividend date for MMM, but this company still looks undervalued at these prices. I hope to sell MMM when it goes to anywhere from 78 to 84. Although I like this stock, I am just too concerned that an overall market correction will bring down good names along with bad ones.

IF: Indonesia is going to be a good investment in the long term. My plan is to hold this fund for many years.

SCUR: This is a value play that contains quite a bit of risk. Its balance sheet looks stronger than what its stock price indicates. It is also trading below its book value. I will revisit this stock in a year or two. If we are coming out of a recession, small caps will be the first stocks to lead the way.

The information on this site is provided for discussion purposes only and does not constitute investing recommendations. Under no circumstances does this information represent a recommendation to buy or sell securities or make any kind of an investment. You are responsible for your own due diligence.