2014 Goals. How did I do?

Almost one year ago I laid out my goals for 2014. With only a few weeks left I look to see how I did...

Total Portfolio: $30,000 ACHIEVED.
This portfolio has been going on for quite a few years in several iterations. To hit the $30,000 mark I would have to more than double the account in just 1 year.
To do that I would have to tighten up the budget. I have always been pretty good but it was time to kick this into overdrive. While I did splurge here and there, especially recently with a new high end computer, I kept true to my goal.

The Investing and Lending Club portions only add up to $29,600 as of the day I am writing this. What is less recorded on the spreadsheet is the $1,500 I threw at the Real Estate Portfolio's mortgage and I have one more deposit for the year coming in. Regardless if the market continues to go down and drops me below my goal level, I am considering this one achieved.

Total Dividends received: $1,000 ACHIEVED.
I find it fitting that while much of the investing community is calling IBM dead and looking at their revenues dropping as reason to be short, that it was IBM's dividend that pumped me over my limit this week.

Average Monthly Dividends: $100 ACHIEVED
This one looked to have been in danger of not be completed for the year. I hit it earlier on in the year but then started taking profit in positions. I'm at 40% cash and have a $105 average expected monthly income amount.

Revisit Lending Club: ACHIEVED
This one was a rather easy goal and I knocked it out early. Not only that but it has become a cornerstone of this portfolio's strategy. With its higher yield vs bonds and equities, I am able to keep a high level of income and free up capital for capital gains positions.

Continuing Education: ACHIEVED
I started, and ahem slacked off on, reading the Warren Buffett letters
Read Capital in the 21st Century by Thomas Piketty
Read a book on Bonds.
Started reading Barron's Economics, and Finance. These are textbook like and I have to warn anyone.. very dry.
Education can be measured in more then just reading. Lending Club gave me new insights into how debt works and with Capital the 21 Century, how wealth transfers from 1 group to another.

All in all 2014 was a great year for me. I'm already thinking about the goals I want to set for myself in 2015.

How about you? Have you achieved what you set out to do in 2014?


Disclaimer: The investments and trades discussed are not recommendations for others. I am not a financial planner, financial adviser, accountant, or tax adviser. The financial actions I talk about are for my own portfolio and money and only suited for my own risk tolerance, strategy, and ideas. Copying another person's financial moves can lead to large losses. Each person needs to do their due diligence in researching and planning their own actions in the financial markets.

Why I am holding off on BHP Billiton (BBL)

One of the nice things about the retail investing community is you can get ideas for companies to research from each other. We often will get a "Dividend Flavor of the Month" type scenario where a good company is found and their valuations are excellent. Someone writes about it and it spreads like wildfire. I know I've found great ideas from others and I've passed a few on myself with PETM, ROST, and RKT.

Recently I've seen people jump on board with BHP Billiton (BBL) and at first glance I can see why. Its come up on numerous screens of mine for several months this year. I've commented on BBL in many comment streams in articles but have yet to write about it myself. I aim to change that today especially with it hitting my low $40s price I have told other bloggers about. As a way of disclaimer I admit that I have not done my normal intensive research on BBL as I usually do. That will come later when I am near a time to buy.

BHP Billiton is a raw natural resource company. Oil, Aluminum, Diamonds, Iron, Manganese, Coal. They are getting into the Potash business too with a large mine in Canada being worked on. At a 5.18 EPS they now have a 8.37 P/E vs their historic 10 year average of 12. A 5.6% yield is great for a corporation and a 20% dividend growth rate is also impressive. My problem though is with their future.

Over at Sharpe Trade I talked about my thoughts on why the price of oil is dropping. The price of iron ore isn't doing very well either. Together they have cause a forward EPS estimate of 2.8... almost half of what it is now. While they have had a 20% dividend growth rate their EPS growth rate has been rather terrible at 2.5% a year. BBL started with a dividend payout ratio of 20% and grew the dividend faster then they grew the actual company. Now at a 47% payout ratio they don't have much more room to grow and if next years EPS estimates are close... we are looking at a potential 80% payout ratio. I wouldn't be surprised if there would be a dividend cut at the end of 2015 or early 2016.

The last bit of concern I have with BBL is that its spinning off assets into another company. Details haven't been revealed so who knows which of their 9 departments will go where and what that will do for growth. I don't like uncertainty with my potential new positions.

My new price target is $30. That is based on 2.8 EPS at a 12 average P/E ratio. This is NOT a market call as far as I am saying BBL WILL go down that low. I think thats a foolish game to get into. BBL could well take off as it has had a very big pullback. No, my $30 price target means that IF BBL gets that low I would consider a buy. If it doesn't it doesn't and there are plenty of other opportunities out there. One thing I have learned the hard way over the years is not to jump on something just because it has had a pullback.

I wish good luck to all the BHP Billiton longs out there. I have no stake at this time and hope it turns out well for you. I'm just going to sit this one out for now.

Disclaimer: The investments and trades discussed are not recommendations for others. I am not a financial planner, financial adviser, accountant, or tax adviser. The financial actions I talk about are for my own portfolio and money and only suited for my own risk tolerance, strategy, and ideas. Copying another person's financial moves can lead to large losses. Each person needs to do their due diligence in researching and planning their own actions in the financial markets.

Monthly Update: November 2014

Another solid month...

Portfolio Acitivities

Bought 7.6861 BLV @ $91.60

Bought 13.1062 JNK @ $40.14

Bought 34.4178 PCY @ $28.94
Bought 6.129 IBM @ $162.52
Bought 17.7930 RKT @ $55.98
Sold WHZ @ $11.59Sold ROST @ $89.10

$500 Deposited into Investing Account
$250 Deposited into Lending Club

Portfolio Income
Dividends ($28.24)
     BLV: $2.61
     JNK: 4.56
     PEMT: $3.51
     RKT: $7.50     
     PCY: $5.84     
     Interest from Cash: $2.21
Lending Club     
     Interest: $49.74
Rental Income     Townhouse 1: $950

Lots of Activity: As I mentioned last month, I needed to deploy my cash. I had been sitting on the sidelines thinking that the recent dip in equities was going to be more. It wasn't and with the Christmas rally underway seasonally, its time to go shopping. I initiated no new positions. Just added to existing ones. 

I sold WHZ before it collapsed. I had expected as much because everything else dealing with oil had dropped and it had not at that point.
I sold ROST for a very nice gain. I am mostly a dividend investor but I do take capital gain trades when they look to have sufficient value built beneath their share price. ROST has a 0.88% yield I sure didn't buy it for income.

Income a lot lower: My monthly average income has dropped due to my selling spree. The vast majority of my sales were for capital gains profit or correctly avoiding big losses. However that does leave me with a 40% cash position which is not contributing income. That is a temporary setback that I will gladly take as I gained or avoided the loss of about 4 years of my current portfolios monthly dividends.

Lending Club finally pulling its weight: I purchase LC notes on the secondary market. My strategy is to wait 10 months after a loan has been issued and if they are never late, have a rising credit score, and have 20% or less of their income going to servicing their debt then I buy the note. Because it is a secondary market most sellers will have a mark up fee to make a little profit. Usually this turns out to be 3 months worth of interest. My big deposits over the spring and summer have been in my portfolio long enough that I'm getting profit now. About 1% a month. 

Ideally I want my LC position big enough that it will give my entire portfolio +0.33% to +0.5% just in interest. That will give my an annualized. 4%-6% gain before my company dividends and capital gains. 

Sharpe Trade Launches: This month the Sharpe Trade website launched. Its been something I and some others have been working on. Currently we have two content contributors. Myself and Dan Shy from NoNonsense Trading. With their help I should be able to reach more people and offer more features with my content than I would be able to do on my own.

It has been one of the main reasons for the slow activity here on my blog. My main writing will shift to Sharpe Trade but I will continue this blog and its portfolio's journey. A good portion of Sharpe Trade's content that I will be creating will be free so all will be able to continue following me.



Disclaimer: The investments and trades discussed are not recommendations for others. I am not a financial planner, financial adviser, accountant, or tax adviser. The financial actions I talk about are for my own portfolio and money and only suited for my own risk tolerance, strategy, and ideas. Copying another person's financial moves can lead to large losses. Each person needs to do their due diligence in researching and planning their own actions in the financial markets.