ETFs Of The Month: HIBL, SOXL

This month, I bought two new triple-levered ETFs - HIBL and SOXL, representing high-beta and semiconductor stocks respectively - under the investing thesis previously posted here.

Boilerplate time...

As a stretch goal: for dividend income purposes, I'd like this portfolio to eventually be as much as a 50/50 25/75 split between stocks and yield.  As seen below, it is currently 38/62.

I am in no rush to flip into yield. I would rather let my winners run forever.  However, if in any given month I see no stocks that present themselves as especially good buying opportunities, I have no reservations in simply adding to my bond, preferred stock, leveraged ETFs and/or covered call ETF/Ns. It is truly a month-to-month situation (as it has always been!).

For the foreseeable future, I want to track my Big Five Two every month, whether I buy them or not.

Amazon (AMZN)

• $1.09T market cap
• no dividend
• $477.8B revenue
• 7% revenue growth
• $66.4B cash
• $147.3B debt
• $39.3B operating cash flow
• $-9.0B free cash flow

Microsoft (MSFT)

• $1.89T market cap
• 0.9% dividend yield
• $192.6B revenue
• 18% revenue growth
• $104.7B cash
• $78.0B debt
• $87.1B operating cash flow
• $48.9B free cash flow

Here's my current portfolio (buy, hold, and sell).  As always, I believe in all of these stocks/ETF/ETNs - until I sell them.

Microsoft (MSFT) 15.00%

Credit Suisse X-Links Crude Oil Shares Covered Call ETNs (USOI) 14.13%

iShares Broad USD High Yield Corporate Bond ETF (USHY) 11.68%

Global X U.S. Preferred ETF (PFFD) 11.26%

Amazon (AMZN) 10.12%

Invesco NASDAQ 100 ETF (QQQM) 6.55%

Global X NASDAQ 100 Covered Call ETF (QYLD) 6.01%

Credit Suisse X-Links Silver Shares Covered Call ETN (SLVO) 5.89%

Global X Russell 2000 Covered Call ETF (RYLD) 5.16%

Global X S&P 500 Covered Call ETF (XYLD) 4.08%

Credit Suisse X-Links Gold Shares Covered Call ETN (GLDI) 3.61%
Invesco NASDAQ Next Gen 100 ETF (QQQJ) 2.49%

UnitedHealth Group (UNH) 1.80%

Costco Wholesale (COST) 1.69%

ProShares UltraPro QQQ (TQQQ) 0.11%

ProShares UltraPro S&P 500 (UPRO) 0.07%

ProShares UltraPro Russell 2000 (URTY) 0.06%

Direxion Daily CSI China Internet Bull 2X Shares (CWEB) 0.05%

Direxion Daily S&P Biotech Bull 3X Shares (LABU) 0.03%

Direxion Daily Semiconductor Bull 2X Shares (SOXL) 0.01%

Direxion Daily S&P 500 High Beta Bull 3X Shares (HIBL) 0.01%

ETFs Of The Month: CWEB, LABU

Back in June 2021, I asked myself the question "why not dollar-cost average monthly into triple-levered index funds for the next several decades?" - a question so good that I didn't want to know the actual answer - and began a commitment to ongoing purchases of TQQQ, UPRO, and URTY for the foreseeable future.

Nearly a year later, those "risky" investments have not blown up (yay!) and I began to look for additional leveraged investments outside of the indices.  This plan calls for all of the following:

• Monthly dollar cost averaging, a strategy that has served me well for my first two decades of investing, DCA is an absolute necessity when dealing with...
• Investment vehicles subject to significant daily/monthly volatility, which double- and triple-leveraged ETFs certainly qualify for, hence the advertised "risk".  To be clear:  the short-term downside potential is a feature, not a bug, when coupling the magic powers of DCA with...
• Massive multi-decade outperformance potential (duh).

So I put on my Warren Buffett/Rip Van Winkle hat and found two instruments of choice:  SynBio via LABU, and China via CWEB (an investment of which Charlie Munger might approve).

As one last step before diving into the pool that I had dipped my toes in, I asked myself the follow-up question:  "is this really going to work?  really?"  The short answer is yes; the long answer is here, which itself contains links to math and other details that underline the premise that I intuitively knew to be correct immediately upon asking the original question.

Boilerplate time...

As a stretch goal: for dividend income purposes, I'd like this portfolio to eventually be as much as a 50/50 25/75 split between stocks and yield.  As seen below, it is currently 41/59.

I am in no rush to flip into yield. I would rather let my winners run forever.  However, if in any given month I see no stocks that present themselves as especially good buying opportunities, I have no reservations in simply adding to my bond, preferred stock, leveraged ETFs and/or covered call ETF/Ns. It is truly a month-to-month situation (as it has always been!).

For the foreseeable future, I want to track my Big Five Two every month, whether I buy them or not.

Amazon (AMZN)

• $1.62T market cap
• no dividend
• $469.8B revenue
• 9% revenue growth
• $96.1B cash
• $139.4B debt
• $46.3B operating cash flow
• $-0.8B free cash flow

Microsoft (MSFT)

• $2.26T market cap
• 0.8% dividend yield
• $184.9B revenue
• 20% revenue growth
• $125.4B cash
• $80.4B debt
• $83.9B operating cash flow
• $46.5B free cash flow

Here's my current portfolio (buy, hold, and sell).  As always, I believe in all of these stocks/ETF/ETNs - until I sell them.

Microsoft (MSFT) 15.54%

Amazon (AMZN) 12.01%

iShares Broad USD High Yield Corporate Bond ETF (USHY) 11.02%

Global X U.S. Preferred ETF (PFFD) 10.62%

Xtrackers USD High Yield Corporate Bond ETF (HYLB) 10.19%
Invesco NASDAQ 100 ETF (QQQM) 6.86%

Global X NASDAQ 100 Covered Call ETF (QYLD) 6.19%

Credit Suisse X-Links Crude Oil Shares Covered Call ETNs (USOI) 5.65%

Credit Suisse X-Links Silver Shares Covered Call ETN (SLVO) 5.42%

Global X Russell 2000 Covered Call ETF (RYLD) 4.62%

Global X S&P 500 Covered Call ETF (XYLD) 3.01%

Credit Suisse X-Links Gold Shares Covered Call ETN (GLDI) 2.54%
Invesco NASDAQ Next Gen 100 ETF (QQQJ) 2.51%

Costco Wholesale (COST) 1.84%

UnitedHealth Group (UNH) 1.74%

ProShares UltraPro QQQ (TQQQ) 0.11%

ProShares UltraPro S&P 500 (UPRO) 0.05%

ProShares UltraPro Russell 2000 (URTY) 0.03%

Direxion Daily S&P Biotech Bull 3X Shares (LABU) 0.02%

Direxion Daily CSI China Internet Bull 2X Shares (CWEB) 0.02%

On The Turning Away: Sold GOOGL, ISRG, V

Unaware how the ranks have grown
Driven on by a heart of stone
We could find that we're all alone

In the dream of the proud

The sales of GOOGL, ISRG, and V were not easy.  They had annualized returns of 17%, 11%, and 19% respectively, and comprised nearly 10% of of my portfolio's overall valuation.  One might say that they were victims of their own success.   

The proceeds from this sale were (once again) directed into my favorite basket of yield ETF/Ns:  the index covered calls of QYLD, RYLD, and XYLD; and the gold/silver/oil covered calls of GLDI, SLVO, and USOI.

With this most recent rotation from stocks into yield, my portfolio now yields a projected 6% annually.  This could grow as much as to 8% annually.

Boilerplate time...

As a stretch goal: for dividend income purposes, I'd like this portfolio to eventually be as much as a 50/50 25/75 split between stocks and yield. As seen below, it is currently 40/60.

I am in no rush to flip into yield. I would rather let my winners run forever. However, if in any given month I see no stocks that present themselves as especially good buying opportunities, I have no reservations in simply adding to my bond, preferred stock, and/or covered call ETF/Ns. It is truly a month-to-month situation (as it has always been!).

For the foreseeable future, I want to track my Big Five Two every month, whether I buy them or not.

Amazon (AMZN)

• $1.66T market cap
• no dividend
• $458.0B revenue
• 15% revenue growth
• $79.0B cash
• $155.8B debt
• $54.7B operating cash flow
• $9.3B free cash flow

Microsoft (MSFT)

• $2.36T market cap
• 0.8% dividend yield
• $176.3B revenue
• 22% revenue growth
• $130.6B cash
• $78.9B debt
• $82.0B operating cash flow
• $49.8B free cash flow

Here's my current portfolio (buy, hold, and sell). As always, I believe in all of these stocks/ETF/ETNs - until I sell them.

Microsoft (MSFT) 15.15%

Amazon (AMZN) 11.58%

Global X U.S. Preferred ETF (PFFD) 11.36%

iShares Broad USD High Yield Corporate Bond ETF (USHY) 11.29%

Xtrackers USD High Yield Corporate Bond ETF (HYLB) 11.20%
Invesco NASDAQ 100 ETF (QQQM) 6.98%

Global X NASDAQ 100 Covered Call ETF (QYLD) 6.25%

Credit Suisse X-Links Crude Oil Shares Covered Call ETNs (USOI) 5.22%

Credit Suisse X-Links Silver Shares Covered Call ETN (SLVO) 5.01%

Global X Russell 2000 Covered Call ETF (RYLD) 4.53%

Global X S&P 500 Covered Call ETF (XYLD) 2.94%

Invesco NASDAQ Next Gen 100 ETF (QQQJ) 2.66%

Credit Suisse X-Links Gold Shares Covered Call ETN (GLDI) 2.42%

Costco Wholesale (COST) 1.70%

UnitedHealth Group (UNH) 1.52%

ProShares UltraPro QQQ (TQQQ) 0.10%

ProShares UltraPro S&P 500 (UPRO) 0.04%

ProShares UltraPro Russell 2000 (URTY) 0.03%

ETN Of The Month: SLVO

This month's choice may seem like a reeeeeeeeach for yield...and perhaps it is.  Having previously dipped my toes into the covered call strategy, I'm now diving in.  My investment thesis is as follows:

• The covered call strategy for monthly dividend income is a successful one, given that the underlying asset will support it.
• Silver is a time-tested store of value; a secondary one to gold, but perhaps relatively undervalued (a currently popular sentiment among a subset of commodity traders).
• Silver is also an essential raw material for technological purposes, which should see increasing demand in the future.

So far, so good.  Now the risk which will throw many red flags:  SLVO's current dividend yield is 35%.  This is clearly not sustainable.  My expectation is that the yield will bounce (down and) around, with a floor in the range of my other covered call investments of 9% to 12%, which is more than acceptable.  In the meantime, I will enjoy the 35% while it lasts.

Boilerplate time...

As a stretch goal: for dividend income purposes, I'd like this portfolio to eventually be as much as a 50/50 split between stocks and yield. As seen below, it is currently 54/46.

I am in no rush to flip into yield. I would rather let my winners run forever. However, if in any given month I see no stocks that present themselves as especially good buying opportunities, I have no reservations in simply adding to my bond, preferred stock, and/or index covered call ETFs. It is truly a month-to-month situation (as it has always been!).

For the foreseeable future, I want to track my Big Five Two every month, whether I buy them or not.

Amazon (AMZN)

• $1.73T market cap
• no dividend
• $419.1B revenue
• 44% revenue growth
• $73.3B cash
• $101.5B debt
• $67.2B operating cash flow
• $31.4B free cash flow

Microsoft (MSFT)

• $2.04T market cap
• 0.8% dividend yield
• $160.0B revenue
• 19% revenue growth
• $125.0B cash
• $81.3B debt
• $72.7B operating cash flow
• $37.8B free cash flow

Here's my current portfolio (buy and hold). As always, I believe in all of these stocks/ETFs - until I sell them.

Microsoft (MSFT) 13.85%

Amazon (AMZN) 12.89%

Global X U.S. Preferred ETF (PFFD) 12.33%

iShares Broad USD High Yield Corporate Bond ETF (USHY) 12.14%

Xtrackers USD High Yield Corporate Bond ETF (HYLB) 12.03%
Invesco NASDAQ 100 ETF (QQQM) 6.65%
Alphabet (GOOGL) 5.09%

Global X NASDAQ 100 Covered Call ETF (QYLD) 3.34%

Facebook (FB) 3.18%
Invesco NASDAQ Next Gen 100 ETF (QQQJ) 2.96%
Intuitive Surgical (ISRG) 2.65%

Global X Russell 2000 Covered Call ETF (RYLD) 2.28%

Global X S&P 500 Covered Call ETF (XYLD) 2.18%
UnitedHealth Group (UNH) 1.38%

Visa (V) 1.30%
Costco Wholesale (COST) 1.30%

Verizon (VZ) 1.22%
AT&T (T) 1.20%

ProShares UltraPro QQQ (TQQQ) 0.05%

Credit Suisse X-Links Silver Shares Covered Call ETN (SLVO) 0.04%

ProShares UltraPro Russell 2000 (URTY) 0.02%

ProShares UltraPro S&P 500 (UPRO) 0.02%

ETFs Of The Month: TQQQ, UPRO, URTY

Have you ever asked a question that you didn't want to know the "real" answer to?

Such as "why not dollar-cost average monthly into triple-levered index funds for the next several decades?"

My brief research led to the following answer:

The risk with this investing strategy is to sell too late.  An 80-90% decline at some point in the future seems inevitable.  I will be required to time the market by "getting out when the getting is good."  Of course, if the declines occur in the early and/or middle years, DCA'ing will work its magic.

The hedge to this risk is the tiny percentile allocated numbers at the bottom of this post.

Boilerplate time...

As a stretch goal: for dividend income purposes, I'd like this portfolio to eventually be as much as a 50/50 split between stocks and yield. As seen below, it is currently 52/48.

I am in no rush to flip into yield. I would rather let my winners run forever. However, if in any given month I see no stocks that present themselves as especially good buying opportunities, I have no reservations in simply adding to my bond, preferred stock, and/or index covered call ETFs. It is truly a month-to-month situation (as it has always been!).

For the foreseeable future, I want to track my Big Five Two every month, whether I buy them or not.

Amazon (AMZN)

• $1.63T market cap
• no dividend
• $419.1B revenue
• 44% revenue growth
• $73.3B cash
• $101.5B debt
• $67.2B operating cash flow
• $31.4B free cash flow

Microsoft (MSFT)

• $1.87T market cap
• 0.9% dividend yield
• $160.0B revenue
• 19% revenue growth
• $125.0B cash
• $81.7B debt
• $72.7B operating cash flow
• $37.8B free cash flow

Here's my current portfolio (buy and hold). As always, I believe in all of these stocks/ETFs - until I sell them.

Microsoft (MSFT) 13.25%

Amazon (AMZN) 12.58%

Global X U.S. Preferred ETF (PFFD) 12.57%

iShares Broad USD High Yield Corporate Bond ETF (USHY) 12.42%

Xtrackers USD High Yield Corporate Bond ETF (HYLB) 12.34%
Invesco NASDAQ 100 ETF (QQQM) 6.42%
Alphabet (GOOGL) 5.12%

Global X NASDAQ 100 Covered Call ETF (QYLD) 3.40%

Facebook (FB) 3.10%
Invesco NASDAQ Next Gen 100 ETF (QQQJ) 2.89%
Intuitive Surgical (ISRG) 2.50%

Global X Russell 2000 Covered Call ETF (RYLD) 2.29%

Global X S&P 500 Covered Call ETF (XYLD) 2.19%
UnitedHealth Group (UNH) 1.46%

Visa (V) 1.31%
Costco Wholesale (COST) 1.28%

Verizon (VZ) 1.27%
AT&T (T) 1.26%

ProShares UltraPro QQQ (TQQQ) 0.03%

ProShares UltraPro Russell 2000 (URTY) 0.01%

ProShares UltraPro S&P 500 (UPRO) 0.01%

ETFs Of The Month: QYLD, RYLD, XYLD

I have sold all of my previous holdings in the iShares Core U.S. Aggregate Bond ETF (AGG) at a slight loss.  The proceeds from this sale, plus some of my existing cash reserves, were used to:

• add the usual monthly purchases of HYLB, QQQJ, QQQM, and USHY;
• add a large "catch-up" purchase to PFFD; and
• initiate purchases in three "Covered Call" ETFs:  QYLD (NASDAQ 100), RYLD (Russell 2000), and XYLD (S&P 500).

These covered call ETFs are an idea I've been looking for ever since I started investing - I've just discovered that they actually exist.  Everybody knows that on average over the long term, the market goes up 8 to 12 percent per year...just not in a straight line.  Covered call ETFs approximate these long term returns by owning the underlying assets (in these cases, stock indices) and selling calls (in these cases, stock index options) against those assets, turning capital gains into monthly dividend payments.  The prices of these ETFs follow the overall performance of the assets, with dampened volatility:  investors are forgoing the potential of excess total returns (and paying an expense ratio of 0.6%) for more immediate cash flows.

Boilerplate time...

As a stretch goal: for dividend income purposes, I'd like this portfolio to eventually be as much as a 50/50 split between stocks and bonds. As seen below, it is currently 53/47.

I am in no rush to flip into bonds. I would rather let my winners run forever. However, if in any given month I see no stocks that present themselves as especially good buying opportunities, I have no reservations in simply adding to my bond and/or preferred stock ETFs. It is truly a month-to-month situation (as it has always been!).

For the foreseeable future, I want to track my Big Five Two every month, whether I buy them or not.

Amazon (AMZN)

• $1.54T market cap
• no dividend
• $386.1B revenue
• 44% revenue growth
• $84.4B cash
• $101.2B debt
• $66.1B operating cash flow
• $36.6B free cash flow

Microsoft (MSFT)

• $1.77T market cap
• 1.0% dividend yield
• $153.3B revenue
• 17% revenue growth
• $132.0B cash
• $82.9B debt
• $68.0B operating cash flow
• $34.8B free cash flow

Here's my current portfolio (buy and hold). As always, I believe in all of these stocks/ETFs - until I sell them.

Microsoft (MSFT) 12.91%

iShares Broad USD High Yield Corporate Bond ETF (USHY) 12.89%

Global X U.S. Preferred ETF (PFFD) 12.89%
Xtrackers USD High Yield Corporate Bond ETF (HYLB) 12.84%
Amazon (AMZN) 12.49%
Invesco NASDAQ 100 ETF (QQQM) 6.11%
Alphabet (GOOGL) 4.63%

Global X NASDAQ 100 Covered Call ETF (QYLD) 3.50%

Facebook (FB) 2.86%
Invesco NASDAQ Next Gen 100 ETF (QQQJ) 2.80%
Intuitive Surgical (ISRG) 2.28%

Global X Russell 2000 Covered Call ETF (RYLD) 2.20%

Global X S&P 500 Covered Call ETF (XYLD) 2.17%
UnitedHealth Group (UNH) 1.40%

Verizon (VZ) 1.39%
AT&T (T) 1.38%
Visa (V) 1.27%
Costco Wholesale (COST) 1.25%

Stocks Of The Month: T, VZ

Going forward:  I will only be posting about stock purchases outside of the regularly-scheduled monthly purchases of HYLB, PFFD, QQQJ, QQQM, and USHY.  (It's going to get really, really boring.)

First...two triggered sales!  I've always thought of Adobe (ADBE) and Autodesk (ADSK) as a pair; they entered my portfolio together in January 2016, and now they have exited together.  Both stocks were similarly outstanding investments as well.  Adobe increased 337% (34% annualized), and Autodesk returned 325% (32% annualized).

This month's stocks are AT&T (T) and Verizon (VZ).  I believe both of these companies are fundamentally undervalued; if each of them were to be built from scratch, the cost would substantially exceed their current enterprise values.  They both generate large cash flows which easily fund generous dividends.  Their telecommunications duopoly represents the level of incumbency that makes for confident investments.  And finally:  the 5G revolution has just begun (i.e. revenues will be growing again soon).

AT&T (T)

• $204.8B market cap
• 7.2% dividend yield
• $171.8B revenue
• -2% revenue growth
• $9.8B cash
• $183.0B debt
• $43.1B operating cash flow
• $36.4B free cash flow

Verizon (VZ)

• $231.8B market cap
• 4.5% dividend yield
• $128.3B revenue
• 0% revenue growth
• $22.2B cash
• $151.2B debt
• $41.8B operating cash flow
• $16.1B free cash flow

Boilerplate time...

As a stretch goal: for dividend income purposes, I'd like this portfolio to eventually be as much as a 50/50 split between stocks and bonds. As seen below, it is currently 55/45.

I am in no rush to flip into bonds. I would rather let my winners run forever. However, if in any given month I see no stocks that present themselves as especially good buying opportunities, I have no reservations in simply adding to my bond and/or preferred stock ETFs. It is truly a month-to-month situation (as it has always been!).

For the foreseeable future, I want to track my Big Five Two every month, whether I buy them or not.

Amazon (AMZN)

• $1.51T market cap
• no dividend
• $386.1B revenue
• 44% revenue growth
• $84.4B cash
• $101.2B debt
• $66.1B operating cash flow
• $36.6B free cash flow

Microsoft (MSFT)

• $1.75T market cap
• 1.0% dividend yield
• $153.3B revenue
• 17% revenue growth
• $132.0B cash
• $82.9B debt
• $68.0B operating cash flow
• $34.8B free cash flow

Here's my current portfolio (buy and hold). As always, I believe in all of these stocks/ETFs - until I sell them.

Microsoft (MSFT) 13.02%
iShares Broad USD High Yield Corporate Bond ETF (USHY) 12.83%
Xtrackers USD High Yield Corporate Bond ETF (HYLB) 12.76%
Amazon (AMZN) 12.39%
iShares Core U.S. Aggregate Bond ETF (AGG) 11.00%
Global X U.S. Preferred ETF (PFFD) 8.50%
Invesco NASDAQ 100 ETF (QQQM) 5.89%
Alphabet (GOOGL) 4.79%
Invesco NASDAQ Next Gen 100 ETF (QQQJ) 2.68%
Facebook (FB) 2.65%
Intuitive Surgical (ISRG) 2.26%
Verizon (VZ) 1.34%
AT&T (T) 1.34%
UnitedHealth Group (UNH) 1.31%
Visa (V) 1.31%
Costco Wholesale (COST) 1.14%

(Preferred) Stock(/Bond ETF)s Of The Month: AGG, HYLB, PFFD, QQQJ, QQQM, USHY

I skipped November's post because...excuses. Here's what happened: 

• Bought more AGG, HYLB, PFFD, USHY
• Swapped my previous holdings of QQQ into mostly QQQM (just like QQQ, but with a lower expense ratio) and some QQQJ (an entirely new ETF consisting of "minor-league prospects" of the Nasdaq - it's what one might wish the Russell 2000 to be, instead of the perpetual underperformer that it is).

Detail-oriented readers will note that these same six ETFs are in the title of this post, as they were bought in December as well.

Also, a trigger sale!  Salesforce (CRM) just reported a so-so quarter and a high-priced acquisition of Slack, which sent its stock below my previously-established threshold.  First bought in October 2013 and purchased on three additional occasions, it posted a 178% gain (15% annualized).

Boilerplate time...

As a stretch goal: for dividend income purposes, I'd like this portfolio to eventually be as much as a 50/50 split between stocks and bonds. As seen below, it is currently 56/44.

I am in no rush to flip into bonds. I would rather let my winners run forever. However, if in any given month I see no stocks that present themselves as especially good buying opportunities, I have no reservations in simply adding to my bond and/or preferred stock ETFs. It is truly a month-to-month situation (as it has always been!).

For the foreseeable future, I want to track my Big Five Two every month, whether I buy them or not.

Amazon (AMZN)

• $1.60T market cap
• no dividend
• $347.0B revenue
• 37% revenue growth
• $68.4B cash
• $96.8B debt
• $55.3B operating cash flow
• $33.7B free cash flow

Microsoft (MSFT)

• $1.63T market cap
• 1.0% dividend yield
• $147.1B revenue
• 12% revenue growth
• $138.0B cash
• $83.2B debt
• $66.2B operating cash flow
• $32.2B free cash flow

Here's my current portfolio (buy and hold). As always, I believe in all of these stocks/ETFs - until I sell them.

Amazon (AMZN) 13.22%
iShares Broad USD High Yield Corporate Bond ETF (USHY) 12.33%
Xtrackers USD High Yield Corporate Bond ETF (HYLB) 12.30%
iShares Core U.S. Aggregate Bond ETF (AGG) 11.07%
Microsoft (MSFT) 10.02%
Global X U.S. Preferred ETF (PFFD) 8.00%
Invesco NASDAQ 100 ETF (QQQM) 4.59%
Alphabet (GOOGL) 4.18%
Facebook (FB) 2.84%
Intuitive Surgical (ISRG) 2.41%
Adobe (ADBE) 2.05%
Invesco NASDAQ Next Gen 100 ETF (QQQJ) 1.90%
Costco Wholesale (COST) 1.35%
UnitedHealth Group (UNH) 1.32%
Visa (V) 1.27%
Autodesk (ADSK) 0.73%

(Preferred) Stock(/Bond ETF)s Of The Month: HYLB, PFFD, USHY

I'm buying yield.

In a few days, I'll receive the first dividend payments from last month's substantial turn from growth to yield. It is...dare I say...kind of exciting!


Boilerplate time...

As a stretch goal: for dividend income purposes, I'd like this portfolio to eventually be as much as a 50/50 split between stocks and bonds. As seen below, it is currently 58/42.

I am in no rush to flip into bonds. I would rather let my winners run forever. However, if in any given month I see no stocks that present themselves as especially good buying opportunities, I have no reservations in simply adding to my bond and/or preferred stock ETFs. It is truly a month-to-month situation (as it has always been!).

For the foreseeable future, I want to track my Big Five Two every month, whether I buy them or not.

Amazon (AMZN)

• $1.60T market cap
• no dividend
• $321.8B revenue
• 40% revenue growth
• $71.4B cash
• $91.4B debt
• $51.2B operating cash flow
• $33.7B free cash flow

Microsoft (MSFT)

• $1.59T market cap
• 1.1% dividend yield
• $143.0B revenue
• 13% revenue growth
• $136.5B cash
• $82.1B debt
• $60.7B operating cash flow
• $34.3B free cash flow

Here's my current portfolio (buy and hold). As always, I believe in all of these stocks/ETFs - until I sell them.

Amazon (AMZN) 13.64%
iShares Broad USD High Yield Corporate Bond ETF (USHY) 11.75%
Xtrackers USD High Yield Corporate Bond ETF (HYLB) 11.73%
iShares Core U.S. Aggregate Bond ETF (AGG) 10.79%
Microsoft (MSFT) 10.13%
Global X U.S. Preferred ETF (PFFD) 7.47%
Invesco QQQ Trust (QQQ) 3.72%
Alphabet (GOOGL) 3.52%
Facebook (FB) 2.75%
Intuitive Surgical (ISRG) 2.32%
Adobe (ADBE) 2.13%
Salesforce (CRM) 1.81%
Costco Wholesale (COST) 1.34%
Visa (V) 1.28%
UnitedHealth Group (UNH) 1.25%
Autodesk (ADSK) 0.63%

The End Of The Innocence: Sold TSLA, NVDA, AAPL, AMD

Remember when the days were long
And rolled beneath a deep blue sky
Didn't have a care in the world

I've been meaning to write my September update for a while now, but things kept on happening...

On September 1st, I bought (more) of AGG, HYLB, PFFD, and USHY.

On September 4th, the first of my recently-established stop-losses triggered for TSLA.  I used the (substantial) proceeds from this to buy (even more) AGG, HYLB, PFFD, and USHY; and also establish a new holding in QQQ.

On September 8th, my stop-loss triggered for NVDA.

On September 11th, my stop-loss triggered for AAPL and AMD.

It is difficult to overstate how important these particular stocks have been for my portfolio.

Tesla - due to both the size of the investment, and its extraordinary performance - had an especially large importance.  The gains from TSLA alone exceeded the value of my entire portfolio through the first 19 years of my investing career.

The result of these sales is a lot of cash...now my largest holding.  I plan to use the proceeds primarily towards QQQ, AGG, HYLB, PFFD, and USHY over the upcoming months.

As if that wasn't enough, the super-secret high-conviction stock in my Roth IRA was also sold on September 3rd via stop-loss trigger.  The proceeds from this sale re-established a 50/50 split between AGG and two new high-conviction stocks.  I will soon update my Grand Unified Theory accordingly.

Boilerplate time...

As a stretch goal: for dividend income purposes, I'd like this portfolio to eventually be as much as a 50/50 split between stocks and bonds. As seen below, it is currently 66/34.

I am in no rush to flip into bonds. I would rather let my winners run forever. However, if in any given month I see no stocks that present themselves as especially good buying opportunities, I have no reservations in simply adding to my bond and/or preferred stock ETFs. It is truly a month-to-month situation (as it has always been!).

For the foreseeable future, I want to track my Big Five Two every month, whether I buy them or not.

Amazon (AMZN)

• $1.58T market cap
• no dividend
• $321.8B revenue
• 40% revenue growth
• $71.4B cash
• $91.4B debt
• $51.2B operating cash flow
• $33.7B free cash flow

Microsoft (MSFT)

• $1.58T market cap
• 1.0% dividend yield
• $143.0B revenue
• 13% revenue growth
• $136.5B cash
• $82.1B debt
• $60.7B operating cash flow
• $34.3B free cash flow

Here's my current portfolio (buy and hold). As always, I believe in all of these stocks/ETFs - until I sell them.

Amazon (AMZN) 11.90%
iShares Broad USD High Yield Corporate Bond ETF (USHY) 9.55%
Xtrackers USD High Yield Corporate Bond ETF (HYLB) 9.53%
iShares Core U.S. Aggregate Bond ETF (AGG) 9.53%
Microsoft (MSFT) 8.87%
Global X U.S. Preferred ETF (PFFD) 4.94%
Invesco QQQ Trust (QQQ) 3.27%
Alphabet (GOOGL) 3.20%
Facebook (FB) 2.49%
Intuitive Surgical (ISRG) 2.07%
Adobe (ADBE) 1.92%
Salesforce (CRM) 1.59%
Visa (V) 1.14%
Costco Wholesale (COST) 1.13%
UnitedHealth Group (UNH) 1.06%
Autodesk (ADSK) 0.57%

Stocks Of The Month: MSFT, NVDA

On January 2nd I posted my Plan for 2020 and Beyond in which I committed to "get[ting] each of Amazon, Apple, Microsoft, NVIDIA, and Tesla to reach 16% of my holdings."

The good news is that I've bumped each of those stocks to a goal of 17%.

The bad(?) news is that each of these 17% (or 16%) goals are not viable without selling the more insignificant of my holdings. I've been lamenting for years that my portfolio has too many stocks; additionally, I've recently determined that several of the lesser holdings have undesirable amounts of debt.

This month's casualty is CSX. It features negative revenue growth (-5.2%), earnings growth (-7.7%), and a cash-to-debt ratio of $2.5B to $17.2B. First bought in March 2017, I was able to realize a 20% gain (6% annualized).


For the foreseeable future, I not only want to track which of my Big Five I buy in a given month - I want to track those that I don't buy.

Amazon (AMZN)

• $1.14T market cap
• no dividend
• $296.3B revenue
• 26% revenue growth
• $49.3B cash
• $63.7B debt
• $39.7B operating cash flow
• $40.7B free cash flow

Apple (AAPL)

• $1.27T market cap
• 1.1% dividend yield
• $268.0B revenue
• 1% revenue growth
• $94.1B cash
• $109.5B debt
• $75.4B operating cash flow
• $45.7B free cash flow

Microsoft (MSFT)

• $1.32T market cap
• 1.1% dividend yield
• $138.7B revenue
• 15% revenue growth
• $137.6B cash
• $84.0B debt
• $58.1B operating cash flow
• $36.2B free cash flow

NVIDIA (NVDA)

• $173.1B market cap
• 0.2% dividend yield
• $10.9B revenue
• 41% revenue growth
• $10.9B cash
• $2.6B debt
• $4.8B operating cash flow
• $3.2B free cash flow

Tesla (TSLA)

• $129.3B market cap
• no dividend
• $26.0B revenue
• 32% revenue growth
• $8.1B cash
• $15.2B debt
• $2.6B operating cash flow
• $1.6B free cash flow

Here's my current portfolio (buy, hold, and sell). As always, I believe in all of these stocks - until I sell them.

Tesla (TSLA) 18.87%
NVIDIA (NVDA) 15.68%
Amazon (AMZN) 14.46%
Apple (AAPL) 11.75%
Microsoft (MSFT) 10.90%
Alphabet (GOOGL) 4.61%
Facebook (FB) 3.10%
Intuitive Surgical (ISRG) 2.42%
Adobe (ADBE) 2.22%
Costco Wholesale (COST) 1.67%
Salesforce (CRM) 1.66%
UnitedHealth Group (UNH) 1.65%
Visa (V) 1.63%
Intel (INTC) 1.55%
Nike (NKE) 1.52%
Starbucks (SBUX) 1.16%
Advanced Micro Devices (AMD) 1.05%
Waste Management (WM) 0.98%
American Water Works (AWK) 0.74%
Autodesk (ADSK) 0.71%
Union Pacific (UNP) 0.61%
Norfolk Southern (NSC) 0.57%
Kansas City Southern (KSU) 0.24%
Canadian National Railway (CNI) 0.24%

Stocks Of The Month: AMZN, TSLA

First - a sale! Comcast (CMCSA) has been an underperformer ever since I bought it over three years ago. Additionally, inspired by this article warning of the fragility of growth via leverage (among other things), I looked at all of my stocks' cash-to-debt levels...and Comcast was by far the worst, with $5.5B in cash and a whopping $112.0B in debt. It was sold at an 18% loss (-6% annualized). Going forward, I will add cash and debt levels to my monthly tracking stats.

For the foreseeable future, I not only want to track which of my Big Five I buy in a given month - I want to track those that I don't buy.


Amazon (AMZN)

• $970.6B market cap
• no dividend
• $280.5B revenue
• 21% revenue growth
• $55.0B cash
• $77.5B debt
• $38.5B operating cash flow
• $18.8B free cash flow

Apple (AAPL)

• $1.11T market cap
• 1.2% dividend yield
• $267.7B revenue
• 9% revenue growth
• $107.2B cash
• $116.8B debt
• $73.2B operating cash flow
• $45.6B free cash flow

Microsoft (MSFT)

• $1.20T market cap
• 1.3% dividend yield
• $134.3B revenue
• 14% revenue growth
• $134.2B cash
• $87.2B debt
• $54.1B operating cash flow
• $35.1B free cash flow

NVIDIA (NVDA)

• $161.3B market cap
• 0.2% dividend yield
• $10.9B revenue
• 41% revenue growth
• $10.9B cash
• $2.6B debt
• $4.8B operating cash flow
• $3.2B free cash flow

Tesla (TSLA)

• $96.6B market cap
• no dividend
• $24.6B revenue
• 2% revenue growth
• $6.3B cash
• $14.7B debt
• $2.4B operating cash flow
• $1.5B free cash flow

Here's my current portfolio (buy and hold). As always, I believe in all of these stocks - until I sell them.

NVIDIA (NVDA) 16.10%
Tesla (TSLA) 15.79%
Amazon (AMZN) 14.70%
Apple (AAPL) 11.93%
Microsoft (MSFT) 10.97%
Alphabet (GOOGL) 4.70%
Facebook (FB) 2.98%
Intuitive Surgical (ISRG) 2.70%
Adobe (ADBE) 2.37%
Costco Wholesale (COST) 1.93%
Salesforce (CRM) 1.74%
Visa (V) 1.73%
Nike (NKE) 1.71%
Intel (INTC) 1.70%
UnitedHealth Group (UNH) 1.67%
Starbucks (SBUX) 1.20%
Advanced Micro Devices (AMD) 1.12%
Waste Management (WM) 1.07%
American Water Works (AWK) 0.85%
Autodesk (ADSK) 0.68%
Union Pacific (UNP) 0.65%
Norfolk Southern (NSC) 0.57%
CSX (CSX) 0.56%
Kansas City Southern (KSU) 0.28%
Canadian National Railway (CNI) 0.27%

Stock Of The Month: NVDA

Revisiting the catalysts for NVIDIA to outperform the market for the foreseeable future:

• NVIDIA is at the heart of technologies shaping our future: deep learning, artificial intelligence, datacenters/cloud computing, and automated driving.
• Within the semiconductor industry, Intel is the best-in-class manufacturer, while NVIDIA is the best-in-class designer. If someone wants the most powerful chips in the world, they choose NVIDIA.
• NVIDIA's new chip (Turing) being so much better than their old chip (Pascal) was a high-quality problem...now in the rear-view mirror.

Restating my beliefs: NVIDIA deserves the current market cap of Intel (95% upside).


NVIDIA (NVDA)

• $125.9B market cap
• 0.3% dividend yield
• $10.2B revenue
• -17% revenue growth
• $3.0B operating cash flow
• $1.6B free cash flow

Here's my current portfolio (buy and hold). As always, I believe in all of these stocks - until I sell them.

NVIDIA (NVDA) 14.77%
Apple (AAPL) 13.51%
Amazon (AMZN) 12.85%
Microsoft (MSFT) 10.60%
Tesla (TSLA) 10.42%
Alphabet (GOOGL) 5.82%
Facebook (FB) 3.86%
Intuitive Surgical (ISRG) 3.51
Adobe (ADBE) 2.31%
Salesforce (CRM) 2.16%
Visa (V) 2.14%
Nike (NKE) 2.06%
Intel (INTC) 2.00%
UnitedHealth Group (UNH) 1.88%
Comcast (CMCSA) 1.86%
Starbucks (SBUX) 1.67%
Waste Management (WM) 1.42%
Costco Wholesale (COST) 1.34%
American Water Works (AWK) 0.96%
Union Pacific (UNP) 0.89%
Norfolk Southern (NSC) 0.84%
Advanced Micro Devices (AMD) 0.81%
CSX (CSX) 0.79%
Autodesk (ADSK) 0.79%
Kansas City Southern (KSU) 0.36%
Canadian National Railway (CNI) 0.35%

Stocks Of The Month: CRM, MSFT

In January, I identified the all of the stocks that I wanted to buy more of during the upcoming year. I've been chipping away at this list ever since, but unfortunately there just aren't enough months in the year to buy them all (at least in significant quantities). So, I set up a battle-royale for this month's non-Microsoft choice between Adobe (ADBE), Autodesk (ADSK), Salesforce (CRM), and Intuitive Surgical (ISRG). CRM won out, due to superior cash flow and revenue numbers.

Meanwhile, I've bought more Microsoft (MSFT) this year than any other stock in any other year, ever. Their recently announced share buyback and dividend raise confirms my bullish thesis.

Salesforce (CRM)

• $128.0B market cap
• no dividend
• $14.7B revenue
• 22% revenue growth
• $3.9B operating cash flow
• $4.5B free cash flow

Microsoft (MSFT)

• $1.03T market cap
• 1.5% dividend yield
• $125.8B revenue
• 12% revenue growth
• $52.2B operating cash flow
• $30.9B free cash flow

Here's my current portfolio (buy and hold). As always, I believe in all of these stocks - until I sell them.

Amazon (AMZN) 13.67%
NVIDIA (NVDA) 13.41%
Apple (AAPL) 13.19%
Microsoft (MSFT) 11.13%
Tesla (TSLA) 8.64%
Alphabet (GOOGL) 6.04%
Facebook (FB) 3.94%
Intuitive Surgical (ISRG) 3.65%
Adobe (ADBE) 2.56%
Nike (NKE) 2.37%
Visa (V) 2.32%
Salesforce (CRM) 2.26%
Comcast (CMCSA) 2.09%
Intel (INTC) 1.95%
Starbucks (SBUX) 1.93%
UnitedHealth Group (UNH) 1.83%
Waste Management (WM) 1.65%
Costco Wholesale (COST) 1.47%
American Water Works (AWK) 1.10%
Union Pacific (UNP) 0.87%
Autodesk (ADSK) 0.85%
Norfolk Southern (NSC) 0.83%
CSX (CSX) 0.80%
Advanced Micro Devices (AMD) 0.71%
Canadian National Railway (CNI) 0.36%
Kansas City Southern (KSU) 0.35%

Stocks Of The Month: CMCSA, MSFT, SBUX

First, another sale...(definitely) my final of 2019. (We're down to 26 stocks, which is pretty exciting!) BlackRock (BLK) was first bought in May 2013. It went up; I bought some more; then it flattened out - rolled over, really - over the past 2+ years. The anemic -2% revenue growth sealed its fate. I've sold it at a modest 15% gain (2% annualized). I used the proceeds from this sale to help fund additional purchases of three stocks that I identified at the beginning of the year, including one that continues its slow climb from a "5" to a "16"...


Comcast (CMCSA)

• $206.9B market cap
• 1.9% dividend yield
• $103.7B revenue
• 24% revenue growth
• $26.0B operating cash flow
• $13.1B free cash flow

Microsoft (MSFT)

• $1.05T market cap
• 1.3% dividend yield
• $125.8B revenue
• 12% revenue growth
• $52.2B operating cash flow
• $30.9B free cash flow

Starbucks (SBUX)

• $115.0B market cap
• 1.5% dividend yield
• $26.1B revenue
• 8% revenue growth
• $12.4B operating cash flow
• $3.8B free cash flow

Here's my current portfolio (buy and hold). As always, I believe in all of these stocks - until I sell them.

Amazon (AMZN) 14.82%
NVIDIA (NVDA) 12.80%
Apple (AAPL) 12.68%
Microsoft (MSFT) 9.59%
Tesla (TSLA) 8.37%
Alphabet (GOOGL) 6.17%
Facebook (FB) 4.28%
Intuitive Surgical (ISRG) 3.59%
Adobe (ADBE) 2.74%
Visa (V) 2.52%
Nike (NKE) 2.29%
Starbucks (SBUX) 2.26%
Comcast (CMCSA) 2.23%
Salesforce (CRM) 2.14%
Intel (INTC) 1.96%
UnitedHealth Group (UNH) 1.96%
Waste Management (WM) 1.79%
Costco Wholesale (COST) 1.55%
American Water Works (AWK) 1.19%
Union Pacific (UNP) 0.93%
Autodesk (ADSK) 0.87%
Norfolk Southern (NSC) 0.86%
CSX (CSX) 0.84%
Advanced Micro Devices (AMD) 0.80%
Canadian National Railway (CNI) 0.40%
Kansas City Southern (KSU) 0.36%

Stocks Of The Month: AMD, NVDA

(Since I'm feeling lazy, and these are the same two stocks chosen in May,...here's May's post with some updated numbers.)


Advanced Micro Devices (AMD)

• $32.0B market cap
• no dividend
• $5.9B revenue
• -13% revenue growth
• $0.01B operating cash flow
• -$0.06B free cash flow

NVIDIA (NVDA)

• $98.2B market cap
• 0.4% dividend yield
• $10.7B revenue
• -31% revenue growth
• $3.0B operating cash flow
• $1.4B free cash flow

Revisiting the catalysts for NVIDIA to outperform the market for the foreseeable future:

• NVIDIA is at the heart of technologies shaping our future: deep learning, artificial intelligence, datacenters/cloud computing, and automated driving.
• Within the semiconductor industry, Intel is the best-in-class manufacturer, while NVIDIA is the best-in-class designer. If someone wants the most powerful chips in the world, they choose NVIDIA.
• NVIDIA's new chip (Turing) being so much better than their old chip (Pascal) is a high-quality problem. The inventory issues causing so much grief with investors will soon be in the past.

Whereas Intel and NVIDIA have larger market caps as mentioned above, AMD is substantially smaller. It is arguably the only significant competitor for either company, and is inarguably gaining technological ground on both:

• In the cloud, AMD has struck deals with Amazon and Google.
• In gaming, AMD will the chip provider for Microsoft's newest XBOX.
• In desktops, AMD will be the first to sell 7mm CPUs and GPUs, which promise increased capabilities and lower power consumption.

Restating my beliefs: NVIDIA deserves the current market cap of Intel (120% upside), and AMD deserves the current market cap of NVIDIA (206% upside).


Here's my current portfolio (buy and hold). As always, I believe in all of these stocks - until I sell them.

Amazon (AMZN) 15.21%
Apple (AAPL) 12.54%
NVIDIA (NVDA) 12.40%
Tesla (TSLA) 9.01%
Microsoft (MSFT) 8.36%
Alphabet (GOOGL) 6.33%
Facebook (FB) 4.38%
Intuitive Surgical (ISRG) 3.76%
Adobe (ADBE) 2.87%
Visa (V) 2.49%
UnitedHealth Group (UNH) 2.19%
Nike (NKE) 2.18%
Salesforce (CRM) 2.08%
Starbucks (SBUX) 2.06%
Intel (INTC) 1.98%
Waste Management (WM) 1.76%
Costco Wholesale (COST) 1.44%
Comcast (CMCSA) 1.41%
BlackRock (BLK) 1.19%
American Water Works (AWK) 1.10%
Union Pacific (UNP) 1.02%
Norfolk Southern (NSC) 0.93%
Autodesk (ADSK) 0.90%
CSX (CSX) 0.85%
Advanced Micro Devices (AMD) 0.77%
Canadian National Railway (CNI) 0.42%
Kansas City Southern (KSU) 0.35%

Stocks Of The Month: CMCSA, UNH

Since last month, the market has gone down considerably. In retrospect: they do ring bells at the top.

No matter...we buy every month no matter what.  I've added to two of my favorite dividend stocks...


Comcast (CMCSA)

• $187.5B market cap
• 2.1% dividend yield
• $98.6B revenue
• 18% revenue growth
• $26.1B operating cash flow
• $12.2B free cash flow

UnitedHealth Group (UNH)

• $230.7B market cap
• 1.5% dividend yield
• $231.4B revenue
• 9% revenue growth
• $10.6B operating cash flow
• $5.9B free cash flow

Here's my current portfolio (buy and hold). As always, I believe in all of these stocks - until I sell them.

Amazon (AMZN) 14.91%
Apple (AAPL) 12.44%
NVIDIA (NVDA) 11.42%
Tesla (TSLA) 8.39%
Microsoft (MSFT) 7.36%
Alphabet (GOOGL) 6.13%
Facebook (FB) 4.33%
Intuitive Surgical (ISRG) 3.94%
Adobe (ADBE) 2.96%
Visa (V) 2.58%
Salesforce (CRM) 2.50%
Nike (NKE) 2.46%
UnitedHealth Group (UNH) 2.36%
Intel (INTC) 2.01%
Starbucks (SBUX) 1.91%
Waste Management (WM) 1.62%
Comcast (CMCSA) 1.51%
Costco Wholesale (COST) 1.46%
BlackRock (BLK) 1.29%
American Water Works (AWK) 1.21%
Booking Holdings (BKNG) 1.20%
Norfolk Southern (NSC) 1.15%
Union Pacific (UNP) 1.13%
Autodesk (ADSK) 1.09%
CSX (CSX) 1.09%
Canadian National Railway (CNI) 0.45%
Advanced Micro Devices (AMD) 0.45%
Kansas City Southern (KSU) 0.38%

Stocks Of The Month: AWK, NVDA

For the third month in a row - and probably, the last time in a while - I've sold a stock. This time it was Aqua America (WTR). Bought at the same time in 2015 as American Water Works (AWK), its returns since then have been inferior:

AWK vs. WTR - 5 YR

Proceeds from this sale went towards AWK to make it a legit "1", and additionally I bought more NVIDIA (NVDA) as I continue my now year-plus efforts to make it a legit "16".

Here's my current portfolio (buy and hold). As always, I believe in all of these stocks - until I sell them.

Amazon (AMZN) 14.53%
NVIDIA (NVDA) 13.49%
Apple (AAPL) 12.42%
Tesla (TSLA) 10.64%
Alphabet (GOOGL) 6.66%
Microsoft (MSFT) 6.50%
Intuitive Surgical (ISRG) 4.31%
Facebook (FB) 4.22%
Adobe (ADBE) 2.70%
Nike (NKE) 2.37%
Intel (INTC) 2.35%
Salesforce (CRM) 2.33%
Visa (V) 2.29%
UnitedHealth Group (UNH) 1.82%
Starbucks (SBUX) 1.66%
Waste Management (WM) 1.59%
Costco Wholesale (COST) 1.34%
BlackRock (BLK) 1.21%
Booking Holdings (BKNG) 1.12%
Autodesk (ADSK) 1.04%
Union Pacific (UNP) 1.03%
Norfolk Southern (NSC) 1.01%
American Water Works (AWK) 1.00%
CSX (CSX) 0.97%
Comcast (CMCSA) 0.63%
Canadian National Railway (CNI) 0.42%
Kansas City Southern (KSU) 0.34%

Stocks Of The Month: MSFT, NSC

I've sold a stock for the second month in a row, and this one is bittersweet. Chubb Limited (CB), known for most of time I've held it as ACE Limited, has been in my portfolio from 2000 to 2001 (sold to close on my first house), and then from 2004 until just a few days ago. It has always been a steady performer, returning 7.50% annualized over the past 19 years. It has recently fallen behind, though:

CB 5-year

CB 2-year

The proceeds from this sale went towards purchases of two dividend stocks that I have recently targeted for additional allocations: a little bit towards Norfolk Southern (NSC); and a whole lot towards Microsoft (MSFT), which along with Google (GOOGL) is now solidly over-allocated in the "5"s group of my portfolio.

Here's my current portfolio (buy and hold). As always, I believe in all of these stocks - until I sell them.

Amazon (AMZN) 14.53%
Tesla (TSLA) 12.16%
Apple (AAPL) 11.97%
NVIDIA (NVDA) 11.10%
Alphabet (GOOGL) 6.76%
Microsoft (MSFT) 6.55%
Intuitive Surgical (ISRG) 4.46%
Facebook (FB) 4.30%
Adobe (ADBE) 2.79%
Nike (NKE) 2.55%
Salesforce (CRM) 2.50%
Intel (INTC) 2.43%
Visa (V) 2.30%
UnitedHealth Group (UNH) 1.86%
Starbucks (SBUX) 1.70%
Waste Management (WM) 1.67%
BlackRock (BLK) 1.28%
Costco Wholesale (COST) 1.28%
Booking Holdings (BKNG) 1.15%
Union Pacific (UNP) 1.09%
Autodesk (ADSK) 1.07%
CSX (CSX) 1.02%
Norfolk Southern (NSC) 1.01%
Comcast (CMCSA) 0.65%
American Water Works (AWK) 0.60%
Canadian National Railway (CNI) 0.43%
Aqua America (WTR) 0.43%
Kansas City Southern (KSU) 0.35%

Stocks Of The Month: CSX, NSC, UNP

Welcome to the fourth (and final) edition of the The Fourth Quarter Dividend (Overtime Edition). Previous editions can be found here, here, and here.

This month I will choose from the "1"s of my portfolio. (Meaning, each of these stocks are roughly target allocated for 1% of my total portfolio.) The candidate stocks are:

American Water Works (AWK)
Canadian National Railway (CNI)
CSX (CSX)
Kansas City Southern (KSU)
Norfolk Southern (NSC)
Union Pacific (UNP)
Aqua America (WTR)

AWK: 2.04% dividend yield, 69% payout ratio, $3.4B revenue, 4% revenue growth, $1.4B operating cash flow, -$0.6B free cash flow
CNI: 1.86% dividend yield, 23% payout ratio, $10.4B revenue, 15% revenue growth, $4.0B operating cash flow, $0.9B free cash flow
CSX: 1.42% dividend yield, 12% payout ratio, $12.0B revenue, 14% revenue growth, $4.0B operating cash flow, $1.9B free cash flow
KSU: 1.50% dividend yield, 15% payout ratio, $2.7B revenue, 7% revenue growth, $1.0B operating cash flow, $0.2B free cash flow
NSC: 2.15% dividend yield, 14% payout ratio, $11.2B revenue, 10% revenue growth, $3.7B operating cash flow, $1.5B free cash flow
UNP: 2.33% dividend yield, 20% payout ratio, $22.5B revenue, 10% revenue growth, $8.2B operating cash flow, $3.6B free cash flow
WTR: 2.61% dividend yield, 60% payout ratio, $0.8B revenue, 5% revenue growth, $0.4B operating cash flow, -$0.2B free cash flow

Amongst a free cash flow-challenged group, CSX, Norfolk Southern, and Union Pacific are the winners. These three stocks also have a promising combination of low payout ratios and good revenue growth, which should support dividend payout growth.

Looking forward to the rest of 2019 - I have a few goals, reflected in the updated buy/hold assignments below, resulting from the yearly exercise that is The Ongoing Concerns:

• Reward winners:  Salesforce (+34% in 2018), Intuitive Surgical (+31%), Adobe (+29%), Amazon (+28%), Autodesk (+23%), Microsoft (+19%)
• Buy values:  NVIDIA (-31% in 2018), Comcast (-15%)
• Add to high-quality, under-allocated dividend stocks quarterly...as of this writing:  Microsoft, Starbucks (+12% in 2018), Costco Wholesale (+9%), Norfolk Southern (+3%), Comcast

Here's my current portfolio (buy and hold). As always, I believe in all of these stocks - until I sell them.

Amazon (AMZN) 15.10%
Tesla (TSLA) 15.05%
Apple (AAPL) 11.26%
NVIDIA (NVDA) 9.25%
Alphabet (GOOGL) 7.05%
Microsoft (MSFT) 4.36%
Intuitive Surgical (ISRG) 4.27%
Facebook (FB) 3.95%
Adobe (ADBE) 2.73%
Nike (NKE) 2.48%
Salesforce (CRM) 2.43%
Intel (INTC) 2.37%
Visa (V) 2.32%
UnitedHealth Group (UNH) 2.11%
Starbucks (SBUX) 1.69%
Waste Management (WM) 1.69%
Chubb Limited (CB) 1.39%
Costco Wholesale (COST) 1.35%
Booking Holdings (BKNG) 1.30%
BlackRock (BLK) 1.28%
Union Pacific (UNP) 1.00%
CSX (CSX) 0.98%
Autodesk (ADSK) 0.97%
Norfolk Southern (NSC) 0.76%
Comcast (CMCSA) 0.67%
American Water Works (AWK) 0.59%
Aqua America (WTR) 0.44%
Canadian National Railway (CNI) 0.42%
Activision Blizzard (ATVI) 0.40%
Kansas City Southern (KSU) 0.34%