Stocks Of The Month: AAPL, NVDA

You may have noticed that there was no "Stocks Of The Month" post for the month of February.

Here's what happened:

• bought more of my top 4 holdings: Tesla (TSLA), Amazon (AMZN), NVIDIA (NVDA), and Apple (AAPL)
• the market went down, up, and mostly sideways

Now that you're caught up, I'd like to share that I've once again (inevitably) changed my allocation targets.

Before, my goals were specific; e.g.
Tesla 22%
NVIDIA 18%
Amazon 14%
Apple 10%
Google 7%
Facebook 5%
Microsoft 3%
...

I've realized that ranking stocks so precisely is far too restrictive (will I always like Tesla exactly 22.2% more than NVIDIA?), and therefore performance of individual stocks should have a determination in how much I own of each.

So now, I've arrived at goals that allow for some "float" within subgroups; e.g.
Tesla 16%
Amazon 16%
NVIDIA 16%
Apple 16%
Google 5%
Facebook 5%
Microsoft 5%
...

And, if Apple ends up at 22% and Amazon at 10%, I don't really care as long as my top 4 stocks comprise 64% of my total porfolio value.

With all of that resolved, March's Stocks Of The Month are Apple (AAPL) and NVIDIA (NVDA).

Note that 1) I have a lot of stocks which are below their target allocation; and 2) I'm deliberately attempting to stuff ten pounds of awesome into a five pound bag - this allocation "problem" is never going to be solved, only managed (on a month-to-month basis, it turns out).

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

Tesla (TSLA) 15.05%
Amazon (AMZN) 13.94%
NVIDIA (NVDA) 12.40%
Apple (AAPL) 12.05%
Alphabet (GOOGL) 7.28%
Facebook (FB) 4.97%
Intuitive Surgical (ISRG) 3.88%
Microsoft (MSFT) 2.95%
Adobe Systems (ADBE) 2.60%
Nike (NKE) 2.25%
Salesforce.com (CRM) 2.20%
Intel (INTC) 1.95%
Visa (V) 1.87%
BlackRock (BLK) 1.80%
UnitedHealth Group (UNH) 1.74%
Waste Management (WM) 1.63%
Booking Holdings (BKNG) 1.58%
Starbucks (SBUX) 1.56%
Chubb Limited (CB) 1.55%
Costco Wholesale (COST) 1.27%
Autodesk (ADSK) 0.90%
Comcast (CMCSA) 0.70%
Activision Blizzard (ATVI) 0.65%
American Water Works (AWK) 0.53%
Norfolk Southern (NSC) 0.47%
CSX (CSX) 0.44%
Aqua America (WTR) 0.44%
Union Pacific (UNP) 0.43%
Canadian National Railway (CNI) 0.43%
Kansas City Southern (KSU) 0.38%

The Plan for 2020 and Beyond, and The Whole 16/5/2/1 Thing Explained

As alluded to in my 2019 summary, here are my investment plans for 2020 and beyond, as well as an explanation of my portfolio allocations.

At the end of each of my "Stock Of The Month" posts describing that month's particular buy(s), I list out all of my holdings followed by their individual current weighting at time of posting, color-coded for buy and hold. For example, here is December 2019's list:

NVIDIA (NVDA) 14.23%
Apple (AAPL) 13.29%
Amazon (AMZN) 12.31%
Tesla (TSLA) 10.77%
Microsoft (MSFT) 10.68%
Alphabet (GOOGL) 5.71%
Facebook (FB) 3.84%
Intuitive Surgical (ISRG) 3.54%
Adobe (ADBE) 2.47%
Salesforce (CRM) 2.16%
Visa (V) 2.13%
Nike (NKE) 2.07%
Costco Wholesale (COST) 2.06%
UnitedHealth Group (UNH) 2.02%
Intel (INTC) 1.90%
Comcast (CMCSA) 1.81%
Starbucks (SBUX) 1.68%
Waste Management (WM) 1.41%
Advanced Micro Devices (AMD) 1.03%
American Water Works (AWK) 0.95%
Autodesk (ADSK) 0.89%
Union Pacific (UNP) 0.83%
Norfolk Southern (NSC) 0.79%
CSX (CSX) 0.73%
Kansas City Southern (KSU) 0.35%
Canadian National Railway (CNI) 0.33%


While discussing stocks, I may refer to them as "16"s, "5"s, "2"s, or "1"s. For example, NVIDIA is a "16"; Canadian National Railway is a "1". This is referring to their individual targeted weighting, which does not change over time - i.e. there will always be four "16"s, three "5"s, seven "2"s, and seven "1"s, adding up to 100. (It is an idea borrowed from Warren Buffett's portfolio weighting in his Berkshire Hathaway portfolio, which historically has had 4-5 large holdings and 40-something other holdings.)

If I were to list out all of my holdings followed by their targeted weighting, it would look like this:

Amazon (AMZN) 16%
Apple (AAPL) 16%
Microsoft (MSFT) 16%
NVIDIA (NVDA) 16%

Alphabet (GOOGL) 5%
Facebook (FB) 5%
Tesla (TSLA) 5%

Comcast (CMCSA) 2%
Costco Wholesale (COST) 2%
Intel (INTC) 2%
Nike (NKE) 2%
Starbucks (SBUX) 2%
UnitedHealth Group (UNH) 2%
Visa (V) 2%

American Water Works (AWK) 1%
Canadian National Railway (CNI) 1%
CSX (CSX) 1%
Kansas City Southern (KSU) 1%
Norfolk Southern (NSC) 1%
Union Pacific (UNP) 1%
Waste Management (WM) 1%

Adobe (ADBE) ??%
Advanced Micro Devices (AMD) ??%
Autodesk (ADSK) ??%
Intuitive Surgical (ISRG) ??%
Salesforce (CRM) ??%


Astute readers will notice that the current and targeted weightings are incongruent - particularly Telsa, and the "??" grouping.

Regarding Telsa: it is the Fifth Beatle of the "16"s. It originally was a proper "16", then I promoted Microsoft to take its place; now, it is officially a "5" (for things-must-add-up-to-one-hundred's sake) and unofficially a "16" (for the-reality-of-my-holdings's sake). (For what it's worth, Telsa is at least greater than a "5", and averages out the underweighting of Facebook within its grouping.)

Regarding the "??" grouping: yes, these "extra" stock holdings mean that my 16/5/2/1s will never add up to 100% of my portfolio. I am essentially attempting to stuff ten pounds of awesome into a five pound bag. However, I feel like the presence of "bench" stocks I like enough to own lends some stability to my portfolio if, for example, one of my "starter" stocks falters. Think of them as cash++...or a side slush fund.


So...with all of that out of the way, what are my investment plans for 2020 and beyond? In short, to make my primary investment ideas the properly primary holdings, such that the "16"s (and Tesla) are true "16"s.

Each of the "16"s (and Tesla) is from 2% to 6% short of their targeted allocation. And, since I am adding to my portfolio instead of reallocating existing funds, each purchase moves the goalposts a little bit further away.

It will likely take 2-3 years of monthly purchases to get each of Amazon, Apple, Microsoft, NVIDIA, and Tesla to reach 16% of my holdings - and today, I am committing to doing exactly that.

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%

Stocks Of The Month: The Distressed 2010

I have to admit...I've been looking forward to this for a while.

Last February, I made the completely liberating decision to buy crappy stocks and not care if they lose money. Pleasantly/well timed to the market recovery, 7 of those 10 stocks are in the black one year later.

So I will repeat the selection progress from last year: 10 more lousy stocks, each 1/10th of what I usually invest per month. And 10 more snarky comments for each wretched stock.

Without further ado, I present to you the 10 newest members of "The Distressed" (percentages are from 52-week high):

Ambac Financial (ABK, -71%): bond insurer which somewhat famously imploded in the fall of 2008.
Blockbuster (BBI, -76%): just like Netflix, but with way more overhead and debt.
Borders (BGP, -73%): old-fashioned, old-media retailer very near to bankruptcy.
China Real Estate Information (CRIC, -45%): irresistible intersection of the twin bubbles of China and real estate.
Energy Conversion Devices (ENER, -74%): beat-down solar cell and nickel battery company.
E*Trade (ETFC, -49%): nearly wiped out by mortgage business. Minus points for annoying talking baby commercials.
GigaMedia (GIGM, -61%): the worst of many Chinese online gaming stocks.
Jackson Hewitt (JTX, -81%): completely inferior competitor to the larger, healthier HR Block.
Palm (PALM, -45%): largely invented the smartphone, only to get trampled by everyone else.
MetroPCS (PCS, -69%): second-tier mobile provider. Bonus points for "Tech & Talk" commercials.

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

Southern Copper (PCU) 10.92%
Apple (AAPL) 10.67%
Google (GOOG) 9.03%
Terra Nitrogen (TNH) 6.82%
Dominion Resources Black Warrior Trust (DOM) 6.46%
The Distressed (ABK, AIG, BBI, BGP, C, CRIC, ENER, ETFC, F, FNM, GIGM, JSDA, JTX, MOT, MTLQQ.PK, PALM, PCS, WFC, YRCW) 5.76%
Ace Limited (ACE) 5.07%
Tesoro (TSO) 4.90%
Frontline (FRO) 4.55%
American Software 4.02%
Blackstone (BX) 3.66%
Biovail (BVF) 3.24%
Vodafone (VOD) 3.11%
Tidewater (TDW) 3.05%
Great Northern Iron (GNI) 3.03%
Apache (APA) 2.97%
McDonald's (MCD) 2.90%
DuPont (DD) 2.42%
Annaly Capital Management (NLY) 2.40%
PDL BioPharma (PDLI) 2.35%
Cherokee (CHKE) 2.19%

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%

Stock Of The Month: AAPL (The Fourth Quarter Dividend Edition)

Historically, I've thought of the last quarter of the year as the time to buy my favorite dividend stocks...though having searched back, I cannot find much formal evidence of this (a recurring - and not-so-reassuring - theme). So let's fix that.

Welcome to the first edition of the The Fourth Quarter Dividend.

This month I will choose from the "16"s of my portfolio. (Meaning, each of these stocks are roughly target allocated for 16% of my total portfolio.) The candidate stocks are:

Amazon (AMZN)
Apple (AAPL)
NVIDIA (NVDA)
Tesla (TSLA)

AMZN and TSLA can be eliminated from consideration right away: neither pays a dividend.

Now let's compare the remaining two candidates.

AAPL: 1.3% dividend yield, 24% payout ratio, $255.3B revenue, 17% revenue growth, $73.0B operating cash flow, $41.4B free cash flow
NVDA: 0.2% dividend yield, 9% payout ratio, $11.9B revenue, 40% revenue growth, $4.9B operating cash flow, $2.5B free cash flow

As you can see, this is not a particularly close contest. Apple is one of the safest, most well-funded dividend stocks in the market, perhaps ever. It will almost certainly increase payouts year-over-year for the foreseeable future.

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

Amazon (AMZN) 15.22%
Apple (AAPL) 15.09%
NVIDIA (NVDA) 14.79%
Tesla (TSLA) 11.11%
Alphabet (GOOGL) 6.61%
Intuitive Surgical (ISRG) 4.26%
Facebook (FB) 4.07%
Microsoft (MSFT) 3.04%
Adobe Systems (ADBE) 2.67%
Nike (NKE) 2.29%
Salesforce.com (CRM) 2.27%
Visa (V) 1.87%
UnitedHealth Group (UNH) 1.80%
Intel (INTC) 1.59%
Waste Management (WM) 1.52%
Starbucks (SBUX) 1.35%
Costco Wholesale (COST) 1.34%
Chubb Limited (CB) 1.27%
BlackRock (BLK) 1.27%
Booking Holdings (BKNG) 1.25%
Autodesk (ADSK) 0.91%
Activision Blizzard (ATVI) 0.59%
Comcast (CMCSA) 0.58%
American Water Works (AWK) 0.53%
Norfolk Southern (NSC) 0.51%
CSX (CSX) 0.50%
Union Pacific (UNP) 0.46%
Aqua America (WTR) 0.44%
Canadian National Railway (CNI) 0.43%
Kansas City Southern (KSU) 0.34%

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%

Stocks Of The Month: The Distressed

A few days ago, I had a crazy idea.

Instead of picking stocks I like and losing money, why not pick stocks I don't like - even hate - and lose money?

So for this month, I chose 10 of the worst stocks I could possibly think of, and bought 1/10th the amount of shares I usually would for each one. If one or two go belly-up, no big deal. Heck, one of them dropped over 10% today, and I can laugh it off. This is a good thing...I think.

Here they are - from now on, to be known collectively as "The Distressed" (percentages are from 52-week high):

American International Group (AIG, -98%). The company that made "derivatives" a curse word. If they are lucky, they will return to being a big, boring insurance company.
Blackstone (BX, -80%). The weasels that sold high on the hedge fund craze by going public.
Citigroup (C, -88%). An ill-conceived, poorly managed financial conglomerate. Fire the management and break up the company, and there's value.
Ford (F, -79%). Um...they're an American car company.
Fannie Mae (FNM, -98%). Could go bankrupt. Or could solve the mortgage crisis.
General Motors (GM, -90%) They're like Ford, only much crappier.
Jones Soda (JSDA, -94%). Makes delicious pure cane sugar pop. Kind of a luxury discretionary item these days.
Motorola (MOT, -64%). Poor management and execution, decent R&D.
Wells Fargo (WFC, -57%). Probably the healthiest bank in America. 7% dividend yield.
YRC Worldwide (YRCW, -87%). Transports lead the market, right?

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

Terra Nitrogen (TNH) 14.41%
Dominion Resources Black Warrior Trust (DOM) 14.13%
Tesoro (TSO) 11.58%
Google (GOOG) 10.02%
Apple (AAPL) 8.46%
Southern Copper (PCU) 8.41%
Frontline (FRO) 8.36%
Ace Limited (ACE) 7.80%
Tidewater (TDW) 4.75%
Atlas Energy Resources (ATN) 4.16%
The Distressed (AIG, BX, C, F, FNM, GM, JSDA, MOT, WFC, YRCW) 4.07%
Apache (APA) 3.71%

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%

Stocks Of The Month: AAPL, GOOG

You might have noticed that there was no Stock Of The Month for September 2008.

That's because I didn't buy any stocks - and hopefully you didn't either. But when the bailout that nobody wants, but everybody needs, is finalized, things will soon be back to "normal".

I sold two stocks last month. On Sept. 19th, Companhia Siderurgica Nacional (SID) was down 38% and its dividend wasn't compelling (i.e. large) enough to keep. On Sept. 23rd, Goldman Sachs (GS) was down 39% and went from the best investment bank in the world, to just another regulated bank. (Full disclosure - I'm very much in favor of increased regulation/transparency/accountability; I just don't want to own a stock whose future profit potential significantly diminished overnight. But if you need to own a bank stock, GS is the one.)

Apple (AAPL) and Google (GOOG) are arguably the two best brands in the world today. Their stock, like everyone else's, was washed out over the past month, declining 33% and 14% respectively. However, their long-term prospects are intact - Apple owns consumer electronics, and Google owns the internet. One bad month won't change that.

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

Dominion Resources Black Warrior Trust (DOM) 13.27%
Google (GOOG) 10.01%
Terra Nitrogen (TNH) 9.66%
Southern Copper (PCU) 9.31%
Apple (AAPL) 8.34%
Ace Limited (ACE) 8.06%
Frontline (FRO) 8.01%
Tesoro (TSO) 5.54%
Tidewater (TDW) 5.21%
Hansen Medical (HNSN) 5.21%
Diana Shipping (DSX) 4.95%
Nintendo (NTDOY.PK) 4.28%
Apache (APA) 4.17%
Vestas Wind Systems (VWSYF.PK) 2.91%

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: NLY, ISRG

I was able to choose two stocks this month, because one that I had owned has some potentially serious issues. The cliffsnotes story on Great Northern Iron (GNI) is that it is a trust which will dissolve in 2015, and the sum of its projected dividend payments and final payout per share, from the present until that time, is significantly less than the current price of the stock. This is openly disclosed in the trust's 10-K filings, and the increasing knowledge of its circumstances has resulted in some recent large losses. I don't feel too terribly bad for owning the stock, as I sold for a slight capital gain and collected a few dividends along the way. But I do have to double-guess myself when I can wonder aloud why it was behaving strangely.

This month's stocks are ones I already own, and wanted to add more...one a dividend stock, and one a growth stock...

Annaly Capital Management (NLY)

Positives:

Huge profit and operating margins (86% and 88% respectively).

+11% spread between ROE and ROA.

Positive operating cash flow ($11B).

Trailing P/E of 8, forward P/E of 7.

Whopping 14.4% dividend yield.

Negatives:

Huge debt ($67B)...of course, debt is their business.

Low insider holding (0.44%).

Intuitive Surgical (ISRG)

Positives:

Super-cool surgical robots.

Solid revenue (21%) and earnings (56%) growth.

No debt.

Positive cash flow.

Negatives:

Low insider ownership (1.2%).

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

Apple (AAPL) 11.71%

Southern Copper (SCCO) 8.58%

Baidu (BIDU) 7.85%

Google (GOOG) 6.39%

Dominion Resources Black Warrior Trust (DOM) 5.62%

Annaly Capital Management (NLY) 5.37%

Ace Limited (ACE) 4.52%

Apache (APA) 4.26%

Hugoton Royalty Trust (HGT) 3.87%

BP Prudhoe Bay Royalty Trust (BPT) 3.80%

Intuitive Surgical (ISRG) 3.44%

Blackstone (BX) 3.33%

Cherokee (CHKE) 3.18%

American Software (AMSWA) 3.18%

Prospect Capital (PSEC) 2.91%

The Distressed (C, ERTS, ESI, JSDA, LZB, MMI, MSI, NPD, PCS, RVR, SKX, STEC, WFC) 2.85%

Vodafone (VOD) 2.70%

DuPont (DD) 2.64%

Frontline (FRO) 2.60%

McDonald's (MCD) 2.31%

Intel (INTC) 2.26%

BreitBurn Energy Partners (BBEP) 2.26%

Nokia (NOK) 1.94%

F5 Networks (FFIV) 1.84%

Stock Of The Month: MSFT...And Also AGG, HYLB, USHY (The Those Aren't Stocks - Those Are Bond ETFs! Edition)

One additional sale was triggered by stop-loss after last month's mega-sale: Nike (NKE), which had been part of the portfolio since 2013 and added to four times thereafter, for an overall 87% gain (9% annualized).

The proceeds went to Microsoft (MSFT), as June is a dividend stock month and it is now almost the same in allocation to Apple (AAPL) as the 4th and 5th of my core holdings; and once again, equal amounts of my bond ETFs (AGG, HYLB, USHY).

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 96/4 - and even if tomorrow all of my stop-loss trigger orders were executed, it would be just 74/26.

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 ETFs. It is truly a month-to-month situation (as it has always been!).

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)

• $1.23T 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)

• $1.40T 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)

• $1.39T 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)

• $216.6B 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)

• $166.5B 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 and hold). As always, I believe in all of these stocks - until I sell them.

Tesla (TSLA) 21.00%
NVIDIA (NVDA) 16.97%
Amazon (AMZN) 13.58%
Apple (AAPL) 11.36%
Microsoft (MSFT) 11.33%
Alphabet (GOOGL) 4.36%
Facebook (FB) 3.09%
Intuitive Surgical (ISRG) 2.42%
Adobe (ADBE) 2.19%
Salesforce (CRM) 1.63%
Visa (V) 1.57%
UnitedHealth Group (UNH) 1.54%
Costco Wholesale (COST) 1.48%
iShares Broad USD High Yield Corporate Bond ETF (USHY) 1.45%
Intel (INTC) 1.45%
Xtrackers USD High Yield Corporate Bond ETF (HYLB) 1.44%
iShares Core U.S. Aggregate Bond ETF (AGG) 1.40%
Advanced Micro Devices (AMD) 0.98%
Autodesk (ADSK) 0.77%

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: AAPL, NVDA

This month's purchases were the same as last month: Apple (AAPL) and NVIDIA (NVDA).

Hindsight being 20/20, I should have chosen the other 2 stocks of the Big Four - Amazon and Tesla. My thinking was that all four are way below their 16% allocation target, so I might as well bring up the farthest laggards first. Of course, there are 14 other stocks listed below as "buy", and any of those could be more deserving. And Intuitive Surgical and Adobe and Autodesk recently reported great results, so they deserve attention as well...

In the long run any given month's choices shouldn't matter (in theory), so I try not to worry about it. They will all have their turns. #TheresAlwaysNextMonth

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

Amazon (AMZN) 14.36%
Tesla (TSLA) 13.19%
NVIDIA (NVDA) 12.72%
Apple (AAPL) 12.07%
Alphabet (GOOGL) 7.31%
Facebook (FB) 4.73%
Intuitive Surgical (ISRG) 4.29%
Microsoft (MSFT) 3.05%
Adobe Systems (ADBE) 2.82%
Nike (NKE) 2.28%
Salesforce.com (CRM) 2.25%
Intel (INTC) 2.07%
Visa (V) 1.95%
UnitedHealth Group (UNH) 1.84%
BlackRock (BLK) 1.78%
Booking Holdings (BKNG) 1.67%
Starbucks (SBUX) 1.61%
Waste Management (WM) 1.59%
Chubb Limited (CB) 1.55%
Costco Wholesale (COST) 1.31%
Autodesk (ADSK) 1.02%
Comcast (CMCSA) 0.64%
Activision Blizzard (ATVI) 0.59%
American Water Works (AWK) 0.57%
CSX (CSX) 0.49%
Norfolk Southern (NSC) 0.46%
Aqua America (WTR) 0.46%
Union Pacific (UNP) 0.46%
Canadian National Railway (CNI) 0.43%
Kansas City Southern (KSU) 0.41%

Stocks Of The Month: BLK, MSFT, NVDA, TSLA

Aside from my ongoing monthly accumulation of additional shares of NVIDIA (NVDA) and Tesla (TSLA), I'm continuing to add to my favorite dividend stocks to ensure they continue to be a significant portion of my portfolio. This month, I chose BlackRock (BLK) with its 2.1% dividend yield and steady outperformance of the market; and the other half of "Wintel" that I didn't buy last month: Microsoft (MSFT).

Yes, they still have the old cash cows of Windows and Office - otherwise, Microsoft has reinvented itself in the past 3 years. They make cool hardware (Surface, HoloLens). They have a significant presence in the cloud (Azure). Most importantly, their CEO is once again a geek visionary (Satya Nadella), and the stock has responded to his leadership by hitting all-time highs. With revenues of $90B growing at 13%, +$40B cash minus debt, free cash flow of $20B, and an extremely safe 2.0% dividend yield, Microsoft has room to grow.

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

Tesla (TSLA) 14.55%
Apple (AAPL) 11.78%
Amazon (AMZN) 11.23%
NVIDIA (NVDA) 9.67%
Alphabet (GOOGL) 8.11%
Facebook (FB) 5.79%
Intuitive Surgical (ISRG) 4.11%
Microsoft (MSFT) 2.72%
Adobe Systems (ADBE) 2.60%
Nike (NKE) 2.18%
Salesforce (CRM) 2.14%
Intel (INTC) 2.12%
Visa (V) 1.98%
UnitedHealth Group (UNH) 1.90%
Chubb Limited (CB) 1.89%
BlackRock (BLK) 1.85%
Starbucks (SBUX) 1.76%
Priceline Group (PCLN) 1.69%
Costco Wholesale (COST) 1.29%
Autodesk (ADSK) 1.11%
Comcast (CMCSA) 0.78%
American Water Works (AWK) 0.69%
Activision Blizzard (ATVI) 0.64%
Waste Management (WM) 0.56%
Aqua America (WTR) 0.56%
Canadian National Railway (CNI) 0.52%
Norfolk Southern (NSC) 0.50%
CSX (CSX) 0.47%
Union Pacific (UNP) 0.45%
Kansas City Southern (KSU) 0.44%

Stocks Of The Month: DDD, SSYS (The True Believer Edition)

(...remember that time that I tried to chase a bunch of high-flying growth stocks? Yeah, I'm unwinding that trade.)

(...however, I decided this month to cut some losers in order to buy the biggest losers of all...)

Including this month, I've bought DDD and SSYS twelve and eight times respectively. If there are any stocks that I believe in more than any others, it would be these; even to my great detriment.

There is some actual evidence that this could be the end of the downward spiral. I submit:

• Headline: "3D Systems Stock Jumps Despite Earnings Miss". That loosely translates to "3D Systems Delivers Mostly Awful Results, Instead Of Usual Completely Awful Results", or "3D Systems Stock Can Find No More Sellers".

• Gartner expects 3D printer sales to more than double every year between 2016 and 2019. At some point, reality will have to converge with these expectations.

• It might be the case that consumer 3D printing technologies are now poised to begin climbing the "Slope of Enlightenment", with further-out technologies moving post-"Peak of Inflated Expectations" (from Gartner):

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

Apple (AAPL) 13.44%
Tesla Motors (TSLA) 9.95%
Alphabet (GOOGL) 7.49%
Baidu (BIDU) 5.45%
Amazon (AMZN) 5.30%
Under Armour (UA) 5.25%
3D Systems (DDD) 4.87%
Stratasys (SSYS) 4.01%
Nike (NKE) 3.95%
Blackstone (BX) 3.01%
Starbucks (SBUX) 2.80%
Ace Limited (ACE) 2.68%
Southern Copper (SCCO) 2.26%
Intuitive Surgical (ISRG) 2.21%
Qihoo 360 (QIHU) 2.04%
Twitter (TWTR) 1.86%
Microsoft (MSFT) 1.74%
American Software (AMSWA) 1.63%
Wells Fargo (WFC) 1.59%
BlackRock (BLK) 1.57%
Cisco (CSCO) 1.44%
Boeing (BA) 1.39%
Intel (INTC) 1.35%
China Mobile (CHL) 1.29%
Veolia Environnement (VEOEY) 1.24%
McDonald's (MCD) 1.18%
DuPont (DD) 1.10%
Ansys (ANSS) 0.92%
Salesforce.com (CRM) 0.86%
Aqua America (WTR) 0.84%
American Water Works (AWK) 0.83%
Costco Wholesale (COST) 0.78%
American Express (AXP) 0.73%
F5 Networks (FFIV) 0.73%
Canadian National Railway (CNI) 0.73%
Coca-Cola (KO) 0.69%
Lululemon Athletica (LULU) 0.63%

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%

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%

(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%