Dividend Downgrade

For the first time, I've experienced a downsizing of the dividends for one of my holdings. Life Partners went from $.20 per share to $.10. Obviously this reflects the downward spiral of the stock and generally poor prospects.  Nonetheless,  the price has staged some minor rebounds (probably because the dividend was cut more), and I'm in for the log run as I've already held this stock for over a year. 

February 2012 Trading

February was a great month for sales.  I closed out positions in most of my index holdings and almost doubled the previous monthly high for realized gains.  In fact, I've already broken the prior record for a quarter with a full month to go in Q1.  This month alone exceeded the opportunity cost  for the whole year (based on 5 year CD rate).

I did make my first new stock purchase in over three months (since 11/21/11), but I'm still down to 34% invested.  This is due to many sales, a transfer of a 401k into my trading account and 2011 Roth IRA contributions.  So lots of cash to play with now and incentive to dip back into the market more strongly.

Purchases this month:

• EnCana Corp. - Although I've not been actively looking for new opportunities, this price was so attractive I couldn't pass it up.  This decision was borne out by the 4% gain in the first three days.  I have a rather high sales price on this at the moment, but I may adjust once I cross the standard 5% threshhold. 

Sales this month:

• SPDR S&R 500 - 6% gain.  Liquidated about half of these holdings.  
• iShares S&P 500 - 4% to 27% gains - I liquidated all holdings in four different accounts over the course of the month. 

Current holdings and unrealized gains/losses are as follows. Most of the remaining holdings are pretty deeply in the red.

No dividends were collected in February, but several are expected in March. 

January 2012 Trading

January represented a fairly good month for both unrealized and realized gains.  Also, a few dividends were collected, but no new acquisitions for the second month in a row, leaving my percent invested continuing the downward path to 76.7%.  It would be nice to get this a little lower, but I am now better prepared to look for other opportunities.

Most noteworthy this month is that I left my enployer of 4+ years, so I have a significant amount from a 401(k) that can be rolled in the investment pool for active trading.  This should add about 10% to the investment pool.  Also, since I had a few gaps in empoyment in 2011, I'm eligible to make Roth IRA contributions for my wife and I for last year.  These factors will further reduce my percent invested.

Sales this month:

• Harte-Hanks, Inc - 9% gain.  Liquidated final 80% of these holdings.  Took several sessions to liquidate further reinforcing my feelings about small caps. 

Current holdings and unrealized gains/losses are as follows. 

The following dividends were collected. 

• Navios Maritime Holdings
• SPDR S&P 500
  

2011 results

2011 was another year of education for me.  As I've indicated in previous posts, I've realized a lot of gain, but I've also maintained higher levels of unrealized losses than in the past, so it's hard to call 2011 and unqualified success.

The graph below represents the positive side of my 2011 results as compared to 2009-2010.

Blue - monthly realized gain

Yellow - 6 month moving average

Red - 12 month moving average

I also learned (or re-learned) the following lessons.

• Take profits when you can.  There are several underwater holdings that were once well in the black.  Shoulda, Coulda, Woulda.
• Be wary of small cap stocks.  These cannot be quickly liquidated in quantity at market price.
• Stick with dividend stocks that pay on a quarterly basis.  TSYS and NOK are exceptions to this rule that have resulted in marginal reductions in my dividend income.

2012 is off to a slow start and I have not made any conscience changes in strategy as I did in 2011.  I find myself with significant holdings in market index ETFs and I'll need to decide if this approach continues to make sense in a (hopefully) rising market.  I also expect to have funds from a relatively large 401k becoming available and I'll need to decide if I want to put these finds into the investment pool and handle them in some other way.   

December 2011 Trading

December capped a very interesting 2011.  Like the rest of 2011, I took profits in December and collected dividends.  I also found myself with considerable unrealized losses for most of my holdings, although I'm well off the lows.

December did hold one surprise that I didn't recognize until the month was over.  This was the first month since I've been trading when I did not make a single purchase.  This, along with sales lowered my percent invested to less than 85% for the first time since July.  This leaves me better prepared to take advantage of buying opportunities that might arise.  But I'd be happy with a bit of a rally that would allow me to become considerably more liquid.

Sales this month:

• Entergy Corp - 7% gain.  After holding some shares for over a year, I finally was able to close out this position with the desired gain. 
• Harte-Hanks, Inc - 7% gain.  I was able to close out about 20% of these holdings before the stock dropped again.  This has reinforced the lesson I had previously learned about small cap stocks.  These are challenging to unload at the desired prices and should be avoided if possible. 

Current holdings and unrealized gains/losses are as follows. 

The following dividends were collected. 

• Entergy Corporation
• Harte-Hanks, Inc.
• Exelon Corporation
• Life Partners Holding, Inc 
• Harris, Corporation
• iShares S&P 500 Index Fund