Friday, October 27, 2017

From Stock Market Hero to Dud in less than a Month

Hi Everyone,

After investing in the stock market now for roughly 8 years, I thought I was starting to get the hang of things.

I read earnings reports, check companies financials, predict future growth, look for undervalued companies based on those prior factors and for once, I was confident!

Phillip Morris (PM) was a stock I had owned since 2011.  After years of doing nothing except paying out a nice dividend, all of a sudden it took off - from $90 to $110 in a span of 2 months.  I looked at this as an opportunity to get out.  The earnings were still deteriorating, and there was only hope from investors that IQOS would save the company.  There was also rumors of a possible merger back to Altria (MO) swirling around.  None of which was based on results from the company.

Well, I like to try and invest more on numbers and not hopes and dreams.

So I sold PM around $110.

It continued its run up to $120.

I want to buy the company back around $100 or less so as of writing, that is still looking good!  PM is back down to $106...  basically still about $110 if you throw in the dividends I have missed along the way.

Now here is the real kicker...

Remember I was saying how confident I was earlier in the post...

Well, I took a look at Biotech stocks.  For a couple of years now they have been under pressure.  Mostly due to drug price concerns and the government interfering.  I look at that as unfounded concerns because it takes a lot of money to develop said drugs.  If you take away the companies ability to make good money off the homerun drugs they create this hurts their ability to do research on new drugs.

Anyway...   after looking through companies I liked two the most...   Celegene (CELG) and Biogen (BIIB).  Both had good earnings, a good pipeline, and were beaten down from their highs.

I took $9000 from the sell of PM, added another $2500 sitting in the accounts for a round number of $11,500 to invest into Biotech - CELG, BIIB.

I now have an average buy price for CELG at $125 and BIIB at $280.

Then they both start to go up!  Life is good!  PM is going down, CELG and BIIB going up!

CELG then hits an all time high! $146 a share!  I'm up over $2000 in a span of just a couple months.

BIIB breaks through the $300 level which was resistance and hits $348!

And then American Dividend Dream bad luck hits home in a hurry....

In the span of less than 3 weeks, CELG hit a an all time high and a 52 week low..   What are the F*($%&G odds!!!!

Now, I'm sitting on a broken stock, a broken company with negativity all around and no path forward.  What should I do?  Sell it and kiss $2000 goodbye?  Hold it for another year most likely, before any positive things happen?  I have no idea.

This just goes to show that no matter how confident you might be about an investment, you are one downgrade from Morgan Stanley, one cancelled phase 3 trial, and one earnings revision down from seeing your stock go from Hero to Dud in less than a month.

BIIB is still looking okay.  Looks like I will have to go another 3 months until another earnings report comes out from that one before seeing which way it wants to go.

I feel so defeated right now its unbelievable.  I almost want to give up on the stock market entirely and try my hand at something else.


Sunday, October 8, 2017

Dividend Income September 2017

Hi Everyone,

September is generally one of the months where investors receive a lot of dividend income.  Its really fun to read other bloggers and watch their year over year growth in the "big 4" months of the year.

Unfortunately for me, the "big 4" months are a little light in regards to income. The big reason is because I just do not have that many companies that pay in that month and the companies I do have are not big payers.

Just 4 sources of income this month:

Visa:  $17.50
Pepsi: $34.56
FTSE - Mutual Fund:  $94.92
Money Market:  $0.13

TOTAL:  $147.11

My FTSE holding is my only mutual fund from my 401K that pays out a dividend.  A bit disappointing that the other funds do not, but FTSE has been doing a fantastic job for me all around.  The growth and the income have been great this year.

The prediction last month about UVE came true.  Hopefully someone out there picked it up in the $15's!!!  It has rebounding nicely and the hurricane impact was much less than predicted originally.  Although for anyone in the Keys, and West Florida, hope everything is okay!

I did not have many portfolio changes this month.  Looking into the future, I would love for CELG and BIIB to explode higher.  PM, MO, DPS and O all look really attractive right now.  I'd love to squeeze a few more points out of CELG and BIIB before making a move.  The charts still look good for both of those companies and the overall IBB index is making moves higher.  With healthcare on the back burner in Washington and taxes on the minds of everyone, the healthcare industry might come roaring back.  With some good earnings reports and its a recipe for good things to come!

I hope everyone had a great September and I look forward to reading those big income totals!