January, 2017: 2 31
Disclaimer - IMPORTANT - Read this first!
Investor's Journal is a diary focused strictly on investments and personal finance issues, primarily from a contrarian and retiree point of view. Follow along with an average guy's failures and successes as he learns, by trial and error, the fine art of value investing.

1/2/17-Happy New Year!

The following assets have been sold from our basic 25 holdings since the last entry: KSS; QCOM; RAIL; and TSM. These have been added: BBBY; CMG; HTGC; and MN.

The resulting basic 25 current holdings are: AAN; AVT; BBBY; BEN; BRK/B; BX; CMG; EIG; ETN; GBX; GLT; HTGC; MLR; MN; NVO; RBC; RDS/B; RICK; RS; SCHL; SLB; T; TOT; TRN; and UVE.

Since the prior entry, and through 12/31/16, our liquid assets have gone down $1570 or 0.13%, to $1,208,052. Our total equities' yield continues to average 2.0% or above.

For the year 2016, ending liquid assets are 14.29% higher than on 12/31/15. By comparison, the S&P 500 Index is up 9.54% in the same period.

Total dividend income from equities as of the end of last year stood at $27,694, well above the 2016 target of $25,888. The target rate of average dividend income increase (13.5% annually since began this standard several years ago) has again been attained.

Our grand total of all assets (real estate, reserves, collectibles, equities, etc.) now stands at $1,509,322 (effective 12/31/16), up 11.42% from its year ago level.

Several months ago, it felt as if I were floundering as an investor. None of my approaches seemed to be working, and I did not know how best to suggest to others what might be profitable. Since then, things have gelled better. In case it is of interest, these are the strategies that evidently are working for me these days:

  1. Buy Berkshire Hathaway shares when available at P/Bk 1.2 or below. Hold them "forever." Ours are up roughly 86% so far.

  2. Buy AT&T shares when the dividend is 5.0% or above and hold "forever." Ours are up roughly 13% so far.

  3. Buy high quality "Value Line Investment Survey" assets when their 3-5 year projected annual total return is 15% or above and their timeliness rank (momentum) is 1 or 2 (high), then sell after held a couple months or more and no longer meet the buy criteria. Ours have been up about 18% so far.

  4. Buy smaller-cap value assets ($10 billion or less market-cap with both P/Bk and P/S positive and 1.5 or below) when also have 26-week performance of 10% or better. Hold a couple months or more and till no longer meet the buy criteria. Up about 9% so far.

  5. Maintain a small set of misc. assets that are better just left alone in taxable brokerage accounts, since to sell them involves way too much complexity of tax reporting. For example, value assets may have been bought many years ago and have since split, been spun off, had their names changed, merged, or otherwise become different than when originally purchased. Over the years, these are up on average about 126% to date.

Please note that the above methods have different average hold periods. For instance, while the misc. no-sell-'ems category (number 5 above) has the greatest overall performance, these shares generally have also been held for a number of years, so the actual annual gains have been only about 8%, dividends included, whereas the smaller-cap value assets on a roll (number 4 above) have typically only been retained in the portfolio about 9 weeks, which means their annualized return is much higher, in the neighborhood of 60%, but they are risky, subject to big drops in a downturn.

Timing is not my strong suit, but if I had to guess I would say there is more hazard in the equity markets of a correction or bear market than likelihood of a continued upward surge to new highs. Our level of reserves now stands at 22% of total liquid assets, a percentage I intend to gradually increase in the months ahead if I can do so without jeopardizing our total equity dividend goal.

I wish everyone a richly rewarding 2017, both in terms of life experiences and nest eggs' growth with security.

1/31/17-The following assets have been sold from our basic 25 holdings since the last entry: BBBY; BX; CMG; EIG; MLR; MN; NVO; RS; and UVE. These have been added: AUY; GG; INFY; MCK; RGLD; RL; SLW; SSRI; and TEVA.

The resulting basic 25 current holdings are: AAN; AUY; AVT; BEN; BRK/B; ETN; GBX; GG; GLT; HTGC; INFY; MCK; RBC; RDS/B; RGLD; RICK; RL; SCHL; SLB; SLW; SSRI; T; TEVA; TOT; and TRN.

It may be noted that we have added 5 gold or silver stocks: AUY; GG; RGLD; SLW; and SSRI. Such stocks tend to do better in periods of uncertainty. Like him or lump him, our new President seems intent on increasing the uncertainty ahead for the U.S., its economy and governance, its international relations, debt, trade, and business prospects. (This category might also lend itself to good exchange traded funds or mutual funds specializing in gold and silver stocks.)

Since the prior entry, our liquid assets have gone up $19,898 or 1.65%, to $1,227,950. Our total equities' yield continues to average 2.0% or above.

Disclaimer and Disclosure Statement
Much as I'd love it to be otherwise, I receive no payment of any kind for disseminating investment information unless, by some fluke, millions of folks, on the strength of these entries, start buying shares of stock I own, a possibility only slightly less likely than our being destroyed by a large meteorite. Do not follow any suggestions made in Investor's Journal as if I were a professional.

Neither I nor Investor's Journal will be responsible for losses by anyone who obtained ideas from this site.

This diary is intended for personal interest and general information only. You are advised to do your own research (as well as to consult highly compensated professionals) before spending money on anything.

I know of no reason anyone should take my financial musings seriously. At best I am a dedicated amateur providing a bit of investment-related insight and entertainment, at worst an amusing diversion.

My wife, Fran, and I may at times own shares of some of the assets mentioned here. But neither of us receive any benefit from reference to them, unless you count the mutual misery when we get it wrong, or the opportunity to gloat when we get it right.

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