9/4/12-There have been no sales or sell signals in the portfolios followed here since our last entry.
On 8/31, I added to our Ben Graham Dividend with Value (BGDWV) portfolio with shares of SYY, at a per share price of $30.44.
As the reader may recall, the BGDWV criteria are: 1. the dividend must be 0.66 or more the average AAA corporate bond yield (as that yield is reported in the most recently received "Value Line Investment Survey" or in the Moody's investment service); 2. the asset must be rated 1 (best) for safety by "Value Line;" 3. the dividend payout ratio must be 0.5 or below; 4. the debt to equity must be 0.99 or below; 5. the asset at time of purchase must have a 3-5 year projected total return, per "Value Line," of 100% or greater.
Based on dividend as well as debt level, equities meeting these criteria are classic Ben Graham value assets. SYY has a dividend of 3.60% with a payout ratio of 0.42 and debt to equity of 0.64. It is regarded as low risk and to have excellent prospects over the next few years.
With the SYY purchase, current BGDWV holdings are: COP; ETN; INTC; ITW; JNJ; MMM; NVS; TRN; SYY; T; and WAG. The total return of BGDWV holdings so far has not been stunning, but this has been one of our better portfolios through a sometimes volatile period for stocks.
More information on our portfolios and their performance should be available in the next entry, expected to include the quarterly report with our followed assets' results through the close of trading 9/28/12.
In the interim, the plan is to enjoy a Rocky Mountain National Park, CO, vacation.
Meanwhile, I wish everyone (and his or her portfolios) well.
9/29/12--The following is my regular quarterly summary (and since it is the weekend, statistics this time are through 9/30/12) of the asset approaches followed here:
Despite many investor concerns, both the market averages and our monitored portfolios have managed to climb the proverbial "wall of worry" to nice returns thus far in 2012, which in turn has aided the overall performances since we have begun following them here. Through 9/2012, the mean result for our four portfolios since the inception for each, has been an annualized increase of 10.8%. With dividends added in, their average total return would have been about 13.7%. Given that these are relatively low risk approaches to stock investing, it seems a satisfactory result to date.
This does not compare favorably, however, with the S&P 500 Index since 5/14/09 (when our low price to book value portfolio was begun), which has an annualized return of 15.21%. As mentioned last quarter, however, that period is atypical for the S&P. A longer perspective shows the index having risen about 9.9% a year (on average), including dividends, since World War II. Our low price to book value portfolio's annual total return has been about 16.6%. If only the closed positions are considered, the low price to book strategy we have used has provided an annual total return since 5/14/09 of 29.5%.
Our total equity book value remains on its glide path toward a year end level at least 13.5% higher than a year earlier. In addition, we are maintaining a total equity dividend yield sufficient to provide at least a 2% yield on that book value total. The intention thus continues to be that a combination of increased book value plus stock (or stock mutual fund) dividends at least total 15.5% annually before taxes.
My wife and I have completed a small milestone since the last such review, having paid off our home mortgage, and so we at last own our home outright. As a result, we now also have zero debt.
I hope everyone enjoys a great fourth quarter conclusion to 2012!
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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.