Hey Tom, Have you considered the Companys who fabricate the machines to make the chips? ASML is the world leader at present and make and should make huge profits. Press releases | ASML - Supplying the semiconductor industry
Yes. I've done some investigation but I don't know enough about the industry to buy into it. It looks like the folks who understand the industry have a great opportunity to profit from the current situation.
It's been a long time since we've had a day that was not positive. Even at that, they are nearly always flat or *just barely* negative. Today we took a hit: 0.9% negative. I think it takes some years of experience to gain comfort through both the ups a downs. This fluctuation cost us $0. Most of the gains improve our lifestyle by $0. What matters is, we have good companies, strong income, and we are beating inflation. I really hold this philosophy deeply. It isn't just a way to talk myself out of doing something foolish. I'd be OK holding our companies through a 50% crash. No problem. In fact, I'd buy more on the way down.
WBI = 202.9 The fall is usually a good time to buy stock. It can be a time of heightened volatility. It proceeds October to December which is typically a time of strong gains. Our companies have been volatile but not quite volatile enough to trigger our limit buy orders. So, we have bought nothing in the last week. One of our core companies is down while the other two are up a smidgen. The result is a flat week. The company that is down briefly dipped $0.01 below my limit buy order on Thursday but my order did not fill. I don't chase anything, at times like this. I keep implementing my process as designed. Our near cash is currently at 22%. This is a comfortable level. If the cash goes below or above our target window, I will adjust my process. I will not adjust due to external influences.
One of my long term buy orders filled, this morning. Another got very close but that company bounced up a wee bit. So far, this has been a good day.
Another long term buy order filled this afternoon. Closed the day flat. The next long term buy orders will require a heavy market hit so I'm not hopeful they will fill. The only way I will spend down very much of our cash, at this point in our lives, is with a deep discount on companies.
All of our companies, except one, were down this morning. We were down 0.4% on the morning. Right around noon, another company bounced up nearly 1% on low volume to become positive on the day. All but two remain negative. Our portfolio is still a bit down on the day. Times like this are a God send for making portfolio changes. Volatility has allowed me to divest of one company (holding company for several restaurants) at a premium and pick up other companies at a discount. "The stock market is a device for transferring money from the impatient to the patient." - Warren Buffett
I don't anticipate buying anything, other than the two companies we have set to DRIP, before Christmas. It isn't uncommon to have a dip at the end of the year, so I will let the distributions build until then. Proceeds from R-E will sit idle until then, also. Point being, our portfolio is going to continue being boring for a long time.
Staying focused. I picked up some good deals, last week. There was a bit of volatility and I had some 7% discounted (from my valuation), long term, buy orders fill. They weren't large volumes but I did sprinkle a bit of new cash on three of our companies. All three of the purchases were at lows for the day and all three shot up right away. It was an amazing week. This week, things took a turn and two of the companies returned to the purchase price of last week. One went 0.7% below last week's price and is still below where I bought it a week ago. What to do. Nothing. I'm happy to have put a bit more cash to work. Our distributions are stronger than ever. The valuation dip has no direct effect on us. If we needed to put a bunch of cash to work, this would be an opportunity. We just added a small amount of new stock, though. I don't redefine reality to make this a big win. It is more a matter of not focusing on micro valuations and paying more attention to our long term prospects. I cannot time the market. Nobody can. If it was possible, retirement communities would be full of market timing people who are relaxing in a good life. They are not. So, I will continue to grow a portfolio of good companies and trust they will work hard and earn us money. I will also continue to completely disregard the idea of trying to redistribute wealth with traders. I have one hell of a lot more to lose than they do, because I don't trade, so it would be a terrible idea for us.
My portfolio is entirely constructed of REITs, utilities, financials, and service industries. I do not currently own a single growth company. Using the theorem, "Not everyone can make money." I have concluded the market will eventually retract. When that happens, I want to own something that is founded on some sort of income. You know.... profit. I wish I had a growth company or two in the mix and I am actively looking but I don't see anything sufficiently interesting. The odd thing is that our companies that make money have retracted about 2% in the last three trading days while some speculative companies, like Tesla, have actually gone up. It has become clear to me the market is being driven by people who have no regard for actual value.
We are at a point in our lives where we need to keep a lot of cash around. Because of that, and because the market fluctuation was a *very* small bobble, it had near zero impact on us. What impact it did have, was positive (we picked up a very small amount of additional stock at a discount). Cash is far more precious to me, now. The only way I would put a significant amount of cash into the market, at this point, would be if the market crashed 35% or more. Even at that, I would not go all in. I can never go all-in again.
After the up turn of the last couple of days, we are still below our ATH of two weeks ago. It does not particularly matter but we would be slightly better off if the market would soften, rather than strengthen. At this point, my intention is to let cash build until the end of the year and buy if there is a New Year clearance. I suspect there will be a dip in early 2022 but time will tell. I do not suspect a dip between Christmas and New Year.
A lesson learned and a lesson not learned. In early summer, I picked up some CWV.V (micro cap stock on the Canadian venture exchange). I tried to buy a small amount but it was a partial fill, as the stock barely trades. At the time, I thought a variant might shut down China, as I've mentioned before, and drive the price down so I had a long term, limit, buy order that triggered in May at $0.18. Those shares sold last week for $0.30 in what I believe to be the only transaction in the last 7 days. The lesson here is that I made extreme little money, due to it being a micro sized holding. I could brag about the short term return but this will have no effect on our lifestyle of any kind. It's essentially a rounding error. I've decided to no longer own this company, due to it's poor market liquidity. This is the second time I've decided this but I'm not worried about a relapse, this time. I would say this is a lesson learned. I won't bother with this company or holdings of this size again. Meanwhile, a long term limit order on a great yielding, small cap, building materials company filled last Thursday. It was a sweet price and a mid size position for us. I immediately sold call contracts on the entire position to further lower the purchase price but a huge up tick this morning is going to see those shares gone from my account at an 11% gain. It was a nice gain. Our cash is still within a comfortable window. I consider it a hollow victory because I like to own companies. Now I shall lay in the weeds until the next market wobble. Also, this event has given me pause with regard to selling calls to increase the yield of my long term holds. I'm a bit young to take on the risk of having huge amounts of cash but selling calls are a risk that goes down with age.
Interesting day in my Canadian account, yesterday. I felt like I lost a call gamble on DBM yesterday morning and at 11:45, MCAN Mortgage Co (MKP) IPOed a fresh tranch of shares at a 20% discount. They accepted my expression of interest and it is expected to fill on Nov 1. I've owned quite a bit of MKP for a few years. It was highly unusual for me to be home, at the keyboard, and looking at my account. IPOs like that usually close within 90 to 120 minutes. I do not pretend there was the least bit of skill involved in this.
