Since I use Seeking Alpha largely as my own personal investing
journal, I find it necessary to expose my scars and failures, along
with the occasional victory.
In this case, I'll share what may be an incredibly foolish
action on my part.
Today when the market opened (7/25/2014) I sold the vast
majority of my stock holdings with only two significant exceptions.
(I kept a few shares of AT&T (
) and a few shares of Southern Company (
). More on that another time.)
I sold companies that I have carefully pruned and added to over
the past 3 years. These were what I thought were the biggest and
best companies in the world, with a bias to the U.S. They are
largely companies paying a dividend, whose dividend growth rate, or
initial starting yield, was attractive. To me that means they were
paying in the 2% to 5.5% range. BCE (
), ConocoPhillips (
), Chevron (
), BP (BP), Target (TGT), The Procter & Gamble Company (PG),
Kinder Morgan (KMI), Colgate-Palmolive (CL), Kimberly-Clark (KMB),
3M (MMM), Coca-Cola (KO), Wal-Mart (WMT), General Mills (GIS),
Wisconsin Energy (WEC), Wells Fargo (WFC), Verizon (VZ), AT&T
and so on.
At better prices I'd happily take them all back into the
I also held a few outliers. Seadrill (SDRL), Vanguard Natural
Resources (VNR), Kinder Morgan Management (KMR), Omega Healthcare
(OHI), Realty Income Corp. (O), and Prospect Capital (PSEC) are
examples. These were 1% of portfolio positions, or less.
I've been very happy with the gradual increase in value over the
last three years, as well as the increasing dividends and the
general prospects for the companies.
So the question is, "Why sell?"
It comes to this. I couldn't sleep last night worrying about the
three indicators that I follow the most: the Dow 30, the NASDAQ
index, and the S&P 500.
I combined this worry with observations about companies and
their earnings reports, with a dash of paranoia thrown in. Some
companies appear very solid, with tons of cash sitting offshore, or
elsewhere. Others are having nice dividend increases. A few are
missing their numbers, but they don't seem to be getting
On the other hand, there are whispers of a faltering economy,
another recessionary period, and a howling cacophony from pundits
that the end is near. Normally I'd see the heavy consensus of
bearishness as a bullish indicator. But I failed to mention one
last concern. Janet.
The concern that Janet might close her Federal purse hangs over
the market like old cigarette smoke in a seedy bar.
My worries can be drawn on paper. They look like this:
This is Coke (KO), one of a handful of spectacular brands, with
an incredible story, broad product footprint, and products that are
hugely popular worldwide.
Coke suffered a "
," has endured a management gaff over
seem to be the new tobacco.
But we are still talking about one of the best brands, run by
one of the best management teams in one of the biggest bull markets
of all time.
So the gap down really grabbed my otherwise feeble attention.
(Maybe the gap will get filled the way it is supposed to, or
But it does show that fates can reverse abruptly.
THE BIG PICTURE
This chart of the NASDAQ serves as stimulus to two contradictory
thoughts. First, it doesn't look like a frothy, blow-off top.
Second, it's been a nice bull market with only one ten percent
Looking a little more closely, this pattern seems to be either a
nice trading range, which I would take to be bullish, or a nice
little double top.
This close up of the highs adds heat but little light.
The advance, below, of the S&P appears a little more
And lastly, thank goodness, the Dow 30.
The Dow 30 has been in a pretty unrelenting climb since
So these charts make me think that a correction is needed and
very possible. A significant part of me thinks that the bull will
run until it hits a wall, but I also remember the words of my
commodities mentor, "When in doubt, get out."
Rest assured I am not suggesting others do as I did. In fact, I
know the market may run further, so please don't follow me. But
full disclosure and being authentic requires that I write the truth
of my actions. As for the wisdom of those actions, only time will
: COP, CVX, BP, TGT, KO, WMT, PG, CL, KMB, MMM, GIS, WEC, WFC, VZ,
T, SDRL, VNR, KMR, OHI, O, PSEC have all been liquidated today.
They may be repurchased at any time.
The author is long SO, T. The author wrote this article themselves,
and it expresses their own opinions. The author is not receiving
compensation for it. The author has no business relationship with
any company whose stock is mentioned in this article.
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