Sunday, January 27, 2013

The Apple loses it's Shine

Boy! When the market turns on a stock it really turns.

Do you remember just less than a year ago analysts at this price for Apple stock (aapl) were crying buy, buy, buy. 

The current levels of less than $500 per share are actually still attractive. I personally sold all but a rump of Apple stock after New Year. That followed a sale in October as the stock fell from its high.

I had some leeway as to when to sell as I had average price levels of $350 per share so I still made some money.

At the moment I will hold back my few remaining shares are held at an average price of $290, if Apple get below thatI would be in for a buy anyway, unless there is some major calamity to make me step away.

Last year analysts saw prices for Apple at $1,000 per share, today they are selling off like yrsterdays french fries.

The last few weeks has been a perfect example as to why an investor should diversify. If you had all your money in Apple and had bought higher than the mid $400 level you would be hurting badly.  No one will call this a bubble, but it was and the bubble on the stock has definitely burst.

Apple as a company still appears to have great prospects, if management doesn't panic and begin to chase the stock.

Keep the brand as an aspirational brand, don't go down market.

Keep a pipeline of genuinely new goods coming forward. Don't re-hash old ideas as improvements.

Don't play a blame game at the top. Firing board members and wailing a long lament.

If Apple does ANY of these things, I would be out of the stock at all costs. If they keep a cool head there will be talk again of the $1,000 stock price in a year or two, though  this shock may weaken investor confidence for quite a time.

Wednesday, January 9, 2013

Bloomberg TV or CNBC?

As an investor information is important to me.

But where to turn for good information  that is a big question.

For me the answer actually came in hospital in the Fall of 2012.  I did not have my phone with me, nor did I have a watch so telling the time was difficult. Regular stations on the TV do not give regular time updates and skimming the stations one day I came across Bloomberg TV.

Not only did they tell me the time every half hour or so but I found their news coverage of the markets more interesting than my usual fare on CNBC.

Bloomberg though it does sometimes seem to focus upon its own magazine editorials reported items in a less catastrophic way.  CNBC often tended to the "sky is falling, sell now" style of reporting.

CNBC reports are also full of  "tips". " buy tjis now" "sell this immediately." Bloomberg has less of this kind of reporting.

One particular item that took my eye last year was a five part piece, a series of reports which showed operations on the Union Pacific Railroad (UNP) There was some financial news on the company but, for a train lover, lots of great footage of the reporter riding the trains, interviewing the rolling stock managers in marshalling yards. OK fun stuff, but also valuable information if the rolling stock manager tells you that they are moving X amount of goods more this quarter over the last years movement. You learn alot watching trains.

CNBC is tied to the studio and reporters seem to drive for the tip without any back-up for the investor to gain crucial information.

For me now Bloomberg TV is the main source of information on a daily basis.

You can also log into Bloomberg TV through the iPhone and iPad app available at the Apple Appstore

Tuesday, January 8, 2013

Rebalancing the Accounts.

Looking at my accounts yesterday I was left stunned and scared. In one account just one stock was dominting the account with 33% of the value. That if anything is a red flag to re-balance your account if ever I knew of one.

ING Prime Rate Trust was a nice little earner in 2011-12, it had grown from less than $5 to over $6.20 in eighteen months and as such had sucked much of my value into that one stock.

Yesterday I chose to re-balance the account by taking some profit from ING Prime Rate Trust (PPR) selling one third of my holding.

PPR is still a good cash generating dividend stock paying7% but it was just too much value in a single stock for my nerves.

The proceeds of the sale went back straight into stocks again.

Disney (DIS) is the entertainment and television conglomerate that owns ESPN and is doing streaming deals left and right at the moment. I added some stock of DIS to an existing hold position.
I also moved on XLV the Healthcare exchange traded fund. With security in the Affodable Care Act it seems likely that medical insurance will prosper in the coming few years and also medical praticioners and suppliers will benefit. XLV cover all these groups rather than the riskier one stock choice.

My third stock pick for the re-balanced cash was XOP the oil and gas exploration exchange traded fund. Again this was chosen because it limits the risk of choosing a bad stock in an are where I have little knowledge

Monday, January 7, 2013

Looking Muni?

This weekend I was looking over some of my investments and looked at my Muni stocks.

They have risen to the $111.25 level, a good return in that I bought at the $101 region and they have been giving me a good return too. Around 2% which equates to around 4% if you allow for taxes, Muni stocks often carry tax free status, though this is possibly in question as Washington DC continues to struggle with their finances.

This is leading me to question whether to hold or sell my muni stock.  Hold it and face the loss of attractive returns in a low yield market or hold and face losing cash when and if the dividends attract taxation.

EEEk. Not that old dilema again. Take the profit or face a possible fall from a great height. The investors eternal dilema. Witth this I don't want to do the old fatal trick and fall in love with this stock, but the returns are still good.

As well as some DRIP investing on the muni stock itself the monthly returns have boosted my cash flow to fuel purchases of lots of other stock.

I will hold for the moment but keep an eye on D.C. for their moves.