tonyw44 - All Comments

PBT

tonyw44 — Mon, 18 Aug 2008 13:42:07 GMT

Leave it to me to be the only person who buys an energy related stock (PBT) only to see it drop.

Thing is, it's still going to generate income for me, month after month.

The only question is how much the dividend is. I know it's coming.

I can live with that. When I bought it, the effective yield was about eight percent. To make my 10-15 percent per year that I want from my stocks, all I need is for the stock to keep up with inflation.

Dumping BRT, Adding FRO

tonyw44 — Mon, 01 Sep 2008 19:40:38 GMT

I've decided to do a little cleaning up of my portfolio to kick off the fall.

I'm dumping BRT. I'm going to stay away from real estate for a while because that market is just too fluid. We don't know when a bottom will be in and I don't intend to lose money waiting for that bottom to come.

I'm adding FRO with the money I get from selling BRT. There are two reasons for this. First, there's the $3.00 dividend, which represents a five percent yield at the current price of about $60. That is payable on September 19 to shareholders as of September 4.

Second, I think that even if the world economy slows and demand destruction occurs with oil, there's still going to be a need to move it around. FRO moves mostly oil, coal, and iron ore. There is going to be demand for these products even in a global recession. While no industry is recession proof, even in a recession people still drive, airplanes still fly, power plants still operate, and steel mills still need iron ore.

We'll see. At the very least, the five percent pop for holding the stock for two weeks is a decent reward.

Loading up on BUD

tonyw44 — Sat, 15 Nov 2008 02:47:39 GMT

Over the past month or so I've dumped a lot of my dogs and bought BUD. It is a pure merger arbitrage play. I know I will get $70 a share in cash when the merger closes. I've bought BUD at prices ranging from $57 a share to $68 a share.

The merger will close, according to CNBC, by the end of next week. After that, I'll take my cash and see what companies I want to buy. There are a LOT of very good companies such as GE at firesale prices, and I intend to take advantage of this.

Consider GE, for example. At $20, which is above what GE is trading for now, the current dividend of $0.31 per quarter gives me a yield of over six percent. What this means is to get what I want as far as total returns go, all I need is for GE's stock to appreciate four to five percent per year.

Not too much to ask for, is it?

There are lots of companies like GE in this market. They've got a ridiculously high yield, and the ability to sustain if not increase their dividends. Yet the market has pounded them. They will be back. If you are patient, you can collect your fat dividend and wait for the capital appreciation over time.