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Thanks Nick
I've caught some falling knives, quite painful and I did feel stupid. Sometimes it paid off, sometimes it didn't. WMT one of few holding up nicely. Glad I didn't sell it...so far.
I don't think I have another 12 years to wait for stocks to skyrocket again. Thinking I'd like to take another dip with some profits taken, but will continue to be frugal on the stock purchase side. Probably going to pull back investing to about 25% of my profits. The rest will go to cash and higher yielding funds. Got cowed, and I don't even live in New Hampshire !
Some gurus now saying that this is the time to begin nibbling. Looking back, on these types of rout, the best opportunities are near bottom. Question is, where the heck is bottom ? Don't know if I have the "stomach" for that.
Nick, I've owned NEE for like forever in my dividend reinvestment account. It's served me well. You mentioned NEP, they seem to be related.
Cramer's talking about December 2018 and around 21,000 on the Dow as if that may be a good entry point.
Tomato, tomahto, it's an epidemic to me.
Thanks Nick,
Good articles.
One of the only stocks I'm seriously looking at is AMZN at this point. They have some weak points with recent acquisitions, but none the less I believe they have a winning formula especially in the "social distancing" environment.
Occidental Petroleum's Dividend Could Be at Risk as Oil Prices Slide -- Barrons.com
1:22 pm ET March 9, 2020 (Dow Jones) Print
By Andrew Bary
Occidental Petroleum's dividend looks to be in jeopardy following a steep drop in crude oil prices on Monday.
The company is vulnerable to a dividend cut because of its high debt levels stemming from a much-criticized $55 billion acquisition of Anadarko Petroleum last year. Crude oil, as measured by West Texas Intermediate crude, was down $7 on Monday, to $34.28 a barrel. Prices of Occidental debt were also sharply lower Monday.
If crude oil prices continue to decline, it is possible that Occidental (ticker: OXY) could eliminate both its common dividend and the $800 million in annual preferred dividends that it pays to Warren Buffett's Berkshire Hathaway (BRK. A) on $10 billion of preferred stock with an 8% annual dividend rate.
"Occidental needs to cut its dividend," analysts at Tudor Pickering Holt wrote in a client note Monday. The analysts added that the "explosion in leverage and risk of volume declines make dividend untenable in our view."
The analysts continued: "Collapse in crude only further stresses the company's balance sheet while the aggregate dividend payout of $2.8 billion hampers flexibility to stave off steep volume declines which will cause leverage to expand further."
Shares of Occidental were down 33%, to $17.34 on Monday, lifting the yield on the stock to 18%.
Bank of America analyst Doug Leggate cut his rating on Occidental on Monday to Neutral from Buy and reduced his price target to $30 from $75, according to FactSet. Occidental last month declared its regular dividend of 79 cents per quarter.
Occidental CEO Vicki Hollub expressed support for dividend on the company's recent fourth-quarter earnings conference call, saying the company has "flexibility" with its cost structure "to continue to pay our dividend."
Occidental appears to be on the verge of reducing costs. In a statement, the company said Monday: "As global commodity prices have declined sharply in recent days, we are prepared to reduce our spending if the current environment does not improve. We are monitoring the situation closely and retain the flexibility to adjust our budget if needed."
Occidental is one of the most highly leveraged energy producers among its peers. It had more than $38 billion of long-term debt at the end of 2019, up from $10 billion before the Anadarko deal. Occidental's debt exceeds that of the much larger Chevron (CVX), which had $27 billion of debt at the end of 2019.
The Anadarko deal is proving to be an albatross for Occidental. It was pushed by CEO Hollub over the objection of many shareholders and the company restructured the deal to avoid a shareholder vote -- enraging holders like T. Rowe Price, who called the move poor corporate governance. Hollub's view was that the deal was so important to Occidental that the company could not risk rejection in a vote. Activist investor Carl Icahn, who holds about 2% of the company's shares, has also been critical of the deal.
Occidental stock now stands at its lowest level since 2003, and the company's market value has collapsed to $15 billion. The stock traded in the high $60s last April before news of Occidental's interest in buying Anadarko.
The company's debt prices, which had held steady even as the stock declined, cracked on Monday, with the 4.4% bonds due in 2049, down 35 points, or 40%, to 52 cents on the dollar, raising the yield to 9.1%. That $750 million issue was part of a debt package issued in August to help finance the Anadarko deal. Occidental still has investment-grade debt ratings from both Moody's Investors Service and Standard & Poor's.
Berkshire CEO Buffett moved to provide $10 billion of preferred stock to help finance the deal last spring. At first, it looked like a coup for Berkshire, given the lofty 8% dividend and warrants to buy Occidental stock. But that Berkshire preferred is now probably worth less than its face value after the steep decline in the company's stock and bonds.
There has been speculation that Occidental's stock drop could prompt Chevron or Exxon Mobil (XOM) to buy the entire company.
The Tudor Pickering analysts doubt that scenario, writing: "We continue to avoid the equity and view the name as worst positioned in the large cap space in this environment. Additionally, we do not think the majors would be interested in acquiring the company as the balance sheet has essentially become a poison pill."
Write to Andrew Bary at andrew.bary@barrons.com
(END) Dow Jones Newswires
March 09, 2020 13:22 ET (17:22 GMT)
Copyright (c) 2020 Dow Jones & Company, Inc.
I'll go out on a ledge here and say that the market will continue to recover for now and follow a pattern where it will go down towards day end.
I'm beginning to think these are short term trades. It's tough looking at the oil patch seeing the bloodletting there.
Markets appear to be recovering. I'm beginning to see some green
A bit wary of following your lead on that one Nick.
Yes SF, Those Canadians have SOCIALIZED MEDICINE ! Just like Medicare here, only worse because theirs is more comprehensive. and that's very bad. Very bad. Now that is socialism in its rawest form ! Terrible. Our country is now great like it's never been before. Because we're Americans we can beat any ole teensy weensy virus. We're gonna pull up our boot straps and beat it. We'll hoard and cocoon like no others. We have Netflix, Amazon Prime, HBO Go and all kinds of streaming services to accompany us to Victory ! Yes sir. Heck ! How could you possibly indicate that the Canadians only have those few cases. Their government is obviously lying, not like our great, perfect, beautiful government. We have this virus beat already. Oh SF, you should get on board.
On the other hand. I'm simply going to wait for buying opportunities and then wait some more. There seems not to be calling bottom. So lets see if the markets get back up to their support lines today.
I have 2, T and ABBV. ABBV is a bit pricey. T has been a long term hold like forever. So its cost is way down there. Each time I'm tempted to lighten up on T I just look at the dividend and think well if it goes down some to yielding a 6% dividend I'll add more. So far that's worked out pretty good. Now ABBV was just added at a 5.5% dividend and I for one am very glad to hear that the dividend is secure. Now, if it will only go up a bit so I can see more green in my portfolios.
Oh and let's not forget about COVID19. My GF's son who lives with us has had a cold for the last 2 weeks, at 29 he's quite healthy. Well, today he decided he would go to City MD an urgent care center, instead of his doctor. He left hastily as the place was crowded with folks coughing all over the place. And my GF started coughing and feels crappy the last few days....
So there's that. Me I'm okay at this point so I washed and polished 2 of the cars today. I'll save the minivan and the other car for another day.
It has begun.
Thank you Nick.
I am seriously thinking about shorting MCD
Yes Court,but,
"Nobody expects the Spanish Inquisition" . Nobody ! Words to live by.
Elroy,
I had an endoscopy a few weeks back and when I asked the nurse what preparations the hospital was making for COVID19 she turned to me with a pained expression and said we are using sanitary methods we use as normal course of action. When I specified if there was an outbreak here what preparedness does the hospital have? She looked at me and said nothing. Northwell Health Hospital, Staten Island NY.
There is a recession coming, just how big and bad remains to be seen. As I've stated, our government put its head in the sand and touted that because planes from China were diverted that all's well. Not so. The time to have acted was before then with preparedness and test kits. This is where I say that the private sector worked, when biomedical labs started their expedited research and ramping up mask production (still can't get them though) and test kits. The government was ill prepared for this through every fault of their own. And we're the recipients of their mistakes.
Good point, SF. But remember, that's beginning to sound a bit political. Accurate, but political.Almost sounds like you're an advocate of Universal Health Care which brings to my mind the ACA. God forbid, SF !
Socialist, just like Medicare and those government services you mentioned like police fire public education and sometimes medical and ambulance service. Best left to for profit companies I always say.
That brings me to a question... How many people on this board received a public school education ? I don't think we turned out all that bad. Am I correct in that assessment ?
M girlfriends sister who retired from Morgan Stanley a few years ago has him as a client. He's 50 years old, healthy and in critical condition now.
Could you name them since I don't have access to the Barrons article.
Well SF,
At least we have a jump on mismanaging...
Nick I have subscribed to that philosophy for a long time. Sometime though it just doesn't work. And when there are more "sometimes when it doesn't work" than there are "sometimes when it does work" I get a bit jittery.
Then the short term concern takes over and I for one would rather flit in and out of equities and not get stuck in intractable positions. To an extent I'm glad I did. NFBK has been clobbered... badly...so has EQH... STWD, BX and MA, but not so much BX, MA or GILD and some other "long term holds" with sizable returns slowly diminishing down to not so hot. That's why I halved those first 5 positions, with considerable returns. The tax man is going to love me next year !
So yeah, I think that under most circumstances yours is a great strategy that I share, a strategy to buy and hold, it's made me a bit of money, but right now these times are different. I'll stay with cash right now until the smoke clears.
I do like V and may keep it. But I don't want a $181.57 stock with virtually no dividend weighing down my portfolio, so I'll be all over this as I was all over IBM which lead to good results.
Incidentally, I like IBM now. Do you ?
As I stated before, under extreme circumstance systems begin to breakdown. We as a people don't plan for these exigencies. Unfortunately, Ameritrade didn't fill an order I thought was filled. Fortunately for me the order that wasn't filled was to sell V at $181.57 in my qualified account. The one that I opened at $180.57. What did happen though was that it did execute and close in my non qualified account resulting in a wash sale.... YAY ! I can sleep tonight.
Regarding systems overload. I'd rather get sick now if I'm going to get sick from covid19. Getting sick ahead of potential overload of patients is best. Our health care systems like many other systems are capable of handling just so many, then, well, people can succumb. I'd prefer to be not one of those people. Not that I'm going to go out and have everyone I meet breathe on me, nor am I going to open up the old bomb shelter, but I will be wary and careful. See what that gets me.
So in light of all the bruhaha, I'm cash flush and ready to go...again.
Hey Nick, maybe you could say on your mark, get set, go.
Some banks do. If you're a small checking account holder with little savings you may be paying service fees. And if you're using ATM's you'll be paying per use.
THIS MARKET DOES EXACTLY WHAT I DON'T EXPECT IT TO DO. BUT IT CONTINUES TRADING IN A "TIGHT" RANGE.
IF YOU CAN CALL 700 POINTS A TIGHT RANGE
NICK I REALLY NEED SOME PROGRAM TO HELP. IF YOU HAVE ANYTHING ELSE IN YOUR ARSENAL THAT YOU CAN TELL ME WORKS, KINDLY LET ME KNOW. THIS IS RIDICULOUS. I HAD V EXACTLY WHERE I WANTED IT. GOT SPOOKED, SAVED MY HIDE AND LOST THE UPSIDE.
Yes, but most likely it will be a good opportunity if you are exposed to lighten up or ride the market up till it falls back again.
Too jittery, these stocks are craaaazzzzzyyyy.
Closed 1/2 V at 181.57 wash sale.
Closed 1/2 V at 181.57 from 180.55.
I think the Ameritrade system is not reporting well today.
So basically I made a few bucks on the round trip and didn't lose on the other.
I am absolutely done with this for the week. Made a few bucks, not even thinking long term. Though GILD was considered a mid to long term hold, I lightened up to make available more $$$. In this market you must be agile. You snooze you lose. I've been too complacent about some of my investments especially the more speculative ones. Now I'm on my toes and won't get caught flat footed again.
Added to V at 180.55.
I'll not hold over the weekend. Very ill conceived trades.
Sold GILD from $76.75 to $78.88. 2.7% turn around.
That's a tough discipline I usually have. In this environment it's difficult to maintain. It's all in choices. When I doubt my stock selections I become moribund and don't do anything. That's been the case with little deviation. The picks I've made to this point have all been wrong. The only thing I may have done is selling into this and reconfigured my portfolios to add more dividends payers and lessened losses with the opportunity to buy back once the smoke has cleared.
Opened with V a nibble at $181.55, hope it holds.
Business as usual. People don't want to change their lives or lifestyle till something changes it.
That may change going forward.
And to that concern, the cost to the US federal government and the states and localities will be monumentally huge. We will be going to near recession if not recession worldwide before this is over. The incredible short term impact will be severe. It's the long term I'm concerned about. Whether this turns into a serious serious downturn. I think this will also result in the Democratic nominees having better odds at taking the White house and Senate. The perception being that the Executive Branch and Senate sat on their hands and that it's time for a change. May not necessarily be bad for the markets, but keep in mind, during the last administration we came out of a recession and the stock market recovered remarkably with gains in employment and business activity. Also the aspect of Universal Health Care being in place MAY HAVE mitigated this epidemic.
Agreed, SF
My target to open DIS is and has been for a few years at $86.
Can't go with DIS, Nick. I just think that it's theme parks will continue to suffer immensely. Movies in theaters will too. But they do have their streaming service which needs to be revamped.
But I guess if you're going in short term there could be money to make.
Oh, and let's not overlook something that's boiling on the back burner- CYBERSECURITY. My belief is that these momentarily overlooked stocks will do quite well and may be just the buying opportunity that's called for. AKAM and NET may be two of those.
Now I thought that CSCO had the chibbies to go further. 50 years old almost to the day and it seems to be getting old. That was my choice. Okay so I'll collect a dividend and hope it recovers.
Thanks Nick for those words.
If tomorrow yo yo's up again I'll consider a new paradigm. That said, for the time being I'm going to take some cash off the table (having much much more in reserve now ).
That said I have substantial research on these 2 funds that I'm going into. They are: RPSIX, and LBNDX. I'll be doing so in the income portfolio, not the aggressive portfolio.
I'm also continuing to look at AMZN, IBM,V,and BP. Any stock that has more or less hit and maintains or bounces off bottom and doesn't go down below it's recent low. There are quite a few stocks in this category, unfortunately none of mine except perhaps MA and BX are candidates...and in spite of all the travel related downdraft, STWD seems still to be holding up, pays a good dividend also.
Regarding charting the S&P NASDAQ, and DIA, New lows aren't occurring which I believe may hold the bottom from dropping further. Famous last words. May be an opportunity to nibble.
Sorry for the rant. I'll contain myself.
Nick, I understand what you're saying. I'm ranting not because of a political position but because I'm ranting out of frustration. I know this is a stock page and in it there are various points of view. This is my own point of view. Not Dem or Republican, moderate, centrist or independent.
I believe our government put it's head in the sand and our leaders told us nothing, and didn't prepare.
All of us here had a very good idea that this thing was coming our way, why didn't our government know and plan? That's the point of my statement.
You know in World War 2 we made the same mistakes. There were many in this country that wanted to stay out of the war. Many in fact that disbelieved that the Jewish people were being eradicated, and that we were protected by the oceans and the Axis powers couldn't get us. It took Pearl Harbor for us to wake up. Nick considering the breadth of this global outbreak I think we should have gone to war months ago instead of playing catch up. Instead of blaming this administration for blundering through this thing maybe I should have tempered my remarks. None the less. They blundered through it and now everyone pays. Just imagine American stock markets if the U.S. had been on top of this. Yes, I see great buying opportunities and I am waiting for the best moment to begin jumping in, and maybe at some point that determination to invest will pay off... someday. This has added too much of the unknown to the equation and since it's a health related problem we (our government) should have been looking into that instead of lowering rates and talking with company executives.
I'm usually pretty cool about stock market fluctuations, but this thing is so over the top and so outside of my experience and purview I defer to my emotions.
Apologies.
Swam 30 lengths last night after a full day outside ruining errands. My experience though is if it's your time it's your time. I lost 2 friends in the last 6 weeks. One was 58 years old the other 74. People die all the time. It shouldn't be surprising to say.