Thursday, October 31, 2013

October Recap

Pretty solid month although I worry the stock market might have gotten ahead of itself.  My plan was to put some money to work and also increase my cash position for greener pastures.  Mission accomplished.  Nothing major to report investing wise other than I'll be looking to replace SNH during November. 

I've been extremely busy getting ready to deploy to Afghanistan.  That's why my blog activity was so low.  Other than that I'm hoping for snow so I can enjoy some Colorado skiing (best in the world?) and a white Christmas before I ship off in a few months.

DOW: 15,546 /// S&P 500: 1,757 /// 10-YR BOND: 2.54%

New Purchases:
1) 20 shares TGT at $62.32: $34.40 annual income


Dividends Received: $410.32
Baxter Int (BAX) $10.78
Coca-Cola (KO) $40.60
iShares Emer Mkt Bnd (EMB) $2.61
Illinois Tool Works (ITW) $12.18
Philip Morris Int. (PM) $97.76
Corporate Office Properties series L (OFC-PL) $22.58
Exchange Income Corp. (EIFZF) $17.30
Realty Income (O) $15.64
Realty Income Series F (O-PF) $6.76
W.P. Carey (WPC) $19.78
Linn Energy (LINE) $24.16
Kraft Foods Group (KRFT) $14.28
Bank of Nova Scotia (BNS) $36.77
LTC Properties (LTC) $28.58
Raytheon (RTN) $31.35
Toronto-Dominion Bank (TD) $30.06

Dividend Increases:
1) LTC: $.155 to $.17 per month.  $30.24 annual income
2) KRFT: $.50 to $.525 per quarter. $2.72
3) ABT: $.14 to $.22 per quarter. $17.28
4) KMI: $.40 to $.41 per quarter. $6.12

New Deposits:
$1,365 to taxable account; $25 to Lending Club

Lending Club Interest:


  1. Looking good CI! Slow and steady on those investments will win the race! I am glad to see you are still putting some money into Lending Club. I think in a couple years you will be happy with how you have done there.

    Best of luck with your preparations and hopefully things can get sorted out in time for you to relax and enjoy the months you have left in the States!

    1. Thanks W2R! LC has been rewarding so far. I'm thinking about switching to a higher yield strategy as it's tough to get money invested with my current screen unless I check for new notes many times per day. It would be so much easier if I let them automate it.

      I plan to take 2 weeks of leave, besides that I'll be running around like crazy. I was added to this deployment with very little notice so I have to play catch up.

  2. CI,

    Nice month! Very solid dividend tally there. I'm jealous. :)

    I think you made a great purchase with TGT. It and WMT continue to elude me.

    Best of luck with the deployment. We all appreciate your service. And I hope you get that white Christmas! Although I live in Florida, I'm lucky to have family up north and get to enjoy snowy Christmases. :)

    Best wishes!

    1. Thanks DM

      It is difficult to have leave again so soon. All this time spent out of country is killing my personal life. I was set to settle down and work on a family, not so much anymore. The last month or two is the first time I have considered doing something else besides the military, I'm getting tired of it all. I suppose this deployment will be a huge boost to my dividend income, but life isn't just about money. Know what I mean?

  3. Another great month! Be careful while you're in Afghanistan and I hope you can get that snow and get sone skiing in before you leave. I've only skied at Wolf Creek but its been several years now. The beauty about the DGI approach is that by investing in quality companies your dividends will jusy continue to roll in and increase while you're away.

    Curious how you feel about LINE/LNCO right now. The yield is pretty amazing considering that's its a growing dividend still. The SEC investigation seems to be winding down and I haven't been able to find out anything it yet. Its intriguing me at least but I don't want to chase the yield. They should still be able to grow even if the Berry merger falls through but I'd hate to see that happen.

    1. I've never skied at Wolf Creek, but have driven past it. I hear they get TONS of snow!

      I plan to just hold LINE. I do not want to buy any more units because it would quickly dominate my income stream in % terms. I'm sure you're aware the stock/unit price tanked ever since the hedgeye short selling & the SEC inquiry (there was never an investigation btw). The previous quarter was disappointing which added more fuel to the fire. It was down in dumps not too long ago, although I felt there never anything actually wrong with the company. That is key and the reason I never thought of selling. Lots of talk of shady accounting and such, but when you report something non-gaap it's NON-GAAP and doesn't have to make sense in gaap terms. I never understood the accounting argument in a bunch of ridiculous seeking alpha articles.

      Basically I feel LNCO is very innovative in that it is the first vehicle ever for a MLP to acquire a c-corp. This has never been done before, Linn is the one and only. Since Linn is the pioneer it is not too surprising that a few kinks needed to worked out for the first deal. I think the SEC inquiry was about making sense of the accounting. Due to time delays it may have killed off the BRY acquisition, but I think long term LINE will be just fine.

      My biggest mistake was over paying for my units. While Linn is thinking outside the box and doing something completely new, I should have compared it to similar companies in the same industry. I would have noticed it was trading at a premium to peers. I should have paid more attention to production, that was another mistake. There is an actual business here besides acquiring new oil and gas properties.

      LINE/LINCO is speculative and very different from buying a Colgate-Palmolive or a Johnson & Johnson. They grow mostly by acquiring assets funded by secondaries and debt meaning eventually LINE will become too big for new acquisitions to even matter. While the oil & gas business is booming right now, I just don't think the Linn party will last forever. However the yield is spectacular and should grow over time. I like the business model which could be summed up as bypassing exploration (and the large associated expenses) and instead gobbling up, then milking proven older assets to the bone. You work in the oil and gas industry, I'm sure you're aware that it takes a lot of capital to drill wells and start production. The large yield stems from a combination of lower cap ex, paying out all distributable cash flow, and not paying corporate taxes.

      I hope Linn decides to increase distribution coverage, however this is one investment where a freeze/cut is not an automatic sell. I'd like to eventually write a post about Linn if I have time. So much to talk about.

  4. Welcome to Colorado! Where are you planning to stay? Vail, Breckenridge, Beaver Creek, Aspen? When will you be here?

    Nice dividend income. Is it for the month? Good job!

    1. I have the "Epic Local Pass" and my parents live in Summit county. Breckenridge/Keystone/A Basin will my stomping ground as I have a free place to stay minutes away from those resorts. I'm looking forward to spending quality father/son time with my dad, he's even crazier about skiing than me! I haven't hit the slopes ever since I joined the Army over half a decade ago. FINALLY I'm back to my home state and can enjoy spending time my dad before he gets too old, and also my buddies I rarely get to see!

      Kind of stinks I have to leave the country again, however I do plan to make the most my time before I go. Just need more snow... I drove past A Basin last weekend and only 1 lift was open.

      I'll be up in Summit county most weekends starting late November. The dividends listed were for October, although RTN paid earlier than usual.

      Thanks for dropping by!

  5. how do you keep track of dividend increases?

    great job with dividend income.

    1. Hey there,

      Keeping track of dividend increases is one reason I maintain this blog. Honestly I look back to posts from last year and also try to stay on top of the news. I expect EMR to announce an increase this month for example, and maybe T or SBSI. I also try to periodically review my holdings and just follow the news.

      Take care.

    2. CI

      Great month and total! You got that right as SBSI just raised the dividend a penny or 5% and announced a special 10 cent dividend. I hope you are doing well and are able to enjoy your time before deploying. Thanks for your service and stay safe. Hope to keep in touch and watch your dividends keep on growing.

    3. I guess I had a good read on that one. Two 5% increases + a special dividend within a one year time frame is exceptional. I only wish I owned more shares... AT&T might unveil a new dividend rate next month, historically it has been released during December.

      I'm still waiting on snow... but I'm ready to hit the slopes when it finally happens. Other than than, tomorrow I'll be in uniform marching as part of the Colorado Springs Veterans Day parade. Events like that almost reduces me to tears. So much pride, especially before heading directly into harms way.

  6. Solid month, you have quite a few payers. I need to eventually add more payers in October. It's a typical lower paying month for me.

    I hope you have a nice holidays. Skiing sounds like fun. I'll actually be in CO in January but I won't get a chance to ski unfortunately. Snow is almost like seeing a unicorn in central Texas.

    1. Happy holidays to you as well! Always a pleasure when you stop by!

  7. I'm in the same boat as you regarding SNH. I sent an email to their investor relations. I really hope I won't have to sell. Since I'm sitting on a small cap gains cushion, I may see what they do next quarter. Since my YOC is over 7%, it will actually be a hard one to replace. I'm really torn on this one.

    Have you seen anything else re: holding the dividend steady and why they did not raise? I can't seem to find anything anywhere. It would be nice if management explained the rationale. If it was a conservative move, I may give them the benefit of the doubt and a small bit of time to recover. Going in with this REIT, I liked that they raised the dividend for 10+ years, but SOME continued growth is always nice. I was reinvesting dividends, but I may take them in cash moving forward to redeploy elsewhere...

    1. Hey how's it going?

      I copy/pasted this directly from the SNH earnings call transcript:

      "In September, we announced the sale of our two Greater Boston inpatient rehabilitation hospitals. The only rehab hospitals we own to a third-party joint venture for $90 million. Additionally during the quarter, we sold one skilled nursing facility and are making progress in some of the other 10 senior living communities and 7 medical office buildings held-for-sale.

      These actions are part of our portfolio of repositioning we announced last quarter. We continue to be well positioned today to pursue a previous private pay acquisitions while maintaining our disciplined underwriting standards and do not have a need to access to capital markets for the foreseeable future.

      With all these moving parts, our board determined earlier this month to leave the dividend unchanged at $0.39 per share, which represents an attractive and secure 6.25% dividend yield as of yesterday's close."

      Actually this all makes sense. SNH is repositioning their assets, and decided against an increase at this time. Sounds like management is just being cautious, and I agree that the dividend is safe. With that in mind, holding might not be a bad course of action because it already has a stellar yield and I only expected a 2% increase anyways.

      I do plan to review some other REITs including ARCP and OHI because I prefer REITs that are actually growing dividends. Both have similar yields. Remember that we only need to replace the current yield, not our yield on cost. I hold SNH in my ROTH meaning capital gains tax is not a consideration.

      Best wishes

  8. I agree, another solid month for you. I hope you have lots of fun in Colorado!

    1. Thanks, I appreciate the support.

      I forgot to mention that I paid $0 in fees/commissions during October. I own a couple shares of an ETF that might have charged me $.10 or so as an expense ratio, but other than NOTHING. Imagine owning a million dollar portfolio of individual stocks, being retired, and paying nothing in fees/expense ratios month after month after month after month. Very encouraging.