Snake-bit, Jinxed. Murphy's Law, et al. Our language is full of terms to describe bad fortune and things that continue to go wrong. Ironically, I couldn't think of a lot of descriptive words or phrases to described a series events when things just went right. This post is about the latter.
The last two days we have looked at JNJ and yesterday I revealed that I initiated a position in the stock last week, but I'm getting ahead of myself, let me start from the beginning.
Residential construction has taken it on the chin for the last few years. Beginning early last year, I began watching D.R. Horton (DHI), the largest U.S. home-builder, looking for a good entry point. DHI had a phenomenal dividend record after being flat in 1998. Its dividend growth had been no less than 20% per year since 1999.
On 11/12/2007 I initiated a position in DHI at $12.31, near its 12-month low. Based on the above, I used funds designated for dividend investing, but I really was looking at it as a value play. On 12/12/2007, I doubled my position.
As I do each year end, I reviewed the stocks I held, their performance and why I held them. DHI was not a stock I really felt great about, but I opted to continue holding it even though it had now fell to around $11. I do not watch my investments on a daily basis, so I forgot about DHI.
Last week I noticed they announced a flat dividend for the 6th quarter in a row. Then I began to question whether this was really a good dividend investment so I checked the price. To my amazement, it was well over $16 - I was up over 25% in absolute terms. Not wanting to lose this gain, I entered a stop loss at $16, which would preserve a gain at a little over 20%. By the end of the day the stop loss had executed resulting in a 21.5% gain (175.5% annualized).
Now that I had cash in my account, the question was "what to buy?" There are a handful of top tier stocks that I am always looking for an entry point. JNJ was one of those stocks. As noted in yesterday's post, I came to the conclusion this was a good time to initiate a position in JNJ. I used approximately 40% of the proceeds to purchase JNJ with the remaining 60% split between two REITs.
Having so many things fall the right way did make for an odd odyssey. Lest I grow high-minded, there is balance in the universe - all three stocks have since fell. :)
Popular Posts - Last 7 days
Over the years, I have observed that there are many ways to earn a good return in the market. In addition to buy and hold , some have succe...
Linked here is a detailed quantitative analysis of Medtronic Inc. (MDT). Below are some highlights from the above linked analysis: Compan...
When you purchase individual stocks, risk is inherent . Sometimes bad things happen to good stocks. Eventually, every investor will hold a s...
Each Sunday I highlight any notable articles that I came across over the past week. Though I may not always agree with each of the articles ...
Since its introduction in July 2009, the D4L Premium Services has seen excellent growth in both features and subscribers. It started with t...
Linked here is a detailed quantitative analysis of International Business Machines Corp. (IBM). Below are some highlights from the above li...
Like many that came before me, I am on a journey to construct a portfolio that will provide me... Dividends 4 Life
About This Site Dividend Growth Stocks is dedicated to the process of identifying superior dividend investments using a value-based approa...
The D4L-Premium Services website went down Sunday morning January 17, 2016. I quickly put together an alternative means to deliver the premi...
Yield does not come without a price, usually in the form of added risk and/or complexity. Ultimately, dividend growth investors realize that...