Randy's 1st quarter update

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As I had previously said, I am trying to follow in Saul’s and Bear’s lead of summarizing my results. I am hoping it gives me a little accountability and perhaps an insight or two that I wouldn’t have had otherwise, and I must admit, I was looking forward to go through this process now that I have done it a few times. I find it interesting to see not only the overall performance but to see how the portfolio is changing, albeit slowly over time.

Before I start, I should note a couple of things. First, unlike Saul and Bear, my portfolio is made up of 65 holdings. I know this makes it difficult to follow them all closely, but it does a couple of good things for me as well. One, with such a large portfolio, I am at a fairly low risk of seriously under performing the market as long as I buy good companies and since I use TMF for most of my selections, I feel comfortable there. Secondly, most of my larger positions have gotten there because they started as a small position and the gains have driven their move up the list. I like this philosophy of letting the winners run and really allowing the company performance pick my winners.

I will add here that I have reduced my totals a bit over the past few months. I think the influence of Saul and Buyandwin specifically has gotten me to go make sure there are not stocks that I no longer have faith in and get rid of them. I would estimate that I have reduced my total number by 8 to 10 this quarter and I actually list the exact total this time and will track that going forward. My nearer term goal is to get to perhaps 50 and then stay there.

Overall, my performance for the quarter was +5.7%, which compares reasonably versus the S&P +5.5%, and R2000 2.1%, but not so well vs Nasdaq 9.1%. I don’t mind this too much as my portfolio is (I feel) lower risk, both because of the companies I own and because the portfolio is a little more than 10% cash and short term bonds.

So here goes, I now have 10 stocks with more than 2% assets (1 up from last quarter) with CGNX being the new addition, entirely due to price increase. I have also added the percentage price increase for each stock this time…


Ticker	  Q4-16  Q1-17  Pr. Incr
AAPL  	   6.5%   7.4%     24.0%  
BRK.B 	   5.7    5.4       2.3
ATVI	   3.4    4.3      36.7
CLNY	   4.5    4.2       1.1
TFSL	   4.1    4.1     -12.6
NFLX	   3.7    3.7      19.4
PRAA 	   4.5    3.1     -17.9
CTRE	   2.2    2.3       9.8
INBK	   2.6    2.2      -7.8
CGNX       1.7    2.1      32.0
FII	   2.3    2.0      -6.9

In addition to the price changes, I did do a little reshuffling during the quarter. I added to both CLNY and TFSL and cut back some on PRAA and NFLX. Let me talk about each of these individually:

TFSL: I added here because, although not a Saul type stock, this is probably the safest stock in my list even though it took a hit during the quarter. Interestingly, every negative stock in the list is a financial of some type. Not a good quarter for the financials. In any event TFSL is a small bank that is in the middle of converting from a mutual savings and loan. 80% of thier shares are owned essentially by the bank and therefore the book value is approx. $30 (stock at $16) and they are buying stock back voraciously, about 15% of the outstanding shares a year and they have the cash to keep doing it as they are over capitalized.

CLNY: is a recently merged REIT that picked up another REIT which had management difficulties. The resulting dividend is 8.2% and they expect to grow the dividend as they have excess FFO to support increases as they digest the acquisition.

PRAA: I cut back here as I am losing faith in their turnaround. The debt collection company has struggled due to the regulatory environment in the last few years. That should improve going forward, but still waiting for progress.

NFLX: Nothing really wrong here. Just a periodic sale as this stock was purchased at waaaayyyyy lower prices (40x). I have felt it was overvalued for a long time so I have limited its size and sold small portions over time. It seems I may be able to do this forever!! (just kidding)

APPL and ATVI both had great quarters and I have no interest in selling either. Especially ATVI, I actually added some last quarter and I think this is a sea change type stock as gaming continues to grow. It is one of those companies that uses the ever increasing technology instead of having to create it. Esports and Virtual reality are two areas that should lead to even more long term growth. I don’t see myself selling this one.

CGNX is also interesting. I have it in a taxable account and truthfully might have thought about selling some except for the taxes and it has continued to grow and has finally broke into my top ten. It is up about6x since I bought it a few years back.

I don’t have much else to add on the rest of the top ten except, man, my financial stocks really stunk this quarter. I don’t see myself changing much here though as I think financials will perform better as interest rate hikes continue.

Holdings between 1.5 and 2%


Ticker     Q4-16  Q1-17
LGIH	    1.5   1.7
GOOGL	    1.7   1.6
KMI	    1.7   1.6
PAYX	    1.6   1.5

Next 5: ULTA, AMZN, LUK, CHUY, ENB

this list dropped by three as CGNX moved up, Chuy moved down into the next 5 list and SKX actually dropped off the list…

I don’t have much to add to the ones still on the list. Ulta continues to climb but I mistakenly cut back on my holdings at the end of last year as I thought it got ahead of itself and it has continued to climb. I can’t bring myself to buy it back at a 44 PE ratio for a retail store but their growth has been outstanding.

SKX actually has fallen off the list as I lightened my position when it spiked on the last earnings announcement. I still own some and don’t have an urge to sell that.

So overall if I add up my top 15 holdings, they represent 47% of my overall portfolio. Which means the next 50 represent 53% of the total… I imagine that might spark a raised eyebrow or two…

As always, I am interested in everyone’s thoughts/ advice / questions……

Randy
Owner of every stock mentioned in this post……

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Awesome stuff Randy, (cool name). You have another 50 holdings? That’s fewer than my US count but even so - probably room for a trim. I do now get Saul’s point about using full company names - there’s a few I wasn’t familiar with which I had to look up.
Thanks for sharing.
Ant

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As always, I am interested in everyone’s thoughts/ advice / questions……

Randy
Owner of every stock mentioned in this post….

You asked for everyone’s thoughts and you specifically mentioned my name as influencing you so I feel obligated to express my views if you are looking for advice. Obviously you are not obligated to pay attention to anything I say.

As you know I hold a concentrated portfolio. I can pay attention to only a few stocks where I can’t keep track of anywhere the amount you hold. You spend a lot of time researching and it appears as you say you have “Winners” In my opinion having a CGNX that has in your words has gone up 6 times in the few years you own it, is the type of stock that should have already made you at least a “Seven Figure Profit” And I hope it has, otherwise you wasted a once in a lifetime money making opportunity, while you were paying attention accumulating and watching the 50 securities in your portfolio making up 53% of the value that probably will never amount to anything You probably will have 20 to 30 of those 50 turn out to be losers

You used the word “trimming” positions That means incurring transaction costs, and “Taxable events” and a lot of diversions that IMHO inhibit you from growing your portfolio for you to make money. AND THAT SHOULD BE YOUR OBJECTIVE —MAKING MONEY ON THE MARKET—ALL THE TIME —WHETHER THE S&P GOES UP OR DOWN.

Less trading IMHO means less losers and more money making, if you pile into the winners you picked and eliminated the loser quickly

This year I have made two sales. I have sold a 7.67% chunk of GAB from our IRA’s to take our RMD’s out. The cash was transferred to taxable accounts. A portion was withdrawn for living expenses, Portions were added to MPLX and HASI and a portion is waiting in cash to be removed when the tax return is completed and due. Even though I sold a chunk of GAB which is yielding 10+% and removed cash for living expenses, and holding cash for taxes due April 15th my portfolio market value has increased 7.36% since Jan 1 2017-- I gear my portfolio for income and the income received Jan 1 2017 to March 31 2017 is 44.386% higher that the same time last year.

Good luck
b&w

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In my opinion having a CGNX that has in your words has gone up 6 times in the few years you own it, is the type of stock that should have already made you at least a “Seven Figure Profit”

Not everybody here has a portfolio large enough that a 6x increase in a stock would yield a seven figure profit.

Brian

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Not everybody here has a portfolio large enough that a 6x increase in a stock would yield a seven figure profit.

Brian

I think he was trying to make the point that if he had concentrated into a much fewer holdings that he study, that holding would have driven his portfolio. Maybe instead of a 4 figure profit, it would be 5, or instead of 5, it would be 6, etc. Did he achieve the type of return in his portfolio given the number of holdings?

On the other hand, if he had chosen only 8 stocks, would have CGNX been one of them?

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TFSL: I added here because, although not a Saul type stock, this is probably the safest stock in my list even though it took a hit during the quarter. Interestingly, every negative stock in the list is a financial of some type. Not a good quarter for the financials. In any event TFSL is a small bank that is in the middle of converting from a mutual savings and loan. 80% of thier shares are owned essentially by the bank and therefore the book value is approx. $30 (stock at $16) and they are buying stock back voraciously, about 15% of the outstanding shares a year and they have the cash to keep doing it as they are over capitalized.

Hmm…Okay, I’m listening. Very interesting stock. Did a smidgen of research after this piqued my interest. Third Financial S&L seems to specialize in loan originations and retail savings deposits. Offers a 3% yield right now.

Then I found this thread on Jim Royal’s public board:

http://discussion.fool.com/tfsl-and-reits-32597168.aspx

Is there any other information, Randy, you have on it that would be helpful. Seems like a very interesting situation.

Matt
MasterCard (MA), Nestle (NSRGY), PayPal (PYPL), and Verizon (VZ) Ticker Guide
See all my holdings at http://my.fool.com/profile/CMFCochrane/info.aspx

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Not everybody here has a portfolio large enough that a 6x increase in a stock would yield a seven figure profit.

Unfortunately, that’s the manager’s fault and not the portfolio’s fault. Many people fear the unusual, and find peace and happiness in the norm. Usually if a stock starts to go up, it stands out among the many “do nothing or worse” stocks they have in their portfolio and they try to “Rebalance” the portfolio before They lose the profit. Many find it an opportunity to use the profits to lower a long standing capital gain loss carryforward. They are still fighting “last year’s war” I believe if you don’t lose last years war it will be easier to win the present war and the next one coming next year.

I think he was trying to make the point that if he had concentrated into a much fewer holdings that he study, that holding would have driven his portfolio. Maybe instead of a 4 figure profit, it would be 5, or instead of 5, it would be 6, etc. Did he achieve the type of return in his portfolio given the number of holdings?

I only talk about things I’ve done. The number of holdings in a portfolio don’t make the profits grow. The elimination of losers in a portfolio and increase in winning portfolio sizes will help propel the portfolio value upwards. Income securities also help to provide stability and growing wealth during corrective times in the market.

On the other hand, if he had chosen only 8 stocks, would have CGNX been one of them?

First of all–You have to understand —I never set out to select 8 stocks as a goal. I never had the money to buy 65 stocks. I never really knew anything about stocks or investing in them. Everything I learned I figured out and adapted, by asking questions on message boards from a few people that I figured made some sense on the boards I am amazed by the amount and depth of study that I read that others have done in the quest of learning to invest.

There probably is a CGNX or two or three lurking in most people’s portfolio. The problem as I see it, is people are worrying about their losers and trying to get even that they aren’t adding to the winners and eliminating the losers. Some people that believe “You never go broke taking a profit theory” Sell their winners and never let them grow to be portfolio leaders and multiply profits to help them reach their goals.
Disregard everything that doesn’t apply.
b&w

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Hi b&w,
I do want input and especially from those who have done this a while successfully, that’s why I like this board to follow Saul’s thinking, and your posts are also a focus of mine because it appears you have gotten very similar results to Saul but in a very different way. I am firmly of the belief that there is more than one way to make this work so understanding potential paths is a very good thing.

Background: I am just a couple years from retirement and trying to position myself to live off a decent investment portfolio and backed up by a nice defined benefit pension. I do still have a very full time job and hence don’t have the time I would like to spend on this but do what I can. So let me ask you some questions…

Less trading IMHO means less losers and more money making, if you pile into the winners you picked and eliminated the loser quickly

To me this goes to the heart of it all. But really, come on now, how do you tell the winners from the losers beforehand? What you say is simple, obvious, and in my opinion, extremely difficult to do. I do think that you can do this, but my method is to look for great companies or companies in great niches, that allow for long term compounding of earnings and results. My belief is that it is very difficult to beat Wall Street on picking which company is going to do better next quarter. It is much easier to pick stocks that should be higher in 5 years. It is also a hit and miss process. I will only be successful (hopefully) a majority of the time.

So having said that. I buy “good” companies. Ones that I think have an advantage in some way. A “moat” if you want to call it that and then let it play out. When I am right the stock becomes a bigger and bigger portion of my portfolio and when I am wrong it becomes much less meaningful.
It appears you are advising to use short term results to guide me, i.e. Sell the losers and buy more of the winners. Well, in my experience, sometimes the short term winners just fall apart for whatever reason, and sometimes the ones that flounder for quite a while finally get recognized and take off…

examples of falling apart that all here will recognize: BOFI, SWKS, SKX… sometimes they come back, sometimes they don’t.

Examples of floundering in my portfolio: APPL, NFLX, ATVI, BRK-B… these all had decent periods of time where they didn’t move and even had major downfalls but the overall business was fine, I hung on and they are the largest parts of my portfolio now…

So that is probably enough, but the question to you is, what criteria do you use to pick a “winner” from a “loser”? I went back to the three stocks you mentioned, GAB,MPLX, and HASI. Two of the three had very uninspiring charts. Not saying they are bad, I know they pay good dividends and if you keep buying when they are down and they do come back…great!! But when do you decide that you were wrong, and need to get rid of it? I bought STON a while back, it paid a 10% dividend and seemed to have the cash flow to back it and even grow, but it fell apart and fast. Dropped half its value in one day… I got out but way too late.

Anyway, I didn’t really mean to write this long, but I am very interested. After following Saul for a while, I think I have a feel for what he does (it’s a magic gut… partly kidding, but that would be another post :slight_smile: but how do you determine that something is no longer performing. My big fear is I put 15% into one company it turns out to be a STON (joke, get it?)

Thanks for all the input. I really appreciate those who do well and take the time to help others that are trying…

Randy
Long APPL NFLX BRK.B ATVI SWKS SKX

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Hi Matt,
TFSL is a very interesting story. I started in the stock based on Jim Royal’s recommendation in what was the Special Ops service. Special Ops has since closed but Jim is still around and has his own board you can follow if you are interested in special situation stocks.

In any event here is THIRD Federal’s story. They were at one time a mutual savings and loan, which meant that the company is actually owned by the workers and customers of the business. For a long time they operated like any savings and loan and the only real difference is that they put all of the earnings back into the business. No dividends, no stock options because the business essentially owns itself. There are a lot of mutual type companies out there. Some insurance companies operate this way as well…

So sometimes, the board of a mutual savings company decides they want to grow and to do so, they need to convert to a regular bank. So they do a conversion. This means they put an offer out to their employees and customers and offer to sell shares in the bank. They pick a price and quantity based on the overall value of the S&L. They then sell shares to the public at the price and a holding company is formed which then owns the S&L. The weird and wonderful part of this is since no one previously owned the company, the price that was paid to buy the shares, i.e. The overall value of the company is collected by the company as cash from the buyers. So essentially, the book value of the company doubles… i.e., original value + cash from stock sale = 2x value.

So these type of conversions have gone on for some time and these are almost always great buys if you can get in on them. Peter Lynch talks about them in One up on Wall Street…

So let’s talk about TFSL specifically…

Typically, because of the large cash infusion, these conversions are done in two steps. The initial conversion where maybe 25% of the stock is converted so prices get set and then a “second step” where the remaining stock is sold. Think of this as a public offering which companies do to raise capital. In TFSL’s case, they haven’t done and according to the CEO don’t plan on doing the second step for some time. So if you look at Yahoo, there are 300 million shares outstanding and the book value is like $6/ share, and the PE is like 60 something. In fact there are only 50 millions shares outstanding because the bank has 250M shares in the holding company which represents future share owners! They don’t have any plans to do the second step because they still have a lot of cash in the bank, so to speak and don’t need more cash.

So what are they doing. Buying back the shares that are still out there. Since the fourth quarter of 14 they have bought back like 20 million shares, and they are buying more everyday. They can pay a 3% dividend because they only pay the dividend on the outstanding shares instead of the whole company. Right now they are paying about half their earnings in dividends and the dividend is climbing every year.

Anyway, that is probably more than you want to know but here is a link to my last post on the special ops board if you can get to it where I update the 2016 results…

summary, when you include the slow and steady growth of earnings and the large buy back, the real PE is about 16 and the growth in earnings per share is like 25%. On top of that the real book value continues to climb and is now over $30 / share and growing every quarter. And I love the fact that there is a very large buyer out there, buying whenever the market doesn’t like the stock, like recently with financials…

http://discussion.fool.com/tfsl-annual-update-32554840.aspx?sort…

As I said in the first post, this is not really a Saul type stock, but it is very much a Warren Buffet / Peter Lynch type stock…and I have been slowly adding over time (b&w, I am adding to my winners! :slight_smile:

Randy
Long TFSL

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Randy,
Why did you think Ston had the cashflow to support their dividend? Looking at their last 10Q it looks to me like their distribution is a lot more than their cash flow. Their cash flow was about 9 million and their distribution was about 68 million if I am reading it correctly. Also they didn’t have any earning and their cash on the books is only 15 million dollars. It looks like they are going to have to cut the dividend and it surprises me that a funeral home operator would be having these types of problems. But my brother is in the business and he told me a lot of them are being bought up because they are consolidating in the industry so possibly they will be bought out.

Andy
Who could be all wrong because I have just started looking at dividends.

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Hi Randy:

I do want input and especially from those who have done this a while successfully, that’s why I like this board to follow Saul’s thinking, and your posts are also a focus of mine because it appears you have gotten very similar results to Saul but in a very different way. I am firmly of the belief that there is more than one way to make this work so understanding potential paths is a very good thing.

Saul’s success as has been discussed here a few times was born out of necessity. My investing started with virtually nothing and no other income or pension–Limited SS and nobody to lean on If i wasn’t successful I’d be living in a cardboard box next to the railroad tracks for a few years by now.

Background: I am just a couple years from retirement and trying to position myself to live off a decent investment portfolio and backed up by a nice defined benefit pension. I do still have a very full time job and hence don’t have the time I would like to spend on this but do what I can.

You are kidding aren’t you? It sounds to me like you have everything all taken care of already.

To me this goes to the heart of it all. But really, come on now, how do you tell the winners from the losers beforehand? What you say is simple, obvious, and in my opinion, extremely difficult to do
You can’t and won’t know ahead of time
To start with-There is no free lunch out there–I select a stock if it has a small capitalization (lot of opportunity to grow)–If it has a growing dividend/distribution (40% of all stock market gains are from dividends/distributions and not capital gains) and the dividends/distributions should be in some way partially or all tax deferred (In 2016 92% of all my dividends/distributions were tax deferred for one reason or another) If I take the risk, I would like the profit to go to me.
If I need a stock (and I rarely do) I buy a starting position. To get more of my money it has to be doing better than the others in my portfolio because only the best get additional funds, the worst get tossed
Many people do a ton of DD to find a stock that will be the next BRK and they will research 100 stocks and confuse themselves looking for something that is probably sitting in their own portfolio right now screaming at them BUY ME BUY ME–But they are too busy to notice. When they do notice, it is up a few points and they have a profit and they get nervous that they are going to lose the profit so they psyche themselves into selling, and keeping the junk and also having a taxable event and the privilege of looking for the next stock to lose money on.

It appears you are advising to use short term results to guide me, i.e. Sell the losers and buy more of the winners. Well, in my experience, sometimes the short term winners just fall apart for whatever reason, and sometimes the ones that flounder for quite a while finally get recognized and take off…

I’m not advising. I’m just saying what I do. If what you do, works for you and you are satisfied with it, then don’t change anything. You are working full time–You have a super duper pension coming, you have a decent investment portfolio-- If in your experience selling the winners because they might fall apart, and keeping the losers because they might come back is the approach you choose to take, more power to you, and if it works for you that’s fine–I don’t do it that way because it doesn’t work for me.

So that is probably enough, but the question to you is, what criteria do you use to pick a “winner” from a “loser”? I went back to the three stocks you mentioned, GAB,MPLX, and HASI. Two of the three had very uninspiring charts. Not saying they are bad, I know they pay good dividends and if you keep buying when they are down and they do come back…great!! But when do you decide that you were wrong, and need to get rid of it?

I love “Very uninspiring charts” It keeps the tourists
away.

Here is the Hannon Armstrong (HASI) story— In Feb 2015 I came across this SA article–

https://seekingalpha.com/article/2914856-forget-beaten-up-ut…

Bought a couple of 100 shares. Price started rising I continued adding Dripped the mostly tax deferred distributions (2016 100% tax deferred) Price topped out middle of last year. Rumors they are not a REIT and will have to change accounting (estimate cost pennies per share) Price was down from $25 to $18 -Company still increasing business and tax deferred distribution raised in Jan 10%. (Also goes X-Div $0.33 Monday April 3)Price has recovered to $20. I’ve added about 13% additional shares in the $18 to $21 area. (Low 6)

GAB started buying Early 2015 (Followed by Value Line for many years) around $6.50 down to $4.50 and now about $6.00 paying a partially deferred 10% annual dividend. So in 2 years starting high and trending lower and currently below the starting point the 10+% annual distribution has conquered another very uninspiring chart by keeping the tourists away(Low toMid 6)

MPLX came to me through two mergers after starting with MWP about 13-14 years ago–MWP was merged into MWE in 2006-7 and then in Dec 2015 MWE was merged into MPLX (Low to mid 7)

My big fear is I put 15% into one company it turns out to be a STON

I start buying and if it works well I reinvest the distributions . I let the company buy their own stock in your name with their own money and add my own only if they are growing the distributions. They can give you fake projections They can doctor the books. But they can’t fake a distribution.

Good luck
b&w

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Hi b&w,
Thanks for the input. I could be wrong, but I got a sense you felt I challenged you somehow. If so, it was not intended. I mentioned my situation, not because I wanted to say I have it all taken care of or that is super duper, but because the overall situation of the investor is critical to understanding their position and where they should be investing. I had previously read your story and was impressed. It sounded Similar to Sauls, that is why I asked for more input from you specifically.

As for your advice, I appreciate it. Not sure I quite get how you decide when the story turns but that is okay. I had mentioned the three stock charts, not because I was trying to say they weren’t great, but instead I was trying to get inside your head about how decide when a stock becomes a loser. A couple of those had seen serious price drops over the last couple years and you clearly still believe in them. Not challenging, trying to see what still see in them. If I hear you correctly, you are saying that the dividend is still growing and the cash flow is there to support it. Those seem like reasonable answers. My experience hasn’t been quite the same but I am working on it.

I will repeat that I think I have a good process but over the last year I have noticed, after listening to you and Saul that I might hang on to a stock too long. I am reducing my positions and I think that is good…

I am learning, and I believe my life is blessed, no complaints here… doesn’t sound like you should have any either…

Good luck!
Randy

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Anyway, that is probably more than you want to know but here is a link to my last post on the special ops board if you can get to it where I update the 2016 results…

Not at all, Randy. That was extremely helpful. Thank you! Do either you or Royal do quarterly-ish updates on the company over on that board?

Anyway, thanks for bringing that to our attention!

Matt
MasterCard (MA), Nestle (NSRGY), PayPal (PYPL), and Verizon (VZ) Ticker Guide
See all my holdings at http://my.fool.com/profile/CMFCochrane/info.aspx

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Hi Randy:

Not sure I quite get how you decide when the story turns but that is okay. I had mentioned the three stock charts, not because I was trying to say they weren’t great, but instead I was trying to get inside your head about how decide when a stock becomes a loser. A couple of those had seen serious price drops over the last couple years and you clearly still believe in them. Not challenging, trying to see what still see in them. If I hear you correctly, you are saying that the dividend is still growing and the cash flow is there to support it. Those seem like reasonable answers.

I believe you found the correct answer right in the first sentence above. Because I don’t know either sometimes. I don’t believe there are 100% hard fast rules that I or anyone can follow. That could be because we are subject to the whims of our fellow investors that own the same stocks we do. Our fellow investors are as unknowing about the inner doings of a company and are fearful in times of stress as much as we are. They tend to try to be the first one out the door at a moment’s notice and then sometimes things get worse ans snowball downhill and sometimes not. And nobody knows which is which.

I will tell you that the most money making time is during the most stressful times in the stocks history. I keep a concentrated portfolio and try to do nothing but accumulate as many shares in those few stocks through the drip plan and funds available. Remember the only income I have is from my portfolio. Therefor I want to use all excess income that I do not require for all my living expenses (including FED and STATE taxes) to reinvest in additional shares to provide additional income. Since I DON’T WANT TO SELL GAB BECAUSE I’M STILL BUYING IT, I DON’T WANT IT TO GO UP IN PRICE. I am happy when the chart(s) are real ugly because then they will not attract the day traders or the option buyers or the gunslingers to create excitement. All they do is create volatility but no value. If they come because of a beautiful chart they will leave and drive the price down which might cause me to sell and incur a large taxable event that I don’t want. And then I would have to find a new horse to ride

I have been building this type of portfolio for almost 14 years
1)So far the income received in 1/1/17 to 3/31/17 is 44.386% above the income received in the same period last year.
2)All income received in 2016 was 92% tax deferred in some manner
3)Current projected income in 2017 is expected to be about 25% above 2016 level.
4)As of Mar 31, 2017 my portfolio has increased 7.36% from Jan 1, 2017
5)Based on current projections about 68+% of income received in 2017 should be in excess of needs and be reinvested.
Gearing a portfolio to future capital gains requires a positive Bull market place and not a multi year bear market to whip you around at the wrong time.
Set your goals and Build your portfolio to suit your needs both now and later

good luck
b&w

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Thanks, I had been doing quarterly updates, in fact I used to be the tickerguide until Special ops closed. I did do the year end update ( the link I gave you), but can’t guarantee I will continue. I will definitely continue to follow them closely as they are one of my largest holdings and a stock I would add to if I wasn’t sure where else to put excess capital.

Randy
Long TFSL

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Randy, TFSL sounded very interesting to me, and your history of the company was fascinating. However I called up a ten year graph of their stock price, and found that they had only moved from $12 and something to $16 and something. In 10 years! I don’t understand it. So I just looked at the 1 year graph and the price has fallen from $17.12 to $16.60. How can that be? What’s the problem in paradise? Or what am I not seeing (the dividends?) How can the price be not rising at a good pace with the company buying all those shares and the book value at $30? If they count ALL the shares they would have a book value of $6, but they’d have a lot more cash if they issued them at $16, so it still doesn’t make sense. I’d love to hear some thoughts.
Saul

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Thanks Saul, and good questions. The truth is I am not sure how the early stuff worked. I know there was a very small no. Of shares that went out in 2007. I believe the real conversion occurs in 2012 or so. What I know for a fact is the recommendation came out in 2012 and the price was 9 and change. At that time there were posts about getting approval to start the buybacks and that they had $300m available from the conversion to do so. So look at a chart since that time.

Apparently, the got approval and started buying back shares not too long after those posts because at that time there were 81M shares out (not including the ones in the holding company) and the book value based on the 81M shares was $22. In the intervening 5 years or so they Have bought back 26M shares so that now there are about 55M shares out and the book value has gone from $22 to $30. At the same time the stock price has gone from $9 to $16+. It was actually $19 and change late last year but has fallen back a bit with the recent financial stocks fall. I bought my first shares when I discovered this about a year or two ago at $14+. I have added recently in the low $17 and high $16s.

The only twist to all this is that the shares not out yet are represented by a board as a part of the holding company. If and when they have the secondary, they will have to set a price and get cash for whatever price they get. This same board every year is asked to forgo their dividends and that is how they pay a 3% dividend with only 50% payout of earnings. Lots of room to grow the dividend as long as they keep agreeing.

The weird part is if they didn’t agree and the bank paid the dividends into the holding company, they would be paying themselves because it would go right back into the holding companies assets…

the whole thing is kind of weird in the sense that these shares exist, are carried by the holding company but are represented by a board representing customers and employees future share owners…

Hope this helps but doesn’t confuse you more…

Randy
long TFSL

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Thanks Saul, and good questions.

Thanks Randy, for your answers. I have to admit I’m still a bit confused, but it does sound interesting.

Saul

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Chuy moved down into the next 5 list

The stock is trading close to 52 week low. Is it because of general retail/ restaurant’s slowdown or any company specific issues? What is your thesis on this?