Hi Alphab:
Thanks for your interest and request for further information. I’ve been waiting for my updated year-end statements to compare with Dec 31, 2015 statements to be able to use real numbers as opposed to assumed numbers and assumed cash amounts histories where applicable.
I have been following your messages on various boards with great interest. Before adopting a similar approach I thought I should do a back-test on the eight holdings you had last October: HASI, GAB, MPLX, ARCC, ETE, EVA, UTF and NRZ.
For my study I assumed I invested the same amount of money in these stocks exactly one year ago, on January 5, 2016. This is different from the weights in your own portfolio which had between 11.79% and 22.52% in the first five stocks, about 6% in EVA and less than 1% in the last two.
2016 has been a wild year My portfolio bottomed on Feb 11, 2016 at -28.5%-Then recovered 13.9% by Feb 29, 2016. The portfolio recovered all the early losses and ended up +18.67% on Dec 31, 2016. I am most interested in income because it is much more stable than security prices (IMHO) and through all the tumult my portfolio income in 2016 increased 24.86% above the income I received in 2015 without any drama. All the drama was in the price gyrations. Current projected income is scheduled to increase 15.58% in 2017 over the received 2016 income AND THAT ASSUMES “ZERO” CAPITAL GAINS.
You asked----
I would appreciate if you could please explain how you responded to the poor performance of HASI and MPLX in 2016. And if you did indeed sell them how did you choose your replacement stocks if you still retained a portfolio of 8 shares.
HASI–I consider HASI as having performed very well for my purposes
HASI ended 2015 at $18.92 and ended 2016 at $18.99. During 2016 Hasi briefly touched $25. In Dec 2015 HASI raised the quarterly dividend from $0.26 to $0.30 and in Dec 2016 they raised it again–this time for $0.30 to $0.33 per share per quarter So according to management and their guidance going forward, business at HASI is doing well. Turmoil in the market has caused the retail investors to sell and take profits. So far I have taken the opportunity presented to me to add to my HASI holdings at the currently depressed prices. I added 35.65% worth of shares to my holdings in 2016 which is also increasing future income.
MPLX-Also an increasing distribution story. However I did sell a bunch (financed the HASI purchases), then decided to start repurchasing MPLX at increasing prices. MPLX was an $85 stock about 2 years ago and has shown signs recently of price improvement ahead. Will it go back to $85? --I don’t know–I’ll take it one increasing dividend at a time every three months
Management projects a 12% to 15% dividend increase for 2017 and double digit increase for 2018.
I hope this helps
b&w