Dow Jones Industrial Average: 28,992.41 Down Week ending 02/21/2020
S & P 500: 3337.75 Down.
This week's blog is to try to help you to avoid mistakes in buying a value stock too early. I want you to learn from my mistakes.
So I bought some Altria (Symbol MO, $45.89) which always pays a very nice dividend. I was anticipating with the investment in Cronos, that they shortly would become the world's commanding commercial producer of marijuana cigarettes. The USA Federal legalization of the product must be imminent, with so many states moving to legalize and tax it. Colorado was already making millions in tax revenue, and the federal government would surely follow to help pay off the Federal budget deficit. Nope, still waiting and collecting my 7.32% dividend. Altria got tangled up with their investment in JUUL the vaping product, which is now on its way to becoming an $8 billion right down for the company. So too early on this one.
Lesson 1: You must take into account the whole company strategy when buying a stock. I bought MO as a marijuana investment stake and the politics came in and said that JUUL was marketing to children with all its flavors. Also knock off Vape brands were causing health problems with vaping. Altria had no way to see all this coming and either did I. So my mistake, not waiting until the US federal government actually legalized the product.
Goodyear Tire & Rubber company, (Symbol GT, $10.85) was a value buy at $14.00. 2019 earnings were good, but now there is a dip down in 2020 earnings. 2021 earnings will be very, very good. I bought it too early, not looking at the 2020 earning year dip down. I am in it too early so now I need to wait. It is my contention that Goodyear is a technology company and is worth more than it appears. Even electric cars have tires that will wear out and need to be replaced with new tires. GT is a consumer goods company trading below its book value. I would buy it in a couple months.
Lesson 2: Always be on the lookout for a temporary earnings dip down. Buy during the dip, not before it.
Three other stocks I bought too early: Gulfport Energy (Symbol GPOR, $1.26) need to wait for Natural Gas prices to recover. Stock has a PE of 1.
Orasure Technologies (Symbol OSUR, $6.09) has a pristine balance sheet. This company actually makes influenza test kits at a time when we have a large worldwide Coronavirus outbreak. How can they not be capitalizing on this? They must have been caught flat footed. Earnings are actually suppose to be even or negative in 2021. Somewhere though there is a winner here. Where are the revenue gains? Again I must wait.
Finally there is Dupont de Neumours Inc. (Symbol DD, $52.43). Finally Breen is in charge! This one just needs to get on track. The earnings are coming. So I sit and wait.
(Note*** For some reason Blogger is not letting me upload any pictures. The spell checker is also not easily available for use. I am not sure what is going on????)
I would be raising cash right now because this CoronaVirus is causing major tie ups with people and merchandise movement in and out of Hong Kong. There will be at least a 2 quarter slow down with lot's of earnings and revenue misses.
Have a great new week,
Freewilly
S & P 500: 3337.75 Down.
This week's blog is to try to help you to avoid mistakes in buying a value stock too early. I want you to learn from my mistakes.
So I bought some Altria (Symbol MO, $45.89) which always pays a very nice dividend. I was anticipating with the investment in Cronos, that they shortly would become the world's commanding commercial producer of marijuana cigarettes. The USA Federal legalization of the product must be imminent, with so many states moving to legalize and tax it. Colorado was already making millions in tax revenue, and the federal government would surely follow to help pay off the Federal budget deficit. Nope, still waiting and collecting my 7.32% dividend. Altria got tangled up with their investment in JUUL the vaping product, which is now on its way to becoming an $8 billion right down for the company. So too early on this one.
Lesson 1: You must take into account the whole company strategy when buying a stock. I bought MO as a marijuana investment stake and the politics came in and said that JUUL was marketing to children with all its flavors. Also knock off Vape brands were causing health problems with vaping. Altria had no way to see all this coming and either did I. So my mistake, not waiting until the US federal government actually legalized the product.
Goodyear Tire & Rubber company, (Symbol GT, $10.85) was a value buy at $14.00. 2019 earnings were good, but now there is a dip down in 2020 earnings. 2021 earnings will be very, very good. I bought it too early, not looking at the 2020 earning year dip down. I am in it too early so now I need to wait. It is my contention that Goodyear is a technology company and is worth more than it appears. Even electric cars have tires that will wear out and need to be replaced with new tires. GT is a consumer goods company trading below its book value. I would buy it in a couple months.
Lesson 2: Always be on the lookout for a temporary earnings dip down. Buy during the dip, not before it.
Three other stocks I bought too early: Gulfport Energy (Symbol GPOR, $1.26) need to wait for Natural Gas prices to recover. Stock has a PE of 1.
Orasure Technologies (Symbol OSUR, $6.09) has a pristine balance sheet. This company actually makes influenza test kits at a time when we have a large worldwide Coronavirus outbreak. How can they not be capitalizing on this? They must have been caught flat footed. Earnings are actually suppose to be even or negative in 2021. Somewhere though there is a winner here. Where are the revenue gains? Again I must wait.
Finally there is Dupont de Neumours Inc. (Symbol DD, $52.43). Finally Breen is in charge! This one just needs to get on track. The earnings are coming. So I sit and wait.
(Note*** For some reason Blogger is not letting me upload any pictures. The spell checker is also not easily available for use. I am not sure what is going on????)
I would be raising cash right now because this CoronaVirus is causing major tie ups with people and merchandise movement in and out of Hong Kong. There will be at least a 2 quarter slow down with lot's of earnings and revenue misses.
Have a great new week,
Freewilly
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