Tuesday, December 31, 2019

2020 Investing Outlook! Picks and Predictions!

My 2020 Dividend strategy! 

In my last blog post back in 2018 I bought Big Blue (IBM) at $115. I still own this great company for all the reasons I mentioned then. This dividend stock is part of my bigger strategy of buying and owning non flashy great companies. When I say non flashy I mean they don't always get the news coverage. They just make money! Now lets look at total return compared to the market (SPY). The return from my purchase which was near the 2 year low with dividends not reinvested is up roughly 23% to the SPY's 21%. Looking at IBM with dividend reinvested its 19% to 17.5% for SPY. I've been buying and reinvesting the dividend so my returns are actually lower at the current moment. The one caveat would be IBM is valued at only14 times earnings. If multiple expansion were to happen returns would be great.

With my first strategy I will continue to own IBM shares and reinvest the current dividend and make monthly purchases. Soon this should put me over 100 shares. At this time I might do a covered call strategy. My prediction is IBM will be back to the $155 range in 2020.

I've traded in and out of AMC Entertainment Holdings, Inc at the moment I've been buying since the $9 mark. AMC ends the year at $7.24. I've bought recently to dollar cost average my position. The current dividend is pretty high and AMC did have a special dividend over a year ago. I sold out before realizing that as the stock went over $20.  This is a company you have to be patient with. There are big swings in price if you buy and sell right you can make a lot of money! This could be considered a buyout target if the stock goes any lower!! A negative is the heavy debt load. There has been talk of dividend cut and it has been downgraded recently. I feel the analyst who downgraded this company has been wrong so many times with other predictions it is hard to have any credibility in his picks. You might say he is great to fade!

My second strategy is to hold AMC shares as it climbs back over $9. I like to buy and sale in stages on the way up and down.

One of my long term holdings which I really like at current prices going into 2020 is (XOM) Exxon Mobil Corporation. The dividend's current yield is 5.01%. For an investor who has been in this stock for awhile or who has been following the market for a long time this is incredible!! Usually before all these low interest rates companies like this would yield 2 to 3 percent max. I take a couple conclusions from this. One the stock will rise to lower the yield or two it can stay undervalued with the owners collecting an unusually high yield. Either way Exxon is a great company with huge reserves in oil and natural gas. It's principal business is in exploration and production of crude oil and natural gas. It transports manufactures the trade and sale of crude oil, nat gas, petroleum products, and petrochemicals. Looking at the 10 year return XOM is only up 39% vs the SPY which is up 218%. All of XOM gains are from dividends as the price on January 4, 2010 was $69.15 vs $69.78 today.

My third strategy is a long term play on XOM! A great company in plain sight! Great companies can stay undervalued for many years. I will continue to reinvest dividends. The high last year was $83.49. XOM's current price is a screaming buy!

I have recently sold out of my NAT position after the quick move from $2 to $5. I sold out around the $4 mark. I don't plan on buying in 2020.

The only 2 non dividend plays I like are MNST and AMZN.

I am long MO, WBA, F, MNST, AMZN as well as Silver and Gold.
In my 401k i'm long GLD and SPY

Let me know your top picks for 2020?

What is your biggest holding going into 2020?

Disclaimer: This is a personal weblog. The Opinions expressed here are my own. All data and information provided on this blog is for informational purposes only. please do your own research before investing.

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