Many investors look to be split on the near-term direction of the markets. The high level of skepticism on the sustainability of this market recovery among investors bring me comfort😬. LUCKILY! I can care less about the near-term outlooks. I can see the light at the end of the tunnel and I think that’s what’s mostly important for the long-term investors.

A recent interview with Ray Dalio on Bloomberg discusses briefly on his thoughts on current risk premium on stocks. I’ve been thinking about this for months! He lays it out for you well. I have the interview link in Mindsnack page if you’re interested. I highly recommend you watch it.

Treasury Secretary Steven Mnuchin told CNBC that shutting down the economy for a second time to slow the pandemic isn’t a viable option. It seems more and more people are starting to quote similar statements.

The prolonged net negative ramifications from closing the economy is being realized and voiced.

COVID-19 counts are climbing quickly again but I think the decision to close the country down as a whole will likely not be considered anymore. Perhaps more isolated shut downs, additional stimulus and regulatory efforts to help stem the spreading of the virus is the likely scenario going forward until we can get a vaccine out.

This will definitely bring structural changes to how some industries do business going forward.

FED’s announced they will start buying individual corporate bonds. This will dampen bankruptcy counts and leave the markets with more zombie companies going forward.

This pandemic sure does make you rethink a lot of your investment thesis on many of your investments. What I previously believed to be strong investments have become less so as some I thought questionable have become somewhat stronger buys.

I’m starting to have a deeper sense of understanding and appreciation towards two particular stocks lately.

The pandemic really slapped me across the face with Mastercard (Ticker: MA). I feel it’s a good LONG-term investment and will likely become a strong dividend player in the future for the obvious reasons. I will pick on this one going forward.

The other is Apple Inc. I have owned this stock on and off for a long time but I’ve been a fool not to own this. I should have never sold. I get it Apple! I get it! It’s the type of company I love but neglected to own…

I took the time to really think about where they are going with their business model. Apple’s iPhone is an amazing hook to bait in customers and lock them inside their ecosystem. I’m sure it’s no different with android users and it’s ok. The markets big enough for a few players.

The integration of all the hardware/software in the future will likely only strengthen the bond of customers to Apple’s platform of products and services. I have to admit I am impressed with Apple proving they can compete with google on many fronts such as maps. They also have the cash for strategic acquisitions if need be. They are stepping into all the right industries. One being media which I believe they don’t need to win the streaming war. As long as their streaming media business helps contribute in retaining and reducing turnover in customer base is what’s important for me. The weight of the added values in the provided suite of services for customers is what’s important. Service revenues are likely to continue to grow and likely to remain a stable part of their revenues in the future. I also believe their physical stores are not necessary which make them a more pandemic proof stock as an added plus.

There are risks mostly to do with China but the company’s pivot and focus on India help reduce the risks going forward in my opinion. I will likely have to average in and build a position. Apple can potentially be a strong dividend player in the future which is perfect for this portfolio.

ANYWAYS! Time to check on those dividends!

 

Highlights and Recap

 Apple Inc. (Ticker: AAPL)

• Company plans to manufacture iPhone SE in India to avoid paying 20% import tax. Reports show Apple has told suppliers in China to ship components to manufacturing partner Wistron. In 2019, Apple has held about 1% of the Indian smartphone market.

 AT&T (Ticker: T)

• CNBC reports AT&T is exploring the idea of selling its Warner Bros video game unit for about $4B in continuing effort to retire debt.

 Boeing Company (Ticker: BA)

• The order cancellations continue. Norwegian Air issues termination notice for 97 planes (92 737 MAX and five 787 Dreamliners). Norwegian Air also files a legal claim seeking compensation for engine related issues on the 787 and losses resulting from the grounding of the 737 MAX.

Corning (Ticker: GLW)

• Company received $204M from Biomedical Advanced Research and Development Authority to support the ability to ramp up mass production of its Valor Glass vaccine vials. Former BARDA director warned that the US might face a glass vial shortage where it may take upwards of 2 years to make enough just to serve the US markets when the COVID-19 vaccine becomes available.

Energy Transfer (Ticker: ET)

• There was a time when I once kinda thought Chesapeake Energy was interesting. Well they have filed for bankruptcy and is seeking the courts approval to cancel $311M in pipeline contracts. $293M of those with Energy Transfer. Just for context, ET did $54B in revenues for 2019.

 JP Morgan Chase (Ticker: JPM)

• China approves JPMorgan Chase’s application to operate the first fully owned futures business in China.

Waste Mangement (Ticker: WM)

• Company agrees to acquire Advanced Disposal Services for $30.30/share in cash. GFL Environmental is expected to pick up the divestitures from the two companies required by the US Department of Justice in the amount of $835M. All asset sells must clear before the closing of the acquisition.

 

Buy Orders

 

Sell Orders

 

Pass Go and Collect Dividends!

Bank of America Corporation (Ticker: BAC) paid $3.24

Chevron Corporation (Ticker: CVX) paid $60.63

Fidelity High Dividend ETF (Ticker: FDVV) paid $187.39

Corning Incorporated (Ticker: GLW) paid $14.52

Home Depot (Ticker: HD) paid $4.50

Johnson & Johnson (Ticker: JNJ) paid $30.30

3M Company (Ticker: MMM) paid $88.20

Qualcomm Inc (Ticker: QCOM) paid $91.65

Raytheon Technologies (Ticker: RTX) paid $41.80

Invesco S&P High Dividend (Ticker: SPHD) paid $175.65

United Parcel Service, Inc. (Ticker: UPS) paid $33.33

Wells Fargo & Company (Ticker: WFC) paid $15.81

Waste Management Inc (Ticker: WM) paid $15.26

Total dividends paid this month comes to: $762.28 😍

 

Dividend Increases & Cuts

Invesco S&P 500 High Dividend (Ticker: SPHD) TTM yield has dropped by -0.02%. (-$0.38 in annual dividends)

Fidelity High Dividend ETF (Ticker: FDVV) TTM yield has dropped by -6.7%. (-$62.98 in annual dividends)

Net changes to the annual dividends come to -$63.36

 

COVID-19 Dividend Cut (Projections)

 

Portfolio Snapshot

“Click photo to enlarge”

• The portfolio consists of 28 holdings down from 31 last month.
• Net dividends added to portfolio this month is $15.03. I’ll take it! 😅
• YY Monthly Dividend is up 26.7%
• Projected annual dividend is up 33% since June 2019.

 

Wrapping Up

The dividend cuts could have been far MUCH worse. Thanks to the FED and the massive stimulus spending, the economy is recovering much stronger than I had anticipated.

I think it’s important to take the time and examine why these large companies resulted to filing bankruptcy so you can avoid investing in such companies in the future.

If you removed the risks of a pandemic, many of these names would have survived. Unfortunately! We don’t live in such a perfect world do we?! 🤧 

“Only when the tide goes out do you discover who’s been swimming naked.” – Warren Buffett

I stick to a simple rule in life when it comes to debt and leverage.

Only leverage what you can afford to lose.

In all honesty, being completely debt free is an amazing way to live. Hard to see myself having it any other way anymore.

Till next month! Please stay safe my friends.