Thursday, June 27, 2013

Lubrication and Financial Services Additions

I'm a big fan of simple businesses. Sugar water, beer, retailing, utilities - all simple businesses. Innovative businesses tend to be more hit-and-miss as the risks are harder to evaluate and less in the hands of the company. With that mindset, I've added two simple but great businesses to my portfolio.

I purchased 100 shares of Calamos (CLMS), an asset manager based nearby. The company manages money for investors and collects a fee for this service. Sure, there is risk is that investors pull all of their money out and move to Vanguard or Scottrade. Calamos has insulated themselves somewhat from this occurrence by issuing quite a few closed-end funds which are essentially strategies where investors cannot pull money out - they can sell shares to others and the funds can trade at discounts to NAV, but CLMS will always manage the money.

I also purchased 25 shares of the WD-40 Company (WDFC). This company makes one product: WD-40 plus a few specialized versions - and that's it! Very simple. A great product with a great, well-known brand name and a reasonable valuation. I don't know how a larger firm hasn't gobbled them up yet.

These purchases add $81 to my annual dividend income, which along with a normalized payout from my sole mutual fund, brings my total expected income over the next 12 months to over $4,000! What a milestone!

I realize that my latest round of purchases has been pretty small (in the $1k-2k range), and that's about to change. I needed to fill in the bottom of my portfolio and had some funds in a smaller account, which explains the smaller size. Going forward, purchases will be at least $2,500 and likely closer to $5,000 other than fill-ins. I want to get all of my holdings to multiples of 25 shares, so the following will either stay or get added to to make this happen: PG, JNJ, KMB, ROK, CAT, C, DE.


  1. Nice buy on WDFC. WD-40 will likely still be going strong long after we are all gone.

    1. Definitely. Great, timeless product. We'll always need to keep our bike chains and doors moving freely.