Friday, August 1, 2014

Unexpected Mid-Year Raise and Recent Buys

My boss somberly called me into his office earlier this week and asked me to shut the door. GULP! Usually, such events are bad things. I racked my brain for things I'd done (and hadn't done) in the last few weeks hoping to find a reason for what I was about to hear...
Once the door was shut, I was told, "I've got some unexpected good news for you." PHEW! Due to planning for next year and some complicated compensation rules & practices I won't pretend to understand, I was "required" to get a raise. And the best part? The raise is retroactive to the beginning of the year! So I'll be getting a catch-up payment on my next paycheck.

Recent Buys:
Also, as usual, I've been buying stocks lately. I've made three meaningful purchases lately:

1) Buying more shares of MAT. The shares have gotten hit on weak toy sales lately, though the company has consistently earned ~30% on their book equity. With a 4.3% yield and strong earned returns, I'm a big fan here.

2) Buying CLMS. The company has been buying back shares and increased the dividend. Assets Under Management has been flattish despite the rising market, though with the share repurchases AUM/share is probably up a bit. CLMS has a ~5.0% yield at today's levels after the dividend increase.

3) Adding exposure to high-yielding CEFs. I read that Bill Gross added something like $300 million of his personal wealth to CEFs earlier this year. If his predictions that interest rates won't rise much through 2020 prove true, this will be a very profitable trade. In the meantime, I get ~8% yields on the basket of CEFs I chose and will reinvest the payments into more equity exposure. I realize that some of the yield is return of capital. And that the leveraged nature of CEFs puts me at heightened risk of rising interest rates, but it's a smallish bet I'm willing to take. Besides these CEFs, I have less than 5% of my assets in fixed-income securities. 

No comments:

Post a Comment