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Non-Tech : Kirk's Market Thoughts -- Ignore unavailable to you. Want to Upgrade?

To: the traveler who wrote (6915)	3/29/2019 10:35:50 AM
From: berniel	Respond to of 26834

simplysafedividends.com

To: the traveler who wrote (6915)	3/29/2019 10:40:05 AM
From: robert b furman	1 Recommendation Recommended By the traveler Read Replies (3) \| Respond to of 26834

Hi Traveler, Yes I had a large position in F. At the year end I took a loss in the shares, so I could buy XOM (which had dropped from 95 to 65 in 2018). My selling of puts in 2018 had built up a nice YTD gain, which was going to give me a big tax bill, while carrying F as a loser. So I dumped most of them (and I miss the dividend already - but XOM is now up 10 points plus from my purchase price). Ford management has stated they can go through the next down cycle and maintain the dividend. I suspect that is still the case. The recent JV with Volkswagen is good for helping fund the autonomous car project, which is gaining in awareness that those cars are closer to 5-7 years out vs. the oft said 2-3 years out. The supplementary dividend is due for a reduction is my best guess. That can be reduced and it will not be that significant - most people don't even know how or when it happens. IF the 60 cents gets cut - it will hurt the stock's price - another KMI kind of decline - that will hurt and make recovery a long term event. The yield is high enough that it has to be considered, but Ford has really talked about the 60 cents being solid. You know how the DGI crowd treats dividend cuts - sell now and think later. I still think the 60 cents is safe. I visited my old chevy dealership just yesterday. I asked what's being sold Full size Trucks and SUV's of all sizes" was the response. That's where all domestic dealers are selling. Denali's are 75-80 grand, Cadillac Escalades are over 100 grand. My F&I manager just shook his head and said , some people roll out of my office with 1400 a month payments and 72 months to do it! Yikes! the market's overall new vehicle volume is topping as many potential buyers are long term committed. If you want a low payment, you buy used, and their valuations are crazy as well if you have low miles. I'm a 25% owner of a Chrysler Dodge Jeep store and that's as much exposure to the auto business as I want! I took a loss on my Ford, mostly because I had gains to offset it with. I loved the dividend. I really felt like F was risky and XOM was solid over the longer run - so I did the conservative tax reduction move. I have to tell you, I'm happy with the move. When dividend yields get over 7%, a view looking for the worst possible events becomes prudent. imo I'm loving my XOM shares even though the dividend yield is just barely 5 % vs F's 7 %. In buying the XOM, I also sold some january 2020 100 puts, which have really experienced time decay mostly due to the price action. If those puts expire to zero and my stock gains hang in where they are now - I will be at breakeven considering the dividends and sold expired puts I received from Ford. That's a rotten way to look at it, but I'll view the total cash flow of a stock and learn from it. Long and short of it - I'm glad I upgraded to a less cyclical stock with owning XOM. Hope that helps! Bob