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Strategies & Market Trends : Underexposed Technical Analysis -- Ignore unavailable to you. Want to Upgrade?

To: Underexposed who wrote (398)	8/5/2019 3:12:51 PM
From: robert b furman	Read Replies (1) \| Respond to of 914

Hi UE, I agree. Part of my investing in the energy sector is to be invested in defensive stocks as we are getting long in the tooth with this business cycle. In past older cycles ,it always took an energy price spike to collapse the world economy. This cycle the US and Canada are generating more oil and causing an energy glut - which I believe has lengthened this cycle. ENERGY BOOMS AND BUSTS ARE HISTORICAL NORMS. That is why I like the blue chips with in this sector. They've weathered these swings before. The best protection to make it through the next cycle is to have a fortress balance sheet. XOM and CVX are two great examples of that. Prior to this I was almost exclusively invested in semi chip equipment companies. This is a similar attribute about semi equipment companies as well. Since then ,I've filled a full position in T, and KMI. I've so far achieved a one third position in XOM,and have been hoping for another price decline down to 65 ish to add another third. If I can buy a blue chip fortress like balance sheet dividend payer that will yield over 5 % and keep that kind of company at 50% of my portfolio,then I've "balanced my portfolio to how I'm aiming it to be structured. Those stocks are currently: GSK,T,KMI,XOM The other 50% I have invested in semi equipment and life sciences firms with no balance sheet debt and margins in the 40% and Ebitda above 20%. These companies must also pay a minor dividend but better yet be acquisitive and have higher growth. Those stocks are Cohu, Brks,Amnf I do have a lottery ticket position in VAL and 200 shares of F. At one time I had a substantial position but this cycle is long in the tooth - so consumer discretionary stocks have been phased out of my portfoliocr Ideally these hi tech companies become so well financed ,they themselves become high dividend yielders of priced at sucha high PE, I can swap them out for the fortress balance sheet high dividend yielders. It's a very long term plan,and the ups and downs can literally take years. I'm sleeping good at night knowing that my stocks have economic cycles, but more importantly, have the ability to continue paying that dividend. So if the business cycle is upset with supply channel reshuffling or manufacturing coming back to the Americas (better yet) or an occasional recession, I just redeploy the dividends and buy more shares for the revenue stream those dividends provide. It's just a way of giving yourself a pay raise. I never have margin - unless a stock is assigned to me, and the dividends will get me back to cash in less than 30 days. I try to build reserve cash and most often sell puts that are max far out in time. This builds time premium in general. I try to sell my puts when the market is climaxing like periods now. I follow Don Wolanchuk's clx studies and that is a great timer for these climax events. Far out in time and when fear makes the put premium explode allows me to hopefully buy these stocks such that the net purchase price of the stock gets me to where a three to five year low in the price of the stock is also. If I can get a stock that reasonably, I keep it in a "buy and hold status" as long as the price does not dip below the 3 year low, minus the annual dividend. That may not be for everyone - it is just where I've found my "Risk Tolerance" to allow me to sleep and feel very good about my portfolio. Just a note of appreciation for making the additional concern and comment about commodity related stocks. XOM surely is that, but even in the throws of the nastiest recession, I still needed to buy gas,oil and plastics and Exxon has the best plan for the lowest cost structure in these commodities. IMO Bob