With three weeks of November in the rear view mirror and the signpost up ahead reading “Thanksgiving weekend next exit,” it is time, once again, for me to report my monthly buy(s) and look forward to tuning out all the financial headlines and noise, at least for a few days.
As I always say, there is never a perfect time to buy. You just have to look at your portfolio, see what’s missing or needs to be bulked up, look for good relative value and a safe yield and just go for it. Too often we try to “out think” the market as if we, or anyone else for that matter, has a clue as to what will happen in the near term or long term for that matter. I’m perfectly content making my monthly buys knowing full well we’ll see the market continue to rise for many more years or fall dramatically within days. As long as my passive income keeps rising on an annual basis it does not matter to me. With that being said:
I have added to my taxable account 14.5173 shares at $55.11 for a total investment of $800.05 in Cardinal Health, Inc. (CAH). With this recent purchase my taxable account holdings in CAH now totals 42.1465 shares with a market value of $2,355.57.
To me Cardinal Health, Inc. (CAH) represents an opportunity to average down my cost basis on a stock that’s clearly had a rough 2017 while still yielding well over 3% with room for future growth which is my main focus. I realize there’s no shortage of near term headwinds affecting this company as Bert of Dividend Diplomats pointed out recently, but that’s precisely one of the best times to buy into a stock. Just look at General Mills, Inc. (GIS) and Hormel Foods Corporation (HRL) bouncing of their recent 52 week lows. Seemingly, when everyone is/was crapping all over a stock, especially a dividend champ, aristocrat or king, etc. take notice. While never a guarantee, more often than not the dividend champs, aristocrats, kings, etc. put into action a play book that returns them to better days given enough time. Remember when McDonald’s Corporation (MCD) was left for dead a little over two years ago? Dover Corporation (DOV) was another company raising dividends for multiple decades that was on its way “out” two years ago and has since mounted an incredible comeback. How about Johnson & Johnson (JNJ) about five years ago? Boy talk about negative headlines for that dividend stalwart back then (Tylenol recalls anyone?). I think you get the point I’m trying to make. Is General Electric Company (GE) the next big comeback story we’ll be reading about in 2020? Who knows but I’d be willing to bet on it. While these are examples of individual stocks I’ve mentioned, the same holds true for the market in general. Every single day you can read about how the market is in dangerous territory and can collapse at any time (when the DOW, S&P fall) or how the market still has legs and 2018 will be a great year (when the DOW and S&P rise). Again, no one knows what will happen.
Not that long ago, (January 2016) we witnessed one the worst starts ever of the new year for the market. Look where we are today. How about the Brexit panic? The Hollywood “elite” moving to Canada if Trump wins. Get over it. Put on the blinders, look forward, save, invest and ride the highs and lows. In other words, don’t sweat it, don’t over think it. We’re humans. We crave burgers, junk food, sweets, fat as well as healthy choices. We’re lazy and greedy by default too. There will always be a corporation to capitalize on our innate human nature and I’m willing to bet on them long term whether it’s Pepsico, Inc. (PEP), General Mills, Inc. (GIS), Hormel Foods Corporation (HRL), Yum! Brands, Inc. (YUM), McDonald’s Corporation (MCD), The Coca-Cola Company (KO) and many, many more.
What do you think about my recent buy? Have you been buying in November as well? Please let me know below.
Disclosure: Long HRL, CAH, GIS, GE, PEP, KO, YUM, JNJ, DOV