Update-Life and Investing

Life

I can’t believe another week is gone, but at least we feel good about what we have accomplished. One of our top priorities has been to complete all those annoying little things that need to be done as part of the recent move. Updating drivers licenses, car registrations, changing mailing addresses with many different parties. All those little tasks take time. Fortunately, we have now completed almost all of them.

Cross2One of the best things about our current lifestyle is the flexibility. Mrs. IS can adjust her schedule when I need to work, while the Little Man and I can volunteer…..go to parks….visit friends/family…..etc….the rest of the time. Last week was also the start of the Lenten season at church, which means I needed to complete a few tasks before the church services changed format for the new season. In total, I probably spent 15 hours at church or on church related projects. In this case I build the wooden cross you see in the pictures, with a friend. (I will definitely get a nice compound miter saw before I take on that project again.) I also built the associated kneelers, for members who wanted to pray around the cross and light candles. While I enjoy volunteering at church, I do not find it nearly as rewarding as volunteering in the community. For me, I think the difference is people. Typically when I am volunteering at church, I am working with at most one other person. When I volunteer in the community, I am often working with a group of up to a dozen other people. I am a very social person, and really enjoy interacting with the other folks. I also really enjoy building things and getting my hands dirty. Seeing a project I’ve completed and built, always feels satisfying.

Kneeler1As part of our current flexibility, we have been spending a lot of time in parks and at the beach. As every Snowbird knows, Florida weather is incredible during the winter and spring. While the water is too cold for us to get in, leaving that to the Canucks, we have enjoyed many wonderful hours at the beach lately. We have been taking family walks at the beach, or going a park, before Mrs. IS goes to work. Sometimes as an added thrill, we pick Mrs. IS up from work, and go have a dinner picnic on the beach. The Little Man loves to dig and play in the sand, while Mrs. IS and I enjoy the weather and being out in nature.

Sometimes, we go walking in the community where we would like to buy our next house. There is a great playground and about 26 acres of park. Some is forested, but most is open fields and courts. We have been leisurely looking for a house in that neighborhood, but figured we’d probably wait for the increase in interest rates to cool off the housing market…..over the next couple years. While I hate renting an apartment, I don’t like to buy something that is overpriced.

As a developer, I have learned that the best values in a given market are rarely listed with a real estate broker. The best values are usually owned by people that are dreading the hassles of listing and selling their property. To find those types of people, I engage a type of guerrilla campaign that I affectionately call “walk and talk”. As the name implies, I spend a ton of time in the subject area while on one of these campaigns. I am literally there every day or two, walking and talking to random people. I engage in conversations with these folks, and start with questions like “how do you like living in this neighborhood?” How long have you lived here? What’s your favorite part about living here? Etc. It’s amazing what people will tell you, once you get them talking. This type of activity is where most of my best leads have come from.

Such was the case, in the area that we would like to live. Knowing that 90% of the houses in the area are out of our price range, mostly because they are too large and listed with a realtor, I have been on a “walk and talk” campaign for a few weeks. I have spoken to a couple dozen people so far and handed out my business cards to the most promising. On Saturday, while on one of these walks, I stumbled across a great prospect. We negotiated the terms of sale, and I wrote up the real estate contract earlier this week. The sellers are currently reviewing the contract with their attorney. If they don’t jerk us around, I think the sale will go through, and we’ll have a new home. If they do, we’ll walk, and look for other prospects. I’m not emotionally attached to this house, so a few hours of my time would be the only casualty if the deal falls through. No problem.

 

Investments

On the whole, we still aren’t seeing much compelling value in the broad markets. As mentioned last time, we have established buy levels in two of our long term holdings……Union Pacific (UNP) and Vanguards Emerging Markets ETF (VWO) …..as well as a buy level in favorite swing trade Pan American Silver (PAAS). So far, all is going according to plan. All three are trading notably below the levels we recently sold them ($109, mid $39, mid $20). Our buy levels, should we get there, are as follows:

Union Pacific (UNP)- under $96

Vanguards Emerging Markets ETF (VWO)- under $36

Pan American Silver (PAAS)- $15ish

These activities represent more trading than we prefer to do, but we’ve decided that trading around our core positions is a good way to minimize risk and harvest some profits…..from a global market that makes us very skeptical. Time will tell, but I think these markets have gotten way, way, way, ahead of themselves on the the idea that the world has changed in a few short weeks. The world has not changed, and political dysfunction is alive and well :)

Happy value hunting!

Where are you finding value in today’s markets?

Disclosure: Currently Long UNP and VWO. Please consult your investment professional to create an asset allocation mix that meets your specific needs. This article is for informational purposes only and should not be considered a recommendation for anyone to buy, sell, or hold any securities. I am not a financial professional. Please consult a real estate professional or attorney when buying/selling real estate.

10 thoughts on “Update-Life and Investing

  1. DivHut

    Finding value these days seems like an impossible task but there still are some relative bargains out there. I’m looking at JCI this month along with some health REITs as they continue to get battered. HCP, CCP and maybe a new position in LTC to name a few. Also, HRL is starting to look interesting too. Thanks for sharing your move update and stock considerations.
    DivHut recently posted…Insuring Your Portfolio With Insurance StocksMy Profile

    Reply
    1. Income Surfer Post author

      Thanks for taking the time to read and comment DH. The medical REIT space has been whacked pretty good. They certainly look more appealing than the retail commercial REIT sector. lol. I hope you have a great weekend
      -Bryan

      Reply
  2. ambertree

    Great idea to learn about a good and find opportunities.

    In Europe, I still find stock that is from a dividend yield point still acceptable while having a solid business model. Buy selling options, I get money to wait for my entry level.
    ambertree recently posted…Let’s get togetherMy Profile

    Reply
    1. Income Surfer Post author

      Thanks for taking the time to read and comment AT. I’m glad you enjoyed the update. Some European companies sure look better to me than most US companies. There is worry about the rise of nationalism and breakup of the euro, but on a valuation basis they look far more appealing. I hope you have a great weekend.
      -Bryan

      Reply
    1. Income Surfer Post author

      Yes they are David. My temperament doesnt lend itself to buying a momentum trade….and housing has been nuts for the last few months. We’ll keep looking, but it could be a while.

      I hope you have a great week
      -Bryan

      Reply
  3. Graham @ Reverse The Crush

    Thanks for the update, Bryan.
    Sounds like life is going well for you right now. The mornings and times you have been spending at the beach sound very relaxing. I absolutely cannot wait until the weather improves over here in Toronto. The combination of day light savings time and snowy winter weather has got me feeling extra tired this week. At least it should start to warm up within a month or so.

    Also, thanks for sharing your thoughts on the market. I have been having a hard time finding positions lately. That said, I have been looking at TD, REI.UN, and RY to add income. I haven’t made a final decision yet though.

    Hope your week is going well!
    Graham @ Reverse The Crush recently posted…Blog Numbers and Income report for February 2017My Profile

    Reply
    1. Income Surfer Post author

      Hi Graham. Sorry for the delay getting back to you. Last week was really tough, and I’ll talk about it in a post that goes us later today. Long story short, I was out of commission. I was thinking of you yesterday. We live and work right near the Blue Jays’ spring training facility. There were a large group of Canadian fans walking around yesterday after church…..all wearing their Toronto shirts. At the same time, the Phillies stadium is only a few miles south of us…..but I don’t see nearly as many signs or banners.

      Today looks like the market may be giving us a selloff, and I’d love to see it build throughout the day. Time will tell. Look for a new post later today. Have a great week
      -Bryan

      Reply
  4. Dividend Growth Investor

    I like your updates, as they have a lot of multiple information points covering a broad range spectrum of things. After reading your post, I had a few thoughts too..

    The real estate market is just crazy here in the Midwest. There are bidding wars, houses selling above asking price as a result, and many houses selling within a day or two of listing.

    There are some values around in stocks. Though in retrospect it may turn out that they were more like value traps than value stocks ;-0

    It remains to be seen whether broad market index earnings manage to grow from here ( thinking about S&P 500). EPS went from $87 in 2006 to roughly $109 in 2016 – unfortunately this is one of those times when earnings didnt double over a course of a decade. If EPS does not grow from here, most expected returns will be just from dividends ( though a valuation compression may be bad for the capital returns).

    I may be biased, but in this environment I would prefer that companies send me a cash dividend directly, rather than buy back stock.
    Dividend Growth Investor recently posted…Canadian Banks for Long Term Dividend Growth InvestorsMy Profile

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    1. Income Surfer Post author

      I’m glad you enjoy the updates DGI. Last week was really tough, so I’ve been out of commission for a week. Will explain in the next post. I agree that with your comments about earnings expectations….and the likelihood of future compression. Time will tell, but I think investors are overly optimistic about earnings going forward. Like you said, I’d rather them pay me a dividend than waste the cash on unfruitful activities. At the current time, my chief concern is value destroying acquisitions.

      I’m surprised to hear about bidding wars and a red hot housing market in the midwest. That’s usually more of a coastal thing. Have a great week and keep looking for that value.
      -Bryan

      Reply

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