Covid – Still Alive and Buying

Covid - Still Alive and Buying

Covid – Still Alive and Buying

Hey everyone how’s it going?

I hope you all are doing good in this covid outbreak. Clearly the world has changed a lot in the last week. I think we are getting close to peak fear. Company’s are shutting the doors for a couple weeks, the markets going up 10% one day and down 10% the next, Sports are all cancelled, politicians are getting the virus and it keeps spreading. Will we make it through this? Of course we will.

Remember media loves fear. It gives them something to talk about and increases viewership.

Seriously we need to relax a bit. I’m getting messages now that I shouldn’t be buying since there will be widespread bankruptcy’s. If you don’t want to participate in the market that’s fine. Everyone has their own risk tolerances. This has been testing mine but at the same time, its getting better every day. I’m now enjoying the lower drips.

Although at 8 bucks usd a barrel I’m worried about our Energy positions keeping that dividend, Enbridge should be fine as long as that oil keeps flowing…. but once the cuts start coming, I think they will be coming fast.

Now I understand some people are scared. The market has never been like this since I started investing, and I’m sure that’s the same for a lot of people. Job security is at risk. For us personally the wife’s office closed until April 1st for the time being. (without pay) And I’m currently just a stay at home dad until the landscape season starts after doing wallpaper for the winter.

I start questioning how busy we will be this year, the phone is still ringing and I’m doing some quotes but we had a really big job lined up for mid season that is questionable at the moment. I guess it all depends on how long this will go for. I think at time’s like this we should really try to support local business’s. Restaurant’s must really be taking a beating. Order something for takeout from them, I’m sure they would appreciate it.




Positives

I’m a glass half full guy and I hate all this negative talk. We need to see the positives as well. Do you see those people in Italy playing music on their balcony’s for everyone? Gym trainers doing workout routines and everyone following suit?- Powerful Stuff!

The canals becoming crystal clear now with even dolphins swimming in them? How about the pollution in Wuhan?

Seeing all your neighbours offering to grab groceries or necessities for people who need help? Bejing and China are starting to come out of isolation and things are getting back to normal. (will the virus spread again, that’s my concern) Clinical trials on vaccines seem to be going good.

The world is a incredible place and people can be great. Unfortunately media doesn’t cover the good stuff happening. This is what we all need at times like this. Go out and do something good, give away that toilet paper if your hoarding it!

Us

I’d like to state that me and the family will be ok during this time, so don’t worry. We got some savings and precious metals I plan to liquidate if things get really bad and metals shoot up. I’m sure things will be hard for some people and it really makes me debate these kind of posts. We are truly blessed to have changed our financial picture when we did. 2-3 weeks off together is actually pretty nice, we don’t get that much time together often. Make sure you enjoy it too. Maybe not every moment…. arg! haha

I hope after this whole ordeal people start buttoning up their financial picture. Things would be a heck of a lot harder if we carried a tonne of debt and didn’t have all these passive income sources. It’s all about getting your money working for you instead of against you. Each year, financially things should get easier.

New Purchases

This week we made 2 purchases…. I swore I would only make one but they quickly hit my target price for the new purchase.

I continued to build our position in Smart Centers Reit. As I said last week in a lower interest rate environment reits, utilitys and telcos benefit immensely. But for some reason reits have taken an absolute pounding. Not a couple punches, straight up beat downs!

Of course some tenants in these places will get hurt as people stay inside and don’t go out much other than for food, depending on how long this will go on I think they will be fine. Remember walmart is a huge anchor to most of smart centers plaza’s and they are diversified from just retail. The locations are also in prime real estate areas, so if there are vacancies they should fill back up once this situation recovers.

I started a position in our kids resp as I loved the diversification of the company and also it was trading at just below fair value. Our kids resp had no real estate exposure so this was a welcome addition.

When it was around 30 bucks a share I figured I would need around 6,000 bucks in shares to get this one to drip monthly in their portfolio. (one full year of contributions and govt match for the both of them) Here we are though and we will now be dripping them each month for significantly less. Winning!

Monday we added 48 shares of smart centers at 19.70 per share. $7.50 per share cheaper than the week before. I told myself to wait for the last purchase at 15 bucks. Let’s see just how low things can go….

Well yesterday they went under 15 bucks. So we added another 65 at 14.90 per share. Smart centers has now dropped more than 50% since the start of the month at this price.

Remember this is a reit that has raised their dividend the last 6 years and sport a 5 year average div growth rate of 3%. It will be interesting to see if they continue that streak this year.




Conclusion

We now hold 158 shares of Smart Centers Reit (sru.un) with a average price of $20.83. I’m very happy with this. In total this will bring in $292.30 a year in dividends. Or $24.35 a month if the dividend is maintained, enough to drip a share each month. Let the compounding begin! Dividend Portfolio has been updated.

We built this position in just the last 2 weeks, 2 and half weeks ago it would of costed a lot more and would of eaten our entire resp contributions. Now we still have lots of room to add to that cnr and possibly bce position. Gotta love it.

I’d like to end this article just stating that I’m a huge fan of dollar cost averaging. On twitter or facebook etc everyone is stating not to put money into the markets. The world is ending, this is just getting started, your wasting your money etc etc

Clearly my timing hasn’t been ideal, of course I would of been better buying all these stocks under 15. Who would of known this stock would be down 50% in less than 3 weeks though?

It’s interesting to see how many people all the sudden sold on the perfect date and seem to know when the exact bottom is. I’ll tell you right now I don’t, Buffett doesn’t either. Some stocks are selling for under 50% of where they were 3 weeks ago. If you won’t put money to work yet, when will you?

This could be one of those once in a lifetime opportunity’s don’t let it pass you by…….

As always do your own research, I’m just a really good looking normal guy. =)

Wish you all nothing but the best. If you are a healthcare worker or someone stocking the shelves at the grocery store, cleaning buildings etc thanks for all you do!

Cheers!

18 Responses

  1. Mitch Dingwell says:

    Always enjoy following along with the updates. Personally I am not buying YET. I don’t think we have seen the last of the selloff. The market hates uncertainty and this is sure as hell a lot of uncertainty. Right now I am accumulating cash, holding all current positions and above all waiting to see where the selloff stops. We are down so far that I think it’s ok to miss a 5-10% move after we hit the bottom than to catch another 30% selloff to the downside. I plan to max out my investing LoC to add as well so this should allow me to add ~15% based on today’s prices and current cash position.

    Current watch list that I already own and plan to add to: BIP, BEP, BAM, BNS, TD, RY, ENB, V, MA in my TFSA and O in my RRSP.

    Current watch list that I want to initiate new positions in: IIPR, DLR (both will be RRSP).

    Keep the updates coming. It’s nice to see that it’s mostly business as usual.

    Cheers,

    Mitch

    • Rob says:

      hey Mitch

      Thanks man, appreciate it. Great list too! Bip and O are up there on my list. May add to our BMo position as well since it’s one of our smallest holdings.

      Good points about the market although it has dropped alot already. Certain stocks havent yet.

      I’d welcome a bigger drop – we may see it as those unemployment numbers come out now. But I’m hoping for the best for everyone and the economy.

      All the best Mitch!

  2. Rob,

    You’re young, careful, and have a long term focus. As for who is warning you about bankruptcies, they’re not necessarily wrong but likely just have a different time horizon. Not that you need advice, but I would just say I concur with your worries about the energy sector since you are dividend focused. Ignore prices for now as they’ll be fluctuating but look closely at the credit ratings of your holdings instead. I recently researched Inter Pipeline, for example, for my Dad as he still has a small position in RBF1280 high yield bond fund (a relatively low risk junk bond fund). With the recent price crash, this and I imagine several other companies have already broken debt covenants, especially those tying senior debt as a percentage of market cap. Many people think that debt is fine in this low or zero rate environment but they fail to realize that credit ratings matter most, and if you break those covenants the company is all of a sudden beholden to its lenders, who can effectively shut them down. Long term focused investors, in my opinion, should be looking to snatch up the best companies with the best balance sheets and credit ratings now rather than trying to get the best “deal” on perceived oversold stocks.

    • Rob says:

      hey Sunday

      Appreciate that. For sure Ipl doesn’t look that good at the moment. They are undergoing their largest project yet and then oil price crashes beyond belief. I bought them last year when things didn’t look as bad. I think a dividend cut is already factored in and will hold it until Heartland is up and running. After that its time to really reconsider my oil exposure.

      No question though I think we need to consider balance sheets more moving forward. JNJ is one i want to add more too but it hasn’t dropped enough. Appreciate the advice, thanks Sunday
      cheers

  3. Matt M. says:

    Good post Rob, I’ve been adding to my positions as well. Could they fall more? Yes (and they probably will), but some of my long-term holdings have dropped to levels that I quite honestly didn’t think I’d see anytime soon, and with 30 years until retirement, I have no problems at all investing in solid dividend-growing companies and adding to these positions. Keep safe and stay the course!

  4. Matthew says:

    Nice buys Rob, as you know I have become a fan of SmartCentres and have been buying up shares like crazy in March. Let the dividends flow in now!

    • Rob says:

      hey Matt

      thanks, yeah seems like a great value at the moment. Nelson shared some sheet that showed how much a director was buying. He bought like 70,000 shares around 23 bucks last week.
      sweet!
      cheers man

  5. I love following along with the updates. Like you Rob, we will be okay in this downturn too.

    We aren’t buying anything right now just holding on to our emergency fund in case things get worse than expected. Thank nice things start to turn around then we will have a good chunk to invest. I’m not worried about buying at the bottom, by the time we get in markets will still be lower than they were and that’s good enough for us.

    • Rob says:

      hey Maria

      Thanks, glad you enjoy them.

      Sounds like you got a solid plan. Gotta love it! Some times I wonder if we should be more prepared in case things get a lot worse, but I think we will be ok.
      cheers

  6. PCI –

    Run in, when others run out. Stay safe and healthy PCI.

    -Lanny

  7. GYM says:

    Canadian REITS are getting hammered (well mine are). Nice update. 2-3 weeks is not going to be 2-3 weeks though. It’s going to be much longer, probably months. We will see the beginning of the curve in 1-2 weeks when the hospital get saturated and then it will be pain and panic for another couple weeks after that.

    • Rob says:

      hey Gym

      Yeah I saw the cdn reit etf was down 50%. So the whole lot of them are getting killed! Hopefully its just a buying opportunity and not full of foreclosures and delinquent tenants.

      I think your right that this will go longer than originally thought especially if Trump rushes everyone back to work as he keeps saying.

      Time will tell

      Wish you and the family all the best.
      cheers

  8. Making some moves right there PCI, making some moves. Keep putting your assets to work and find those dividend gems during these times. I loved the focus on positivity. I would also like to mention how nice it is to have slowed down a little, and now we are spending more time with family as we are home together!

    Bert

    • Rob says:

      hey Bert

      Exactly. I bump into neighbours all the time walking the dog these days and some ask how I’m so positive in times like this. Things certainly dont look so good at the moment but there is a lot of positives to it as well. It really is enjoyable hanging with the whole family most of the time. lol.

      It almost makes me second guess my stance on not retiring early. I think I actually could now, there’s enough house projects to keep me busy.
      All the best Bert!

  9. German says:

    Love the SRU buys. It looks like $15 was the rock bottom price for now. I’m pretty sure stores like Walmart will continue to operate. It’s part of the essential services. I transferred more money to my account to buy the next dip. The past 3 days some stocks jumped 20-30% so I will wait until they pull back. I don’t see a catalyst yet for the markets to move higher, but I’m ready to pull the trigger should we retest the lows.

    • Rob says:

      hey German

      It definitely was a fantastic price, although I wonder if it will be rock bottom. It will be interesting how the next couple weeks play out and china especially. What if they break out again? Crazy times for sure, hopefully once in a lifetime! Look forward to seeing what you purchase next.

      all the best German
      cheers

Id love to Hear What You Think

This site uses Akismet to reduce spam. Learn how your comment data is processed.

%d bloggers like this: