wab said:
Toejam, I remember you saying that you ER'd primarily due to MSFT and INTC. Just curious -- are you still holding your original positions? If not, when/why did you diversify?
I recently bought INTC for the first time since 2000. I no longer view them as a high-growth tech stock, but they're starting to look pretty good as a dividend-paying utility with some growth potential. If they increased their payout ratio, they would become extremely attractive. Ditto MSFT.
Hello Wab:
In response to your above inquiry, please refer to my first 3 posts (#56,55,54) when I first joined this forum in early 2004. I did not ER primarily due to MSFT and INTC. I was able to ER in March 2004 due to several factors: Some luck, being frugal, saving & investing over many years to build up a sizeable portfolio (MSFT did help a lot here, but it wasn't the only stock I owned), rental income/real estate appreciation from rental property owned over 20 years, small but cola'd pension, low expense health/medical coverage (connected with prior employment) that continued after retirement, and $500K received in cash through a stock buyout of the company I used to work for (this was distributed in several increments between 2003 and 2004). Although my base pay salary was never more than $55,000/yr., I did work a lot of overtime when required and there were a couple of years where I received huge bonuses.
In my original post back in early 2004, I casually mentioned that I purchased several hundred shares of MSFT in 1986. I threw out this info casually, based on my best recollection at the time I wrote the post, because I was too lazy to go back into my records. This info was inaccurate. I went back into my records last night to find out when and how many shares of MSFT I actually purchased, and this is what I found: Bought 200 shares in 10/87. Sold 200 shares in 10/89. Bought 400 shares between 6/92 and 12/92, and have not sold any since then. These last 400 shares have grown into a total of 12,800 shares due to stock splits, and this amount represents about 12% of my total portfolio of investable assets (not counting real estate). I had also bought shares of INTC and CSCO some years ago and have continued to hold these much smaller positions, even though it has been very painful to see them go so low. For reasons similar to yours, I continue to hold all 3 stocks with hopes of higher dividends and a turnaround in the stock price.
Since the tech bust of early 2000, I have continued to add a variety of dividend-paying large cap stocks, small cap mutual funds, large cap international stocks & mutual funds, and a REIT. This is where most of the aforementioned $500K cash (that I received between 2003 and 2004) went. I have tried to stay away from tech stocks but admit that I bought some QCOM several years ago and have held onto them.
Starting last year, I further diversified into emerging markets, small cap international, and a few more large-cap international equities (ETF's, individual stocks and mutual funds) with part of my cash holdings and from proceeds from the sale of some "loser" large cap domestic stocks and mutual funds that I finally gave up on. The reason for this further diversification was that I was still overweighted in large-cap domestic equities, so wanted to add to my International holdings. Hope that wasn't a mistake - I keep telling myself I am in it for the long term and hope Jeremy Siegel is right . . . If everything comes crashing down, at least I have my pension and rental income that I can (hopefully) rely on. I don't hold any bonds right now because I kinda think of my pension and rental income as a rough substitute, being that they are fairly stable and consistent. I know a lot of people would not be able to sleep with this type of "risk", but I guess it is just in my blood to invest this way. Something like UncleMick's "male hormone thing", although I am not male and am not an INTJ (hehehe). And I won't blame anyone if one day I find myself standing in line at the food bank.
As of 4/30/06, total portfolio of investable assets (all brokerage accounts, IRA's, 401(k), and checking/savings accounts): $2,476,348. Total equity in personal residence and 2 rental homes: $791,000. So, Total Net Worth as of 4/30/06: $3,267,348. As of today, subtract perhaps $100K (?) from this figure due to large losses in both domestic and global markets within the last week. As mentioned, I have not been looking at my balances recently (too depressing) although I do expect this kind of volatility with the types of investments I hold.
For estimating home equity, I used the King County Assessor's valuations, which are a lot lower than what Zillow.com shows. If I use Zillow's figures, total equity for personal residence and rentals totals $1,083,000 (almost $300k more than the County figures.) Think Zillow's valuations may be more accurate because their figures are based on, among other things, what comparable homes actually sold for recently? I used the County figures 'cuz I like being conservative in valuing assets, and it seems real estate prices in the local area have skyrocketed out of control in recent years.
Toejam
but; YTD as per closing yesterday: 7.3%
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