Wow, where did September go? It absolutely flew by! Last time I checked September was just starting, and I was lamenting the end of summer….
Now, fall is definitely here. The forecast is rain, rain, rain, and even more rain….for the next 6 months.
Time to make some delicious Pho soup, and read a few good books instead of thinking about dreary weather. That’s how we roll here in the Pacific Northwest. The rotten weather is why we end up traveling to places like Hawaii for a break.
Are we going to travel anywhere this year? We haven’t made any travel plans for the wet season yet, but I’m starting to seriously think about it! Somewhere warm and mostly dry — like Texas, Okinawa, or Thailand.
Enough day-dreaming about travel!! How did our September finances turn out?
Expenses For September
Expenses for September clocked in at a slightly-higher than usual $4,431.23. Yikes!
September was one of our most expensive months this year! So where did all the money go? The main categories of our spending broke out like this:
Our food costs are back under control after an expensive July, but fuel costs were higher than usual due to a family road trip. Utilities also took up a big chunk of our budget this month too. Our water bill alone was nearly $200.
Argh! It’s like whack-a-mole. I stomp down on one expense and another pops right back up!
September did have some good luck though — we managed to secure a very nice bunk bed for the boys for the low-low price of free. That’s my kind of price!
Dividends For September
Dividends in September were quite healthy and in excess of our spending. (Yay!) After a rather dry August, a flush September is welcome news.
Yes, you read that correctly, $7,786 dollars in September!
The vast majority of the dividends are from our investment in the Well Known Energy Company (WKEC). You know…that secret company we’ve been buying shares in for the last few months. Yeah, that one!
September marked the very first dividend from the WKEC. Overall, our big investment in the WKEC will give us a significant boost in the dividend department by the end of the year.
But how are things in the dividend department shaping up for the entire year, you ask?
Hey, $35k isn’t too shabby! By the end of 2016, I expect we’ll have dividends around $43,000 for 2016.
Unfortunately, that’s less than our expenses, and we probably won’t meet our goal of living completely off dividends in 2016. Darn.
I just wasn’t able to invest the cash fast enough.
Finding decent investments at fair valuations has been a significant challenge this year. Despite our huge purchase in the Well Known Energy Company, we still have significant amounts of cash to invest…I just can’t find enough smart places to put it.
Having too much cash might be one of those “good problems to have”, with the market near all-time highs and a Federal Reserve hinting about raising rates.
Could 2017 be a negative year? Will the bull market finally end? I have no idea, but I’ve got the cash ready if it happens.
September Portfolio Changes
As rumored last month, on the 1st of September I ended up selling our position in Telus.
Usually I don’t condone jumping in and out of investments to make quick gains; that isn’t my style. That’s just trading. But in this case, we held the shares long enough and I felt the move was warranted — The business was deteriorating to the point where little compounding would happen in Telus’s future.
Frankly, I started thinking of the future value more like a bond than a business. The shares looked fully valued over $33, and I didn’t see Telus as being a long term portfolio holding.
So, I sold our Telus shares and moved the additional cash (roughly $32k) into ….wait for it… the Well Known Energy Company (WKEC).
By my math, the WKEC is a better long term value, with some pretty significant growth opportunities. We’ll see how that one turns out.
And NO, I’m still not prepared to say what company it happens to be.
And Then A Funny Thing Happened
This afternoon I signed-on to my laptop to check out my portfolio watch list…and, to quote Sesame Street, “one of the kids was not like the other“.
Endurance Specialty Holdings was up over 35%!!!
(Note: In case you don’t remember, it used to be our largest holding. We still own over 1500 shares of ENH by way of the Montpelier transaction from 2015)
“Wait a second…” I thought, “This has to be some kind of mistake. Stocks don’t just jump 35% in a single day.”
Nope. It wasn’t a mistake. The shares are in-fact trading up over 35% on rumors of a buyout by Sompo Holdings Inc. Apparently it’s a pretty solid rumor, because even the Wall Street Journal is reporting it.
The report suggests ENH will be purchased at a price of $6.5 billion…roughly three times our adjusted cost basis and AFTER the giant dividend paid-out last year. While the rumor is a long ways away from a ‘done deal’, at prices this high it’ll probably get done.
It certainly took me by surprise!
The insurance business is no stranger to mergers, but after the acquisition of Montpelier last year I figured nothing would happen for years. I even started trimming back our ENH holdings earlier this year, as the business has been in a decline.
Yeah, great call there Mr. Tako! Now I just look dumb.
It just goes to show:
- You can still make good money from mistakes.
- Time is the friend of a long term investor. We’ve held our shares for over 10 years. Maybe this will finally be the end of the train ride.
- My excess cash problem is going to get even worse.
- Not having a job might be a Very Good Thing™ when tax time comes.
So, that’s it for today. As the ENH deal develops, I’ll definitely be updating the blog with the outcome.
Update 10/5/16: The ENH purchase is no longer a rumor. The price settled on $93/share. That’s 40% higher than the pre-deal trading price.
[Image Credit: NOAA]