April 19, 2015

Stock Market Drops Make Me Excited


It’s been awhile since I updated you on the only investments I tend to discuss on the site, the KRIP portfolio.  That is the backup source of retirement funds behind the businesses, the projects, the “real” investments, and main focus of my career.  It tends to hold high-quality blue chip stocks that get bought at attractive prices and then parked, ignored, with dividends reinvested for decades.  

In the past few months, I’ve been using some of my copyright royalties and dividends from one of the Kennon & Green businesses to make additional deposits in the KRIP portfolio.  On random, odd days, individual companies I’ve been eying will have big drops that let me pick up some shares at steep discounts.  Wall Street’s behavior defies logic (e.g., Wells Fargo & Company reported a 22% increase in profits today and investors sold so much stock that it fell 8.44% by the close over concerns that loan growth wasn’t fast enough resulting in declining revenue) but it is working to my long-term advantage.  

Most stocks seem fairly valued, or even slightly overvalued.  But there are a handful of great businesses that are trading at prices that seem, to me, grossly undervalued.  The result?  This is how excited I’ve been lately (see image).  I’m just too busy to write about it.  I owe several friends, acquaintances, and readers responses that are now a month or more behind due to the growing popularity of the site.