RIP Screening for the Bruce Miller guided Income-Only portfolio
I have spent much of the last month re-coding the RIP spreadsheet to include a comparison table of all tested tickers along with features to sort, save, retest and track evaluation histories. Max Drawdowns for each ticker were added, but the realities of corporate actions have limited the usefulness of this feature somewhat (tickers change & closing price histories are of various length, making comparison difficult). The SS currently shows MaxDD calculated using 5yr EOY values only. The next iteration will use a daily close calculation covering 5 years, which will be more useful & accurate. There have been several other changes to the SS, too numerous to list. Suffice it to say it keeps getting more useful every day.
With those changes incorporated into the SS, here is the current breakdown of our 2 taxable and 2 retirement accounts as we migrate towards Miller’s strategy (note: other accounts will use TAA and are managed professionally)
Not much has changed in the last month. ESPR was sold as a dead end. I wish I had never heard of it. More ARTH (a speculation) was added when it corrected recently, although I have some concerns prompted by the VF appearance of a poster who may be a paid pumper. Watching ARTH closely with stops in place.
AMTGpA and GDVpD preferreds were added, bringing the BondPfd Risk Group up to 12.8% in REITs - still well within Miller’s allocation guidelines of no more than 40% BondPfd in one income group.
I plan to add more preferreds in non-REIT industries, like GDVpD, in the future (DLNG Pfd is on my list). I might even end up with mostly Preferreds spread between 3 groups, but this depends on what happens as it happens.
I feel pretty good about the speculative positions (ARTH & GBT) and have been doing very well writing options (puts in the ones I want to keep or add to and calls in the ones I want to get rid of (GLOP). TSLA has been the most lucrative with pretty good premiums and low risk of assignment when OTM far enough.
The legacy holdings that would not ordinarily meet Miller’s criteria (AVACF, FRO, GLOP, NAP, AWLCF) will remain awaiting recovery of their respective sectors. I am nervous about AWLCF, but believe the others are relatively safe. Eventually, all of these will be replaced by safer securities. Ignoring the Legacy and Spec categories (which are not part of Miller’s strategy), we are only using 4 out of 18 Income Groups. I would like to diversify into more. There’s plenty of cash, so it’s just a matter of identifying inclusion candidates and deciding when it’s time to buy.
Over the weekend, I decided to look into Utilities. Using Schwab’s stock screener I selected Utilities (all types) with Small-Large Mkt Caps, yielding more than 3% with a 10 year div growth rate of >=5%. Some other tickers were thrown in from a previous screen, leaving me with 34 utilities of all stripes. Each was run through the RIP spreadsheet to compare company financial data with Miller’s inclusion criteria. The results are attached, sorted by my safety score..
This image is probably too small, so I’ve attached a larger version. It’s hard to get a feel for these without looking at the graphs, but you can't put all of them on one graph. Here’s the top rated SWX graph.,,
The pictures make it clear at a glance that dividends are increasing nicely, but the price has probably gotten ahead of itself. Hence the decision to wait & watch.
The quest for yield has driven Ute prices to the sky lately. Basically, most utilities seem over- priced right now, so I’m not buying any. A few of these have preferreds, but they are trading above the call price… Further research would be needed before investing in any of the top rated Utes. I will wait for any correction before acting.
Just what I have been doing with Miller’s income-only strategy.
