Recent transactions

I haven't been very good with keeping notes lately. Here's a little catch-up:

Before end of the year, I unloaded FDC. Reason:

• Western Union is spinned off. WU was the main reason I bought into FDC in the first place. While FDC's other business are still excellent, my focus is shift.
• Use the drop in price to off set the huge cap gain I got in 2006. Over all, the return from FDC with the spin off of WU was a moderate 10% annually.

Also before the end of the year, I added PFE. Reason:

• Market still undervalue drug companies. I sold off BMY earlier this year after I realized the company is not very well managed. PFE offers better drug pipelines, and better management
• PFE recently hiked it's dividend. At my point of entry, my annual yield was about 4%, slightly lower than the 4.5% yield that I got from MRK when I bought it for $30/shr. At this rate, with the potential (very likely) dividend hike in the future, PFE and MRK are my long term safe investment. It's thrilling to receive thousands of dollars in dividend. On top of that, pay less tax than bank interest (CD fans take note).

On 12/20/06 I bought into SBH. Reason:

• Special situation. SBH is a spin off. The best explanation can be found in Fat Pitch Financial's blog: Sally is a Beauty of a Spinoff. Although the situation deteriated a little.

After the new year, I unloaded FII. Reason:

• FII has been an under-performer in my portfolio.
• The reason for purchasing shares was murky. Best I can remember was that it was a safe bet (FII has been profitable), and Investment companies were hammer at the time (2003)

Over all, FII was only game me a 5% annual return for my investment. Not terrible, not great either.

I also sold off my AVP position. Similar reasoning to FII. The turn-around is slower than I expected. Sold off for a small profit. Although I recently check the price and found Avon has advanced quite a bit after I sold it. I suppose the Peter' law, or the Lynch Principal is at work.

One exciting addition I made after the new year is Sears Holding (SHLD). I watched the stock with infinite interest since it was in the mid-$90 and never bought. It's a masochism that I love the stock and yet kick myself not buying it. Lampert is a son-of-a-gun that can perform magic. I was scratching my head 5-6 years ago as how k-mart can ever survive let alone compete. After Eddie took over, with addition of Sears, the ship is finally chartered by a competent captain. I kept waiting and waiting for an entry point (I suppose that's how Warren was waiting for an entry point for Wal-mart). Finally after the new year, SHLD had another mini drop, and I got myself some share at $167.