Introducing the Entertainment Basket!

I regularly review my portfolio allocations and try to find ways to consolidate positions into baskets. Doing this allows the bigger winning positions to remain bigger as it decreases the number of positions, thereby increasing the Target Position Allocation.

This week, I realized that I had two individual allocations, Disney (DIS) and Logitech (LOGI), which both have all the capital removed. I wouldn’t be able to add enough back into them to increase their allocation to the target as I have a key rule: Never turn a winner into a loser.

Once I’ve removed all of an investment’s original capital, I can only add profits back in, I can never give the position a positive cost basis again. When I had added capital back into positions in the past, it ended extremely poorly (see: Canopy Growth Corporation).

I decided to roll Logitech and Disney in with Take Two Interactive (TTWO) (previously in the Old-Spec Basket) to create an Entertainment Basket since Logitech makes gaming peripherals, Take Two Interactive makes video games, and Disney, well, quite obviously, makes entertainment in the form of media, theme parks, experiences, and so much more.

Doing this reduced the number of positions by two (2) since each Disney and Logitech had their own allocation, and increased the Target Position Allocation substantially from 7.14% to 8.33%.

Disney (DIS): Profit-Taking

Disney’s (DIS) incredible rally (incredible for Disney, I guess…) continued this week with my next sell order getting triggered on Tuesday, selling 6.53% of my position at $119.61. The sale locked in +186.83% in gains on some of the shares I bought when I originally opened the position at $41.70 on February 14, 2012.

The sale lowered my per-share “cost” -$9.00 from -$9.15 to -$18.15 (a negative per-share cost indicates all capital has been removed in addition to $18.15 per share added to the portfolio’s bottom line in addition to each share’s current value).

From here, my next sell target is $142.19, just under a past point of resistance, and my next buy target is $91.29, just above a key point of support from the past.

DIS closed the week at $122.36, up +2.30% from where I took profits Tuesday.

Meta (META): Dividend Reinvestment

Meta (META), the artist formerly known as Facebook, paid out its first quarterly dividend on Wednesday. At $0.50/shr each quarter, this dividend isn’t going to light the world on fire (the annual yield was 0.40% at the time of payout), I’m never going to look free money in the mouth … that’s a heck of a mixed metaphor, there.

After reinvestment, the dividend had no effect on my cost basis, so it also had no effect on my buy target which remains at $388.89, above a past point of support.