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Pandemic Portfolio: Update #51

This is an update to a series. See Starting a Portfolio from Scratch to learn how it started.

Finally Showing Signs of Life…

The Pandemic Portfolio has been one of my most challenging portfolios to manage ever since its inception. Since I started in May 2020, the stock market was erratic and acted in ways no one had seen before. It was incredibly difficult figuring out when to put money to work and how much.

Obviously, I should have gone all-in instead of buying in stages with the portfolio. The past is 20/20 hindsight.

Over the past month, the Pandemic Portfolio has started showing signs of life with gold and silver finally taking off, and the industrials really rallying. I still have way, way, way too much cash at more than 2/3 of the portfolio, but I’ll be working on that as we head forward.

In the meantime, let’s take a look at the moves made since the last update…

Barrick Gold (GOLD): Dividend Payout

Current Price: $16.64
Per-Share Cost: $17.91 (-0.50% since last update)
Profit/Loss: -7.12%
Allocation: 6.30%* (+0.62% since last update)
Next Buy Target: $13.35

Barrick Gold (GOLD) paid out its quarterly dividend on Friday, March 15. Since the company is headquartered in Canada, my broker won’t allow me to reinvest the dividends, however I still receive the payout, of course. The dividend lowered my per-share cost -0.50% from $18.00 to $17.91.

From here, my next buy target is $13.35, above the low Barrick saw in 2022, and my next sell target is $18.35, just below resistance of the high Barrick saw at the end of 2023.

Caterpillar (CAT): Strategy Update

Current Price: $366.43
Per-Share Cost: $314.97 (Unchanged since last update)
Profit/Loss: +16.34%
Allocation: 1.51%* (+0.15% since last update)
Next Buy Target: $303.12

Caterpillar (CAT) has exhibited incredible strength over the past month, rallying to higher all-time highs time-after-time. This strength has been identified as extending breadth in the market as investors move into industrials like CAT, particularly with its exposure to the growth in artificial intelligence.

Due to this, I’ve raised my next buy target from the $280s to $303.12, a past point of support and a key Fibonacci Retracement level.

Chevron (CVX): Dividend Reinvestment

Current Price: $157.74
Per-Share Cost: $144.00 (-1.06% since last update)
Profit/Loss: +9.54%
Allocation: 2.65%* (+0.03% since last update)
Next Buy Target: $139.67

Chevron (CVX) paid out its ample quarterly dividend on Tuesday, March 12, which, after reinvestment, lowered my per-share cost -1.06% from $145.55 down to $144.00. Given the significant strength Chevron showed at its low earlier in 2024, that will be my next buy target at a price of $139.67.

I will take profits in the position, but not until Chevron makes an attempt at its all-time high with my sell target $187.81 just below a key point of resistance CVX saw after it hit its all-time high of $189.68 back in 2022-23.

Costco (COST): Profit-Taking & Adding Back

Current Price: $732.63
Per-Share Cost: -$939.58* (-$739.49 since last update)
Profit/Loss: +310.15%
Allocation: 2.16%* (-1.83% since last update)
Next Buy Target: $676.89

* A negative per-share cost indicates all capital has been removed from the position and each share remaining adds the amount to the portfolio’s bottom line.

When Costco (COST) continued making new all-time highs and rallied with great gusto into earnings on Thursday, March 7, I decided to do something I never do – I dramatically reduced the position by selling 77.53% at $786.19 right before the market closed.

The sale locked in +156.19% in gains on shares I bought for $306.88 on May 11, 2020 and lowered my per-share cost -$3,203.22 from -$200.09 to -$3,403.31 (a negative per-share cost indicates all capital has been removed in addition to $3,403.31 per share added to the portfolio’s bottom line in addition to each share’s current value).

I love Costco – both as a shareholder and as a customer – but whenever the stock rallies into its earnings report, the news ends up being a catalyst for a selloff. As I was afraid, Costco disappointed and the stock sold off.

When Costco was in freefall on Friday, I added 10.93% back to the position at $739.09, locking in a -5.99% replacing some of the shares I sold the day before.  When Costco fell even further, I bought another 2.074% shortly before the market closed at $727.66, a -7.44% discount on some more of the shares I sold the day before.

The two buys gave me an average buying price of $737.25 and raised my per-share “cost” +$2,463.73 from -$3,403.31 to -$939.58. From here, my next buy price target is $676.89, above a past point of support, and I have no additional sell targets at this time.

COST is $732.63 as of this update, down -6.81% from where I sold at $786.19.

Crown Castle (CCI): Strategy Update

Current Price: $105.83
Per-Share Cost: $126.24 (Unchanged since last update)
Profit/Loss: -16.17%
Allocation: 5.58%* (-0.25% since last update)
Next Buy Target: $89.09

In the face of a rallying stock market, Crown Castle (CCI) continues to exhibit weakness, selling off quite a bit in the last few weeks. As a result, I’ve lowered my next buy target from around $100.00 down to $89.09, a past point of support from late 2023. I’m in no hurry to add to this position until it reaches lower levels.

Digital Realty Trust (DLR): Strategy Update

Current Price: $144.04
Per-Share Cost: $98.05 (Unchanged since last update)
Profit/Loss: +46.91%
Allocation: 4.72%* (+0.13% since last update)
Next Buy Target: $97.60

Digital Realty Trust (DLR) has held up decently well over the past month, though it is trading in a range between $135-$155. While, initially, I had planned to buy DLR above my cost basis, the questions regarding interest rates, inflation, and the potential for a significant market pullback has led me to lower my next buy target to $97.60, the next point of support under my cost basis at $98.05.

Microsoft (MSFT): Dividend Reinvestment

Current Price: $420.72
Per-Share Cost: -$53.35* (+0.17% since last update)
Profit/Loss: +342.98
Allocation: 2.26%* (+0.02% since last update)
Next Buy Target: $398.89

* A negative per-share cost indicates all capital has been removed from the position and each share remaining adds the amount to the portfolio’s bottom line.

Microsoft (MSFT) paid out its quarterly dividend on Thursday, March 14, which after reinvestment, raised my per-share “cost” +0.17% from -$53.44 to -$53.35 (a negative per-share cost indicates all capital has been removed in addition to $53.35 per share added to the portfolio’s bottom line in addition to each share’s current value).

Why did my cost basis raise after receiving a dividend?

Whenever all capital has been removed from a position, a dividend reinvestment adds more shares to the position, not more profits. So, the profit in the position is divided by more shares and raises the per-share cost even though the value of the entire position is also increased by the new shares from the dividend.

From here, my next buy target is $398.89, above a recent point of support, and I have no plans to take profits from this amazing investment at this time.

Pepsico (PEP): Strategy Update

Current Price: $175.01
Per-Share Cost: $96.62 (Unchanged since last update)
Profit/Loss: +81.13%
Allocation: 3.96%* (+0.05% since last update)
Next Buy Target: $155.97

Pepsico (PEP) saw a significant pop after analysts raised price targets on the stock and reiterated the company as a strong buy in mid-March. Despite this good news, I am sticking with my buy target down at $155.97, PEP’s low from last October.

I can’t shake this feeling that the market is due for a substantial drawdown, and I feel Pepsico could likely see that price again in the near future.

iShares Silver ETF (SLV): Strategy Update

Current Price: $22.75
Per-Share Cost: -$4.00* (Unchanged since last update)
Profit/Loss: +96.11%*
Allocation: 0.56%* (+0.03% since last update)
Next Buy Target: $20.15

* A negative per-share cost indicates all capital has been removed from the position and each share remaining adds the amount to the portfolio’s bottom line.

Despite gold rallying to new all-time highs, silver (SLV) hasn’t seen a similar pop, still around -50% below its all-time high. While it did rally some over the past month, it started giving back some of those gains toward the end of this month.

Accordingly, my next buy target is $20.15, a low silver last saw earlier in 2024.

Union Pacific (UNP): Strategy Update

Current Price: $245.93
Per-Share Cost: $245.50 (Unchanged since last update)
Profit/Loss: +0.18%
Allocation: 1.01%* (-0.07% since last update)
Next Buy Target: $212.50

After initially popping following my opening buy at $245.50 last month, Union Pacific (UNP) rolled over and sold off below my cost basis within the last week. Reviewing UNP’s past price action shows the stock regularly pulls back 15-30% so I’ve lowered my next buy target to $212.50, a past point of support less than -18% off its recent high.

Waste Management (WM): *Profit-Taking*

Current Price: $213.15
Per-Share Cost: -$4.89 (-$39.84 since last update)
Profit/Loss: +190.52%
Allocation: 1.76%* (-0.39% since last update)
Next Buy Target: $187.89

* A negative per-share cost indicates all capital has been removed from the position and each share remaining adds the amount to the portfolio’s bottom line.

Waste Management (WM) continued rallying on Monday, February 26 pushing deep into overbought territory and making new all-time highs, so I decided it was time to remove the last of the capital from the position.

My sell order sold 18.64% of the position at $208.87, locking in +82.26% on some of the shares I bought for the $114.60 on January 15, 2021. The sale lowered my per-share cost -$39.84 from $34.95 to -$4.89 (a negative per-share cost indicates all capital has been removed in addition to $4.89 per share added to the portfolio’s bottom line in addition to each share’s current value).

From here, I will start adding back to the position at $187.89, a bit above the 50.00% retracement from Waste Management’s recent move from its October 2023 lows to its all-time highs. With all capital removed from the position, I have no plans to take any additional profits at this point as I wait to see where WM goes from here.

WM is $213.15 as of this update, +2.05% from where I took profits at $208.87.