Buying Union Pacific (UNP) and Enjoying the Ride

Posted on Sep 17 2015 - 2:35pm by Sharpe Trade

(We continue from previous ‘Sharpe Income’ posts here, while this particular entry discusses what occurred after the FOMC statement of September 2015)

Again, we are not surprised.

My biggest carry away from the Fed statement is that yes … they will take the world economy into account when considering whether or not to take action.  It is not a simple matter of employment metrics.   Which does fit with their mandate.  If global conditions meltdown, I’m sorry, but I don’t think in today’s world you could expect to see a whole lot of inflation in the United States economy.

And so …  here are the actions we are taking …

Sharpe Income … we are using the money reserved in the project, and purchasing Union Pacific (UNP) at current market prices.  Again, this is only for the Income side of things.

Clients of The Sharpe Report … we can just sit back, and enjoy this action.  There is no reason to adjust that hedge. Yet.

Clients of our ‘Mastering Markets:  Valuation Investing‘ product … check the sample diary …

(We continue with ‘Sharpe Income’ posts in the following entry …)

4 Comments so far. Feel free to join this conversation.

  1. NewLife September 17, 2015 at 4:37 pm - Reply

    I wasn’t even aware of you valuation class. Looks awesome.

    You’re confident enough to purchase a long term position,which is great, but how did just today’s new and moves affect your thinking? I ask only cause my stance on market direction is still neutral/confused.

    • Dan September 17, 2015 at 7:23 pm - Reply

      At the moment, I’m bullish, apt to change. But in the right now … things look nice on the upside.

      However, I should clarify that buying Union Pacific (UNP) for Income and any valuation purchases that are made are completely indpendent of the market direction for say, the next 4 months. It’s one of the nice things about valuation investing, and income purchases. I don’t have to worry about what the market is going to do 5 months from now.

      🙂

      D

      • NewLife September 17, 2015 at 8:52 pm - Reply

        Can I assume you mean, at least partially, that a significant amount of risk will be offset by dividend payments?

        • Dan September 17, 2015 at 9:10 pm - Reply

          Ehhhhh … that’s one component. So yes, dividends are ONE part of it. But another component would be the non-correlated strategy I run within the account. Another component would be a metric I use, to tell me how many positions to have on, and how much cash to have. Another component would be … how OFTEN I make a purchase.

          Put all of those factors together ( (dividend / non-correlated strategy in the same account / how many positions are had and how often, in relation to —> / and the cash kept in the account that stabalizes the account ) ) and where the market is at is sort of irrelevant. 🙂

          D

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