What I Am Buying Today.

[EricL]

(10-25-2025, 10:30 AM)Dividend Watcher Wrote: Fair enough. I believe QCOM is slowly shifting their focus to more than phones. I'm willing to hold it for now. Our cost basis is so low that we can hold for now.

QCOM up 15% on announcement of AI accelerator chips. Another great example of why I shouldn't be a trader.

/smh

[Dividend Watcher]

LOL! I've made much worse mistakes.

They were pretty quiet during the development of this. Now they have to execute. Don't be surprised when it drops back to where it was. The market's been overreacting quite well lately.

Good luck on your new purchases.

[Dividend Watcher]

Well, I finally did something I've been toying with for the last year. I closed my position in John Deere & Co. (NYSE: DE).

It's been a great ride but here I am in my late 60's, retired and holding on to a position that has a dividend yield that hovers around 1.0% that hasn't been increased since last February (2025), a trailing P/E in the low 30's with an optimistic projected 10-15% increase in earnings for the next 5 years, and a trade war that's ongoing. Management has done a great job reshaping the company with AI and intelligent crop management along with expanding their turf & construction business. It's just gotten too expensive considering some of the other companies I'm building a position in right now.

I purchased my shares in 2013/2014 and have trimmed it 2x in the last couple years in the $300-400 range because it had gotten too big a share of my IRA. Today, I closed the position at $592 with a cost basis of $85. My Yield on Cost (YOC) was around 8% but, if I took the proceeds and invested in other promising companies paying around 3.3%, I could increase my dividend income from around $130/yr to approximately $360/yr. 13 years is a long time to hold on and if the yield was a little better, I probably would still be a shareholder. Yup, I'm sort of bragging. Then again, a couple months ago, I could have sold in the $650 range so maybe I'm not that smart. 

I know Warren Buffet and Charlie Munger would have encouraged me to hold onto my shares as Deere is an iconic manufacturing company but I don't have billions of dollars in my investment accounts to draw from. I am glad I was listening to them when Chuck Carnevale recommended selling when the price got up in the $160 range because the valuation had gotten ahead of itself back in 2018/2019. A double seemed appealing at the time but Deere's management was discussing a lot of their changes they were working on in that time frame.

Peter Lynch was right, you only need a few big gains to make up for a lot of mistakes.

So what did I do with the proceeds? Two companies that have taken a recent correction are ADP and ACN. I suspect they got thrown out of portfolios because of the fear of AI that's come to investors' attention right now. Both are yielding around 3.4%, P/E's are less than 20 and the payout ratios are 50% or better. Neither company has traded at such a low P/E and that yield for over a decade. Both have major investments in AI and have products already using the technology to increase productivity. I expect both to be able to come close to DE's projected earnings growth but the valuation is what tipped the balance. What I don't use to build those positions is put in a money market account until I decide what other changes I'm going to make.

[Kerim]

Sounds like a reasonable move, DW. I held DE for a while long ago, but exited the position -- probably way too early. But wasn't ever really enamored of it and never really felt like I understood its cycles. I'm going to take a closer look at ADP on your recommendation though!