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The month that was:
November was the best month of the year for the stock market. The Dow went up by about 7.5%, the Nasdaq went up by about 6%, and the S&P 500 went up by about 5.7%. Small companies did even better, as the Russell 2000 went up about 11%.
On November 5th, Donald Trump won the presidential election, and Republicans won control of the Senate and the House. The next day, the Dow jumped about 1,500 points, its best day in two years. Investors expect Trump to cut taxes and reduce regulations, which could help company profits, especially for banks and small companies. On November 7th, the Fed cut interest rates by another quarter point, to between 4.5% and 4.75%. Later in the month, the Dow closed above 44,000 and the S&P 500 closed above 6,000 for the first time ever.
One worry is tariffs. Trump has promised to put tariffs on goods from other countries, including China, Mexico, and Canada. Tariffs could make some products more expensive and could hurt companies that sell a lot overseas or make their products in other countries.
This month, one of the companies I bought, Celanese, cut its dividend by about 95%. As I have explained before, I like companies that raise their dividends every year, because it shows that their profits are strong and growing. When a company cuts its dividend, it is usually a sign that it is struggling and needs to save cash. Celanese makes chemicals used in paints, cars, and many other products, and it borrowed a lot of money to buy another company in 2022. With sales slowing down, it decided to cut the dividend to pay down its debt. The stock fell about 26% in one day.
Buys -
Bought 5 CE at $90.99
I bought Celanese on the day it fell, because I thought the drop was too big. Looking back, this was a mistake, since a dividend cut is exactly the kind of warning sign I usually try to avoid.
Bought 24 PINS at $34.33
Pinterest is a social media app where people save ideas for recipes, outfits, and home projects. It has been growing its users and its profits, and the stock was at a low price, so I started a new position. However, the day after I bought it, Pinterest gave a weak forecast for the holiday quarter, and the stock went down about 14%.
Bought 9 SNOW at $128.70
I bought Snowflake back right before it reported earnings on November 20th. Snowflake's sales were much better than expected, and the stock jumped about 32% the next day!
Bought 4 CROX at $105.73
Crocs makes the famous colorful rubber clogs, and it also owns the HEYDUDE shoe brand. Crocs is very profitable, and the stock had come down a lot from its high, so I started a new position.
Sells -
Sold 5 BROS at $46.11
On November 7th, Dutch Bros reported great results, and the stock jumped about 28%. I sold a few of my shares for a profit of about 37%, and I am keeping the rest.
Sold 85 PFE at $26.10
Pfizer went back down after I bought it in July, and I sold my shares for a loss of about 15%. This was my second time losing money on Pfizer this year. I have learned that a high dividend is not a good enough reason to own a stock if the business is not growing.
Sold 2 HSY at $174.11
I sold two of my Hershey shares for a loss, because cocoa prices are still very high.
Buys and Sells -
Bought 7 DG at $81.62
Sold 7 DG at $78.59
Bought 25 VIK at $45.70
Sold 25 VIK at $44.15
I made two short-term trades this month. Dollar General's stock has gone down to its lowest price in years, and I bought a few shares. Viking Holdings runs river and ocean cruises. Both stocks went down after I bought them, and I sold them within a couple of days for small losses of about 3% to 4%. Short-term trades are hard to get right, and I want to be more careful with them.
Thanks for reading my newsletter!