271,000 jobs were created in the United States according to the Bureau of Labor Statistics. This data point far exceeded Wall Street expectations of 181,000 non-farm payroll additions. The market reaction was rather blasé. That is except for high dividend paying stocks which got taken to the woodshed for fear that now, finally, the FOMC would raise rates come December. Enough already with the rate rise fear. It will happen, we all know that, but these periodic tantrums that the markets throw is just plain stupid.
Over the weekend, Weyerhaeuser (WY) agreed to buy Plum Creek Timber (PCL) for 1.60 WY shares per 1 PCL share. As it turns out, we hold PCL in our Low Volatility / High Dividend strategy. That stocks yields 4.37%. PCL was one of those stock that got clobbered on Friday, by 1.90%. Based on Friday’s WY closing price of $30.40, PCL should rise in value by 21%. However, we know that it will be somewhat less as arbitrageurs will short sell WY a little. Still, it will be a nice lift to the Low Volatility / High Dividend Portfolio, our fastest growing client strategy. So much for fear of rising rates.
Late Friday, Berkshire Hathaway (BRK/A) reported its quarterly results. Thanks to Warren Buffett’s financial engineering of Kraft Heinz, Berkshire Hathaway recorded a $6.8 billion pre-tax and $4.4 billion after tax gain on the Kraft – Heinz merger. This hid weakness in Berkshire Hathaway’s main insurance business and large declines in the company’s holdings of International Business Machines (IBM), American Express (AXP) and Wal-Mart (WMT) this year.
Today I will be on Bloomberg Radio’s Taking Stock show at 3:45 PM. You can tune in on WBBR 1130AM New York, Bloomberg 1200AM and 94.5FM-HD2 Boston, Bloomberg 960 AM and 103.7 FM-HD2 San Francisco, Bloomberg.com, and Sirius/XM channel 119.
Disclosure: At the time of this commentary Scott Rothbort, his family and/or clients of LakeView AssetManagement, LLC was long PCL — although positions can change at any time.
Scott Rothbort is the President & Founder of LakeView Asset Management, LLC, a registered investment advisor specializing in high net worth private wealth management. For more information on investing with LakeView Asset Management, LLC call us at 888-9LAKEVIEW or request more information by clicking on the contact button on the top right hand corner of the website. LakeView Management, LLC is a Nevada LLC, with its principal office located in Henderson, NV and branch office located in Millburn, NJ
Scott Rothbort is also the publisher of the LakeView Restaurant & Food Chain Report, a newsletter focusing in on food, restaurant, beverage and agricultural stocks. An individual subscription to the newsletter can be ordered at www.restaurantstox.com Furthermore; Scott is also a professor at the Seton Hall Stillman School of Business in South Orange, NJ.
– Read Scott’s intra-day thoughts and comments on Scutify for which he is a co-founder of its parent company Wall Street All-Stars, LLC
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