IB Net Payout Yields Model

Trade: Sold Caterpillar

Catching up on trading from yesterday. Trimmed half our position in Caterpillar (CAT) in the Net Payout Yield Portfolio after a weak reaction to a positive earnings report. Also after the huge run and the lack of a buyback implemented by CAT leaves the NPY at only 2.4%. This is not significant enough for this portfolio so discipline requires us to sell.

CAT has been a long term holding of the portfolio, but the gains in the stock and the limited payouts suggest the stock may be topping. Not to mention the negative action in the stock from bullish earnings. From the chart, its apparent that at least the short term action is negative.


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