Purchased 114.9557 Shares of Union Pacific

From my Lessons Learned article posted a few days ago, I stated that I needed to have greater dispersion with my buy/sell trigger points in my model. Last year I wrote that my buy/sell triggers for Union Pacific were a 17% market price decrease from the prior peak and to sell at 100% of prior peak. This year, I reset those points to:

  • Buy Point – 18% market price decrease from prior peak
  • Sell Point – 102% of prior peak

On 10/16/2020 around 2:40PM the market price peaked at $210.95 per share. This means my buy/sell points are as follows:

  • Buy Point – $172.98 
  • Sell Point – $215.17

At market opening this morning, the price dropped past the $172.98 to a low of $171.66 at 10:01 AM. However, my orders are prearranged and thus, I purchased 114.9557 shares of Union Pacific at $173.98/share including trading costs of $1 per share. Thus, I now have a $20,000 position with Union Pacific.

Altogether, the Value Investing Fund has two pools currently. The REIT pool has $60,000 invested over 3 stocks and the Railways pool has $40,000 invested between Norfolk Southern and Union Pacific. None of the other four railways are close to the preset buy/sell trigger points.

As of this morning (11:30 AM), the Value Investing Fund has the following values:

REIT Pool                               # of Shares                    Cost Basis              FMV
– Equity Residential                    574.459                        $30,000             $26,654.90

    – Essex Property Trust             48.9644                         10,000                 9,695.93
    – UDR                                    606.9803                         20,000               18,355.08      
       Sub-Totals                                                                 $60,000             $54,705.91
Railways Pool
     –  Norfolk Southern                98.2849                         20,000                19,849.62

     – Union Pacific                     114.9557                         20,000                19,880.44
        Sub-Totals                                                                $40,000             $39,730.06
        Totals                                                                     $100,000             $94,435.97

In addition the fund has $330.40 in the cash account for the PUTs sold on Union Pacific for $170 per share. 

Altogether, this appears not so good; in effect the fund is down $6,000. Its OK though; again, I remind readers that with value investing, the key is to maintain patience. The underlying business ratios tell me that the respective prices will recover to their prior peaks within a reasonable period of time. Now it is just a matter of waiting. Act on Knowledge.

© 2020 – 2022, David J Hoare MSA. All rights reserved.

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