Bert’s Recent Buy – EMR…too

Yesterday was a very fun day for me as I quickly went from a passive trader who was standing to the sideline in a matter of minutes.  My purchase on Friday shared a lot of parallels with a situation from a month or two ago, which resulted in learning a valuable investing about always having a watch list prepared.  The best part…the result was different and I couldn’t be happier.  See why I purchased Emerson Electric (EMR) yesterday.

EMR Logo

I won’t go into too much detail about why I purchased Emerson Electric because the stock has been getting a lot of coverage on our website recently.  Heck, Lanny loved the metrics to the point where he also purchased the stock this week (If you want the most up to date metrics, check out his purchase article).   Shortly, EMR has  current dividend yield north of 4%, has a long track record of increasing their dividend (58 years), has a payout ratio below 60%, and has averaged a 5% dividend growth rate over the past five years.  What’s not to love about this Dividend Aristocrat?

To me, buying Emerson on the company’s slide is a given considering the strong fundamentals listed above, our stock analysis from a few months ago, and the fact the company passes of Dividend Stock Screener with flying colors.  Great company, strong yield, great fundamentals.   The best part of this purchase was…you guessed it….the story behind the purchase.  Come on, do you think each stock purchase is made by having a perfect plan, logging onto the website, and simply executing the trade?  Heck no!  The stock market is volatile (especially recently) and can have sudden swings that throw curveballs at us investors.

On the day I purchased Emerson, my fiancé and I were flying to St. Louis to visit her old college roommates and meet their newborn children.  I hadn’t been to St. Louis in 3+ years, so I was excited to visit, explore the city, and re-unite with the gang.  Our flight landed at 8:40 AM central standard time, just a few minutes after the market opened.  I turned on my phone and had a few text messages from Lanny (are any of you surprised?) letting me know that the stock market was dropping right out of the gate. 

Does this story sound familiar to any of you?  For me, I felt like I was in déjà vu from a month ago when the stock market suddenly dropped and I learned that lesson about having a watch list prepared.   What happened a month ago was shocking, as I received a text message from Lanny letting me know that the market was falling. Instead of buying a stock, I froze in place since I had no idea where I wanted to spread my capital.   After this episode, I promised I would never let this scenario happen again and constructed an “Always Buy” watch list so I had a list of five stocks readily available in the event the market suddenly dropped again.   One of the stocks on this watch list was, you guessed it, Emerson Electric.

So this time, when Lanny texted me that the market was sliding, I knew how to react and which five stocks I would potentially purchase.    I opened my investing app and noticed that Emerson had the largest decrease of the five stocks on my watch list and just like that my investing decision was made. I was ready to purchase a stock within 30 seconds.  But this story also required some luck since I was not using Sharebuilder’s automatic purchasing option that allows users to purchase fractional shares.  Obviously I wanted to receive the highest number of shares possible, who wouldn’t?  When I received Lanny’s text, I had enough capital to purchase 26.95 shares of EMR.  In an angry manner, I began setting up an order that would automatically execute at the price that would allow me to purchase 27 shares on my phone and the trade executed within seconds as EMR’s price continued to fall.  Just like that, I increased my position in EMR by 27 shares and added $50.76 in forward dividend income to my portfolio.  Now, I own 65.6076 shares of EMR, which is projected to produce $123.34 in annual dividend income.  All in all, the purchasing process took 5 minutes.

I’m lucky.  Rarely do we get the opportunity to turn a negative experience into a positive one as quickly as I just did.  Building that “Always Buy” list was huge for me as it allowed me to act quickly and decisively.  I didn’t have to waste valuable time researching the best investing option to determine which stock  I should purchase, and that made all the difference between capturing a downturn or missing it (as I did last month when I exited my meeting and the stock market had rebounded).  Hopefully you all enjoyed the story behind the purchase as much as I did and liked the purchase itself.

Do you have any “Always Buy” stock list?  Did any of you purchase stock this week? Are you considering purchasing EMR? If so, which company did you buy?  If not, are you waiting to see what the market has in store for us?  Are you currently watching any companies?

-Bert

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11 thoughts on “Bert’s Recent Buy – EMR…too

    • Thanks Mike. With how quickly the market changes, I don’t think you can ever be too prepared. Putting together a watch list of stocks that I will always want to buy in the short term (I plan on updating that list annually or if a stock falls out of favor) was a game changer for me. Now I am ready to act quickly and decisively if needed.

      Nothing can stop any of us if we keep our focus and keep clawing away towards financial freedom. Let’s keep on rolling!

      Bert

  1. Good story Bert, must have felt awesome seizing that opportunity right there on the spot. Unfortunately I’m not looking into adding more EMR at the moment, but I wouldn’t be surprise if I came around for some more EMR in a couple of month. At the moment I’m looking into buy some JNJ (I know super exciting..), but still exploring other opportunities.

    Have a good day!
    – mraitn

    • Mraitn,

      The smile on my face in the airport was ear to ear after executing the trade! You can’t go wrong with JNJ, it is another one of my always buy stocks and I would love to add more as well. The best investing decisions are sometimes the most boring, and I wouldn’t have it any other way. Keep us posted with what investment you decide to purchase.

      Thanks for stopping by. Have a great evening.

      Bert

  2. Bert,

    Nice move there. Great job capitalizing on an opportunity!

    I also added to my EMR position today after watching it slide fairly heavily over the last few days. I’m now completely filled up on this name with 105 shares. But I feel really good about loading up one last time here in the mid-$40s with that 4.2% yield. Looking forward to profiting alongside you for years to come. 🙂

    Cheers!

    • Jason,

      You had quite an active day in the market today. Adding UTX, MMM and EMR? I like your style here. You aren’t messing around with a 105 share position, holy cow. That produces you $197 in forward income annually and almost nets you five shares after DRIP. Are you kidding me? I couldn’t think of a better company to own such a large stake in. Let’s ride this sucker all the way towards financial freedom!

      Excited to see what changes you have in store for all of us. Keep on grinding and clawing your way towards FF my friends. As always, thanks for stopping by and the kind words.

      Bert

    • Hustler,

      Sometimes mistakes provide us with the best lessons. It is an unfortunate but necessary part of the process. I am just lucky that this mistake didn’t hurt me financially. Couldn’t be happier with this purchase and I’m excited that this stock is become a pillar/foundation stock in my portfolio.

      We all are going to have some great times ahead, right? Let’s keep on pushing and striving for financial freedom.

      Have a great evening!

      Bert

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