Plum Creek Timber - Low Volatility, High Yield

Roger Nusbaum submits: I had a comment in response to disclosing owning Plum Creek Timber Co. Inc. (PCL) to capture lumber, and due to its low correlation to the stock market. The reader noted some analysis that says the stock is unlikely to do much in the next twelve months. The analysis cited could be correct; time will tell.

But the bigger theme is the role that all holdings play. PCL has been in the mid-$30s the vast majority of the time I have held it. It pays a high yield and does not move (for the most part). This is exactly what I want it to do. I have other holdings that yield a lot and don't move. Other names do move. Things like industrials, energy, a couple of consumer names and a few other places is where I expect most of the growth to come from.

The utilities, the other more traditional REIT I own, and a few other of my holdings—I hope will be steady and dividend paying. One thing I think I do well is blend together stocks that do different things in such a way that the overall portfolio is usually very predictable. The anecdote mentioned above might be an example of what I mean.

If I am accurately assessing this it is due to something I have talked about many times, which is watching how stocks react to all sorts of different news to learn what the stock is capable of. I don't think learning the fundamentals alone is enough.

PCL 1-yr Daily Chart