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Brown Bag Portfolio April 2020 Review

May 04, 2020 1:13 PM ETECC, OXLC, PPL16 Comments
Michael Hesse profile picture
Michael Hesse


  • The market's improving, but we still have a long way to go.
  • I continued to buy throughout the month.
  • How the BBP performed during April.

My son commented the other day that one day he’ll tell his children about the great pandemic of 2020 and describe being holed up in his apartment for 2-3 months while he worked remotely. I commented that I’ll be telling my grandchildren that I went to work. As an “essential worker” life hasn’t changed much for me, although now I’m wearing gloves and a mask as I go about my day. The company that I work for isn’t paying us bonuses, or granting us hazard pay or doing much of anything in order to support the technicians that generate most of their revenue. However, I’m grateful that I’m still working while so many others are not. Perhaps when this crisis is over, I’ll find a better position with a different employer. Perhaps not, we’ll all have to wait and see how quickly the economy recovers and what the new landscape looks like.

Things will change, I’m sure of that. Over the next several months I expect to see companies reopening, but with new protocols in place. I’d expect that we’ll all be wearing masks for some time, temperature checks before entering facilities, and that we may see periodic flare ups of the virus and tremendous strains on some of our supply chains. Hopefully, critical industries such as biopharma will move factories and sourcing out of China and back to the United States as it becomes more and more obvious that outsourcing our manufacturing capabilities to an authoritarian nation that has been credibly accused of utilizing slave labor, religious persecution, and ethnic cleansing, isn’t a smart long term economic plan, even if it does save a few dollars along the way.

However, whether or not the Defense Protection Act is used to order companies to return to the US or whether those

This article was written by

Michael Hesse profile picture
I'm a field support analyst for a large information technology company and author. I am primarily interested in building a strong dividend-oriented portfolio to supplement my income when I retire.

Analyst’s Disclosure: I am/we are long DOW, BXMT, EPD, T, EPR, MAIN, BP, NEWT, PPL, ECC, OXLC, NRO, GLO, IVH, JQC. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.

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Comments (16)

How about jumping into ARCC?
Gerard Kaman profile picture
I own OXLC. The dividend cut or suspension, whatever the case may be, was off set by President, Saul B. Rosenthal, $195,800 purchase of OXLC, buying 20,000 shares at a cost of $9.79 a piece. So what is the real story behind OXLC?
Moriarty profile picture
Thank you Michael for the thoughtful comments.

I believe our investment strategies are similar – very much an incremental approach. Unlike you I have no tolerance for ragged numbers of stocks (arising from drip purchases), but I do like to add incrementally, especially where stocks are out of fashion but I believe them to be essentially well-run. Last month I added 245 NRZ and I’m delighted to see the news today.

I look forward to future articles – hold on to what you believe!
As always enjoyed your article.
I too have a position in EPD,and I would recommend ABBV as I believe that it is a good company. Hope the best for you . Stay the course.
Michael Hesse profile picture
@stock wader Thanks for reading and commenting. I may purchase more EPD, although I'm already quite heavy on that one. I agree it's a good long term hold. ABBV also looks like a good position to start soon
oxlc just suspended its dividend.
Michael Hesse profile picture
@craigcmu well that sucks! Hmmm will have to do some thinking....will probably hold and see if things recover
I have only seen that they MAY suspend. You saw something different?
Michael Hesse profile picture
@Mawyai I've checked everywhere I can and agree, I only see MAY suspend. It wouldn't surprise me at all if they lower the dividend, but I think suspending it would be drastic. I think after further reflection that this is one that I'll just hold and hope it recovers. I didn't plan on actively adding to it in either event.
Thanks for the article! You have a decision to make on oxlc after their earnings and the div outlook. Best of luck to you!
Michael Hesse profile picture
@Fryloc77 yes I do...will have to give it some thought...
I've always enjoyed your reports especially since we have so many in common. The only buys I have done in the last few weeks are EPD, since I firmly believe the dividend is safe and the yield has become better than just respectable, and the preferred for CEQP. I did that because I believe Crestwood is situated well enough to make it thru this crap and so I don't have to face more dividend cuts or elimination altogether I decided on preferred route. It has paid off with my best buy just 2 weeks or so at $3.65 yielding over 22% and the unit cost has gotten into the mid $6s but still yield well above it's 9.25% issue rate. I will continue to add.
Michael Hesse profile picture
@Mawyai thank you for the comments. I think EPD is an excellent long term hold.
Nate the Great profile picture
MH - Staying the course seems like the best option. I think the bottom is in and we'll likely slowly mosey our way back to previous levels as we open up and folks cautiously emerge. Thank goodness we can nibble without commissions! I think the biggest issue is how the oil patch plays out....it's a big sector for me (though not so much for you) and the RDS cut was a bit of a shock. There may be some opportunity there for you!
Michael Hesse profile picture
Thank you...I agree...seems best to stay the course
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