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Strategies & Market Trends : Value Investing
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To: CusterInvestor who wrote (44791)10/4/2011 2:30:59 PM
From: E_K_S2 Recommendations   of 78670
 
High CusterInvestor - It's not worth paying the premium for SRV IMO. To do a profitable trade you need to time the bottom of the Oil price drop (not exactly) so you can participate in the reflex rally. By approaching this from a value perspective, you have a bit more safety and flexibility with TPZ (because of their low use of leverage) and you typically are buying at a discount to it's NAV. Therefore there is more of a "level of safety" to the TPZ buy rather than the SRV buy.

I always try to error on safety and value. If I have to stay in the trade longer than I expect , I was able to buy in at a discount to NAV that generates a good yield so it can be held if the market freezes up. There is less risk in holding a fund than a specific stock so you are not going to have the dividend disappear either.

It's still a bit early for a TPZ trade but one to watch in the next few days or weeks.

EKS
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