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Strategies & Market Trends : Value Investing
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To: Spekulatius who wrote (32160)9/25/2008 9:58:13 PM
From: E_K_S  Read Replies (3) of 78704
 
Hi Spekulatius - I was lucky as I sold all of my WM and C to book a small tax loss late last year (Dec 2007). I put most of the proceeds into the Financial Select Sector SPDR (XLF) (which pays a pretty good dividend) but now I have a 25% loss which I hope to recoup longer term.

What banks finally survive will probably be profitable. It will take quit a bit of time before any type of lending activity gets to where it was in the past few years. That is why I plan to close my long term position in NYB (my only bank company in the portfolio other than XLF). This is one of my top 5 holdings representing 5% of the portfolio. I have a small gain at current prices but think I can find a better place for the money.

I am concerned that any new lending (where available) will require higher lending requirements and be more difficult to obtain. This will slow overall economic growth.

Companies that can organically grow using their strong balance sheet and excess free flow cash should be good value targets. These types of companies generally include software and service companies. HWP purchased EDS which added significant cash flow to their balance sheet.

I am going to try to identify companies that do not require any outside financing to grow their business. I plan to also look at those companies that are buying back their own shares.

Some of the names on my watch list include MSFT and ORCL.

Any ideas?

EKS
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