Title: value investing in the downturned markets
Hi all. I'm new to the forums, and an investing novice, being in the markets for about a year. I started my investing with heavy positions in BP after the DH disaster, which paid off well, and MO, which paid consistent dividends. I sold my positions last week to prevent losses prior to the government debt ceiling announcement. Right now I'm holding GLD, with the logic that many investors will panic and put money in GLD, driving the price up. I also hold a small position in CCJ after the Japan quake but its not recovered. I had considered selling it off but did not, for it makes up for such a small percentage of my total investments that a loss is not a big deal, and that I believe it will rebound.
As it stands, much of what I'm doing right now is just psychological contrarianism not deeply rooted in value methodology - that's what I'm here to learn more about.
I've read Intelligent Investor, Black Swan, Style Investing, Stock Market Genius and Little Book. Currently onto Security Analysis.
So after that introduction, I'm wondering what everyone is doing now that the markets are tanking. Good values are likely to be had in many places.
What's the thought process in finding value stocks? So far what I've been doing is going through the Google screener, looking for low PB ratios and/or good div yields and researching the companies. Most of the good div yields are REITs which I am not going to touch, and the rest have bad dividend histories or are venus flytrap companies (MAIL comes to mind). Terra Nitrogen had a good div yield and seemed pretty healthy but its a weird structure that I don't understand - its a corp owned by a bigger corp(CF holdings), and it has one factory that sells all of its products to the bigger corp. Why would a company do that? So I'm still reading the annual reports...
What else should I do, and where else should I look, when searching for and evaluating value stocks?
Any thoughts? |
