I'll just take cheap whatever the business. I think that Buffett companies have a long way to fall before they become attractive again as buys. They're just exiting "sell" range and entering "hold" range. Coke will fall to 60 and people will say cheap. Yeah, well, I thought it was overpriced at 50.
So for now I'm taking my own advice and looking within my own portfolio. I've added to Deswell, Telebras, General Cigar and Midway. Deswell and Telebras are completely falling apart. Barring an unlikely dividend cut thanks to Deswell's cash hoard, it now yields over 10%.
I also took new positions in Agouron, Incyte, and Tidewater.
Agouron - a premier biotech - is getting killed with the rest of biotech and now sells for less than 1.5X trailing sales as they explode upward. Incyte I've already discussed. Tidewater is simply the most debt-free, free cash flow-rich boat/oil services operator. In a downturn invest in the biggest, right? There's insider buying and a stock buyback.
For what it's not worth, now I have people telling me that the world is crashing and that people just don't understand. There were over 2 billion in outflows last week from stock funds. The headline in the local paper screamed "Meltdown!" and everyone is talking about the market crashing. I'm seeing people fleeing, which may do more technical damage, but I don't see the fundamentals in my stocks deteriorating as much as the change in market value would seem to warrant. I'm happy to pick up Brazil's telecomm system for 6 times earnings if people are willing to sell it to me.
Mike |
