I got my flu shot but it didn't keep me from catching the greed bug-
I am way too anxious to commit funds to capture benefits of the rising market. That's often been a scary time for me.
Also, a corollary is that I'm furious with myself for missing easy and quick profit runnups -- Lyondell from 16 to 22, Aetna from 66 to 80, Cooper Vision from way under 20 to over 27, and many others --- daily march upward - almost straight up. Which of course builds on the feeling that it's a heck of a lot better to just buy something than be in cash -- this is the time to be making money. Especially with so many -- maybe almost everything - moving higher.
One switch I am noticing is that it seems that with many/most of the stocks I am watching, if the company now announces unexpected bad earnings, the stock doesn't get hammered as it seemed to midyear through early Oct. Some companies even rally -- as was the case with many companies before the June/July market breakdown.
Right now, I am finding it hard to step up and find stocks I like at prices I will pay.
I am looking at the health care sector because it's out of favor and because there's maybe a fear that with more Dems in Congress, Pres. Clinton will push for and maybe get, healthcare legislation/reform. So far, I've added to my position in SHG (p/bv = .78, psr= .12) and initiated a position in GHV (p/bv = .64, psr = .32). As the population ages, the demand for eldercare services should increase. And somewhere along the line, maybe the prices of these provider companies will too.
Today I've gone back and bought more of Mike B's recommended MWY. Seems like insiders are increasing their buying, so I have too. It's a risky company IMO- big profits depend on hits-- and, like the movie biz., that is often random. Plus, there are a lot of these kinds of companies out there. Still, we have a pe of 8 (assuming they can maintain earnings), a large number (several hundred) probably very good technical people, and Sumner Redstone controls the business. This stock has not moved up (from its lows) in the current market-- but it could.
I've also started a tiny position in Catellus Development (CDX)this week. They are big property owners and developers in California. Stock's up about a $1 from my buy point. Chose CDX after I noticed good 'ole JOE starting to move. (And it was from 20 to 26 and I missed it yet again!) These real estate companies were mentioned by fund manager Leon Cooperman in Barron's about 2 weeks ago.
I've also added Tue. to my position in Schlotzsky's (symbol BUNZ -- I notice it was incorrectly reported by me as BUNS in my first mention of it). Given the price near book, the reasonable-for-this-market pe, the repeating stream of earnings from being a franchisor, the apparent popularity of the food (my subjective and unqualified opinion), and my guess that they can replicate their model, plus there's no on-the-books long term debt-- I think it's worth it to increase my bet on the expectation that the stock will move up from current lows.
Paul Senior |
