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Strategies & Market Trends : Value Investing -- Ignore unavailable to you. Want to Upgrade?

To: Wallace Rivers who wrote (20046)	11/15/2004 11:04:11 PM
From: Paul Senior	Respond to of 78601

Lot to cogitate about regarding MLS and its discussion here. Discussion started maybe late '98. If I remember correctly, Jim Clarke liked Chelsea (CPG), and my preference was MLS. The stocks really didn't do that well for quite a while. Meanwhile though, the dividend yield was somewhere between 9 and 11% depending on when you bought (MLS). I looked at CPG several times over the years, and there never seemed to be a time when CPG was not the better performer. Chelsea was always the better pick and performer, if I recall. So I could've switched from MLS to CPG at any time and done better. More importantly, to my way of looking at stocks - I like to diversify, diversify - rather than pick one over the other, I could have and should have bought both. Which I've done with stocks in many subsectors, and so this practice is consistent with my operating style. But I wrongly failed to do this here. When a stock does rise after a long basing period, there's nothing like getting in and going for the ride. Although for me, I never can figure when that time is. With MLS, if there was a catalyst, I never saw it. Wallace Rivers captured a lot of the gain, 41-58 in six months, whereas those who bought (and held) from late '98 saw a rise from under 20 to 60 in about six years. The dividend's been increased slightly too I note, so the yield on original purchases of the '98 period is over 11% now. Timing is everything they say, and this situation doesn't contradict that. Anytime one can get 17 points on a 41 dollar stock in 1/2 year, that is a good time (assuming we're not in a superinflationary period). On the other hand, it doesn't negate the positive situation of tripling one's money over six years, and the addition of receiving a good dividend yield in each of those six years. So the lesson for me is that you had to get in the thing - or listen to Jim Clarke about his CPG or other choices -g- - and you had to hold on six months or six years. And, imo, you had to overcome the sneer factor of REITs - yeah they're basically dividend payers, they can be risky (1974-5 debacle?), and since they're not real capital growers (how can they be when they have to pay out 90% of their money?), so of course you'll not get much capital gain out of them. (I'm still surprised how they've performed.) For me, it's about having a propensity to diversify, diversify. It's a lot easier getting into such a stock and holding on to it - if only for the 10% dividend - if the stock is not a huge component of one's portfolio such that one constantly watches over it and frets over it or is bored with it or is tempted into taking gains and trying something else with the proceeds. In the same vein, we could have a similar discussion about LHO, a non-dividend real estate stock Jim Clarke and I both liked back in those same days. Stocks bought properly - or maybe only somewhat right - where management is given enough time to bring results to the bottom line - or the market perception changes ---just a few of those stocks can add value to a portfolio and provide some balance to otherwise risky or concentrated holdings. Jmo here, and the fact that some of these stocks are now at five year highs doesn't really justify my argument, but it sure makes it easier for me to speak my opinion with some conviction - wrong though I might be -g-. finance.yahoo.com finance.yahoo.com finance.yahoo.com