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

To: Grommit who wrote (44786)	10/4/2011 10:27:56 AM
From: E_K_S	Respond to of 78665

Hi Grommit Thanks for reminding me to look at KMB. No longer close to it's all time high. I was looking at peeling off some shares and moving the proceeds into some of these deep value buys (Gov trading under $20.00). I am trying to pick up another lot of GOV now yielding close to 8.5%. Fortunately, I have a good chunk of money stashed away at Vanguard in their GNMA fund. I just moved a portion to the brokerage account (it takes 3 days through ACH transfer). I agree w/ you that this could be a long (several month) drawn out move to the down side so my new buys have to be done with patience and in small amounts. The other strategy I am looking at is to peel off shares from my profitable high dividend paying stocks (several are near highs and have stalled out from moving higher) and move the proceeds into beaten down multi year low dividend payers many which are selling at 10PE or lower. For example I am looking at selling some VZ and/or T and buying some of the many REITs that have been discussed (COR, GOV, DLR). The idea is to maintain the portfolio dividend stream but have a better capital gain grower. My backstop for parking money into preferreds is not working today as the MHR series is dropping to the point where I s/d be buying more and the series C is now $1.00 below PAR. The D's are yielding more than the C's. Much of the 3%-8% moves in these is due to the lack of liquidity and a few holders liquidating for "fast" cash. I plan to be moving some more funds into these and selling at some what higher levels with a market rebound. This works fine as long as the underlining companies remains sound. It's a fun market as there are a lot of opportunities to make money and refresh the portfolio with a lot of good value positions. It's just a bit frustrating that next week the value buys may be a better prices than I am getting today. FWIW doubled up my losing position in Fibria Celulose S.A.(NYSE: FBR ). Company is impacted by the strong Brazilian Real and even as the company reduces their LT debt, they still are leveraged more than I would like to see. This one goes into my AG basket. EKS

To: Grommit who wrote (44786)	10/7/2011 2:16:52 AM
From: Spekulatius	Read Replies (2) \| Respond to of 78665

I decided that the market will drop for awhile longer. Duh, what took so long? So I sold a lot of stocks to raise cash, and I will try my hardest not to buy anything for at least a month. If I am wrong, that's OK. I am starting to reduce my risk exposure, in particular oil stocks. This is not a valuation call but a macro call - I do not feel that good about the market either. We had a growth scare in 2010 but this time feels different. My concerns: Austerity moves in Europe and US will suppress growth ECRI report points to recession (priced in?) Europe (partly priced it but may get worse). China - slowdown and possible credit crunch The latter could become a big deal and is not priced in. A moderate slowdown probably is but some reports seem to indicate problems in financial system that could have serious consequences, imo. The problem is the shadow banking system that seems to drive the hot real estate market and keeps companies alive that would go into bankruptcy in other countries (China does not have a bankruptcy as we know it). While this shadow banking system may not be a problem by itself, it seems that the shadow banking system itself obtains it's funding from the regular financial system via trusts that are owned by life insurance companies and regular banks. The exposure at this point is unclear and that is what scares me. If regular banks get associated with this and hold bad paper, we could get into a 2008 post Lehman type situation starting from China. Experience shows that it will probably radiate out from there and might be hard to contain. I am not stating that it is bound to happen but it's a significant probability and will cause considerable downside. Looking at the supposedly safe Chinese bank stocks it occurs to me that something does not smell right: finance.yahoo.com I am not selling indiscriminately, but I decided to reduce my exposure to the energy sector on this upward move and particular those stocks that I have been overweight in. I expect at least more of a See-Saw market with opportunities to play volatility and in the worst case another leg down.