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

To: J Mako who wrote (45188)	10/27/2011 9:37:25 PM
From: Jurgis Bekepuris	Respond to of 78468

I don't value the whole market. You may be right about Shiller PE though I think it may be somewhat flawed in current situation. I won't argue about it though. :) I agree that macro is still somewhat shaky. There's the supercomittee drama coming up. Europe still can surprise on negative side. There is some concern about China. I am cautiously optimistic, but bad things can happen. Anyway, we are where we are and everyone can make their choices what to do. :)

To: J Mako who wrote (45188)	10/27/2011 9:41:04 PM
From: E_K_S	Read Replies (2) \| Respond to of 78468

Hi JMako - What's your 10 year view on inflation? A high inflation rate would skew the blue line lower perhaps by one square. Look where it was during J. Carter period. I expect double digit inflation some time in this decade based on the amount of U.S. deficit spending and total cumulative U.S. debt. Corporate balance sheets are the best in decades with lower leverage LT debt, high amounts of cash, little to no pension liabilities and very efficient operations that use computer and enterprise networks never available before 1990. Therefore from a fundamental "Value" look, I am very bullish on many U.S. corporate companies. The important thing for me is that as our currency is debased (there is really no stopping this trend based on Congress inaction), what asset class would want to own? U.S. Cash, Foreign currency, Bonds, equities, hard assets (gold, land, oil) or some combination of all of the above. My plan is to hold equities of companies that own hard assets (like oil & minerals) and/or have solid non leveraged balance sheets that generate excellent FCF and reoccurring revenues w/ the ability to raise prices. I want to buy them w/ PE's of 10 or less and close to BV. I am also buying high yielding preferreds that generate income which are collateralized by companies that own hard assets like Oil & NG (not real estate or fancy financial derivative products - no financial stocks). The third leg in my "Value" investment theme is to buy real estate investment property deeply discounted that provides the portfolio an inflation hedge for the double digit inflation that is bound to raise it's ugly head during this decade. Most of my sales are stocks that move up outside my value target range. I am looking to move the proceeds into other stocks that meet my value measures or just park the money into high yielding preferreds and wait until other equities fall into my buying range. Therefore, I am pretty much always invested in "the market" and do not hold much cash. I would love to play the swings in the market but I am lousy at timing when the right time is to buy and when the right time is to sell (other than using my simple value metrics). Therefore, if the market tanks and certain equities are "buy" candidate, I sell my high yielding preferreds and buy the stocks. I do become extremely bullish on certain sectors when I see certain hard assets priced at historical lows (like Oil below $40.00/barrel or NG below $3.50 a bargain at today's value). I will load up and play a reversion to the "mean historical price level". I see this with borrowed money now (where it make sense like w/ income property) as interest rates are at 50 year lows. EKS