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

To: Spekulatius who wrote (48301)	6/11/2012 4:31:16 PM
From: E_K_S	Read Replies (1) \| Respond to of 78741

Hi Clownbuck - So where is the real Value Investment - What about Cash as a "value" asset? The material stocks and commodities in particular may have already seen their highs and could be headed a lot lower IMO. For me, there are better rivers to fish and my top priority now is capital preservation rather than chasing screaming value buys. I believe a long term (7-10 years) deflationary period is possible (maybe now 30% probability) and as a results all prices could very well be a lot lower in the future except for bare essentials (food and AG related equities). My strategy is to hold out on any more commodity and natural resource buys until next year and focus on yield and different safe holding buckets for my investment capital. If a worst case (or even a 50% worst case), I should be able to buy some excellent value plays w/ my cash, perhaps 30% less than the current values. I put CUM.TO on my watch list today. They own a 75% interest in Copper Mountain (w/ over 5 Billion pounds of copper in the ground). There are many other resource rich candidate located in Australia, Canada and the U.S (hopefully avoid political risk staying in these countries). If the slow Euro implosion continues, the probability of a world wide recession comes into play that could further cause economies to contract. Even more QE may not provided the stimulus to keep the U.S. growing. Testing the 2009 lows now becomes a real possibility. For me, it's not worth the marginal gain chasing new value candidates at this time. I am still 80% invested in securities and preferred stocks which I continue to hold (they generate income and I have low cost basis). Even in the 50% worst case, I expect these stock to lose at least 30% of their value. For now, I am just trying to find calmer waters to hide in while I wait for the market to correct to much lower prices. The value case for me, is "Cash if King" (or cash equivalents) and eventually in 12-18 months I believe I can buy most equities 30% lower. I continue to build my value watch lists. There will always be some excellent "Special Situation" opportunities. Aurcana Corporation (AUNFF) is a silver miner I recently bought at $0.756/share. Their chart does not look exactly like GNM.AX but it is one I continue to add to even at current prices (AUNFF last $0.98/share). As many of the large cap stocks fall in value, many of these smaller cap stocks become exceptionable values too. That's my current "value" take. Remember to maintain some cash reserves as many of the current value buys now, will become better value buys in 12-18 months. Disclaimer: I have been wrong in the past and will be wrong in the future. My views constantly change and at this time, that's the way I see things playing out. EKS