Investments Trade Log

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m741
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Post by m741 » Fri Aug 05, 2011 5:40 am

What dividend plays stand out right now? Seems like a lot of blue chhips haven't been hammered too badly. For instance, PG is only trading at the level it was in March. So it's set back ~3 months, but that's not too much. Same with names like ABT, JNJ, PEP, etc.
One name, not a pure dividend play, that sticks out to me is MMM. I think it's been way oversold.


jacob
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Post by jacob » Fri Aug 05, 2011 7:21 am

Asia is down. At least they didn't have to sell gold to cover their positions/they moved into gold.
Odds are the show continues tomorrow. The European markets open in about an hour.


jacob
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Post by jacob » Fri Aug 05, 2011 7:26 am

BTW I suspect/hope this is a short term hiccup (like the Greek issue earlier this year) rather than a sentiment switch to "let's consider all news to be negative from now on".
If not, pick telecom and utilities to ride it down to DOW <<10k. Pick mining and energy to ride it up. If you feel gutsy, US treasuries is the safest place on the planet.
My "active" portfolio (the one I get my dividends from) was down 4% today. It's big on telecom. It also has lower beta (m)REITs and utilities. Large positions in GE and WFC dragged it down.
My IRA which is 23% gold, 37% bonds, and 50% Dogs was down 1% today. It was actually in neutral until gold started selling off.
Seeing that the politicians don't seem too inclined to fix this credit problem, I wonder what the solution is for the individual ... somehow the western world has to start producing useful stuff again. This is, of course, a funny thing to say for someone who retired (but then again, my job didn't entail making anything useful in the first place). I do think we could produce useful stuff in more limited amounts. I just don't trust this whole mass scale economy based on service+finance+government+military. That complex simply produces nothing---it just rearranges products.


George the original one
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Post by George the original one » Fri Aug 05, 2011 4:35 pm

In the past few days, I've sold JNJ, DPM, WPC, and ARCC as they've hit my mental stop losses. Some of these were total sales (DPM) and others partial.
T is starting to flirt with my stop loss and I'm trying to decide whether I want to pay attention or not. I'm inclined to let that one ride.
It's weird to watch the BDCs get clobbered, yet the mREITs are holding ground.
Oh, yes, I also sold FAX on Tuesday when the debt deal was signed. It was pretty obvious to me that faith in the US$ was being restored and thus reverse the decline vs. the Aussie$, at least temporarily. Expect to repurchase FAX once the currencies stabilize.
LTC will report earnings on Monday. It's down to an attractive purchase price, so I might add some today. UHT is also down to an attractive price. On the other hand, the healthcare REITs are still getting beaten up due to fears about Medicare/Medicaid cuts.


dragoncar
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Post by dragoncar » Fri Aug 05, 2011 6:40 pm

George & Dividendguy: Just goes to show that one man's stop loss is another man's limit order.


George the original one
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Post by George the original one » Fri Aug 05, 2011 7:21 pm

@dragoncar - absolutely! It's all relative. If were in retirement, I probably wouldn't have bothered with selling.


eric
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Post by eric » Fri Aug 05, 2011 9:02 pm

There is very little to suggest that now is an opportune time to start buying. Most long-term participants would benefit from a study and/or review of previous bear markets. Some of the worst times to buy coincide with the initial heavy volume decline and subsequent bounce.
One does not have to be an ardent practitioner of technical analysis; however, a study of market structure including market breadth, and an evaluation of the leading bull market stocks is a very useful skill-set for evaluating opportune buying times. Employing such analysis does mean that one is employing timing mechanisms to determine when to deploy capital, but everyone must realize that any buy or sell decision uses some form of market-timing.
Based on my analysis, this week symbolized an important transition to an intermediate-term downtrend, if not an outright bear market. There will likely be counter-trend rallies; nonetheless, there are enough clues to suggest further weakness to come.
A worrisome trait of the current market remains stocks that have held up, but are in late-stage patterns. Such patterns in leading stocks often fail before a final market flush. A few such leading stocks include AAPL, GMCR, NFLX, FOSL, and AAPL. These stocks helped lead the recent bull market and are likely targets of sellers should weakness persist. Markets take time to heal, and the next few weeks are likely to be volatile. Extremes in volatility followed by a dampening over a period of months may suggest that a market is at a fulcrum point - either low volatility for a long duration followed by steadily increasing volatility near a top, or a period of high volatility followed by declining volatility near a bottom, as participants give up.
I think studying breadth and market leaders is vital for all investors, no matter their respective timeframes or strategy. Useful books that discuss how to evaluate the market landscape include How to Make Money in Stocks by William O'Neil and Secrets to Profiting in Bull and Bear Markets by Stan Weinstein.
good luck everyone.


chilly
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Post by chilly » Sat Aug 06, 2011 1:20 am

Eric has some good advice to consider IMHO... with the level of volatility, it's scary. When would you have bought back in in 08'? @13k? @12k? @10k? @8k? You would have hated the world if you thought @11k was the bottom.
No matter what they say in books or on TV... equity markets aren't really driven by underlying concrete financials, they are driven by millions of speculating gamblers reacting to the media and speculating on what the other millions of speculating gamblers are going to do with their money. Dividend payers and bond holders being a couple exceptions.
Fwiw, I'm down 3% in the past couple weeks of 9% drop in the DJIA... having largely moved to fixed assets a couple months back. Still stings though! That's a year's ERE living expenses!


eric
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Post by eric » Sat Aug 06, 2011 7:37 am

Chilly,
Glad you saw some value in my comments. And 3% down is not bad given the recent carnage.
The reason I offered some opinion is because many have a tendency to try and be a hero after such violent down moves; however, such action, though bold, is often fruitless. Indeed, buying dips in bull markets can be a potent strategy. But all evidence suggests this sell-off is not a garden variety dip.
Getting stuck early in a bear market destroys capital that is much better deployed at the end of a bear market or near the beginning of the next bull market. One doesn't have to be a genius to employ a few basic tools that reveal the underlying health of the market.
Whether one is value, growth, income oriented, or a combination of all three, a basic study of market history and periods of secular and cyclical bull and bear moves is extremely useful for putting into context the current action.
Anyway, a bear market will take almost all stocks down, so better to be near the end when you start accumulating shares rather than the beginning.
I personally am a subscriber to The Kirk Report since 2007, which is worth every penny for the content delivered on a daily and weekly basis. Charles focuses on both long and short term time horizons, so his commentary is broadly applicable.
Eric


jerry
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Post by jerry » Sun Aug 07, 2011 1:11 pm

If market highs, lows, bears, bulls could be predicted, somebody would write a book and everybody would be rich. I think the best you can do relative to timing is to stick with an asset allocation that you rebalance regularly. This forces you to buy low and sell high against your natural instincts. Very few people have the courage to do this in a bear market, but I have not seen a better system.
Asset allocation/rebalancing only works if the market rises over time. If you don't believe this will happen, you should not be in the stock market. If this does not work, ere probably does not work for most people either unless you are fortunate enough to retire in a time of high interest rates where you can buy 30 year treasuries and forget about investing.


dragoncar
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Post by dragoncar » Mon Aug 08, 2011 11:09 pm

eric, your statement "Whether one is value, growth, income oriented, or a combination of all three, a basic study of market history and periods of secular and cyclical bull and bear moves is extremely useful for putting into context the current action." would be perfect for a site like seekingalpha. You should consider contributing some articles. I agree with jerry, though, and find it highly unlikely that above-average returns can be obtained through "basic study." Of course, you didn't say that above-average returns could be obtained, just that study was "useful".
For my part, I finally capitulated and moved to a large Permanent Portfolio position. It's scary, because I'm the kind of person who sees gold as ridiculously overpriced, and stocks on sale -- common advice is to buy when there is blood in the streets, and that's what we had today.
Nevertheless, I haven't been able to find fault with the PP theory, and I've come to terms with the fact that, from a psychological point of view, I need a more stable strategy that will allow me to invest my savings regularly until FI. Re-balancing will likely be accomplished by purchasing an under-performing asset class every with my monthly cash surplus. This matches my psychological profile well, as I tend to want to buy things that are "on sale" (my latest blunder was a small position in NOK, which I still think will outperform in the coming years, but I digress).


jacob
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Post by jacob » Mon Aug 08, 2011 11:22 pm

According to the Shiller P/E index, stocks are still not on sale. 25% further down and they'll be fairly priced. 50% further and _that_ is on sale.


dragoncar
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Post by dragoncar » Mon Aug 08, 2011 11:58 pm

We'll have to agree to disagree about the Shiller P/E -- I prefer to use the leading 10 year P/E, which I have named Precog P/E.


jacob
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Post by jacob » Tue Aug 09, 2011 12:20 am

I've named it Overshoot P/E ;-P


sshawnn
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Post by sshawnn » Tue Aug 09, 2011 1:20 am

I went against logical thought today and bet on an underdog. I purchased a small stake in BAC after the news broke of the unloading by the large, popular hedge fund manager. Too big to fail? Probably. It may be a buy and hold for a long while. I also purchased shares of SYBT as they seem to keep a comfortable amount of "good" debt in house. Catching a falling knife is what I did but I still have another hand to grab the knife with.


DividendGuy
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Post by DividendGuy » Tue Aug 09, 2011 2:12 am

@sshawnn
BAC? You have more guts than I do. I wish you luck with that.
I'm leery of financials right now..but wouldn't mind WFC and USB at current levels. GE might not be bad either.
Of course, I see so many equities I'd like to purchase I can't see straight.


OurLifeInc.
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Post by OurLifeInc. » Tue Aug 09, 2011 3:10 am

GE has me interested too. I'd like to see a higher yield...perhaps if it were to get over 4%, I'd pull the trigger. I am looking for global businesses now...trying to stay away from domestic only for the time being.


chilly
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Post by chilly » Tue Aug 09, 2011 3:14 am

GE does look pretty good. UTX has no financial component. ARCC. CWH been bombed out if you were late to REIT's and still want some.
I'm always curious about companies like ARCC that got utterly destroyed in 08' but maintained dividends. Holders as of the 3/09 quarterly payout were getting a 48% yield due to the collapsed price and consistent dividend.


OurLifeInc.
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Post by OurLifeInc. » Tue Aug 09, 2011 3:24 am

Is there any concern with interest rates in regards to REITs that anyone holds? I have read conflicting opinions as to what the downgrade will do to borrowing costs, whether they go up or down. As I understand REITs do better with low rates?
Any other stocks people are looking to load up on? I still like WM, and I like it even better at this price...just concerned that it is heavily tied to the US economy, which in the long run I think will be ok, but....


eric
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Post by eric » Tue Aug 09, 2011 3:45 am

This is an example of using some basic analysis to ascertain market conditions: http://stockbee.blogspot.com/ - A really great site to learn about market methodologies and psychology.
These types of sell-offs rarely lead to sustainable rallies. Rather violent bounces will occur before some degree of equilibrium is eventually established.
At this point, the market is so stretched that a snap-back is almost assured in the coming days, especially since short sellers will eventually cover, putting a bid under the market at least temporarily. The only alternative at this point is a continued crash scenario.
Since I work for a broker-dealer I wouldn't be able to write for a public site like seeking alpha. I still do much writing for myself, though.
Stocks like BAC appear dead money for many years. A company with a float that large will take years to recover, and barring serious inflation, the share price is likely to remain depressed for a long time. There is hardly a dividend and the market seems to be pricing in a capital raise, which means dilution. In a broad based liquidation caused by forced selling, there will be much more attractive stocks to come. Even WMT with reliable profit growth and a real business model has done nothing for 10 years - in part because such large float stocks take extreme demand to move higher. At least you get a 3% dividend in return.
Jerry, there are books written that discuss very notable concepts and tools that help one analyze the market under multiple timeframes. So they have been written. I agree that there is no way to predict a bottom or top, although there are ways to determine periods of higher risk and lower risk based on the underlying health of the market. There is more work involved, but a little work to avoid these periods goes a long way to preserving your capital. The books I like are Stan Weinstein's Secrets to Profiting in Bull and Bear Markets, which is dated but has very useful concepts and sells on amazon for 13 dollars. And William O'Neil has published numerous versions of How To Make Money in Stocks. Older versions can be found at a thrift store for a buck.
Best.


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