All 'new' money going into Tibix.......

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justin:

Greg,

How many times can I buy PG, KO, GE, BAC, WFC, etc "on sale?"

It's getting exhausting. :-(  LOL.

Justin 

P.S. Hope everyone is enjoying these lazy hot summer days..... :-) 

Justin, please don't tell me you're still buying into BAC.  I hope I'm wrong, but the Countrywide deal Lewis is pushing seems to leave BAC with the short end of the stick.

On the other hand, KO's March div increase makes buying more easy to swallow.  :-)

Greg,

I just reinvested a whole bunch into BAC at the end of June.  But you are right.  It's looking pretty dismal for all things financial.

Just came back from my vacation and I'm still in good mood.  :-))))))))))) 

Justin 

justin:

How many times can I buy PG, KO, GE, BAC, WFC, etc "on sale?"

It's getting exhausting. :-(  LOL.

I personally hope we get many more chances. Prices are fine right now on many good-quality stocks, and lower prices would just make them even more attractive. Unless the economy goes into a permanent tailspin, lower prices today just mean we'll get to our end goals sooner and with less money invested. Of course, keep diversified... I don't want a large portfolio concentrated in just a handful of stocks. And keep some assets in a supersafe place, like T-bills or insured deposits.

Byron Wein was on CNBC this morning, and he pointed out that the S&P 500 is at about 16x what it should earn this year. That's a reasonable price, especially considering where Treasury bond yields are at (4% on the 10-year issue).

Regards,

Duane

It is really getting difficult to put one's hard earned $$ into bad right now.  But I am holding my nose and hoping for the best in 5-10 years down the road.  Just cannot see BAC, C, WFC, PG, GE, JNJ, KO, etc going bankrupt.  It is getting very hard, though.

Am spreading $$ into divvy stocks and funds such as SGIIX, OAKBX, MALOX, PRWCX, American, Wellington, Thornburg and D&C funds.

Justin

Of course there are no guarantees in the equity markets, but I believe stock purchases made today will look good in ten years' time. With a market p/e now in the mid-teens, I think it's realistic to expect returns that are close to the long-term average, say 5%-6% over inflation.

Again, I prefer to stay pretty diversified. That's a personal choice, but with so many good buys out there I don't see the need to overly concentrate in any single stock or market sector. A typical position for me is 1%-2% of retirement assets, FWIW.

I like some of the consumer cyclicals right now. Yes, their earnings are not as steady as a J&J or Coke, but valuations are compelling. Try Harley Davidson. Earnings are forecast to be down about 20% this year, but the shares have been sliced in half and now trade hands at about 12x the reduced estimate. You've got to like a company with customers that will put the company logo on their bodies. (How many folks have a tatoo of Aunt Jemima or the Pillsbury Dough Boy?! Pretty close to zero, I'd imagine).

I also like global infrastructure. Again, earnings have taken a hit, but the shares have really been crushed. For example, Cemex's earnings are forecast to be about 15% off from last year, but the shares are down more than 40% and trading at about 8x the 2008 estimate. In the US alone we have a massive amount of neglected infrastructure that will need to be replaced or improved... from roads and bridges to municipal water and sewer systems. On top of this, there is all kinds of buildout happening across the globe.

Since this is the income investing board, I'll note that both of these stocks also yield north of 3 1/2% today.

It's a good time to crack open One Up On Wall Street, either for a re-read or for the first time. The odds are very high that civilization as we know it will surve this dislocation. The great majority of corporations will at least muddle through the mess we're in, and many will be doing much more business in ten years' time than they are doing today.

Regards,

Duane

Duane,

Thanks for the tips on Harley and Cemex.  

Also, thanks for reminding me about  One Up On Wall Street. 

It's one of the only three investment books on my desk, the others being The Only Investment Guide You'll Ever Need and Bogle on Mutual Funds. 

Well, gotta get some zzzzzzz.  Still have to work and make a living.  :-)

Justin 

I like Andrew Tobias, and still think The Only Investment Guide You'll Ever Need is one of the better general personal finance books around. I read his daily web column from time to time, but it's frequently dedicated to politics, not investing.

Not sure much should be read into this, but I see that Cemex was down only 8 cents today when the overall market was down pretty hard. Other global infrastructure stocks, like CAT and UTX were also down less than the market.

Duane

If I buy Cemex, CAT and UTX, they will surely take a dive along with the rest of the market.  Duane, if you have a position in these companies, let me know.  I will send you an email before my purchase.  I don't want anything bad happen to your portfolio.  :-)

Thanks again for your tips.

Justin 

P.S.  Even though my portfolio is taking a beating, I was somewhat pleasantly surprised that my 2nd quarter dividends were higher than the 1st quarter.  However, the increase in dividends does not begin the cover the loss.  :-(.

I'll be watching for the e-mail!

CAT and CX are very recent purchases. I've been wanting to buy CAT for a while, and finally pulled the trigger when it dropped below 70. CX seems pretty cheap to me, even considering the problems with the housing market.

Duane