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Stay Calm in the Face of Turbulence
Rating: 2.06 (18 votes)
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Are you making changes in your portfolio? Getting frustrated with the volatility of the market? Wondering whether we're in for a bear market, a recession, or if this is merely a short term correction? Well, so are the pros, the pundits, and the economists. Stick with what you know and build on your strengths. Assess your investments and decide if they are going to perform for you in this market environment. In times of turmoil it can help to do nothing. If you have faith in a company and you feel it will give you eventual rewards, by all means keep it. I just read a posting by one of our fellow bloggers who called himself an Apple bull. He went on to say he had sold Apple because it was going down. That is what stocks do; they go up and they go down. Years ago I bought Apple (I paid less than $10.00 per share for it).The stock market has been through several bear markets and recessions, but holding the stock for the long term has more than made up for any short term blips. My current portfolio holds primarily oil and gold mining stocks. To me this is a market climate for hard assets. My top performer has been SSL. I think Sassoil (now around 52 dollars per share) will be good to 68-70 dollars a share and this weekend Barrons echoed my opinion with a nice story on the company. Their patented technologies of converting coal to fuel could easily be utilized in the USA. The gold mining companies have tremendous upside in this time of uncertainity. Gold is hovering around 800 dollars an ounce and production costs average slightly over 300 dollars an ounce. Big mines are buying smaller mines and paying bigger premiums. Kinross, Goldcorp, and Barrick all have upside left. Gold should hold in a bull market for a few years. It has risen rapidly over the past three years. Prior to that the selling price was about equal to the production price (300 dollars) so little capital improvements were made to mines and production remained flat for several years. The direction of the price of oil is anyone's guess. I just know we need it and natural gas to keep our economy flowing. That means the exploration companies and the drillers will stay busy. The cost of drilling rigs is astronomical, but there's lots of money to be made by companies that own several rigs, especially those of the offshore variety. And then there's the pipelines. Pipeline companies are necessary to transport oil and gas from place to place. The speculators and the hedge funds can play havoc with the prices of both oil and gold. I've stopped paying attention to weekly fluctuations and only focus on the long term fundamentals. All of these are positive. | ||
A 7% yield is awfully tempting
Rating: 2.50 (6 votes)
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InvestorPlace Blogs is powered by Marketocracy. Marketocracy has authorized Investor Place Blogs as an official registrar for voting through Marketocracy's Investment Research Rating service. Registered members of InvestorPlace Blogs are linked with a Marketocracy account to establish voting power based on their performance of trading and posting on stocks.
I'm usually an oil and gold person. But when Bob Rubin went on television today and said that Citi's dividend was secure, my heart pounded with the excitement of a winning lotto ticket. The secret to making money in any asset is to buy it right. If the price is affordable, one can easily hold the asset until the return reaches maximum potential. Since Citi was selling at 55 earlier this year before all the subprime issues came out, that may be a reasonable target to shoot towards as an exit point later down the line. In the interim, think 7%! You can't find a 7% yield of this quality with all the upside potential of C. At today's price of thirty dollars, you stand to earn 100% on your money if you include the dividends. Think of it. C's dividend is $2.16 per share annually. It has a p/e of 8, yes eight, and way below the current S and P average p/e ratio. Two years ago it was the telecoms that were in the dirt. People that bought AT&T in the twenties are patting themselves on the back for their brilliant purchase. Sectors rotate and fall in and out of favor. Right now C is definitely out of favor, but a 7% yield and a dividend that is secure adds considerable plusses to this picture. | ||
