Th3 Core

Why We Are Here => Economics & Investing => Topic started by: rcjordan on September 22, 2011, 09:36:25 PM

Title: "Only two positions are working in this market: "
Post by: rcjordan on September 22, 2011, 09:36:25 PM
"cash and fetal" --senior portfolio manager Mark Dow of Pharo Management

the Dow closed down 391 points, or 3.5%, the S&P lost 3.2%, gold shed 4%, silver plummeted 11%, copper tumbled 9% and oil fell 6.7%
Title: Re: "Only two positions are working in this market: "
Post by: Travoli on September 22, 2011, 11:41:03 PM
Was a pretty brutal day.  I've been completely out of the markets since 2007 now.
Seems like we've got much more deleveraging to do.
Considering the inability of average Americans to get credit, owning rentals seems like a good plan.
Title: Re: "Only two positions are working in this market: "
Post by: rcjordan on September 23, 2011, 12:44:56 AM
Yeah, you and the markets have convinced me to keep a cash position with my spare change at least until after Greece defaults and European banking implodes. 
Title: Re: "Only two positions are working in this market: "
Post by: BoL on September 23, 2011, 11:16:38 AM
heading further south this morning.

Interesting blog post in the BBC by Robert Peston, the offical guru of all things to all men
http://www.bbc.co.uk/news/business-15016828

I would imagine that China does have some of the answers, but maybe it's better for them to wait some more and buy us up a little cheaper.

Title: Re: "Only two positions are working in this market: "
Post by: dogboy on September 23, 2011, 01:51:29 PM
>owning rentals seems like a good plan.

This is what has happened in So Florida.  The best deals to get into down here, if you have cash, are low end multi-unit rentals that will always have rental potential... the margins in this space are good enough to justify all the other BS involved with property management.  The other deals are townhouses that sold for $250k that are now $40k/foreclosed.
Title: Re: "Only two positions are working in this market: "
Post by: Drastic on September 23, 2011, 02:15:14 PM
I've been looking at doing residential rental property for a bit, and a friend recently convinced me of the lower income market.

150k house =rent 1k-1.2k/month
25-40k house = 500-600/month

A recent downtown purchase of his was a house that had burned. Paid 6k for it. Lot was worth at least 7.5. House structure was still good so he gutted it and refinished for 15k. Now renting for 500/mo.

Time is now, for sure. We have a window of opportunity, just don't know for how long.
Title: Re: "Only two positions are working in this market: "
Post by: eurotrash on September 23, 2011, 03:35:34 PM
Where can you find those $40k foreclosed townhouses Dogboy?
Title: Re: "Only two positions are working in this market: "
Post by: ukgimp on September 23, 2011, 05:01:26 PM
You need the warchest to do it though since finance is hard.
Title: Re: "Only two positions are working in this market: "
Post by: littleman on September 23, 2011, 07:17:55 PM
For me its all about yields these days, there are still stocks out there that have a good return on investment and have relatively stable prices.
Title: Re: "Only two positions are working in this market: "
Post by: rcjordan on September 23, 2011, 07:33:08 PM
>still

Here's what I was working on last week. The p/e ratios & yields are just prior to the latest crash.  I haven't had a chance to see how they've weathered it, but there was a lot of talk about investors running to safe harbor stocks and dividend stocks which will have the end effect of driving down the yields.

                                              P/E Ratio   Yield
ABT  Abbott Labs                               15.4   2.90%
BDX  Becton, Dickenson and Co.      12.8           1.90%
MRK  Merck & Co                                 34      3.90%
GE   General Elec Co                        11.8           2.40%
JCI  Johnson Controls                      12.8           1.80%
BBT  BB&T Corp                                15.8     2.20%
XOM  Exxon Mobil                              9.4      2.50%
SU   Suncor                                       14.6   1.20%
MMM  3M Co.                                     13.3   2.50%
T    AT & T                                           8      6.60%
PEP  Pepsico Inc                                 15.3   2.90%
ITW  Illinois Tool Wk                           11.1   2.80%
K    Kellogg Co                                   15.7   2.70%
IMO  Imperial Oil                               11.5   1.00%
SLF  Sun Life Financial                      7.8      4.60%
MSFT Microsoft Cp                            9.6      1.80%
PG   Procter & Gamble                       15.7   2.80%
MFC  Manulife Financial Corp               9.8   2.60%
RY   Royal Bank of Canada                15.9   3.80%
VZ   Verizon Comms                          18.6   6.50%
GIS  General Mills                              13.8   2.80%
BNS  Bank of Nova Scotia                  10.9   4.30%
IBM  Intl Bus Machine                        13.2   1.80%
Title: Re: "Only two positions are working in this market: "
Post by: littleman on September 23, 2011, 07:46:12 PM
RC, check out REITs and Business Development Companies (BDCs), many are doing better than 10%.
Title: Re: "Only two positions are working in this market: "
Post by: rcjordan on September 23, 2011, 08:03:43 PM
I distilled the above list from 3.5 years (2007-2011) of buyer data of dividend stocks, then culled it based on trend (up = more buyers moving into the stock over time), p/e ratio, and bond credit rating. There were a few REITs in the starting group, but they didn't make the 'trend' cut, as I recall.
Title: Re: "Only two positions are working in this market: "
Post by: ukgimp on September 23, 2011, 08:07:21 PM
There are some pretty good yeilds in there RC.

Some of the higer earners are spread across sectors as well, which has to be good.

I dont do much in the way of stocks atm
Title: Re: "Only two positions are working in this market: "
Post by: rcjordan on September 23, 2011, 08:13:54 PM
>sectors

I tried to balance it out across sectors. That's why Merck is in there with that suck-y 34 p/e.  Had I allocated any money to Merck, it wouldn't have been as much as most of the others.

REITs

http://caps.fool.com/tickerrankings.aspx?filter=7&sfname=%25reit%25&sortcol=24&sortdir=0

2 look decent, not having tanked miserably recently and have a good credit rating; BreitBurn  and HCN
Title: Re: "Only two positions are working in this market: "
Post by: littleman on September 23, 2011, 08:22:16 PM
I have some specific companies I'm investing in, but I'm going to post them in the IC.
Title: Re: "Only two positions are working in this market: "
Post by: rcjordan on September 23, 2011, 08:33:28 PM
>IC

Thanks!

I ran today's quotes on my list above. On average, they are down about 7% after this latest market drop.