The Core
Why We Are Here => Economics & Investing => Topic started by: rcjordan on September 22, 2011, 09:36:25 PM
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"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%
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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.
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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.
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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.
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>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.
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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.
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Where can you find those $40k foreclosed townhouses Dogboy?
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You need the warchest to do it though since finance is hard.
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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.
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>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%
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RC, check out REITs and Business Development Companies (BDCs), many are doing better than 10%.
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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.
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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
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>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
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I have some specific companies I'm investing in, but I'm going to post them in the IC.
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>IC
Thanks!
I ran today's quotes on my list above. On average, they are down about 7% after this latest market drop.