paper money has to tank with a 13 trillion dollar M3 money supply and a 61 trillion dollar CDS market that has dubious counter party health... what's so simple as to not to see why this thing is headed for the cliff so OK you bot a CDS for the crap GM paper that is underwater big. when do you try to collect? where's the market in a panic? is the Fed. gonna bail you out? with what? if you can't explain what will happen to a 10 year old in less that 30 seconds... they iz big trouble in river city
I started buying some of the companies on my list. Here is my portfolio so far.... Symbol- Pct from Yr High- Yield AIG 60.86% 3.10% AXP 42.27% 1.90% BDK 39.79% 2.90% BMY 37.25% 6.30% CBS 44.73% 5.40% CCL 36.79% 4.80% CLX 22.54% 3.50% CU 35.82% 3.60% CVC 43.14% N/A DD 20.80% 3.80% DEO 21.93% 2.80% EWH 30.51% 2.90% GSK 19.51% 4.70% HNP 52.14% 6.00% HST 48.12% 5.80% HSY 36.67% 3.60% IBN 60.05% N/A IFN 48.83% N/A IP 43.73% 4.30% ITW 22.73% 2.40% KFT 22.96% 3.70% M 57.08% 2.70% MMM 28.34% 2.80% MRK 39.99% 4.20% NOC 21.21% 2.40% PFE 33.92% 7.50% SLE 31.03% 3.40% SNY 32.75% 3.40% SYY 21.39% 3.10% TKF 39.44% 2.24% UL 27.19% 3.60% UTX 25.88% 2.00% VE 41.62% 5.60% WAG 31.44% 1.20% WHR 45.40% 2.60% WPPGY 37.15% 3.77% WTR 40.61% 3.10% WY 40.23% 4.80% The portfolio is not evenly weighted. Certain stocks (like AIG and AXP) were under weighted because I expect further weakness in their shares. Other stocks/ETF's were overweighted because I wanted more international exposure (IFN, VE, EWH) or because they should hold up better in the current economic environment (CLX, DEO, UL). A few other stocks that are close to my entry targets are PG, DE, VZ. I am slowly scaling into these positions on weakness for long term holds. Most of these stocks/ETF's are well off their highs and offer nice dividends.
Dividends are a trap here. I would not be buying good companies in a bear market. I would be shorting weak ones. Not that complicated, but good luck anyway.
No company with ample cash and a strong cash flow would date cut their dividend. market cap loss for the loss
This portfolio is a long term hold. I am and will continue to buy solid companies as the market takes them down. With the exception of a few consumer staples stocks that are down 20%+, the majority are at least 30%+ off their 52 week highs and many are 40-60% off their highs. The money being used was sitting in CD accounts earning negative real returns. I make my living as a trader, and I have always been drastically underweight stocks in my retirement and other accounts. I never thought the risk/reward was worth it to have roughly 40% of my net worth in my trading account (retail) and the rest in the market. Over the last few years I did better owning CD's and bonds than US stocks. At this point, I think it's worth it to start buying brand name companies and foreign market ETF's well off their 52 week highs (slowly, not piling in). Many of the companies on my list have been around for 100+ years. If they go under then odds are the whole US market and currency has collapsed so why even hold a CD?
Update on the portfolio--- Here are the stocks I have purchased so far and my Gain/Loss AIG -5.15% AXP +6.45% BMY +14.99% CBS -6.75% CCL +8.40% CLX +0.42% CU +3.15% DD +3.69% DE +2.50% DEO +4.77% EWH -0.66% GSK +8.44% HNP +1.24% HST -12.95% HSY +3.07% IBN -0.28% IFN +4.59% IHF +2.27% IP +1.63% ITW -0.26% IYR +5.57% KFT +2.71% M -6.50% MMM -4.85% MRK +4.91% NOC -2.24% PFE +5.69% SLE +3.85% SNY +9.36% SYY +5.78% TKF +4.32% UL +3.26% UTX +6.67% VE +0.35% WAG -2.01% WHR +2.26% WPPGY -5.45% WTR -4.79% WY +3.15% The portfolio is up 2.27% (not including dividends) since I started buying on June 20th. The S&P is down 5% in the same period. Largest holdings-- 1) IFN 2) VE 3) TKF 4) DE 5) EWH Smallest holdings-- 1) HST 2) WPPGY 3) SLE 4) GSK 5) ITW I dropped CVC and BDK from the original portfolio for a small loss because they didn't meet the updated criteria for holding (WPPGY might be getting the boot too). Added DE, IYR, IHF, NOC. Missed my entry price on PG and KMB by a hair. Not happy about missing out on adding them. KMB should come back down, but I'm not sure about PG touching my entry anytime soon. Due to the rally of the last few days, I don't have much on the "new add" list. Will continue to piece in the portfolio on weakness. I would really like to get more shares of the pharmaceuticals. Most of them rallied hard right after my first buy points so I was not able to add on weakness.
Good long-term strategy IMO. It's certainly better than any kind of fixed-income investment. Buying brand name blue chips with solid dividends (way above t-bill rate and many above the 30 year bond yield) when the S&P is off 20%+ is a smart move.
Update on the portfolio--- Here are the stocks and my Gain/Loss AIG +1.97% AXP -0.82% BA -1.02% BMY +7.69% CBS -8.80% CCL +8.85% CLX +1.85% CU +8.85% DD +2.23% DE +6.07% DEO -1.78% EWH +0.48% GSK +6.99% HNP +2.22% HST -3.18% HSY +6.91% IBN +4.46% IFN +12.95% IHF +9.98% IP +24.66% ITW -0.64% IYR +7.73% KFT +9.54% KMB +5.41% M -7.77% MMM +1.18% MRK -3.45% NOC +0.44% PFE +6.90% SLE +9.45% SNY +9.20% SYY +1.73% TKF +21.09% UL -4.18% UTX +4.79% VE -0.75% VZ +1.04% WAG -3.09% WHR +15.27% WTR -2.29% WY +12.51% The portfolio is up 4.44% (not including dividends). The S&P is down 4.42% in the same period. Largest holdings-- 1) IFN 2) UL 3) TKF 4) VE 5) DEO Smallest holdings-- 1) GSK 2) ITW 3) SLE 4) BMY 5) PFE I dropped WPPGY on the bounce for a very small loss. Added BA, VZ, and KMB. Still haven't been able to add to my pharmaceutical shares (except MRK). Was hoping that the ELN and WYE news would cause some more selling in the Pharma sector. Will continue to wait on my buy prices. More than doubled my Unilever position after their post earnings drubbing. UL (or UN if you prefer) now down 30% from it's 52-week high. Will continue to add to this consumer staple monster. New add list--- Will add RSX after the 25%+ drop off it's highs. Also hoping for a little more drop in VPU (Vanguard Utilities ETF) to my buy point and still hoping for PG to hit my entry price.