This does not need repeating. This market is not for anyone who can not afford to lose money. That is hopefully an obvious point. Late today, I placed several below market limit orders to add to my existing positions in Alcoa, Intel and Lincoln National. It looked like none of those orders were going to fill at about 2:40 C.S.T. I then did one of my scatter gun approaches to invest my cash flow for November, as I said that I would do.I placed market orders to buy the following: 30 shares of Gannett filled at 7.75; 25 shares of SL Green Realty (SLG), a new position filled at 23.35; 40 shares of CB & L Property filled at 3.7 (CBL); 40 shares of First Industrial filled at 6.19 (FR); 25 shares of the New York Times filled at 7.08; and 30 shares of News Corporation (NWSA) filled at 6.65. So I am mostly done for the month of November now.
All of these buys are contrarian plays and would be controversial. For me, they have one characteristic in common, the shares have been beaten into the ground so bad that I feel that it is likely the businesses are being substantially undervalued over the long term.
All of these buys are contrarian plays and would be controversial. For me, they have one characteristic in common, the shares have been beaten into the ground so bad that I feel that it is likely the businesses are being substantially undervalued over the long term.
I have previously discussed Gannett. At the current dividend rate, the yield is over 21%. The market is probably anticipating a cut, but I am not so confident that will be done soon. OLD GAMER HATCHES A PLAN AROUND 1 P.M TODAY
I mentioned on Monday that I might take a nibble on FR and CBL common, COMMENTS: REITS , CB & L, FR, LRY and AMB; Re-start buying common stocks, and I will keep my preferred positions. I have already discussed the problems with these two REITS and will just incorporate my prior discussions here.
Even after their recent common stock dividend cuts, CB & L yields 40% based on my purchase today at 3.7 whereas First Industrial yields over 16% excluding the special dividend it intends to pay early next year. The first special dividend is .20 a share (see discussion: Notable News 10 30 2008) I sold FR common stock at near 30 for a profit just a few weeks ago. I also own preferred stock in CBL, SLG and FR. I do not intend to add to any of these positions.
News Corp had just become to cheap to ignore, even if you assume a severe recession. I mentioned that my entry point was getting very close on this one in a prior post: More Pain to Come: Cisco and NWSA; BDN, GXP & ALJ EARNINGS
It has just been smashed, and that is an understatement. I was thinking that it was time for this Tennessee boy to own a few bricks in Manhattan.
The New York Times, what can you say, is a deep deep value play, hidden to almost every sane person on the planet, with close to a 13% yield. My confidence in this one is expressed by the buy, 25 shares. The chart at yahoo finance only goes back to 1986 and the NYT has not sold for 7 bucks a share since 1986, just maybe this is a tad over done on the downside.
All of these buys would be controversial and unquestionably contrarian, possibly slightly on the deranged side of an otherwise very logical and rational individual. I do not expect them all to succeed. I will give them at least 11 months and a few days to work their problems out before selling for a tax loss. Otherwise, if things take a turn for the better, I might just have two or three nice long term capital gains from today's bunch.
I am not a financial advisor but an individual investor trying to navigate my way through a mind field. In these posts, I am acting as an unpaid financial journalist and an occasional ornery political commentator. I am also aggregating financial news stories that I view as important and providing any reader of these posts, assuming there are more than a couple, with links to those articles, sort of a filtered, somewhat intelligent, free search engine. Any discussion made by me of particular securities is not a recommendation to buy or to sell. Trade at your own risk. Consult with your financial advisor prior to making any purchase or sale. I will try to identify my sales too but it may take a few minutes after I implement them to create a post explaining my reasons. The sale may before or after the post. Before buying or selling any stock, even one recommended by a trusted financial advisor, please research it and make up your own mind which is what I always try to do. Research would include reading reports, reviewing financial records, earnings estimates, sec filings and prior earnings releases and news. In this post, and all others by me, I am merely describing my reasons for purchasing or selling securities, and the potential pitfalls that I identified prior to purchase or the reasons for a sale. The securities mentioned in this and all posts written by me may not be suitable for others based on their unique financial position and risk profile. Always read the prospectus before buying a Trust Certificate, bond, preferred stock or other bond or bond like investments.
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