Quote:
Originally Posted by Claeren
there are not good buys out there, but it is a tricky time and seemingly healthy companies have all sorts of reasons to suddenly not be in the current environment.)
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It definately seems really tough to try and time the market. For the most part, I agree with you and Cowboy's thesis about money that was leveraged via real estate traders being spent and lost, but the market doesn't always follow what the economics say. Obviously, stocks are more of a psychology game then losely following the economics. I guess the hope is, a good business will, over time, go up in value.
Here's what I have and my thesis:
Lululemon - I mostly bought in when the stock crashed when their 4Q earnings came out strong, but they forcast a weak 2009 year. In the long run, this fad clothing seems to keep selling despite the recession (what recession?), and stores are expanding across the USA. To compensate for expected sales drops, they've shored up inventory all the while showing much, much stronger store-to-store earnings then any of their competitors.
BoA - they're getting killed by Merill Lynch, but if you look at BoA aside from Merill, they arn't in as deep as they are with ML. As I mentioned in the other thread, one of my friends is a lawyer involved in the acquisition and (not that this is inside info, its published, but in >100 page jargon only lawyers seem to understand) and the long and short of it is, BoA can sell whatever bad debt they want to the feds, essentially keeping all the good debt from ML and shouldering off the bad debt to the feds. I assume this is the arrangement the feds made for BoA to acquire ML in a shot gun wedding.
JPM - the strongest bank out there, huge asset base acquired by WaMu, bought BS for a bargain, and Dimond is looking like a genius. JPM doesn't require any government bailout.
LVS and MGM - this was my gamble, down 98% for LVS and 90% for MGM, so I thought "what the hell" and in Las Vegas fashion, gambled it. They are both down about 60% since I bought them, both in solvency issues and MGM might be running into default on their CityCenter project. Hopefully they don't, but hey this was a gamble where I fully realized the consequences.
Wells Fargo - they also don't need government aid (I think? I'm starting to lose track who is who) and historically WFC is well managed. I'm taking a small slaughtering here, but I'm in this for a long term so I'm not too worried.
BNI - US railroads, my thesis here is they transport goods from the Mexico boarder through the US in that whole rural industrial part of the mid-west and into Ontario. With a tree hugger Obama, and growth in Mexico, my thesis here is BNI is a good buy. Expensive, but you get what you pay for - strong earnings and near zero debt.
American Express - I dunno why I bought this... dammit.
Eaton - my largest holding, they've fallen probably 40% since I bought them but I'm not too worried by Eaton. Eaton runs a really tight ship with inventory, their middle managers keep a close eye on production (extremely high operating EPS), and they essentially have a strangle hold on their products with economies of scale. 97% of their retained earnings have made profits, and a conservative management projects 15% incone growth and 10% sales growth to 2010. Eaton also has expanded outside of the USA quite nicely with overseas acquisitions. (i.e. China)
Nvidia - aggressive, cutting edge, been slaughtered by the recession but holding a large portion of the market. I dunno if my own bias is coming in here, but the design engineers they have there are among the best I've met of any company. I dunno if that means anything though, I guess thats just calms my sense of confidence in Nvidia. Hopefully it doesn't mean I'm delusional here...
Western Digital - the stronger of its market, really tightened its ship for this recession (while Seagate didn't), strong earnings but these HD makers seem to be running each other to the floor trying to jam more and more storage into their HD.
Intel - worlds biggest chip maker, solid company, and I've seen their 5-year, 10-year, 20-year, 50-year plans and from various presentations and conversations with VPs and CTO's. One of my supervisors is also a former VP of Intel too - not that I've got any secrets from him or anything, but I've certainly learned alot about how Intel runs its business and projects its future and its strategy for releasing products. They must spend quite a bit on marketing research, just as they spend a ton on R&D.
Berkshire Hathaway - I think everyone here knows what Berkshire is about
Cisco - huge huge huge company, with strong operations in Asia as well.