Scary stuff in the news this week and the market is reacting. OIL UP, GOLD UP, STOCKS DOWN; what to do? For starters the down trend indicates more sell side pressure than buy side, however in the end there are an equal number of buyers and sellers and I have been one of the buyers.
Berkshire Hathaway (BRK.B or BRK.A) is one irresistible safe haven that is well-capitalized, diversified, and managed by the best in the world. If I want someone to help me manage my resources in good or bad times it is Warren Buffett, Charlie Munger and friends. It has very desirable fundamentals and I have owned some for a few years -- bought some more yesterday.
Washington Mutual (WM) is another stock I acquired some time ago in my Roth IRA enjoying their high yield (4.5%) and continue to watch it for an opportunity to buy more. The opportunity has not materialized, because over the last six months it has moved up considerably, even with issues of higher interest rates and a slower housing market. Now the market has been getting creamed this week and it has only been affected slightly. It was actually up today! Given their strong fundamentals of high yield and earnings, low P/E, and ever growing hard assets this is one to watch. They are also mentioned periodically as a potential acquisition target and this too probably supports the stock price a little. If the market continues to slide next week I may own some more.
Southern Company (SO) has been the biggest addition to our family holdings. It is now in at least seven portfolios and I have sold naked puts for November 30's. I AM NOT RECOMMENDING ANYBODY SELL NAKED PUTS. Selling naked puts is very risky and as they say..."don't try this at home folks." I like Southern because it is near a 52-week low, but has had five years of continuous growth. It pays a huge dividend, as utilities traditionally do, and it is located in a part of the country that has relatively low wages, cheap land, good weather, a favorable tax environment and it has seen tremendous growth in the past two decades, which I believe is very likely to continue.
Our bloggers have been touting Wal-Mart (WMT) lately, I among them yesterday and as it trends down with the news it becomes even more worthwhile to consider. I do not own WMT but I am watching it.
Fear is ruling the market now but it is also going to create many opportunities for those watchful brave souls that can separate quality companies from the risky ones and take advantage, building a first class long term investment portfolio.
Google (GOOG) (not suitable for a safe haven) reports on Monday; Thursday, July 20. Since the company does not make projections (many great companies do not) and also tends to be tight lipped about most everything the stock market could get even more volatile. Google certainly rings loudly in the market but is it a "bellwether" stock, I don't think so. (And here are 10 more reasons why I don't think so.)
Have nice week end all.
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Reader Comments (Page 1 of 1)
7-14-2006 @ 8:46PM
Gary Stoltz said...
Another safe-haven for stocks is RAD. It hasn't been beaten down at all during any past downturns. check it out
7-14-2006 @ 11:36PM
rene sperling said...
I am wondering what is happening with AVDI. Cannot find any info.
7-15-2006 @ 12:20PM
R. Binzley said...
How long do you expect the down-trend to last? Can you suggest any sectors in the market that would yield higher year-end prices? Thank you.
7-16-2006 @ 11:13AM
Janson said...
Err... Google? Not!
7-16-2006 @ 12:06PM
Sheldon said...
Responding:
RAD - Rite Aid has little or no profit, no dividend, massive debt and has under performed for years given that CVS & Walgreens have been doing great and expanding rapidly it is all on them. If not for the massive debt they might be bought out. THIS IS NOT A SAFE HAVEN.
AVDI - Audio Visual Driver International is a penny stock. NOT A SAFE HAVEN; you must be LOST looking at my blog?
DOWNTREND - I have no idea how long it will last or if we are in one. I do not have a crystal ball. I look at facts. I do not recommend following sectors but individual companies...look at the difference between RAD & CVS (GM or Toyota)which are in the exact same business and sector. My suggestions are stated clearly above...Look for more in the coming days. Peace to all, Sheldon
7-16-2006 @ 12:09PM
al said...
more UTILITYS ELECTRIC&PIPE LINES
7-16-2006 @ 2:26PM
brad said...
Google reports on Thursday, not Monday.
7-17-2006 @ 1:07PM
Sheldon said...
Your right Brad, I just checked and AOL Money & Finance now has the correct date...its 7/20/06...good catch.