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BigFatBEAR (99.16)

Enough is enough.... BFB is going to begin buying and holding

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August 03, 2009 – Comments (17) | RELATED TICKERS: COP , BP , BWP

There's an old saying that goes, "if you can't beat 'em, join 'em".

Even though I think earnings are mostly miserable, and even though I believe that the economy is still shrinking (but just at a slower rate)...  low interest rates and the stimulus seem to be having their desired effect on economic activity and investor confidence. I've likely missed the bottom (damn, it is hard to time the market) and we're either correcting back strongly from here (very unlikely), or we'll stay range bound and the markets will return to fearful and choppy. Either way, I'm slowing going to begin buying and holding for the very long-term.

I will start accumulating shares of high-yielding energy companies in my shiny new Sharebuilder Roth IRA, and will force myself to not sell until 10+ years have passed. 

I've had the benefit of paying $0 in rent for the last 2 years. I've decided that I'm going to start "paying rent" - or Dollar Cost Averaging - to a few landlords named COP and BP every month. "It’s far better to buy a wonderful company at a fair price than a fair company at a wonderful price."

I'm still going to save the bulk of my funds and get in at a better price than where we're currently at, which I think is likely, but yeah. Market timing is becoming too stressful, too time-consuming, and counter-productive to my goals at the moment. I'm buying with some trepidation right now, but if the market corrects from here I'll be buying with plain glee. "We simply attempt to be fearful when others are greedy and to be greedy only when others are fearful."

 

Lastly here's a tribute to Michael Jackson, in his prime. Anyone else remember this from their childhood? I LOVED this as a kid. I present to you Captain EO, in 2 parts:

 

17 Comments – Post Your Own

#1) On August 03, 2009 at 1:11 PM, awallejr (81.52) wrote:

Might want to just diversify a little then.  Buy some BP one month, maybe T next month, then maybe BMY 3rd month until you have a core of 5 and then just keep adding to those positions on a rotating basis.  No need to wait for a pullback since you will be adding in constantly over the years anyway.  Just start the position at least.

My 2 cents anyway.  Hope it all works out for you.

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#2) On August 03, 2009 at 1:19 PM, davejh23 (< 20) wrote:

Based on earnings, the market should be crashing...not just pulling back a bit.  Is the market rallying due to institutional buying?...funds that were holding cash dumping money into the market for fear of missing any more upside?...crash coming?  Or, are we pricing in high inflation?...the rally continues as the USD weakens?

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#3) On August 03, 2009 at 1:20 PM, BigFatBEAR (99.16) wrote:

Hahahahaha!! Captain EO is so ridiculously awesomely epic and cheesey! Oh man. Imagine watching this in 3D at EPCOT at the age of 6...!! So great.

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#4) On August 03, 2009 at 1:35 PM, outoffocus (23.44) wrote:

OMG! Bear capitulation? We must have finally hit a top.

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#5) On August 03, 2009 at 1:36 PM, automaticaev (80.68) wrote:

very easy money makes me nervous.

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#6) On August 03, 2009 at 1:38 PM, automaticaev (80.68) wrote:

lol ya if you want to buy and hold now probably means to sell lol

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#7) On August 03, 2009 at 2:05 PM, anchak (99.73) wrote:

Neil...all the best....

Honestly I would wait a little if I were you.

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#8) On August 03, 2009 at 2:21 PM, MattH42004 (99.91) wrote:

Be careful, you might want to read THIS first. If you truly believe that "we'll stay range bound and the markets will return to fearful and choppy" then you would be in the same camp as the great Mr. Kass (and myself, but I doubt that matters too much). If you agree with the piece, particularly this line at the end

"I would further argue that we are in an extended stock market trading range for several years to come and that, more than likely, we are now at the upper end of that trading range...the market's recent advance has likely served to reduce, not increase, the margin of safety." 

then you are probably buying in near the top of the range, and a little patience might be needed for the time being. Of course, if I remember correctly from reading some of your earlier posts your around my age and have time on your side. If you do decide to buy and you desire energy exposure and yield you might want to look toward some of the MLPs along with your Big Oil names. 

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#9) On August 03, 2009 at 2:28 PM, binve (23.58) wrote:

BFB, this sums up my sentiment: http://www.youtube.com/watch?v=fyfyhKga-6Y .

No prob man, I totally understand how you feel. This is the rally that won't quit. FWIW, I added to my shorts this morning (80% cash, 20% short), because I think there will be a pullback soon. Not a very dramatic one though (not a crash ... yet), I will be mostly in cash. I think we have another rally in the cards from mid/late Aug - Sept/Oct. Past that, then your name will be back in full force :) (just my random and arguably worthless thoughts on the matter). Take care bro :)

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#10) On August 03, 2009 at 2:44 PM, goldminingXpert (99.97) wrote:

Keep most of your cash free... this is equivalent to shorting bad companies at S&P 666. You're looking at THE TOP of the US equity markets give or take 50 points for the next two years right now TODAY. Just about everything with a ticker symbol is going lower than here. The banking system is actually collapsing... FBI raids today and the FDIC is bankrupt. The GDP print was armegeddon bad... minus double digits percent once you take out the bankrupt government spending increases. The Euro, Pound, etc have gone into an unbelievable blow-off top... the Pound is up 7 cents in two days... completely unreal. 85% of my net worth is now invested in puts with expirations no later than December and in levered bear ETFS.

 I like BWP, BP, etc a lot, but BP is at 52 and it was at 45 just weeks ago. How can one buy it now? Even BWP has crept off its long-standing perch at 22.

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#11) On August 03, 2009 at 2:53 PM, portefeuille (99.96) wrote:

BP and BMY are somewhat notorious for being dead stocks (except for maybe those dividends). They might be dead money for another few decades ...

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#12) On August 03, 2009 at 2:57 PM, goldminingXpert (99.97) wrote:

BP will make a killing if the price of NG ever recovers. Plus the dividend yield alone outperforms most bonds.

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#13) On August 03, 2009 at 3:50 PM, Mark910 (< 20) wrote:

GMX

"The GDP print was armegeddon bad... minus double digits percent once you take out the bankrupt government spending increases."

Also I wonder if you took out the govt spending how far down other areas would go as well.  For instance, cash for clunkers, means more cars sold artificially that people would not have bought otherwise or will now not buy over the course of the next few months.  This goes for mortgages, housing, you name it.

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#14) On August 03, 2009 at 7:07 PM, chk999 (99.99) wrote:

Market Top!

Actually I'm just kidding you. What I have noticed is that while the trend I thought would happen eventually did, it took really a lot longer to happen than I thought possible. It didn't matter whether the trend was up or down, it took years longer to happen than I planned. From this I extrapolate that the run up will go on much longer than I think conceiveable. I've seen estimates that it might go on as long as until fall of 2010.

For real money I'm cautiously bullish, but plan to take some off the table if anything looks to be really overheated.

Might want to add some natgas driller exposure in there somewhere, that stuff has got to get more expensive.

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#15) On August 03, 2009 at 7:52 PM, NOTvuffett (96.24) wrote:

Hey BigFatBear, I don't know if COP is the oil stock to own.  I have read that they didn't make the best of decisions recently.  Have you looked at the offshore drilling companies?  Their business model is less tied to the spot price of oil than companies like XOM, COP, etc. I own RIG, they are the largest, but other names in the sector that come to mind are NE and ATW.

chk999, I think the nat gas may turn around towards the end of the year.  If it doesn't, I think I will sell my nat gas stocks and put the money into something else.

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#16) On August 04, 2009 at 2:18 PM, bullishbabo (100.00) wrote:

Totally unrelated, but you and I have the exact same charms!

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#17) On August 06, 2009 at 11:31 PM, bothisellhigher (50.74) wrote:

I remember and my love of motown music is totally intact.  My last two years in high school (65+66) were spent there + the next 4 at UofM-Go Blue...thanks for the refreshing memories of Michael in a better time.  I've been in BP for awhile and will be for awhile longer (target 70) and will collect the nice dividend until that time...LGCY is a nice buy now as well...I'd buy it but I'm totally invested longer term in BP, LINE and AUY...with the caveat that GMX is correct when he points out current crappy affairs of the world and market correct if Mr. market (S+P) declines down through 935...Again though, if you are truly 10+ year long term in expectation BP will fair thee well.

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