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October 31, 2011 – Comments (14)

I hate to sound like a broken record, but I'm really don't trust this market. It isn't cheap enough to buy and the macro factors look pretty bad. I hope not too many more companies go under as the European contaigion spreads. But just on an instantaneous profits level, it isn't that expensive either. The question is, are the profits maintainable, or do they revert to the mean?

So I'm still mostly in cash, waiting for things to either get worse, or resolve. 

14 Comments – Post Your Own

#1) On October 31, 2011 at 11:31 PM, VExplorer (29.63) wrote:

I'm in the same boat

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#2) On November 01, 2011 at 12:22 AM, whereaminow (< 20) wrote:

Up, up, up, and away...

Davd

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#3) On November 01, 2011 at 12:23 AM, whereaminow (< 20) wrote:

It would help if I could type my own name correctly

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#4) On November 01, 2011 at 2:31 AM, motleyanimal (57.48) wrote:

I'm 50/50. That way I'm always half right.

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#5) On November 01, 2011 at 3:01 AM, Valyooo (99.39) wrote:

I don't see how it can go any way but up.  Increasing earnings, more easing, no economic boom, low consumer confidence (contrarian signal)...what more could you possibly want?

Forget cash...buy something high yielding if you want safety.  PHK or some muni's.

I would think most crashes are the result of booms...there was no boom so I don't see a bust.

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#6) On November 01, 2011 at 4:29 AM, FleaBagger (28.15) wrote:

I told my Dad to dip his toe in when the S&P went below 1100 recently, and without my permission he sold for a ~15% gain a few weeks later. I told him, "accumulate on the dips," because with all the money-printing they're going to be doing, trying to sell high will have you selling oo early. Still, I expect a significant swoon over the next few months.

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#7) On November 01, 2011 at 10:16 AM, Mega (99.96) wrote:

Valyooo 

PHK is not safe.  It is trading way above NAV and the dividend is unsustainable.

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#8) On November 01, 2011 at 11:22 AM, EnigmaDude (82.55) wrote:

Selective buying is the key, I think.  For example, BHI just placed an ad in the Denver Post announcing 1500 job openings. I think we are in the early stages of a new domestic (onshore) energy boom and there are some good opportunities out there.

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#9) On November 01, 2011 at 12:08 PM, leohaas (31.08) wrote:

Long Term: Up.

Short Term: a volatile sideways.

I just need to figure out what Short/Long Term here means...

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#10) On November 01, 2011 at 2:26 PM, Schmacko (55.55) wrote:

"Short Term: a volatile sideways."

This is how I see things. Figure S+P could drop another 100 points from here and then resume range trading.  Macro still seems negative overall but I don't think US politicians are going to let the market tank before the elections next November.

There needs to be a catalyst to get the market to definitively breakout in one direction.  Don't know what that is or when it will be though.

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#11) On November 01, 2011 at 2:30 PM, ryanalexanderson (< 20) wrote:

My personal investment guidelines (which have nothing to do with my silver-only CAPS profile) are that I'll stay away from stocks until people stop talking about credit issues. I'll confess to know nothing about credit markets, except that the time to accumulate stocks is when credit markets are boring. They aren't boring at the moment. 

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#12) On November 01, 2011 at 4:15 PM, memoandstitch (< 20) wrote:

It's more like up, down, up, down, ...  

I have already called the definitive up one month ago, when I called the bottom

http://caps.fool.com/Blogs/what-a-truly-amazing-day-for/650768 

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#13) On November 01, 2011 at 7:39 PM, Valyooo (99.39) wrote:

PHK is not safe.  It is trading way above NAV and the dividend is unsustainable.

Do you understand the inverse correlation between bond prices and interest rates?  Why would it be any different for bond funds?

I'll take 11.5% on a dividend way over NAV over >3% on a treasury any day of the week.  

How is the dividend unsustainable  Look at the payout history...incredibly reliable.

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#14) On January 06, 2012 at 2:28 PM, Mega (99.96) wrote:

"Do you understand the inverse correlation between bond prices and interest rates?  Why would it be any different for bond funds?"

Yes, of course. No it's not.  These questions are irrelevant to my comment.

"I'll take 11.5% on a dividend way over NAV over >3% on a treasury any day of the week." 

It would be smarter to stash your cash in a sock drawer and pay yourself 11.5% a year.  At least that way, you can invest in your sock drawer at NAV instead of PHK at a huge 68% premium to NAV.

Put it another way - for every $1000 you invest in PHK, you only get about $600 in assets.

"How is the dividend unsustainable  Look at the payout history...incredibly reliable."

The distribution rate is way higher than their income.  Which means that NAV is going down and a dividend cut is inevitable.

http://www.cefconnect.com/Details/Summary.aspx?ticker=PHK

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