Time to Buy (Again)
We have continued to fall off of our early January highs giving us all one more wonderful opportunity to buy. I am going to continue to sing this same song. This is your time! Sure this might not be the end and things may still fall, but you only get so many chances in this life. And if you keep holding out to try to catch the very bottom then you are going to lose 9,999 times out of 10,000. Don't be that guy!
So I am continuing to average down some of my existing positions and add new ones. I threw a sizeable chunk in today. I have some more on the sidelines that I'm holding on to and if we drop further can add to those positions. I suggest you do the same. Most attractive to me right now are solid, well-known, historic large cap companies that pay large dividends and have paid those dividends consistently for decades (and increased them).
What I bought today...
GE - I doubled my position today at $13.25. This thing is yielding over 9% I mean come on! It's a no-brainer! This is now my third largest individual position next to Microsoft and Diageo. GE may be weighed down by their huge financial arm, but they are so diversified and their industrial arm should really help them out... especially as the government looks to spend on infrustructure.
BP - Established a position in beaten-up oil stock. I like BP because of their 8% dividend yield and also because they are positioned in both oil and alternative energy. Picked it up at $41.86.
Janus Mid Cap Value Fund (JMCVX) - My father-in-law suggested that I did not have enough mid cap exposure--and he was right. Once the recovery starts the mid (and small) caps are likely to lead out of it and have over-sized gains. So it's good to have a solid position there. So I opted to go the fund route rather than trying to pick individual mid caps. This fund had the best returners over the 5 year and 10 year and the least amount of losses over one year!
Others that I am watching closely...
Kimberly-Clark (KMB) - The makers of staple brands like Kleenex, Huggies, Scott Paper Towels, and Depends. They also have exposure in the medical industry with gowns and what not--basically anything paper. They are paying an attractive 4.5% yield and P/E is around 12. They are in the same vein as Johnson and Johnson (JNJ) with slightly less medical and slightly better value. This is an especially good bet if you think the recession will wear on for a while, but a good one no matter what. I'm hoping to establish a position here soon, but I don't like to buy too much in one day!
Intel (INTC) - I have poo-pooed Intel for a while. I think that processors are kind of commoditized and the margins are small, weighing on profits. But as prices get down around $13 and yield around 4.5% and P/E at 10.55 then it starts looking really good even so. Intel is clearly THE name in processors and the demand for processors is not going anywhere, even if the recession slows it down temporarily.
AT&T (T) - Solid old brand, growing mobile and broadband market with 6.5% yield. They've always paid dividends and their P/E and FP/E are 11 and 14. Definitely a buy. I also like Verizon, but I think T is a little better value at this moment around $25.
Microsoft (MSFT) - I'd definitely be buying them around these prices ($18.75) if I didn't already have such a large position in MSFT (they are my largest)... I mean come on! I bought at $22, $20.75, and $19.75. You should definitely get in here if you aren't already. I may be tempted to add more, but I'm resisting getting too heavy in any one company.
Other large cap, value-priced, established, dividend payers on my radar...
Verizon (VZ), Johnson and Johnson (JNJ), Coca-Cola (KO), Toyota (TM), Yum! (YUM), and Chevron (CVX).
And one more non-dividend payer that I have an order in for...
I put in a limit order for Apple (AAPL) at $75 and another at $60 in case they continue to fall. It really is a buy NOW (at $79) so I should just do it, but what the hey we'll see if it hits $75. They dont' pay a dividend, but they innovate and make people crazy for their brand... with or without Steve Jobs at the helm. Definitely a buy. Could easily double within three years once we pull out of this.
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