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What Stocks Are People Buying?


Viking

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Many stocks are at 52 week lows. Resource stocks have been killed. Financials are down alot. During last years sell off I noticed that some sectors and stocks got cheap in Aug and others got cheap in Nov; the market kind on cycled through sectors as it found its way to bottom. So I missed buying some great companies early in the sell off (like USB). So during this sell off (if thats what transpires in the coming months) I will be more aggressive buying companies as they get cheap and not wait.

 

After today, I am 35% stocks and 65% cash. As a general rule for every 5% drop in the S&P I will invest about 10%-15% of my net worth. I.E. if the S&P falls from 1270 to 1200 I will look to move to 45% stocks and 55% cash. How much I spend will obviously depend on where the stocks I like trade.

 

What stocks have you been buying or are you close to pulling the trigger on?

 

Over the last month I purchased JPM, DNB, KR & DWA.

Today I purchased BAC, RY.TO, WAG & POT

 

On my watch list are GLW, KSS & BMO (and lots more...)

I would also like to begin accumulating a few resource stocks (best in class with lots of cash).

As the stocks I own fall 10% from my purchase price I will also look to double my position (to max 10 or 15% position)

 

I am looking for:

1.) #1 or #2 player in their market segment

2.) strong balance sheet (low to moderate debt)

3.) strong management (successfully managed through 2008/09 melt down)

4.) strong history of returning capital to shareholders (dividend and/or share repurchases)

5.) stock trading at or near 52 week low 

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I would say a key to investing is "know thyself"

 

I've come to realize that I'm just a cigar butt, cheap assets get a business for free type of investor.  So no matter what the market condition this is how I invest.  I make the most mistakes when I stray from this, and my results are the best when I stick with this.  The nice sweetener is that during rough periods the stocks that fall into my lap are a bit higher quality than what I'd normally be picking through in a bull market.

 

So things like Guinness Peat Group, Solitron Devices, Hanover Foods -> bought more or put in orders over the last week.

 

I saw RSH is almost a net-net, maybe they'll be on the radar soon..

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What Stocks Are People Buying?

 

Anacott Steel.

 

 

Seriously though, not much. I have been fully invested and I don't have much money trickling in. I have bought a tiny bit of CTMMA and some BAC.WSA.  I'm thinking about shorting something and I'll also probably do this tender offer: http://motiwalacapital.com/blog/jakk-tender-offer-gives-small-investors-a-chance-to-make-200/

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