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Re: All set to go shopping
Old 05-23-2006, 05:39 PM   #21
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Re: All set to go shopping

Thats what I said about three years ago.

Ooopsie.
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Re: All set to go shopping
Old 05-23-2006, 05:41 PM   #22
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Re: All set to go shopping

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Originally Posted by Cute Fuzzy Bunny
Thats what I said about three years ago.

Ooopsie.
Three years ago, interest rates were dropping and we just declared war. What were you thinking?
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Re: All set to go shopping
Old 05-23-2006, 05:46 PM   #23
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Re: All set to go shopping

Whenever I can, I like to find investments that won't be hurt by discontinuities. Back in the mid-80s there were gas producers with contracts with the pipelines at $6-$9 MCF. These were hugely over market, since the bottom had fallen out of the gas market since they were contracted. Investors were seeking these companies, since they were getting more for their gas. I reasoned just the opposite- the only thing that might happen here is bad, the contract gets broken. I didn't know if that would happen, but it seemed at least a fair bet. So I went looking for an entity with below market contracts, figuring this could only stay the same or get better. And the same forces that were set in motion trying to release pipelines and consumers from paying over market rates, might also allow this company to get at least a market rate.

I found an MLP with gas contracted at $0.35! So I bought it, along came FERC, and before too long my outfit was getting $1.80, just like everyone else. And of course they were now free to respond to market forces, which I viewed as mostly upside.

Today, twenty years later, the quarterly distribution on this outfit is close to half of what I paid originally. If I hadn't sold some over the years, to "diversify", I could almost have retired on that one small investment.
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Re: All set to go shopping
Old 05-23-2006, 05:57 PM   #24
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Re: All set to go shopping

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Originally Posted by HaHa
If I hadn't sold some over the years...
Story of my life. I always sell my winners too early and my losers too late. That's what makes timing so hard. You have to get all three things right: what to buy, when to buy it, and when to sell it. So, I gave up on that and just try to adjust my asset allocation based on simple stuff like E/P vs treasury yield. I'm about 45% cash today.
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Re: All set to go shopping
Old 05-23-2006, 07:26 PM   #25
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Re: All set to go shopping

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Originally Posted by wab
No idea.* *We might be due for a "relief rally," but personally, I think you're a couple years early dropping your hedge.* *What's the best-case upside?* *Do you think interest rates will drop back down to 2%?* *Another big war?* *This party is over for a while, and I think we're looking at sideways at best, and who knows at worst.
Yeah, I have to agree, but I am mostly invested in equities that do not move with the indexes. I have basically a portfolio that would do well in an economic "brown-out", with some inflation hedges in place. Plenty of risk and reward, but mostly non-systemic.
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