Join Early Retirement Today
Reply
 
Thread Tools Search this Thread Display Modes
Anything, ANYTHING Cheap Out There?
Old 01-01-2006, 09:35 PM   #1
Full time employment: Posting here.
 
Join Date: Dec 2004
Posts: 714
Anything, ANYTHING Cheap Out There?

I think I know the answer to this, but ... some of you have clued us in to the Pentagon Federal Credit Union 5.25% 5-year CD's, and the Emigrant Direct 4% money market accounts.* You made our 2005 financial picture better, so we're grateful.

And, we try to buy low, when the bloom is off the rose, and everyone else is avoiding a sector ...

But for the life of me, I don't see that sector currently.* Perhaps we're being myopic.

Commercial real estate here in Nashville seems to be an opportunity, since the residential has been discovered, but the commercial is lagging.* But other than that very minor opportunity, I sure don't see any investments that are shunned right now.

Gold is hot, oil / energy is hot, commodities are strong, the equity markets have generally done well, and residential real estate is obviously very hot, albeit cooling a bit.* I suppose bonds may be an opportunity if the inversion produces the historically expected results, but ...

Last I heard, Mr. Buffett was still sitting on a hoard, waiting for an opportunity.

Richard Rainwater, according to Fortune, is focused on Peak Oil, and ready to pull the trigger, on ... ?


Does anyone note an investment market that appears to be the current shunned, in-the-shadows opportunity?
__________________

__________________
Craig is offline   Reply With Quote
Join the #1 Early Retirement and Financial Independence Forum Today - It's Totally Free!

Are you planning to be financially independent as early as possible so you can live life on your own terms? Discuss successful investing strategies, asset allocation models, tax strategies and other related topics in our online forum community. Our members range from young folks just starting their journey to financial independence, military retirees and even multimillionaires. No matter where you fit in you'll find that Early-Retirement.org is a great community to join. Best of all it's totally FREE!

You are currently viewing our boards as a guest so you have limited access to our community. Please take the time to register and you will gain a lot of great new features including; the ability to participate in discussions, network with our members, see fewer ads, upload photographs, create a retirement blog, send private messages and so much, much more!

Re: Anything, ANYTHING Cheap Out There?
Old 01-01-2006, 11:00 PM   #2
Recycles dryer sheets
 
Join Date: Feb 2005
Posts: 454
Re: Anything, ANYTHING Cheap Out There?

It's probably too late now, but a while ago, I noticed that the Russian market was trading at very low P/E and maybe other measures. The fiasco where the government was destroying shareholder value at an oil company was going on or just had, and people were afraid to buy stocks, since shareholder rights were questionable, to say the least.
The market seemed so cheap though, that maybe the worst was already priced in, and it may have been a good buy. I don't remember why I didn't bite.

Now that oil profits have lifted other markets that are heavy on oil, I'd guess that Russia isn't so cheap anymore. But, maybe you could check it out if you like. I haven't looked into it in some time.

Another idea--Geremey Grantham of GMO says that "high quality" stocks in US are cheap right now. If you believe him, you could pick a few, or steal some of GMO's picks. The "quality" fund prospectus defines what is meant by high quality.

I think the "cheapest" US index today, without paying a high ER, is probably BRLIX. Or maybe a large growth index, I don't know.
Not that BRLIX is that cheap, except perhaps compared to some popular investments.

If you believe this data: http://www.globalindices.standardand...ntal?index=BMI
(I don't believe. For example, I doubt the Venezeula stock market yields 12.91%)
then it looks like there's some world markets that are pretty cheap, including some more developed ones. Not all of them easy to invest in, and some of the EM are quite risky.
__________________

__________________
lazyday is offline   Reply With Quote
Re: Anything, ANYTHING Cheap Out There?
Old 01-02-2006, 08:40 AM   #3
Recycles dryer sheets
 
Join Date: Dec 2005
Posts: 137
Re: Anything, ANYTHING Cheap Out There?

Agree, I sold my house and have a pile of change - and I can't find a durn thing to put it in. The best I can figure is that the world is awash in capital and so it's bid everything up. Which makes me nervous that maybe (probably) investments are high not because of fundamentals but because there's simply money looking for a home. Which points to a sell off. I just stuck it in treasuries and will see what happens.

A collegue of mine of FIRE'd at 43 a multi millionaire (and who now runs his own private investment company) said, maybe three years ago, the same thing. His best advice? Just spread it around as best you can.
__________________
danm is offline   Reply With Quote
Re: Anything, ANYTHING Cheap Out There?
Old 01-02-2006, 09:20 AM   #4
Thinks s/he gets paid by the post
Spanky's Avatar
 
Join Date: Dec 2004
Location: Minneapolis
Posts: 4,046
Re: Anything, ANYTHING Cheap Out There?

Quote:
Gold is hot, oil / energy is hot, commodities are strong, the equity markets have generally done well, and residential real estate is obviously very hot, albeit cooling a bit. I suppose bonds may be an opportunity if the inversion produces the historically expected results, but ...
Siegel does not think bond for the long term. He think stocks (esp. emerging) and the energy sector will continue to strive.

http://finance.yahoo.com/columnist/a...nvest/2052?p=1
__________________
May we live in peace and harmony and be free from all human sufferings.
Spanky is offline   Reply With Quote
Re: Anything, ANYTHING Cheap Out There?
Old 01-02-2006, 10:09 AM   #5
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
brewer12345's Avatar
 
Join Date: Mar 2003
Posts: 16,391
Re: Anything, ANYTHING Cheap Out There?

There are plenty of cheap assets out here, but its at the level of individual bonds, stocks, etc. rather than whole markets or indexes.
__________________
"There are three kinds of men. The one that learns by reading. The few who learn by observation. The rest have to pee on the electric fence for themselves."



- Will Rogers
brewer12345 is offline   Reply With Quote
Re: Anything, ANYTHING Cheap Out There?
Old 01-02-2006, 10:37 AM   #6
Moderator Emeritus
Nords's Avatar
 
Join Date: Dec 2002
Location: Oahu
Posts: 26,617
Re: Anything, ANYTHING Cheap Out There?

Quote:
Originally Posted by Charles
And, we try to buy low, when the bloom is off the rose, and everyone else is avoiding a sector ...
Charles, I'm going to guess that you're a value investor who's not really interested in growth stocks, momentum, technicals, or options.

But this is a stock-picker's market, and if you're unable (or unwilling) to put the time into the research then you shouldn't invest a dime... or you should invest it with others who have a track record.

For example you've probably passed over the world's 10th largest mutual fund-- Berkshire Hathaway. It's currently trading at a 30-40% discount to intrinsic value. It's been dinged by natural disasters but it's raising its supercat premiums by an obscene amount-- 25-40%-- to reflect the industry trend of recovering capital after a bad year. Consolidation will drive out the marginal performers. General Re is one of the few insurers with a AAA rating and its principal has decades of experience. Buffett's stash also puts him in the enviable position of being able to make a quick cash offer (discounted, of course) to close deals that would take other companies months. Bill Gates just bought 100 of the "A" shares and perhaps you could buy the same percentage in your portfolio.

Brewer has identified a similar opportunity in standalone small-cap reinsurance companies. Cruise through his old posts and do your own due diligence but there are some good opportunities out there.

Tweedy, Browne Global Value (TBGVX) is closed to new investors but will reopen when they find more value investments for their 20% cash stash. Keep an eye on them while you're keeping your cash in CDs, and read their website's value-investing library.

Nortel (NT) may be finally coming out of the woods. Their latest CEO (the third in as many years) actually has industry experience and has been sweeping out the old to bring in his team. Of course I've been waiting for this blessed recovery for over a year so do your own research.

Retailers will go through a small dip this month. Wal-Mart (WMT) is about to report that their holiday sales fell in the low end of their prediction. The herd will dump retailers, the sector will drop a few percent, and by February the sector will rebound when it'll turn out that all of those gift cards (not counted in December's sales figures) were redeemed in January for blowout sales numbers. I wouldn't be surprised to learn that Buffett has been buying WMT to make up for his 1990s oversight.

CostCo (COST) is another retailer with a widely-acknowledged employee benefits program and the industry's lowest turnover. They pay a nice dividend, Charlie Munger sits on their board, and they've been expanding their loss-leader gasoline sales because of all the customers it drags into the store. They make a great cheap pizza, too. Watch the stock for the next few months and buy on dips. Anything below $45 is nice and below $40 would make me dump other losers to buy more COST.

Tate & Lyle PLC (ADRs trading as TATYY) makes sucralose, the only naturally-derived low-calorie sweetener that doesn't degrade at high temperatures (in the baking oven). Their stock was up over 20% at one point but has eased and may even be oversold. Their patents are strong, a new factory is on schedule for early 2006, EU sugar subsidies broke in their favor, major food companies are buying Splenda like crazy, and this British company will benefit from a declining dollar. It also has a nice dividend payable this week.

Home Depot (HD) & Lowes (LOW). Buffett's been buying HD and is probably going to keep on buying. As the housing market cools people will continue to renovate their homes (especially insulation!). Whole TV cable channels (Style, HGTV) are devoted to teaching us all how to spend more money renovate our homes for better value. I think that products have become easier for homeowners to select & install on their own and will continue to expand as DIYers cut the contractors out of the loop.

Fanatic value investors pay attention to overvalued stocks as well as undervalued ones. Many financials are overvalued after years of interest-only mortgages and other leveraged debt products. If the housing market collapses or some other catastrophe pushes homeowners into mortgage default, companies with a high percentage of IO mortgages will get hammered. Another short-selling favorite of mine is Abercrombie & Fitch (ANF), whose CEO is one of the few remaining unindicted jerks. Wait until it peaks & flattens ($65-%70), go short, and wait for him to implode. I'm thinking Enron, Krispy Kreme, & Taser all over again. WebMD (WBMD) and Herbalife (HLF) may be there already.

Intel (INTC) is finally recovering from TH's retirement. Their brand is undergoing a huge overhaul and they just got a number of pages in Business Week. Read the article and decide for yourself, but I'm intrigued by their oversold volume and their price breaking below its long-term moving average. There'll be buying opportunities in the next six months.

If you don't want to take on single-stock risk, look at sector ETFs. I've been happy with the S&P600 small-cap value ETF (IJS). It just juggled its indexing method this month to better reflect value stocks (as well as reduce turnover). It also pays a modest dividend which Fidelity reinvests for us at no charge. Another quality ETF is the DOW Dividend ETF (DVY). ETFs aren't such a good deal for DCA investors but their ERs are a bargain when purchased in five-figure amounts.

Finally, renewable energy. I've identified a trend but I haven't done my due diligence yet, so the rewards await your efforts. I've been tracking the prices of photovoltaic solar panels for the last year. Bargains abounded at $3.50/watt in 2004 but have easily doubled since then. Federal RE incentives have just kicked in (as well as other state incentives like NJ and global subsidies like Germany & Japan) so the entire industry is getting a govt kick-start this month. The suppliers I chat with are selling faster than they can ramp up production, and contractors are scrambling to buy inventory before it doubles in price again. $7/watt is considered a great price today if you can find it, and I bet we'll be seeing $10/watt by summer. Nov/Dec will explode in a frenzy of late-year tax planning. The trick is finding a company that doesn't just make PV panels as a tiny sideline. I don't have any answers yet but Evergreen Solar (ESLR) is on my "to research" list.

Similar demand is being subsidized for hybrid vehicles and home energy-efficiency improvements. Toyota & Honda stand to benefit handsomely from their hybrids as do GM & Ford (if they don't have to break their unions in bankruptcy court). Building materials will benefit as everyone looks for ways to reduce their heating bills.

Disclosure: Berkshire Hathaway, Tweedy Browne, and IJS make up the vast majority of our retirement portfolio. We also own a significant minority of DVY and TATYY. I have a small position in NT. I've owned WMT, COST, HD, & LOW before and I will probably do so again. I need to think about buying Intel. I've shorted ANF before and I can't wait to get back onboard the ride. I'm ready to short HLF & WBMD. I wouldn't touch Toyota, GM, or Ford with a 10-foot pole in either the long or the short directions but I need to take a look at ESLR as soon as we finish expanding our solar array. Finally, I've been sitting on a few of Brewer's recommendations and I'm already beginning to regret not getting off the dime.
__________________
*
*

The book written on E-R.org, "The Military Guide to Financial Independence and Retirement", on sale now! For more info see "About Me" in my profile.
I don't spend much time here anymore, so please send me a PM. Thanks.
Nords is offline   Reply With Quote
Re: Anything, ANYTHING Cheap Out There?
Old 01-02-2006, 12:02 PM   #7
Thinks s/he gets paid by the post
Spanky's Avatar
 
Join Date: Dec 2004
Location: Minneapolis
Posts: 4,046
Re: Anything, ANYTHING Cheap Out There?

What are the major differences between the Berkshire Hathaway A and B share (other than the price)? The price of A is very, very stiff: $88,620. I wonder if this is one way to deter small investors. It seems that the returns are different also.
__________________
May we live in peace and harmony and be free from all human sufferings.
Spanky is offline   Reply With Quote
Re: Anything, ANYTHING Cheap Out There?
Old 01-02-2006, 12:31 PM   #8
Moderator Emeritus
Nords's Avatar
 
Join Date: Dec 2002
Location: Oahu
Posts: 26,617
Re: Anything, ANYTHING Cheap Out There?

Quote:
Originally Posted by Spanky
What are the major differences between the Berkshire Hathaway A and B share (other than the price)? The price of A is very, very stiff: $88,620. I wonder if this is one way to deter small investors. It seems that the returns are different also.
Here's the rules.

The "A" share price is designed to discourage trading, although at today's commissions that's a lot smaller deterrent than it ever has been. The share volume/liquidity is really too low to permit technical analysis.

The "B" shares are set at 1/30th of the "A" shares to discourage other companies from setting up mutual funds. This was an effective deterrent in 1996, when the "B" shares were introduced, but companies are starting to talk about setting up funds to make the "B" shares more affordable again. I don't know if BH is considering "C" shares!

An "A" share can be converted to 30 "B" shares anytime, but the reverse transaction does not exist. So arbitrage occurs if the "B" shares rise above 1/30th of the value of an "A" share, and this messes with the returns a small bit. If the "B" shares trade above 1/30th the NYSE specialist (or anyone else) buys the "A" shares, converts them to "B"s, and sells them at a fractional profit to drive the price back down.
__________________
*
*

The book written on E-R.org, "The Military Guide to Financial Independence and Retirement", on sale now! For more info see "About Me" in my profile.
I don't spend much time here anymore, so please send me a PM. Thanks.
Nords is offline   Reply With Quote
Re: Anything, ANYTHING Cheap Out There?
Old 01-02-2006, 12:47 PM   #9
Thinks s/he gets paid by the post
MasterBlaster's Avatar
 
Join Date: Jun 2005
Posts: 4,359
Re: Anything, ANYTHING Cheap Out There?

Anything cheap out there ?

Well if you believe in the eficient market theory - ie. EMT then every thing is properly priced. Nothing is cheap and nothing is expensive.

Russian mutual funds have very low PE's because the market has taken into account that someone over there just might be skimming your fund. And that their market just may not be an unloaded game.

I'm not sure that I beleive in EMT so I won't give a long dialog about its merits.

However, when someone proposes a stock as cheap one must always keep in mind the risk associated with that investment. Risk is many times associated with cheap.

Now change the word cheap to risky and go back and look at the other posters proposed investments.

Just maybe it'd be better to have a broad-based diversified portfolio and let others take the risk looking for cheap stocks.

__________________
MasterBlaster is offline   Reply With Quote
Re: Anything, ANYTHING Cheap Out There?
Old 01-02-2006, 01:13 PM   #10
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
haha's Avatar
 
Join Date: Apr 2003
Location: Hooverville
Posts: 22,385
Re: Anything, ANYTHING Cheap Out There?

Quote:
Originally Posted by MasterBlaster
Anything cheap out there ?

I'm not sure that I beleive in EMT so I won't give a long dialog about its merits.
Thank you.*
__________________
"As a general rule, the more dangerous or inappropriate a conversation, the more interesting it is."-Scott Adams
haha is offline   Reply With Quote
Re: Anything, ANYTHING Cheap Out There?
Old 01-02-2006, 01:30 PM   #11
Recycles dryer sheets
 
Join Date: Feb 2005
Posts: 454
Re: Anything, ANYTHING Cheap Out There?

Quote:
Originally Posted by MasterBlaster
Now change the word cheap to risky and go back and look at the other posters proposed investments.
IMO this doesn't always apply. For example, I suspect that in the US, largecap growth like VUG, very largecap like BRLIX, and "quality" stocks all have lower risk than the market (if you diversify appropriately) and are all cheaper than the market.

But, it's very easy to be wrong. So, I agree that:

Quote:
Originally Posted by MasterBlaster
Just maybe it'd be better to have a broad-based diversified portfolio and let others take the risk looking for cheap stocks.
__________________
lazyday is offline   Reply With Quote
Re: Anything, ANYTHING Cheap Out There?
Old 01-02-2006, 06:13 PM   #12
Recycles dryer sheets
 
Join Date: Oct 2004
Posts: 325
Re: Anything, ANYTHING Cheap Out There?

I am buying what IMHO will be the next commodity price swing upward after energy and land: Agricultural Consumables.

Those Chinese and South Asians (and the global population in general) will be upgrading their diets. I want to own those agri-companies that can meet their new demands:

Here are my last three buys in this sector:

Hines Horticulture Inc
HORT:NASDAQ

Archer-Daniels-Midland Co
ADM:NYSE

General Mills Inc
GIS:NYSE

As in any investing decision Do your own due dilligence. 8)

__________________
"TEMPUS FUGIT"
LEX is offline   Reply With Quote
Re: Anything, ANYTHING Cheap Out There?
Old 01-02-2006, 10:11 PM   #13
Recycles dryer sheets
 
Join Date: Jun 2005
Posts: 213
Re: Anything, ANYTHING Cheap Out There?

Quote:
Originally Posted by lazyday
Now that oil profits have lifted other markets that are heavy on oil, I'd guess that Russia isn't so cheap anymore. But, maybe you could check it out if you like. I haven't looked into it in some time.
It could get cheap again because of this nat gas screw up with Ukraine.

I am collecting cash waiting for opportunities. Although I am looking at RWF and IGR for international real estate exposure.

Mike
__________________
mikew is offline   Reply With Quote
Re: Anything, ANYTHING Cheap Out There?
Old 01-02-2006, 11:39 PM   #14
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
Brat's Avatar
 
Join Date: Feb 2004
Location: Portland, Oregon
Posts: 5,914
Re: Anything, ANYTHING Cheap Out There?

Quote:
Originally Posted by LEX
I am buying what IMHO will be the next commodity price swing upward after energy and land: Agricultural Consumables.

Those Chinese and South Asians (and the global population in general) will be upgrading their diets.* I want to own those agri-companies that can meet their new demands:

Here are my last three buys in this sector:

Hines Horticulture Inc
HORT:NASDAQ
I wasn't aware that Hines grew foodstuffs. The consumables that I know about are landscape materials.
__________________
Duck bjorn.
Brat is offline   Reply With Quote
Re: Anything, ANYTHING Cheap Out There?
Old 01-04-2006, 11:50 PM   #15
Recycles dryer sheets
 
Join Date: Oct 2004
Posts: 325
Re: Anything, ANYTHING Cheap Out There?

Brat:

This may be a better fit as to the pure Ag-Play rather than Hines:

Monsanto Co
MON:NYSE

I own both. Perhaps the better logic for holding Hines is that landscaping demand is in line with the real estate play.



Good Luck 8)
__________________
"TEMPUS FUGIT"
LEX is offline   Reply With Quote
Re: Anything, ANYTHING Cheap Out There?
Old 01-06-2006, 07:28 PM   #16
Recycles dryer sheets
 
Join Date: Dec 2005
Posts: 186
Re: Anything, ANYTHING Cheap Out There?

nothing wrong with holding cash...

I put some in market, some in muni funds, short term bonds and lots in cash...you can do this
or put most in stocks rest in cash
or put most in cash the rest in bonds and stocks...

~what ever helps you sleep at night! THAT IS THE MAIN THING... if the market goes down 5% in a day, can you sleep ok? that is the true essence of what to do with your money...
__________________

__________________
We should all feel blessed!
wstu32 is offline   Reply With Quote
Reply


Currently Active Users Viewing This Thread: 1 (0 members and 1 guests)
 
Thread Tools Search this Thread
Search this Thread:

Advanced Search
Display Modes

Posting Rules
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts

BB code is On
Smilies are On
[IMG] code is On
HTML code is Off
Trackbacks are Off
Pingbacks are Off
Refbacks are Off


Similar Threads
Thread Thread Starter Forum Replies Last Post
Buy a cheap call option? lazyday FIRE and Money 5 02-02-2007 10:37 AM
Are you cheap? boont Life after FIRE 79 08-08-2006 07:36 PM
Are We Frugal & Methodical or Just plain Cheap? education Life after FIRE 40 11-13-2005 09:36 PM
cheap cheap vacation EricMD FIRE and Money 4 09-02-2005 10:42 AM
Cheap "glove compartment" Cell phones redux cute fuzzy bunny Other topics 29 05-14-2005 01:31 PM

 

 
All times are GMT -6. The time now is 10:09 AM.
 
Powered by vBulletin® Version 3.8.8 Beta 1
Copyright ©2000 - 2017, vBulletin Solutions, Inc.