Sometimes, you never know who your friends are. There I was, wondering what to do with a new cash injection, when suddenly, dear old Jose Manuel Barroso, comes to my aid. He said, according to the BBC,
Markets remain to be convinced that we are taking the appropriate steps to resolve the crisis. Markets highlight, among other reasons, the global economic uncertainties due to both economic growth and the protracted decision on budgetary adjustments in the US but, first and foremost, the undisciplined communication and the complexity and incompleteness of the 21 July package.
which could be summarised as "Hey, Mr. Market, it's time to panic." This is just what I need right now, and I feel the greed starting to build as others get fearful, but I am not going to rush in. Down boy, down boy. Slowly, slowly, catchee money.
As I am fairly satisfied with about 70% of my shareholdings, I am mostly going to be topping up on some of the companies I already own, having first reviewed their fundamentals in terms of debt levels, valuations and business prospects. In the downturn of 2008/2009, I concentrated on growth and did reasonably well. This time around, however, I want to build income out of sensible, sustainable yields of 4-7% (yup, I won't by buying more HMV).
I felt the FTSE100 was fairly valued around 5800-6000. It has just closed below 5400 after a daily fall of 3.4%., so we are getting into good value territory. Accordingly, I am starting to buy. However, big falls often continue, even after rebounds, and I am in no hurry to plumb the depths. Companies I am interested in are AstraZeneca, Aviva, Balfour Beatty, Braemar, Electrocomponents, Hiscox, IG Group, Marks and Spencer, Marston's, RSA, Vodaphone and Waterman.
I daresay, I shall also be tempted by a few dismal recovery stocks, too, like Colliers International, PVCS, BP or even a bank, but will hopefully have the good sense not to get carried away. Meanwhile, I think it is worthwhile taking some time to enjoy the Euro crisis. Jose probably won't say much more now, but there are no doubt plenty of others waiting to chip in. Start talking, guys.
It's a long hot summer (well, should be). I can see you out there with the Pimms on the garden table reflecting on the latest offers from Mr Market, sending him back with the 'hey, you can do cheaper'
ReplyDeleteRSA - I have them @ 16% down, they're going for a CEO change. Results looked pretty good to me, and they have a good dividend increase history even through the credit crunch. I'm sorely tempted to buy, but as you say, shouldn't loose off all the ammo at once ;)
Have AZN too, taken some heat on them, I know the patent story but we're all getting older and more in need of their sort of stuff, I'll see what Mr Market can do me for with them - another great steadily increasing divi story...
Heck, I'd buy Jose a beer for kicking this off!
@ermine, Pimms in the garden? Sounds nice, but I may well be too fretful, trying to stay calm . . .
ReplyDeleteKeeping the Graham metaphor in mind, however, helps. Looks like another hairy week, next week.