Archive for category Stock Picks
Some of you have shared your comments, thank you, on some of the royalty trusts mentioned as short-term holds. Great Northern Iron (GNI) ends its trust in 2015. This is true. We do not see it as a play longer than 12-18 months as we watch the market corrections settle in. In fact, as opportunities arise to invest, we will be taking money out of those holding tanks and moving them into other things. It is staying within its trading range, though, which does not indicate any immediate cause for alarm. Four years in investing cycles is quite long.
If you look at Morningstar’s article on Warren Buffett this morning, the Oracle of Omaha is doing what I’m doing as well: Seeing the oversaturated market, taking profit, and waiting for the correction. With oil unrest taking center stage, the pretense for correction exists. Add to that my recent recommends in oil and mineral rights stocks that pay 7-10% dividends are all up 3-22% over the last two weeks and you have the signs of a shift.
If you made some money on it, and you don’t want to ride the ride another cycle, get it gone.
I will often be asked: “Why should I spend six years to make my money when I can buy small stock X that went up 432% last week, or buy Apple which zooms up from time to time, and be done with it?”
There are a lot of ways to make money in the stock market. Everyone finds a way that suits their temperament, their tolerance for risk, and their adrenaline level. Beyond that though, I have to ask you: How much are you willing to pay for nothing.
Any time that you buy a stock in excess of its fair market value, that is what you are buying.
According to my time-tested indicators, the market is very, very overvalued right now. That is not to suggest that a large or sharp correction is imminent, but certainly there is little doubt that, with prices as high as they are, a little bad news or some collective profit-taking by mutual and hedge funds could cause a reset of at least 3%-5%.
If you have followed my column that was formerly on Morningstar.com, as value vultures, we were engaged in buying stocks of companies that would benefit from the calamities in the market which had found themselves wedged in the circumstances of fear and credit crunches.