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Vector Group Ltd. Message Board

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  • ltbhdollars ltbhdollars Mar 23, 2011 5:37 PM Flag

    VGR or the Bank

    I see three possible problems with your logic ... if this is indeed monies held as a cash reserve against sudden health/employment/financial crisis, then IMO, it should continue to remain liquid and cash only.

    Everyone should have 6 months living expenses held as a cash reserve. I would not advocate "investing" those cash reserves.

    Secondly, comparing a savings deposit in a bank and buying a stock ... there's the huge risk delta bank versus stock (using a pre-bank meltdown perception of banks as "safe").

    Lastly is the question of where VGR falls on the risk profile for stocks. VGR is 5-6% of my portfolio but I recognize the ~14.5% payout is a real indication of VGR's higher risk.

    When VGR's 14.5% is compared with MREITs at 12-18% and E&Ps at 5-7% ... I believe the associated risk is easily identified ... the stock's ownership presents a high level of risk.

    As long as you're not using the grocery money, recognize the risk and accept possible consequences of that risk ... then I say consider buying this stock ... but never ever with your cash reserves.


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    • Good point and I agree with you this is not house money I call this my kiss stock keep it simple stupid I usually get out around 20 watch it get beaten down like a red headed step child and jump back in charts dont lie!! I really dont think this stock goes higher than $22 in the near future and I do think debt will be an issue but cash flow is good a buy out is possible I watch it close and keep my finger on the ejector seat have had a good run so far who knows!!!!

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