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PowerShares Financial Preferred ETF Message Board

  • ltbhdollars ltbhdollars Oct 5, 2004 7:09 PM Flag

    When Pigs Fly

    A post on Stockhouse today reminded me of this old saying. I think its really appropriate to the markets today as I believe everything is expensive and that the tide is indeed causing all boats to rise.

    When it comes to finances and tech analysis, I am just a simple minded guy with a small pocketbook who has really been very very lucky the last 5 years. I loosely follow about 30 stocks with a close watch on 12 or so. Several are just sentimental stocks that are way below my divie % criteria but solid 100 year payers that I have held in the past.

    Those stocks aside, I watch my 2 US MBS REITS, and all the rest are Canadian Trusts. One is a diversified and all others are O&G. The O&G also make up ~80%+ of all my folios.

    So, anyway in my wandering way, my point is I am always trying to look ahead to ID what is the next new stock purchase. I have not been able to find one for quite awhile, I purchased BTO as a concession to my need to maintain at least some margin ability since I have the need for cash draws from time to time. I prefer to use monthly distributions to repay this loan rather than decrease the principal.

    Sorry, to the long time BTO holders but although its a nice holding both its liquidity and its divie % are quite a cut below my normal requirements (although in prior times I have held UST, He and NFB for several years).

    Part of my problem may be my O&G universe which IMHO is currently being manipulated by both the traders and the Hedgies (although I firmly believe in the longer term outlook for O&G).

    And it is to this phenomia that I refer to flying pigs, cause close your eyes and throw a dart at a list of the O&Gs, then look at its will see a steady, constant upward gradient for the last three or four weeks, with any given close probably a new 52 week high.

    My last bastion of higher distribution has just dipped under 16% but remains the only candidate for monthly IRA reinvestment at the moment. It may be time for a new paradyme for this oldtimer. If this trend continues into the colder weather I may have to again adjust my sights downard from 16% minimum to 12% or so, as I had to adjust earlier down from 24-26%.

    I am not fond of change, I like my stocks to stay cheap and pay big distributions so I can keep buyin em cheap. Of course I really prefer getting paid 26% rather than 15% I get now for some of my holdings.

    The bottom line: hard time to find and make new purchases and a shakeout may be in the cards (due to traders and not energy fundamentals). Long term, I remain commited to staying in the energy space.

    If I could afford to take anymore CGs, I would roll out of 50% of each of my gainers that approach or are greater than 100% and roll into different O&Gs that although expensive are paying better %, however need to wait for taxable 2005 for that.

    It may get bumpy..but the very short term green I see today is truly a pretty sight

    Be Cautious

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    • What do you think of VLO--I own tankers, PEO, SFF,etc. I am not crazy about the high prices of energy related issues but I think demand will be strong for a few more years (unless we get a major recession). VLO is a large refiner and the chart for last 15 years looks good. It is next to impossible to build new refineries in US due to regulations.

      Another stock to look at is DHR--they know how to make money and run the new way--mean and lean(incredible long term chart).

      • 1 Reply to abellantoni2000
      • As I have mentioned before, I am a long term believer in Oil/Gas as well. The Worldwide demand for Oil is growing because of the strong growth in India and China where about 40% of the World's population live.

        That, to me, is the most signficant factor. However, these high O&G prices are going to effect inflation in this country which puts us at risk in other sectors of economy as well as risk from the FED fighting increased inflation with higher interest rates. Its a tangled web and not likely to be a good scenario for overall growth in U.S. over the next few years.

        I hope to have a chance to enter the American listed Canroys at a more reasonable price one of these days... Meanwhile, I enjoy the discussion...

        Sam in Michigan

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