Friday, March 13, 2009

Attractive looking Stock Prices

Like Warren Buffett in a Sees Candy Store or perhaps a young man in a whorehouse looking for a Beyonce lookalike, I am starting to get weak and giddy at the wallet for all the bargains out there.

I know stock prices are going to go lower but I am sorely tempted nonetheless.

While watching the Share Investor Portfolio drop in value day to day I have to say, once again, I have mixed feelings.

On the one hand I loathe watching the value of the portfolio get hammered by things out of my control but on the other hand I look at share prices for some of the stocks in my portfolio and start to dribble at the thought of buying stocks for less than I originally paid for them and that is most of them-bar Sky City Entertainment [SKC.NZ] and Fisher & Paykel Healthcare [FPH.NZ] which are still holding their heads above the rising financial waters.

So what in the portfolio am I interested in adding to?

I really like Goodman Fielder [GFF.NZ] which touched NZ$1.25 today and is at near lows for no good reason other than irrational fears regarding debt levels.

ASB Bank Pref B Shares [ASBPB] are trading at 65c , 35c below IPO listing and currently paying a 14% gross dividend. This share is low due to bank fears and the possibility of a lower dividend.

Michael Hill International's [MHI.NZ] share price-51c today- has been getting a caning because of an all-round retail downturn but it still makes money and is a well managed company.

The Warehouse Group [WHS.NZ] is doing well in the current retail climate, the best of the New Zealand retailers but its share price today of $3.45 doesn't reflect that.

Its dividend is intact and its prospects good for the coming year.

Mainfreight Group [MFT.NZ] has been dealt a blow share price wise, all the way down to $3.52 from a high of around 8 bucks fifty, but profit for the last quarter was slightly up and in my not so humble opinion it is New Zealand's best run company.

I know I should just grow some bigger financial balls and take the plunge, because these shares are selling well below what I initially bought them for so that is what is making them look as attractive as a naked Beyonce covered in fudge but my better judgment is holding me back.

I know I am not alone in this.

Millions of investors still have money looking for a home, they wont invest in bank deposits because interest rates are too low and they wont yet invest in real estate because prices have some way to fall, so the stockmarket is looking a more are more attractive place to go(sorry Beyonce) but investors like me are thinking that sector is still looking a bit sick.

The financial case makes sense but the emotions are clouding good thinking sometimes. Fear is holding people back from reality.

Perhaps I should take the plunge again?

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The Four Filters Invention of Warren Buffett and Charlie Munger

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c Share Investor 2009