Im Buying: Contact Energy Ltd

I have finally put my money where my fat mouth has been over the last few months 1, 2, 3, 4 and bought Contact Energy Ltd [CEN.NZX] shares. I haven't bought any shares since I went mad in mid 2009 and spent a good $70,000.00 on cheap shares in AIA (1,2) MFT, WHS and MHI.

I have been a patient little sod for the last few years - regular readers will notice the plethora of CEN posts I have made in that time - watching for my entry point for Contact and below $5.35 was my trigger point . I managed to pick up 9000 for $5.34 and am very happy with the price.

The CEN investment is not part of the Share Investor Long-Term portfolio I have a different strategy for this one that I cannot go into here but readers will be able to follow this investment on a daily basis as it fluctuates in value.

I bought primarily because the stock is cheap and I outlined that yesterday in a morning post (I made the CEN buy at 4.45pm) and because of the distinct possibility that majority owner Origin Energy Ltd [ORG.ASX] are keen to make a bid for the company.

The money I used was borrowed and at 5.75% the greater than 6 % gross dividend yield means that I am still ahead even if I have to hold for a year.


Contact Energy @ Share Investor

Share Investor Portfolio 2: Value @ 7 July 2011
Share Price Alert: Contact Energy Ltd 4
Share Price Alert: Contact Energy Ltd 3
Share Price Alert: Contact Energy Ltd 2
Share Price Alert: Contact Energy Ltd
Stock of the Week - Reprise 5: Contact Energy Ltd
Origin Energy asset stripping Contact Energy
Stock of the Week - Reprise 4: Contact Energy Ltd
Stock of the Week - Reprise 3: Contact Energy Ltd
Long Term View: Contact Energy Ltd
Stock of the Week: Reprise 2 - Contact Energy
Stock of the Week: Reprise - Contact Energy
Not so fast Davy Boy
Still Watching Contact Energy
Beam me up Davy
Stock of the Week: Contact Energy
MarketWatch: Contact Energy - June 2009
MarketWatch: Contact Energy - Jan 2009
Contact Energy looks bright during dark times
Share Investor's 2009 Stock Picks
Follow the Monopoly Board

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c Share Investor 2011

Share Investor Portfolio 2: Value @ 7 July 2011

The Share Investor 2 Portfolio is a separate portfolio apart from the original Share Investor Portfolio and contains just one share, Contact Energy Ltd [CEN.NZX]. It will only have this one share in it and has a far shorter time frame than the original long-term portfolio that I started 8 years ago.

The portfolio was started today with 9000 shares purchased at $5.34 at a total cost of $48,060.00 and $144.18 in brokerage.

After the first day trading the portfolio is down $180 or 0.37%.


Share Investor Portfolio 2 as at 17:30:00, Thursday 07 July, 2011 (NZT)

Stock	Quantity	Cost price	Total cost	Market price	Market value	Change	%
CEN	9,000	$5.340	$48,060.00	$5.320	$47,880.00	$180.00	0.37%

0.37%

	Total cost	Market value	Change
	$48,060.00	$47,880.00	$-180.00

Share Investor Portfolio 2

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c Share Investor 2011

Share Price Alert: Contact Energy Ltd 4

After a Share Price Alert just two weeks ago on Contact Energy Ltd [CEN.NZX] where shares plunged 18c or 3.13% to $5.57c due to bad operational data and a loss of 20000 customers CEN shares have passed well below their previous support levels (see 3 year chart below) where the downside usually stops at around $5.50. Yesterday CEN closed trading at a 2 and a half year low of $5.32, a price not not seen since February 2009 when this stock started its trading trip where it has ebbed between around $5.50 and $6.50 per share.

The drops have been on much higher than average volumes.

There are rumours that majority owner Origin Energy Ltd [ORG.ASX] are keen to make a bid for the company and are mismanaging the company intentionally poorly so the share price is affected and they can come in and make a cheeky bid for the 47% odd of shares they do not already own. Its sounds an odd thing to do but nevertheless this rumour is currently doing the rounds for a number of good reasons that will remain between me and my keyboard.

This stock is looking more and more attractive everyday for the short term investor.

My last advice two weeks ago still stands to buy but with the added thought that there could be more bad news to come based on the share price drop so that could provide more opportunity for those that are patient.


Share Price Alert Series


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Contact Energy @ Share Investor

Share Price Alert: Contact Energy Ltd 3
Share Price Alert: Contact Energy Ltd 2
Share Price Alert: Contact Energy Ltd
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Stock of the Week - Reprise 4: Contact Energy Ltd
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Long Term View: Contact Energy Ltd
Stock of the Week: Reprise 2 - Contact Energy
Stock of the Week: Reprise - Contact Energy
Not so fast Davy Boy
Still Watching Contact Energy
Beam me up Davy
Stock of the Week: Contact Energy
MarketWatch: Contact Energy - June 2009
MarketWatch: Contact Energy - Jan 2009
Contact Energy looks bright during dark times
Share Investor's 2009 Stock Picks
Follow the Monopoly Board

Discuss this stock at Share Investor Forum - Register free
Download CEN Company Reports

The Warren Buffett Way by Robert G. Hagstrom Buy new: $19.54 / Used from: $12.94 Usually ships in 24 hours

c Share Investor 2011

My G'G' Generation

Economies and social norms go through cycles. Over generations peoples views change and are moulded by the things going on around them and the values and mood of the day.

If you look at fiscal responsibility and being savvy with money we need to look at a timeline to get an idea of what I am getting at and why there is hope for the current generation.

The generation that grew up during the Great Depression of the 1930s (I added the date because I know of a 17 year old who has no idea when it was and I know he is not alone) and learnt lessons during dark economic times which positively shaped their attitude to life and finances; they lived within a budget, were entrepreneurial, saved money and propelled the global economy from the 1950s to the early 1970s like no time before in modern history.

Skip forward to the generation my parents grew up in, the baby boomer generation, and by sheer numbers alone they swept everything up before them. They seemed to have learnt little from their struggling parents who brought the boomer generation up in the unprecedented good times and proceeded in the 1970s - till now really because of their sheer numbers, to go on an orgy of drugs, sex, debt, share buying, house buying and then more house buying all on an orgy of credit (and took some of my generation along with them) and it is clear that the economy has suffered (in the 1990s and now) as a result of their carelessness with money, failure to live within their means and their arrogance of numbers.

My generation, generation X, who grew up in the 1980s and 90s are a bit confused when it comes to finances. We got the crumbs from the table of the boomers so some of us learnt early on that we must forge out on our own because "nobody owes us a living" and we just have to do it ourselves. Parallel to that though, we also had some of my generation that thought people like me owed them a living and decided to drop out of the competitive environment, seek welfare and stay on it and bleed the economy dry. Those tough times at home and abroad really shaped me and others as entrepreneurs and savers and will lead to a more sound, rational and sustainable economy - at least for the medium term - during our time at the head of the table. Forget about the other part of my generation, we will deal with them at some other stage...nah, lets just cut the mothers off!

I have much more hope for the generations that were born in the 1980s to early 2000s though and my baby who is two years old (I am a late starter - see above re boomers) .They are growing up in economic times that are second only to the Great Depression and lessons learnt from some of my generation and what they are experiencing now will shape these kids into the same sorts of people that were born out of the 1930s. Highly independent, fiercely entrepreneurial and able to live within a budget.

It is looking good for the future.

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c Share Investor 2011