I see this morning where Excelon has made a bid at a 37% premium for NRG. The interesting thing about NRG is that WB bought 3 million shares in the 2nd quarter. The key point is Buffett paid about $44 per share and the stock is currently at $18. You don't see Buffett lose 50%+ very often. Will he be tempted by the $26 price? I don't think he needs the cash...
I have a new stock on my top 25 list that is going toe-to-toe with the stock picks on the Magic Diligence site: TSCM. This is Cramer's old company and has really fallen on hard times, going from $16 to under $4. They do have $2.6 per share in cash, so perhaps a decent deal. Of course, with investors feeling tapped out and likely burned out, the last thing you want to do is pay for investment advice (though perhaps that is when it is needed the most).
One stock I am thinking about buying today is the preferred shares of Endurance (ENH-PA). I have never bought preferred shares before. They are going for $14 and pay a quarterly dividend of 48 cents. That works out to $1.92 a year, which is about a 14% yield. I think they are fine financially, and I am going to start moving some of my portfolio away from common stocks (my other move has been to MLPs, I bought OKS at $39, which works to a 14% dividend as well). I am getting older, pushing 50, and the recent crisis has made me realize that protecting my nest egg is getting probably more important than growing it... and hey, 14% seems pretty snappy!
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I haven't been reading the Yahoo MFI message boards. Has anyone had a serious discussion around whether or not MFI simply does not work? I think we've entered the stage where it's becoming more and more obvious that it does not work ... the fact that JG published a book about it guaranteed it's demise.
People are always trying to figure out whether it really works or not. I'm not sure that we have enough data yet to say one way or the other whether it works. Whether any one or 10 people who are using it makes or doesn't make money right now is not exactly overwhelmingly powerful evidence. I would be interested to see whether JG would, after say 3 years, release statistics on how the system has fared in that time.
On the other hand, if the system really does work, but is in the midst of a down cycle, along with the rest of the market, I suspect that there are very few people who will stick with it when (or if) it rebounds again.
I guess my point is that whether people on the board say it works or not is basically pure conjecture at this point.
I think I can unequivocally say it has not worked since the book came out (based on my monthly tracking portfolios). Does that mean it "doesn't work" or does that just prove what JG said about valid systems having stretches of under-performance?
I don't know, but I am having trouble staying the course when I see stocks in areas I know very well (like insurance) incredibly under-valued.
MG
To clarify, I am firmly in agreement with Marsh: the system has not worked the last couple of years. What I was saying was that it's too soon for us to tell whether the system doesn't work, period.
Marsh, I understand your trouble staying the course, and that there are tons of excellent companies selling for very cheap right now. I guess the problem is that when (if) the market ever comes back over the next few years, and the insurance companies (or whatever industry) become fairly priced again, then what do you do?
I don't have an answer. But I know I will be dialing down the risk. I will be moving over next several years into more fixed income and stocks like MLPs that act like fixed income. I am pushing 50 and need to be thinking more in that direction.
MG
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