Another week..but with volatility

Ok, it was another hectic week for me, once again this week threw up more reasons for me to quit my job however that is another story altogether.

Ok back to the stock markets. This week, I had a good friend who came to me asking for yield plays. He said he was looking for yields that were in excess of 10%. Now that is just mad. Where are you going to find sustainable yields of 10%? Most of the stocks have rallied so much, even the REITs no longer offer such yields. He mentioned that First Shipping Leasing Trust offered such a yield, but I need to remind all my readers that this is probably looking at the world through the rearview mirror. The yields cannot be sustained because FSLT will probably be raising money through rights or units creation to meet their debt obligations. That means that no new value is created while your current earnings will need to be divided by even more units.

Now lets look at yield plays. I am not criticizing people who are looking for yields, I know my Grandma loves yield. So if you are my grandma's age, please do look out for yields. As for those who are still young, pls pls pls never never never look for yields. IF a company starts to pay you good dividends compared to their stock price...that means they have stopped growing. That means capital appreciation is going to be mediocre. If you want to be defensive and not want to take risk, get out of the MARKET! Do not go for yields. If the market tanks, your yields are going to get higher because that stock price is dropping like a hot rock...

Look for sustainable businesses that has the vision to find other channels to grow! That is the best way to invest.

The market has shown a lot of weakness over the past week and I am pretty sure many technical chartists are going to come out over the next couple of weeks telling you how weak the market is going to be. I agree, it is probably not going to be strong, but I believe that this could be the buying opportunity for many investors that did not manage to get into the market to benefit from the recent rally. Look for cheap entries.

I know I will be. Stay tuned for more. But lets first hope I can get my pesky boss off my behind. I really have not had time to do as much research on my stocks as I would have liked. But I do see some interesting stocks...not going to say much now because I have not really found out enough.

Have a good week ahead..and remember...the market is just in a bad mood, but moods will change. Do not let the daily gyrations determine your long term vision.

Best,

SVI

Things are getting expensive

I have to say that it has been really a tiring week for me, all the strenuous activities which I had to go through prevented me to put in any postings. I would have liked to write more often but to be honest, there was also nothing much to write about. Basically, the market did not really move throughout the week and with the exception of a few stocks, the rest of the market remained status quo.



One observation I have made is that it is harder and harder to find value. Most of the stocks have rallied to great heights and valuations are looking stretched. Earnings are coming in slowly but nothing has really looked interesting so far. As a value investor, I am finding it harder and harder to find stocks that demonstrate value at these prices.

Was doing my screenings last evening and I was really not impressed with all the valuations that came out. I continue to be bullish on my previous calls, but I am not able to come out with any other ideas as of now because it is really looking a little expensive.

Will keep you guys posted!

SVI