You can ignore authors, whether they are producing too much noise or being needlessly provocative, by clicking the yellow unhappy when reading their post.
- Manlobbi
Stocks A to Z / Stocks D / Dollar General (DG)
No. of Recommendations: 8
I am in Warren Buffett "buy more hamburgers when the price has dropped" mode and am itching for the market to have correction to at least late September 2022 levels. Cash is piling up and things are just too expensive now. It helps that cash is now earning appreciable interest here in 2023, but as a buy and hold investor, happiness is buying a quality company when it is selling for 10X or less pre-tax earnings. Munger says opportunity favors the prepared mind and I have several companies I'd love to buy should they ever cross below the 10X line.
Anybody else here sitting on their hands and waiting for a correction?
Itching and waiting.
Uwharrie
No. of Recommendations: 10
Anybody else here sitting on their hands and waiting for a correction?
Good luck to you. At least the t-bills will bring in 5%. I am basically fully invested or more-so all of the time. There are companies trading at less than 10x pretax earnings available today but they might not be the ones on your list.
Fairfax Financial, for example, trades at less than 10x earnings and is at an all-time high. Sometimes you don't need a dip.
No. of Recommendations: 3
Thanks for the Fairfax Financial comment. Yes, there are value opportunities at any given time. Most of the ones on my love to have list are steadily marching upward and I may never get to buy them at deep value pricing.
Still sitting on my hands waiting for the next DLTR seen in September 2021, homebuilders in June 2022, refiners in mid-2020, tobacco in late 2021, etc.
Waiting . . . . waiting . . . . waiting.
Uwharrie
No. of Recommendations: 4
Uwharrie,
Trying to adjust my brain as I've recently entered the soon to draw down phase. Feels like the usual heads we win if BRK appreciates short-term and tails we are better off long-term with lower price and WEB vacuuming up shares at discount to IV. Was certainly more excited about corrections when I had steady professional income biweekly and continued cash build-up.
I'm currently sitting on 7% MM/cash of investable assets and it seems like BRK is 14% cash/cash eq. or so. I did add more CVX and OXY recently.
No. of Recommendations: 17
When the itch for correction is openly verbalized it is almost certainly prevalent.
My view that's from 50 years of investing hindsight, is that small investors should never need a correction to find things to buy. In 2000 Buffett made a statement that hangs on my 100 plus years Securities Research chart, a framed thing in the basement about 5 feet wide and 2.5 feet tall. He said the market was likely more over-valued than at any time in his life including 1928.
22 years later, my two largest holdings are up some. Berkshire is about 7 times what it was then and AJ Gallagher is over 11 times more than the 2000 value.
From the beginning of the most over-valued market ever. Luck is/was my model, but there were things obvious values in 2000 as per hindsight.
No. of Recommendations: 7
Another reasonably priced security I purchased today was the Occidental Petroleum 22-strike 2027 warrants. I paid exactly $37 per warrant and will obviously not be receiving OXY's growing dividend. I also cannot predict oil, gas or NGL prices.
OXY has just posted earnings, conference call slides, and the conference call transcript so the company disclosure is extremely up to date.
There are 900 million OXY shares outstanding and a $3 Billion repurchase plan for this calendar year. Small amounts of Berkshire's preferred will likely be redeemed at a 10% premium to face value this year.
No. of Recommendations: 0
If you bought AJG in 2000 it was trading at a multiple of 12-14 times next years earnings.
Meanwhile the S&P500 was trading around 26-30 times?
No. of Recommendations: 0
Speaking of waiting for Godot'I mean a correction that never seems to come, Dealraker - can you share your thoughts on AJG and PGR. I look at the 5 year charts on both of these companies and they seem to exemplify the benefits of buy and hold. They are always moderately expensive on a valuation basis but the strength of the business seems to drive continued growth. I remember that this is / was your line of work and would love to hear your perspective. Would love to know what you think of the steadfastness (hat tip to Manlobbi) of the business models
No. of Recommendations: 0
Another reasonably priced security I purchased today was the Occidental Petroleum 22-strike 2027 warrants.
Man I wish I would have known to look for these. I bought June '25 $30 calls. The warrants would have been a better deal. They still have a $22 exercise price, right? Some (very?) rough calculations show the warrants are trading at 7% to 13% lower than would be expected of options with a similar expiration date.
No. of Recommendations: 1
Man I wish I would have known to look for these. I bought June '25 $30 calls. The warrants would have been a better deal. They still have a $22 exercise price, right? Some (very?) rough calculations show the warrants are trading at 7% to 13% lower than would be expected of options with a similar expiration date.
The warrants still have a $22 exercise price. They don't adjust for regular dividends. I don't recall whether they include the same anti-dilution adjustments that Berkshire's warrants had, but I don't think it will matter either way. It's kind of reminiscent of the Bank of America warrants that Berkshire got privately, but the average Joe could somewhat sorta play along with the BAC TARP warrants that traded freely. These OXY warrants were Carl Icahn's idea when oil prices took their plunge and OXY was strapped for cash.
No. of Recommendations: 2
With Chairman Powell's recent pronouncements and SVB's tragic downfall, many stocks are getting cheaper! Some of the companies I like are returning to good valuations. We'll see if it gets back to last September's really good purchase valuations.
I am rubbing my hands and rocking back and forth in anticipation.
