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Tuesday
Sep132011

Stocks for the Bernanke Money Printing Machine

You’ve been asking about the US debt downgrade by S&P.

First, remember that rating agencies are private companies with private opinions. They may be more informed than the big mouth down the block but what they issue are opinions not facts.

S&P is the same company that rated all the sub-prime debt packages AAA. Those who listened to them lost billions when losses and defaults came in those packaged AAA (risk free) loans.

Smart people who ignored the rating agency opinions and didn't invest in "AAA" mortgages did quite well during the meltdown. Many even made money.

I'm not listening to them now and neither are investors like Warren Buffet.
As a matter of fact, the U.S. is borrowing money at lower rates today than last week. That means the global bond market isn’t listening to them either.

But wow! The stock market sure is in a panic.

What am I doing?

I keep a section of my Kapitall Desktop filled with stocks I wish I would like to buy but am waiting for them to get cheap. That number of the front makes it easy to see value as the market falls.

I'm looking at the price earnings ratios of stocks I've been watching and waiting to buy at lower prices. You can see the price of a dollar of next year's profit on the front of every stock object.

As I've said before, I ignore price in terms of dollars per share and focus on the price of profit.

In other words, I use dollars per dollar of profit.

I'm selectively buying those companies with good businesses, stable earnings and good products. I like companies that make products people must have like food, healthcare, beauty, paper product.

There are also plenty with dividend yields above 4% now. Use Kapitall’s screener to find your own.

I’m staying away from adding to my already sizable (and money losing) positions in financial shares (ouch).

My morning appearance on Fox News: http://bit.ly/neubertQ13

 

 

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