Trading Like It's 1930's
"Most of the time common stocks are subject to irrational and excessive price fluctuations in both directions as the consequence of the ingrained tendency of most people to speculate or gamble... to give way to hope, fear and greed."- Benjamin Graham, The Father of Value Investing
If you don't know who Benjamin Graham is, then you'd better look him up before you buy your next stock. His book, Security Analysis published in 1934, remains to date the bible of many value investors including Warren Buffet, the current world's most richest person.
Benjamin Graham's fame arose from the ashes of Great Depression and his principles couldn't be more applicable than in the current bear market. Investors looking for cheap stocks will be rewarded if they follow in the steps of Benjamin Graham.
That said, you want to look for low price/earnings ratio, low price/book ratio, no (or low) debt, high (and safe) dividend yielding high performing stocks in the current stock market wreckage.
4 comments:
High performing stocks rarely offer good dividend yield.
Fear of a recession will surely lead us into a recession.
Maina, I once owned SBS and CPL when they both paid 8% dividend. They doubled in price before I sold them.
Nokia at 4.6% is one of the stocks that I'm eyeing.
You'd be suprised how low stocks have fallen. I'm looking for stocks that pay at least 10% yield.
Ok. But only a few will give you both sides (income and growth).
This thing hasn't weaned me off financials. Still trawling for bargains in the sector. Was thinking oil. But they have a positive correlation with economy.
Housing and financials are dead money for a long time to come. We may see more bankrupticies in these 2 sectors. This is the dot-com crash all over again.
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