I'm still buying more stocks paycheck to paycheck - I've been pretty much "all in" since that big day in November. There are so many companies trading cheaply that it's hard to know how to prioritize. I feel that pretty much any stock in the market could be construed as cheap, so there's no need for me to swing for the fences with mediocre companies that may be even cheaper. Just solid companies with clean balance sheets for me, and I assume I'll get mine whenever the market as a whole rises.

adam,

Care to give us some of your recent buys...

Nothing exciting kfh. Additions to already existing positions BRK, KO, BNI, AAPL, and a small purchase of USL. I'm thinking of adding a little more to BRK tomorrow if prices resemble today's, and I've been reading everything I can find about LUK as well.

I also have about 10 micro caps that I'm reading about (a few are Klarman's ideas), but I'm not sold on any of them just yet. Just reading for now.

why would you buy BRK, KO, and BNI when BRK gets you KO and BNI? I would think buying BRK and/or an index fund and then using a small portion, maybe 10-15% of your assets and work the micro and small cap space.

Dizzy,

What micro caps are you looking at besides WILC, we have gone over that one already?

Are you or anyone here looking into munis at all. Prem Watsa seems to like them especially those re-insured by BRK.

I have been a big fan of ZNT and buying it but its got alot of head winds, primarily because 80% of its revenuses comes from the California and Florida markets.

But they have a strong book, with no derivatives and mostly investment grade and gov't bonds. Also the fact that it is now selling at a 27% of book value seems to me like a steal.

Last year ZNT broke even on their underwriting business and made money on their investments but alot less then the prior years due to lower market rates. They have since move some money to riskier short term corp. to take advantage of the yield spreads.

Two things of interest from their annual report frequency decline but severity increased. Severity is the increase in cash payment for claims relating to permanent disability. As I feared most medical inflation is on the uptick which means the company is paying more for those who need continuing medical attention (this is very bad!).

The reason I am still a buyer rests in the companies management. I believe they have disciplined underwriting and have been proactive in heading off this higher medical cost inflation that the whole industry must soon endure. They have created their own medical network in California to control medical costs. They will soon be rolling out a medical network in Florida as well. But the most optimistic scenario I can think of is that those permanent disability claimants start being bought out which will mean lower future payouts. Also in relative terms the company is well positioned to take advantage of their competitors miscues. As evidence I offer the following, Zenith increased California rates by 4% while the average was about 10% for their competitors. For the past few years their competitors were underwriting with reless abandon while Zenith stayed the course and kept to their discipline. As a result most their competition is underwiting at combined ratios above 100%. Those severly damaged by the recession and underwriting losses have stopped doing business or raised rates dramatically. With fewer competitors and higher rates from competition it stands to reason that Zenith will gain back some lost premiums thru the intense competitive landscape the permiated during the past few years.

Dizzy Wrote:
-------------------------------------------------------
> why would you buy BRK, KO, and BNI when BRK gets
> you KO and BNI? I would think buying BRK and/or
> an index fund and then using a small portion,
> maybe 10-15% of your assets and work the micro and
> small cap space.


Why should Buffett buy BNI when he can just buy back BRK shares instead and get BNI that way? This world is full of tough questions.

Do you have 90% of your portfolio in an index fund and the remaining 10% in micro caps? That doesn't seem to match up with previous comments you've made about your own moves.

"Throwing in the towel" is the new "Flipping houses".

In the last 12 hours, I have seen those words all over the Internet.

Unfortunately, retail investor capitulation doesn't mean the markets can't fall another 30%.

S&P 475 seems feasible to me, and actually, I am bracing for it. I was, admittedly, way early to this "party of the century".

In any case, if it matters, I am long just about everything with 10 year average ROICS > 18% or the realistic potential to begin achieving that in 5 years. Everything but my financials have relatively strong balance sheets. I also prefer stocks that have international exposure, can pass on price increases and the cost of inflation, and/or can benefit from China's growth (energy, consumer products, railways).

I likely own the market at DOW 9000, give or take 500 points depending on dilution to my bank holdings. Lots of ETF's and some mutual funds, too. I would add to any of the positions above at any time if they or the market should fall significantly further.

When I bought these financials, back in October and Nov., I didn't expect a depression. Oh well. I learned my lesson, and when the next depression occurs in 75 years, I'll be better prepared because then I will know to listen more carefully to what is said by Shiller, Roubini, Grantham, Rodriguez, Soros, and Rogers:

AVP
AXP
BAC (mistake, obviously; hoping for dilution less than 40%)
BCS (possible mistake)
BERK (how much can one person own of this exactly?)
BBBY
BNI
CHL
CNI
CNF
CQP
COP
COST
DPS
DELL
EBAY
EXBD
GE
ITYBY (mistake)
JNJ
KMP
KO
LUK
MCO (maybe a mistake; too early to tell)
MHP
MKL
MMM
MSFT (maybe not a long term holding, but great ROIC history. Probably won't last.)
MSTR
PEP
PG
PM
SBUX
TJX
WSC
USB
WAG
WFC (in God and Warren I trust; he better be right...)

Obviously there is too much risk above, due to financials. Not what I would necessarily recommend now, but I own them already for better or worse.

ETF's

EZY
KXI
ISFM
SCZ
VDC
VEA (lots of big pharma here)
VV
VTV
VWO

(if you are a long term buy and holder of ETF's and are not familiar already with the Vanguard family of ETF's, check out their expense ratios and portfolios. They are an amazing value.)

and the usual value family of mutual funds (Fairx, FPA, Royce, Third Ave, Weitz, Longleaf). No REITS. No shorts. No Gold. No hedges. My holding period is way too long. I am not a trader or a short term movement player.

My stock wishlist is longer still, but things will need get much cheaper.

On the wish list, among others:

DIS
MA
V
FDS
FFH
GS
BGP (@ 33 cents?)
POT
PKX
SOR
PNC
BNK
healthcare generally
CVS
WMT
MCD
some of the holdings of Cascade (Bill Gate's investment company)

well, its really a very, very long and culled list with few financials. Here is more:

LARGE_CAP

ACN ADP ADSK AMZN APOL AZO BEN BMY CHL CHRW CL CLX CME COH COL CPB CTSH E EXPD FAST FDO FII GCI GPS HD HRB HSY K LLTC LLY LXK NUE SCHW SLM SNY UL UPS

MID_CAP

AEO AIB ANF ANSS ARO CHD CHS CMG CVD DCI DLTR DV ENDP ESI EV FDS GNTX GPN HANS HSIC IDXX JKHY NFLX NTY ORLY PHLY ROL ROST STRA TSS UA URBN WOOF WSM XEC XRAY

SMALL_CAP

ABCO FOSL FWRD GFIG GYMB HCSG HIBB HPY HTLD JCOM JOSB KNX LDR LHCG LSTR MANT MW PETS PNRA QSII SCSC TSCO TTC VIVO VLCM WDFC WWW ZUMZ

That covers it. Good luck to all.

I have been buying media companies....News Corp and Viacom. Unfortunately/fortunately they keep going down so I keep buying.

Spencer, Audrina, Heidi, Brodie and all the other numbnuts on "The Hills" betting keep generating revenue or...ohmygodIwilltotallyfreakout.

no i dont adam but i wasn't sure if you had experience investing in smaller cap companies so that was just a suggestion on how to get comfortable with it. i dont know if its the case but i often find value guys just copy their idols and usually its good to figure if you'd own stock X if your idol wouldn't own it.

Plus something like KO for example is not cheap. Given the amount of foreign revenues they have they will have some headwinds in terms of currency translation losses so that 11x 2009 PE might be around 13x. It's not screamingly cheap to me. The mega and big cap space is perceived as "safe" but if you do more work downstream you'll find far more interesting companies that have much much larger valuation discounts. AAPL? Some of those companies are down but fairly valued because the growth is gone. Ipods and mac books will have to be sold at cheaper prices to get anywhere near the same level of historical growth. So you end up with a great company that is fairly priced here IMO.

sabonis - why not buy the bonds instead? they're offering yields of 20-40% and at least are further up the cap structure. for some of htose guys with newspapers, print media, and ads falling off, i'd rather be more senior than hold equity. just my 2 cents.

@ abeck....

FDS; on your wishlist; one impressive set of numbers over the last decade.
Care to share the price that would tempt you ?

"Act only according to that maxim whereby you can at the same time will that it should become a universal law." Immanuel Kant