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Author: greenmartianV Big gold star, 5000 posts Top Favorite Fools Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 18444  
Subject: Re: The urge to sell everything--resist? Date: 12/31/2009 2:19 PM
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<Are you thinking bonds here?>

right

Are these the sort of fixed income we should be looking for and are there other areas you are looking in?

candidly, not my area, though I've looked at some relatively short-term corporates for companies I follow, though in a lot of those cases companies are calling existing bonds with new financing so you have to start all over. Course, when I buy these things, I'm looking for stability, not return. From what I've seen lately, there ain't much to choose from right now (as an aside, I spent some time looking at international bond funds but they tend to have the same low yields as we do here though in the unhedged ones you do get currency diversification, but it isn't as specific as stock picking). But again, fixed income serves as an achor of a portfolio, not the growth ara. If it matters, i would make it a point to re-read Graham's Intelligent Investor (the Zweig annotated version) regarding many things but specifically fixed income selection. I found it very helpful.

i am seriously thinking about stalwart consumer staples JNJ comes to mind but it has made a serious run.

Up to you, but trades for 13x 10 estimates with a pretty BS, buyback plan, and 3% yield. Yeah, was nicer below 60ish, but...

Don't follow mmm anymore, at least beyond screening.

Again, up to you, but I ALWAYS have some consumer staples exposure because it is the stalwart area where I am most comfortable. As a rule, ok balance sheets, lots of free cash flow, and pretty reliable business models that respond well to good news as a rule. Course, they were cheaper earlier this year, but so was everything else. I add and subtract according to ranges, usually by forward pe ratios (using Value Line estimates which are as good as anyone's in this specific area) vs. 5 year historical PE ranges. It works more often than you might think...

again, just 2c
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