Wednesday, June 15, 2011
Well, I've decided to make a recent purchase. As I've said a few times before, I like to "walk the walk" when I "talk the talk". I believe in making purchases through high and low markets, and I believe in dollar-cost-averaging into positions on a monthly basis. The market has been extremely volatile lately, but that hasn't kept me away. I like to look past all the chaos and peer into what I think are good values, no matter the market conditions.
I have only made one purchase so far this month. I don't know if I'll have enough capital to make any more moves this month. Paying off my car has left my capital reserves a little parched, and for now I'm excited about what I have decided to do.
I purchased 72 shares of INTC at $21.44 share on 6/10/11. I am an avid fan of Warren Buffett. I believe, as he espouses, that you should only invest in companies that you totally understand, in industries that you can easily become familiar with. It is because of this investment thesis that Warren Buffett does not invest in tech based companies. He believes in investing in his "circle of competence". I am somewhat inclined to agree with him on this. I have not invested in a tech company before this purchase, and have been generally shy about initiating any positions or committing any money to any tech stocks.
I feel pretty comfortable, however, getting my feet wet with Intel. I recently opined about my interest in Intel during my recent watch list article. When I wrote that article I was all but certain to initiate a position with Intel. I feel it is one of the better values on the market, with a relatively high yield, low P/E ratio and generally positive growth prospects. I feel that once they start to really grasp the mobile/tablet market the sky is the limit for this company. If they falter in that market, I really feel that bad news is already priced into this stock. The downside is limited, in my opinion, while the upside could be quite dramatic. We will see. At any rate, I don't want to make this position a core holding, or a cornerstone of my portfolio, but I feel comfortable with the size of the position and would actually feel comfortable with doubling it if weakness continues. Beyond that, I would monitor and add as allocation would allow. We all know that the tech industry can change overnight, so one has to be careful about how much capital is allocated toward tech stocks. The entry yield on my investment is 3.92%.
What are you buying?
Thanks for reading.