Nothwithstanding the latest little pull-back, the markets have done very well over the last year or so. As I noted in another post http://valuevestor.blogspot.com/2011/01/time-to-add-risk-hmmm-not-sure-about.html
it's time to be price sensitive as not to overpay for a stocks. Most stocks are fully priced. There are areas of value, as there always are in any market, but the choices are fewer. It's also important to sell companies that have reached their intrinsic value. Many resources stocks, particularily the metals have reached full value, give or take a few percentage points. The NAV's aren't providing the margin of safety they did 2 years ago. I don't see NAV's moving much higher from here. Over the next few weeks I will be looking closely at my major metal/mining holdings and reviewing my intrinsic value estimates and likely trimming some positions. I do hold shares of a mid-tier Canadian miner ( LUN.TO ) that is involved in a potential take-over, so I'll move slow on that one. A big premium buyer could emerge.
The soft commodity stocks still have room to run. I'll continue to hold oil and oil service stocks for now.
I'm turning a little more defensive and plan to raise the cash component in my portfolio.
Good Call on LUN - looks like that takeover is very close to materializing.
ReplyDeleteThanks, the whole Inmet-Lundin-Equinox-China Metals, has been and interesting story. I was figuring that FCX would emerge as a buyer, but it seems that China Investment Corp is stepping up. They just might pay full premium - we'll see.
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