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A third month of stock market turbulence (July 08)
Starting with Yell, my decision is out
of the pending tray. I have averaged down and the reason is twofold.
First, published results were not half bad and secondly a purchase
of over 20million shares occurred just a few days ago, a dramatic
change from the relentless pattern of share sales. On a much lower
purchase price, I acquired half as many shares as already owned and
reduced my average purchase price by 17%. I still lag the market
price by 41% but maybe, just maybe, I have fished the bottom.
My second brave decision in this third month of great market
uncertainty, has been to average down again the Taylor Wimpey
holding so that now my average holding price is only 87p. However,
the price continues to decline and now stands at 44p. Nevertheless,
there are signs that money supply for mortgages is loosening
slightly and rumours that the Treasury is planning to extend special
help for the beleaguered sector. Given the current yield on this
stock, I shall hold firm.
Sterling Energy has not picked up standing now at about 9.9p. Once
again a firm hold within my mixed portfolio.
Having "run to cash" with my successes both in the autumn of last
year and in the early part of this, the time came within the last
four weeks to tip a tentative toe back in the water. The two new
share purchased have been Lloyds TSB on the basis of they being the
first banker to report (due Wednesday 30th July) on current trading
and in the hope that the majority of bad news for our bankers is
behind us. Secondly, I have returned to an old favourite Luminar
Leisure. Exactly one year ago Luminar ordinary stock changed hands
at £7.50: I have just acquired a few shares at under £2. I believe
that people will still party whatever the economic climate at this
the largest night club owner in the UK. The shares yield 9.4% and
the dividend is covered 2.4 times.
Have I done right in buying these two shares? We shall see. Next
month I will discuss some of the other shares held in my depleted
portfolio. If readers want to learn about how an electronic shares
portfolio works, please read the separate article. |
