Originally posted by roberter1
'going to cash' is a term that has become more common on forum since end of Li run early 2018.
Seems like lot of people are waiting for something (or quite a few things) that might or might not happen.
Hound and I always been skeptical about the 'we are in specs' or 'we are in cash' type of approach, especially in a prolonged low interest rate enviroment.
After Li boom, garage went up the food chain to higher MC stocks with some success, last 2 or so months that has become increasingly at risk and looking around for somewhere to 'park' some money while the market ponders and garage gets on with trading on a smaller scale as outcome of applied risk.
the type of stock that attracts is high yield (> 10 in a few cases), out of favour over last 12 mths or so that has been in long term downtrend but has found robust support which has held over a period of time.
There are a few out there which hound has stumbled across, GEM a good example and a thinking persons alternative to giving the banks 100k free to 'hold on to in your interest' for 3 mths.
MC - 1 billion.
Support tested and held @ 2.
Trend - sideways up ?
Yield > 10%
seems to me everyone who has wanted to get out as done so, only the 'true believers' left supported by some concrete metrics, the question if dow does cark it how much lower by % will this go?
These stocks are 'out of favour' for a reason and ? do apply but they have found a most powerful ally over time in the form of 'mathematics'.
Hound and I have moved money into few of these type of stocks in lieu of holding and increased % cash,
sitting on big lumps of cash in a low return (if any) bank account just seems bit 'iffy' to the trading team.
Disc. hound been actively parking in GEM last 3 months and at this point is entitled to lift a paw to the banks on results.
How do you feel about the regulatory uncertainty in GEM? It was one of the first stocks I held, off the back of a Patterson’s buy recommendation passed on by dads broker. Sure enough I got burnt but that’s reasonably irrelevant, thing that worried me was ‘childcare’ being a political plaything, much like negative gearing and that it was prone and at the mercy of policy change. As you have alluded though, it’s faaaaar cheaper now than when I bought it In the lofty >$4 days
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