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Letter to the Editor
This article originally appeared in the September 2002 Issue of INSIGHT
How Many Houses Can You Buy?
This writer would be the first to admit that there have, upon occasion, been sounds of nail-biting and, yes, actual sobbing coming from my office over these past few months. Any readers with stock investments can certainly sympathize. While many investors are more than a bit anxious, times and trades being what they are, I think it would be wise for us to keep in mind that investing - in anything - always carries some risk with it by its very nature.
Do I think the Market will go sky high soon? No. Plunge into the abyss? No. Give me a few more gray hairs? Sure, but will I get completely out of the Market? Of course not. What I am doing now is keeping close watch over my investments and, hopefully, considering sensible ways to diversify a little to protect myself.
There has been a lot of talk about real estate as the new "sure thing" for investors. It probably is sound advice to have some money invested in real estate, but how many houses can you buy? I certainly would advise against pulling everything from the Stock Market and putting all my hopes in this sometimes risky business. Real estate can certainly be a satisfying investment for those of us who enjoy "surveying our holdings," but none of us can predict how long success will be with us in that sector.
I may just be leery of any action that involves my "all," having heard the same advice over the years about bonds, preferred stock, diamonds, gold, and collectibles. If anything ever sounds too good to be true - it always is.
Perhaps it is really time to start buying shares again, conservatively. ADP, for example, is at just over $38 per share, almost down to its low of $32. Odds are that this company will never see that low again. With ADP’s market reputation as a stable and sturdy company, now is an opportune time to buy some shares.
Keystone Automotive, too, looks like a pretty good buy at just under $17 per share.
CCC Information Systems doubled its stock price this year and is still selling for about one-third of its highest price. It’s an attractive price.
A risk I would not recommend is Drivershield, despite its showing a significant increase in stock price for the year.
Citigroup completed the spin-off of Travelers in late August. Chairman and CEO Robert L. Lipp plans to grow the company and strengthen its market share now that the insurer is out on its own again. We have added Travelers to our Stock Report in place of Citigroup.
We have updated our INSIGHT Fund Index, too. We have replaced our 150 shares of Citigroup stock, valued at $5,376 with 333 shares of Travelers. This move immediately improved our INSIGHT Fund by an additional two percentage points.
Overall, even with our Supplier Index down just over three percent YTD, Collision Repair Industry related stocks are still out-performing the Dow, and I am still counting on a continued steady recovery through this year and into 2003.
-Charles Baker-
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