Be Observant and Patient - Take Opportunities When They Come

There are, most of the time, good companies selling at fair prices and we do purchase these stocks in small amounts throughout the year. But seldom does something come along that checks most boxes on my investment criteria checklist. After two years of consistent research and being patient, commodities started to look undervalued last year and are meeting a high percentage of principles on my check list.

Rio Tinto just came out with their six month dividend amount. It will be paid at the end of September and it is almost 5% of its current stock price. That is only the semiannual dividend and this is at a time when long term US government bonds are offering 3%. Something will have to give, commodity stock prices will have to rise or the economy will have to slow and profits will have to decrease. I am not in the business of predicting the economy, so I just need to buy value when I see it and have a big enough margin of safety to outlast down economic times. The large publicly traded commodity companies (Rio, BHP, Free-port) have this margin of safety. They all boast a competitive advantage in different ways and should outlast a down turn. But if the economy doesn’t fall out of bed, we might see these companies get revalued higher. Lets see what happens but either way I feel like after two years of waiting I have founds something the is hitting a majority of my investment checklist.