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Stingy Investor Tip Sheet

High Yielding Smoke Stocks

It has been a bruising month for the markets and every day seems to bring more bad news. Big banks and financial concerns have been failing daily. At the current rate, it'll soon be hard to open a savings account in the Untied States. Fear has infected the markets and it is moving to main street.

Problem is, even if Congress gets around to passing some sort of bailout package, the patient might already be dead.

Are you panicky yet?

Well, stop it and get a grip.

These sorts of panics happen in the stock market reasonably often. What is the best defense? To buy and hold stocks with a large margin of safety.

It just so happens that one of the best times to buy good stocks with large margins of safety is during market panics. You don't want to buy everything but you should be looking for stable firms trading at very low prices relative to their business values.

Survival is easy when you don't need to borrow money. It is even easier when you're a cash generating machine like a cigarette company. Due to the current panic you can get yields north of 6% from big tobacco. Can these stock go down? Sure thing. Even cash generators can decline in a panic. But some are starting to look quite interesting.

Company	                Price	P/E  Yield Div.Grow Leverage
======================= ====== ===== ===== ======== ========
Vector Group (VGR)	$17.83	20.3 8.52%    5.0%     8.3
Reynolds American (RAI)	$48.78	 9.4 6.97%   11.4%     2.3
Lorillard (LO)		$68.49	14.0 5.37%	       2.6
BAT ADR (BTI)		$61.50	14.7 2.57%   13.5%     3.2
Star Scientific (STSI)	 $3.36 -12.0 0.00%             4.0
Source: msn.com, September 29, 2008

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09/29/2008   11:45 PM EST   Permlink   save & shareTobacco



 
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