One important difference between AU and the US is the demand/supply for housing...
In AU, if builders just completed housing/units for existing demand, it would take longer than 20 months to fill. This does not include any new demand arising. This is my case for asset values holding up and the RBA lowering rates to increase further demand leading to rising house prices. As we should already know, a healthy housing market, a healthy economy we should see...
In the US, the complete opposite is the case...Supply heavily outstrips demand and I feel the US still have further to fall in terms of residential and small business investment.
In a long way around, the effect on VPG I believe should be positive in the medium term with AU and EU demand starting to rise in H2 09 for housing... The cash rate and Tax breaks brought forward from 2010 to this year should speed along a quicker repair than normally prevailent in times of cyclical business.
A point of note, the US has been in recession 'every' 8 years over the past 40 years...This is a cyclical event which is also hotly disputed as economists don't always believe in cyclical events. However, if history repeats, this recession shoulds be over by 2010 ready for the 2016 one...
VPG
If VPG improve their disclosure, sell off non-core businesses at realistic value and retain a large chunk of cash, (foregoing dividends in the short-term) VPG should weather the storm to see a very strong and brighter future IMO starting in H2 09...
Asset values in AU and EU should recover I believe and as long as VPG are not forced into a fire sale...I think they will be back towards 50 cents+ in the near future...
Then-again, I'm not a trader but a position taker and have to-date never sold a share I have bought over the past 10 years...VPG is no different. Any dividends will be reinvested with them until such time my holdings allow me to retire...
In the interim, I am happy to sit back and read all this commentary daily with a smile...ha.
Sure there is other stocks worth buying, yet for the value inherent in VPG this will be one of the lucky gems IMO...
Have a good night...
VPG Price at posting:
9.7¢ Sentiment: LT Buy Disclosure: Held
(20min delay)