i will call her at 1.40, page-187

.5% next week should do the trick. Yield over 10%. The income is paid from perpetual income.
YMW Portfolio
If the House of Reps fails to pass the bail out and we get another downward plunge I will try to add to the portfolio's Woolworths holding - 2,000 at $24 and QBE - 2000 at $20/22 for a total $100,000. Woolworths is in a very strong position largely selling household necessities - fresh food and groceries. It has state of the art management, technology and formats. QBE is in a powerful position as a general insurer with a strong balance sheet. It is able to pick up market share as competition falls by the wayside and now sees a mind blowing quantum of acquisition targets. A bit like Berkshire, QBE can be choosy.

As indicated last week, we purchased a further 10,000 Telstra for the portfolio at $4.21. We also executed the conditional order placed in YMW 31 for a further 1000 CBA which were acquired at $40 on the September 29 crash day, the only day so far since the order was placed that the shares have seen that price. Due to the falling value of the portfolio in the very difficult month of September, the cash percentage remains above 10%. We will also, as is our usual practice, add additional money to the portfolio in January.

For many years with this portfolio I have simply tried to buy large, excellent companies which I felt could be held for many, many years. If I look at sector allocations at various times I appear under or overweight but I try to buy good companies for the long term realising at times their sectors will be under pressure or outperform. It is an area where more thought could be spent, but I really do like the opportunity to buy excellent companies at panic bargain prices.

CBA was a good example at $40 though on Crash Monday, I thought the panic might take them considerably lower - $30, but was happily wrong. CBA rates very highly in my family portfolio.

A friendly broker recently complemented me on the way I avoided investment bank satellites, problem property trusts and second line resource stocks. At times in recent years, each of these sectors has been strong performers. But I don't like investment bank satellites as they are fee slaves - prefer the head company if I am going to buy. There may be some bargains in that area now. We weren't covering property trusts, and if we had, I would have hated the gearing levels going up beyond 30%. I now clearly like the value in GPT, and am watching for an opportunity to further build that position. I will double up if it falls back to the $1.35/$1.50 area on some shock or other - this is NOT a prediction. Second line miners are often sky rockets that first go the wild blue yonder then back to earth, hardly long term investments.