I’m launching my stock picking dairy with this pick as it sums up my favorite investing advice, “Be Greedy When Others Are Fearful” (Warren Buffet) and my favorite Greek God, Gamblor. Gamblor is said to be the God of speculative investing (Homer J Simpson). When panic makes the front page, that’s when I put my chips on the table. On Tuesday, the headline “Greece downgraded to junk” caught my attention and NBG, which was on my wish list, had a 15% pullback. Only 15%? As you know, Greece going bankrupt has been looming for a while now and NBG has fallen from $8 to under $3 since October 2009 (for a total 60% pullback.) Perfect! Thank you Motley Fool Global Gains for putting NBG on my radar. NBG is priced for death but long term, I think it will be just fine, mainly thanks to Turkey. Here is why I’m buying NBG:
- Largest bank in Greece lending $68 billion to Greece customers
- Foreign lending makes up 29% of bank loans. NBG owns Finansbank and has branches in Turkey, Bulgaria, Serbia, Romania, Albania, Cyprus, and Macedonia. Turkey makes up 43% of NBG’s earnings and has been growing 18% per year!
- NBG is one of the most highly capitalized banks in Europe with a strong brand name.
- 30% of Greece’s debt is owned by the French and Germans. Greece won’t go bankrupt. IMF director said Wednesday “We have to do this because if we don’t fix it in Greece, it may have a lot of consequences on the rest of the European Union.”
- The details of the Greek bailout should be announced this weekend
- Price To Book is only .62!
- FPE of 5.23!
- These facts were provided by Motley Fool’s Tim Hanson & Nathan Parmelee and they actually visited NBG in person. Tim and Nathan have a great head on their shoulders.
I add money every month so all my positions are bought in increments. I try to keep my cost basis to around 5% of my Portfolio. Enough to count if I’m right, not too much pain if I’m wrong. You only need one home run to kill the market so I take a lot of swings. I have a huge tolerance for risk, and a 30 year timeline. So if my investments drop 50% or more I think “Should I buy more?” This is an extremely risky investment.
Monty
Greedy When Fearful 
Well?
NBG is in the speculative portion of my highly diversified portfolio. Even though this investment is down -29% (including re-invested dividends and when I bought more at $1.60) I’m still beating the market mainly due to the massive power of AAPL, NFLX, UA, LULU lately. I’m still holding NBG. I won’t be selling NBG until two things happen: Greece declares bankruptcy or it recovers. If owning a stock that quickly drops 50% keeps you up at night this stock is not for you.
[…] crisis in Europe seems endless. I started buying into the panic in 2010 with the National Bank Of Greece (NBG) to take advantage of a turnaround. Fast forward two […]
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