For the record, I finally sold my Medibank Private Ltd (ASX: MPL) shares.
More on that below…
But to the market. And an overnight fall in the Dow Jones and 5% drop in oil prices has prompted the local S&P/ASX 200 (ASX: XJO) (INDEX: ^AXJO) down 0.6%.
Unsurprisingly oil producers are leading the way. Heavyweight BHP Billiton Limited (ASX: BHP) is down 2%.
It would be putting it mildly to say it's been a tough couple of months for oil investors. I would know.
Source: Nasdaq.com
My shares in Cooper Basin producer, Senex Energy Ltd (ASX: SXY), are once again feeling the pinch.
Down over 6.5% in early trade today, they've now fallen almost 50% since I thought they were good value at $0.53, just a few short months ago.
Boy, was I wrong.
I was like the great many investors who didn't envisage a price war between OPEC and North American shale producers.
With my portfolio hurting, the way I see it, I now have two choices…
I could cop the price falls, sell my shares, take a tax break, and move on. Wiping my hands clean of the sector altogether.
Or I could do what most dyed-in-the-wool value investors would do: continue to search for bargains. I haven't found any yet but when I do, you'll be the first to know.
It's this kind of heads I win, tails I win investment philosophy which allowed me to handsomely outperform the market throughout 2014.
Indeed whilst investors were busy throwing out gems like Coca-Cola Amatil Ltd (ASX: CCL), I was patiently waiting to scoop them up.
I'll be the first to admit though, I did have my fair share of luck.
Picking up shares of Liquefied Natural Gas Ltd (ASX: LNG) at around 30 cents looked like a decision of pure genius after the fact.
But whilst the fundamentals were in place and the valuation looked great, no one could've predicted the shares would jump 740% for the year. Still, I'll take it.
After all, there was every chance my investment could've gone to zero.
But despite what my economics professors taught me at university, my decision wasn't one of high-risk/high-reward speculation.
It was one of the medium-risk/high-reward variety that they don't teach you about.
Meaning, the downside was limited to my initial $2,000 investment. Whilst the upside was significant.
The 13-bagger (Wall Street jargon for a 1,300% gain) which followed, was pure luck. No ifs buts or maybes.
That's why I was more than happy to sell a majority of my holding when I did.
Luck is something which buyers of Medibank shares at today's prices are going to need a bucket load of.
Currently priced at $2.37, Medibank's current valuation is eye watering. I think it fits into the category of medium-risk/low-reward.
So you can imagine my surprise when I read in The Sydney Morning Herald last week that Bank of America Merrill Lynch analysts put a price target of $3.00 on the stock.
I could be wrong, they could be right. But with an expected yield of just 2% in 2015, I wasn't prepared to stick around to find out.
Instead, with the money from Medibank, I've been adding some great dividend paying shares from Motley Fool Share Advisor to my own, and my family's portfolio.
Due to the strict trading requirements here at The Motley Fool, I can't giveaway their names just yet.
But what I will say is these four companies are not hope and pray types of investments.
They each sport fantastic fully franked dividends and excellent growth prospects – perfect for those investors who are willing to hold long-term and seeking to escape low interest rates.
And with the official RBA cash rate expected to fall to 2% this year, I'm betting they won't stay at these prices for long.
Watch this space.
