Corda Investment Management Sees Opportunity

April 11, 2011 - PRLog -- HOUSTON – Many learned financial analysts believe a correction is imminent. It’s just a matter of when.

Investors won’t find any disagreement from Corda Investment Management (www.cordamanagement.com), a full-service money management firm, which recently made its case for a correction and an ensuing buying opportunity.

“We are approaching the end of this cycle, as the Federal Reserve’s monetary easing program is to be complete by the end of June,” said Bonner C. Barnes, President and Chief Investment Officer of Corda. “On top of that, we are about to have a full scale Capitol showdown on our national debt.  As our elected officials grapple with putting a ‘balanced’ budget in place, the market will yaw, pitch, and roll as investors consider the impact of persistent deficits for years to come, what impact it will have on the U.S. Dollar and what it might do to interest rates.  The bull market just passed its two year anniversary, and while we surmise further gains are possible, the risks from this elevated perch are formidable.”

John Schloegel, Corda’s head of Portfolio Management added that the good news with a correction is that “we will be in the remarkable position to take advantage of it.  We have cash and fixed income investments that can be converted to equities and other higher yielding securities should the market provide a good entry point.  Instead of making an endless stream of tactical buys and sells based on short-term price fluctuations, we remain focused on a longer-term strategic view.  Our goal is to build a predictable and consistent income stream that can grow over time.”  

As a contrarian, Barnes said Corda will be “looking for compelling valuations that will provide a one two punch of both price appreciation and dividend income.  This long view does not mean we will be insulated from short-term problems – problems that can be weather related, economic, political, and even company specific.  However, if we properly identify world class companies with solid balance sheets and good cash flows, when faced with external shocks, surprises, and the mere mortal ebb and flow of expansionary or recessionary periods, we can be confident that a properly built portfolio will reach the goals we have envisioned from the get go.  And again, that goal of building a reliable income and growth stream that will provide a consistent total return over time.” Barnes added that once Corda finds good opportunities, Corda may hold them for three, five, or even 10 years.

The Golden Geese

“We call these equities Golden Geese,” said Barnes. “They will produce Golden Eggs, i.e. growing income streams, and we won’t be so inclined to sell at a moment’s notice if the market takes a short-term tumble.  The reason we like the strong dividend payers is that it enforces a certain amount of discipline to the managers running the companies.  Some CEOs have been tightfisted with their money toward shareholders and extravagant with everyone else, but with a challenging and slow growth economic environment that is here to stay, costly acquisitions and other free-wheeling spending habits will be met with harsh shareholder criticism.  Even hardened executives in the technology space are coming around to focusing on dividends.  Intel Corp (INTC) places a high priority on cash dividends.  Another tech titan, Cisco Systems, recently initiated a dividend, but they too must place an even higher priority on driving value through a dividend stream as the initial payout is only in the 1.4 percent area.

“In the bubble years, promises of rapid growth implied large capital gains – but those days are long gone.  Today, heady growth is extremely difficult to come by and investors are downright skeptical.  Therefore, as investors win more battles to garner their share of income, there will be opportunities to capitalize.  Our search for the Golden Geese will continue unabated, and if the market takes a dip every now and then, we will be positioned to profit from it.”

For more information, media should contact Holt Hackney at hhackney@hackneycommunications.com, or 512-716-7977.