Freeport-McMoRan Copper & Gold (FCX)
Freeport-McMoran Copper & Gold (FCX) is a stock I’ve had my eye on for years. It’s a major worldwide player in copper and gold explortion and mining, with significant exposure to silver and molybdenum as well. I favor the copper exposure simply because the growth of India and China seem unstoppable. The gold is a nice touch in my eyes because I have so much faith in our federal government–and its ability to ignite a whole lot of inlflation as our bailouts continue.
So what’s been holding me back? Well, a couple of things. First, I was concerned that the dividend was a little low. Granted, it’s all relative, but when I buy individual stocks I like to see current high dividends and a history high dividends. The dividend was a little low and the “history” part was a little weak for my tastes.
The recent market correction, however, brought FCX down to a price where the yield has climbed over 10%. Valuable commodities, inflation protection AND a high dividend yield? I couldn’t resist, so I bought a few hundred shares–just before the directors cut out the dividend and the price dropped another 15%.
How sorry am I? Well, I rather I’d waited. On the other hand, I won’t buy any stock if I’m not willing to hold it for 5-10 years minimum. And no single stock makes up more than a few percent of my portfolio. Maybe I’m too pessimistic (in terms of inflation), or optimistic (in terms of a global economic recovery), but I am reasonably certain that a turn of the business cycle combined with increasing rates of inflation will take care of this situation for me long before 5 years has elapsed.
What do you think? Am I just whistling past the graveyard here?