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Yesterday, the market was the most green I’ve seen it in awhile. Celebrating St. Patty’s Day a little late there, aren’t we? Well either way, the current condition of the market should be seen as a buying opportunity. It’s not too late. You might call me bullish, but I’m just as cautious with my money as the next investor.
Keep Your Eye On The Ball
The “ball” being fundamentals. Making this suggestion to investors is usually pretty ineffectual. Reading the headlines may translate into…how do you say…thinking too much. Yeah. That. Don’t do that. When I say fundamantals, I mean know the company’s financial condition, be aware of the industry they are in (competition is a stock killer), and determine the company’s value without being concerned about its price. Bottom line: due diligence.
Don’t Panic
Someone like Jim Cramer might say “don’t hesitate”. He’s definitely a “pull the trigger” type of guy (but he has rules…read one of his books), and I like that. Back to the suggestion at hand…don’t panic. Don’t fall into the fast-paced whirlwind that is the stock market. Stay calm, do your due diligence, and pull the trigger. Ok. There I said. All this subprime news caused a huge sell off. To everyone that sold: thanks. Think of this as a stock sale. Many stocks are more valueable than their prices indicate…for now. Many investors are able to buy stocks at the bid right now primarily because they believe the bid is below the market value of that stock. No need to be greedy. Just pay the price it deserves…in today’s market. I’ve heard Warren Buffet analogize buying stocks to paying $20 for a steak one night, and then returning to the restaurant to find out the steak is $15 now. Who complains about that?
Fed Agrees with Derrich.com
Well, not officially, but Fed Chariman, Ben Bernanke, has downplayed the subprime issue from the get go. And rightly so. Look, investors shouldn’t be frightened away from the market. Just guesstimating, there’s no way more than 5% of all mortgages made were subprime loans. I’d bet more than 95% of the mortgages made still boast positive equity. The crappy part is that there is likely to be an increase in lending standards hurting future borrowers to which banks will lend money. (There you go, bears. Are you happy?)
So, get out there and buy some stocks. I suggested a few stocks under $10 last week. I’m just plating seeds here. I’m no licensed investment advisor, but I’ve got some experience and wish to share it. Do with it as you wish…and good luck.
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March 20th, 2007 at 11:22 am
I’ve read a lot of your post and your recommendation are always exellent.
Question :
I did bought some of GP Strategies Corp., but stock went down quite a lot already, do you think it will climb up anytime soon?
thanks for your input, pleasure to read you once again.
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scam alert at:
http://www.typerswanted.blogspot.com/
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March 20th, 2007 at 1:25 pm
Hmmm…Income Statement looks good. Balance Sheet for FY 2006 had some cash missing, but they acquired a new company, Sandy Corporation, which provides custom training services primarily to the automotive industry. Insiders are selling shares, and that’s a little discouraging, but they do keep an “excited” attitude in their estimation of future progress. I’ve done well with it so far…made a little under 8% to date. I plan to hold on to it for a while longer. Dont panic, and make some rules. My rule for this particular stock is if it drops anymore, I will take a 5% gain and be done with it. Price targets are set much higher than where it currently sits, so I’m not horribly worried. Just keep an eye on it.
March 20th, 2007 at 9:06 pm
Buy in wide scales and stay diversifed.
March 20th, 2007 at 10:06 pm
Excellent advice. Warren Buffett > *
March 22nd, 2007 at 2:02 pm
With the tightening of the economy it’s time to liquidate your excess merchandise to keep capital floating.Check out the link below:
http://www.sellmyinventory.com
Thanks!
March 29th, 2007 at 3:00 pm
It’ll be fun to see overtime how your picks do. who knows, you might be the next Jim Kramer…
April 2nd, 2007 at 7:18 pm
I tend to be bullish on the market, but I found a strong argument in this article for a down market in the near future. The 2 things in this article that scared me the most were that insider selling is at its highest pace in 20 years, and cash in mutual funds are at record lows. If there’s no money to buy stocks, how can they keep going up?
April 2nd, 2007 at 7:47 pm
Movement to hedge and ETFs, although I’m not sure that completely explains the mutual fund issue. Good point about insider trading. I usually look at the age of the insider. If they are old geezers, I let it slide. They gotta eat their cake at some point. But if all the insiders are trading, I stay away. They something I don’t. Thanks for the link, Chris. Great read.
July 13th, 2007 at 9:25 am
[...] Warren Buffett is a name with which many are familiar. Our good buddy at the RetireRichBlog makes an excellent suggestion with regard to investing in the stock market: It’s time to buy Sears Holdings. I couldn’t agree more. This reco goes along with my thoughts on buying stocks on sale. [...]
August 1st, 2007 at 11:06 pm
[...] For those of you that have been following the stock market closely, there have been a number of opportunities to buy and many shifts in focus with regard to industry. Technology stocks are back. Great. I’m glad [...]
March 3rd, 2008 at 2:32 am
[...] (I use Scottrade). And buy some stock. The most important thing in all of this is that you do your due diligence. “Pulling the trigger” is perhaps the hardest part of buying stocks. But it can really [...]