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Bad day on wall street, are you buying stock?

post #1 of 14
Thread Starter 
If things go down more tomorrow, I am loading up - 15% of my net worth disappeared in the last two months, but I kept one third of my powder dry and am buying Apple, Corning, Take Two, United Healthcare, Google and Gamestop tomorrow.

What are you doing in these dark days?
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post #2 of 14
thinking along the same lines except energy companies (and I don't have as much money to play with)...
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post #3 of 14
I looked at mine and it's not as bad as I thought. I'm a 30 year investor so I'm not worried about fluctuations one year to the next.
post #4 of 14
Thread Starter 
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Originally Posted by hardeeharhar View Post

thinking along the same lines except energy companies (and I don't have as much money to play with)...

Just watch out for companies with a lot of debt, most of the energy companies (except Exxon) seem to have boatloads of it, and in a contracting credit market that could be a bad thing.
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post #5 of 14
It is tempting, but I have a policy of never buying individual stocks. I'd also be concerned that this is just the beginning of an even bigger drop. Apple sure does look cheap, though...
post #6 of 14
1. Bear markets can be lucrative if you short wisely.

2. Expect growth in cleantech regardless.

3. Apple is pretty dynamic. Their corporate culture and morale are great right now. A company like that is always a safe bet.

4. Copper may be a good commodity ... more research needed.

5. Don't buy funds. Pick your own stocks.
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post #7 of 14
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Originally Posted by Splinemodel View Post

3. Apple is pretty dynamic. Their corporate culture and morale are great right now. A company like that is always a safe bet.

I got in at $109, bringing my average price down to $128 - good price, but it still hurts seeing it go a lot lower. Hopefully we are at the point of maximum misery where all the weak hands get out, and we can start going up again.
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post #8 of 14
Quote:
Originally Posted by e1618978 View Post

I got in at $109, bringing my average price down to $128 - good price, but it still hurts seeing it go a lot lower. Hopefully we are at the point of maximum misery where all the weak hands get out, and we can start going up again.

I can't do Google, but Apple is looking good. I think I might buy some Monday. I was also thinking about buying some of the cheapo bank/investment stocks. Give it 5 years, and they could be worth 10 times what they are now.
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post #9 of 14
Thread Starter 
Quote:
Originally Posted by SDW2001 View Post

I can't do Google, but Apple is looking good. I think I might buy some Monday. I was also thinking about buying some of the cheapo bank/investment stocks. Give it 5 years, and they could be worth 10 times what they are now.

Or zero... I am staying away, the only financials I own are NASDAQ and MasterCard, both processors that carry no ongoing risk.
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post #10 of 14
Quote:
Originally Posted by Splinemodel View Post

5. Don't buy funds. Pick your own stocks.

I recall reading (from a book by an investment pro) a suggestion that index funds are a good component in a personal investment portfolio, since they allow distributing your investment thoroughly and cheaply. The overhead is low due to it being the only differentiating factor between competing index funds.

Would you disagree with that, or do you just mean focused funds?

I can think of two reasons for investing in individual stocks instead: going for even lower overhead, or thinking you (for whatever reason) know better than the market pros.
post #11 of 14
Thread Starter 
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Originally Posted by Gon View Post

I can think of two reasons for investing in individual stocks instead: going for even lower overhead, or thinking you (for whatever reason) know better than the market pros.

I am down 22% since I started July 28th, and the S&P is only down 13% in that time, so there could be something to what you say, but I have some problems with index funds:

1. No accountability - if everybody used index funds, then all the CEOs of companies in the S&P500 would be able to do anything they liked without reprisal. No "voting with your feet" - CEOs could do all kinds of things to abuse the shareholders without worrying about it.

2. You can't avoid obvious dogs - really overvalued stocks like bubble-era dot-coms, etc. Financials used to be 17% of the S&P500, and so you got some obvious trash if you invested in them over the last year.
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post #12 of 14
Quote:
Originally Posted by e1618978 View Post

I am down 22% since I started July 28th, and the S&P is only down 13% in that time, so there could be something to what you say, but I have some problems with index funds:

1. No accountability - if everybody used index funds, then all the CEOs of companies in the S&P500 would be able to do anything they liked without reprisal. No "voting with your feet" - CEOs could do all kinds of things to abuse the shareholders without worrying about it.

The advice was for individual small investors, not the professionals who manage most stock on the market and have altogether different circumstances. Besides, when the shareholders (other than the index fund) don't like what's going on, that shows in the price and all future investments in the index fund will automatically reflect it.

I understand and agree with your argument but I think it's kind of irrelevant. Everybody will not have everything in index funds no matter what.
Quote:
2. You can't avoid obvious dogs - really overvalued stocks like bubble-era dot-coms, etc. Financials used to be 17% of the S&P500, and so you got some obvious trash if you invested in them over the last year.

But if something is a *really* obvious dog at a given point in time, shouldn't it be reflected on the stock price already, because the keenest investors have already sold or are selling their stock?

Or from another angle, shouldn't you be shorting that stock and hedging if you had information that good? Which brings us back to the "assume you know better than the market on average" thing.
post #13 of 14
Thread Starter 
Quote:
Originally Posted by Gon View Post

But if something is a *really* obvious dog at a given point in time, shouldn't it be reflected on the stock price already, because the keenest investors have already sold or are selling their stock?

I stopped believing in efficient markets a long time ago. For example, it was pretty obvious to me that Lehman brothers was worth zero when the stock price was at $13, since they would have had way lower than zero equity if they sold their $100B in mortgage backed securities at 0.22 on the dollar like Merrill Lynch did.

I shorted the stock, but then some bozo named Dick Bove came out with a false $20 buyout rumor, and it bumped up to $16 - I held on and made a profit at $12, but my point is the whole time the stock should have been at or near zero. Ditto with Amazon, it is consistantly 2x or 3x overvalued - why is that when other stocks are not?
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post #14 of 14
Quote:
Originally Posted by e1618978 View Post

If things go down more tomorrow, I am loading up - 15% of my net worth disappeared in the last two months, but I kept one third of my powder dry and am buying Apple, Corning, Take Two, United Healthcare, Google and Gamestop tomorrow.

What are you doing in these dark days?

Well I'm biding my time. Just as this massacre was foreseeable over 2 years ago, right down to when it would begin, so are the coming further slides. The market has got a lot more downside yet. Whether that is going to be catastrophic or not remains to be seen.

The USA has dug itself a very deep hole of debt, funding absurd consumer spending. The question is will the USA pay for its own mistakes or will China and the other Asian lenders pay it for them?

I have been sitting on a lot of cash waiting for the shit to hit the fan. Now that it is splattering all over the walls I'm waiting for the air to clear to see whether I can safely move it into equity.

I can't do anything about the investments I already have through superannuation, all I could do was restrict any additional contributions. So at the moment like many others I am sitting slightly uncomfortably on the sidelines hoping my cash investments stay safe until I can use them.

The only positive things I can see are that this will cause the current US Administration to be thrown out on its ear (a pity they can't be held more accountable) and that the environment will get a slight respite from the assault upon it by "economic rationalism" aka unrestrained short sighted greed.
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