Please register to participate in our discussions with 2 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
No disrepect meant, but that could not be further fromthe truth. From a value investing long term perspective, now if the perfect timeto buy, and it has been the perfect time since the beginning of 2009.
The stock market has increased in the aggregate a good 50% and its still a good time to buy? I can understand someone arguing that early 2009 was a good buying opportunity...but now? The fundamentals are not there.
In terms of individual stocks...yeah nothing can go wrong there.
Let's face it a society does not get rich by trading by trading financial instruments with each other, the money generated in this fashion is funny-money and will be weeded out in some shape or form.
The stock market has increased in the aggregate a good 50% and its still a good time to buy?
I don't give a hoot what "the market" does, except when it drops and drags solid companies down with it to discount prices. I'm not buying shares in every company in the market, so why on Earth would I care what "the market" does in the aggregate? I'm only worried about a handful of company stocks that I consider great long term investments, and I add to my positions whenever "Mr Market" offers me a good price. Still doesn't make sense to you? You have to think of it as buying parts of COMPANIES, not stocks. Shares of good companies will always come back, you just need a little time, patience, and the confidence in your choices to keep buying more when the price goes down. That's what value investing is all about. And besides, if you have so little confidence in a company that you panic and sell it's shares at the first hint of a decline, why did you buy it to begin with?
Here's one of my favorite quotes. It's from Peter Lynch, and remembering it constantly over the last two years has made me a LOT of money:
"Bargains are the holy grail of the true stockpicker. The fact the 10 to 30 percent of our net worth is lost in a market sell-off is of little consequence. We see the latest correction not as a disaster but as an opportunity to acquire more shares at low prices. This is how great fortunes are made over time."
Let's face it a society does not get rich by trading
One last thing - trading and investing are two different things. Think of it in simpler terms: I go and buy a pack of baseball cards. I get a Ted Williams card in my pack, and my buddy offers me 50 of his common cards for it. What am I better off doing, trading with him and ending up with 50 crappy cards of no name players, or putting my Ted Williams card in a plastic sleeve and tucking it away safely in my drawer knowing that in the long run, it's going to go up in value because he's a great player? I'm going to tuck it way, and then wait until the corner store runs another sale on baseball cards, and go buy another pack.
This is all just my opinion of couse, take it for what it's worth, and good luck.
I don't waste my time with the stock market, I prefer to gamble in Vegas. Stocks are overvalued, but that has not stopped them from going up in the past.
obama said you should save for college and not gamble in vegas. just kidding
I'm not buying shares in every company in the market, so why on Earth would I care what "the market" does in the aggregate?
Simple, market psychology. If the market starts to crash again the shift in psychology can bring down the value of even solid companies.
Quote:
Originally Posted by treasurekidd
Shares of good companies will always come back, you just need a little time, patience, and the confidence in your choices to keep buying more when the price goes down.
Sorry, but previously "good companies" go bankrupt all the time. Not to mention the cases where the company just declines slowly over time and then gets bought out at some bargain basement price.
Continuing to buy the company when its stock is crashing can go either way. In fact, it more often than not does not end well. There are usually good reasons the stock is getting hammered and its a complete open question whether the company will recover.
You're not reading and thinking about what is being said again.
I said "there are usually good reasons", never did I suggest there are always good reasons. Nor did I suggest a bear market will always bring down the value of solid companies, rather that it can do so.
If the market starts to crash again the shift in psychology can bring down the value of even solid companies.
Yes, again offering me a buying opportunity.
Quote:
Sorry, but previously "good companies" go bankrupt all the time.
It sounds to me like you may be confusing big, well known, heavily traded companies with "good" companies. There is a difference. Big, well known companies are not automatically safe from failure just because they are big and well known. I never said that that was what I was looking for. I look for strong businesses, with strong management, strong balance sheet (meaning lots of cash and little to no debt) and strong free cash flow. And good dividend yields help too. My current list of "good" companies is at 6. Sure, I do speculate when prices go down enough - BAC and GE made me lots of money over the last year, but I wouldn't buy them now, not at these levels.
Not necessarily, also one has to sell their equities at some point.
Quote:
Originally Posted by treasurekidd
It sounds to me like you may be confusing big, well known, heavily traded companies with "good" companies. There is a difference. Big, well known companies are not automatically safe from failure just because they are big and well known.
No, I'm doing no such thing. It seems like you have not bothered to look at the historic ebb and flow of businesses. Businesses that were once great, have "lost their religion" and failed. The idea that one can't go wrong by investing in a "good company" is historically inaccurate.
Long term you're not going to make much money investing your money in "good companies". After all, if it indeed was a good investment strategy others would jump on and it would dilute the possible earnings. It is a bit funny because right now its all about investing in "good companies" or "dividend investing". Yet another micro-bubble that will eat its own lunch.
Not necessarily, also one has to sell their equities at some point.
No, one does not HAVE to sell at all. One sells their equities when they have helped one to achieve one's goals. In other words, if you've done it right, you sell at the time and price of your own choosing, which usually means at a profit. If you have properly allocated your capital, you don't HAVE to sell unless you choose to.
Quote:
Long term you're not going to make much money investing your money in "good companies".
What? Are you serious? There is so much wrong with that statement that I couldn't begin to understand it. Are you suggesting we invest in bad companies?
Quote:
After all, if it indeed was a good investment strategy others would jump on and it would dilute the possible earnings.
That's exactly what I want to happen, except that in the real world of investing, the "others jumping on board" results in increased demand and higher share price. I don't have the slightest idea what you mean by "dilute the possible earnings" - that's not how it works at all.
Wow.
Last edited by treasurekidd; 02-07-2010 at 04:03 PM..
Please register to post and access all features of our very popular forum. It is free and quick. Over $68,000 in prizes has already been given out to active posters on our forum. Additional giveaways are planned.
Detailed information about all U.S. cities, counties, and zip codes on our site: City-data.com.
Please register to participate in our discussions with 2 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
