The Stock/Investment Thread

[Dreadnaught]

That's what I said a few weeks ago. But can't settle on anything I'm totally on-board with, I just get the sense there are more asset value declines to come.

[wiggin]

That's what I said a few weeks ago. But can't settle on anything I'm totally on-board with, I just get the sense there are more asset value declines to come.

I haven't the faintest clue where prices are going, nor do I care. IMO that kind of thinking is akin to trying to time a bottom.

The reason I'd be interested in buying right now is not because prices have gone down - after all, stocks could still be overvalued if they were stratospherically priced before, or they could be coming up off a trough but still be worth a buy. No, it's because there are solid companies selling out there at bargain-basement prices. There are a lot of companies out there trading at ridiculously low P/Es given their earnings history and estimates, which were just dragged down by general market panic/malaise. So what if prices drop a little more? They could also start rising. If the price is right, I wouldn't bother worrying about catching the very best price, but just a very good price.

Of course, that logic fails utterly if one is buying shaky companies, but I doubt you'd do that.

If one had even more money, it could help smooth out these concerns about volatility and possible drops in short-term asset prices by doing the good ol' dollar cost averaging - but it needs to be enough money to make the additional trading costs minimal.

[Dreadnaught]

I haven't the faintest clue where prices are going, nor do I care. IMO that kind of thinking is akin to trying to time a bottom.

The reason I'd be interested in buying right now is not because prices have gone down - after all, stocks could still be overvalued if they were stratospherically priced before, or they could be coming up off a trough but still be worth a buy. No, it's because there are solid companies selling out there at bargain-basement prices. There are a lot of companies out there trading at ridiculously low P/Es given their earnings history and estimates, which were just dragged down by general market panic/malaise. So what if prices drop a little more? They could also start rising. If the price is right, I wouldn't bother worrying about catching the very best price, but just a very good price.

Of course, that logic fails utterly if one is buying shaky companies, but I doubt you'd do that.

If one had even more money, it could help smooth out these concerns about volatility and possible drops in short-term asset prices by doing the good ol' dollar cost averaging - but it needs to be enough money to make the additional trading costs minimal.

It's not about trying to time the bottom as much as putting money in companies (even solid companies) when they are at the mercy of larger trends that will keep every stock in the doldrums for a significant period of time.

And also concerns over whether even-solid companies may have their earnings threatened by a persistently weak economy. Pretending otherwise is yet another fallacy by thinking you can beat the market.

[CitizenCain]

It's not about trying to time the bottom as much as putting money in companies (even solid companies) when they are at the mercy of larger trends that will keep every stock in the doldrums for a significant period of time.

And also concerns over whether even-solid companies may have their earnings threatened by a persistently weak economy. Pretending otherwise is yet another fallacy by thinking you can beat the market.

Hey, if this things lasts another few years, you're gonna have bigger problems than losses in the stock market. I'd almost say get in now because if the economy tanks any further, it won't matter, and if it recovers, you're positioning yourself to make a good return in a short time period. Changing Technicals and Fundamentals and confused j00 "experts" notwithstanding, of course.

[GGT]

It's not about trying to time the bottom as much as putting money in companies (even solid companies) when they are at the mercy of larger trends that will keep every stock in the doldrums for a significant period of time.

And also concerns over whether even-solid companies may have their earnings threatened by a persistently weak economy. Pretending otherwise is yet another fallacy by thinking you can beat the market.

Sorry, but the other fallacy is that new market investors can hope to catch up to the old market investors. That you can base your retirement on market profits, like your parents did. Sure, they'll all say young folks "have a longer time horizon" and a longer employment future. So even if there's another crash, you'll have more time to catch up and recoup your losses.

Don't believe it. Don't take investment advice from people who can tread water, naked, with sharks circling.....long after you've lost your shorts. The tide keeps coming and going--but it's really hard to run naked, find new swimming trunks, and get back in the water. To surf with the sharks and violent tides, and hope "this time" will be better is nothing more than gambling. May as well take your hard-earned money to Vegas, bet on the ponies, or play on-line poker. Your chances are about the same at this point in time, and it's all a crap shoot.

[wiggin]

It's not about trying to time the bottom as much as putting money in companies (even solid companies) when they are at the mercy of larger trends that will keep every stock in the doldrums for a significant period of time.

And also concerns over whether even-solid companies may have their earnings threatened by a persistently weak economy. Pretending otherwise is yet another fallacy by thinking you can beat the market.

*shrugs* It's a matter of perspective. If I went value investing right now, it would be to scoop up buys for the medium to long term (more than 5 years), so I'm not worried about persistent market weakness. Furthermore, that's why you buy solid companies whose recession performance is likely to be decent though not stellar - you know, staples and the like. I think my suggestion to buy some housing-related stocks (e.g. Caterpillar) was much riskier since that was trying prognostication. All I'm saying now is that I wouldn't mind owning a chunk of X company at the current price given its fundamental value. Even if it trades below that fundamental value for a long time, I don't really care; I know it's a solid pick.

I guess in a way it is 'beating the market', but only because the market is composed of either people who are in it for quick bucks (so won't touch a stable value stock without a really good reason) or who are, frankly, idiots (like all of the people who pulled all their money out of stocks at the bottom of the crash). It's not that I know something the market doesn't about these valuations; it's that I'm following different goals than much of the market. I don't disagree that the economy sucks, and that will drag on earnings for some time to come. I just don't care that much about short term earnings.