Here are some of my thoughts that you’ll find in the Knowledgebase:
The take-away is don’t panic at irrational sell-offs. If it’s one stock, then you have to make sure there’s not something wrong with that particular company. When it’s all your stocks and the pundits are all saying the big crash is coming, relax. It’s just something that happens now and then. [Post 2332]
It’s certainly all our stocks now. Ironically, the only two stocks I have that are up this week are two very small positions: AEYE and INBK (16.43, up from 16.40 on Friday).
* I think of what is going on now as a period of temporary insanity. We are in a growing economy, with rising employment, growing GDP, and growing corporate earnings, especially for our stocks… The only thing that would lock in your losses would be to sell at these ridiculous prices. Hang in there.
Saul
For FAQ’s and Knowledgebase
please go to Post #3591
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From Steve Reitmeister’s Trading Alert last evening at Zacks. No recommendations in this little excerpt, just some thoughts about the market.
Saul
Wrong. Wrong! WRONG! The US stock market fell -1.5% on Tuesday. Why? Mostly become of shockingly weak economic news out of Germany, which is considered the bellwether European nation. In the simplest possible terms, this is why this sell off is ridiculous.
EU GDP in 2012 was -0.4%. That’s terrible, but US GDP that year was a quite healthy +2.8 allowing the S&P 500 to rise +16%. So no harm done by Europe…EU GDP in 2013 was +0.1%. Anemic growth for sure, but US GDP ratcheted up another +1.9% while the S&P 500 soared +32%. Again, the US was immune to Europe’s economic disease.
I think the point should be clear from above. Until the US economy shows any real damage from European economic malaise, then US stock investors should pay it no mind. Buy the dip is still the order of the day. Unfortunately the market can continue to be wrong for as long as it likes…in time those irrational feelings give way to more rational points of view which has the market reverse course…
For me the fundamentals are the True North of investing. They tell you where things should be headed. And yes, it may take a meandering course, but in time it usually finds it way there. Thus, if I align my portfolio with this True North, versus irrational sentiment, I typically end up with profitable returns.
The True North view of investing now, for US markets, is one of a steadily growing economy with few signs of slowing. This is beneficial to earnings growth. Toss in a low interest rate environment and it pushes people away from bonds and cash towards stocks to get an attractive rate of return.
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Saul, et al,
I paraphrase: ‘I bought when the market went down by the couple hundred points. It was a good opportunity. I’ll be buying more if goes down again. I like to buy when the market goes down.’, Buffet said just the other day on a broadcast after a big downer day.
Several posts from fellow Fools on your board in the last few days have alluded to, or proclaimed, purchases. Based on your re-posting of the above and your posting from Reity at Zacks, it seems you are probably of the same mind as Buffet.
In the past couple weeks I have seized what I believe to be opportunity in BOFI, UBNT, SKX, SWKS, PFIE, SZYM, SYNA, WAB, AIOCF, F, INVN, CELG … Not that we are at a bottom, but that I find these to be good price points on great businesses for long term investing positive return.
How many others have been buying this dip? How agressively? In the “core” companies we discuss on this board or other businesses?
Hanging in there and wondering with whom I’m hanging,
KLVanLiew
Hi KL,
In the past couple weeks I have seized what I believe to be opportunity in BOFI, UBNT, SKX, SWKS, PFIE, SZYM, SYNA, WAB, AIOCF…
I have added to my positions in all of these but SZYM (and that because it’s not making any money yet and is thus a wait and see for me). I reduced my AMBA and sold out of a starter position in MG to raise the money. (Good thing I sold out of MG as it is down 20% today on disappointing earnings.) I reduced AMBA because it hasn’t sold off and there are so many other stocks that are real bargains to redeploy the money in. It may turn out to be a mistake, but that’s what I did.
Saul
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How many others have been buying this dip? How agressively? In the “core” companies we discuss on this board or other businesses?
I have been buying the last few days. I had a little cash, sold all AFOP, and sold some AMBA to raise cash (dropped my position from 7.5% to 5.2%).
I added to PFIE, SYNA, UBNT, and BOFI.
Chris
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