- Jan 23, 2002
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I just want a raise a word of caution on timing when the bottom is going to hit. A lot of people on here have never really experienced a recession before. Although the 2000-2002 hit the markets hard, particularly tech stocks, it was a pretty mild recession by definition.
A true recession will hit a lot of new investors hard, and will bring a lot of fear among those who never experienced one. Remember those stories of your parents not being able to sleep at night because they had a lot in the market, and even more dangerously, a lot in only one or two stocks?
In reality, we're only down about 10% or so and you see people crying already.
The best way to invest, for virtually everyone, is to be in index funds - and contribute a set amount on a timely cycle. You'll diversify your risk and mimic the market instead of trying to chase 100 baggers and be burned big time.
A true recession will hit a lot of new investors hard, and will bring a lot of fear among those who never experienced one. Remember those stories of your parents not being able to sleep at night because they had a lot in the market, and even more dangerously, a lot in only one or two stocks?
In reality, we're only down about 10% or so and you see people crying already.
The best way to invest, for virtually everyone, is to be in index funds - and contribute a set amount on a timely cycle. You'll diversify your risk and mimic the market instead of trying to chase 100 baggers and be burned big time.
I don't pay attention to technical analysis when picking stocks, mainly because I don't understand the interpretations and also the fact that I've been doing well so far without using them.
I can understand moving average, but once you start talking about stochastic, bollinger, resistance etc...you've already lost me there.
So do you get in/out of a company you want to invest in based on the trend, news, your gut... ?
ponyo
Lifer
- Feb 14, 2002
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2000-2002 for tech stocks wasn't a recession. It was a freaking Depression. I'm talking Siberia type. When stocks like JDSU, ICGE , CMGI, Nortel, PMCS, AMCC, etc lose like 98% of its value from the high to never recover, that's like Armageddon. People on margin probably committed suicide. I have no idea how I survived.
One thing I learned though is how vicious the downturn is in the sector once the bubble pops. Saw it again with the housing stocks and now with the mortgage and financials.
- Jan 23, 2002
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Yes, tech stocks got hit really hard. But look at the valuations of the tech stocks compared with the valuations today. The P/E ratio was in the STRATOSPHERE back then, they had a lot of room to fall. We have a sort of buffer if a recession comes because stocks are much more fairly priced now. S&P P/E ratio is around 15-16 right now, much better than the dot-com boom.
If a recession does happen, it will be much different than the one we just experienced. This one is housing led vs corporate spending/labor market. And although I don't agree exactly with Bernanke cutting so much so early, it's a much different strategy than what Greenspan did. He cut while the country was already in a recession, and it usually takes 9 months before rate cuts trickle through the economy. Ben did his first cut well ahead of any recession. He could actually steer the economy away from one, although at what cost long-term... I don't have an answer for that.
Originally posted by: Azurik
Originally posted by: richardycc
here is my 'documentation' this week, bought MBRK at $2.98. trade with me, you might get rich too!
Good documentation and nice gains. Sold it yet?
yeah, I sold some today at $3.45, and bought some MPEL at $12.11 for a recession proof/asia long term play.
A couple of my stocks sold today because they hit their stop loss. One of them being TTWO. I may get back in again depending on how low it will go. I'm thinking the anticipation for the next Grand Theft Auto will drive this one up again.
All those things, and MOST importantly, their balance sheet, management, and key statistic ratios such as EPS growth, book value/share, history of paying dividends, etc...VS. their competitors.
You can find those statistics and many more through Yahoo Finance.
I generally pick several sectors that I think will be in favor, find mutual/index/ETF funds of the sector and then research the companies listed in those funds.
Gut is very important feeling BTW. I know it's saved my ass plenty of times.
Gotcha. I know it's still important to research the sectors/companies, but I meant as far as deciding when to get in or out. As far as research goes, I'm lucky my school has a subscription to Value Line. Much easier to find all the information than it is on the free sites, but I guess I shouldn't spoil myself too much.
EDIT: And my gut would've saved me from losing 8% overall in the past two days, so you may be right about that. But of course, you know what they say about hindsight. I'm now at about 0% gains in a little under 2 weeks (as is the S&P 500, so I guess I could've done worse).
it's funny because i just read in the WSJ today that CSCO is a good solid company and is a bargain compared to AAPL or GOOG, yet it won't be going up anytime soon
think it's a good time to buy a hold for a year or two? it sure is cheap!
That's not much of a surprise.
The stock only had a run the past 2 weeks because of speculation that they will be bought out by IBM which seems in itself moronic.
IBM is now a software/service company.
They left the hardware business a long time ago and won't see much benefit in buying AMD (or any chip/hardware maker for that matter).
That comparison doesn't mean much.
That's like saying AMD is a bargain compared to VIA or Transmeta.
ponyo
Lifer
- Feb 14, 2002
- 19,688
- 2,811
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Covered my Citi short this morning. I don't want to press and 10% is good enough. Also bought some Apple. Chart shows decent support at $120 and that's where I thought it was headed after earnings. I thought also about picking up some Google but I don't want to load myself with betas in this choppy market. I gotta have some dry powder.
ponyo
Lifer
- Feb 14, 2002
- 19,688
- 2,811
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I don't like how the drugs are trading. The group as a whole hasn't been trading right since the beginning of the year and it's puzzling. My feeling coming into the year was that the drugs were going to outperform the market as people flee into recession proof stocks like drugs and nondurable consumer goods. So far that thesis has been wrong although it's still early. Drugs feel heavy and act like they want to go lower. Anybody has insight to something I might be missing or not seeing?
I'm liking the action I'm seeing in Etrade. Gonna have keep an eye on it as I see some potential.
I'm liking the action I'm seeing in Etrade. Gonna have keep an eye on it as I see some potential.
You have a question about some of the specific companies in general?
The entire sector seems too big for me to just put a paint brush over or make generalized statements.
The thesis will still be correct IMO.
This will be the year for healthcare, non-cyclical consumer staples, and "sin" stocks.
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