Momo dead...

Discussion in 'Trading' started by wutangfinancial, Jul 9, 2008.

  1. I'm thinking that now is the time to do some deep value hunting. Finally. Until recently, multiples were still inline with averages, and earnings were at all time highs. With margins shrinking due to rising inputs, along with contracting multiples, we're going to start seeing some deep value plays.

    Obviously, commodities and EEM stocks are still trading above historical averages.

    I think trimming some commodity exposure and moving to some consumer discretionary, stuff that's trading for really low multiples, might make sense. Maybe even capital equipment/industrials and the like. I'm talking for long term plays, for those traders with 401ks. I'm looking for stuff that's really oversold and starting to get squeezed.

    I think the MOMO stuff is gonna keep getting creamed, and the weak/deep value stuff will start to bottom and creep back up. Kinda an inversion of what's been happening untill this last week and a half.

    I think the best fundamental criteria right now would be companies with little debt, large cash hoards, and solid dividends or buy back plans. Stocks where earnings were hit, missed some quarters, but where the business is still intact, brand equity is still strong, and the p/e's are real low. Classic Graham stuff. It usually doesn't work, IMO, except in these times of panic.
     
  2. We now have the opposite site to momo. Downward momo is the new trend.

    Bear market!