it is possible that there will be a "capitulation" ( don't you love buzzwords ) in the next week or so. If you have money that you can truly afford to lose you could wait for that to happen and buy some calls. But it definitely hasn't happened yet.
so, everybody's bearish...the only bullishness i see is those who say everything will finish selling out in a month or so (the "capitulation" theory)... i didn't make this very clear, but when i said time to get real long, i wasn't talking about buying high flyers or anything else in the news. what i've been doing is taking 100sh here and there (and trying to keep my risk low) of those small caps and mid caps that i know have been growing 50% or more for the last 2-3 years. in other words, my buys have had nothing to do with market timing - i have 2 stocks that i know extremely well, and have nothing to do with our country's financial situation. yes, they have betas over 2, and have been getting hit fairly hard, but i am confident that i will be able to pull a few bucks off of them in the coming weeks. but this discussion about the markets is fascinating, so let's keep it rolling...
yeah...the downside to averaging down is that i want those shares, but not if i can get them cheaper monday...
picking bottoms is a fool's game. wait for confirmation of a reversal. the trend is down until proven otherwise. tntneo
Good point. Especially true if the buying is for a long term investment. Long term moves take time to set up. Looking back at some of the historical reversals, there is always time to get confirmation and get into the move.
yep.. I did not mean disrespect by my comment. but this is such a common mistakes. I remember after 9/11 the same kind of threads.. 'let's buy the market. let's be patriotic'. I was with so few others warning members to think with their money, not to defend democracy with it. the markets don't care, neither should you. we went days of relentless selling before finally the market reversed and rallied. when you try to buy 'the bottom' you are only the fool on the other side of all the smart money selling to you. Also, 9/11 was just after 12 months of CNBC calling the bottom every single day. if your time frame is longer than a few days, you just can't ignore the trend active on daily bars. "for bottom pickers, the trend is your enemy !" It's better, imho, to keep it as a friend. it can be a nasty friend sometimes (a spike up because greenspan says something bullishly stupid). But it is such a powerful enemy : it does not take prisonners ! wait for technical confirmation. if you are fundamentalist, it's hard to justify buying entering this summer too. anyway, you don't have to agree with me. it's just an opinion. if you are a pro, I hope you know something I don't tntneo