I believe we are closer to a bottom then we were several months ago. Why is it time to sell? Why shouldnt investors start averaging into the SPY or the Diamonds or the IWM? I think its too late to sell and a great time to buy. Although I think it will go lower, I wouldnt stay away for the next 5 years. I would be dollar cost averaging into one of the diversified etfs and hold.
While i don't have any respect for cramer. But anyways, Why do you want to catch a falling knife? What will you do if insurance companies start going under due to depreciation in their investments leading to losses in making payments to the insured? what about the potential crisis coming in alt-a's and SLM? (Btw a beautiful setup forming on SLM!! need i say in what direction!) These may not happen, the crisis may end, but if you are averaging down right not, and the floor vanishes from beneath your feet, you loose, it will recover in its own time dont know could be 6 mnths or 15 years frankly I don't care for that far into the future its not my style. But this I do know, once it starts going up and you average up then it will cost you about the same to buy the same thing without loosing out on initial losses and time. Use you money somewhere else till then, unless you enjoy tying it up and having a loss works like an afrodisiac for you. To explain this further: 4 + 3 + 2 + 1 = 10 1 + 2 + 3 + 4 is also = 10 Unless you are scared that you cannot catch the absolute bottom, in which case it would be marginally more expensive, and even if it is more than that will be far lesser than your opportunity cost. Weigh your pros and cons. Best of luck either ways! Cheers!!
Last Thursday or Friday he said that if you are going to need your money within the next 5 years to just pull it out of the stock market now.
I am waiting for an honest to goodness double bottom at 780 on the S&P. I believe, though, there is a significant chance of it moving even lower. When I use the anticipated 2009 earnings and P/E, I come to between a 500-600 price target. I wouldnt average in for the long term say right now, but I certainly would consider it in the low 800s and then come in at 3 month intervals thereafter. When is it a good time for investors to get back in? Certainly not in 5 years when there has already been a recovery.
It's apparent that few on ET have made the effort to educate themselves. The correct way to Value Invest ala Graham/Buffet is to patiently wait for the dust to settle/till there is light at the end of the tunnel. Value investing does not advocate trying to guess stock or market bottoms. You sacrifice a small amount of potential profits by buying on the way up, not the way down. EX stock cut down from $50 TO $15. You don't start buying because the stock is beaten down because it can fall further and wallow away for years at its final bottom. As the fundamentals of the company improve and the price rise off it's final bottom of $8 you begin buying at $. You watch and wait for the fundamentals of the co to improve and buy on the way up not down. And value investing does not employ any timing or guessing of market bottoms or tops. Don't be lazy and remain stupid make the effort to read a few good books on stock investing. Graham>>Securities Analysis, The Intelligent Investor
Buffett has been buying like crazy. GE. GS ... he has invested 10s of Billions in recent months. Is he waiting for dust to settle? One of his favorite quotes: "Be fearful when others are greedy, and be greedy when others are fearful."
Cramer on rare occasion is right. He is right to advise this as stocks can go much much lower from here. Some bear markets have gone down 80%, look at the history of bear markets. The nasdaq from it's peak around 5000 bottomed around 1200 a Big % loss and where is it today? IF someone NEEDS THE CASH to pay bills it is best to cut the loss here at 40% as the chance (due to all the unprecedented highly negative market factors out there) we fall further and then wallow away for several years is a very real possibility .
WRONG. Buffet has NOT been buying like crazy. Buffet has not bought any shares of common stock of GS or GE. He got warrants and a sweet heart deal of 10% income. That IS NOT the same as buying stock. Not even close. You obviously have never read any of his books.
Since we are significantly lower than we were several months ago, and time is linear, it follows that we are closer to a bottom. Even a 3 year old could come to that conclusion.