Rande, the NAZ is now down 9% in about a week. Only slight inflation worries. True, the market is spooked, but on the other hand there is a point to start buying. You talk about late August as a possible bottom, but it isn't time we should be measuring IMHO it's market movement. The prices coming into irresistable buy ranges. With the way the market moves so quickly sometimes huge movements can happen in several days, both up and down. If catching the bottom is the goal, then we must strike when no one else is buying, when the market is clearly oversold but the talking heads are still talking fear and loathing. It's a tricky game but I believe the short-term bottom can be here and now, or darn soon. If Greenspan says something conciliatory (knowing how much damage he did with a few words last week) the turnaround could happen within 48 hours. True, this isn't for the faint of heart, but if you're now suggesting taking losses and getting out for the next month or more (a little late of course) then I question that strategy. You were right about getting out two weeks ago and I sold half my stocks then too. My mistake was getting back in last week (too soon). But now that I'm in (with plenty more buying power if I want to use it) what would you suggest?
To simplify matters, let's look at four favorite stocks which have tumbled: MSFT (down from 100 to 87), LU (down from 77 to 64),
MRK (down from 76 to 68) and AOL (down from 125 to 100).
Do you really expect much further selling in these? Won't people snap up MSFT in the low 80's, AOL in the mid 90's, etc.?
I'm sorry it's just hard for me to believe that the tech leaders will return to recent lows. I could be wrong but I have a feeling MSFT at 85, LU at 62, AOL at 98 and MRK at 67 is the bottom. And if it is that means at least some short term gains buying on the next dip (if there is one) until the fall jinx is upon us. Or does the fall jinx come three months early this year? Possible.
Let's assume there is another quarter point interest rate rise.
What other than that is there to spook the market further now? Don't stellar earnings counter-balance an uptick in gas prices. Won't the CLinton economic team do whatever is necessary to keep the market strong? Won't at least the quality tech leaders pop back quickly and survive this sell-off?
One thing I know, there is almost no buying in the stock market now. But that means a huge amount of cash on the sidelines just waiting. So when the buying starts it could move the market very very quickly. Having suffered this paper loss of the past week I'd at least like to get half my money back short-term. I'm going to Europe in two weeks and will want to sell off before I go. So between now and then I'd like to time things right and take advantage of every opportunity.
It's either that or sell off now and accept a 6% loss in my portfolio.
What are your two cents on all this? Thanks in advance. |
