You sure got a lot of responses to that post.
I am about 30% below my high for the year.......and 2000% ahead of where I was 5 years ago. This is the third time I have followed AMAT daily, as it got chopped in half and kept going down......and I am 110% certain it will hit new alltime highs........eventually. My casualness is born of experience, not deer-in-the-headlight numbness.
I'm batting about .500 for this year: went to mostly cash January to June, then jumped back in too soon. If I buy AMAT, I'll need to sell something else, and I'll do that, if I decide 40 is going to hold, or if it goes to 30.
Even if we get a recession, and a sharp downturn in semi-equip bookings, and I time it wrong, and buy AMAT way too soon, all I have to do is hold on, and within 2-3 years, I'll have an excellent return. At worst, we'll get a 1987 or 1998-type downturn: brutal but short-lived. Time, and not all that much time (I can wait 2 years), will fix it.
We are NOT going to get a downturn in stocks that lasts a decade before hitting new highs. That would require one of two things, neither of which is going to happen, IMO:
1. interest rates go up and stay up. 30-year fixed mortgages hit 20%, briefly, in 1980, after being at 4% in the mid-1960s. That's why the 1970s were so bad for stock investors. I see zero chance of double-digit 30Y fixed mortgages in the forseable future.
2. profits and margins go down and stay down. I have plenty of stocks to choose from, to fill my portfolio with, in companies who I think will be growing EPS, long-term, at 20%+ (some of them 20%++++++++).
As long as those two things don't happen, and I see little possibility of them happening, my longterm stance will be bullish. My attitude toward all downturns will be, "this too shall pass". Of course, I still may sell AMAT when it hits a P/S over 8, and I may buy market puts when the S&P is over a PE of 30, but those are just short-term tactics/risk reduction. |
