Rick, imho, great companies will always be worth owning at VERY low prices, as long as you can wait it out. Less frequently, they are worth owning at very good prices. For example, I noticed recently that a cd I opened in 1981 was for 18.3%...so although stocks were cheap that cd might have been a better idea. It's usually a great idea to even buy at a reasonable price as long as you can wait, but imho, we are way below reasonable, and it looks to me like we won't have much of a wait, now. I think we have about an 80% chance of being much higher by January.
Let me say that there is NOTHING in my experience that has prepared me for this. It's truly awful. I never imagined that things could be so low and the majority would still think they were not cheap enough. That's really dumb when you think about it...they obviouly get cheaper until everyone thinks they are too cheap. An sp pe of 15-17 with rates at 4%. Incredible. SP pe was around 8 in 74, but rates were 3x higher, AND sp earnings were not in a trough in 1974.....this market is significantly cheaper than that one. There is simply not a yardstick for this.
Is this happening, these cheap prices, because something beyond my comprehension is occurring? It seems to be. You bet. |
