Based on my experience back in '08-09, I would say wait until some analysts start saying that some of these companies will go bankrupt, and then wait a little longer. IMHO, they will get to outlandish prices. Possibly in Q4 sometime, when tax loss selling is happening. Not enough fear in the sector yet. But there will be a very nice buying opportunity. The kind where you can triple or quadruple your money in between 6 and 18 months. But--we will have to fight off that fearful feeling of throwing away money.
Back in '08, I started trading LDK when it was around 13 or so. Had a few successful trades, then it went against me, dropped to 11. I hung on, thinking it had to go back up. It went to 9, and I thought that was the bottom, since it had held there a few times before, and I bought more. It cracked 9 and I bought still more at around 7. It kept going down, I bought more at 6, 5, and 4, and managed to accumulate what for me was a pretty big position. I was pretty terrified as the stock went down to about 3 and some analysts began talking the "B" word. FINALLY it started going back up, despite continued B talk from some analysts (in particular one at Piper Jaffrey who kept being quoted in Barrons). I managed to reduce my average cost to somewhat below 7, and started selling it off when it got to 7 and change, and sold more on the way up, getting rid of the last bunch at around 11 or so. I ended up making some money on the experience, but most definitely not in the way I originally thought, and most definitely not anywhere near as much as I could have made. And suffered a whole lot of anxiety.
I'm waiting this time. If I miss some bounces, so be it. I'd rather sleep better. |
