I agree with you that this is way overblown, but for investors, we're seeing things on sale. XOM has a book value of $45, but traded as low as $38 today. This is a 20 year sale in the oil & gas arena. I bought some FENY to play the large oil & gas companies, including producers and service companies. Check out FENY to see who's in there, Exxon and Chevron make up a large chunk of it. The reason you want to stick with the majors is that they will continue to cash flow and will pick up a lot of assets on the cheap when all the shale plays go bankrupt. So they will be the big winners when we come out the other end of this. I would stay away from junk bonds, shale company bonds, and small and mid sized oil & gas plays. They have all been swimming naked and the tide has gone out.
I also have been implementing my buy plan, which got triggered at 15% down on the SPY peak and again at 25% down from peak today. My max stock allocation has now gone to 35%, which means, I have to start buying in equal increments monthly over the next 6 months to get there. I'm already at 12% stock allocation, but will buy another 4.6% allocation each month for the next 5 months to get to 35% total stock allocation. My next buy trigger is at 35% down from SPY peak, which will increase my max allocation to 50%. We'll see if we get there, but I think we very well might, because the Feds latest announcement of $1.5 Trillion repo not-QE resulted in a 30 min bounce and then stocks gave up all their gains again. So the Fed juice is no longer working, which is a very strong signal we're in a real bear market now.
Good luck, John. There's money to be made here, if we're careful. I'm a long term buy and holder, so for me, I am just buying cheap stuff and buying more when it gets cheaper, and I have a very long horizon. |
