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Author Topic: Dow bottom  (Read 915 times)
The Emperor
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« on: Nov 13, 2008 at 15:12 »

I have been saying this for weeks now I think the bottom is 8000.  Today we hit 8000 again and then a massive up swing.  Thoughts?
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« Reply #1 on: Nov 18, 2008 at 13:25 »

I've never been more than casually interested in the market and its mechanisms: I have followed some stocks and "mentally invested" in them, just to see how I would have done (actually, pretty well, had I the money to put in).  For example, Apple around 8 years ago; a bunch of local stocks, where I have some decent knowledge of the strength of their business.  The downside to speculation hit my brother-in-law.  His wife, Mrs. F's sister, was on Who Wants to Be a Millionaire (I was the lifeline, got her past the $16K hump question, she wound up with $64K).  Well, they decided to invest... at the back end of the tech bubble.  Got burned, twice, because everything had just been going up, up, up, and when the bubble burst, they didn't have tax money.  Lessons learned.

Anyway, my gut feeling to this is that things will be bad for a while, but the strength of the American economy will see stocks rebound.  Yeah, I think 8000 is about the bottom of all this.  By the end of next year, I think we may be getting close to 10,000 again.  We might not see 14,000 again for some time, but I do see this crash as an opportunity to get solid, undervalued stocks cheap.

Not that I have a ton of money to speculate with, but Costco gives Exec  Members $90 to start a Sharebuilder account.  So I think I'll try a monthly investment for a while and see how the market goes.  Under the standard plan (6 investments/month, $12, but a 25% rebate of that monthly fee), I'm mostly concentrating on local stocks, stable companies, good dividends.  I do also have a couple of alternative energy stocks at a low price per share, just to see if they get some ride.

A lot of these stocks are trading at 50% of last year: if they even regain half that in the next year or two, it should be a good call.  A few years ago I was doing freelance proofreading for a company working on annual reports.  One company was Harsco, a manufacturing company.  Watched their stock grow steadily for years, financials are good, they grew from the teens in the late 90's to $66.51 last year, traded higher than that IIRC around a year or two before.  Anyway, they're around $22 now, with a 3.50% yield.  I think they'll be close to the 40 range this time next year, which means if I'm investing over a period of steady increase, with dividend reinvestment, a pretty decent return is possible.

Now, that does assume a lot.  That the economy will turn around.  That the market won't stay mired for a protracted period.  That analyst target projections for stock value are worth a damn.  But as someone who's invested almost entirely via retirement 401/mutual funds, I see this as a time of great opportunity.  If you're not faint of heart.

Some stocks that have dropped significantly -- auto industry, banking -- I wouldn't touch with a ten foot pole.  I mean, I like an informed gamble, but even if the Feds dump money into Ford and GM, doesn't mean I want to.  You look at Wachovia... stock is dirt cheap.  Worth buying?  Do you play the horses?  Not for me.

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bamf16
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« Reply #2 on: Nov 18, 2008 at 13:58 »

It's so damn confusing, I just tried to go with an index fund that will hopefully mirror the market in the long run.  If I get some "fun" money I may try some individual stocks, but for now sticking with the Vanguard VFINX.
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« Reply #3 on: Nov 18, 2008 at 14:10 »

It's so damn confusing, I just tried to go with an index fund that will hopefully mirror the market in the long run.  If I get some "fun" money I may try some individual stocks, but for now sticking with the Vanguard VFINX.

I hear that.  I like that as a long-term strategy, no muss no fuss, but I think if you time this thing right on some smart individual stock plays, big opportunities are there.
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pensodyssey
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« Reply #4 on: Nov 19, 2008 at 16:18 »

Quote
I was the lifeline, got her past the $16K hump question, she wound up with $64K

What rodent is better know as 'Harrisburg Hash'?

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The Emperor
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« Reply #5 on: Nov 19, 2008 at 20:23 »

I like GE and Microsoft.  Dirt cheap right now.  I have a Fund I invest in, but would like to dump a little fun money in these two.
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« Reply #6 on: Dec 15, 2008 at 13:40 »

Quote
I was the lifeline, got her past the $16K hump question, she wound up with $64K

What rodent is better know as 'Harrisburg Hash'?


You get the tough question, you call an expert. 
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« Reply #7 on: Dec 15, 2008 at 13:43 »

I like GE and Microsoft.  Dirt cheap right now.  I have a Fund I invest in, but would like to dump a little fun money in these two.


Well, I don't have a ton to invest, but I've started putting money into about 7 stocks so far with the stocks still trying to get off the mat.  So far, in what is a statistically insignificant period of time, I'm up between 15% and 20%, but the markets are too volatile to project that out.  I'll add a little each month and see where it goes.  3 of my stocks just declared dividends.

GE is one I considered, and might still add in.  I agree that it could be a good value pickup.  I haven't really looked at Microsoft, though. 
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The Emperor
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« Reply #8 on: Dec 18, 2008 at 16:09 »

I probably missed the boat, but we will see what next year brings.  I liked GE at 13, a lot, but not so much at 17.  Msft at 17-18 I still think is a good buy.  I am increasing my contributions to my mutual funds and holding off on the individual stocks for now.
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