World Stock Markets Open. Going Down So Far.

[usconservative]

What matters is that the company I invest in is a solid company that will be around for a while. Such as Lockheed Martin, Wal-Mart, Microsoft, Johnson & Johnson.

You do know that Johnson & Johnson is under investigation for over-stating profits don't you?

[Dec31,1999]

Re: 19 I agree.

The marxist sheeple, who invested in the stock market because their unions told them or made them, now want the government to protect them from their foolish choices. Now they want complete socialism to protect them from evil corporations. What a laugh.

[Dec31,1999]

I guess we'll see in a few hours how people vote with their dollars.

[arete]

I look at those charts and get a headache.

Richard W.

[pepsi_junkie]

You do know that Johnson & Johnson is under investigation for over-stating profits don't you?

No they arent, theyre under investigation because of concerns of quality problems in manufacturing some drug in one of their factories. I dont think it is an accounting issue at all.

[pepsi_junkie]

What matters is that the company I invest in is a solid company that will be around for a while. Such as Lockheed Martin, Wal-Mart, Microsoft, Johnson & Johnson.

Partly true. First, there is no guarantee those companies will be around too long (most companies are long gone 80 years after their founded, even the giants and some of those are old companies). But thats academic, they'll be around probably. But if you sustain a 30% loss over a two year span and you make 10% a year after that, its a over 2 years just to break even, total of 5 years with ZERO gain. Thats just rotten. Buy and hold has been proven to work great in great markets but when the bears emerge your better off putting the money under the mattress and buying back when things get better.

[Afronaut]

pepsi_junkie You are spot-on

You buy a stock at 50 it goes to 25 and you wait for 50 again? That's insanity. "I’m a long term investor." After one losses 30-50% in share price, they automatically become a long term investor. Or take a loss.

Remember It's all Bushes fault.... <---Sar

[arete]

I'm sitting this dance out.

Richard W.

[mdittmar]

"Valuations matter, and they have been improving," Thomas McManus, strategist at Banc of America Securities, said. "Now we are starting to see bargains popping up, good companies available at prices you would not have considered possible in some time."

[Tasha]

Because I believe in President Bush, and I like the man a lot, tomorrow I will be going and buying stocks. I do believe what President Bush and Alan Greenspan said, the economy is doing OK. If any FReepers will be doing any buying tomorrow, remember: Don't use margins, don't use borrowed money and buy only as much as you can afford. Do not play heroes, and if you feel uncomfortable, do not buy.
We are in for one crazy day tomorrow.
Good luck to everyone. The most important thing is, Do not panic. Remember, at this point Wall Street is greatly oversold, by any technical indicator. But there are other forces which may come into play.
Good luck to everyone. Remember, the darkest is always before the dawn.

[theoutsideman]

So then, you are just another buy-and-hold moron?

[arete]

not near to panic mode.

Why would anyone panic? Because Friday was a bad day? Did someone call a panic and not invite me?

Richard W.

[mdittmar]

We may see a little more downside,but I never try to call a bottom.

I can see Mr.and Mrs. 40 hr a week,haven't paid any attention to the 401k/profit sharing in 8 years, two kids,nice house sitting around the kitchen table.

" It looks bad, why don't we shift out of the mutual funds into this safe money market fund on Monday"

They will check it again in 5 years or so.

Buying!

[Soren]

its a over 2 years just to break even.

Actually, it's close to 4 years to break even after you take the loss. You have to get back to 1 from .7 (1/.7 = 1.42, which at 10% per year is just under 4 years). So you go for 6 years with no gain in your example.

[jrp]

What's that old adage?

Buy when there's blood in the streets, sell
when there's dancing in the streets.

Seems like things are getting starting to get bloody.

[captain11]

Remember, at this point Wall Street is greatly oversold, by any technical indicator.

Right. I'll keep that in mind while ignoring 25 P/E's (using real earnings, not EBITDA) v. historical 11-12 P/E's, and 7.5-8 P/E's at the true bottom of a bear. Buy away, girl.

[pepsi_junkie]

Your right, I screwed that up big, forgot that a loss of X% requires a gain of >X% to recover. For instance, if you take a 50% loss, it requires a 100% gain to recover to the original value, and at 10% a year that takes 7 years, not accounting for additional time to add a little to offset inflation.

Note that to really recover you have to also take inflation into account, gotta throw another year (or two) of 10% gains on probably just to have your money have the same buying power. Sheesh. Hold through a 30% loss and youd better be prepared to wait a looooooong time to get back to even, and thats given above average returns of 10% per year each year.

Buying and holding is screwing a lot of people! The key to the market is cutting your losses when they're small (I use a 7% cutoff initially, when it dips that low below my buy price I take the loss and move on, no matter what) and letting your winners ride, adjusting your "sell" point up as the price goes up. That's right, the key to making money in the market is learning how to sell.