World Stock Markets Open. Going Down So Far.

[SamAdams76]

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

That'll be me. Check back with me in 20 years and we can talk about what a moron I was.

[SamAdams76]

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.

Five years with zero gain? You're talking short-term. I'm talking long-term. 20-40 years. Some of these stocks I've had since 1982 and it will probably be another 20 years before I sell them.

[Richard Kimball]

I wouldn't sell out of panic, but I do always ask the question, "would I buy this stock, at this price, today?" How much I paid for it has little relevence to how much it is worth now (except for taxes).

I had a guy trying to sell me a used car, and I told him I'd pay him $5500 for it. He kept telling me how he'd put custom this and that, new paint job, and that he had over $5000 just in custom work done on it. My response to these situations is, "you have a car worth $5500. That's the blue book value for this car in mint condition. That's what a bank would base the loan on, that's what the insurance company would give you if it was totalled. The fact that you spent $10,000 on a $5,500 car isn't my problem."

I'm not saying buy or sell. I am saying check your investment. Take care, & hope you're a millionaire in that twenty years.

[Mike K]

Tasha, what type of buying will you do tomorrow, day trading or longer term? What kind of stocks do you think are attractive at this point? If not stocks, what sectors?

Did you know that Alan Greenspan is a big promoter of the "greater fool" theory?

[razorback-bert]

Just what are you planing to buy?

[usconservative]

No they arent, theyre under investigation because of concerns of quality problems in manufacturing some drug in one of their factories.

Thanks for the correction.

[pepsi_junkie]

Five years with zero gain? You're talking short-term. I'm talking long-term. 20-40 years. Okay, take the giant loss and wait for it to recover. Could be many many years, however. Look at the 70s, when the markets didnt really rise, they just sat there for years. In the meantime you could sell (well, might be kinda late now) and put the money where it won't lose and when things turn around re-invest in the same stocks. You get in with many more shares and benefit from that giant runnup you are counting on anyway, and in the end you have a lot more dough. Just my $0.02 worth, everyones style is different. Good luck to you in your investments!

[SamAdams76]

You're talking about timing the markets and that is easier said than done. Even pros have lost their shirts trying to time the market. I'm a low risk kind of guy and I'm not the day-trading type. I don't have my holdings running across the bottom of my screen all day at work. I choose to build wealth over time through dollar cost averaging. Yes, I've taken losses with the recent bear market but they are paper losses only. You don't really win or lose at the stock market until the day you sell. Meanwhile, my monthly contributions are buying additional shares at lower prices so that when the market does go back up, I'll have that many more shares.

I went into this stock market thing (back in 1982) knowing full well that I am risking my money. That's why I don't invest any more than I can afford to lose. I expected to have years like this and frankly, I'm surprised we didn't have more years like this back during the 1980s and 1990s.

Again, the prices have gone down but I still have my shares and I think I have chosen my stocks wisely. No Enrons or Worldcoms in this portfolio. They will go back up again and to be honest, even if they go down more, I will still be ahead of the game because I bought some of these stocks 20 years ago!

As you say, everybody's style is different. I don't expect to get rich using my style of investing but I'm not going to go broke either. Even if the market drops even more and stays stagnant for the next 20 years (when I expect to retire), I will still have enough to assure a relatively decent annuity in my retirement years.

[Dog Gone]

I wish I knew how to invest in the Pakistan Stock Exchange.

[razorback-bert]

Cement stocks and B O Punjab seem to be the big stocks.

[Tasha]

I buy S&P futures, and Nasdawq futures. Then the brokers go on the street and buy the baskets of stocks. When traders get to the market you can recognize it by wide swings.

[Tasha]

I buy for the long term, mostly, I don't do any day trading. Mostly I buy S&P futures.

[Tasha]

Yes, I was buying today. The market moved up and down and the mutual funds unloaded their redemptions. Another day, another dollar.

[Mike K]

So are you going long the S&P after seeing the gignatic head & shoulders it's completing? Here's a 5 year picture, where do you think it goes from here?

Dive Dive Dive

[RightWhale]

The PPT hasn't yet kicked in

I think the PPT is there to slow the descent, not to stop it. Make it more manageable. Am I the last one in the world to figure this out?

[pepsi_junkie]

You don't really win or lose at the stock market until the day you sell.

This is true to an extent. If you bought Worldcom at $16 and are still holding it, believe me, that money is gone even though it is just a paper loss in theory.

I'm a reformed buy&holder myself. But I learned a harsh lesson. Heres and example. I had bought Cisco Systems at around $22 a share (split adjusted) back in 1998, its a leader in its field, generates lots of cash, had great numbers across the board at the time, and their product is great. It went to around $80, a 400% gain. Sweet. But I was a buy and holder so I never cashed out. Then it turned downwards. And down. And down. I finally just gave up when it was at $20 and took a 10% loss. It hurt but it had to be done IMHO. Since then it is stuck between 12-15 a share, so I saved quite a bit by just sucking it up and selling when I did. Taking the loss stung but I've been able to move that money into better stocks (like Lockheed) and actually make a little money with it while I wait for Cisco to come back. I can always buy my shares back at $12 now if I want them and pocket the $8 a share difference between where I sold and where I re-bought. Anyway this happened to me on a bunch of stocks (I was into a few tech stocks sadly) and it cured me of buy and hold. Hopefully you didnt get burned as badly in your picks. Again, good luck!

[SamAdams76]

You are right, of course. Some stocks are not worth holding on to and for those companies, there comes a time when you must cut your losses and take what you can get. Somebody holding onto to a powerhouse company like Microsoft however, concerned that the stock has lost 20% of its value, should just ride it out.

Speaking of Cisco (which is a strong company with a strong future, I believe), their main competitor Nortel Networks is currently selling at $1.12 a share or thereabouts. Glad I didn't buy any of that stock when it was $80 a share. But Nortel, for all its problems, is an innovative company with some excellent products and services. Especially in the area of multiplexing. I can't help but think that whoever buys into that right now will do very well for themselves over the long haul. It will probably never go up to $80 again, but even if it just goes up to $20 someday, that's a nice return. I'm thinking long and hard about that one.

[ventana]

Where have you been? It's been three years since you have posted? Well, I hope you are well. V's wife.