Walk out onto the floor of the New York Stock Exchange after a day's trading and you'll no doubt find litters of paper piled upon piles. You may likely find heaps of fingernails and fistfuls of hair as well.
It's no surprise that these guys who work on Wall Street are probably the most nervous bunch of people you may ever meet. But this is actually a good thing. At least in my mind.
For a large percentage of people such as you and I, commonly referred to as Main Streeters, jittery nervous Wall Streeters often times play right into our hands. I'm bearing in mind that most Wall Streeters are after the knockout stock play. They're looking for that one-two punch that will lead them to a quick profit-or they are looking for the door hoping to preserve as much capital as possible after the old you-know-what hits the fan. They trade in large volume and the slightest tick up or down can be Heaven or sheer disaster. There can be massive swings in the price of a stock because of this.
This is more true in the current market when few stocks are being valued based on their fundamentals. You know, those things you and I are interested in. Things like, what is the long term strength of the company? What do its future earnings look like? Is it a company that can do well in an up or down market? Moreover, what is the company's intrinsic value?
Looking at stocks and the market in this way reveals that there are a great many, solid companies that are getting hammered for no good reason other than the fact that everyone is getting hammered. Don't get me wrong. Some stocks are being fairly dragged through the muck, and it is more important than ever before to identify who they are and avoid them. But for the one's that aren't, bargains abound for the patient investor. Quite literally, the stock market is on clearance and I think you should be buying the market right now rather than just sitting on the sidelines or selling the entire lot. If it's a good stock, it's a good stock in any market, and downturns simply make it cheaper to create a new position or add shares to an existing one.
What's more, I think you should be betting on the rebound that will come, even if the real benefits may not appear for another 24 months or so. That means I want to keep it in mind to buy the stocks of companies whose products and services people will buy when they have money to blow again. Rebound companies of particular interest to me right now are Target Corporation (TGT), Marcus Corporation (MCS), and Visa Inc. (V). Apple Inc. (AAPL) tends to be a favorite of mine still as well. Even at nearly $200 a share I think this stock is a bargain. Other rebound plays include automobiles, electronics, restaurants, casinos and resorts.
As for oil, you know I'm steering clear of that. Perhaps a short play may be in order in this sector. But even then I'd still wait to make that play until after the price per barrell goes above $160-$170. Who'd be my first pick for a short candidate? Exxon Mobil (XOM), of course. Yeah, the bigger they are the harder they'll fall. Plus, XOM in particular was the one getting all the bad press.
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