What are the best stocks to buy now that the market is tumbling?

interesting

Quote:

This year has already been the worst in at least a decade for the $2.5 trillion hedge-fund industry, associations say. But last week's collapse of Lehman Brothers and an unexpected, temporary ban by the Securities and Exchange Commission on the short-selling of financial stocks -- a widespread hedge fund practice that bets a share price will fall -- sent shockwaves through the industry. Several funds are now teetering.

Unregulated and secretive about their trading strategies, hedge funds have enormous sway over the markets. Industry groups say they are responsible for more than a third of stock trades. Some market analysts worry that a collapse of a major fund could shake confidence in an already fragile financial system.

Losses from hedge funds may also quickly spread to other segments of the investment world. In 2007, pension funds had about $76.3 billion in hedge funds, up from about $50.5 billion the previous year. Endowments have invested about $75 billion, according to a recent study.

http://www.washingtonpost.com/wp-dyn/content/article/2008/09/22/AR2008092202747.html?hpid=topnews

the principle of unintended consequences applies....those in charge impose short selling bans to save financial corps, and the price is that everybody losses a little faith in American markets and also we risk taking down the hedge funds. Hedge fund theory depends upon being able to short sell, if they can't do that they CAN NOT make money.

Let's all wave the pension money bye-bye

1 Reply

@hawkeye10,

Of all the things I can worry about, hedge funds making money just isn't one of them.

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@NickFun,

Nick, I have a different take on investments for the long term. Invest regularly every month - even now - and you'll average out the lows and the highs. The stock market is one place you don't want to play a guessing game, because nobody knows its lows or highs. Averaging is a very good technique in a volatile market.

1 Reply

@cicerone imposter,

I am sure you are right CI. But I have withdrawn most of my American investments. Brazil has some of my money as does Mexico. But most is locked away in the bank for now.

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@cicerone imposter,

I was gonna say gold but didn't want to limit you. Australia is a giant hole in the ground for china.

This is a buyers market, for those lucky enough to be cashed up. Look to the fundamenals. Strong balance sheets, low levels of debt. Companies dealing in everyday products. Look around your house, If you were short of money what would you buy on a weekly/monthly basis? What would you not buy?

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Okay, Apple is at 105.90 now. That's a nice-looking price. It was at 180 just six weeks ago.

How low will it go?

1 Reply

@kickycan,

kicky, Apple is good for the long-term because of Steve Jobs and his skills, but the short-term for consumer products is going to dump this holiday season; no money, no credit.

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@cicerone imposter,

So then do you think Apple will keep falling for the near future, even after they pass a bailout bill? I just don't want to miss my window of opportunity here, like I always do because I'm a chicken. If I did buy it, I would be happy even if it took a couple years to move back up to what it was in August ($180/share).

1 Reply

@kickycan,

Yes; most consumer products will suffer this holiday season. Most families will be cutting back on spending just to keep their heads above water.

What I've read is that Taiwan who produces about 70% of our electronics is also suffering from this economic downturn. It's a good indication of the decreased demand on all electronics including those iPods and computers.

My guesstimate on the wait before our economy returns to some normal supply and demand growth will be about five years from now.

BTW, nobody can time the prices of stock; the best strategy is to buy at regular intervals for the long term to average out the cost; semi-weekly, monthly, semi-monthly...

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@cicerone imposter,

cicerone imposter wrote:

Sit on your money for now; it's not a good time to buy anything. Right now, cash is king.

I expect the DOW to hit close to 9,000 before we see any basement buying, and that may take until late next year when the sub-prime mortgage lenders have cleaned out their books - but 9,000 is the magic number for me. I'm holding off until then, because I sold some funds when it was up at about 14,000 knowing we were headed for this bear.

Okay, the market has now slipped under 9,000, and Apple is at 89. Less than half what it was only a couple months ago! Is it a good time to get in there yet? I await your advice. Oh, crap, I guess if I wnt to get in, I'm going to have to start an account with one of those places like TD Waterhouse or Schwab or something. Anyone got any tips on which of those guys will take the least amount of my money in fees and commissions?

Thanks.

1 Reply

@kickycan,

kicky, What I did today was buy back 25% those funds I sold when the DOW was over 14000. Nobody should try to guess the market, and the next best thing is to average out your buying or selling. Don't ever put all your eggs into one basket. Calm and strategy is the best bet. That means also looking at more than one stock.

1 Reply

@cicerone imposter,

Screw that strategy and leveraging stuff. I just want one big score! Smile

Seriously, I've been burned once before in the stock market, so don't worry, I'll be very careful about it. But do you think Apple is a decent buy right now?

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@kickycan,

Looking at Steve Jobs' health, it's a toss up.

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Now that almost all hope of avoiding a depression are gone, I would look to firms that will make money on escapism. During the last depression the cinema was the thing, reasonably cheap few hours of transport out of reality. I would think that theater stocks would be good this time, as well as gaming systems and firms that produce game software. Fast food will do reasonably well, but sit down chains like applebee's and chilis are a no go...people will drink heavy but will not pay bar prices, nor tips.

1 Reply

@hawkeye10,

I sorta disagree; I believe the travel and entertainment industry is going to suffer big time. Those extra dollars will be spent on food and fuel above their cost of housing/mortgage.

1 Reply

@cicerone imposter,

Look to history CI, the needs of the soul almost always trump the needs of the body. People will eat less well and use the money to do something that makes them happy, something that makes them forget their troubles.

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@hawkeye10,

people will also want to spoil their kids, who owns chuck-e-cheese?? Buy it.

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@hawkeye10,

I do look at history; all 73 years of it. Do you know what happened before the current school semester? Many didn't buy what they usually buy for their children as in past years. Families are cutting back where ever they can.

1 Reply

@cicerone imposter,

Quote:

I do look at history; all 73 years of it. Do you know what happened before the current school semester? Many didn't buy what they usually buy for their children as in past years. Families are cutting back where ever they can.

No, people are cutting back any spending that does not make them feel good that they don't have to do. Nobody likes to buy school supplies, especailly not the hundreds of dollars worth of crap that the schools demand they we send our kids with that they really do need it then the schools should be buying it. . And we usually don't feel good about buying designer clothes either, as the kids don't need it and it sets a bad example about what is important in life. Thus this year when the schools and the kids demanded the usual the answer was hell no!

Has nothing to do with hours of fun at chuck-e-cheese

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@kickycan,

Kicky ..... Apple looks to me like it could trend toward the $70-ish mark, with the close under $90 today. For the long haul if you have the buckeroo's anything under $90 is a decent buy IMO. I wouldn't be in too much of a hurry to buy it now though.

I have an order in for BLL stock @ 27 if it hits it. I have made a ton off of that stock in my private portfolio. Earnings report due out the 30th of this month. Technically weak ... fundamentally strong. And it seems the weaker the economy ... the more people sit at home and drink beer. Wink

Great for BLL stock!

2 Replies

What are the best stocks to buy now that the market is tumbling?

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