Dec, 2007. Now the average recession last somewhere around 27 months, so we probably have a year
and a half to go, at least. The stock market today is down at (9:30 pacific time) 434 points and black Friday
had ok sales. Are we having fun yet?
Kropotkin
and?
Interesting that we can only say we’re in one by looking back, and now unbeknownst to us we’ve been in one for a year. This “revelation” would mean nothing to most people if so many on Wall Street weren’t freaking out. Not that it’s inconsequential by any means, just that the real problem is fear.
Fear: 60%
Future: 20%
Actual Figures: 20%
To me, that is what dictates the market. Anyway, I’m leaving my money in the market, in fact, I want to wait until it hits bottom and then invest some more money. Basically, you can play it safe by using general accounting principles. Buy into companies that have a lot of value in tangible capital. Also, since loans are hard to come by you also want to focus on companies that have a strong debt to income ratio and strong short-term liquidity.
Obviously, you also want a company who has revenue that exceeds costs and who you can reasonably project to continue to have revenue that exceeds costs. The best case scenario is if you can find corporations where their net income exceeds their annual expenditures, though rare, they do exist.
When the actions of most of the power players are dictated by fear it is a prime-time for someone with a level head to act. Sure, if you are looking to retire in the next year or so, then you want to get the hell out of the stock market now, but if you are between 20-55, I would say you will find that the market is excellent for long-term investment.
Take advantage of the low prices while they are still low. In terms of putting more money into the stock market I am biding my time because I think it will get worse before it gets better.
But, the books of corporations in terms of quarterly and annual figures are matters of public record, so employ general accounting principles when deciding what to buy. And as we learned with names like AIG, Ford, General Motors and may learn with Citi, a big name doesn’t really matter all that much.
the real problem for most of us is impatience