Comments on: Five Things We Can Learn From the Market Bust

By: Current account

Current account — Mon, 30 Mar 2009 11:50:19 +0000

Do you think the same thing is happening now with gold? I see that the demand for real gold by households is going down, but the paper value seems headed upwards for quite some time now.

By: Jeremy

Jeremy — Fri, 27 Mar 2009 12:59:32 +0000

I realize that, but I wasn’t just basing it on the absolute price. I use technical analysis for many of my entry and exit points. Back in early-mid January it was showing support at $13. It tested this level for a few days without falling so it was either going to find that as a bottom or plummet through it. I bought a few shares right near $13 in case it was the bottom at the time, which it obviously wasn’t. It came back a few days later and saw resistance at $13 and then continued to drop thereafter.

So I wasn’t just looking at it and saying wow, GE is cheap at $13, but I was just looking for confirmation as to what the stock was likely to do in the short-term based on technical indicators.

Of course a lot of people would argue that technical analysis is a fool’s errand and akin to witchcraft, but that’s beside the point. Given I plan on holding the stock for many years and believe in the fundamentals and long-term prospects, the charts are simply helping to shave off a few percentage points here and there when getting in.

By: Writer's Coin

Writer's Coin — Fri, 27 Mar 2009 11:12:40 +0000

@Jeremy Buying a stock based simply on the stock price is a fool’s errand. It’s like picking a horse at the track based on the jockey’s number. One thing has nothing to do with the other.

By: Jeremy

Jeremy — Thu, 26 Mar 2009 20:19:06 +0000

Adam, I’m with you there on GE. I’ve been slowly buying shares of GE this year. Originally I said anything under $13 was a bargain and bought some around there. I was quickly proved wrong as it dropped to below $6. But, I bought the whole way down and even snagged some at $6. My average price is now around $9.50 or so.

But I bought for the same reasons you mentioned. We know GE isn’t going anywhere. Sure, the finance arm is killing the stock price and it’s trading more like a bank right now, but I bought it with the intentions of holding for 10, 20, or maybe 30 years. So what it does in the near term and what people say about it won’t mean much down the road.

By: Dana

Dana — Thu, 26 Mar 2009 19:42:22 +0000

Cheers, Jeremy for the guest spot, hope all’s well.

I’m looking forward to hear from your readers and what their thoughts are on the recession.

By: Adam @ Checkbook Diaries

Adam @ Checkbook Diaries — Thu, 26 Mar 2009 18:54:13 +0000

I consider myself an investor. Although I might not do as much homework as I should about each company that I invest in (I’m new to investing), when I buy a stock I plan to hold on to it for years, if not decades. With the recent economic downturn, I have been targeting large, well established companies that have ridden the market down. I don’t tend to pick companies that are obvious investors in risky investments of their own, or have poor business models. I try to pick out companies that have been more or less victimized by the market and should return to higher values over the years. One example of this would be my recent purchase of some GE stock at $8.50 per share. Luckily that one has yielded immediate games and make me feel good about my choice. A less that fuzzy feeling has been experienced so far with my purchase of GM at $4.90 per share. I’m really hoping that they are able to get past their current situation and back into profitability, but I’ve got decades to wait. At my age, the potential gains fair outweigh the potential losses given the low per share cost of many of these stocks.