See my new post on my Motley Fool CAPS blog. As I write this Thursday, October 9, 2008, Japan’s, S. Korea’s, and Australia’s stock markets are all down over 7% for tomorrow. Whether the bottom is here or not, stocks and bonds have fallen enough for me to encourage you to buy, though not indiscriminantly.
0 thoughts on “A Time to Buy”
Good article. RCMT has been a perennial net-net, ,very speclative IMO. There will be a time when there are some great deals that I believe can be found with a less than cash or net current asset screen but I’m waiting for some names with big moats. I think its good to be bearish and patient. I’m not an economist but Soros really hates what’s going on and what isn’t being done.
I understand the idea of buying on the way down but what if we are only halfway or less through, and next year down again. I think trading for the bounce maybe soon which we will have soon is good just not for the long-term yet
Mark, I believe that the best way to play cheap stocks that are more speculative is to buy a few of them (which is why I also purchased TSR, NED, and SOAP; I remain long all of these but SOAP). And I do believe that the risk is significantly mitigated by buying them when they are that cheap.
Perhaps you are right and we will see much better companies become much cheaper. If so, I will welcome that day and will look forward to deploying more of my cash to buy them. However, I believe it is ultimately futile to try to time the market well. Buying cheap stocks (stocks trading under NCAV) has acquitted itself well as a strategy particularly in previous down markets.
Michael, I agree that now is a short-term low for US stocks, and perhaps a long-term low for emerging markets. I shorted a VIX near the end of friday with that expectation. Particular small-cap longs that I prefer are XING (70% owner of QXM, among other businesses; given the relative market caps, no reason to get QXM over XING at this time; Chairman of CEO has recently expressed his desire to spend $10M USD to buy back XING stock for his own account); LTUS; ETLTQ
I’m holding ETLT to. It was one of the few stocks I couldn’t convince myself to sell over the last few months mostly bc of the valuation. What are you looking to get out of ETLT? are you looking for it to trade up to cash levels? Management has done a pretty good job with the company. I think it will be awhile before the market comes around but I’ll wait. It seems to be a perennial cheap stock in other words cheap year round for a long time which isn’t good
Mark & Frank — I held ETLTQ before, but I get scared of Chinese stocks, particularly OTC Chinese stocks. I was hesitant to play and recommend NED, which is listed on the NYSE.
Funny your timing on the NED suggestion. I just looked at NED and found this:
Not that I would be extraordinarily worried about this, but I would bet that small-cap investors will drive the price down tremendously on this news because they are prone to panic easily (just as ETLTQ investors have panicked for the exit on numerous occasions merely b/c they haven’t paid the $700K judgment in the US that they could easily afford to pay).
I understand your concern, but companies like LTUS, ETLTQ, XING, CHCG, etc. (several others I’ll disclose after I build up the position size I want) are just too good to pass up, in case they’re not scams. If one hits the jackpot, it pays for all the others. NED doesn’t look nearly as compelling as the fundamentals on these other companies.
If you want some larger caps or US-exchange-listed buys right now, I would look at ORH, GKK, RAS, DRYS/EXM, FSTR, CRMH, SVLF.
Good luck! The volatility lately has brought about a fantastic trading environment, and I’m up pretty big in the last month (on pretty much every trading idea EXCEPT the long Chinese small caps), so I’m excited.