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STOCKS – UNCLE FRED’S READ ON INVESTING NOW
By fred | December 9, 2008
Wow, my eBay store is doing practically nothing. That has got to tell you something about the mood of the nation’s people, they are scared – and they have every reason to be – still!!! I usually sell four or five jewelry items a day, now in what is the so called ‘peak’ of the Christmas buying season if I sell one a day I am happy. There are going to be a lot of unhappy retailers this year.
With approximately ten percent of the work-force out of work, that still leaves nine out of ten working. Also there are millions of retired folks that have set incomes, maybe a bit dented like ours with investments maybe not looking as bright and shiny as they did. So there is money, just folks are scared and sitting on it, wondering what will happen, what to do with it. With all this your old Uncle thought maybe we should talk about money and investing a bit.
All of my life I have been in favor of buying when no one else wants to, hey, you get the best bargains then. If I want something on eBay or an auction site the best time to buy is on a holiday weekend, very late at night, middle of the week, silly to buy on the weekend when everyone is hooked up and bidding an item up. Same with buying now, everyone is making deals on merchandise, so smart folks with money should be buying – which leads us to stocks.
Buffet, likely the world’s smartest investor is buying stocks, companies again. Of course, I was reading where he had a bankroll of about 47 billion dollars, a bit more than the rest of us. Still, little money like most of us have, — to get to big money cannot sit doing nothing.
First off, in my humble opinion, if you want to get your feet wet you maybe should start buying. To early? Maybe! You have got to start sometime and if you have ever read about successful investing – the time to buy is when there is blood in the streets. There is blood in the streets now, at least that is what think and that makes smart money want to buy in a down market.
I would start a bit of buying – I would buy some of the stocks that I figured will be around when this recession, depression, whatever you call it is over in a few years. It may take that long so if you start to invest – don’t get ants in your pants, have a lot of patience.
There are three ways I would go about dipping into this market right now.
One – most old folks have CD’s, if I wanted to stay only with CD’s (that is not really any fun but some old folks want zero risk so I am including that here) I think I would leave my money in your broker’s money market account when they come due for a few months yet.
Money markets are giving a couple percent so be satisfied with that until after the first of the year until we see what direction Obama is going to lead this nation in. I have a hunch that with money being so short, CD’s (Certificate of Deposits) interest may go up considerable so it makes no sense to put money in six month or year or multi year CD’s now if you can get double the interest soon. It is worth letting money sit idle for awhile just to see the lay of the land.
Two – I would start looking at investments – stocks that are solid and will still be around when this is all over. For profits to take off the top I would set up some PCA (Position Cost Averaging) programs. I would invest in the software to run these programs, you can get a super software from Investment Systems Inc. of Florida for around $300.00 a one time investment you will be damn glad you made. I would look for stocks that are solid but have taken some big hits. I would not buy a lot, just get myself started – set up four or five programs start out with only three or four thousand a program. Just buy a couple thousand dollars of the actual stock if the program is for $4,000 total, leave $2,000 as the bank for each program. Then if the stock goes down you have enough funds to buy more. Right now I would not invest more than ten or 20% of your cash assets, BUT you got to start getting your feet wet. Takes guts to buy into a down market but that is the only way to make big money. Get your feet wet and then as you gain confidence in your decisions buy more when opportunities such as dips come about.
For those of you that do not want to use PCA, I think you should still stick in a few bucks, or at least start looking for good solid companies that will outlast this current mess we are in. Waiting for after the market moves up in a few years big time may make you some money but the smart guys are buying now when the big shock has dumped the market, dumped the good and bad. Sorting all this out can be very smart, very profitable, where you make hundreds of percent – but you got to jump in and do it now.
The biggest mistake I found over all the years I wrote my investment research letter was folks doing it wrong. If stocks were in the toilet, down – folks instead of looking at it as an opportunity to invest with stocks on sale at a bargain they would hide their heads and some even sell off at losses. Then when stocks moved up, they would get all exited and buy – not tooooooo smart – in fact that is just plain dumb. How in the hell can you make money if you sell when stocks are down and buy when stocks are up.
“Buy low, sell high” is the age old recipe for successful investment, please remember that.
O. K. Fred we agree with you – where do we start? Here is a few I would look at: Constellation Energy, Goldman Sach, General Electric, Toyota, Western Union, Master Card, Amazon, Potash, also check these out AG, ACI, GIG, BP, EFP in all this mess you should find a few to fill your needs.
There has got to be a bunch more, go to YAHOO and search, look for stocks with low P/E’s (Profits to Earnings) then check out their Profit and Loss Statements, look at the charts to see if they are selling at their lows. Look for stocks that have taken some big hits just because the market has been down.
Anyway, I just felt that you may want to know what your old Uncle is doing. Just because I don’t do my monthly research report does not mean I am not interested in stocks, in the market, investing for all the years I truly believe that is where the money is.
One last word, I would not, I repeat would NOT, do any day or short term trading without professional advice. If you want some excitement in your life on a daily basis, for God’s sake send an e-mail to Investment Systems and get with them on a program to do it professionally not by the seat of your pants. They now have the software to make it pay, put the odds in your favor, take the emotion out of investing, the only way to make money.
We will get back to fun stuff like C.E.O. Cat and Everybody’s Danish in a couple days just wanted to stick in a bit about the market for those that have been on my back about the when and how.
Love ya, Uncle Fred
Topics: In The Markets | No Comments »