I would like to reiterate that on a personal note I don't care if stocks go lower or higher. I continue to find stocks at levels where I do not care to check their quotes the next day. I am finding enough attractive stocks that I am actually getting more and more excited as something that I buy goes down. I hope to buy more of Mosiac (MOS) under $30 a share. Maybe Intrepid Potash (IPI) will go to low single digits so I can load up on it. Maybe JASO will trade under its net cash value so I can buy a stock at a P/E of 2 growing at 30% a year for free. Ensco (ESV) is trading below tangible book value which is probably understated by at least 50% because of depreciation rules.
Finding a perfect bottom is virtually impossible but if you are fortunate enough to buy a stock pretty close it you should not care. Kind of like this picture, the perfect bottom may be elusive but I see enough to get excited.
Tuesday, November 18, 2008
Searching for the the "Perfect Bottom"
My favorite analyst, our very own Mad Scientist Dr. Saif Lalani, emailed me today:
(Nothing contained herein is a recommendation of any kind.)
The mother of all crisis?
I won't include a copy of the picture the Mad Scientist included with his communication. Kids!
Of course, if the world's financial system does not collapse, the Mad Scientist is probably correct in his optimism. And at these levels, exchanging certain equities for US$s is less than appealing. My bet is stocks will be higher a year from now. But I cannot bring myself to add to equities here (I have enough). Perhaps I am behaving like the average individual investor - waiting for the market to rise before I buy (buy high, sell low). Maybe it is too late to sell and too early to buy. Then again, I look at certain energy producers and servicers trading at 4X next years earnings, (my OWN estimate. I do not listen to sell side "analysts") with little to no debt and fat dividends and I do get excited. Also, I continue to try to add to Gold by selling naked puts (I should mention that on the Gold I DO hold I sell out of the money covered calls to generate income and to lower my cost basis. I will continue this strategy, but the calls will be WELL out of the money).
On the other hand, the U.S. equity market is so grossly oversold that a truly massive rally could come at any moment.
Of course, I reserve the right to change my mind on a moment's notice. Markets change, data changes, things change.
Mentatt (at) yahoo (d0t) com
Posted by The Short Story Man at 4:41 AM