Last week, Buffett plopped down 10 billion to invest in Goldman. Now he's acquired a 10% stake in BYD (Hong Kong battery maker). When everyone is talking defense, getting out of the market and the beloved Cramer is saying raise cash, the most successful investor is buying. Is this the best time to buy? Who knows, we only have past figures to determine whether or not something is cheap. At this point, it takes some brains and some guts to get in. Since I have a little more guts than brains, I keep loading up on well diversified indexes. As someone put it (unfortunately, anonymously), you could do worse things than to buy indexes 20-30% off of their highs. My strategy is to keep on buying on the way down. I figured if the market keeps going down, I'll buy some more. So I start loading up at 20-30% off, if it goes to 50, 60, 70% off, I'll get even more ... then hey, won't I look smart? Maybe I could get a gig on CNBC talking about how I predicted and bought the bottom. <cough>
Keep in mind, these are long term holdings (10, 20 maybe even 30 years). This is not advisable if one has a shorter timeframe before they need the cash.
What about speculative buying? The blog came about mostly to talk about trading systems, speculative plays and ETFs, but with the markets in a bit of volatile state, the pure speculation that is normally at the forefront of my mind has taken a back seat. It's not dried up by any means, the positions I posted last week are still as they were. I believe that fresh cash has a somewhat rare opportunity and it's taking center stage in my market evaluation at the present time.
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