Stk Mkt: Opportunity During Crisis

Discussion in 'The Lounge' started by RazorbackTitans, Oct 3, 2013.

  1. RazorbackTitans

    RazorbackTitans Starter

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    For anyone interested in investing in the market, here is just something I have been watching over the last few days. I'm not a professional investment adviser and you always invest at your own risk. With all that being said however, if the market is an arena that you are curious about using to build your nest egg, here are a few thoughts of mine from our most recent doom's day, apocalypse, "omg we're are all gonna die!" crisis. :scared:

    hal.JPG
    Here is the last five days on HAL. I found this to be a textbook example of the opportunities that are created during moments of mass hysteria and crises. The folks that kept up with the news got in a day or two before the shutdown once the price began to drop below the recent average. It was not until the actual shutdown that most folks piled on trying to take advantage of the cheap prices. By the end of the 2nd, the discount was gone and everyone sold off when the markets reopened on the 3rd.
    Most of us Average Joe's would have gotten in around mid-day 9/30.. but after watching prices drive all day on the 2nd.. you would have been correct to drop it like it's hot!

    Crazy times can be your best friend.. always keep a pile of cash on hand so you have the tools to capitalize on the fears of others. Usually high profile crises that are blasted all over the airwaves, like this government shutdown, will create something like this somewhere.

    If you don't feel comfortable riding just one bull, try putting your dough into an exchange traded fund that sooner or later will drive upwards again even if you are wrong in expecting the bull to follow the bear. Here is IJR, a small-cap ETF that captures the mood of the market in much greater detail than a large cap fund during a dooms day event.
    So what if your worst fears come true and the bear hangs around longer than expected? Make it rain on that jerk periodically over the duration of the downward trend. That will lower your average cost per share so that you at least profit sooner than you would if you didn't keep investing in your bad decision.
    IJR.JPG
    #1
  2. GoT

    GoT Strength and Honor Tip Jar Donor

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    good luck

    I mean that.

    Speculation is not my thing, but It helps grease the rails so I have no problem with the people who do it
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  3. RazorbackTitans

    RazorbackTitans Starter

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    I guess I should have added that this strategy is a form of speculation and that one should by no means let all their money ride on something like this. With that said, the old saying, "There is no such thing as a free lunch" applies here. With big gains comes a certain level of risk. I personally also subscribe to a conservative approach in my portfolio, but I do tend to air it out big when I see big news of catastrophe on the air waves. Some of the best money I ever made was from money put into the market as the collapse of 2008 was happening. Invest on the way down and you can drive you avg cost per share down.. the retail sector was especially burned hard and some good companies dropped down to a few bucks a share. The same ones go for around $80 a share now. Just do the best you can to educate yourself about the underlying financial health of a company because sooner or later, the stock price will reflect whats going on in the finances.

    MY PERSONAL OPINION, though :thumbsup:
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  4. GoT

    GoT Strength and Honor Tip Jar Donor

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    absoutly correct


    I was sitting in my brokers office when Ford was well under $2 a share back when Chevy and Chrysler were tanking. Sadly I did not have a pile of $s too throw at Ford so I missed out on just such a oppertunity. Ford stock was being dragged down by the ineptitude of Chevy and Chrysler and was a definate buy at that point - oh well
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  5. RazorbackTitans

    RazorbackTitans Starter

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    Hindsight is a b^tch! I often think of times when I coulda, shoulda, woulda and feel like kicking myself in the face. haha
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  6. Alex1939

    Alex1939 Old Man Tip Jar Donor

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    Never ever worry about that toooo much with the stock market. It's soo easy to say I coulda bought Facebook at the low and sold for 100% gains right now. As it was I bought it at IPO and eventually sold it for 40% up, and now it's up another 10%..... ****, I think I just did what I said not to do.


    Anyway, be careful out there. I know it hasn't happened and there have been a lot of false predictions out there about another similar 2008 correction... but this one actually does scare me enough that I have heavily shifted to cash.
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  7. GoT

    GoT Strength and Honor Tip Jar Donor

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    Really???

    I dont see that at all.


    Markets go up, markets go down. Constantly buy throughout your lifetime and never panic.


    Dont keep anything in the market that you know you will be spending in the next 5 years.


    which means upon retirement, before actually, you will be building a pile of cash to live off of.


    well thats my thoughts anyways
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  8. Alex1939

    Alex1939 Old Man Tip Jar Donor

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    I have a certain amount of my money and investments in the "buy and hold" strategy you suggest above. I buy the same $ amount of the same ETFs each year. The ETFs are basically S&P (IVV), Nasdaq (ONEQ), Small Cap (IWM), EEM (Emerging Markets- China, South Korea, Taiwan, South Africa, Brazil, India, Russia) and ILF (Brazil, Mexico, Chile). I won't sell those, they just for buy and hold.

    BUT I have a certain amount of other money that is for trading and speculation. About 3 weeks ago I took gains and put that into cash. I'll still buy ETFs but try and time the market. I'll also buy individual stocks to trade. Sometimes I'll buy those multiple ETFs or shorts.

    And I have a healthy percentage of overall money in a bond ladder. However my bond that expired this year I have not re-invested because bond rates are so crappy it just didn't seem worth it to tie up the money for the returns.

    Really wish I had started options trading years ago. It's still the one thing I really want to get into.
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  9. GoT

    GoT Strength and Honor Tip Jar Donor

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    gotta agree with you about the bonds.

    you seem 'experienced' so I suggest you explore foreign bonds in stable countries.

    I understand you can still get 6-7% in Australia. That would come with a relatively stable exchange rate.


    Not my thing but might be worth looking into
    #9
  10. RazorbackTitans

    RazorbackTitans Starter

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    really? that high down under huh? Ill have to check that out :cool2:
    #10