Stock question for the experienced.

[Dr.Gargoyle]

In general I agree with the falling knife adage, but the reality is you don't get good buying opportunities when everybody else is piling in, you get them when everybody is rushing out. I feel like a broken record on this, but I guess it bears repeating: invest like an investor, not a trader. Worry less about this week, this month, or even next month. If you think about next year and the year after that, and don't invest on margin or with money you'll need soon, in the end you'll usually come out fine, and without worrying about falling knives.

We agree.

I was just pointing out that this might not be the best of all times to invest, considering e.g. the deficit, the dropping consumer confidence, unemployment stats, or a crashing real estate market, just to mention a few factors.

As I said, we do agree in that you should invest long term. The big question is when do you buy and sell?
I just don't think it is a good time right now given what I said above. I "guess" the market will drop as soon as the recession hits.
Nevertheless, I do agree one should seize the opportunity and buy when people are panicking. Still make sure it doesn't drop further or you could stand to lose a lot of money.

and yes.. I do talk from own experience. It seemed like a great opportunity at the time.

 

[IJ Reilly]

We agree.

I was just pointing out that this might not be the best of all times to invest, considering e.g. the deficit, the dropping consumer confidence, unemployment stats, or a crashing real estate market, just to mention a few factors.

As I said, we do agree in that you should invest long term. The big question is when do you buy and sell?
I just don't think it is a good time right now given what I said above. I "guess" the market will drop as soon as the recession hits.
Nevertheless, I do agree one should seize the opportunity and buy when people are panicking. Still make sure it doesn't drop further or you could stand to lose a lot of money.

and yes.. I do talk from own experience. It seemed like a great opportunity at the time.

You can't know when the peaks or valleys will occur until after they occur, so what it really comes down to is an investment decision. Sure, it could go down more -- but if you're in it for the long haul, then who cares? If you completely lack confidence in the economy as a whole, then a money market fund or CD are your best investment vehicles. Investing takes nerve, patience and the ability to marginalize your regrets. If you try to find the perfect time, you're probably going to lose. That's my experience, anyway.

 

[Dr.Gargoyle]

You can't know when the peaks or valleys will occur until after they occur, so what it really comes down to is an investment decision. Sure, it could go down more -- but if you're in it for the long haul, then who cares? If you completely lack confidence in the economy as a whole, then a money market fund or CD are your best investment vehicles. Investing takes nerve, patience and the ability to marginalize your regrets. If you try to find the perfect time, you're probably going to lose. That's my experience, anyway.

Again I think we agree.

Regrading peaks and valleys, I never buy a stock if I see it drop day after day. I will wait until I see some change that is "stable", i.e. rise or stick to a value for a period of time. First then I buy a stock.
If the stock keeps rising, I have only "lost" the difference between minimum value and my buy value.
If it falls... well bad luck

If I would buy stock that is falling, I risk that my view of what is the minimum value might not be identical to the markets. That is, the stock keeps falling below my minimum value.

My experience is that the latter difference is much bigger than the former difference (between minimum value and my buy value).

I do agree that you shouldn't put too much value at the current stock price. However, the stock market has become much volatile than before, why I think you must pay more attention to your buy price today than before.

 

[IJ Reilly]

Sure, but for now I think it's fair to say that AAPL and the markets have stabilized and even recovered some. Is this the absolute bottom? Who knows? One thing I would say is it's not really a falling knife. A couple of weeks ago, I'd have used that description but not after the last two weeks.

 

[MattyMac]

Sure, but for now I think it's fair to say that AAPL and the markets have stabilized and even recovered some. Is this the absolute bottom? Who knows? One thing I would say is it's not really a falling knife. A couple of weeks ago, I'd have used that description but not after the last two weeks.

Yeah I've been watching it and it seems that its starting to stabilize and begin a trend back up.

 

[Dr.Gargoyle]

Sure, but for now I think it's fair to say that AAPL and the markets have stabilized and even recovered some. Is this the absolute bottom? Who knows? One thing I would say is it's not really a falling knife. A couple of weeks ago, I'd have used that description but not after the last two weeks.

You are correct. I was thinking a bit more long term. There are many uncertainties on the financial markets right now. I think this will effect the stock prices negatively. Again, just guessing here.

IMHO, the latest 50 point interest drop smells desperation. The interest cut also resulted in an appreciation of the dollar. The question is just how much the FED can let the dollar appreciate before import becomes so expensive that consumer confidence will take a serious blow.

I have been heavy in stocks for the past 10-12 years but right now I am selling off slowly and reinvest in bonds/hedge funds until this commotion blows over.

That said, I think APPL is a sound stock that is priced low relative other companies, but I think the financial/real estate markets are up for a brutal wake up call.

I think that APPL might do well in short term, but will fall with the rest of the stock market when the recession hits full out.

Yeah I've been watching it and it seems that its starting to stabilize and begin a trend back up.

My advise to you is to keep your finger on the sell button until we know the end of this financial mess. Keep a very close look at the market. I suspect 2008 it will become a very bumpy ride.
In any case, Good Luck!

 

[jb60606]

sorry, I had to run before.

for the record, and those who jumped on me about the option thing; having a margin account doesn't mean you're trading-on-margin. He said he wanted to buy 100 shares, so I assumed he has the cash.

 

[IJ Reilly]

You are correct. I was thinking a bit more long term. There are many uncertainties on the financial markets right now. I think this will effect the stock prices negatively. Again, just guessing here.

You can always find uncertainties in the picture, but I have yet to hear any forecasts for a long or deep recession. I agree 2008 is bound to be a rough ride, but we've had them before and survived. I suppose having toughed out the big sucking sound of 2000-01, downturns like this one look like small potatoes, and I'm thinking more about how I can profit from it instead of worrying too much.

 

[Frisco]

Personally with the recent stock decline I am seriously considering investing in Google stock. At 516 it seems like a great bargain, considering a short time ago it was over 700. I was ready to purchase on Friday, then I paused when I heard Microsoft is buying Yahoo. Personally I don't know what to make of that news in terms on Google's stock.

 

[jb60606]

Personally with the recent stock decline I am seriously considering seriously investing in Google stock. At 516 it seems like a great bargain, considering a short time ago it was over 700. I was ready to purchase on Friday, then I paused when I heard Microsoft is buying Yahoo. Personally I don't know what to make of that news in terms on Google's stock.

I think GOOG missed earnings by $.01.

I think it'll rebound. They have no competition, and MSFT/YHOO won't materialize for years, if ever. I'm not saying it has hit its bottom, but I'd have a hard time thinking this is its ceiling.

Times like this are a value investor's dream, IMO

 

[obeygiant]

Personally with the recent stock decline I am seriously considering seriously investing in Google stock. At 516 it seems like a great bargain, considering a short time ago it was over 700. I was ready to purchase on Friday, then I paused when I heard Microsoft is buying Yahoo. Personally I don't know what to make of that news in terms on Google's stock.

I think GOOG may be untapped at this point. If you think of what they're capable of years in the future, including and entire online operating system, telecommunications, and possible hardware, $516 a share is a bargain. Also since they said the shares would never split. Thirty years from now, maybe the shares will be worth as much as Berkshire Hathaway.. maybe

 

[asxtb]

Are you actually advising a first-time stock buyer to invest on margin?

for the record, and those who jumped on me about the option thing; having a margin account doesn't mean you're trading-on-margin. He said he wanted to buy 100 shares, so I assumed he has the cash.

I'd like to apologize to jb60606 for having everyone jump on him. He was never advising to invest on margin. If anyone had read my question that he quoted, you would have seen that he was instead answering my question about needing margin to trade options.

 

[MattyMac]

Well appl is at 122 today

 

[blairwillis]

MattyMac, I just caught this thread and had posted earlier on the "Apple stock free-fall" thread elsewhere in the forums. It's low, but maybe not the bottom. The market is out of control right now. I'd wait, wait, wait. Better to miss the first 10% climb out of the hole and not take a 10% further drop right after your investment.

I'm light on stocks, got a nice chunk in gold etf's and holding cash in anticipation of further decline.

In the long, long, long, long run, yeah apple should be a great investment. 10 years from now it won't matter as much if you bought in at 122, 132 or 112. However, I think 60 wouldn't be out of the realm of possibility within the next 3 months, given the craziness that's going on. I sincerely hope we don't see 60, but I think there is too much out of control at the moment to even make a reasonable guess.

YMMV!

 

[MattyMac]

Thanks for the tip! I think this has been the best post yet in this thread. I agree with waiting for the rise, instead of buying now and being dissappointed by the decline.

I've talked to a few others and they too feel that the stock may get much worse in the upcoming months. I'll have to hang onto my cash a bit longer

Thanks again!

MattyMac, I just caught this thread and had posted earlier on the "Apple stock free-fall" thread elsewhere in the forums. It's low, but maybe not the bottom. The market is out of control right now. I'd wait, wait, wait. Better to miss the first 10% climb out of the hole and not take a 10% further drop right after your investment.

I'm light on stocks, got a nice chunk in gold etf's and holding cash in anticipation of further decline.

In the long, long, long, long run, yeah apple should be a great investment. 10 years from now it won't matter as much if you bought in at 122, 132 or 112. However, I think 60 wouldn't be out of the realm of possibility within the next 3 months, given the craziness that's going on. I sincerely hope we don't see 60, but I think there is too much out of control at the moment to even make a reasonable guess.

YMMV!

 

[MattyMac]

Well I didn't jump on the stocks when I wanted to ($119) and now they are floating up pretty high. Live and learn.

 

[deputy_doofy]

I realize this thread's a bit old, but I'd like to chime in about Sharebuilder.

There is only a monthly fee IF you choose to sign up for it. The three options are:
- Basic Plan ($0/month)
- Standard Plan ($12/month)
- Advantage Plan ($20/month)

So, can you only buy on Tuesdays? The answer is NO, but let me explain.
Sharebuilder has an auto-trade feature that you can use. On top of your monthly fee (again, $0, $12, or $20, depending on what YOU choose), you pay a commission on each stock purchased with the auto-trade. The commission for auto-trade is as follows:
- Basic Plan ($4 commission)
- Standard Plan ($0 commission on first 6 stocks that month; $2 commission on any other stocks)
- Advantage Plan ($0 commission on first 20; $1 on all subsequent stocks)
The other benefit to auto-trading (and no, I don't know why they choose Tuesdays) is that it will purchase fractional shares as well. This method allows you to set it and forget it, while your portfolio accumulates.

The other option, of course, is to buy "real-time," which has a $9.95 commission. You can do these any time, any day during open stock market hours (9:30a-4p).

I'd say, if you're a novice like myself, Sharebuilder is very "friendly." I'm amassing all kinds of crap now.