The last time I updated, I was beginning my swing trade experiment. Well, I never got one to work out for me. Actually, I only got one stock (PENN) to meet the criteria before the stock market began its collapse. After that, I decided to table the concept because of the extreme volatility. In some regards, that is what you want, but there were too many other “seemingly” good buy and hold bargains to pass up. I’m going to retry swing trading once the market volatility calms down, and I can’t really find well priced stocks.
The first thing I bought was Apple. I got it at $106 (yes it is down 16%). I know that its retail and this is a terrible time to be buying retail, but they have a large market to grow into. With the iPhone launch, their core base of fanatical users for their desktops and laptops, and their apps, I just see them continuing to grow. It’s already a higher end product primarily bought by young working age individuals, and I’m not sure how much those people are being bothered by the collapse except in banking. The P/E at the time was around 18, and I just couldn’t pass it up at that price.
The second thing that I bought was Entergy (ETR). That’s right, nuclear power baby! My dad worked their prior to his retirement, and I know it’s a solid company with a good CEO in Wayne Leonard. Plus, the power bill is the first bill paid. They may make less money, but the economy isn’t going to stop you from having power in your home. Plus, I want to see it through the company break up. If the credit markets ever unfreeze and they get financing, then it’ll unlock a lot of value leading to an explosion in price.
Finally, I’ve done a little dollar cost averaging on my primary holdings of SPY and DIA. I’ve been buying on the way down, but I’m currently out of cash. I’m still buying small amounts in my 401K which is getting matched at 100%, but I’m tapped out of expendable cash right now.
I’m probably going to raise my contribution to the max match, and put my bonus and tax refund into the market should I get one. Other than that, I’ve got some freed up cash since I rented my rental property around a month ago.
Needless to say, I’m a big buyer right now. To answer your question, it is extremely tough to buy now, and it takes a lot of heart to do so. To salve the fears, I’ve been checking the amount of cash generated, amount of cash on hand, and the amount of debt to make sure they can survive a downturn for the foreseeable future. These are still companies. As long as they are in business and the primary consumer for the product wasn’t using large amounts of credit to buy the products, then you should be fine.
If I’m stupid then let me know…
No comments:
Post a Comment