Monday, March 5, 2007

The stock market continues downward

When Greenspan speaks everyone listens. Does it really matter if Greenspan is the current Fed Chairman or not? I think not. He still has the power to affect markets. Greenspan says there is a possibility of a recession by year end, and the market immediately reacts, and the stock market begins a downward spiral. However, what did Greenspan really say? He said there was a possiblity of a recession, not a probability. If we parse, what Greenspan really said, we find, there is always a 100% chance of a possibility of a recession at any moment in time, however the probability is remote.

When emotion hits the stock market, which is what happened last week and continues this week, the market corrects. This of course is always healthy for the market. The economy is humming along and there is no recession in sight.

If you are a trekkie, become a vulcan when it comes to investing. Remove emotion - emotion needs to always be removed from the equation. Conventional wisdom says "panic when the market goes down", but as an investor, you need to look at this as an opportunity and start looking at stocks which have hoards of cash flow, good business models and well run. Start picking out stocks and be ready to pounce on them when their prices drop. I am going to wait a few more days to see if the prices drop further. Companies I am currently looking at are the following: (note: these are already in my portfolio, and I am looking to buy more)

1) Carmax KMX (down 11.89% in a week)
2) Compas Minerals (CMP) (down 7.41% in a week)
3) Cemex (The premier Mexican cement company) (CX down 11.8% in a week)
4) Fastenal FAST (down 6.46% in a week)
5) Ebay (ebay) (down 7.3% in a week)
6 ) Novartis (NVS) (down 6.38% in a week)
7) Johnson and Johnson (JNJ) (down 3.43% in a week)

Happy Investing!

No comments:

Republican Party Blogs - BlogCatalog Blog Directory DeeperLeft member