Tru dat.

That's why I trade options when I trade (as opposed to my retirement which is mainly stock) and why I don't let all my $ sit in equities (except my retirement which is ultra-long term by force).

The fact is this past week was a once-in-a-decade type event. It happened in 87 and again in 2000 and now in 08 the excesses have been flushed out of the system and we can look forward to recovery down the road. In 2000 I lost close to $100 grand and that hurt. Losing $5000 sucks but it's not crippling. As careful as you try to be every now and then some focker is gonna t-bone you and as long as you can walk away with all your parts in working order you simply get a new car and get back on the road.

We had a financial hurricane this week, hurricane Lehman. It was a rough ride, you took some damage. But the eye has passed and while there is a lot of cleanup to follow you can fix your roof and get back to living a normal life again.

Stocks are cheap. Buy some.

 

sorry if i sound like a neophyte but here goes.

now with the potential bailout, will stock investors in general have a stronger morale to invest in the near future? i wanted to buy AAPL when it was at $120 the other day but didn't have my trading account set up. So my question is, do you think there will be opportunities like that again. I'm assuming no.

 

Just buy some at 140

 

Dc, AAPL is an emotional stock. Cthree follows it better than I do so we'll see what he says but just look at its past. We saw $120's not so long ago. So the answer is yes, you will have great buying opportunities in the future. You just have to keep the fundamentals in mind. If their sales contine growing then don't "anchor" yourself to thinking $120 is "the low." Maybe it'll be $150 for "the low" next year. Base your decision of value on its PE, not just price.

 

Just take the emotion out of it.

AAPL in the 120's is a good deal even if jobs bites the dust. Crude, but you have to consider all the variables. Just set up limit orders on stocks you want and don't worry about it if it's for the long term. I have a limit buy on AAPL in the high 120's. If it hits, great, if not, I bought some in the 130's and at 150 so it's no big deal.

 

AAPL is a crazy ass buy at 140 and 23x forward earnings.

 

but if i base my investment based on the PE ratio, wouldn't most investment books tell me not to invest lol i have approx 18k to invest and even to buy 100 shares i would have to put down 14k. not that i have a problem with it, but i would like to maximize my profits.

 

A good investment book would tell you to look at historical PE's for the company and its industry. It shouldn't say "X" PE is high or low in isolation. AAPL peaks near 40 and, usually oscillates down near 30. To me, AAPL below 30 is a buy (for a contrasting example, GM's PE is stunningly low but still not a "buy").

The multiple depends entirely on what people expect from the company in the future. Right now Apple is still growing so a premium PE is, probably, justified. If Steve Jobs gets ill or quits you can expect serious multiple contraction. I'd be surprised if held above 15 PE for a year or more after he leaves. That's because, right or wrong, most people give Jobs credit for the growth and future of Apple.

You want to see a nose-bleed PE? Check out FSLR (First Solar) before it came off its highs recently. Folks had amazing growth expectations for it, many still do. Scares the pants off me unless it drops another 20% or so.

 

You need to split your cash into different stocks and not just buy AAPL lone. If your just going to buy AAPl buy half here and if it does go down buy a little more. You can never catch a bottom for any stocks. Another thing to keep in mind, since your new to investing. Please have a good stomach when shit hits the fan. Don't sell at the bottom and buy near 52 weeks high, it's the worst thing you can do.


Nate

 

Here's a tip. When everyone thinking the world is ending you should buy. When people are getting very greedy you should take some profits.