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Bargains Everywhere ?

Finally the most volatile week in the history of stock market is over and we are about 4-5% up in this week. Not bad considering Vix cross 80, we had upward move in DOW by 900+ points and downward move close to 800 two days later. But this volatility must be confusing to lot of investors including seasoned ones.

So what should we as common investors do ? Here are some pointers which may help:

Warren Buffet is recommending buying in this market and he is buying for his personal account. I like his statement:

"Be fearful when others are greedy, and be greedy when others are fearful. And most certainly, fear is now widespread, gripping even seasoned investors"

and he had given some historical examples of 1932, 1979 and 1999. He is my stock guru so I am following him and doing some buying for my own account (although very small amounts:-)

There are so many bargains around with most technology stocks trading at PE of 10-11 and financials/energy stocks trading at single digit PEs. Here are some of the stocks, MFs, ETFs I am considering:

  • VMW at 20 (VmWare)
  • SFI at 1.6 (istar Financials)
  • CNO at 2.5 (Conseco)
  • Ebay at 14-15 (EBAY)
  • LVS at 13-14 (Las Vegas Sands)
  • DIG at 29-30 (Proshares Ultra Oil and Gas)
  • UYG at 10-11 (Proshares Ultra Financials)
  • MINDX and MCHFX (India and China focussed mutual funds)
  • IBN at 15-16 (ICICI bank - India's second biggest bank)
  • And finally SSO at 30 (Proshares Ultra S&P)
Most of these are risky and you need to have patience to deal with volatility associated with these stocks/ETFs. But in long run, most of these would return 50%+ in next 18-24 months.

Caution: Invest with caution, patience but at the same time with confidence such volatile market. You may not get such an opportunity for another few years (last time we got such opportunity was in 2002).

Last week few of us had a bet based on my previous blog: Would Dow close near 9000 or 7000. Of course, me and some friends who are more optimists won the bet.

Colin Powell has endorsed Obama for President - just the kind of shot Obama needed 2 weeks before the election.

Have a good weekend!

/Shyam

Comments

Anonymous said…
new bottom today shy???

u ever gonna discuss things with me or do you just dismiss me as some crazy guy???

I would assume you would like to discuss things...
12:56 PM
Anonymous said…
HERE IS WHAT I WANT TO KNOW SHY???

YOU HAVE SOMEONE HERE WHO HAS GIVEN YOU SERIOUS REAL DEAL TRADING IDEAS...ROADMAP TO MAKING INSANE AMOUNT OF MONEY...

WM WB NCC---ALL CALLED BY ME

WFC SHOT...BAC IN THE MID 30'S

Q SPY IWM...EVEN GAVE YOU STRIKE FOR PUT OPTIONS

I TALK AND DISCUSS MACRO TRENDS AND THEMES OF THE ECONOMY BECAUSE THAT IS WHAT INTERESTS ME MOST AND I BELIEVE HAS BEEN PARAMOUNT TO ALLOWING ME TO ABSOLUTELY CRUSH

SO I TRY ENGAGE YOU IN CONVERSATION AND DISCUSSION OF ISSUES, AFTER YOU HAVE SEEN MY POSTS FOR MONTHS AND MONTHS, AND YOU DONT EVEN WANT TO DISCUSS THE OTHER SIDE OF THE TRADE OR AN OPINION THAT IS CRONTRARY TO YOURS

UNFUCKINGBELIEVABLE TO ME BUT HEY WHATEVER...HOPE ONE OF YOUR BOTTOM CALLS EVENTUALLY TURNS OUT RIGHT

I AM THINKING 763 ON SPX---MIGHT HOLD---NOT SURE
5:12 PM
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