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Posted by dapperdobbs on January 1, 2009, 7:26 pm
> To all Gurus on this list.
>
> Do you think US stock markets are hovering around the bottom? Or do you think
the worst is yet to come?
> In such uncertain environment, what is a good investment strategy?
> Would buying something equivalent to complete stock market index at regular
intervals to ensure dollar cost averaging be a wise move?
> Any other strategies? Please share.
>
> Thanking you in advance.
>
Many seem to equate indices with investing in stocks. Indices include
stocks I wouldn't touch. There are some very good quality stocks with
solid earnings histories and solid earnings prospects trading below 6
times earnings. AT&T is one.
True, stocks correlate with the market, but not all of them, not
perfectly. Stocks do correlate with earnings. I wonder if the mass-
marketing on the part of funds whose disciplines are "top-down" have
influenced any of the many posters here? It's relevant to talk about
the broad market and its PE and yield and book value, and earnings,
but the broad market is made up of individual companies. That's (I
guess) a "bottom-up" approach, or fundamental analysis.
"Numerology" is important, too, but what makes a business successful
is a primary consideration. The product line is what drives the sales
and earnings. Like the Buffet story before he invested in American
Express - he stood at a restaurant and observed that people paying
with credit cards were exceptionally proud. So, I guess he figured it
would be a popular product.
At year end the hypothetical portfolio I set up is +12.72% v. a
Vanguard broad based index +7.6%. The website "Stockalicious" was
temporarily hijacked, but is back online. My collection is just stocks
I thought had gotten badly beaten up even though they are solidly
profitable companies. My disappointment, really, is CHRW - I kind of
cheated a bit on that one, since it didn't get badly beaten up. Its
earnings are too good, and are somewhat insulated (the company does
logistics for trucking). It's the percentage leader in the collection.
http://www.stockalicious.com/portfolio-holdings/4710
http://www.stockalicious.com/portfolio-holdings/4745
Prosperous 2009!
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