Thursday, February 7, 2008

Don't Panic!

The market has been quite turbulent. I myself have decided to walk away from it and not pay too much attention. Even in my regular portfolio, I'm not that heavily invested in stocks, so I can afford to not worry too much. That being said, with the wild swings of the market as of late, I have seen one day drops in my portfolio in the $1000 range which makes me nervous.

However, when things look bleak, it is time to start looking to buy things. You can essentially think of the market as going on sale, and don't we all like a good sale? Like my man Warren Buffet says, “Unless you can watch your stock holding decline by 50% without becoming panic-stricken, you should not be in the stock market”. Given this bit of advice, this little 10% drop or so at the beginning of the year is nothing. I'm in fact somewhat excited by it because I really want to buy into some good stocks.

That being said, wait a few more percentage points down. The perfect case study in this is Google. Google is down to about $500 from a high of $740. This stock is in no mans land at this point. I would not be a buyer of it, but I also might not be a seller of it. Google has good long term prospects, but right now the stock is getting beat up along with the rest of tech. Is this panic selling? Absolutely! But if you can't stand to watch the stock drop another $100, you shouldn't be in it. It can easily go down another $100 because it is so tied to online advertising, and in a recession, which everyone is predicting, advertising is one of the things businesses cut back on first.

If however, you can buy the stock and ignore it, than this would be an excellent time to consider buying into it. It is all about the type of person you are. Long term investors want to seriously start looking at the market, and trying to pick some stocks up that you have wanted for a while. All others who let their emotions ride the roller coaster along with their stocks are best to avoid the market until things start leveling out.


  1. What are your thoughts on Microsoft buying Yahoo?

  2. [...] my quick thoughts on the proposed Microsoft and Yahoo deal after a comment by bluejay311 in my last post.  . What the hell is Microsoft thinking? Quite frankly this is Microsoft’s [...]

  3. Best time to buy. There should be, lots of bargains out there. Just do your homework and make money.