In keeping with everything I’ve written for the entire past week… now that we have crashed, and there has been some price recovery… and that we should expect some later price erosion, so the pre-openers are off this morning, moments before the open.
Sit tight and wait. Give this some time… if, at any time, it should actually turn into another ugly rout again… if you should feel that twisting, tightening sensation in the pit of your stomach… “Everyone’s selling! Nobody’s buying!” YOU step up, and you be the one with cash in hand to relieve those poor, suffering shareholders of their impossible burden, that they might get to feel good once again. They’ll think that you’re doing them a huge favor!
I don’t expect, and I would not want for things to head seriously south as soon as today, but it could happen. We really want it to take place, beginning next week. The idea is to let the fear build, resulting in a couple or three down days, eclipsed by another sell-off taking it all the way back down, causing new fear and panic. If that should unfold; if it should go just like that… Buy!
Now, this must be said. Yes, every indication is going to say something like, the summer was the top, this is just the beginning of a new bear market, and everyone should just sell out of everything. But, I’ve got to tell you. Don’t buy that. Every indication IS going to say that it looks like a new bear… and everyone knows that… which is almost certainly why this likely and actually… isn’t!
Bear markets don’t start with a sluggish, slowly improving economy, which is actually not strong. They don’t start when interest rates are so low, and money is so cheap, and they don’t start when investor sentiment is already so negative, and the concern for a bear market is so prevalent… (ah, well, at least I don’t think they do!)
I liken what’s going on more to 1987, and, more recently, with 2011. I am of an opinion that we will rather wildly muddle around here, up and down, back and forth, for a couple of months, or so, and then rip out a new year-end rally. And, if not in the end of this year, then at the beginning of the next. Let’s see if I’ve got this right or wrong… as always, any such prognostication must be subject to change when circumstances warrant.
What I will do, as I always do, is monitor the market, and act accordingly. I actually do want a bear, as I want to accumulate shares for as little cost as possible… I just don’t think, at this time, that I’m going to be blessed with such a wonderful benefit as share prices… half off!
Here’s to your successful investing!
Harold F Crowell