Comments on: Now’s The Time To Buy – Right?

By: Joseph @ Debit versus Credit

Joseph @ Debit versus Credit — Tue, 25 Nov 2008 19:56:39 +0000

I try to always be optimistic. Based on optimism then now is definitely the time to buy. Unfortunately this is a large and complicated mess and technically speaking could lead to something worse than a recession.

Better to be safe than sorry, so I am trying to buy stocks (to catch any long-term upside) but I am also trying to prepare for the worst.

Good post.

By: Mike Norman

Mike Norman — Thu, 30 Oct 2008 21:42:42 +0000

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By: ajc

ajc — Tue, 28 Oct 2008 23:00:01 +0000

Right now I have close to $1 Mill. of 100% borrowed money that says that now is a very good time to buy in.

By: Eric

Eric — Mon, 27 Oct 2008 19:55:10 +0000

I wish I could invest more in my retirement fund, but the next best thing is moving my funds from safer investments to the small and large caps, which I’m doing over the next 6-8 months until I’m 100% back in stocks. Even if the market goes down for months to years after I’ll still end up ahead twenty years down the road.

By: Kitty

Kitty — Sat, 25 Oct 2008 23:29:48 +0000

@Outdoorsman – if Buffett had been such a propagandist as your link seemed to imply, how come he wasn’t screaming “buy” in 2004? In fact, in 2004 he said that he cannot find any values in the market, that he is under-invested and it’s bad, but it’s better than to regret it later. He also called derivatives “financial weapons of mass destruction”. Similarly in 1999, Buffett told that we shouldn’t forget about Cinderella: if you don’t leave the ball on time you’d be left with pumpkins and mice. Both during the internet boom and during the real estate babble Buffett expressed concerns about the markets repeatedly. So he isn’t always telling you to buy.

At the same time, two times when Buffett told he was buying – in 1979 and, if I am not mistaken, in 1990, he ended up right.

Even while 2004 wasn’t exactly the top, and 1979 wasn’t exactly the bottom, if you followed Buffett and bought in 1979 and 1990, then sold when he warned in 1999 and 2004, you’d have come out ahead.

I think his track record speaks for itself.

It is quite likely that the market will go lower. The problem is if you wait until the economy starts to improve, you may miss 30% of the next bull market. Historically, markets have gained 30% of bull market values within first month at the start of bull market. Markets look-ahead, so they start go up several months in advance of actual recovery. You don’t know when it’s going to be. By waiting until the market goes up, you may lose a large chunk of the gains.

@MBhunter – 1) is a good point. In fact, in my brokerage account I may start buying specific companies only – those with great balance sheet, great earnings, good guidance – i.e. those that went down for no reason at all just together with everything else. Specifically dividend payers. Unfortunately there is no such possibility in 401K, although I may look at which companies some of the “value” mutual funds are buying, and if I like these companies – invest in these funds.

I don’t believe in 2) – specifically because of his track record. If he so believed in his ability to influence the crowd, he’d not warned us in 2004 and in 1999. So far, there haven’t been any time in history when he could have being accused of trying to influence the markets for personal gain without good reason. Why do you think he suddenly starts doing it now?
How about those who criticize Buffett – what is their track record?

By: mbhunter

mbhunter — Sat, 25 Oct 2008 13:27:58 +0000

1) Buffett didn’t say which stocks he was buying. It may be an excellent time to buy certain stocks. I think it’s a poor time at the moment to buy stocks broadly.

2) BRK has dropped $35k from its high. Might he not want to encourage people to buy stocks?

By: David

David — Sat, 25 Oct 2008 04:15:31 +0000

I say go for it.

Yes, the market could go lower, but you’re not trying to time the market. You’d be making a decision that based on historical performance, buying when the market is under 9000 would be a bargain.

I plan on increasing my investments. I’m going to open up an individual IRA (in addition to my Roth 401K).

Also, I recently moved the portion of my 401K that was in bonds (about 7%) into a low expense S&P 500 index fund. I know that the market may go down, but I don’t think it’s going to crash. Eventually it will pay off. I’m still 30+ years from retirement, so I have time to wait.

By: Early Retirement Extreme

Early Retirement Extreme — Sat, 25 Oct 2008 02:44:24 +0000

Time? I don’t know. I don’t care. But I do know that now there are many more opportunities to buy companies at attractive prices than there was a year ago. I mainly buy for yield given a margin of safety. Further declines simply mean that my yield or as I see it “my annual retirement stipend” becomes easier to increase. In fact it’s twice as easy as it was a year ago.

By: Stacey

Stacey — Fri, 24 Oct 2008 22:36:09 +0000

You’re without dependents and have a good rainy day fund? Then why not?

However for those w/debt, uncertain job futures, near-term significant needs, and/or college on the horizon, I wouldn’t lock it up in a retirement acct. Much better to have access in these uncertain times. I never thought our savings bonds would look so good…

By: Chad

Chad — Fri, 24 Oct 2008 21:37:24 +0000

I’ve been buying stock mutual funds like crazy.. Granted I am being smart and using extra money I dont really need right now, I have a Gi-hugic emergency fund, Im 100% debt free, I am hoping to buy my first house in about 7 to 10 years from now, so this money going in to stock mutual funds 10 years from today could make a really great downpayment for it, or if things go really good, Have enough built up to buy the place outright and still have money left over. One good thing about the market staying down… each day that it stays down means one more day I can delay moving in.. thats the only thing i’m not looking forward to when I buy a house.. actually having to do the moving in part… ugh.