As I wrote recently, I’ve been on a buying spree when it comes to the Stock Market. A friend of mine recently asked me if I sleep well at night. The answer is ABSOLUTELY! Here is why:
At the height of the dot-com boom, everybody (and I do mean everybody — myself included) thought that the market would keep rising forever. What happened next? The market collapsed.
At the lull of the dot-com bust, many analysts said we were in the lull for a long while to come. Guess what? The market started gaining.
At the height of the real estate bubble, people thought the sky was the limit when it came to the house price boom. Next thing we know, the market crashed, and the price of houses everywhere were slashed some as much as 50%.
Now the day after the Dow Jones lost the most point ever, everybody is panicked and assumed we will be in a great depression soon. My prediction is, we’ve probably hit rock bottom (or are really close to it) that it will be silly to not buy the badly beaten stocks now!
They say buy low, sell high. I would take it one step further. I say buy when the doomsayers speak, and sell when the cheerleaders shouts.
Update: The Oracle of Omaha, aka Warren Buffett, recently wrote a op-ed piece on NYTimes affirming my own beliefs about the stock market. It’s good to know that I am on the same page as the most savvy investors of all time!