Does anyone else think it is time to start buying?

**jIM_Ohio** · 10-09-2008, 12:21 PM

DS- I never stopped buying to begin with and if I had extra cash, I would be investing it. But because the EF was raided about a month ago, I need to build that up first and that is a 12-15 month project.

**disneysteve** · 10-09-2008, 12:29 PM

Yes, Jim. I knew you were buying. And, of course, I'm always buying through my regular monthly investments. I'm referring to additional buying. Fortunately, I had some cash on the sidelines that I'm now going to commit to the market. Some of that is within retirement accounts and some is in our taxable brokerage account.

**scp** · 10-09-2008, 12:37 PM

Could you share what you're thinking of buying? Do you think it's worth waiting for the markets to bottom out?

**tripods68** · 10-09-2008, 02:00 PM

SCP,

Are you long term investor or a trader?

**Scanner** · 10-09-2008, 02:06 PM

Yes, I would buy - you can never "time" the bottom. . .you can only buy on the way down.

Personally, I think it's easier to time the top. . .I had a feeling about a year ago when I posted here that I had done so well in my international. . .shouldn't I sell it (I dunno if you all remember). . .well, my "spider senses" were tingling. . .but you have this pundit advice of "you gotta just buy and hold" that I listened to instead of listening to my gut.

I have even thought about buying on the margin right now. . .I predicted 8600. . .now the pundits are saying 7000. Any which way you slice it, now is the time to buy.

Anyone here ever buy on the margin (yeah, kinda a stupid quesion for savingadvicees but I thought I would ask)?

**Scanner** · 10-09-2008, 02:08 PM

Here is my brokerage breakdown:

Margin Loan Rates

Wow. . .I could get a rate of 6% on 2.5 million dollars. . .a bargain. . .and in line with my contrarian philosophy.

When everyone is fleeing credit. . .now is the time to have it

**tripods68** · 10-09-2008, 02:14 PM

I would buy more if my slush fund isn't tied to the stock I already hold. I have to wait until the stock recovers a bit enough to sell for profit. Or I may to sell it at a loss and buy it again at lower price to recover losses at the upside. I haven't decided it yet.

**Scanner** · 10-09-2008, 02:36 PM

Well, let me quote a line from a movie that my 6 year old son makes me watch over and over and over again.

It's from Charlie and the Chocolate Factory with Johnny Depp.

Charlie wants to sell his golden ticket for money to feed the family. Ther grumpy grandfather, who has been cantankerous up til this moment in the movie, calls him over and lectures him.

"Let me tell you something. There's plenty of money out there. They print more of it everyday."

No truer words have ever been spoken.

Eh, Ben Bernacke?

**jIM_Ohio** · 10-09-2008, 03:23 PM

I posted an article on another thread yesterday.

Buy on 10% dips and sell when 25% above the buying point.

Meaning pick todays market value- if it drops 10% buy and if it is 25% above that point sell.

You need enough cash you can do 3 straight of one transaction before doing the other.

Meaning if you buy, only use 1/3 of cash because there might be 3-4 10% drops which trigger a buy before you get one 25% increase to trigger a sell.

I am doing something similar with wife's Roth- buying sectors which are dropping, holding the ones which go up, then occasionally selling off at market peaks to take profits.

**LivingAlmostLarge** · 10-09-2008, 04:44 PM

Nope. I have to consider a cash position right now with unexpected expenses. I am still investing in 401k and IRAs, but nothing else right now.

**disneysteve** · 10-09-2008, 04:50 PM

Originally posted by jIM_Ohio View Post

Buy on 10% dips and sell when 25% above the buying point.

Meaning pick todays market value- if it drops 10% buy and if it is 25% above that point sell.

Just to make sure I understand your system...

Stock ABC closed at $10.00 today. You would buy if it drops to $9.00, 10% down from today's close. Then you would hold it until it hit $11.25, 25% above the purchase price. Is that right?

**jIM_Ohio** · 10-09-2008, 05:23 PM

The triggers are the markets, not the securities.

The system was someone else's, I was just regurgitating. Look at my posts from yesterday and the smart money article is linked in one thread or another.

System-
S&P 500 is at 900
buy if it goes to 810 (10% drop), sell if it goes to 1125 (25% gain). If it hits 810, the next 10% drop would be 729.

That would be the buy/sell signals (I assume) for any stock within that index.

You could do same thing with NASDAQ-
if NASDAQ is at 1650 today, 10% drop is 1485- buy any NASDAQ stock, 25% gain is about 2000.

I am only explaining what I understood the writer of the article to be using as his buy/sell triggers.

The big issue is on 100% type gains (like 1997-1999 bull) you might be out on some large gains towards top. Because the 25% sell triggers would miss out on some good gains.

**tripods68** · 10-09-2008, 05:42 PM

Here's the strategy I used over and over again as a day trader. I learned this techniques many years ago.

Once you identified a stock you want to buy at the ideal price $10.00 Z stock. You been eyeing on this stock for a while YTD down 50%. You see an upside potential for Z stock. Assumed you have a cash on hand about $2K.

Enter
Buy at $10.00 @ 100 shares (cost basis $1K)
Drops $9.00 @ 100 buy 100 more shares (cost basis $900+ 1000=$1900 or $9.50 a share)

Exit
Stocks climbs in the few weeks @ $12.00 a share. You sell at that lock price.
Profit: $500.00 ($2.50 a share X 200)

Upside: Lower cost basis more profit. Patient is the key.
Downside: Lose more money if the stock goes down and not willing to be patient.

But if you never lowered you cost basis by not buying additional 100 shares. Your profit is only $200.00.
Upside: You still make profit
Downside: Not as much.

The most important thing about this strategy to learn how to hold on the downside and when to sell on the upside. Its the most difficult part when the stock just keep spiraling down and you want to cut your losses that's where I am right now. Similarly, if the stocks climbs up beyond than expected, the tendency sometimes is to hold the stock a little longer for more upside. The problem that is the longer you wait, the stock could just head south in minutes wiping all potential profit completely.

I have made money and loss executing this strategy on the daily basis. But it's a lot of fun at least for me

**scp** · 10-10-2008, 10:09 AM

Tripod- I'm looking to do long term investing, don't have the time to be a day trader- thanks for your tips!

Does anyone else think it is time to start buying?