Why You Should Sell

I can be just as dumb as anybody else. -- Peter Lynch, September 2008

Peter Lynch earned near-30% annual returns running Fidelity Magellan from 1977 to 1990. He's sold millions of books, raised millions for charity, and holds the rare distinction of having a Motley Fool Global HQ conference room named after him.

But in September 2008, Peter Lynch also had the ignominious honor of holding both AIG (NYSE: AIG  ) and Fannie Mae (NYSE: FNM  ) in his personal portfolio -- as they dropped 82% and 76%, respectively, during that month alone.

Ouch.

For those of us who have spent our investing careers trying to match the great Peter Lynch … well, if you lost 80% in September, then congratulations -- you did it! If you did better than negative 80%, then you beat the great Peter Lynch.

Invest like Peter Lynch
We kid, of course, and we're in no way demeaning Lynch or his illustrious career. Rather, we're just pointing out how hard it's been to avoid a flameout lately. When the blue-chip S&P 500 has dropped some 40% over the course of a year, you know it's bad.

And when companies like Boeing (NYSE: BA  ) and Adobe Systems (Nasdaq: ADBE  ) drop more than 50% in the course of a year -- even though they're historically strong operators that appear to have little to do with the crisis on Wall Street -- you know it's rough out there for pretty much everyone.

In other words, even if you don't own AIG or Fannie, you probably own a stock like AIG or Fannie. We sure do. Brian, for example, has ridden Whole Foods Market (Nasdaq: WFMI  ) from $40 to $12, while Tim has watched pump-maker Colfax sink from $20 on down to $10. Ahem.

We are not alone
And while there are many stocks that will recover from this market downturn, it's likely we're all continuing to hold stocks that won't. New research, from Professors Nicholas Barberis and Wei Xiong of Yale and Princeton Universities, gives a name for this tendency. We're exhibiting "realization utility."

Realization utility encourages investors to hang on to stocks that have sunk -- even when those stocks have dim futures. Here's how they explain it:

The authors consider an additional experimental condition in which the experimenter liquidates subjects' holdings and then tells them that they are free to reinvest the proceeds in any way they like. If subjects were holding on to their losing stocks because they thought that these stocks would rebound, we would expect them to re-establish their positions in these losing stocks. In fact, subjects do not re-establish these positions.

That's right. If we force-sold all of your stocks and gave you the cash to reinvest, would you buy the stocks we had just sold? Odds are, you wouldn't.

So, why would you hold on to stocks that you don't think will recover? We'll let the good professors give it to you straight:

Subjects were refusing to sell their losers simply because it would have been painful to do so … subjects were relieved when the experimenter intervened and did it for them.

Wait a second
But aren't we the guys who pounded the table two years ago about how individual investors like us sell winners too early, missing out on life-changing multibagger gains to lock in a modest return? "Quick trigger fingers aren't rewarded," we wrote at the time.

And that's still true. But down markets like this one present an enormous long-term opportunity for investors … only so long as you're willing to do some selling.

See, when stocks are expensive, we may invest in mediocre stocks because they look cheap, while passing on superior operators because they're too expensive. Today, however, those superior operators are all down double digits at least.

Google (Nasdaq: GOOG  ) , for example, dropped more than 50% in 2008. Dream stock Microsoft (Nasdaq: MSFT  ) -- given its growth, FCF-generating abilities, competitive advantages, and bulletproof balance sheet -- has a P/E in the single digits!

In other words, now is the time to upgrade your portfolio.

Why you should sell
You should always sell when you have a better place to put your money -- and today, a host of superior companies are on sale. The takeaway, then, is to recognize when realization utility may take root, take a sober view of your holdings, and take advantage of this down market to upgrade your portfolio. Ten years from now, you'll be very glad you did.

We're both looking to take advantage of current prices in foreign markets -- which have been hammered even worse than our own S&P 500. If you're short on ideas, you can try out our Motley Fool Global Gains service free for 30 days. You don't have to subscribe to anything, and you can take a whole month to check out our entire portfolio of premium stock ideas (including a list of our five favorite stocks for new money) and download every back issue. To learn more about this offer to try Global Gains, simply click here.

Brian Richards owns shares of Microsoft and Whole Foods Market (still). Global Gains co-advisor Tim Hanson owns Colfax. Microsoft is a Motley Fool Inside Value recommendation. Google is a Rule Breakers selection. Whole Foods is a Stock Advisor pick. The Motley Fool has a disclosure policy.


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  • Report this Comment On February 20, 2009, at 11:03 AM, DargFool wrote:

    I love the statement, "You should always sell when you have a better place to put your money".

    I give that a capital DUH. The problem is identifying when one place is better than another. Presumably the losing positions you are holding were "better places to put your money" at the time you bought them.

    The buy and hold investors basically say, hey, we have no chance of identifying which investments will do better than the other, so we will get our returns by trading infrequently.

    The value investors say, We only buy quality cheap, and we think we can differentiate between cheap quality and cheap crap.

    The growth investors say, We can't tell what it's worth, but if it is moving in the right direction, then by a fallible application of Newton's law, a stock price in motion tends to stay in motion.

    The financial planners say, everything is a gamble so you have to a million small bets instead of a few large bets. And by the way, here is your bill.

    The traders and talking heads say, Buy my computer trading system, its models have been tested in all market conditions, and it generates returns of 23% (your results may vary).

    The hedgers say, I don't know which way its going to move, but if it moves a lot I win.

    The average investor says, "Damn, screwed again. I paid that CEO 10 million to LEAVE the company after I got a 90% loss. Great job Board of Directors, you are really on top of things!". I am taking what's left of my money and buying a beer. At least I can enjoy that.

  • Report this Comment On February 20, 2009, at 12:40 PM, AnalystBuster wrote:

    Magnificent comment, DargFool !!

    I'm not selling-in-order-to-buy-another unless the relevant companies' stories have changed SUCH compared to when I bought, that a move of that sort is justifiable.

    Then again, I don't need "the market" to be in the doldrums for that. I'd be doing that no matter how high or low "the market" is at.

    P.S.: I've never done that before, and am not very likely to do it any time soon...

  • Report this Comment On February 20, 2009, at 12:43 PM, kurtdabear wrote:

    Your article implies the presumption that diversification consists of having a broad range of stocks, which is, of course, what Wall Street would prefer we believe. (The problem guys like Lynch and Bill Miller have is that they develop a "street mentality" after decades of exposure. That and a lack of attention to macro-economics leaves them with a dangerous lack of imagination.)

    Real diversification consists of having a wide range of asset classes, not just a diversified stock portfolio, i.e., gold ETF, bear fund shares, cash, anti-dollar shares, anti-bond shares, etc. You may not make a lot, but you won't lose a lot, and if your stock portfolio is heavy on dividend stocks, they'll chip in a little income.

    Your advice to trade-in losing stocks now and buy other, "better" stocks is ill-timed. With the current steady losses in stocks and the general uncertainty over new government financial plans, we're probably on the verge of another one of those "throw the baby out with the bathwater" selling episodes that occur as withdrawals from hedge funds and mutual funds create forced selling by large institutional holders of stocks.

    This force will be exacerbated by continuing earnings declines, which will begin to jack up all those "low" PE's that all the stock peddlers are currently touting. If you've got stocks you really dislike, go ahead and sell, but save your ammunition for a future opportunity to bag better bargains. You may miss a bear rally or two, but in the long run, you'll be better off buying after the Dow is somewhere below 5000 and the S&P around 500. Even then you'll need to pick good stocks and to be prepared to hold them for years to see any appreciable gains. (If Business Week survives this depression, your signal of a market upturn will be when they again declare the death of equities.)

  • Report this Comment On February 20, 2009, at 4:01 PM, MAcDScientist wrote:

    I don't understand - How can Microsoft be an Inside Value recommendation, and at the same time, say that a PC Revolution is soon to bring down the Microsoft empire in the advertisement below. This seems contradictory.

  • Report this Comment On February 20, 2009, at 5:05 PM, onthemarsh wrote:

    The more I read abut what to do-- the less I know about what to do... I'm one of the sad statistics-- each of my "diversified" holdings have tanked so much that my loss in selling will never be made up.. Each one of these "well thought out " buys has lost more than I can believe-- All the while the "experts" were blowing hot air about "holdum", sellum" "Now is the time to make a killing"-- but with what cash??

    Gonna buy hard silver with whatever I can get for my stocks and ride it out with something that at least can be held in my hands...

  • Report this Comment On February 20, 2009, at 5:09 PM, cismine wrote:

    I have seen my 10,000 shares of Microsoft go down, down, down, along with 5,000 shares of BBT. Holy

    cow, what a drop that was. But, you know what, I really do not care. I have 5 banks that $100,000 in each one paying 4.5%.

    And, by the way, you contradict yourself many times over.

  • Report this Comment On February 20, 2009, at 5:58 PM, judithjo wrote:

    Isn't this article a little late? You advised me to buy Allied Irish Banks for the nice dividend. I bought at $24, $20, and $13. It is now at $1.60 and has cut out its dividend. I don't expect you to be clairvoyant, but this is another horrible loss for me. I've only held onto it because The Fool has held onto it, but I'm going to go back to my old strategy where I buy a stock and if it falls 10%, I sell it. I don't think you should have bothered to send this article.

  • Report this Comment On February 20, 2009, at 6:04 PM, Redbird95 wrote:

    Great but even "safe" stocks continue to drop. I can see the sell but buy now? I thought GE was a great bargin at $15 (down from $35) now it is $9 (another 40% down) with a yield of 13% but will it go to $6? Sometimes ridding a new purchase down is worse than seeing the old ones sink.

  • Report this Comment On February 20, 2009, at 6:28 PM, sniksnik wrote:

    Well, the comments so far reflect a lot of desperation and frustration. I think that fundamentally The Fool continues to be right for the -very- long term. But right now and for a couple of years to come, new rules will develop and apply in order to stomach the exuberance (who said that first?) of the last 25 years or so. I, at 62 years of age, have decided to sell my stocks, although they represent only 10% of my assets (the rest is cash and home property, which is ok in Switzerland). Because I believe that the stock markets will go down a lot more before they will recover. I may be wrong, but at least I know what I have and sleep well. I hope for all of you though that I will be wrong and wish you a quick rebound for your stocks.

    P.S: I bought GE at $15,- and sold them at $13,-. I would not buy them back at $9,- but again I might be wrong.

  • Report this Comment On February 20, 2009, at 6:41 PM, ianx wrote:

    The poor guy adviced on the Irish bank.Please everybody stay away from any bank.How about following the DOW(dxd) it is going down but be prepared for a few bull spurts and jump into ddm. GOOD hunting IAN

  • Report this Comment On February 20, 2009, at 6:45 PM, be1fool wrote:

    You guys don't listen to Motley Fool, instead use them as a resource, they are not God. I use Scottrade and have several "lists" going, one of them is titled Motley Fool and I track the success or failure of the Fool recommendations against other articles that I read. I view the Fool as an educational tool and not always a head of the pack. But.........I still use it. I am down as well on some of my choices, very down on some of the Fool choices. I don't know what to do anymore then anyone else. I don't think it is a good idea to sell low though.

  • Report this Comment On February 20, 2009, at 7:45 PM, ReillyDiefenbach wrote:

    As one who listened to Bill O'Neill (may the Loard Jebus bless and keep him) and didn't ever accept more than an eight percent loss on any holding, I wonder how long the buy-and-hold-like-grim-death crowd will continue to misinform their friends, relatives and the public at large as they stand on the taffrail of the Titanic.

    It'll probably float again, right?

  • Report this Comment On February 20, 2009, at 10:45 PM, tmjb100 wrote:

    I retired at 63 and cashed out my 401k at $625,000. I used Motley Fool periodicals to invest all of it in roughly 35 Fool recommendations over a period of about 1 year. Now I am sitting on a pile of Foolish paper worth $320,000. Maybe I'd be better off timing my exit from the Fool periodicals.

  • Report this Comment On February 20, 2009, at 11:22 PM, jwest94 wrote:

    Almost any investment in stocks would have netted the same result tmjb100 you can't blame TMF for the way the market has reacted.

    On top of that why at age 63 and retired would you put all of your retirement money in stocks? That's not very foolish ;). If you had paid attention to the articles on TMF you would have had a proper diversification for your age.

  • Report this Comment On February 20, 2009, at 11:48 PM, SintUniversal wrote:

    The whole world focus on US market only because it is the ECONOMY of the world since world war two. Just like British Empire before World War Two and shortly after, the world trading currency was pound sterling. I remebered the day in 1965 when we had to open a Letter of Credit to import from Japan to Thailand, the Japanese suppliers demanded pound sterling and the bank involved was Bank of America, then the biggest bank in the world, long before the Japanese and Citibank took over. USA is no longer the ECONMY of the world. Biggest debtor to almost all major nations, shabby airports and public infrastructures (travel to Europe, Asia and Australia and see for yourselves), national budget deficit, US citizens hardly pay their credit card monthly due in full but pay in installment with killing interest, such a bad habit of spending beyond your means, thus the subprime housing. But America the Beautiful and the Wonderful, learn your lesson, read your history and regain the spirit of your founding fathers how they built this great nation. Nation Building is now what you need. Change your Hollywood, Playboy, Las Vegas culture to good morality, frugality, hard work and modesty (don't force your value upon others and don't invade other nations on impulse) . Since World War Two, you lost the Korean War, Vietnam War and you will be defeated again in Middle East and everywhere. Like you, we are patriotic to our own country, no one in this world like the idea of being invaded and occupied. We will get rid of our bad leader ourselves. I cheer for USA and I hope it will turn to a great nation once more, sharing properity and friendship with the world. You don't know how lonely you are outside your country and how world citizens despise you. CHANGE and Build your nation now.

  • Report this Comment On February 21, 2009, at 12:23 AM, Bonefish100 wrote:

    I've had it with The Fool and all of the advice countering advice countering advice. I've lost 60% of my money in Fool picks.

    I have a carpenter friend who is 80 years old with an 8th grade education who's stock picks far exceed anything the Fool has ever recommended.

  • Report this Comment On February 21, 2009, at 12:53 AM, seer1949 wrote:

    First time commenter. I agree with everyone who has stated that they have no idea what is going on.

    The Fool has gone out on the extreme with the idea of a 100 year portfolio because no models work. Look at their own returns over the last years and throw a dart. If you had invested in every pick, you'd be up on about 50% and down on 50%.

    So where does that leave us. I tried a little experiment recently and picked a few that they recommended but low and behold the same thing happened if I had thrown a dart. I even used "logic" and still came up with the same conclusion I have had over the last years since the 80's.

    1)The market is manipulated by those who have the greatest funds available. They short and long way before you and I have any idea what is going on.

    (The truth of this is obvious from the spin every time the market goes up or down. Its figured in, its not figured in, no one is happy, they are waiting.) It doesn't matter whether its good news or bad (as seen very recently when the market rose a few days in a row against very bad economic information).

    2) Only time will tell whether we are right or wrong in our investments in this insane cycle. Months ago "people" were predicting a Dow 7500 and even a Dow 5000. It doesn't take a genius to know, historically, how this has happened time and again and the numbers are made a reality by those with the greatest to gain and manipulate.

    3) Be a crumb picker. Someone above noted that he used to sell when the stock dove 10% (and the same goes the other way as well). Resources abound for insite into stocks or areas that might do well but unless you are a very involved investor, you either make your picks and pray or you make your picks and keep making picks.

    If one is observant, you will notice how "they" manage to change the working parameters when the masses catch on. And then they change them. When mutual funds were in their hayday, you could count on Lynch and others to really work their funds and return decently to the investers. You could actually count on upside returns because the system wasn't based on constant turnover in the funds and those who ran them had some real experience. Now rookies get bonuses for minus returns. And it doesn't matter how much money you've got invested.

    One might say that the old rich got tired of too many new rich and worked to make sure they lost a lot and quickly. Why else has there been no perp walk for all the dishonest investment counselors and reps who missold and misrepresented.

    Hell, my parents lost money from a Merrill Lynch Guy who actually put my father (late-70's at the time) into insane tech funds. My father lost money and the investment guy got the bonus and the walk even though it was all down in the facts - thank you SEC.

    So, in closing, it won't matter if Obama finds the ideal solution or not. He is not in control. You know who is and if we are lucky, we get some of the crumbs. BTW, if you have to wait 10 years or more for a 3 bagger, how can you spend the money you need now?

  • Report this Comment On February 21, 2009, at 10:18 AM, WakeUpAmerica wrote:

    Wall Street is biggest ponzi scam game going.....

  • Report this Comment On February 21, 2009, at 5:16 PM, Langalier wrote:

    seer 1949... Google this...

    "silent weapons for quiet wars"

  • Report this Comment On February 21, 2009, at 10:16 PM, courtneTHEgreat wrote:

    Yes, I told you so.... The DOW will clear 7500 before it will ramp up. Now, I say it will clear 6600 soon. The economy is not going to boom upwards until we get some balls to fix what is wrong. Next week will be great selling, only stopped by program buy points, like at 6900 and 7400.... BAC down to $2, Nordstrom cut in half, technology looking for new lows....

    If it takes the small investors to fix things, to hold the DOW up, we are in trouble.

    Yes, sell out of this market and get into cash and gold. After things show actual strength, investors can buy stocks back, slowly.

    courtne-the-Great

  • Report this Comment On February 21, 2009, at 10:50 PM, rdlincoln wrote:

    I agree with the person who said that the stock market is a ponzi scheme. I am a new investor, spurred by the knowledge that I have to learn enough to get back the 15% that my 401K lost. I like to avail myself to all the knowledge sources I can but I will not subscribe to any sources that sell knowledge. I don't trust anyone who makes money in the market and I don't see any growth in the market that can be depended on right now. The IMF has stated that "all the advanced economies in the world are in a depression". America doesn't spend trillions of dollars to mitigate recessions. None of us know what we're up against. The old economy is gone. It's never coming back. The future business climate remains to be determined. There simply is nothing at present that can give us any insight into the prudence of following any particular discipline as regards investing. Unless you can afford to sustain a total loss of your money, this is a good time to withdraw completely from all forms of investment. If you believe the Federal government is on top of things, I think your faith is misplaced. There is simply nothing right now to place any faith in, in this world.

  • Report this Comment On February 22, 2009, at 8:19 AM, SAMSCREEK wrote:

    I agree with be1fool & truthisntstupid. I am down on many of the stocks that I own, but I still have faith in them and hope they will survive. Therefor, I believe it would be errant on my part to sell them now and lock in a guaranteed loss.

    I have to get this off of my chest. I believe that had congress and both Bush and Obama sent the stimulus money to the people of America, we would have bought cars, paid up mortgages, saved money, and bought misc other items that would have jumped started the economy. Instead, they sent the money to the companies and CEO's who have helped create this mess from their greed and selfishness.

    I am lucky, as I am retired and no longer have to fight the job battle. I am not rich by any stretch of the imagination, but am debt free.

    I wish those of you who still have to fight the rat race, the best of luck. Maybe we will one day get a congress that cares for it's people and not its pork spending to ensure they get re-elected.

    O.k......sorry for saying all of this, but I do have a lot of concern for what the world will be like for my grandkids.

  • Report this Comment On February 22, 2009, at 11:35 AM, ReillyDiefenbach wrote:

    Investing in stocks is ALWAYS a gamble.

  • Report this Comment On February 22, 2009, at 12:31 PM, VicGilliam wrote:

    Trueth is a handfull of families in the world controls most economies of the world-looks like the ONE WORLD BUNCH is wrecking the US to bring us down to the EURO socialistic nations. Wreck the middle and upper middle class in the USA and the population will turn to BIG GOVERNMENT for help. To shoreup Social Security, simply wreck the Babyboomers 401k's and IRA's, they will work till they drop! These markets will bottom, leaving the road wide open for those in comntrol to snatchup everything at bargain basement prices! Another thought, doesn't government employees penssion come out of the same funding (General) as do Social Security? Nobody seems scarred that their government penssions are at jeopardy, Funney??? I got returns on IRA of 50% in 90 days, by watching very close the up and down manipulations of the worlds Supper Powerful Rich. Why else are we watching those who have done the most to wreck the markets---being rewarded for complete incompetancey. P.S. CEO's etc, get off those golf cources and back in your office and start doing the job you are being paid those outrages wages for!!!!!!

  • Report this Comment On February 22, 2009, at 12:48 PM, VicGilliam wrote:

    Maybe a date to watch December 21, 2012

  • Report this Comment On February 22, 2009, at 4:05 PM, Jacksschitt wrote:

    I am in accord with Samscreek. What I have bought, I considered to be goo,stable and qulity stocks. Some came for reeomendations from Motley Fool and other publications. No one put a gun to my head and made me call the broker. I read the advice, did my due diligence, and made the purchases.

    Some things are beyond our control. When we have reps like Barney Frank Chris Dodd and others of that ilk making the rules so they and their pals can make the dollars and when it becomes unsustainable and tanks, we are left holding the bag. How coul Madoff rake in the bucks and not purchase any stocks for his accounts over a decade? Someone was paid off and/or asleep at the switch; or both.

    The bottomline is I am responsible for my own actions and decisions. Yeah, I could have used the First National Back Yard Bank or stuffed the dough under the mattress. I chose to invest in the market. Now I have to choose to sell and lock in my losses or hold on until the turn around happens. But I cannot blame anyone but myself (and thoshe crooks in government that got elected, but not with my vote).

  • Report this Comment On February 22, 2009, at 4:30 PM, LeftBeachFool wrote:

    I read articles like this and then peruse the comments to see if folks have ideas similar to my own. The net result is that this noob appears to be coming up to speed fast, IMHO. Indeed these are trying times.

    Having said above, I am currently working on a strategy that appears to be working for me in this worse then bad environment. Because I don't *know* yet that it will pan out, I'll not expound upon my findings at this time (not enough time to be even 60% sure yet.). When I know that I failed or suceeded with my strategy, I'll be glad to put it in writing for others to comment on, good or bad. This is how I learn.

    I do know that starting to invest after being laid off last year and having to move my retirement out of the company plan has been an adventure to say the least. Being a techie, I thought I was getting started OK by taking advice from others with way more knowledge and experience than myself, and tempering that with studying my targets, reading books, and subscribing to investment research that I thought would help me to at least stay level. Here is the short list of my own findings. (BTW You can look at my Caps stuff and you will find that i clearly don't know what i am doing there. I use Caps as a research tool and my investment portfolio in no way reflects what i do there. The bottom line is I don't loose money in Caps so anything goes just to see what might happen.)

    1) I've gleaned way more useful information from the community than I have directly from reading Fool advice. For that I thank all of you.

    2) I put about 50% of my portfolio into Index Fund and Municipal Bonds looking for safe(er) places to be in accordance with Foolish strategy. While I'm not making much money in the Municipal Bonds, at least they aren't tanking like the Top Rated Index Fund(s) I bought. Bad mistake there unless there really is a recovery.

    3) I used Stock Advisor and the Fool articles to get ideas on stocks to buy and I did my research inside and outside the Fool to pick what i thought would be the best chances mostly high growth. That was another of my greatest mistakes. I see now that without the large funding to invest widely regarding these stock picks, I didn't have a chance being a small investor and not being as experienced as I should have been before taking those positions.

    Now, overall, in the last 6 months, I've only lost about 10% of my portfolio so to be honest I don't think I did that bad. However, with the strategy I'm embarking on now, I've been able to consistently gain 5% on new investments after having dumped things like Viropharma for a 50% loss in a matter of a couple of months. I mean, I didn't know that thier Phase 3 trials were going sour until 4 hours after they nose dived.

    So, I guess what I really wanted to say in this comment is that, IMHO, there are strategies that can be learned, that could work for you, but, in my experience you won't read about them. Since I'm working with a Rolled Over IRA and a small standard trading account, I can't short with the former, and I don't have the margin to even think about shorting in the trading account. My strategy falls back to finding the right indicators to tell me when to buy low and sell higher after all costs are factored in. In the short term, I've been much happier, and less depressed. Hope this helps you to think more positive as well.

  • Report this Comment On February 23, 2009, at 2:19 PM, Ecomike wrote:

    I stayed out of the market for 20 years, got back in in October as I started to see stocks on sale. So far I have been up, down and even, right now about even, which means I am holding about twice as much stock as I had 4 months ago. I sold NCX today at 300% profit on an Arab (Dudais, UAE?) Take over, taking it private at a 300% premium over last weeks closing pricing. They are buying and we are selling. SIRI got a private (Non-gov) bail out last week, stock tripled in one day. Trick is buy stocks that get hammered huge.

    I feel pretty good as I am even with my peak value from last year as of today, with the market at a new bottom.

  • Report this Comment On February 23, 2009, at 9:35 PM, tom728 wrote:

    The only 'place' to be now is in cash and wharever

    you can muster from GNMAs & some Corp.Bonds

    just below AAA.

    The only stake I have out there is in some Gold

    Miners ABX & AEM but when gold really shows

    that shine by holding over 1k I will take a shot

    with GOE,GLD with a trailing stop but not a

    a big commitment.

    Being long the commodity has killed more guys

    than smallpox and I'm "Stayin' Alive".( see Bee Gees

    if you hate disco less than the powers running this

    Market )

    No more uptick rule or borrowed stock to short !!!!!!

    No prohibition of super leveraged ETFs ?

    We don't stand a chance...........

    Peace out,

    Tom

  • Report this Comment On February 24, 2009, at 7:32 AM, SAMSCREEK wrote:

    Thanks truthisntstupid & Jacksschitt. I believe you two, are going to be rewarded quiet well after the stocks that your dividends have purchased at these low prices, resume their upward movement one day.

  • Report this Comment On February 27, 2009, at 1:55 PM, SWEAT7 wrote:

    Well folks,

    GE just announced that they will drop their .$.31 to $.10. They could lose the AAA rating or AA whatever.. at this point.. bills need toi be poaid and it looks like an investment in GE is a leap of faith one should really evaluate.

    After reading through this thread, it is hard to sell after riding this down 50% or more. The company is well diversified and will come back. When, who knows.. but selling is when you lose the dough, not watching it collapse.. even $.10 per share is better than the alternative of loosing and not having anything That is one stock. here is the bright side.. even though it cut its rate.. the market is not responding to this event. maybe the markets are numb or just haven't had a chance to react.. not sure.

  • Report this Comment On February 27, 2009, at 2:19 PM, DoubleDownDan2 wrote:

    I'm just glad to be able to say that I FINALLY know

    Jacksschitt!!!

  • Report this Comment On February 27, 2009, at 2:30 PM, farrockgrad wrote:

    What ticks me off about these types of articles is that their alternative to selling losers is to buy other stocks. How about putting those monies into something safe (e.g. TIPS, CD's, even MMFs) until the market turns around? I've heard the argument that you can't know when it will turn around so you will miss a portion of the gain when it does turn. And to that I say so what--bull markets run for a long time and if I miss the first 20% I still have 80% of the gain ahead of me.

    If I listened to all the fools (and Fools) who kept on telling me to buy 6-9 months ago I'd be down an additional 25% from the first hit I took.

  • Report this Comment On February 27, 2009, at 2:45 PM, timkop wrote:

    After fueling up my 401K last year and seeing its value go down, down, down ,diown, down and down. I changed to putting the minimum amount in my 401 K to get the maximum company match. I then switched my option to the money market fund. I figure I will spend the difference today on personal things for my family and me.

  • Report this Comment On February 27, 2009, at 2:47 PM, wisner1 wrote:

    I've been with MF less than a year. Having worked in Washington in the private sector after having been transferred from NYC. This I know! The gap between the two is very big. Never on the same page. Washington does not have a clue what the profit motive is about. And I am not only speaking of the politicians but the career people, the second line, in the government who think their role is that of the great protector. Bottom line. MF located in DC area is to close they really can't tell the forest from the trees!

  • Report this Comment On February 27, 2009, at 3:15 PM, kpmom wrote:

    See when I see things like this, I wonder why I ever subscribed to the Motley Fool publications, and am glad I canceled my subscriptions. Y'all rode your stocks down 40%, 50%, 60%, and MORE??? Why????

    And you guys have the nerve to CHARGE for your "reccomendations"? This is the problem with the MF's "buy and hold" forever mentality. Do you realize how long it will take to make those losses up (if ever), never mind moving ahead? I follow IBD's reccomendation to cut all losses at 7-8%. And don't tell me about Buffett's buy and hold strategy. He's a zillionaire. Most of the rest of us are not. Shame on you all for not advising your follows to PRESERVE CAPITAL at all costs. For we workin' stiffs it's the name of the game

  • Report this Comment On February 27, 2009, at 3:24 PM, tom728 wrote:

    You mention Bill Miller at Legg Mason...

    as it turns out he is on the honor roll

    for having one of the largest positions in

    CitiBank......along with the Sheik of

    Arabi.,

  • Report this Comment On February 27, 2009, at 3:43 PM, Banno wrote:

    Great article! As a subscriber to MF's Hidden Gems since its conception I would like to see a MF HG special article advising on which stocks to sell. I know that we should all be in charge of our own portfolios however the very reason the Layman’s like myself subscribe to HG for the sound advice and would not be in a position to research and make sound, unemotional judgements about which stocks to offload. With the credit crunch bleeding cash from our pockets in every other area the extra cash to invest is really needed right now ! Thanks MF for the great advice over the years, we need you now more than ever !

  • Report this Comment On February 27, 2009, at 3:46 PM, dippppydoo wrote:

    I HAVE COME TO THE CONCLUSION THAT ALL YOU GUYS ARE DOING IS SELLING NEWS LETTERS, SORRY I FELL FOR YOUR ADS AND SUBSCRIBED. YOUR ADVICE IS SOSO????, DONT SEND ME ANY MOR OFFERS FOR ANY NEWSLETTERS DIPPPPYDOO

  • Report this Comment On February 27, 2009, at 3:48 PM, michaelbinCA wrote:

    Faith and Good Works are prerequisite for salvation. So, that said, I must extend good works to the readers. Faith is pretty much up to the individual.

    My advice is to buy low and sell high.

    Also, there are far any people giving advice for too much money. Rid the planet of these parasites would be a start, a great start.

  • Report this Comment On February 27, 2009, at 3:54 PM, michaelbinCA wrote:

    I recall an episode of the Sopranos when the lower downs (knock around guys) were in a bull pen making as many calls as possible to hawk various stocks. The idea was to gett as many people as possible to BUY, thus, in theory, causing the price to rise. Then, at a precise moment, the higher ups would sell their shares which were bought at a very low price. So, may I conclude that the MEDIA follow this practice? Answer: Of course.

  • Report this Comment On February 27, 2009, at 3:56 PM, JoeyBallz wrote:

    Hey whiney guys that are bitching about losing their money on stock recommendations from Fool. Just because they each recommend a stock to buy each month doesn't mean that you should go out right then and there and buy it. There are dozens of underlying factors that you need to consider before just buying whatever a newsletter says (No, I'm not going to explain them to you, go read a book). If you've been buying every recommendation they've given you for the past year, you're going to be down 50% from where you started. That's what happens in a recession. The knife is still falling and will continue to until the nation regains confidence. If you try to catch a falling knife when it's got a heavy weight behind it, you're going to get cut... well your money is at least. If you think just because they recommend a stock that means you're going to make money on it right away or in the middle of a recession you're either retarded, a Hillbilly that never finished getting their GED or you just shouldn't be investing at all. These recommendations are mostly stocks to buy and HOLD so that once a bull market makes a comeback (who knows when that will be), these stocks will rebound better than most stocks out on the market (If you haven't checked, their recommendations are doing much better than the market itself). Don't blame Fool.com because you don't understand the basic concepts of investing. If stocks give you too much of a tummy ache and you're selling them once you've already lost 50% of your money try out some nice mutual funds or ETFs.

    P.S. If you still want to go on and make blind thoughtless investments, please be my guest. You're only helping me build my own wealth. Happy trading! :-)

  • Report this Comment On February 27, 2009, at 3:57 PM, michaelbinCA wrote:

    The mob will be the mob will be the mob will be the mob.......

    Hey, in the plant world, parasites have done very well. It's the same way in the animal kingdom.

  • Report this Comment On February 27, 2009, at 4:49 PM, garyanton wrote:

    My own approach is to only invest in securities which yield substantial dividends or interest - i.e preferred shares, income trusts, MLPs, CEFs, bonds, etc. I avoid common shares because of what many people above have complained about - I have no idea where "the market" is heading. While portfolio values can still get crushed if companies fail to pay a dividend or go bankrupt (I held both Lehman Bros bonds and Freddie Mac preferred shares and incorrectly thought they were utterly solid), overwhelmingly companies continue to pay. Yields right now are often extraordinary and the steady, generally predictable cash flow sure beats the guesswork of timing the market.

  • Report this Comment On February 27, 2009, at 4:52 PM, apachelark wrote:

    In my humble opinion I don't think we know the half of what is really going on in the economy only because it would cause more panic than already exists. Every day a new little morsel is released about some lender, bank or automotive company being in much bigger trouble than first reported.

    I agree with those comments above that a money market or similar holding pen looks the safest right now, reassessing every 60-90 or 120 days. Of course it's understandable that most of us will have to ride it out, unless we take a huge loss, and hope for a recovery in the next few years.

    How this came to happen is unbelievable. Are there no checks and balances? Shouldn't auditors and accounting firms hold some liability for not catching this?

  • Report this Comment On February 27, 2009, at 4:54 PM, rdytoretyre wrote:

    sell puts and hold on for dow 6000

  • Report this Comment On February 27, 2009, at 5:11 PM, javnnf wrote:

    be1fool wrote:

    > You guys don't listen to Motley Fool, instead use them as a resource, they are not God. ..

    Yes but they have misled just too many "customers" of them. I am one of those who trusted their recommendations, and 5-star rating from Hidden Gems.

    They all have shown the worst possible fate.

    I a drunken chimpanzee could have picked as good a stock.

  • Report this Comment On February 27, 2009, at 5:11 PM, AriasPalm wrote:

    There is a big difference between phantom earnings and the real thing. If you go back and consider what you invested and not on what you "earned" I think you will decide, as I did, that getting out with your principal intact is worth it. We have in the past few days taken on more debt as a nation than we can ever hope to repay. The administration is trying to even the playing field, taking from those with the ability to pay and giving it to those without the ability to pay. This will be the case for the next four years at least, and the extra thirteen dollars in your paycheck will be counted as income when you file your 2008 tax returns. Yes, there are checks and balances and it is called the American people. As long as we keep re-electing the same tax and spend people to congress, we can count on keeping less and less of our hard earned money. First, pay off debt, second, squirrel away as much cash as you can where you can get at it and third, hoard food. Good luck, my fellow Americans!

  • Report this Comment On February 27, 2009, at 5:25 PM, biglittleone wrote:

    My first stock purchase was in 1952. Anyone have earlier first exposure to risks of markets?

    I sold it before being drafted into the army in 53. Next purchase was after graduating from college in 1960. Still have some of the ofspring of this purchase.

    Since then I have had many more gainers than losers.

    I will probably buy some more in the next several weeks.

    It helps to be debt free in a paid for house.

  • Report this Comment On February 27, 2009, at 5:41 PM, rwk2008 wrote:

    Most of us (including me) have tended to give stock pickers far more credit for clairvoyance than they deserve. TMF doesn't know how the market will behave, doesn't know which stocks have solid base and which are mostly hot air. TMF picks a few stocks they THINK might perform better than the market in the short to medium term (think a month or two to a couple of years). If the market drops 50% and their stock drops 45%, in some limited sense they were right. When everything was booming, and bubbles were expanding, it wasn't hard to be a hotshot stock picker. In today's market, it takes a lot more digging and long-term perspective to get it reasonably right most of the time. And you don't get that with a couple of guys pumping out lots of stock picks

    every week.

    One thing to remember - unless you think the market is going a lot lower, don't be a net seller of stocks. If you expect a recovery in the next year or two, pick some stocks YOU expect to hold up and do well, and put some money into them. They probably won't be the ones that have almost completely collapsed (like CITI, BofA, Fannie and Freddi, and GM). They also may not be the ones that have dropped less than the rest. You have to consider the source and value of the advice, and make up your own mind. Remember Warren Buffet took a loss on Level 3, Bill Gross is surprized at the dept of the recession, and Peter Lynch had big bucks in AIG last year. And most of the multi-million per year investment bankers were betting on toxic real estate 'securities' up until last summer. Nobody gets it right more than about 2/3 of the time.

    I see a lot of posters who want to bring the neo-con republican wing nuts back to run Washington. Hello! What part of ran the country into depression do you not get? If a republican tells you it is night, go to the window and check. They haven't been right for a long time, probably since Teddy Roosevelt left office. They've given us two major depressions in less than 100 years, and they still haven't given up on trying to kill social security, medicare, and the American labor movement, three of the progressive ideas that made our country great and built the middle class most of us are a part of.

  • Report this Comment On February 27, 2009, at 5:46 PM, ArmoKris wrote:

    Maybe it's because I'm an editor, but I often find Foolish headlines misleading. "Why You Should Sell" implies (to me) that I'd better sell my entire portfolio ASAP. Fear grips me as I click on the link to read why I need to unload all my stock.

    How about something less sensational and more accurate, like "Realization Utility: When It's Time to Sell." Just a suggestion from a fairly new member.

  • Report this Comment On February 27, 2009, at 5:48 PM, mablesleetcopino wrote:

    I'm unfortunate enough to have some Citigroup shares in my Roth IRA. However, selling would be a mistake. There would hardly be any proceeds to redeploy!

    Also, I called the IRS and asked if a security declared worthless held in a Roth IRA can be deducted as a capital loss. They said yes!

    So, normally a capital loss in Roth IRA has no tax benefit, just as a gain is tax free. However, if you let it go to zero, according to the IRS it is deductible. I checked the tax law for Roths, and it doesn't come out and say a worthless security deduction needs to be in a taxable account.

    Worth a mention. In this case, I can redeploy the tax savings - a much greater sum than the proceeds I would get from selling.

  • Report this Comment On February 27, 2009, at 5:54 PM, FoolOGarbage wrote:

    These Fool's keep losing me money and keep asking me to buy more of their services that they have neatly packaged in a 100 ways to nickle and dime us.

    I've definitely been fooled and been foolish...

  • Report this Comment On February 27, 2009, at 5:54 PM, rowen2000 wrote:

    We are the victims of American Voters who don't know how business works and put a Jackass (Democrat Donkey) in office. The man they elected may be school smart and Chicago street smart, but he has never worked in a real responsible job under the authority of a responsible boss. I feel sorry for him. He looks like a lost ball in high weeds.This nation is at fault for giving this man more authority than he can handle.

    At 80 years old I can say honestly and sincerely that I never got a job from a relatively poor man. I never worked for someone who was not smarter at business than me. But I learned that only God has the power to make a man wealthy. When I see my well chosen stocks dropping because of the business conditions worldwide, I realize that my expectations are too short range. God doesn't give wealth to wimps. Jesus scolded the man who went out and buried his wealth for fear of loss, and he took away that money that he feared to lose. Read the parable of the Ten Talents. Only the risk takers profited in the long run. Stay in there and pray for a turn around despite our leaders imperfections. The leaders are really not in charge of the entire world's economies. Learn what patience really means. Temporary suffering is a part of it.

  • Report this Comment On February 27, 2009, at 6:08 PM, fallguy2008 wrote:

    I have NO IDEA what to buy or what to sell. Everything I THOUGHT was a good buy on paper has turned out to be a DOG!!! You cant trust anyone these days - not your investment advisor, your banker, your broker or your Big Brother. Everytime I read an article like this I just roll my eyes and sigh. Good thing I took up drinking to get my mind off it.

  • Report this Comment On February 27, 2009, at 7:00 PM, SonzTwin wrote:

    This article, it's timing, and the background (NOW'S THE TIME TO BUY!!) prove that The Fools, are? I've stopped listening to them and canceled everything I once subscribed to, albeit a few bucks too late. They have no clue!

  • Report this Comment On February 27, 2009, at 7:08 PM, GoodoleR wrote:

    The economy is far worse than people know, and the decisions coming out of the White House are devistating. We will be lucky to repair in a decade what will be destroyed in the next two years. The omnibus includes drastic language on the ESA that will allow for the environmental community to sue any project requiring fossil fuels under the ESA. As well, there are massive proposals for cap-and-trade and other climate change regulation. Just cap-and-trade would be a tax in upwards of $6 trillion over the next 10 years. any manufacturer that is dumb enough to stay in the United States will not be able to afford energy at prices that would compete internationally. The fantastic paying jobs in the chemical industry will leave. If you think things are bad now...just give it another six months...

  • Report this Comment On February 27, 2009, at 7:14 PM, holmes101 wrote:

    Does anyone remember how much the original Bush "bail out" cost? The one where everyone got $600 or couples got $1200 bucks. If you take that amount (I think is was about $1b) and divide it into the trillions being spent now you would get a multiplier for $600 or $1200. It would be significant. Samscreek is right on when he suggests putting these trillions in the pockets of we the people to stimulate the economy. Within 6 months the economy would be purrring!!

  • Report this Comment On February 27, 2009, at 8:40 PM, laogao wrote:

    Yet another pointless article with yet another sales pitch at the end.

    These guys are as predictable as bank CEOs.

    Won't be renewing my subscription, despite the benefits I get from the comments from real people.

  • Report this Comment On February 27, 2009, at 8:57 PM, buytheticket wrote:

    Thanks to the Motley Fool, I have made money, not a lot over the years, and never paid a dime? Just the free information was enough to help most of the unknowing. How many of the rest of you out there even put half the effort out to find any of this information? The economy has taken the most blame finding stock market " experts " and turned them into semi babbling reruns of 2000 years of samo,samo, good luck to all and don't forget to support your local

    Illuminati. And thanks Fool, I did get a lot of valuable articles from you.

  • Report this Comment On February 27, 2009, at 9:18 PM, dollarmagnet wrote:

    The problem today as many know is that the information out there by which we navigate the financial waters isn't worth a rat's a--. One example: Moody's and the other rating agencies knowingly giving AAA ratings to garbage which was one of the major problems that has gotten the world financial system in this near collapse.

    Some individuals made magnificent sums of money in this process, but in the process killed the goose that laid the golden egg. Will the goose be brought back to life? No one, the Fools or anyone, has the answer.

  • Report this Comment On February 27, 2009, at 9:18 PM, cestmoi123 wrote:

    The trademark speaks for itself, and I was as Fool as I could be for this "Motley"charade--designed to make money out of all us "fools". Guess they will have as a defense when sued, that they made a full disclosure as to their true intentions and the foolisness of the clientele they were looking after..

    Prosecution ought not to be discarded.

  • Report this Comment On February 27, 2009, at 9:20 PM, dollarmagnet wrote:

    Also,

    Question to Peter Lynch:

    Did ya at least allocate some money to gold?

  • Report this Comment On February 27, 2009, at 9:27 PM, StarWitchDoctor wrote:

    hi - is this some kind of rant article. Is gold the only hedge you fellas talk about? oh sorry im on the wrong page im sure.

  • Report this Comment On February 27, 2009, at 9:29 PM, 00cotton wrote:

    i too was a fool i hold now 950 shares of GE at 35.00 per share,2300 amr. at a cost of 13.50 per share, and sold around a 1000 of mot. this year for around 10,000.00. i was told it would always come back.what a fool i was. ps. i am lost 90 years. am i nuts?? 00blondie

  • Report this Comment On February 27, 2009, at 9:31 PM, StarWitchDoctor wrote:

    Rowan you are the man.

    Thanks for the checkup.

  • Report this Comment On February 27, 2009, at 9:33 PM, StarWitchDoctor wrote:

    GE may be able to make a comeback but I think they did poorly with the Dividend cut. A good management would have cleared a dividend elimination. I am not happy as a shareholder that they are not going to pull out the stops to survive the downturn.

    Dont bet the house on any of this stuff.

    never bet any more than you can afford to loose.

    it can make you a pauper.

  • Report this Comment On February 27, 2009, at 9:56 PM, InvestingShar wrote:

    It seems that there fewer and fewer real investors left in the world every day now. But there are so many gamblers!..Buy today hoping it's going to go up and sell tomorrow to get some return in case it'll go down.

    These are shares of the company we are talking about here. We are owning part of the company!

    A lot of speculations, a lot of misleading information, a lot useless articles, a lot of bad news out there right now.

    But the true investor beleives in the concept of the stock market, the concept of trading, the concept of investing. The true investor buys value cheap. And this is the time, gentlmen! This is the time to get on the board, fasten your setbelts and enjoy the journey for the next 2-5 years. And once the world economy is telling you: It's going good. - you have to sell everything you've got and wait for the next time like NOW!

  • Report this Comment On February 27, 2009, at 10:36 PM, Profile341 wrote:

    To overcome my reluctance to purchase financial advice, please answer the following question. If you know which stocks are going to be the big winners in the future, instead of charging me for the inside scoop, why don't you just borrow huge sums of money and buy the stocks yourselves? I am reminded of the late night infomercials where the guy says you can make a fortune in real estate if you just buy his course. Why doesn't he make a fortune in real estate instead? If you want my dough, throw me a bone. Show me a track record of recommendations and results. And if you have integrity, show me the losers as well as the winners.

  • Report this Comment On February 28, 2009, at 2:09 AM, nicko168 wrote:

    Based on the past weeks, the stock market has been a place for the guys to rally & show their frustration towards "Robin Hood".So, no matter what stocks u thinking of..forget it....

    Ultimately, do you know who's the real fools? Ha..Ha..

    Real fools are the one who plunge their own economy to zero together with the $787 billion stimulus plan. Why?

    They'll be slapping their own face caused it opens up the opportunities & competition to the "third" world to buy all the "CHEAP" US Companies..Arabi, China, Kuwait & maybe Iran, Iraq etc...

    Based on the recent news, US companies are selling off thier valuable assets (technologies, bank etc) in order to pull through the crisis & who are they selling to? Make a guess....AIG went to China, Singapore etc selling off their stakes..Another is selling their US technologies or commodities caused they're ridden by billions of dollars debt....At the end of the crisis, what will the US companies who once holds the supremacy in technologies, banking etc become? "Zero" is my answer...

    Who the losers? The real losers are the next generation facing the real US....

    There's a old chinese teaching:

    "To break one chopstick is easy..

    To break a bunch of chopstick, is difficult"

    To the real fools, WATCH OUT!!! Ha..Ha...

  • Report this Comment On February 28, 2009, at 9:06 AM, docwife wrote:

    As a student of communications, I am reminded every day of the inherent self-interest and self-rationalization inherent in almost any message from anyone including investment advisors. Everybody has an agenda which might not match yours. Further, the sheer volume of information and its driving force in shaping and distorting people's perceptions of reality is overwhelming everybody. Particularly disturbing is the erosion of common sense. For instance: If people want to learn to fly airplanes, but don't want to learn to how to land them, then they are up to no good. If people cannot afford a house, then don't give them a mortgage. If college students don't have incomes, then don't given them credit cards. It looks like our beloved nation is now the biggest debtor in the world, that our tax policies will drive our best companies abroad permanently, that class warfare will strip our most productive citizens of the means and the will to re-capitalize our economy, and that our beautiful children will live in a country more like France, but wthout the fun. Am I right?

  • Report this Comment On February 28, 2009, at 9:23 AM, StarWitchDoctor wrote:

    docwife, that is genius about the airplanes, a perfect analogy.

  • Report this Comment On February 28, 2009, at 9:59 AM, lintowin wrote:

    Any discussion of stocks should begin with a discussion of the Obamist budget. Like it or not, he's proposing huge social changes. And, like it or not, with the economy in tatters people are receptive to change. So we'll likely see much of what he's putting on the table get enacted. Krauthammer's Friday editorial in the Washington Post lays out exactly what is likely to happen. Education, health care and energy get the money and we stay in a deficit forever.

    I'm a realist, not a politician, so it doesn't matter what I think about his plans. But I do think they'll happen. And I'd like to make some of my money back.

    How do you recommend investing with that scenario?

  • Report this Comment On February 28, 2009, at 10:00 AM, Pennywse wrote:

    Most of you people here are just plain funny. The naysayers are rapant in this column. As a matter of fact I am shell-shocked at the amount of raw ignorance being displayed in the blogs of this article. Really? Do 75% of you posting here understand the basics of investing?

    "I lost everything because of TMF" ... are you kidding me? You put all lock, stock, and barrel in the market on one companies advice? Shame on you.

    For the MANY others that have somehow found it possible to put the blame squarely on TMF, have you even taken the time to see just about EVERY company is down? Very, very few companies are actually up at this point. Do you expect TMF to pick only the stocks that go up especially in them middle of a nasty recession? Newsflash ... NO COMPANY can possible only pick winners in this hostile environment.

    Please, please stop your freakin whining and know that most of the companies picked by TMF have better potential than the dogs you woulda pick on your own.

    When the economy returns - and it will - you will be on the sidelines still licking your wounds and wishing you had trusted in market and the advice of TMF. Also, I'd be safe in saying when the market does get bullish those that chose to trust in the good advice from companies like TMF (and there are others) will be hailing them as GREATS. You only have to go back to 2001 when TMF was picking stocks that ended up wielding folks a lot of money in the next 5 years. It's all right there. Educate yourselves!

  • Report this Comment On February 28, 2009, at 10:05 AM, Savannahguy wrote:

    "You should always sell when you have a better place to put your money -- and today, a host of superior companies are on sale. The takeaway, then, is to recognize when realization utility may take root, take a sober view of your holdings, and take advantage of this down market to upgrade your portfolio. Ten years from now, you'll be very glad you did." - Brian Richards

    Brian, why don't you just go out on a limb here, bud. Seems like you're still thinking Twentyeth Century Investing 101. Thing is, everything has changed (insert 80 paragraphs covering FDR to Obama here).

    Your line, "ten years from now you'll be glad you did (invest in equities now)" only works if you get really lucky, or you invest in your own company and that company succeeds or you go against those talking heads that have their own agenda to pump and dump. The smart play now is to buy precious metals, particularly gold and silver, and pink sheets.

    Brian, if you think the stocks you mentioned are selling at a bargain now, wait until you see their price in two years. So, go ahead and buy now and ride way down for a few years if you like... I'd rather invest in certain commodities, precious metals and a few penny stock companies that have good business models with good fundamentals that create products and provide services that will thrive through the 'New Deal 2.0'.

    Then, I'll wait until Congress and the Obama administration to completely screw the markets and the dollar. In two or five years, I'll look at traditional equities again... maybe.

    Good companies will survive. In 3-5 years we'll see who is left standing and, more to the point for investors, which companies still have a good product that is still needed by consumers in numbers that can afford said product. Among those companies, I'll look to those that have had their stock price trashed unfairly just because they were in the hedge and institutional funds with all those overvalued stocks being hammered today.

    Sad but true... hard but fair.

  • Report this Comment On February 28, 2009, at 12:22 PM, lostinlehi52 wrote:

    Well, I sold my subscription to Motley Fool Income Investor. Does that count as "cutting your losses"?

  • Report this Comment On February 28, 2009, at 12:22 PM, oldfossil99 wrote:

    I have been following the Motley Fool since the guys werre in college. They have had good solid advice for many years. They MISSED this one and they shouldn't have. They need to get away from Wall Street and start listening to Main Street like they did in their early career.

    I got out of stocks completely in late 2006 because it was obvious that a collapse was coming. Not obvious to Wall Street types, nor the economists of today, who, frankly, should turn in their degrees and admit that they are totally ignorant. Here is why it was obvious.

    1. The median home price was approximately 220,000. The median houshold income was 38000 per year! This means that the median house cost about six times the median income. The historical value of affordable housing is about twice the household income! It is one thing to argue that the rules have changed, but not by that much!

    2. The price of oil had soared! Everything we buy is related to the price of oil.

    3. Median houshold income had barely budged since 2000!

    You put these three things together and the crash becomes obvious!

    Yes, missed the big run up ion 2007, and was mentally kicking myself, but stuck with the basics and stayed away. Guess what! I missed the crash.

    There are other factors as well, and we have some huge work ahead of us in this country. The good news! In the US we still have more natural resources per capita than any other nation. How to make that work for us is the issue.

    As to sell everything?

    If the dire predictions come true then our whole economy collapses and nothing but guns will have value. Let us pray that the Government intervention works, or we are in for an upheaval of astronomic proportions and it will be UGLY.

    Bet on the government intervention working, because anything else is disaster!

  • Report this Comment On February 28, 2009, at 12:25 PM, capitalismisdead wrote:

    docwife and others...our financiers have started and will continue to apply common sense when purchasing our t bills. simply put- america and the american lifestyle is the biggest ponzi scheme in the history of the world. our currency will soon reflect that fact.

    our so called leaders and most americans fail to come to terms with reality. nearly 40 years of irresponsible monetary policy has drawn us into a black hole. and what do we do to try to get out? exactly what got us into the mess; an unprecendented amount of spending to prop up a system that has failed. our lifestyle and consumer based economy is unsustainable. the current administration has put the final nail into the coffin with their tactics. and our fiscal responsibility plan is to cut the ANNUAL budget in half by the end of obamas first term. the problem is that the so called reduced figure is 750 billion dollars; 300 billion more than the largest previous annual deficit (2008). thomas jefferson is turning in his grave.

    to sum it up...buy hard assets...physical precious metals should be a part of everyones portfolio. paper currencies will fail soon..include food, energy, and technology that makes commodity and energy processes more efficient.

    another item for thought...we have an over supply and capacity for consumer items that are not needed and never will be truly be needed. world food supplies are at 40 year lows... we need more farmers and less ipods. good luck to all

  • Report this Comment On February 28, 2009, at 12:52 PM, Savannahguy wrote:

    "Let us pray that the Government intervention works, or we are in for an upheaval of astronomic proportions and it will be UGLY."

    Oldfoss, I agreed with your post until you said that. I'll be praying that government intervention does not work. If this government is successful, America will fail.

    Capitalismisdead, good post and right on... but you'd best be very careful with energy. I believe the way to play energy is to buy emerging independent, new technology companies that SAVE consumers energy or lower the high power factor of utilities. Right now, the electric grid is overtaxed (much as we taxpayers are). Energy prices will soar and the government has already mandated that inefficient energy products are out (in some cases, such as incandescent light bulbs, have already been legislated to become obsolete by 2012 and replaced by CFL's).

    Most consumers and investors have no idea of this.

    Energy saving products will be the golden children of 2009 and onward.

    Medical information and interdepartmental, national and international database and data entry device technology will also boom.

    Then, like you... gold, silver and precious metals. Physical is safest, but there are some mighty good vectors, funds and stocks out there too. Watch gold go to $1200, beginning the runup in a few weeks. Then, we'll sit tight as some very legitimate, highly respected technitions and predictors estimate gold going to $2,000 and as much as $6,000.

  • Report this Comment On February 28, 2009, at 1:34 PM, fkauz wrote:

    I all goes to prove just one thing: DON"T PAY ATTENTION TO ANY STOCK PICKER OR ANALYST!

    I have followed Navalier who is just another guy trying to draw a pay check without any credibility whatever. When he occasionally turns out to be right, he promotes himself as a hero and all quickly forget all the "wrongs".

    Case in point: The MF promoted a stock called Headwaters (HW) with a 4 star rating. The stock was recommended above $10 and is below $2 today. The MF is just the latest guy trying to draw a paycheck and are well....just full of feces

  • Report this Comment On February 28, 2009, at 3:07 PM, jgneuw wrote:

    And my comment is ?????

    "--- yet you do not have because you do not ask."

  • Report this Comment On February 28, 2009, at 7:10 PM, freddyv3 wrote:

    I am amazed at how people can ignore facts and history again and again and again. Folks, this is not 1970 and it is not 1980 and it is not 1990 it is 2009 and we are in a serious restructuring of our economy and it is far from over. Sell everything except the SDS and only buy that after a run up of 10% or more then sell it when you start getting excited about how much you are making. Quit kidding yourself about a turnaround and show some discipline!

  • Report this Comment On February 28, 2009, at 8:31 PM, Belisarius42 wrote:

    Just about everyone I know has lost at least 50% over the last two years! Armagedden OUT!!

    No more paper investments till this is over. Over means a good chance of a reasonable ROI on buy and hold investments that isn't stolen (taxed, inflated, defrauded) away. Sure I could bet on the downturn, or the volitility, but that is gambling, not investing. The casino is rigged, and the rules can change any time.

    I'm buying grub, garden, garb, guns and gold more or less in that order. I don't expect to gain but at least there is a chance to break even!

    I'm paying the tax to get out of my 401K and IRA, Closed. Zeroed out. Still have some treasuries, and savings bonds, for now

    Right now S&P P/E is pointing to another 50% decline from here, and, maybe we get a rally first, but I'm not bettin on it. What is almost for sure is that by this time next year the purchasing power of the S&P will be half or less what it is today! Lots of banks and brokers will be history or nationalized.

    Even a house (fully owned, low maintenance, good construction and insulation in safe area) is a better bet than stocks. It won't to go to zero and a safe place to live will be important soon.

    Those who stay in stocks and manage to make nominal positive returns will be lucky to break even after the Obomanation Tax, Inflation and bankrupt brokers and banks take their toll.

  • Report this Comment On February 28, 2009, at 8:54 PM, Savannahguy wrote:

    Bellsarlus, you are right on the money there. Just remember... doesn't matter how many guns you have if you don't have ammo. Make sure that's on your list. Some dealers here are running low and seeing a tightened supply. Strange. Maybe it's just a local thing. Dunno yet.

    This spring I'll enlarge the garden, begin the remodeling the home, buy more gold and stay with a couple of my good, growing penny stocks. My 'to do' list includes stocking up on plenty of Yamalube for the boat (before gas and oil go through the roof again), load up on fishing tackle, keep the hunting land in order, stuff the cupboard with some rice, flour, coffee and such and I'm set to hunker down.

    I've never before considered being a "survivalist", but it seems like a pretty good time to cover the bases. Prices are going up, dollar is going down. Hyperinflation is around the corner. No time to get caught needing to buy a lot. When the bottom rops out it's going to happen in a flash and catch most folks unaware and unprepared. Mark it down.

    Like the wise old coastal saying goes: You can give a hungry man a fish dinner and he'll have one meal then be hungry again tomorrow... or you can teach him to fish... and he'll drink beer every day for the rest of his life.

  • Report this Comment On February 28, 2009, at 10:05 PM, 44humble wrote:

    Ammo in short supply...well theres a reason for that..research ammo with an expiration...seems they want to make ammo that is no good or expires after three months. With that nasty rumor out, everyone is getting well stocked. If they cant control guns, they will try to control ammo..cant have a good ole tea party with dead ammo.

  • Report this Comment On March 01, 2009, at 3:44 AM, BaitBoyinOK wrote:

    First time commentor:

    I have seen way too many negative comments, but very, very few specific opposing propositions on specifc buy recommendations. I do respect those recommendations relating to precious metals, gardens and guns (including references to ammo - which I also find in short supply.) If you are so negative on Fool recommendations and have experienced negative outcomes, and also have locked in your losses by bailing out too soon - then what is your recommendation other than to lock in losses and sit tight on your reduced nest egg?

    I want to see specific alternatives. If you do not have specific alternatives then what is your point in commenting?

    I invested,knowing full well that I could, and would, likely experience a significant downturn given the acknowledged volatility of the current market. You have seen, as well as I have, that every time Obama, Geithner, Dodd, or Frank make a remark that the market tanks. (I, for one, wish they would just shut the heck up. I would be doing thousand of bucks better off for it!)

    Those companies that I did invest in, with or without Fool recommendations, I did so after due dilligence. Some have lost a lot, some have gained. While I'm still behind I have faith and belief that their business is a viable business, that they will survive, and that they will come back stronger and better than ever. I do have a couple of losers - but, I expect even them to provide me with an opportunity at some near future point in time to sell at a breakeven point to allow me to reinvest in a better company. I am currently tracking better than sixty prospects, just so I can be in position to make a move when it is beneficial to do so. To do anything else would be to lock in a loss with no alternative avenue of reinvestment.

    If you have an alternative investment for me to go ahead and sell a 40% loser that will lock in that loss and then guarantee that I will make up that loss plus commissions and return a profit over what I will have a year from now if I maintain ownership - then by ALL MEANS, please, please, please feel free to post up. THAT kind of response I have yet to see here. Anything else sounds like WHINING to me.

    Am I wrong in that assessment or does everybody else expect miracles for the price you pay for the advice you get on this site?

  • Report this Comment On March 01, 2009, at 8:30 AM, Savannahguy wrote:

    BaltBoyinOklahoma, I'm sure you could get a "this stock will double, triple, quadruple" pick from everyone that posts here, simply because (almost?) everyone that posts here are investors.

    My advice is, if you see general advice a specific pick from anyone (including the King Fool's themselves) on this or any website or blog board, then ou'd best take it with a grain of salt, young man.

    Oh, most will give it to you straight and give you their picks for any number of reasons: one, because they own it and they want you and everyone else to buy it for obvious reasons. Two, they want to sound like an expert, or three: they are twisted and just want you to buy a dog, and four... they want to pump a stock publicly so they can dump it or short it if the fundamentals aren't there.

    Unfortunately, knowing who to trust these days in person is difficult, much less strangers behind monikers on an impersonal blog. I'm new to the Motley Fool's blogs, so I'm not familiar yet with the sincerity/authenticity of the individual denizens, so I can't help you there. I've given my picks (on the "Bailout/No Bailout" string, but since I'm not established here and haven't built any credibility or familiarity on this blog, I hesitate to drop my specific suggestions, for the reasons I've stated.

    By the way, there was not so much as a comment, question or challenge from anyone on any of my picks, again... probably for the same reasons I've stated. We all have anonymity here but some of us, myself included, have a moniker or "handle" that travels with me on any and every blog I visit. Over time, those that know me by Savannah Guy know what I stand for and, agree with me or not, know that I mean what I say. My moniker represents me, my values, opinions and ideals. It has and will continue to earn a reputation on blogs as a name you may not always agree with but a name you can trust.

    With the stock picks I've given before, I either own them or I say that I don't own them but am considering. I could care less whether anyone here thinks my stock picking advice is good or not, but I had hoped to engage a few folks in discussing investment ideas. Perhaps this is not the forum. If not, I'll keep searching for a respectable blog forum where that is the norm.

    So, in the meantime... whatever you read on the boards, do your own due diligence and use your own common sense and remember to allocate according to your ability. You won' go wrong. If you really are interested in some specific suggestions, just come back on here and ask for that. Then I'll know that you aren't a typical hit and run poster and I'll be glad to accommodate. Even then, goes without saying...

    due diligence and allocate, allocate, allocate.

  • Report this Comment On March 01, 2009, at 8:37 AM, Savannahguy wrote:

    Whoops... many dropped letters and a few missing words from my post. I'd best be more careful in the future, lest I look like a bad sppeler. ;-)

  • Report this Comment On March 01, 2009, at 9:45 AM, capitalismisdead wrote:

    bait boyin ok, savannah guy and others..regarding specifics..in my opinion HOGS is something to consider...just my opinion please do your research....

  • Report this Comment On March 01, 2009, at 10:12 AM, Savannahguy wrote:

    capitalismisdead, so, you like Chinese hogs, eh?

    Just looked it up, did a quick topline and am not sure if I see what you're so proud of there with HOGS. Sure, the commodity area is rich with good plays but c'mon... hog meat from the wonderful place that brings us unsafe toothpaste, poisonous pet food and toxic paint on toys?

    Add to that, the new tax on cow and pig methane gas (flatulence), and you may have to trim that fat from your portfolio.

    Lemme know if I'm missing something here. Do you see a big upside to HOGS? Really?

  • Report this Comment On March 01, 2009, at 10:45 AM, capitalismisdead wrote:

    savannah guy..i see excellent steady long term potential....look at the yoy growth rates. the growth rate is difficult to beat...look at the revenue...look at the market cap....consider that china is akin to the united states in the early 1900's....consider that the chinese are not consumers as of yet...consider that the government will have to force the chinese to be consumers going forward to keep their economy going at a decent pace bc mark my words US consumerism is dead and gone..they will eat more processed food just like we do now...everyone needs food..that will never cease.....with a country as early in development as china is (keep thinking US in early 1900's) of course there is going to be issues like the ones you mention...its part of development..the US had all kinds of issues early on....we still do now...we just had a salmonella issue?? its part of life....and oh yeah china has 4 times as many people as the united states...in twenty years i honestly believe the market cap will be between 10 and 20 billion.at least...in my mind its a no brainer....

  • Report this Comment On March 01, 2009, at 11:26 AM, Savannahguy wrote:

    Hmmm... OK then, I'll check HOGS out.

    Back at you with a few picks of my own for dramatic growth potential: PureSpectrum Lighting. PSPM (Pinks). I’m expecting this stock to quadruple in price this year. Call me crazy. The time to buy is now... Monday.

    The other: Gold Miner's Vector (GDX). This stock is trading at 34 and will go to around 80 this year. The time to buy not tomorrow but very soon… probably the end of next week, when it sets a new, higher bottom. This and a few other gold plays will ride the soon to come runaway gold market.

    Am I pumping these because I own them and want everyone here to get in on them and raise the price? Yes and no. Yes, more people buying what I already own is a good thing, but that's not really my motivation. Everybody here could blindly jump at these and it wouldn't make a difference to me or the stock, but I own both and am very bullish about them. Do yourself a favor and check these out.

    You’ll thank me and pay attention when I post these things in the future. In turn, a few of you may point me to stuff I've never heard of. Then, this blog will have real value.

  • Report this Comment On March 01, 2009, at 9:50 PM, afooloofone wrote:

    Like everyone out there, my IRA and brokerage fund had taken a hit (can you say Citigroup). But I also used some cash last year to buy up some CD's and bonds at an OK rate. I won't retire next moth off them, but it has helped me lose a lot less. I also have cash on the side if a deal comes around like WMT at $46. Does anyone think Wallyword is going bankrupt in the next 3-5 yrs? Be like a boxer, bide your time and wait for your shot. You may get punched a few times, but all you have to do is land a few well placed shots.

  • Report this Comment On March 03, 2009, at 1:19 AM, Texicano wrote:

    I subscribed to Hidden Gems last year. That's the bad news. The good news is that I didn't buy any of the recommended stocks. I have, however, invested faithfully in a very diversified way in a 401K over the years. I rode out the dot com bubble and was glad I did, but this current situation is a different animal all together. Everything financial is on its head. This is the greatest learning experience since the Great Depression. And NOBODY knows what is to come of it. We have learned some things though. We know not to trust financial advisors, gurus and other assorted "experts". We now know that far too many of America's great businesses are run by corrupt and/or ignorant pirates and third rate boards of directors who have wholey abrogated their fiduciary responsibilities to shareholders. I think we have also learned that research and due diligence are highly over rated in a market where there is an over abundance of hype and false corporate information, and where there is very little transparency.

  • Report this Comment On March 03, 2009, at 1:38 AM, Texicano wrote:

    As to the question of selling "losers" I hardly know where to start. Is it smart to sell low what were the best stocks (or mutual funds) I could find just a few months ago? To buy what? Other stocks or funds I don't have any more confidence in than the ones I'm selling? Sell low and get out of the market so that some arab shiek or Chinese warlord can buy up a sound American business for a song? I'm already retired, but the house is paid for, I'm debt free and have a little income. Think I'll hang on until the country gets smart. Or I could move to the Philippines and live in the new house there.

  • Report this Comment On March 03, 2009, at 1:51 AM, anmi2008 wrote:

    LOL! Wow. So I should sell my crushed positions to pick up some new SHITE that is probably going to get crushed in the immediate future?

    Unbelievable. Jokes on us, huh?

  • Report this Comment On March 03, 2009, at 8:08 AM, Terhathum wrote:

    I'm tired of the contradictory statements made by the Fool . . . "Wait a Second" buy Microsoft, followed up by watch out for the "two words that could kill Microsoft"! I understand they're here to make money and I'm fine with that, but I expect something of worth in exchange for the fees for their services. Sadly, the Fool appears to have degraded into nothing more than a marketing machine with little real value.

  • Report this Comment On March 04, 2009, at 12:52 AM, AIBisasorryjoke wrote:

    Hey docwife...times may be bad, but there is no reason why it can't be fun in the USA. A little comparison:

    France: Baugettes

    USA: wonderbread

    France: good, cheap vins de table rouge

    USA: Bud

    France: Fromage de chevre

    USA: Kraft slices

    France: Haut Montainge

    USA: Just about anywhere in the SW (truthfully, in terms of stunning vistas, the USA has almost anywhere beat hands down).

    France: Tour de france

    USA: Bowl for $

    France: Paris

    USA: Paris, Las Vegas

    Ok, so it's France 5, USA 1 on the culture competition.

    Still, at least in the USA, nearly everyone speaks english, Ce nest pas la meme chose pour la France, donc, je ponce, les Etas-Unis gange le jeux. Chaquant son gout :)

  • Report this Comment On March 04, 2009, at 9:13 AM, Savannahguy wrote:

    Texicano, ditto that. All of it. My sentiments exactly.

    Want three very solid sources of good information? Check out Jim Rogers, Jim Sinclair (JSMineset) and Gerald Celente’s ‘Trends Research Institute.’ These brilliant guys get it, they see the big picture and they don’t mince words.

    ~

    From Trends: "Trendpost: When the ship is sinking there are very few options: Life boats, life rafts, life preservers . and for the late to act, possibly a few pieces of floating debris to cling to. We are trend forecasters, not certified financial advisors legally empowered to provide such advice. Although gold prices declined today some $15 to $925 per ounce, we forecast that gold will be one of the few life saving investments that will continue to increase in value, reaching $2,000 per ounce and beyond."

    ~

    From Sinclair: “Things are now "Out of Control." This international financial crisis is now out of control as the world asks if the USA has two presidents, one president or no president at all. It would appear that Paulson is in financial control with Bernanke as his second. I warned you by personal email long before the statement was proven totally correct that "This is it." That was followed by "This is it, and it is now." Many people laughed it off. This is it, and it is now.

    Now it is out of control. Now we enter the Collapse of Confidence period. Then we begin the Weimar Experience.”

    ~

    From Rogers: when asked by Maria Bartiromo, “What do you think of the government's response to the economic crisis?” in a recent interview, Jim Rogers eloquently and accurately stated, “ Terrible. They're making it worse. It's pretty embarrassing for President Obama, who doesn't seem to have a clue what's going on—which would make sense from his background. And he has hired people who are part of the problem. [Treasury Secretary Tim] Geithner was head of the New York Fed, which was supposedly in charge of Wall Street and the banks more than anybody else. And as you remember, [Obama's chief economic adviser, Larry] Summers helped bail out Long-Term Capital Management years ago. These are people who think the only solution is to save their friends on Wall Street rather than to save 300 million Americans.”

  • Report this Comment On May 24, 2009, at 3:37 AM, ozzfan1317 wrote:

    The Important part is to do your homework and never committ more money or take more risk than you can stomach.

  • Report this Comment On December 22, 2009, at 2:46 PM, xjp83x wrote:

    Most people that I see fail do risky "investing" like buying on margins, borrowing money from institutions, make option calls which prices are absurd, etc. Timing matters in investing. When the market is down and climbing up, obviously you would want to buy more than sell.

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