I posted this in the KP board, but if there are any LTBHers left out there, I thought I would repost it here. FWIW I agree with Rat, the charts all look very broken and the fundamentals are not looking so hot either, but we must look beyond the fog...
Sticking to my guns
Now the S&P500 has joined the Naz in Bear territory. If the Dow drops to 9400 or so it will join the other 2 indices.
I was looking through some of my old posts and saw this old gem: Did YOU forget to read the small print?
I stand by everything I wrote in that post. Go ahead look it over.
As I've always said, I'm still learning, but in times like these I have to go to the core of my being, my master plan. So what do I do?
I stay the course.
I will look at what I own and see if those companies are quality companies that can produce sizable gains in the next 2-3 decades.
I believe that most of my big positions carry much more upside potential than downside potential. Will any of them be a ten bagger in the next 6-12 months? Well, I doubt that very much, but then I may be surprised.
I am keenly aware of the risks I face by putting my money in the stock market, especially selecting companies that seem to be valued dearly by most standards. I did this on purpose, knowing full well that in a bull market I would do very well, and that in a bear market I would underperform the market by a great amount.
I also expect a few of the companies I own to go bankrupt, that would be par for the course, but then again I expect some to do very well. With the ones that go bankrupt I stand to lose 100% of my money, but with the ones that do very well you can cover a multitude of sins.
I don't invest on margin, and I only put in money that I can afford to lose. I dollar cost average into my companies, buying more as they get cheaper and less as they get more expensive. Primarily though I concentrate on the businesses behind those slips of paper. Yes, technology has been taken out and shot, but trust me, someday it will be back. It may take years, but I'll be there waiting, patiently, always looking for promising companies.
I am also learning every day. I learn with everybody here on the boards and with my friends via e-mail. I read about new methods. Some of which I may add to my arsenal, such as some of the studies we've been carrying out on long term price/volume trends seen in charts. Who knows? Next time the Naz hits a high, I may buy puts as insurance and be quicker to sell stocks of companies that have less than stellar fundamentals.
As everybody loses their head all around me I look around and see that the World keeps revolving around its axis, products keep being manufactured, information keeps being exchanged and money is made and lost. My job right now is to stick to my long-term plan, to learn from my mistakes, and to move on.
When the fear evaporates (and yes someday it will) many opportunities will abound. Will we be there to take advantage of these?
My father-in-law, a child of the depression, never trusted stocks, and always invested in T-Bills. He missed many decades of growth and opportunity while playing it safe. Contrast him with a friend of mine whose dad had just died, but left his mom an estate in the 7 figures by investing almost exclusively in equities.
I will continue to stay invested no matter what. I may be a lot pickier in the future with the companies I select, and hold lighter any momentum plays, but essentially at the core of my being is a long term investor.
Not calling any sort of bottom, but looking ahead to a prosperous future someday,
(Glutton for punishment, xerohype)