Opportunity of a Lifetime?

[BadThad]

The major market correction times are tough...there's no doubt. However, investors that survive will certainly prosper in 5-10 years from now. Many blue-chip stocks are trading at 1980's levels today. Plant the right seeds and I believe in a few years you'll be so green it will change your life.

Do you agree?

[fz4fun]

BT-I agree, for any patient investor who carefully chooses his/her long bets, the 5 to 10 year return is going to be major wealth-building time. Look at J & J, US Steel, Cleveland Cliffs just to name a few. I mean US STeel and Cleve Cliffs were both well over $100 a share less than a year ago and can be bought now for $20-30.
Plant those seeds and wait for the trees to grow

Good thread

[BadThad]

This article today sums it up....it came out AFTER my post. Great minds think alike! LOL

U.S. stocks at or near declines where investing makes sense
2:44p ET February 5, 2009 (MarketWatch)
NEW YORK (MarketWatch) -- With equities bouncing back after an initial smack on Thursday -- and Friday's jobs report for January looming -- the bear market is likely at or near a level where history would dictate investors step back in.

"Investing at lows, assuming you can identify them, is a very rewarding proposition," said David Krein, senior director, institutional markets, Dow Jones Indexes.

On Thursday, consumer discretionary, information technology and financials led a late-morning turnaround, with one analyst pointing to speculation of a possible bidder for Bank of America Corp. and chatter the SEC might scrap or modify its mark-to-market rules as helping lift equities.

"These rumors show that there are willing participants out there who want to get back into the market, most are waiting but if say for example the administration can come up with a decent stimulus plan the market may respond and we could get a very nice rally despite the fact that the current situation is quite negative," said Robert Pavlik, chief market strategist, Banyan Partners LLC.

The Dow Jones Industrial Average was lately up 135.96 points at 8,092.62. The S&P 500 added 17.97 points to 850.2, and the Nasdaq Composite rose 38.16 points to 1,533.21.

In looking at the current drawdown period -- the decline in value of the Dow Jones Wilshire 5000 from its peak to its trough -- the most recent drop is about 41.5%. That's less than the 44.12% drawdown experienced during the 2000 to 2002 bear market, said Krein.

While only time will tell whether the bottom has been hit, a 40%-plus decline is significant, to the degree historical trends hold, said Krein.

Timing is everything

"If we happen to be at the bottom now, maybe history will hold and maybe it won't, but it still takes a multiple of the period of decline to recovery. It's that buildup that investors do not want to miss," said Krein.

The market took about three and a half years to recover after the 2002 bear market, yet the market rebounded 14.86% in the year following the trough date.

"If you expand this out to two or three years, the market has rebounded 28.28% and 48.29%, respectively," Krein said.

Historically, the recovery takes about twice as long as the decline. But for those "with the stomach and capital to wade back in," investing at market lows in the past has translated into gains of 40% and more for those who buy and then wait out the bounce back, Krein said.

"If you're a long-term investor, I think stepping in even at this point in time would be a good move. Economies don't stay weak forever, so it makes sense to position for a turnaround that we see happening sometime next year," said Pavlik.

"Everybody is gun shy right now, but look at some of these fabulous companies -- Caterpillar [Inc.] is not going to go out of business, and it's at a multi-year low. I bought some the other day, and almost had to hold my nose doing it, but look at its fundamentals, and the domination of the industry they are in," said Pavlik.

Investors want to buy on the way down, rather than trying to chase on the way back up, and it's near-impossible to know exactly when the bottom is going to hit. As Pavlik put it, "you don't want to catch a falling knife."

[3DCyclone]

BT, I think it is just as important to identify which of these blue chips will be the strongest coming out of the recession and in the best position for earnings growth, dividends, etc.

I would like to know what you are smoking!

[BadThad]

Originally Posted by 3DCyclone

BT, I think it is just as important to identify which of these blue chips will be the strongest coming out of the recession and in the best position for earnings growth, dividends, etc.

I would like to know what you are smoking!

That's what the forum is for....give us your ideas!

I still believe in banks and financials. They historically perform well and I believe they will be better than ever once this is all sorted out. Buy 'em while they're cheap!