Sunday, November 16, 2008

Value Investing - Risk/Reward Starting To Look Good

I Just wanted to say a word about value investing at these levels since I have been getting so many emails and questions about it. True to my form, I have never really been a fan of value investing for various reasons. Mainly, I believe more in day to day market emotion than I do in the ability of people to buy based on valuations every single day.

Now, having said that, if we start to see the market tank next week, I think it's time to really start slowly buying up stocks for the long term. I am not say that this is the time to throw all your money in, but you should start to "nibble" slowly IF we go lower. Let's face it, you really can't make money shorting a stock, because the most you can make is 100% of it goes to zero. However, if you have a $5 stock that used to be at say $30, you could make nearly 200% over a couple months if it goes up to $15. Regardless of whether you think the bottom is in (which I don't) or not, its time to start thinking long term on some stocks...