Bottom Feeding

| By admin In Editors comments |

Ok so the market dropped out from under us, but most of us have been there before and those who have are now set to make a profit. Now no one is smart enough to pick the bottom of this slide, but the bottom will come.

As usual we will be overwhelmed by this Bear Market ^(http://www.ucontext.com/cbhop.php/4314/0/6df071ea38f216913f8cf3c7301fd484/bear+market) but rest assured it will turn and those who are prepared will reap the rewards. It is my opinion that it has a bit further to go and looks like it will last a while longer. Once we get over the effect of the mortgage crisis in the US and the oil prices we should see some improvement.

It’s all about opinions: Once we see the end of the daily deluge of bad news from the media, then opinions will change. If you are ready you can start to pick up the bargains and believe me there are some real bargains just sitting there for the taking.

We have seen stocks that are in no way involved with either mortgages, or oil, fall dramatically, ask yourself why. Why would a very profitable company with excellent figures and excellent prospects, suddenly see their stock price on the floor? Well sentiment has a lot to do with it. That’s right sentiment. In my opinion 60% of stock traded on the market are bought on sentiment.

I sit here day after day and watch stocks go up and down, seemingly for no reason. What is it that drives the market? Why do those involved all seem to follow a trend, and how does the trend evolve? Why is it a stock can be trading down, or up many dollars within a couple of hours, and who sets the trend anyway? Well it is you the investor. You react to the trend, every time, be it Bear or Bull, it is the reaction of the investor that makes the trend.

Bear markets are a part of our lives, and I have seen many come and go. They seem to end when familiarity sets in and those in the know, with the spirit, start buying stock that has been unrealistically forced down. Those smart people start to see the value in those companies; sales, profit earnings, take over possibilities, and just the real value of the stock that hasn’t changed one little bit from when it was trading $20 higher.

Now is the time to stop listening to the media hype start listening to your own gut feelings and have the nerve to act. No one has ever lost buying on the bottom of a Bear Market. Start doing some hard yards and earn what you make. Be prepared to break away from the crowd. I know it takes a lot of fortitude but you will not get rich overnight playing the stock market. It is a nerve racking business and you have to loose sometimes to make it, but there are reasons why some win and some loose, and it’s called due diligence. Look for those companies that are improving and growing even in this horrible market. When sentiment changes, so will the market. Some will be ready to reap the rewards, will you be one of them.

MR (ed)

Editorial for August at

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