Quote Originally Posted by daihashi
Good analogy.

I pulled all my investments about 3 months ago and have them sitting across 4 interest accounts at the moment. I'm waiting for signs for the market to stabilize; currently I'm at about 12% total YTD, far better than most people I know. I'm curious to see what will happen between Wachovia, Wells Fargo and Citibank. I may want to hop on that early depending on the terms and outcome of the situation.

For people who have no investments; this is a GREAT time for you to prepare to dump some serious money into the market. You will probably be seeing 100% returns or more over the next couple of years (assuming the market stabilizes soon/before end of 4th quarter.).

edit: I should add an addendum, I don't want people blaming me for bad investment decisions so I'll add this. If you are able to determine that a company is more profitable than what it's trading at and you diversify your investments... then it will be a good time to invest.

There are many things to look at when trying to determine if a company is profitable or not. I won't go into details but I'll say these two things....

There is a formula out there to do this

AND

Although it's a bit outdated... pick up The intelligent Investor and Security Analysis. It will teach fairly good basics for stock market investing.

Investing is long term. Look at any one who's been successful in the market.. they ride out the rough times. For instance Warren buffet just dumped 3 billion into GE because he determined it was worth more than it was trading at; however he did it safely... 3 billion dollars is about 1.4% of Buffets net worth. He didn't go crazy and dump all his money into it.

So figure out what's profitable.. and only dump a fragment of your net worth into it.
I'm glad you mentioned Warren Buffett. You can be for sure this guy will keep making money. He didn't take the bait on the tech boom because he didn't understand the business model. People secretly snickers at him at the time, but once the bubble hit, Buffett came out as a genius as usual.

I think the most important thing with investing is to invest in companies you understand. Which is why it's important to do the homework, look at companies financial reports, SEC filings, perform the various calculations you need to determine the financial health of the company, investigate what they do and how they model their business and compare with other companies in the same industry. The more you learn, the more successful you'll be at investing.

Right now it's a gold mine. Personally I'm waiting on whether the market drops further which I think it will. Then it's christmas.
thcbongman Reviewed by thcbongman on . Dow drops below 9,000, S&P nearing 900 I knew it was going to follow the bailout, but actually seeing it is truly something... As fears of recession run about, credit freezing, and job outlook seems uncertain, money is trailing out of unsecured investment and headed into guaranteed forms of investment. As this happens, stocks will continue to fall. It is very likely we will see the Dow in the 7,000's and maybe even somewhere around 6,000. The last time the Dow was @ that level, it was 1996... There are rumors that the Fed Rating: 5