Concerning Peter’s Random Observation #5 below--yes, the stock market is really bad. I’m not a rich guy, but I crossed the six figure loss mark several weeks ago, and you don’t even want to know how ugly today’s 700 point loss was. I won’t know to total for another half hour yet, until mutual fund prices settle and are posted for the day. BUT, I’m drooling. Remember Warren Buffett’s axiom that the time to buy is when there is blood running the street and everyone else is panicking. He’s been waiting ten years for this moment, and that’s why he’s now buying up GE, Goldman, Constellation Energy, etc. Remember that shareholders have been beating on him for years about holding 40 to 50 billion in low-return cash. Just wait, he said.
Even if there is a really deep recession, the risk level now being priced into stocks and bonds is absurd. See this piece by my pal Kevin Hassett on just how absurd it is getting.
So yes, I have been buying stock every day this week, a little at a time. I’m still getting pounded of course and am almost out of new money to throw in. But the stock market has never turned in a negative ten year return even during the Great Depression. I figure I’m going to get a great return. I did in 2002 when I threw in big both times the market dipped to 7,500 or so.
And hey, if it doesn’t work out, my losses will allow me to escape Obama’s intended higher tax rates he wants to throw at me. So it’s win-win either way!
FRIDAY UPDATE: Looks like I’ll be going with the tax loss strategy!