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So now, with a whirley-Beanie and sub-20 CAPS Rating



October 08, 2008 – Comments (2) | RELATED TICKERS: GE , COP , MEE.DL

Life is good!  Why?  Because my CAPS picks aren't with REAL Money!!  Whoohoo!  My rating has gone from 99.6+ to under 20.  Why?  Because I thought that the stock market couldn't get any worse. 

Here's some wisdom:  When you think it cannot possibly get any worse, it will get a WHOLE lot worse!!!  Why is that true?  I'm clueless, but it seems to be the case.

So I look at S&P P/E averages and saw that they were LOWER than during the depression years and near all-time lows.  So, what did I say?  "It can't get any worse!"

So I looked at GE with a single-digit P/E and said "It can't get any worse!".

So I looked at the Fed Bailouts and the improved Accounting Rules and I thought "It can't get any worse!".

Then I looked at GE's fire sale of shares to Buffet and others at nearly HALF what it had been BUYING the shares for during the last 5 years, and I thought "It can't get any worse!".

So I looked to the Natural Resource Buys - ConocoPhillips with a P/E in the 4's and Massey Energy with a P/E in the 3's and thought "how in the WORLD could it get any worse!".

And it got worse!  Buy when there's blood in the streets?  Someone is squeezine the dang corpses like so many tubes of toothpaste. 

It can't get any worse!!   . . . . . Can it?

2 Comments – Post Your Own

#1) On October 08, 2008 at 5:18 PM, truhusker (81.55) wrote:

 dont worry about your CAPS rating. I dont really like the rating system anyways, because the way its based off of you beating the market. you could still be making cash if it were real, but just not beating the market. plus times like these with all the volatility, individual stocks get beat harder than the S&P, unless you have a portfolio of 1000+ individual positions. on the flipside, well-picked individual stocks perform better than the S&P, so in the long run you should be fine.

 one last thing: just because a stocks pe is in the single digits does not mean it cant go lower, it does give some cushion but not a cure-all. low pe's dont always mean a good thing for an investment too, keep that in mind.  

hypothetically if the pe of a stock is a 1, but the market as a whole is in a bear like the kodiak man-eater we are in now, even though you dont see it happening... it can always go lower. even when you think the bleeding has stopped and our feet have met the bottom.

before buying a value stock, always look at the broad market as a whole and also the sector the stock is in. even if a company is doing well,outpacing earnings estimates, growing capital, etc.      its price can still be pushed down by these two factors

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#2) On October 08, 2008 at 6:54 PM, nuf2bdangrus (< 20) wrote:

I log my CAPS pick when I make my first buy in a stock.  But typically, especially now, it is my smallest share purchase.  I am saving $ for the fall.  CAPS doesn't give any credence to a DCA approach.  I used to care, but I no longer do.  Trouble enough making any real $, let alone CAPS points.

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