Dec 24

On March 13th (a Friday) I posted “Have We Hit Bottom?” and it seems we did. While the return on the S&P since then, a 49% rise from 750.74 to its 1220.59 close last night. But if we learned anything from the tech crash, it’s that not every company goes bankrupt after a major decline, most survive returning to some semblance of normalcy. To be fair, there were quite a few stocks that went belly up in 2001, many of which never had a viable business model in the first place.

In this past cycle, what would have been our reward had we put our money where my thoughts were, back in March? Let’s assume $2000 per company in invested among 10 different stocks and use the closing price on March 16, so you had the weekend to read my post of the 13th.


GM – $2.52 to $0.49  $389 (left from $2000)
Ford – $2.10 to $10.08  $9,600
CitiGroup – $2.33 to $3.29 $2,824
Bank of America – $6.18 to $15.19 $4,916
Beazer Homes – $0.50 to $4.99 $19,960
Pulte Homes – $9.52 to $10.06 $2,113
Exxon – $66.97 to $68.26 $2,038
Sunoco – $28.12 to $25.52 $1,815
Merck – $26.21 to $37.25 $2,842
Johnson & Johnson – $50.73 to $64.57 $2,546

This basket of stocks chosen from 5 industries returned $49,043 or a gain of 145% from the March 16th date. Note, the bottom for each of these stocks was even lower than this. CitiGroup was under a dollar, Ford had an intraday low of $1, Beazer, 24 cents. If only we can learn to recognize and act on that bottom, we stand to be well rewarded. To be successful at profiting from such market moves one needs a cash reserve, steady job, and a very strong stomach. Also, I’m not suggesting that anyone make such moves with a large part of their portfolio. Most of my own retirement account is in a combination of index funds and ETFs.


written by Joe \\ tags: , , ,

Mar 16

One of my regular readers responded to my “Bottom?” post on Friday suggesting that, “[He] doesn’t think that we need to jump up at every spike.” Of course, he’s right, the bottom may be far away, and one should always look at the long term, not seeking inflection points. More important, I appreciate the link he sent to this graph:


This graph helps illustrate the absurdity of my post Friday. As you can see, the line to the bottom and out again certainly isn’t straight.


written by Joe \\ tags: , ,