Should You Start Buying Stocks?
By Justin Gardner | Related entries in Economy, Stocks, VideoNot yet says Robert Shiller, the author of Irrational Exuberance and creator of a variation of the P/E ratio (price/earnings) called CAPE (cyclically adjusted price/earnings).
Here he goes into how CAPE is determined and how it’s shows that there’s still room to go down.
Are you buying right now?
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This entry was posted on Tuesday, February 24th, 2009 and is filed under Economy, Stocks, Video. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.
February 24th, 2009 at 4:04 pm
I’ve got a reminder in my calendar to invest 10% of my cash across a basket of stocks at the start of every second month.
I certaintly see scope for further share price falls, but I think widespread fear is factored into the market and no-one ever rings the bell to signal the bottom
February 24th, 2009 at 4:29 pm
One of the crappiest of reasons to invest money is because you think it’s the right time. Market timing is for people foolish enough to think that they are smarter than the rest of us.
One ought to invest in the market if
a. one has spare cash not needed for current anticipated use
and
b. one can identify companies that one thinks are a solid investment with fundamentally strong long-term prospects.
Then by all means, take that money and dollar cost average it into the market.
I feel sorry for folks investing because they think the bottom is now, as well as for folks investing in companies like say GM or some bank, just because they are receiving gov’t cash and help.
February 24th, 2009 at 10:45 pm
That is very Grahamish advice there Kranky. But I’m encouraging all to invest in my highly-leveraged hedge fund — 70% of our portfolio is composed of African micro-loans and 30% in an massage oil company in Newark, NJ. Of course I take the obligatory 2/20. Now is the time to invest — don’t hold back.
February 25th, 2009 at 8:40 am
JH, who is Graham?
Most of what little I know about investing I culled from a book by John Bogle, a few other sources, and semi-regular digestion of Marginal Revolution plus whatever articles of economic interest I have run across.
February 25th, 2009 at 2:40 pm
Ben Graham – author of “Security Analysis”. Warren Buffet’s mentor
February 25th, 2009 at 3:09 pm
Ben Graham was a economist and investor — advocated “value investing” and authored the famous book Security Analysis. One of his disciples was/is Warren Buffet.
Forgetting about my Hedge Fund, I’ve never been a big proponent of technical analysis (50/200 day weighted moving average, cup and handle, et al.). Still, I think there are some buys out there (and definitely some shorts).
February 25th, 2009 at 3:32 pm
I’m putting everything I own into Sirius/XM.
What? That’s not a good idea?
Hmmm…. maybe GM then….
Seriously, the only reason to be in the market now is to speculate, and there is always room for a little bit of that.
February 27th, 2009 at 3:01 pm
Yeah, what Rich said. There’s some really, really good bets out there right now, but almost every one of them also has the caveat: “This company may file for chapter 11 if the economy doesn’t turn around soon.”