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Once in a lifetime buying opportunity???
10-13-2008, 08:54 AM
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#1
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Full time employment: Posting here.
Join Date: Feb 2007
Posts: 741
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Once in a lifetime buying opportunity???
Well.... now that the stockmarket has dipped below 9000, (although on a massive upswing today), I am thinking how can I capitalize on this situation. I have been reading others opinions, and thought I would ask the group their thoughts. After all... the combined financial knowlege and experience would put most brokerage houses to shame... Like all of you I have been living the LBYM lifestyle for a long time. As a result I have quite a bit of liquid assets right now. Normally this would have been foolish, but just happened to work out now that the market has gone down so much. I was thinking of opening up a taxable Vanguard Mutual fund account. I am already maxed out on Roth IRA and 401k. I was thinking of taking 15k and splitting it between Vanguards Total Market, and Total internation market. I am currently 35, so I still have a long retirement horizon... So what do you all think.... a smart move... or a foolish one? Thanks for all of your thoughts...
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10-13-2008, 08:58 AM
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#2
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Jun 2002
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At age 35 it sounds to me like an excellent idea.
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Numbers is hard
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10-13-2008, 09:00 AM
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#3
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Thinks s/he gets paid by the post
Join Date: Jun 2005
Posts: 1,543
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what if the market falls below today's levels next year? just like in 2000 - 2002. first it was dot bust, then 9/11, then enron/wcom and then october 2002 was the final capitulation low.
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10-13-2008, 09:02 AM
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#4
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
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Al, the OP is 35. He has many years to recover if we haven't already seen the market lows.
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Numbers is hard
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10-13-2008, 09:02 AM
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#5
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
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Location: Central MS/Orange Beach, AL
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What if it doesn't? That is the question.
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Retired 3/31/2007@52
Investing style: Full time wuss.
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10-13-2008, 09:03 AM
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#6
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
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Quote:
Originally Posted by al_bundy
what if the market falls below today's levels next year? just like in 2000 - 2002. first it was dot bust, then 9/11, then enron/wcom and then october 2002 was the final capitulation low.
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Just to play devil's advocate, what if it DOESN'T??
There's about as much bad news as I can remember in recent history. There could be another sell-off but I don't think the Dows is going to hit 7000 or anything dire like that.......
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Consult with your own advisor or representative. My thoughts should not be construed as investment advice. Past performance is no guarantee of future results (love that one).......:)
This Thread is USELESS without pics.........:)
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10-13-2008, 09:04 AM
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#7
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
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Quote:
Originally Posted by FinanceDude
Just to play devil's advocate, what if it DOESN'T??
There's about as much bad news as I can remember in recent history. There could be another sell-off but I don't think the Dows is going to hit 7000 or anything dire like that.......
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Cramer says DOW 4700 by tomorrow.
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Retired 3/31/2007@52
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10-13-2008, 09:04 AM
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#8
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
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Quote:
Originally Posted by al_bundy
what if the market falls below today's levels next year? just like in 2000 - 2002. first it was dot bust, then 9/11, then enron/wcom and then october 2002 was the final capitulation low.
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Possible. But valuations using long-term earnings trends were quite a bit lower in October 2007 than they were in March 2000. And given a fairly similar loss in the Dow and S&P, I have to think that means valuations today are even lower than they were in 2002, assuming you don't think we're headed for the D-word this time.
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"Hey, for every ten dollars, that's another hour that I have to be in the work place. That's an hour of my life. And my life is a very finite thing. I have only 'x' number of hours left before I'm dead. So how do I want to use these hours of my life? Do I want to use them just spending it on more crap and more stuff, or do I want to start getting a handle on it and using my life more intelligently?" -- Joe Dominguez (1938 - 1997)
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10-13-2008, 09:05 AM
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#9
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
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Dawg, have another beer and take your pooch for a walk. Wait, you could be hit by a truck if you do that.
Maybe just go back to bed and pull the covers up over your head...
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Numbers is hard
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10-13-2008, 09:05 AM
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#10
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
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Time to go all-in.
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"Hey, for every ten dollars, that's another hour that I have to be in the work place. That's an hour of my life. And my life is a very finite thing. I have only 'x' number of hours left before I'm dead. So how do I want to use these hours of my life? Do I want to use them just spending it on more crap and more stuff, or do I want to start getting a handle on it and using my life more intelligently?" -- Joe Dominguez (1938 - 1997)
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10-13-2008, 09:06 AM
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#11
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Full time employment: Posting here.
Join Date: Nov 2005
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If I were in your shoes, I'd definitely do it. I'd probably wait until tomorrow or later. IMHO, it looks like we'll enjoy a major rally today in both domestic and international stock. As the week wears on, the euphoria will dissipate and I think stocks will temporarily go down. You may want to consider dollar cost averaging in.
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10-13-2008, 09:08 AM
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#12
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
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If you listen to Cramer, there's no hope for you.........
__________________
Consult with your own advisor or representative. My thoughts should not be construed as investment advice. Past performance is no guarantee of future results (love that one).......:)
This Thread is USELESS without pics.........:)
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10-13-2008, 09:08 AM
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#13
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
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Quote:
Originally Posted by REWahoo
Dawg, have another beer and take your pooch for a walk. Wait, you could be hit by a truck if you do that.
Maybe just go back to bed and pull the covers up over your head...
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I think I've had one too many beers the last few days. Almost passed out this morning. Felt good yesterday. Oh well, lay off the beer today. Sucking down coffee this morning.
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Retired 3/31/2007@52
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10-13-2008, 09:09 AM
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#14
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
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If the market doesn't recover enough for a 35-year-old to grow a retirement portfolio over 20-30 years or more, we're screwed anyway, whether invested or not.
__________________
"Hey, for every ten dollars, that's another hour that I have to be in the work place. That's an hour of my life. And my life is a very finite thing. I have only 'x' number of hours left before I'm dead. So how do I want to use these hours of my life? Do I want to use them just spending it on more crap and more stuff, or do I want to start getting a handle on it and using my life more intelligently?" -- Joe Dominguez (1938 - 1997)
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10-13-2008, 09:09 AM
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#15
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
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Quote:
I don't. Saw that on the Bogleheads site.
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10-13-2008, 09:11 AM
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#16
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Thinks s/he gets paid by the post
Join Date: Jun 2005
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Best time to buy is during the big panic days....Agree about waiting on days when the markets are up big....I dont agree with this being like 2000 - 2002...there were a lot of excess to be worked out during that time....as I remember couldnt say that much was cheap...now is another matter
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10-13-2008, 09:11 AM
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#17
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Recycles dryer sheets
Join Date: Apr 2007
Posts: 491
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Then I am going long on guns, ammo and gold .
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10-13-2008, 09:12 AM
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#18
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
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Quote:
Originally Posted by ziggy29
If the market doesn't recover enough for a 35-year-old to grow a retirement portfolio over 20-30 years or more, we're screwed anyway, whether invested or not.
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Actually I was replying to Al Bundy's statement.
Originally Posted by al_bundy
what if the market falls below today's levels next year? just like in 2000 - 2002. first it was dot bust, then 9/11, then enron/wcom and then october 2002 was the final capitulation low.
I think it will recover. I'm sticking to my 5 day prediction.
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10-13-2008, 09:36 AM
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#19
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Thinks s/he gets paid by the post
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historically secular bear markets run 15-20 years on average. don't have any data on 1873, but the Great Depression was just over 20 years and the 1970's bear market was around 14 years.
median SP500 PE is 15.17 from 1920 to the present. google it to confirm it.
if you factor in $50 earnings for the SP 500 for 2008 then we are right around a PE of 18. the last estimate i read was $63, but that was in the summertime. if the SP500 rallies to 1200 then $63 gives you a PE of 19 and $50 gives you a PE of 24.
if you factor in 10% earnings growth then the numbers are a little better but still way above the historic mean. and there is still a lot of unknowns of what kind of damage the last few months caused that aren't going to be seen until next year. but add in the deleveraging that is going on and then earnings growth that will come out in time and possible bankruptcies next year and we'll see what happens next year.
i bet a lot of corporations are having a lot of meetings to talk about reducing the risk of using short term funding to meet operating expenses
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10-13-2008, 09:44 AM
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#20
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
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Quote:
Originally Posted by al_bundy
if you factor in $50 earnings for the SP 500 for 2008 then we are right around a PE of 18. the last estimate i read was $63, but that was in the summertime. if the SP500 rallies to 1200 then $63 gives you a PE of 19 and $50 gives you a PE of 24.
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Historically, P/E is a terrible indicator of valuation during an economic downturn because short-term weak earnings make the market seem way overvalued, even though a classical security analysis valuation wouldn't make it seem so. I think PE5 or PE10 is a much better indicator as it tends to smooth out the boom and bust cycles.
__________________
"Hey, for every ten dollars, that's another hour that I have to be in the work place. That's an hour of my life. And my life is a very finite thing. I have only 'x' number of hours left before I'm dead. So how do I want to use these hours of my life? Do I want to use them just spending it on more crap and more stuff, or do I want to start getting a handle on it and using my life more intelligently?" -- Joe Dominguez (1938 - 1997)
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