Quote:
Originally Posted by Rekna
I thought about buying gold and silver but I have to wonder if that is a good idea. It seems to me that one of the primary uses of gold and silver is jewelry. If the economy goes into depression the demand on jewelry would drop greatly and thus the value of those two metals would also drop. Their price seems to be to elastic to me. Copper on the other hand might be good depending on how elastic/inelastic the demand is on that metal.
Maybe the best thing for us to invest in is canned goods and a storage closet  |
Canned goods and storing water by the barrel....
My feeling is gold, silver, even copper have never been worthless. There will always be someone who will be willing to trade or barter for them, because times always get better. Same with land, but it's too expensive right now, for me. Those are the things wars are fought over. Gold, Silver, gems and land. No matter how bad times get they always have value.
Te people who think long term and are not easily sent into frenzy will buy stocks in companies now and everyday as the market declines. Why? Because eventually it goes back up.
IF you play the market:
I looked at the crash in '29. That doesn't tell the story. On July 1st, 1929 the market hit a high 343. Then it fell. April 1st, 1932 it bottomed at 42.84.
Then it climbed back. It went back up and it took 22 years, July 1st 1954 to get over the 343.... closed 360. From there it has pretty much gone up... some valleys but never a true sustained fall.
I have also observed that throughout history, one thing becomes very strong, nationalism. Which in turn leads to wars. Which in turn leads to better economies. Now, if we can take out the wars and just get to the rebuilding part.... everyone will be okay.
Just hold onto your stocks. If you have a company you don't like but you do like one cheaper, sell the one you have that you think will not make it and buy the cheaper one, you think will make it, with that money.
The biggest thing is to be smart. In reality you lose NOTHING until and ONLY UNTIL you sell. Just like you have no profit until and only until you sell.
The 2 biggest problems on Wall Street and in the stock market are: the institutional computer programmed buys and sells.... because they see blips and react according to their program. So they will continue to sell as the market goes down, thus forcing the market to continue falling. The other is the nervous investor who put his future on the market and pulls out because he is scared. Thus, creating more of a selling atmosphere, thus pulling the market lower, setting off more institutional computers to sell, lowering the market getting people scared to sell and take a loss... and right now we could very well be in that form of a cycle.
But the smart money knows, you just wait it out. Buy as people panic. Hold onto what you have and use this market to your advantage.
Let's say I bought 10 shares of X 2 years ago at 10. 100 bucks I have in. It started to fall....
at 7 I buy 10 more shares now I have 20 shares with 170 invested.... my average is now 8.5 a share.
it falls again.... at 5 I buy 20 shares now I have 270 in with 40 shares, my average is ... 6.75
Today X is trading at 2..... I know X is a strong company and will eventually comeback.... if it doesn't well I am only out what I have in... so I'll buy 60 shares.
Now, I am sitting on 100 shares of X.... valued at 200, but I have 390 in. My average is now 39 a share. Now.... I wait.
As X goes up, I buy 100 at 3. 200 shares with 690 in, my average is now 3.45 a share.
So I sit and when X climbs back over 3.45 I have made profit. If I had been selling at each down tick tho... I would have kept losing.
That is how the market should be played. Buying as it is going down, accepting the loss but knowing when it goes back up your losses will be gains and in the very worst case if the stock totally never goes up or zeroes.... you only lose what you have in. And it's like Vegas, baby. You only go into the market with what you can afford to lose.
Bank stocks right now are plum for the picking. RBS maybe a good one to consider. Fifth Third is definitely one bank stock to grab a hold of. Bank of America will e going down more but should bottom out soon. National City and KeyCorp I would watch closely. Start buying small shares and wait. National City is probably going to sell out. Key may but they aren't in that bad of shape.
GM and Ford also.... buy as they go down, they are damn close to rock bottom and will go back up.
Look at companies that will thrive in a depression and buy into them. Campbell's soup is always a smart buy.
Point is if you don't like what you are holding sell and buy something that is losing stock value but will eventually go back up.
Think LONG TERM... if you panic easily, sell everything take your money out of the bank and put it in your mattress. Because in the end if the market truly bottoms out.... our money will probably be as worthless as the stocks you pulled out of but you have extra padding to sleep more comfortably on.
And if you have nerves of steel keep buying. Because if it does go back up, you will have a very very nice nest egg for yourself, and you didn't have to spend much.