Public Opinion and Market Bottoms

The stock market plays a huge role in my personal happiness, so it has been very confusing to friends and family when my toes are tapping when the Dow Industrials has toppled 6,7, 800 points in a day on horrible volume.

How can I be so happy when EVERYBODY else is so glum? How can I smile when I watch CNBC and see the cleanup from the bloodbath that day?

Simple. the market is throwing out some incredible buying opportunities. When companies like JP Morgan are at $26 per share, paying a 6% dividend - how can I not be happy? Bank of America BAC is another one. Paying a 8% yield at $14/share, this is the stuff that investment dreams are made of.

Everybody talks about buy low - sell high as a strategy. Seems simple enough, right? The problem is emotion. It is this emotion that causes people to buy Google AFTER it went from $200 to $700 in a couple of years, and keeps those same people away  when that same issue drops to $300. Google at $300 is a steal compared to the same stock at $700. The problem though is group think. People feel good about "investing" when everybody else confirms their decision. They DON'T feel so great to be buying when everybody else is selling.

I don't want to try to catch a falling knife, I will get cut 10 times out of 11. But, I do want to establish a position over time as these great stocks find bottoms.

Need to run for now, but much more to follow on this subject.

Always do your diligence! Don't follow my ramblings! I am not a professional and do not want to be responsible if you lose your money!

Good luck!

Mr. Boo 1031