Start Showing Love to Some Stocks

The market has been making a bottom of sorts. It's too soon to say whether it's the final low before a massive recovery, or an intermediate-term low that'll hold for a few months. Either way, this is a time for building positions, adding money to the market, setting yourself up to benefit from higher prices to come.

The Kelly Letter made seven stock purchases and added money to its permanent portfolios in the first quarter. It did so at the low in January and the test of that low in March, both times to howling ridicule from commentators. We sport a thick skin for such criticism and, in fact, see it as confirmation that we're doing the right thing. It looks to be the case this time, too, though it's a little early to say.

Keep this in mind: you should get more aggressive with your buying as the market moves lower, not more aggressive with your selling. Makes sense, right? Yet, most people reverse the order and sell as the market moves lower and buy as it nears its apex.

Cases in point:

• Everybody loved Advanced Micro Devices (AMD) at $40 two years ago, and hates it today at $6.
• Everybody loved Dell (DELL) at $40 three years ago, and hates it today at $20.
• Everybody loved Starbucks (SBUX) at $40 two years ago, and hates it today at $18.

To paraphrase Warren Buffett, hate when others love and love when others hate. It's a hateful crowd these days, so start loving some stocks.

Comments

[dectra]

So you're trying to say we MAY have hit bottom, so buy up? No thanks, I'll wait until next quarter to see what's going on with the other big banks and their less than transparent info on what other sub prime writedowns are in the bag.

[mythoughts]

Jason, You never have anything worth saying, so I'm wondering why you are getting paid for saying nothing.

[galewhitaker]

I agree with User 85824 Jason. You are a menace. I think the bottom line is you are long this market and you are scared to death its never going to recover. I think there is a good chance it won't recover until you are old and grey.

[gezulu]

Perhaps you could state some reasons why these stocks should be loved.