The Sandy Bottom: Time To Buy Apple, Amazon And Facebook?

Includes: AAPL, AMZN, FB
by: Rick Whittlesey

In the stock market, fear trumps faith. But fear also clouds our vision and leads us to miss opportunities. Most market bottoms are simply overlooked as they occur, because most investors are simply too traumatized to invest amidst the fear and uncertainties brought on by portfolio declines and the blitz of bad news.

While the loss of life and property from Hurricane Sandy is nothing short of tragic, this point in time represents an opportunity for those who are able to look beyond the purported doom and gloom and fiscal uncertainties our nation faces, right before our presidential election.

The market hates unknowns--and we no doubt face lots of them right now. But there are always silver linings. So it's important to step back and simply remember what we actually know, and hopefully gain some perspective regarding what should make the market surge during the first half of 2013.

Soon, the market will know if we are being led by either Obama or Romney. Obama means status quo with the Fed and no likely replacement of Bernanke. A Romney win, while more pro-business, will likely see the market pull back slightly as Wall Street ponders potential changes to QE3 stimulus.

The single biggest thing looming is obviously the fiscal cliff, but we know (don't we?) that whomever is elected will resolve it, rather than allow us all to fall off that cliff and thus greatly damage the market and the still-sluggish economy. It will all be worked out over the next few months, and when it is, the market will surge 3-6% over the short term.

We also know that we will recover from Sandy. The devastation from Sandy will no doubt spur job growth and spending as people and communities rebuild their fractured lives and towns. But as we witness long gas lines (reminiscent of The Watergate Bottom), incredible devastation from flooding and fire, lack of electricity and crippled infrastructure--fear, hunger, thirst and raw emotions play out before our very eyes on the web, Twitter, Facebook and television.

So it is difficult to simply remember that our dear Yankee brothers and sisters will of course re-build yet again. But they will. The indomitable human spirit will prove itself once again. (Does anyone seriously doubt the toughness, resolve and resilience of New Yorkers and the people of New Jersey?)

What else do we know? We know American corporations are working harder and smarter. CEOs and their management teams aren't sitting around saying "Woe is us. Whatever shall we do? This isn't fair." They are re-tooling, becoming more creative and more strategic and already managing to often squeeze out surprisingly good revenues and earnings. Let's step back and take a quick glance at a few widely-held equities:

As we see Apple (NASDAQ:AAPL) down over $125 per share from its $704 high, are we supposed to suddenly think Apple has run its course, simply because of a fixable map problem with the iPhone5 and the fact that they can't keep up with demand? Should we forget about their massive balance sheet and cult-like following and even Apple TV? Are all future products and sales suddenly toast because Steve Jobs died? Do you really want to bet against Apple?

How about Amazon (NASDAQ:AMZN)? Is Amazon going out of business now that the stock has pulled back from $264 a share to the low $230s? Everybody hates their dismal margins, capital expenditures, astronomical P/E and relentless focus on the long term, but almost everyone uses Amazon to buy stuff on the web. And they remain the benchmark most analysts and money managers use when talking about retailers, both online and brick and mortar. Amazon is even becoming a verb. Do you really want to bet against Amazon over the long term?

Facebook (NASDAQ:FB) as well has pulled back from $23 recently to under $21 days ago. (And will likely pull back even more as 777 million locked-shares expire on November 14.) But the user base just keep growing and mobile revenues and strategies increase beyond expectations. Yet Facebook's critics use Facebook itself to write about how much they hate Facebook. Ah, the irony.... So do you really want to bet against a company with 1 billion users led by Mark Zuckerberg?

It is a mistake to let the tragedy of Sandy and the fear of the unknown paralyze us (the election, the fiscal cliff, QE3's lifespan, Europe's mess, Iran's threat to Israel, China's growth rate, etc.).

Only time will tell if this current period becomes known as The Sandy Bottom of 2012, but don't miss the opportunities that exist in the midst of all the fear and uncertainties. And if prices go lower still--then lower your cost basis by buying even more. Don't get caught following the masses who are selling when they should be buying.

If you expect to catch the major market moves upward, you can't wait until all the planets align and the news turns decidedly positive. Bargains are out there right now--so do your research. Step back and seek some perspective. Let faith trump fear. Think about all the things the market will know a few months from today that will diminish the excessive wall of worry it currently climbs.

Unless you believe we are truly doomed by which candidate gets elected, the fiscal cliff, Hurricane Sandy, U.S. corporate management, Fed policy, China's GDP, and what Greece decides to do, don't get caught sitting on the investment sidelines waiting for the world to end.

Disclosure: I am long AAPL, AMZN, FB. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.