On the Ascent
Unlike some, I welcome lower prices; they provide attractive entry points. Wearing my hat as an investor, I never quite understood the notion of selling because the market is breaking down, when share prices grow cheaper and when putting in buy tickets is the hardest trade. The Oracle of Omaha expressed the concept of buying low (and on weakness) more eloquently: "Price is what you pay; value is what you get." (Of course, one that wears the hat of a trader must be more responsive to the market's price action.)
Many subscribers justifiably have asked how I can become so much more constructive if the averages only fell to slightly lower levels than fair market value. Below are a few brief answers:
- As I have repeatedly written, in a fairly valued market, many individual stocks can thrive.
So, what has happened to stabilize the markets since Friday's close? Below are four impactful factors:
- Overall earnings and forward guidance were far better than many of the pessimists expected.
From my perch, the U.S. stock market might now be heading back to new highs.