Wednesday, February 6, 2008
How low will the markets go? Super Tuesday was not so super if you were long the market. The Fed suggested that they may be done lowering interest rates for a while due to inflation concerns. The Fed should have spread out the interest rate cuts over a period of time. Why drop the rate 125 points within eight days? I bet they would have achieved the same results by cutting the interest rate by 50 points on the scheduled meeting date. When the Fed shows its hand they better be prepared for the chaos to follow. The Fed should calm the markets while keeping inflation under control. We may be entering a period of stagflation which would include slow economic growth with rising unemployment. Stagflation coupled with a recession could lead to more crummy market days like we have had this week.
So, where am I going to put my money? I have been advised to stick any remaining funds under my mattress by a trusted source, but where is the upside to that? There are some bargains out there if you are willing to ride out the waves. I have made money in the past with these companies and still like them all.
1. Adobe (ADBE) - Tech has been taking a hit recently but adobe has some great products and should come back strong whenever this market turns.
2. Texas Instruments (TXN) - whenever you can get this stock under $30 buy it and hold it. Easy 15%.
3. Southwest Airlines (LUV) - this stock has a lot of buzz around the office and it has historically been a good earner
4. Garmin (GRMN) - approaching its 52 week low, this may be a great entry point on a strong growth stock
And a couple to gamble on:
5. Baidu (BIDU) - taking a dive now, but if you can find the bottom you may be in luck
6. Dicks Sporting Goods (DKS) - Trending upward, should go higher