Well folks, the Stock Market is following in Classic Form… Last week we had an enormous Panic Sell Off dropping the DOW by almost 7.5% in one day and the total losses so far are just over 40%.
Still not as bad as the early 70′s and the dot com crash of 2000 but its being made to look that way.
And yesterday… Monday… it’s rallied back by almost 1000 points… over 11%… and possibly hit the bottom though the bottom historically hasn’t been reached until the One Day drop exceeds 10%… though 7.5% is pretty good… so it just might lose that 11% and fall a little further.
Now… Who are the Winners and Losers?
In the game of “Some Days You’re The Windshield… Some Days You’re The Bug,” I much prefer being the Windshield.
There are going to be Two Winners here… First those who sat back and didn’t rush to sell… and Second those who Bought from the Bugs at VERY depressed prices.
Berkshire Hathaway… Warren Buffet’s wonder stood pat… and I would bet in the next couple of weeks will be in a buying mood.
As for me…. Accelerated the remaining allowed contributions to my Roth IRA (Dollar Cost Averaging has to take a Back Seat to this Chance) so I could get as many shares as possible before the bounce back up and dumped some extra money into the Mutual Funds.
The Bugs…who have followed the time honored saying of those with a nervouse stomach and don’t believe that History Repeats Itself… repeat “The Bug Mantra” after me… “Sell Low, Buy High”.
A lot of them sold last week and will buy on Tuesday (after Monday’s rally) and all they’ve done is give a part of their hard earned money away.
But you know… This sort of behavior on the bug’s part allows a lot of us with more common sense to make a good bit of money.
Even though we’ve had a rally, the market is still down far enough that everyone should be scraping up every penny they can get and putting it into their IRA’s and Mutual Funds.
Photo credit: stock.xchng.