"I think my main problem is looking at what the shares 'were' worth and thinking im getting a bargain.. im slowly coming around. but wow theres some bargains out there! I think."
Cent stocks aren't that low if there isn't a reason. Risks are significant. My bias is naturally bullish on this one and I have never hidden that, however I have a limit. Even $100 dollar stocks that have fallen to $20 doesn't mean it has bottomed. 1987 Stcokmarket crash, bounced straight into the recession we had to have.
In times like these (I am not that old but was working in the last recession luckily) profitable companies will go out the back door, simply because they cannot get finance (different last time around, interest rates were high).
However, a protracted downturn and things will get worse (no a doomsayer just practical). Keep an eye on the unemployment figure this is usually a good indicator. Once people lose jobs, production in the economy slows, deficits blow out, interest rates go up to attract overseas capital to fund our spending habits and support the dollar to minimise inflation. Housing prices drop but most people cannot afford to buy anyway, but you still have to pay the mortgage with no job. Not sub prime but prime loans crash.
Hope it doesn't get this far (don't think it will, but who really knows). This bear is a credit crisis, if followed by an affordability crisis God help us all. So to say things are cheap and worth a bet is okay, but my opinnion is to limit yourself as cheap is only relative to what its worth at the end of the day, which could be zero.
Good-Luck
BBI Price at posting:
5.3¢ Sentiment: LT Buy Disclosure: Held
