tread carefully

Not meaning to be boring or state the obvious but for new investors please be careful in this new bear market. It will be over one day but you must forget about the prices of stocks before the fall. Both the E in PE and the P are now both being decreased by analysts as they all run like sheep to justify the new price. The E will come down as companies earnings are likely to decrease if the the slow down that the market is predicting is correct. A slow down caused by US recession and also a general wariness of consumers and businesses which will make the perceived slowdown a reality.

Also in a bear market the multiple that is the P will retract. Just as in a bull market there is talk about multiple expansion there is now multiple contraction as sentiment has changed. Sure there are bargains appearing now but go in slowly as there is likely to be more fallout.

Avoiding the market altogether and being all in cash is also wrong as when it recovers it will be much more expensive to get back in. DOnt listen to doomsayers on here most of these people are not even real, just lonely.

Be extremely wary of spec and story stocks as the promoters will find it hard to ramp in this environment. The crazy prices you saw for pure exploration or unproved technology stocks are gone for good. Of course some of them will come true but it will be a very small precentage that ever make it.

The last resources crash post Bre Ex wiped out the entire junior mining sector which is why there has been so little exploration for so long until this recent commodities boom.

The thousand of little junior explorers cannot possibly survive this downturn and will have to merge , sell or JV projects or just run out of cash and collapse. The spin merchants and spivs will keep trying but their bubble has burst for now.

Cash flow and solid businesses with low debt are now being sought after by investors and the super fund money. This is the new environment. By all means chase the next new thing and the specs but please dont borrow to do it and make it a small part of your portfolio. The odds are against you now

There are some stocks on here which keep appearing in the most popular post list and they really smell. Please be wary as most of the posters are blatant rampers and the rest are loyal sheep who have become addicted and possibly levered into the stock and have everything riding on it. It is very unlikely that any really popular spec on here is real. It is possible but unlikely.

Good luck to all and take care out there


Take care.