To Buy or Not to Buy?
Since all the hubbub about the Fed chairman not being such a pushover and going to jack up rates another quarter in June, with no date for a pause in the tightening clearly indicated in coming months, the market has fallen a bit. Quite a few stocks, especially metals, oil, and foreign markets ETFs, have dropped 20 to 40 per cent from the highs established during the euphoria of the first week in May.
What do you guys think? Time to buy at a discount from recent highs. Or time to stand on the sideline and wait for a clear signal of what the future holds. Figuring DCF and PEG valuations for many stocks seems to indicate that there are a lot of good companies selling well below intrinsic value.
So, do you subscribe to the value theory, which would seem to indicate that this is a time to buy? Or do you go with a momentum/technical analysis approach which would seem to indicate waiting for a clear upward shift in the momentum indicators, i.e., a clear breakout?
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