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BUY BUY BUY! Yes, this mantra rings 'true' through the ages! 'Times are bad, we're only going higher from here,it IS time to BUY!' Mortgage rates heading for 16% not too long ago 'GREAT TIME TO BUY' - Sellers MUST BE CRAZY! Builders OVER-built; it's a BUY-in opportunity; I'll flip two, three, four FL condos! OPEC floods the market; damn! another great time to BUY!!!! CDO's derivatives I'll buy into that! Market's EXTENDED, that IS the time to BUY!!!. With all this BUYING going on, it's no surprise the Market is IN a HISTORIC MESS.

On Aug. 29th, 2007 'Does Credit Crunch Signal Deep Woes in Economy?' ( YES! I SOLD ALL MY HOLDINGS in OCTOBER 2007) Mr. Stewart maintains 'I was very comfortable buying stocks recently, even if further declines are in store.' I now read your buying discipline is to BUY every 10% drop, sell every 20% gain. From date of previous article (+1 year) I do NOT see one +20% gain, just 4 x 10% drops (-40%); ALL great buying opportunities, for sure! Unfort...(Read more of this comment)unately, for this type of account a 'break-even' today we will need to see NASDAQ 3000, and to make your 25% SELL signal will be a NASDAQ 4000? WoW! Now THAT is the greatest buying opportunity I've ever heard of! Sounds like I better BUY some of that 'buying opportunity' TODAY!!!

NO, fortunately I learned years ago that 'things' are only worth what one is willing to PAY, and with many, many, many 'smartmoney' people NOT willing, let alone NOT able to pay for more of these 'cheap' things; I believe you will have many, many, many more -10%p BUYING opportunities in store.

So, BUY NOW! Sorry, I'm NOT buying IT!!

October of 2007 was the time to SELL!


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unfortunately, it is possible to take 50/70 years to reach a new high. Review the research of Zvi Bodie of Boston University. Mr. Stewart is not a student of finance. Markets tend to rise over long periods. If you invested $1.00 in Japan 19 years ago, you would now have $.25. James Stewart simply does not know stock market history.

wake me up when the dow is at 6500 and reeady to move up. 2012 or thereabout. Dont get me wrong, the dow would move sideways until 2012., thereafter the excess would finally be over!

The Dow is a worthless index because it's a price-weighted index, but your point about the market in general is unfortunately accurate.

What amazes me is commentators are talking as if the bailouts and the concomitant moral hazard created don't exist, or if they do exist, won't affect the ability to recover economically. This is truly delusional.

Great call, Mr. Stewart! Since you posted this article recommending 'Buy! Buy! Buy!', the DJIA has dropped another 1500 points.

Now is not the time to buy; the markets are still risky and my estimation is another 1000-1500 points downward before all is said and done. Some pundits are expecting 7000-7500 on the Dow.And still two more years of pain. Look at 2015 for the markets to really take off. What am I doing? Day trading 20% of portfolio and keeping 80% in cash. Its the only way to make a few bucks to keep up with inflation.

Here's a riddle: How is the economy going to recover when major financial institutions are broken? How can one trust financial institutions given the moral hazard created by the various (no pun intended) bailouts of private sector companies?

Markets like this do present good buying opportunities if you know where to look and spend some time looking at company fundamentals, which is a much better investment in time than listening to Cramer. If individual stocks look too scary and you don't have the time to conduct proper research, consider some indexed ETFs for which you can set limit orders. In this time of volatility, don't place market orders--decide in advance what you're willing to pay to own something and place a limit order. Have an opinion about how much percentage further the market will drop against your favorite index(es) and test a limit order at that level with a portion of your cash. If it proceeds to go even lower, set another limit order for another portion of your cash. It's a lot more fun to dollar-cost average going downward than doing it on the way up--gives you more of a sense of 'getting a bargain' each time! But you have to want to hold for the long term (3+ years). The indexes will come back in a rea...(Read more of this comment)sonable time to make the gain worth the wait if you have the cash now. With perhaps another 5% downside yet, we'll soon see the advisors to the large institutional and investment funds start putting their money back in. You want to be smart enough to have some skin in the game already in when that tsunami flow of cash hits the market.(Show less of this comment)

Long term buy & hold is where it is at...only way for a long term investor to profit...Jim Cramer..his advice is horrible...don't follow him or you will surely fail...he's all about the hype and doesn't focus on the tried and true--buying low cost, low turnover passive index funds and holding them long term with occasional balances...just check out the marketwatch article called the Lazy portfolios...if a 5th grader can beat all the pros that should tell you something...math doesn't lie unlike people who have an agenda...if you want a really good web site try www.ifa.com and download their very nice book or just read chapters online...very enlightening...

good luck..keep buying...when the market turns around you will already be ready for the upswing and won't be market timing.

Great idea that works - the same I've been using this strategy with success since 1983. It's not perfect, but it is sensible, simple, and profitable. When I started investing I learned 3 easy rules: diversify, be patient, and look to buy when others are screaming to get out. Cramer's recent doom and gloom advice, while it may all turn out to be true, was like a giant billboard exclaiming, 'Here there are bargains!'

Insure your portfolio.
Simple affordable steps can be done to secure your position. I have been bearish for more than a decade. I have averaged double digit returns and never had a losing year. Yes, that includes 2000-2002.

I use a Defined Risk Strategy from Swan Consulting. www.swanconsultinginc.com

Good Luck!

DKP50, I think your math is wrong.

'5. My other $2,100 is worth +20% ( went -30 to -10% ) = $2,500'

From $1000, $700 (-30%) to $900 (-10%) is a 28.6% gain. In your example, $2700. If it goes back to even, the gain is 42.9% or $3000.

The two times the market has repriced in a BIG psychological recession in our lifetimes: (S&P 500 index levels presented because they're a bit more conservative than NASDAQ) - Jan. '73 (132) to Sep. '74 (55) and Jan. 2000 (1498) to Sep. 2002 (996), amazingly, the market fell about 46% in each case. If you want to extrapolate that to today's events, the S&P 500 index topped at 1526 in Q3 2007. 46% lower from there puts the bottom at an index level of 702. Todays the S&P just broke 1000 and ended the day at 996. So if you believe that history repeats itself, then you've got another 29% drop from here to 702 and it's likely to occur over the next 15 months. Sorry to hit this gong twice, but I'm just trying to save some money for a few good people. Smart money will be mostly in cash and 30% short over the next 12 to 15 months as the negative earnings cycle plays out.

By the way, the WSJ has an interesting article talking about how global shipping rates from Asia to Europe have dropped from $2,800 to $700 indicating how much the global economy is slowing.

I agree the market is going significantly lower with the S&P 500 at least reaching its previous low of 800. It may even go below that. Scary.

I respect and usually agree with James Stewart, but the advice presented here is akin to financial malpractice. There's an industry of columnists and financial advice-givers in this country that often encourage people to buy prematurely in difficult times because it's long-term (10+ yr) sound advice that most people can't screw up. It's like the guy this morning on CNBC speculating that we might be approaching a near-term bottom. So what if people listening to this advice are somewhat stupid and jump into the market prematurely - at least they'll stop the bleeding for everyone else and commentators feel good that they're not fanning the flames of a burning house. Take it from a professional investor - if you buy today you will regret it. We're not even near a bottom - especially for the Nasdaq 100. Investors who want to be a bit more aggressive should have at least some healthy short positions on ETFs (so you at least profit from the coming recession that's being priced into this...(Read more of this comment) market DAILY). My recommendation is 70% cash and 30% broad-based ETF shorts (no leverage). That means buying ETFs like PSQ (100% inverse correelation to NASDAQ 100 - same as shorting QQQ).

I'm sure that Jim's system works well for the standard variety market correction, but these are extraordinary times and anyone dumb enough to follow Stewart's 'system' is going to get creamed. Jim should know better. (Show less of this comment)

He probably uses the NASDAQ because it's more volatile and thus he will hit his by and sell points more often.
Jim, I think your methods are good. I have not followed your method and am down 30% ytd. However, last year I had a 38% return by using my method when the indexes returned about 6%. But right now I am using a method similar to yours only I am using larger down points before buying since this market seems to want to stay in free fall.

Dear Mr. Stewart,

I can see why you are buying, but can you explain why you use the Nasdaq index? Wouldn't a more balanced, broader index such as the S&P 500 be better?

Best wishes.

You're still buying financials?! I can't believe it.

I have 2 ETFs to suggest that may be of interest:

1. PKW - this ETF holds companies that have been buying back their shares.

2. PIQ - an ETF that holds companies identified by a mathematical model run on a computer. This is an example of so-called 'Quant' investing.

Both of these have been back-tested 10 years versus the S&P 500 and have significantly outperformed the market.

Cramer and others keep trying to 'pick the bottom' Unfortunately, if you think it's a bottom, then it's not. Why? - if anyone thinks it's a bottom, they start buying, not selling. A bottom only occurs after everyone has sold and it is not recognized until it's too late to invest at the bottom.

For years I've heard don't sell when the market is down. Guess no one listens to good advice. My CD's are coming due at the right time.

Why Not just ;
a. If you feel a Bear market is comming? As we all did Last 4th qtr of 07' and surely the 1st qtr of 08'?

b. Just Short your stocks?

And For Mutual Funds? Short the ETF's in relation to what Sector of funds your in...
And Since International Sector did the worse in 2000-2002? Just short the Int'l ETF or Using Pro Funds Ultra short funds for Int'l?
That fund is +122% YTD!

that's what I did..I kept out 25% of my $ going into 08' and used it to buy that Short Fund..
1. $7,500 left in the Fund, is down -25% = $5,625 balance value
2. The Other $2,500 in the Short Fund = 122% = $5,550 value
3. Total Value = $11,175
4. Cost basis = $10,000
5. Profit = + $1,175


Short funds : UXPIX for Int'l and URPIx for L/S caps
or SDS for Large caps..

I'm confused.. The way I see it? I'd have to invest = to 30% of my Cost Basis already in a stock to make it worthwhile?
1. I have $7,000 in Stock and it's -30%
2. I buy another 30% = $2,100 at that -30% down price
3. The stock ends up at the end of the Yr still down say -10%
4. My First $7,000 - 10% = $6,300 bal value
5. My other $2,100 is worth + +20% ( went -30 to -10% ) = $2,500
6. Total value = $8,820
7. Cost basis = $9,100 = - $280 Loss
8. vs The Original 7,000 -10% = -$300 loss

so why bother?

What Am I missing?

Hey are'nt you the same guy who about 1-1/2 years ago was saying 'bologna' to Greenspans gloom predictions on the then coming sub-prime crisis??

I've always heard that it's best to buy when others are fearful and sell when others are greedy. I think it's good advice if you have a long term horizon. Some stocks will seem like bargains years from now. Patrick in Michigan