Lows of 2008 and 2009 are not Forgotten

Today, we are coming to you with an entry that focuses on the lows of 2008 and 2009. Those miserable days seem to be eerily familiar right now, but money was made by value orientated longs who looked at the value of the company and not the charts or current market conditions.

Now many of our PSE followers know that we try to provide color on technical analysis, but if the market capitulates, you have the throw technicals out the window. Lows of 2008 and 2009 still remain.

In a nutshell, capitulation basically happens when investors panic and sell equities and rotate to cash, CD’s or bonds. In other words, the retail investor has thrown in the towel, and institutions are liquidating to meet redemption’s. Smart money types like Warren Buffet often profit when this happens, not only because of his infinite wisdom, but Buffet has an extended time horizon on his long positions as well.

Some technicians are looking for a break of 1100 on the S&P 500 on heavy volume for the capitulation signal. It almost happened today, but the market seemed to stabilize. Don’t think for one minute that the talking heads won’t be throwing around the “Black Monday” term tomorrow if the market remains weak. While we are not in the business of picking bottoms in the broader indexes, we think it’s wise to build a list of quality names just in case a drop happens. It is wise to remember the lows of 2008 and 2009.

Lows of 2008 and 2009 Still Linger

All to often investors lose all rationale when the market is killed and don’t focus on taking advantage of somebody else’s weakness. There were several bargains back during the lows of 2008 and 2009 and a select few retail investors made massive percentage gains buying the dip. The only requirements then were knowledge, staying power, liquidity and patience.

Here are some names that are not only quality trading stocks, but solid companies as well. These stocks could potentially retest their lows of 2008 and 2009. Below are some names and their absolute lows during the 2008-2009 periods:

Ingersoll Rand (IR:NYSE) 11.46
Goldman Sachs (GS:NYSE) 47.41
Bank of America (BAC:NYSE) 2.83
Apple Computer (AAPL:NASDAQ) 78.19
JP Morgan (JPM:NYSE) 14.96
Exxon Mobil (XOM:NYSE) 56.51
Sprint Nextel (S:NYSE) 1.35
Microsoft (MSFT:NASDAQ) 14.87
Potash (POT:NYSE) 15.84
Newmont Mining (NEM:NYSE) 21.17

For now, keep these prices from the lows of 2008 and 2009 handy on a just in case basis.

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