We hope you are all making your lists and checking them twice. What company or companies are you going to buy when the time is “right?”
Are you in love with the CEO? Is the business unique and strong? Does it pay good and rising dividends? How old is the company?
If you want to get into the weeds, how much debt does it have? Is it doing stock buy backs?
Let’s address the last question first: stock buy backs. In spite of near-universal condemnation of the practice, company boards and some investors still act as if that is really a good practice.
Here’s a link devoted entirely to stock buybacks. Good information. Delves into the nuances. Be sure to Google the term “stock buybacks” for some insights.
On balance, IFO does not like this practice. Do your due diligence before you make up your mind. One red flag: buy backs purchased with borrowed money! Other names for borrowed money: debt, leverage.
While waiting (we haven’t traded any stock for weeks), check out some website we have listed in our Blog Roll. Here’s one discussion from Dividend.Com’s Feb. 15 note. Quick summary: it’s not time yet.
For background from one of the best: Donaldson Capital. He says the “correction” is just noise, and backs it up with good analysis. Note to Julie, “If you are reading this, this may be the best start for your son for learning about markets, etc.
Don’t be fooled by the “volatility” — in this case wild swings both up and down. That really IS noise. Also, if you start reading more and more analysts saying “this is a real correction, don’t buy now, more bad news is coming,” etc. that may be the time to consider buying.
Remember: buy low, sell high?