As of 2:30, the markets are down by about 1.5%, and it's all because of our friends across the pond. As frustrating as it is, get used to it, because until Europe (collectively) can get their fiscal houses in order, we will continue to see these triple digit losses. This is why I continue to harp on the strategy of being conservative and investing with short time frames.
That being said, there are certainly a lot of attractive stocks out there that are severely oversold and represent very attractive investments for those individuals who don't mind the volatility. I continue to believe that this is not a time for market participants to merely "buy and hold", but be opportunistic and "trade". Now I am in no way talking about day trading, which I find to be extremely dangerous and tough to do, but I do believe a person can buy stocks when the market sells off and hold them for a short period of time and then sell them for small profits. For example, in looking at my stock screen, I think you could buy KKR Financial Corporation (KFN) at $7.90/share, and hold it for a couple of days and be able to sell it for around $8.30-$8.50...now you're not talking about making a lot of money, but if you bought a 1000 shares at $7.90, and sold those shares at $8.30, you just made $400.
In looking at another specific stock, I've noticed that the company Sallie Mae (SLM), which is the largest student loan lender in the country, is trading at $12.92. Not even taking into account the company's ongoing business and franchise, the value of their existing loan portfolio is $20/share...now THAT is an attractive stock to own. I believe that the share price of Sallie Mae will trade back up towards the $20 area over the next 3 months; and because the stock price is trading at such a deep discount to what the company is actually worth (based on their loan portfolio), the company could possibly be bought. Oh, and on top of that, the stock pays a decent 3.2% dividend.
Like I've been saying over the past couple of months, if someone is willing to be patient, there is a lot of money to be made in the stock market over the coming months...but again owning stocks right now is not for the faint of heart.
