This Works Much Better Than “Buy the Dip”

Tim MelvinTim Melvin

It never fails: When stocks take a dive – any dive, it doesn’t matter if it’s a 100-point dip or a 1,000-point plunge – all over, cable television pundits come out of the woodwork to talk about “buying opportunities” and “buying dips” on all kinds of stocks.

I admit, the prospect of getting a “deal” on a popular stock like, say, Facebook tickles the greed gland. I can see how some would find it irresistible.

But here’s the question you’ve got to ask yourself: Am I getting an unreasonably good deal?

In other words, are you getting the absolute best price possible?

In almost every case, the answer is… no.

And the truth is, you probably never will.

Because the kind of “dip” that brings Inc. down from a P/E of 234.06 to a truly attractive, “unreasonably good” P/E is likely to be one you’ll need bunkers full of bullets, fresh water, and gasoline just to survive.

Your portfolio just might be the least of your worries as we enter “Mad Max”-style, “super-unleaded gas and .45 cal. ammo are the new currency” territory.

So instead of waiting around for Armageddon to place your market order, I suggest taking the “rich guy’s” approach to buying when the markets get rough…

Join the conversation. Click here to jump to comments…

Tim MelvinTim Melvin

About the Author

Browse Tim’s articles | View Tim’s research services