Thursday, September 17, 2009
The recession has presented a golden opportunity to buy stocks. I said months ago that stocks were really cheap, and even now, though some of them have a high price tag, they are still cheap. Those who wanted to complain about the market and the economy, and those who did nothing with their money have really lost out on one of the best growth times in the last 20 years.
Heavy weight stocks that are still cheap includes Goldman Sachs and Apple. While other banks were losing money, Goldman (GS) was gaining. The price of GS stock has gone from $60.00 in March to $180.00 today. That is a 200% gain in 6 months time. That beats your measly 1.25% CD. Apple (AAPL) has gone from a low of $39 in March to $175 today. That is a 348% increase in 6 months. These two stocks were greatly oversold due to March panic, but they are far from being over bought. GS has a price target of $240 per share.
Our best performing stock that we bought in the March panic period is Mc Dermott International (MDR) This stock has gained 150% since March. It's a moments like this that I wish we had bought a thousand shares instead of 200. Yet, 300% growth per year on even 200 shares is pretty good.
Other winners are AK Steel (AKS) 70 %, Gerdau American Steel (GNA) 71%, Noble Corporation (NE) 80%, Haliburton (HAL) 50%, All of these increases in the past 60 months. With the economy on an upturn and traders getting back into the market, who knows where these will go?
One to watch, Starbucks Coffee. Starbucks has a loyal patronage and will emerge much stronger than many would think. Believe me, I know from experience that the morning lines at Starbucks are long. That is because their coffee is good.