You Heard It Here First

Circle this day in red, as I am now calling this as the right time to start buying some stocks.  Maybe not an absolute market bottom, but I figure we're certainly below prices that you can rationally explain.  Dow well below 9,000?  P/E ratio for a the top 1000 companies in America sitting at 12.75?  (That's a rough estimate based on the P/E ratio calculated for the exchange-traded fund PRF.)  Yeah, I'd say we're pretty much at the bottom.  Stocks haven't been this cheap since 2003!  If you're like me, young and throwing money in a 401(k), count your lucky stars.

We're beyond belief right now.  I bought $1,000 of GE stock the other day at $20.00 per share.  That's at a P/E of 9.4.  That's crazy, they're a profitable, dividend-paying company!  Today they dropped down to $19.01 per share.  Today GE is suddenly worth 5% less than yesterday?  Do you believe that?  It's madness, but if you've got some cash on the side it's awesome.

Paul Krugman put up an obvious blog post about today's sell-off:

"Seriously, I'm sure we'll be hearing all kinds of explanations of today's drop - it's Paulson saying that he'll inject equity, or Obama's rise in the polls (yes, seriously, that's the right-wing line), or some obscure ruling by some government agency.

But you want to remember Robert Shiller's classic real-time study of the 1987 crash.  Basically, the crash had nothing to do with any news item.  Investors sold because - drum roll! - prices were falling."

There's some seriously irrational shit going on out there.  I recommend you make like me and pick up some quality stocks at fire-sale prices!

(Disclaimer:  Don't bet the farm (haha! remember when people had equity in their property), invest savings that you don't need for at least a couple years just in case I'm wrong).