Don't Believe the Hype, But...

So after the market has increased in value now for roughly 6 days, a lot of naysayers are starting to come around and say that we "may have hit the bottom". People are looking for more signs than a group of fourteen year old girls in an Ouija board. I don't believe the hype, until my friends at the paint company tell me that production is up, I am going to have a hard time believing it. There is just too many people on unemployment, too many scared to purchase more than anything besides the necessities. I won't believe it until consumer spending is up for a couple of quarters.


The savvy investor, the contrarian, and myself know (I am the dumbest of the three) that if you wait too long you may miss the bounce. So I have begun the search for more good stocks. It is a gamble, no doubt. I have two ultimate criterion. 1] The potential company must be one that will exist when this economy has finally turned. 2] The potential company must be one that will be profitable when this economy has finally turned. Sorry GM doesn't qualify.

My favorite way to begin a stock search is through the magic formula screen. I have talked about it before, recommended buying the book, and believe in it's methodology. I won't go into full on stock research in this post, but will say that my findings turned up several good prospects including: CALM, MLHR, MSFT, PCU, PM, RIMM. Until I plow through their latest financials I won't recommend anything. Also there are a few perennial industrial powerhouse stocks that are 'relatively' cheap including LECO and EMR among others.

I will start doing the numbers because I am beginning to feel like it is a good time to start looking to buy. We will see how it goes.

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