Some of the stocks on my Buy List and the prices at which I’d likely start to step in and nibble: $FB below $70, $FSLR below $40, $SNDK below $90, $GOOG below $490, $AAPL below $100 and so on. Maybe even some Yandex call options if it drops below $15. If we get a sell-off in the broader markets of another 5-10%, which I think is looking likely (see analysis below) I’ll have my Trade Alerts for you so stay tuned.
The endless Greek economic/financial/political crisis continues and we must always remember that real individuals in Greece are being hurt by the choices and policies of their own and the rest of the world’s leaders. But what matters to traders and investors is the potential impact of all this on our our markets and economy.
In the near-term, the latest Greek crisis is largely based on Greek political parties and domestic pressure from an economy in depression battling larger EU and banking cartel desires. That many convoluted crosswinds and the markets focus on this make it a headline risk for the near-term for sure. Indeed, the path of least resistance in the markets might be lower for the next week or two as the EU worries feed on themselves. Here’s a good quote outlining why:
The exit would also spill into other countries as investors speculate about which might be next to leave the currency union, he said.
“In the short run, it would be Lehman Brothers squared,” Eichengreen warned.
To be clear — I don’t care about Greece’s economy or Greece’s debt when it comes to investing (I certainly care about the people of Greece as a human being though). Greece was a total distraction. And it probably will be again at some point. Let’s be ready for that and remember how profitable it has been to follow our playbook which said to buy and buy aggressive into the teeth of that recent “Greek crisis bear market”.
As for the longer-term impact of the final outcome of these Greek crises, let’s apply some numbers to keep it in perspective. When I’d pointed out back in 2010 that Apple’s market cap was bigger than the entire GDP of Greece, both were in the $300 billion range:
The market cap of just one little company in this country (Apple) is larger than the entire GDP of Greece. I’ve pointed out that for decades people have repeatedly sounded the alarm about various other countries’ collapse and how they are supposed to doom our own markets and economy but that they never actually do. And indeed, by far the number one response to such statements is:
“It’s not about Greece, it’s about the possibility of contagion and whether or not the Euro can survive at all.”
And my rebuttal to that is quite simple:
I don’t care one iota about the existence of the euro when it comes to my stock market analysis.
Apple is now worth more than twice the entire GDP of Greece and there are now dozens of US-companies that are worth more than the entire GDP of Greece of $240 billion. In that same article, I asked, “Will Apple sell fewer iPads in 2013 if Greece and Spain leave the Euro and go back to using their own currencies? No!”
As a long-term investor in stocks like Apple, Google, Facebook, Synaptics, and so on, I would probably look to start to scale into some of my favorite such Revolution Investing names on an opportunistic basis. I’ve also trimmed most of my personal positions so a major Greece/EU crisis-driven sell off would enable me to buy some of those shares back.
Finally, here’s the first article I ever mentioned Greece on Marketwatch from back in 2010 talking about why I wanted to buy the Greek/EU crisis-driven sell off. Check out the 9850 level of the DJIA I mention. You gotta wonder what it’ll be like in four years when we look back at this article that I’m typing as the DJIA is now more than double that level.
Then again, maybe the time to buy is when the headlines are full of nothing but reasons to sell. I’m thinking we might be seeing a blow-off top in the “fiscal crisis concerns” market, and I think the key to making money here is keeping your cool and to get longer into weakness below DJIA 9850. Cover some shorts (we’re covering one short that’s been a big winner for us already in the portfolio today) and start scaling into some longs and even some calls in the best names that you’ve got in your portfolio.