My wife is a coupon clipping queen – a clever bargain hunter of the highest order. With her fine tuned sense she can spot a deal from a mile away. Rather than pay top dollar for a product, she exercises judicious patience and waits until the price is right. In trader speak, she lets the price come to her. If she were to ever venture into this game of trading I can assure you she would be a value investor. Some shoppers cut coupons from a single newspaper each week. “Amateurs!” my wife would say. Why get one paper when you can get five? Five times the coupons, five times the savings. Traders can learn something from such a mentality. How about developing a shopping list of stocks that you desire to buy when a sale arises?
The list may consist of strong fundamental companies, high dividend paying stocks, or those in the midst of strong trends. Over the coming weeks as the market grapples with the Japanese disaster and potential nuclear fallout, the continued tensions in the Middle East, and a bevy of other market moving news you will likely see some of these stocks on sale. By compiling this list you’ll be ready to strike once the market finally does establish some type of bottom.
One of the darlings in the tech space which accounts for a large percentage of the Nasdaq 100 is Apple (AAPL). The selling pressure in the market finally came home to roost in this leader as it fell over 4% in Wednesday’s trading. Given the dominance of AAPL in the tech space, it deserves a top spot in your list. In its current position AAPL looks quite vulnerable and will likely experience more selling pressure over the coming days and weeks. However, since its bear market lows in early 2009 every correction eventually setup a stellar buying opportunity. Such may be the case yet again once the current bout of selling abates.
It is interesting that market corrections are hated so much by the masses when they are loved by professionals. The difference is due in part to the fact that experienced traders know how to spot opportunities amid the turmoil. The development of a shopping list can help you to spot such opportunities and take advantage of the sales which crop up every once in awhile on Wall Street.
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