The year 2008’s very own version of Black Monday where the Dow Jones average made a drop larger than it has ever seen, actually gave us a Black Tuesday of a sense. I’m not talking about “black” in the sense that things are bad, nor am I talking about black to relate to crash of stock values. I used Black Tuesday as a term that’s similar to what we all know as Black Friday, where millions go out to find deals and bargains for goods the day after Thanksgiving.
Wall Street came back Tuesday nearly 500 points, a day after its biggest sell-off in years, with investors believing that congress would pass the $700 billion bailout plan. But to many people thinking in a glass half full mindset, bargain hunting could be on the brain and they could see this as a very lucrative blowout sale on Wall Street.
Traditional stocks that normally would cost hundreds of dollars aren’t what they used to be. Amid all the bank collapses, mergers, and investors feeling insecure, prices of stocks are falling fast to just a few dollars per share. Currently, you can find Freddie Mac or Fannie May somewhere in the range of just over $1 per share. And if you believe what goes up, must come down, then it may be good to also believe what goes down, must go back up. And with many of these stocks that isn’t hard to believe.
Wachovia’s stock has been falling on hard times lately. You may have seen recent reports that they’ve been bought out by Citigroup; well that helped them. In just one day after the merger holders are already seeing profit after days of significant drops. It’s new partner Citigroup gained 14 percent, J.P. Morgan gained 12 percent, and Bank of America gained 10 percent. All have seen previous significant drops due to financial crisis and turmoil, but are apparently coming back.
Not for nothin’, but at this time when many investors are taking calls of sell, sell, sell, other people should be thinking buy, buy, buy. We’ll likely never see many of the for sure bankable stocks that always make profit at this price again. I have friends who brought Freddie/Fannie when they dropped to well below $1 and they have already seen a good profit, even if it’s only at $1.50. That stock could reach $20 in the next 6-8 months.
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