I’ll preface this piece by first declaring I am not an investment expert by any means. I have made some wise choices and some foolish ones over the years, same as most people I’m guessing, and the fact that I have any money in accounts at this point is more of a miracle than anything planned.
But I would like to share some observations in case they help anyone.
In 2002 the job I had was eliminated and I had to transfer my little corporate 401K to a private account. I held off putting the money into anything until the declining DOW took a big hit in the Fall of that year. I had been doing some research into what looked good and came up with some likely candidates. The best was Corning (GLW), generally due to the company’s patent portfolio and particularly its investment in fiber optics and LCD screens. Conventional wisdom at the time was that fiber was overproduced and so as the market fell across the board Corning was beaten up disproportionately until its stock was below $2 per share. Instinct told me to load up but common sense dictated that I spread the money across numerous investments.
Two years later my portfolio had doubled in value. I sold most of my Corning stock for around $24 per share.
The point is not to boast but to demonstrate that a downturn can be an opportunity. I have once again lost my job due to economic reasons and will have another chunk of 401K change to roll into my IRA. The DOW has repeated its significant loss of value (and may continue to do so). So the question now is, what is the next “Corning” for me? And when do I buy?
I can’t answer either question for anyone else, but I have kept my eye on some stocks and believe I can be confident that a few will recover their value along with the economy in general eventually. My new list looks like this (in alphabetical order by stock symbol):
- AK Steel Holding Corp. (AKS)
- Chesapeake Energy Corporation (CHK)
- 3Com Corporation (COMS)
- Costco Wholesale Corp. (COST)
- Dynavax Technologies Corp. (DVAX)
- Hewlett-Packard Company (HPQ)
- IAMGOLD Corp. (IAG)
Ivanhoe Energy, Inc. (IVAN)
Nokia Corp. (NOK)
Templeton Emerging Markets Income Fund (TEI)
Wells Fargo & Company (WFC)
There are others in my current portfolio that I hope recover but those are the ones I feel best about, especially those in bold.
There’s plenty of uncertainty now but consider this: industrial investors won’t let their money idle for long. There’s a lot of pent-up pressure to find somewhere to invest. That pressure will continue to build as long as the global economy declines or dithers, but sooner or later Big Money is going to find a place to go. I’m of course hoping I’ve identified at least a few of the channels. Some are supposed no-brainers, such as alternative energy and medical developments. I suspect others will be in critical resources (including metals and even, ultimately, fresh water).
I’m not advising anyone on what to do investment-wise. I recommend anyone looking for someplace to stick their money to research deep and wide before settling on anything. I am making small, incremental acquisitions now and will likely make a large purchase with those 401K monies by this summer. And if any readers have similar stories to share, by all means post them in the comments here. I’d be interested in all viewpoints and experiences.
Disclaimer: author is a former Nokia employee and has directly benefitted from Chesapeake’s natural gas drilling