Blood In The Streets

Today marked one of the worst collapses in financial history as the Dow lost 778 points or almost 7% as the House failed to pass a bill for 750 billion dollars to help the credit markets. The Nasdaq had it even worse losing over 9% or 199 points! Brutal, absolutely brutal!

Now I hate to beat a dead horse, but if you are a long term investor this is not the end of the world. In fact, because in most cases the baby is getting thrown out with the bathwater there might even be some stocks worth owning that are looking very cheap. Unfortunately, this credit crisis has spread into mainstream and there is really no way to tell how long this will last. That is why it was so crucial to pass the bill that failed today. Every day that passes without a resolution will be a blood bath... sure not as bad as today hopefully, but who knows, there isn't any certainty what so ever which is very bad for stocks in general.

Now there are companies that I would still be picking up at this point. Let's all remember that there will be a tomorrow and a next week, next month and next year. The election is quickly approaching and both candidates are preaching investing in solar and wind power. So with that in mind I still like ESLR which was beaten up very badly by the fallout with Lehman Brothers and now stands at just over $6! I really can't believe it got that cheap, but the whole thing with Lehman Brothers caused a panic and the stock sold off. Another one I like at these levels is ORA Ormat technologies which today hit a fresh 52 week low at 36.39. These two companies are going to benefit from the next president, especially if it is Barrack Obama who has a real plan to change or energy structure.

I have said it before and I will say it again, Google GOOG is just an unbelievable buy at these levels. Today it fell $46 to $385, that's right $385! This gives it just a 25 P/E ratio! For a company that grows like Google this is very reasonable.

Now could everything crash again tomorrow and the next day? Sure, but how about 2-4 years down the line? The market will correct itself from time to time, this all be it is a real problem and we need congress to pass something ASAP, until then we will most likely drift lower.

As always, buy in increments and over time your investments will do fine. Good luck to all and most importantly don't panic...

Picking Up The Pieces

Tomorrow looks like it is going to be a blood bath for the bulls... The Dow futures are down as much as 520 points as global markets around the world are being hammered. If you are a long-term investors these are the hardest times to take. It is tough to see your hard fought gains go down the drain as the bears take over and short everything in site.

The fact of the matter though, is that stocks have outperformed every asset class over a 20-year period. If you are in it for a the long haul you will be alright, in fact you should be doing some buying of quality companies on sale as the dust settles and people realize that the global economies aren't just going to collapse.

Technology companies will continue to make money, alternative energy will still be a huge growth area, whether or not a bank or insurance company goes under. People will still consume, and companies will still make money...

Most of this decline is simply due to the fact that the banks lent out money to people who couldn't afford to pay after they jacked up rates. I mean isn't it the banks job to make sure it's clients can payback loans even if interest rates jumped? Either way, there is one simple solution and that is an emergency fed meeting, and a large rate cut. The bulls have been on the sidelines simply waiting for the next fed meeting. If this doesn't happen tomorrow it will get ugly... very ugly.

Well, Mr. Ben Bernanke, now is your time to shine...