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0 pointsmaest6y ago0 comments

> $XLE for those that want to pick up cheap stocks.

A nuance is that you don't want to buy into these stocks while people are moving away from vice stocks.

However, once the trend is stabilised and there are no more marginal investors to adopt a vice-free portfolio, then you should buy all the vice stocks as they will have a more favourable discount rate.

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4 comments · 3 top-level

scarmig6y ago· 1 in thread

I remember immediately after Deepwater Horizon, RIG dropped something like 50% to $40 a share or so. I invested heavily in it, proud of my own savviness and cynicism.

That worked out well.

perl4ever6y ago

I found that investing in BP when people were at their most pessimistic about the well being capped did work well.

Unfortunately, following up that success by buying into TEPCO once it had dropped by half after their accident turned out not to be a good move.

However, one may console oneself that it was a public service in providing some cash to the Japanese pension funds, proverbial widows and orphans and whatnot that were selling at that time.

H8crilA6y ago

It's already the cheapest segment of the S&P 500: https://www.gurufocus.com/sector_shiller_pe.php

Timing the exact bottom is hard.

phkahler6y ago

IMHO the price will only be low while people are selling. You dont want to wait for that downward pressure to stop. You never know how fast it will bounce back.

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