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It never fails: When stocks take a dive – any dive, it doesn't matter if it's a 100-point dip or a 1,000-point plunge – all over, cable television pundits come out of the woodwork to talk about "buying opportunities" and "buying dips" on all kinds of stocks.
I admit, the prospect of getting a "deal" on a popular stock like, say, Facebook tickles the greed gland. I can see how some would find it irresistible.
But here's the question you've got to ask yourself: Am I getting an unreasonably good deal?
In other words, are you getting the absolute best price possible?
In almost every case, the answer is… no.
And the truth is, you probably never will.
Because the kind of "dip" that brings Amazon.com Inc. down from a P/E of 234.06 to a truly attractive, "unreasonably good" P/E is likely to be one you'll need bunkers full of bullets, fresh water, and gasoline just to survive.
Your portfolio just might be the least of your worries as we enter "Mad Max"-style, "super-unleaded gas and .45 cal. ammo are the new currency" territory.
So instead of waiting around for Armageddon to place your market order, I suggest taking the "rich guy's" approach to buying when the markets get rough…
About the Author
Tim Melvin is an unlikely investment expert by any measure. Raised in the "projects" of Baltimore by a single mother, he never attended college and started out as a door-to-door vacuum salesman. But he knew the real money was in the stock market, so he set sights on investing - and by sheer force of determination, he eventually became a financial advisor to millionaires. Today, after 30 years of managing money for some of the wealthiest people in the world, he draws on his experience to help investors find "unreasonably good" bargain stocks, multiply profits, and build their nest eggs. Tim tirelessly works to find overlooked "hidden gems" in the stock market, drawing on the research of legendary investors like Benjamin Graham, Walter Schloss, and Marty Whitman. He has written and lectured extensively on the markets, with work appearing on Benzinga, Real Money, Daily Speculations, and more. He has published several books in the "Little Book of" Investment Series and a "Junior Chamber Course" geared towards young adults that teaches Graham's principles and techniques to a new generation of investors. Today, he serves as the Special Situations Strategist at Money Morning and the editor of "Max Wealth" and Heatseekers.