Saturday, 23 June 2012
How rock-bottom airline shares made bold investors 400% gains
How rock-bottom airline shares
After the September 11 terrorist attacks, shares in airlines were understandably out of favour.Boeing's shares hit rock bottom about a year after 9/11. But it was sentiment and fear driving the share price so low, not the fundamentals of the company. A bit of clear analysis would have told you that was a buy opportunity.
If you'd bought Boeing shares in 2002, you would have watched them soar to FOUR TIMES their value within 5 years.
The rule is, buy when share prices are depressed. Warren Buffett puts it this way...
"When hamburgers go down in price, we sing the Hallelujah Chorus in the Buffett household. When hamburgers go up, we weep. For most people, it's the same way with everything in life they will be buying except stocks. When stocks go down and you can get more for your money, people don't like them."
When the mood is pessimistic, and sentiment – not facts – drives prices down, then that's the time to buy.