I remember my speculative markets professor at Wharton used to say that you can't make money doing the same thing everyone else is doing. That made sense to me and I've had a contrarian bent ever since. My friend Howard (happy birthday Howard) likes to buy stocks making all-time highs. It's a tried and true methodology and it works well for him and that approach was the basis for Howard's Wallstrip show.
But I've never been able to get my head around doing the same thing everyone else does. You have to invest in a way that makes sense to you. One of the comments I got on my google post last week (i think it came via email because I can't find it and quote from it) suggested that you can't make money being long in this market, that this is a time to be making money on the short side. But I've never shorted stocks and I am not going to start now.
When I look at the carnage in the markets (the DOW is down 9% in the past 30 days), I think that I should buy something. And the thing I've got my eye on is google for all the reasons I outlined in that post. If it gets to $400, and it just might happen with another day like today, I will start buying.
The way I look at it, things are bad out there, particularly for financials and companies with bad balance sheets who are over-leveraged and have near term liquidity needs. You can't buy those stocks in this environment. But there are plenty of companies out there with stock prices 10-15% lower than they were a month ago where the fundamentals of the business haven't changed. And my gut says it's time to start nibbling at them.