Be Careful How You Buy This Drop

 | Jun 20, 2013 | 3:25 PM EDT  | Comments
  • Comment
  • Print Print
  • Print
Stock quotes in this article:

jnj

,

pvh

Huge seller in the marketplace blasting out futures. That's how you get that sudden drop.

Do you buy it?

Remember, at this juncture, there is no "it." You have to buy beaten-down industrials that just reported good numbers, or tech companies that have told you all is a OK, or, best of all, regional banks that will be re-pricing depositors' CDs.

The issue, of course, is we are all used to buying the foods and drugs and utilities on weakness, and they aren't working.

Let me give you an example. I want to own Johnson & Johnson (JNJ) right here. But there's nothing new at JNJ. The yield is not superb compared with the "new" bond yields. The earnings don't have a lot of momentum, but at the same time the company isn't going to break itself up, given how well it is doing. So you have to pass.

Or take PVH (PVH). Literally a week ago, they told you that things are much better than expected. But the stock was at $111 when we got the good news, and it is still 10 points above that. Do you want to come in up 10? I don't, not with a consumer products story.

It's a nasty day. It might be nasty tomorrow for many stocks. But we know that the texts say you have to do some buying of some stocks that are down after a big second down day, because a third of this market is trying to bottom. To me, it is the industrial/tech/bank portion.

And the time to put some money to work if you have waited, I think, is right into the close. 

Columnist Conversations

DHI is the biggest loser in the S&P 500 today. The homebuilder is off over 10% on its heaviest downsi...
AMZN is trading $360.49, up 0.7% with IV30™ up 3.3%. This is a pre-earnings note focusing on the stock...
EBAY's rally off the June lows has now lifted the stock over 11%. Early last month the stock successfull...
Lang:
Been busy moving names in/out today after results last evening. We rolled our FB calls up to Sept and booked ...

BEST IDEAS

REAL MONEY'S BEST IDEAS

Columnist Tweets

BROKERAGE PARTNERS

Except as otherwise indicated, quotes are delayed. Quotes delayed at least 20 minutes for all exchanges. Market Data provided by Interactive Data. Company fundamental data provided by Morningstar. Earnings and ratings provided by Zacks. Mutual fund data provided by Valueline. ETF data provided by Lipper. Powered and implemented by Interactive Data Managed Solutions.


TheStreet Ratings updates stock ratings daily. However, if no rating change occurs, the data on this page does not update. The data does update after 90 days if no rating change occurs within that time period.

IDC calculates the Market Cap for the basic symbol to include common shares only. Year-to-date mutual fund returns are calculated on a monthly basis by Value Line and posted mid-month.