Worth the Wait

 | Aug 27, 2013 | 3:01 PM EDT  | Comments
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Stock quotes in this article:

ko

,

bmy

You know I like to nibble. It's almost always paid off. But I cannot think of a time before an event that we know will be difficult where it paid to buy the first day of the selloff. The second day, yes, but the first day really doesn't make a lot of sense even with the bonds doing the right thing.

This market feels like a falling knife. Given that the bonds are rallying, I am sure there are plenty of stocks that could soon get yield protection. But I think you have to wait for your price as there's nothing that's going to turn this market around that will happen tonight. Assad isn't going to step down or commit suicide. The Russians and the Chinese aren't going to pressure him to step down and, if anything, you have to expect that something will go awry, not improve, between now and launch day.

Now, I know that we could be overdone on the downside today. But tomorrow people who didn't sell today or didn't know the extent of the damage will come in and sell, knowing that we are just 24 hours before a big unknown. Remember, this administration does not think about what impact, if anything, its actions could have on the stock market, so you know that you do not have a Washington safety net underneath you.

In fact, you have worse than that. I think the market might have been down badly simply on the understanding that in a week's time we are going to be hearing about government shutdowns and higher taxes for the rich. That's what you get with this intransigence.

My old formula of buying stocks like Coca-Cola (KO) and Bristol-Myers (BMY) will probably work, and if you feel you simply have to do something then I would go for those.

Otherwise, just watch. I think this government will give you a chance to buy lower. It's always been good for that and I don't think this will be any different this time.

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