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When the market is down (referring to indexes like Dow or S&P), there are stocks that compose those indexes that are down as well (cheaper). I want to find a place (website, forum, etc) that will help me filter the noise from the news. That brings the best cheap stocks.

I will give an example:

During the BP oil spill, the BP stocks were cheap. I bought a few based on the financial advice of a few friends, and it was a great business.

Where to find good information on cheap (GOOD) stocks?

closed as off-topic by Chris W. Rea, MD-Tech, Pete B., Grade 'Eh' Bacon, Nosrac Nov 20 '17 at 16:34

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Indexes are down during the summer time, and I don't think it has something to do with specific stocks. If you look at the index history you'll see that there's a price drop during the summer time. Google "Sell in May and go away".

The BP was cheap at the time for a very particular reason. As another example of a similar speculation you can look at Citibank, which was less than $1 at its lowest, and within less than a year went to over $4 ( more than 400%). But, when it was less than $1 - it was very likely for C to go bankrupt, and it required a certain amount of willingness to loose to invest in it. Looking back, as with BP, it paid off well. But - that is looking back.

So to address your question - there's no place where people tell you what will go up, because people who know (or think they know) will invest themselves, or buy lottery tickets. There's research, analysts, and "frinds' suggestions" which sometimes pay off (as in your example with BP), and sometimes don't. How much of it is noise - I personally don't think I can tell, until I can look back and say "Damn, that dude was right about shorts on Google, it did go down 90% in 2012!"

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    Thanks. I guess my question comes from my incorrect knowledge that indexes are composed (calculated) from a set of stocks. So my assumption was if the index is down many stocks should be trending down as well. Thanks for the clarification. I 100% understand your point of looking back, because at th time Citi was down, I was thinking about it, but did not do it, because I did not have the stomach. Thanks again. – Geo Jun 7 '11 at 2:20
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    Indexes are composed based on the price of the stocks, of course, that's the whole point of indexes. Indexes go down because stocks go down, but if all the stocks go down together, like now when there's no particular crash of a certain company or industry, then you can look at all the usual parameters to decide which stock to buy, as you would any other day. Stocks going down in June is rather expected, IMHO. – littleadv Jun 7 '11 at 3:28
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Something you might want to consider, instead of going out bargain hunting in hopes of picking something up on the cheap is to start doing you research now for a stock you would like to have in your portfolio and watch it for news that might cause it to go down before picking it up when it is down for a bit. As you pointed out with the BP stock, prior to the incident it was a solid stock that was being held in a number of funds. By identifying solid stocks now you can also make the decision on the basis of the news to if the fundamentals under the stock are severely impacted or if it just a temporary dip in prices.

Also, you might want to index funds such as VTI that are tied to the overall market and also pay dividends. When the market tends down for awhile you can buy some shares that you can either hold for dollar-cost averaging or sell off again once the market picks up.

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Keep in mind, that bargain hunting will fail you from time to time. I know a lot of guys who bought Nortel at $10, planning to hold it until the inevitable recovery.

  • Is all part of the gambling :). Thanks for the advice, I knew nortel was going down. – Geo Jun 7 '11 at 14:08
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Do your own research

There are hundreds of places where people will give you all sorts of recommendations. There is as much noise in the recommendations as there is in the stock market itself.

Become your own filter.

You need to work on your own instinct. Pick a couple of sectors and a few stocks in each and study them. It is useful to know where the main indexes are going, but - unless you are trading the indexes - it is the individual sectors that you should focus on more.

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