With Wall Street up big time one day and then nervous the next, it is apparent that wealth builders are in a Dirty Harry predicament.
Effectively, we are looking at numerous great opportunities based on current share prices, but we have to ask ourselves: ‘Do we feel lucky, punk? Well, do we?’
The penny dropped for me last night on my SWITZER program on the Sky Business channel when I was interviewing Tom Goode from JB Were in Melbourne. As he covered the BHP Billiton (BHP) production story, my crew flashed up the chart of the company’s share price and it screamed out to me that this has to be a great dollar-cost average opportunity. And I reckon Rio Tinto (RIO) fits into the same category for the long-term investor – both companies are great value now.
But you might be saying, but what if European nightmares this year send their share prices down even further?
Well, I’d say to you, buy more if you believe in the long-run China story, and that’s exactly what long-term investors have to think about: the long-term. To worry about Europe between May and October – the scariest months for investors – is to be a short-termer.
It is significant to me that the sad news that Warren Buffett has prostate cancer came on the day I had my BHP epiphany as he always advises investors to be greedy when others are fearful.
As a long-term investor, I do feel lucky and I like the company, the management, their customers and their long-term story.
The same applies to Rio and I would throw in Telstra (TLS) too – I especially love their dividend.
Out there will be an eventual big spike in stocks and BHP and Rio will make a lot of long-term investors who kept the faith very happy and today’s share prices pretty well ensure I am on the money.
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