Was this the investing opportunity of a lifetime?

Here is a conversation that I will never have with my wife:-

“Darling, there is a sale on at your favourite department store, many prices have been reduced by 50%, and others are just a fraction of their original cost, would you like me to take you?”

“No thanks. I’d prefer to wait until prices start to rise again.”

Nobody in their right mind wants to pay full price or worse, too much, when they are buying any goods.

However, statistics show that many investors start buying shares when they are getting more expensive.

The stock market is like any other market. You wouldn’t turn up at your local fruit and market stall and say, “Gosh, they look incredibly cheap can you let me know when they’re more expensive and I’ll come back then”.

As the financial crisis began to unravel, and the FTSE-100 lost about half of its value, a fantastic buying opportunity was created. I wonder how many people dived in and started picking up the bargains or even a simple tracker fund?

It’s a sad fact, but statistics over many years show that generally most investors don’t take these opportunities, and many will only start investing in the stock market again when it’s back to or above its pre-crash levels.

One of Buffet’s many excellent one liners is something to the effect, “Be greedy when others are fearful and fearful when others are greedy”.

In my opinion, the crash will prove to be one of the great investing opportunities of a lifetime (or if not a lifetime then certainly a decade or two), particularly for the selective stock picker.

The thing about stock market corrections or crashes, or whatever you wish to call them, is that they bring down the good, the bad and the ugly.

Of course, it’s ensuring that you have enough knowledge to sift the wheat from the chaff, although even some of the less attractive companies get battered far too much during general market mayhem and panic, and present very attractive buying opportunities.

Since the market nadir, a huge number of stocks have gone on to multi-bag, and for astute investors who were able to seize some of these opportunities, the rewards have been huge.

As you already know, one of my particular favourites was Avesco, which has risen from a low of 20p ish to its current value of 96p and, in my opinion, is still hugely undervalued. There are of course many, many more examples and far too numerous to mention here, but 4 examples that made it onto my monitor were:-

Hogg Robinson which fell to around 4p and is now 59.5p, Johnson Service Group which fell to around 5p and is now 33.75p, TT Electronics which hit 20p and is currently 174.5p and finally Pendragon which reached about 1.5p and is currently 23p (although I do remember that it rose well above 30p at one stage).

Happy hunting and I hope you were able to take advantage of Mr Market's generosity.