Here’s what value looks like

Posted by Richard Russell - Dow Theory Letters

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A brief excerpt of the lengthy daily internet comment by Richard Russell of Dow theory Letters. One of the best values anywhere in the financial world at only a $300 subscription to get his report daily for a year. HERE to subscribe.

 

“In the stock market, as in most businesses, the money is made in the buying. Which is another way of saying that your safest bet in investing is buying when prices are on the bargain table. When are stocks on the bargain table? The answer is when they provide a safe, high return.”

Russell’s bargain times:

“On June 13, 1949, the P/E for the S&P was 5.4. At the same time the dividend yield was 7.6%.

On December 6, 1974, the P/E for the S&P was 7.5 and the dividend yield was 5.1%.

On April 21, 1980, the P/E for the S&P was 6.8, and the dividend yield was 5.7%

On August 12, 1982 the P/E for the S&P was 6.9, and the dividend yield was 6.3%.”

“great investing goes with great patience. Any fool can pick “good stocks” at any time. But the great fortunes are made by investors who have the knowledge and patience and capital to buy the bargains when they appear. Please read “Rich man, Poor man” on our home site.

“As my old friend, John Magee used to say,” “Don’t tell me what to buy, tell me when to buy it.”

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The 84 yr. old writes a market comment daily since the internet age began.  In recent years, he began strongly advocated buying gold coins in the late 1990’s below $300. His position before the recent crash was cash and gold.

There is little in markets he has not seen.  Mr. Russell gained wide recognition via a series of over 30 Dow Theory and technical articles that he wrote for Barron’s during the late-’50s through the ’90s. Russell was the first (in 1960) to recommend gold stocks. He called the top of the 1949-’66 bull market. And almost to the day he called the bottom of the great 1972-’74 bear market, and the beginning of the great bull market which started in December 1974. He loaded up on bonds in the early 80’s when US Treasuries where yielding 18%.