We have Powercell on our list of wiseguys (see: the list) for some time now and this week the stockprice has dropped to a support level. That is why we have decided to make a long term investment and bought shares of Powercell. So far we have made some nice profits and even cashed in some of our wins two weeks ago (see the traffic light change to 30% cash on July 12th). Thus leaving some room to buy now.
This might be one of those moments: There are more and more worries about a new outbreak of the corona virus and the major stock indices have all gone down last week. So this might be a good time to buy for the long term.
We could be to soon since the summer holidays are comming but we believe that since most people will stay close to home for vacation that the stocktrading will go on. As soon as we will know that the corona numbers stay within reasonable limits everybody will be back to buy stock and prices will jump. On the other hand when a second wave of the corona infections will come all the stockmarkets will go down and we will buy some more (and not only Powercell). That is why we keep some cash.
Warren Buffett once said that it is wise for investors to be “fearful when others are greedy, and greedy when others are fearful.” This statement is somewhat of a contrarian view on stock markets and relates directly to the price of an asset: when others are greedy, prices typically boil over, and one should be cautious lest they overpay for an asset that subsequently leads to anemic returns. When others are fearful, it may present a good value buying opportunity.