In an article I wrote last month called "What's on Your Doomsday List?" I wondered out loud whether the Aug. 2 debt-ceiling deadline would turn into a day of epic economic woe, or whether it would be more like the overhyped Y2K and produce nothing but piffle. If the former, I suggested creating a list of stocks that could become real bargains if the market tanked.
Be greedy when people are fearful
As we all are aware, the market did indeed drop precipitously --- even without a government default. I may have been off by a couple of days in my timing, but I wasn't wrong about getting a shopping list ready. Here is a recap of what I wanted to buy, how those stocks fared, and what actions I took.
My Doomsday Watchlist
My Target Prices
Johnson & Johnson (NYS: JNJ)
McDonald's (NYS: MCD)
Not holding my breath
PepsiCo (NYS: PEP)
Bought at $63.50 Aug. 1
Coca-Cola (NYS: KO)
Costco (NAS: COST)
Bought at $76.00 Aug. 2
Berkshire Hathaway (NYS: BRK.B)
Source: Yahoo! Finance.
*Original article publishing date.
**Date of the 4%-plus Dow drop.
I started writing this the Saturday after S&P took America's credit rating down a notch, exactly what we were afraid would happen if we defaulted. Now, I'm watching the stocks heading further downward.
McDonald's, in particular, has seemed pretty resistant to stock market jitters, so I wasn't holding out hope there for a real bargain. But it's being punished today along with the other stocks in my list. Berkshire is now in my buy territory, and I intend to make a purchase if it's still there in a couple of days, when I am allowed to purchase a stock I write about.
It's probably a good time right now to start making up a shopping list of your own. You can start right now by putting together a Watchlist. Start one for yourself from scratch, or follow along with my list.
At the time thisarticle was published Fool contributorDan Radovskyowns shares of Berkshire Hathaway, PepsiCo, Johnson & Johnson, and Costco.The Motley Fool owns shares of Johnson & Johnson, Coca-Cola, Costco Wholesale, PepsiCo, and Berkshire Hathaway.Motley Fool newsletter serviceshave recommended buying shares of PepsiCo, Johnson & Johnson, Coca-Cola, Berkshire Hathaway, Costco Wholesale, and McDonald's, as well as creating diagonal call positions on PepsiCo and Johnson & Johnson. Try any of our Foolish newsletter servicesfree for 30 days. We Fools don't all hold the same opinions, but we all believe thatconsidering a diverse range of insightsmakes us better investors. The Motley Fool has adisclosure policy.
Copyright © 1995 - 2011 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.