The recent downdraft in the stock market ( not counting Tuesday) has been fierce and swift. But we live in a trading environment that rewards the investor ready for the wild swings and who is prepared to take advantage of them. I'm going to show you some simple rules for finding value in a market like the one we have now and how to avoid the stocks that won't perform.
I don't foresee another major sustainable move in the general market this year -- I had thought that our rally from the March '09 lows was overdone and the latest downdraft of close to 10% from those highs has been long overdue and necessary.
Yes, there is concern about sovereign debt in Greece and the possibility of that increased risk bleeding into Portugal, Spain, Ireland and even Italy. It is the possibilities of the latest Armageddon that create the quick selloffs like the one we've seen in the past several sessions. But it also provides the best opportunities.
I've picked out two stocks that demonstrate what I look for in selecting plays for a market that's undergone the kind of pressure selling we've seen recently. These stocks provide only the template, and it's always better when you've done your own homework and selected your own candidates.
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