08-17-2013, 12:35 AM
I too bought MCD recently at approx $101/share. While retrospectively I would have preferred to buy it now (at 95.03), over the long run this little dip is fine, especially considering my small amount of dividend reinvestment will be able to buy more shares. It is not like MCD is going anywhere.
I can't remember where I read or heard this, but if you think of it this way it makes sense: When we go to the grocery store do we want to see the prices of all the products go up in price? No, we would prefer to buy things at discounts. The same should be true for stocks. "Be greedy when others are fearful," as Warren Buffett has said. If you watch the business news channels and talking heads then you might think it is the opposite. To continue the analogy, everyone there is happy to see grocery store prices rise when you want to buy. Buy recommendations increase substantially as the stock price rises since everyone wants the positive reinforcement of going with the crowd and being "right."
I'm long MCD and might add to my position (after purchasing some KO first, that is).
I can't remember where I read or heard this, but if you think of it this way it makes sense: When we go to the grocery store do we want to see the prices of all the products go up in price? No, we would prefer to buy things at discounts. The same should be true for stocks. "Be greedy when others are fearful," as Warren Buffett has said. If you watch the business news channels and talking heads then you might think it is the opposite. To continue the analogy, everyone there is happy to see grocery store prices rise when you want to buy. Buy recommendations increase substantially as the stock price rises since everyone wants the positive reinforcement of going with the crowd and being "right."
I'm long MCD and might add to my position (after purchasing some KO first, that is).