Lloyds and BHP are among the cut-price buys.
Never waste a good crisis, they say, and I've been doing my best not to squander this one. I said this this is the buying opportunity I've been waiting for, and I have dutifully done a bit of shopping.
Buying shares right now is a bit like setting off for Oxford Street in the Christmas sales -- you need sharp elbows and iron nerves. In my weaker moments, I have been tempted to sit quietly at home instead, and hang onto my pennies. Still, I boldly did battle, and returned home laden with cut-price goodies. Only time will tell whether they were worth the money. So what did I buy?
LLOY? LOL!
I suspected I was buying Lloyds Banking (LSE: LLOY) too soon when I topped up my existing holdings at 35.39p on 5 August, and cursed my impatience when it quickly dropped to around 28p.
I'm a little happier now, with the big UK banks staging a minor recovery. Barclays (LSE: BARC), Lloyds and Royal Bank of Scotland (LSE: RBS) have developed the habit of rebounding sharply on the slightest uptick in sentiment, which suggests that investors still covet them. We might see another rebound if the regulators end up going soft on the sector, which is more than likely.
It could take some years for banks to recover, and they will be barren, dividend-free years. Indeed, the next leg of the eurozone crisis could knock their shares even lower. But I've got twenty years until I retire, to see if my bet pays off.
Would you bet against the banks?
Dig deep for miners
It's nerve-wracking throwing money into this market. The only way I can do so is to remind myself that I am investing for the very long term. It also helps to pick up shares that have already fallen a long, long way.
Such as mining giant BHP Billiton (LSE: BLT), which was down 25% on its twelve-month high when I bought on 23 August at 1,940p. This share could slump further, especially if China suffers a hard landing, and I may have bought at the wrong point in the commodities cycle. But at least I haven't bought at the very top.
Again, time is on my side. The good thing about taking a gamble on shares is that you can wait years for your bet to come off.
Going for gold
I really have taken a gamble on my next stock, Vatukoula Gold Mines (LSE: VGM). I missed out on the gold boom, after wrongly deciding the price looked toppy at $1,300. With gold touching $1,900, my ability to time the market is as bad as Gordon Brown's.
I thought I could make amends by investing in a junior gold-mining stock instead, especially since prices have trailed down in recent months. When I bought Vatukoula on 23 August at 120p, it was down nearly 50% on its twelve-month high of 227p.
If UBS is right, and gold really is set to hit $2,075 in 2012, and if we get another bout of 'QE', the cash will keep flowing into gold-company coffers, and that has to be good for their share prices.
I'm speculating a little on Vatukoula, but I'm hoping that both fear and greed will work in my favour. Fear, as investors dread more turbulence, and greed, as they try to cash in on gold's recent gains.
Always bet on black
If I was a brave investor, I would have bought oil explorer Tullow Oil (LSE: TLW) a few weeks ago, and I'd be celebrating this morning, as it is up 11% on encouraging news from its joint venture with Royal Dutch Shell (LSE: RDSB).
Instead, I spread my risk with Junior Oils Trust, drilling into this unit trust on 27 July and again on 10 August. Fund manager Angelos Damaskos has been taking advantage of recent market weakness to invest in oil stocks with good reserves in politically stable areas. During the next decade or two, oil can surely go only one way -- out of the ground, and into the atmosphere. This means there will be less of it than before, and it will fetch an ever higher price.
I'm 11% in the red so far, but in due course, I expect to end up nicely in the black stuff.
Sale of the century
It is far too early to say whether my strategy is working, so I'll let you know in a few years. In the meantime, I'm expecting plenty more volatility, and have kept a bit of cash in reserve. The sales aren't over yet.
Happy crisis investing!
More on the markets and shares:
> Harvey owns shares in BHP Billiton, Lloyds Banking and Vatukoula Gold Mines, and holds units in Junior Oils Trust.
