INDEX INVESTING JUST BEFORE AND JUST AFTER A BIG CORRECTION

HOW YOUR INVESTMENT OF $1 WOULD HAVE DONE
IF YOU INVESTED JUST BEFORE OR JUST AFTER A MAJOR CORRECTION COMPARE PAIRS OF COLUMNS 3-4, 5-6 & 7-8
year  return Value Value Value Value Value Value 2014 13.8 63.03 101.54 1.85 2.98 1.63 2.60 2013 32.43 55.39 89.23 1.63 2.62 1.44 2.29 2012 15.88 41.82 67.38 1.23 1.98 1.08 1.73 2011 2.07 36.09 58.15 1.06 1.71 0.94 1.49 2010 14.87 35.36 56.97 1.04 1.67 0.92 1.46 2009 27.11 30.78 49.59 0.91 1.46 0.80 1.27 2008 -37.22 24.22 39.02 0.71 1.15 0.63 1 2007 5.46 38.57 62.15 1.13 1.82 1 2006 15.74 36.58 58.93 1.08 1.73 2005 4.79 31.60 50.91 0.93 1.49 2004 10.82 30.16 48.59 0.89 1.43 2003 28.72 27.21 43.84 0.80 1.29 2002 -22.27 21.14 34.06 0.62 1.00 2001 -11.98 27.20 43.82 0.80 2000 -9.11 30.90 49.78 0.91 1999 21.11 34.00 54.77 1.00 1998 28.73 28.07 45.23 1997 33.67 21.81 35.13 1996 23.06 16.31 26.28 1995 38.02 13.26 21.36 1994 1.19 9.61 15.47 1993 10.17 9.49 15.29 1992 7.6 8.62 13.88 1991 30.95 8.01 12.90 1990 -3.42 6.11 9.85 1989 32 6.33 10.20 1988 16.64 4.80 7.73 1987 5.69 4.11 6.63 1986 19.06 3.89 6.27 1985 32.24 3.27 5.26 1984 5.96 2.47 3.98 1983 23.13 2.33 3.76 1982 21.22 1.89 3.05 1981 -5.33 1.56 2.52 1980 32.76 1.65 2.66 1979 18.69 1.24 2.00 1978 6.41 1.05 1.69 1977 -7.78 0.98 1.59 1976 24.2 1.07 1.72 1975 38.46 0.86 1.38 1974 -26.95 0.62 1.00 1973 -15.03 0.85 1972 19.15 1.00
CASH IS KING JUST AFTER  A BIG CORRECTION.   MAKE SURE YOU HAVE IT. RECOMPUTE TABLE WITH DIFFERENT CASH % AND PICK YOUR CHOICE BY YOUR RISK AVERSION.

More on Energy : Schlumberger

Morningstar has a high recommendation on Varco (NOV) and Schlumberger (SLB).  Both are beaten down due to oil prices and may still have some downside.  But who can time the market perfectly ?

While SLB has a Wide moat rating, NOV has only a narrow moat.  Both do have an A+ rating for credit meaning their balance sheets are strong.  I like the story on SLB a lot, particularly the various defensive steps it has put in motion, its size, leading market position, etc.  Russia is an issue, but I don't believe a company so big as SLB would not have hedged their investment appropriately.

SLB trades at 85.21 and has a Fair value estimate of 105 and Buy At recommendation of 73.50.

If one has a time horizon of 3 years, this would be a safe bet with very high potential returns if one hedges appropriately.

Possible trades are:

Buy/Sell with Jan 16 calls for strike 90 sold at 5.40
Buy/Sell with Jan 16 calls for strike 100 sold 2.48
A 50-50 combination of the above if one can afford it since upside potential is quite high.
Sell Jan 16 strike 90 PUT at 11.05

Happy Hunting !