What to buy when the DOW tanks

This weekend I did a little analysis on the value of the DOW 30. Currently, there are only eight stocks in the DOW 30 that I would consider buying. They are Boeing Co. (BA), Citigroup Inc. (C), DuPont (DD), Exxon (XOM), Johnson & Johnson (JNJ), Merck (MRK), Philip Morris (MO), and United Technologies (UTX). If the DOW slides even further you may want to consider Caterpillar, SBC Communications, and Home Depot.


Everything else is overvalued. So, dispite the current frenzy in the stock market the DOW 30 is still overvalued. I expect more selling this week. Even the good stocks I mentioned will probably take some losses when more people start selling off their 401K stock funds and moving it to safer havens, if the panic continues you may see the DOW dip below 7000. So, I would wait until after August 15th before considering buying anything. I picked the 15th because that's when the CEO's have to sign off on their financial statements.


Lastly, I expect Cisco (CSCO) to finally take it's slide downhill. Over the years Cisco has been in just about everyones stock fund, even though it is extremely overvalued. It currently has a P/E of 91.00 !!!!!!! It's real worth is $3.19 per share. So, you may want to look for other companys like this with high P/Es and dump or short them. But, if short be careful. People still like CSCO because of what it represents, not what it is worth. But, eventually I expect it to tank like the others.


Good Luck


Mark