Not only is the stock inexpensive on an absolute basis, it's a bargain compared with those of other truckers. If you're the kind of investor who enjoys ransacking the clearance table, the bear market is a blessing in disguise. For you, the downturn is like being a kid in a candy store. So, with blue chips treading water and technology's ex-titans in shreds, you have lots of opportunities to scoop up discounted merchandise. On top of that, bargain hunters should have the wind in their sails for some time to come.
Potential minefields Buying stocks that sell for peanuts is tricky.
Lots of stocks deserve to be cheap and stay that way. There can be, as with chemical company W.R. Grace, which is now in bankruptcy proceedings, legal obligations that will consume earnings for years. Or a company's credit can be shot, as is the case with the also-ran discount chain Ames Department Stores. Its stock has crumbled because of stagnant sales and strong competition, and the company's crushing debt load makes the resumption of growth but a dream. Yet many ultracheap stocks are compelling.