Doubling Down

Yesterday was a spot of good news in a horribly bleak market.

I continued gritting my teeth in the morning, and I bought more stock into this sickening decline. Added to my Goldman Sachs and Cisco positions, because to make money, you have to buy when everyone else is selling.

And believe me...everyone else was selling yesterday. CNBC broke out an old Will Rogers quote from the Depression, when he said I am not so much concerned about the return on my capital as I am the return of my capital. When you hear that three times in the same day, you can be fairly sure that pessimism is running high. The Dow was down 25% from its highs, nearly 8% in 3 days, and the flight to safety was reflected in the soaring price of gold. What does all that mean? It means start buying.

And then in the afternoon, a break in the storm. $180 billion made available by the Fed for bank-to-bank lending. $50 billion for the Exchange Stabilization Fund to guarantee Money Market funds. Rumors about more help on the way, with the Fed buying toxic mortgage-backed securities at 30 cents on the dollar (most MSBs are currently valued at zero, so 30% is a huge lift.)

On this news alone, Goldman went from 88 to 108. After the close, additional measures were announced. New York Attorney General Andrew Cuomo will probe illegal short-selling in Goldman. And finally, the big one...the SEC temporary banned shorting in financial stocks, including GS. (Ironically - I hate this move as a classic overreaction from a regulation-heavy government. But it will certainly make me money in the short run.)

Call me crazy, but outrageous goverment action like this comes at the bottom, right? Historically, massive bailouts don't occur halfway down. This has to be a sign that I can finally start scratching back toward level. But be warned: I'm disagreeing with Cramer on this one. Of course, I'm thinking that yesterday will look like a tremendous buying opportunity in a few years, while Cramer tends to be more concerned with next week. Still, I can't see selling Goldman today unless it shoots through 150.