Apple and Cat: Correction Buys

09/03/2015 7:00 am EST


We are in correction territory and I don't know how much lower it will go; but I have been through many corrections and good companies always come back, counsels value investor Russ Kaplan, editor of the Heartland Advisor.

I cannot pinpoint a date but I will advise one thing: The worst thing to do is to sell and hope to get back in at the bottom.

While the stock market averages may not signal a bear market, some individual stocks are definitely in grizzly territory and that is more important.

Apple (AAPL) is a stock you should definitely buy more of or begin a position, if you don't already have one.

It is interesting how companies can return great earnings—even better than expectations—like Apple—and still fall in stock price.

The reason is short-term thinking by analysts. One of the companies many Wall Street analysts consistently seem to underestimate is Apple.

While analysts are guessing such things as how many iPhones will be sold during the next quarter, visionaries like Apple CEO Tim Cook are looking ahead to such things as the manufacture of driverless cars.

Because of analysts’ obsession with short-term results—which often can’t be realistically predicted—shares of Apple have fallen about 30%.

A stock that is way down in stock price because of the slump in agricultural commodities is Caterpillar (CAT).

During the last year the stock has fallen about 32%. Caterpillar is a financially strong company that can withstand nearly any agricultural slump.

As any study of the history of agricultural prices shows, prices of agricultural goods are always in flux.

Peaks are followed by valleys, followed by peaks. In other words, I doubt that agricultural prices will stay down.

Incidentally, if you hold CAT, while you are waiting for commodity prices and the price of the stock to go up, you will receive a dividend of 3.9%.

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