All this raises the interesting question:  Are we supposed to be picking a low price that the stock might reach at any point during the next five years, or are supposed to be picking a low price that we think is the lowest the stock might be at five years from now?

It's a good question and goes to the heart of the matter.  I think that the assumption has to be that, for a growth company, the overall trend in price is positive--at least, that would be my expectation.  If I had any other inkling, I think I wouldn't invest in the company in the first place.  So, I view the low price as something that could be achieved in the short term--with in a year and probably less.

I agree here too.  What's happening today isn't typical and, based on history, isn't likely to repeat itself for the next fifty to eighty years.  So for me, the consequence of that observation is that I am sitting out until things settle down.

For those that don't receive alerts from the WSJ, here's the latest one I received.

The U.S. economy has sunk into a recession and government action is critical to stem the damage, according to economists in the latest Wall Street Journal forecasting survey. On average, the 52 economists surveyed now expect gross domestic product to contract in the third and fourth quarters of this year, as well as the first quarter of 2009. If those predictions bear out, it would mark the first time U.S. GDP -- the total value of goods and services produced -- has contracted for three consecutive quarters in more than a half century.

I think that there's a chance that the drop in output could be longer.  I also think that, when NBER makes the call on a recession, we're going to find out that we've been in one for most of this year and most of next.

I am not comfortable making any kind of calls on low prices as the territory we're in now is completely unfamiliar.  I think that the market--here and overseas--is irrational.  If not irrational, I think that the reaction of a rational investor has to be that he or she is dealing with irrational participants in the pricing mechanisms--the exchanges and markets.

Over on Manifest Investing, I made what probably appears to be a ludicrous suggestion, but I stick with it.  I think that Paulson and his counterparts in Japan and the EU should call on the governing bodies of exchanges and markets to take a two day time out--close down for two business days.  I think it necessary because what I see isn't an orderly effort to determine price, I see an enabling mechanism for irrational behavior.  And just like any form of "terrorism," it takes very few participants to set the tone for everyone else!

At the heart of the current problem is money, specifically, the problems in the credit markets that first surfaced on September 17.  On that most scary of nights, things started to look like they were coming to a grinding halt.  I am in favor of transparency; transparency in pricing is critical (hence my criticism of the ban on short sales), but what's happening today just makes no sense.

So, as long as we're in unchartered territory and I can't really figure out what's happening or why, I don't want to play.   We're definitely in an era when we'll be able to buy companies at extraordinary low prices; I am looking forward to doing that.  However, I have also watched what Warren Buffett recently and he has constructed "investments" such that the only way he can lose is if the company goes belly up.   Look at the Goldman Sachs deal, for example, with a 10% guaranteed dividend.  The signal to me: he doesn't know where the bottom is and is not going to invest unless he gets protection.  I don't have that kind of clout, so I am sitting on the sidelines until the insanity stops.

The questions asked above pertained to the Stock Selection Guide which is produced by NAIC or Better Investing.  The tool is used to analyze growth companies and determine which of them are of the best quality that offer the best time to invest.  For more information on the organization and the tools it has developed for individual investors, follow the link in the first sentence.