How to Make Money from Cyclical Stocks -- Video about my experiences in cyclical stock investing,, I talk a bit about past mistakes and how I'm learning from those to make good percentage returns on cyclical stocks... With particular reference to the housing industry,...
For the full written article, along with charts etc please visit:
http://waystofattenyourwallet.blogspot.co.uk/2013/04/cyclical-stocks-be-greedy-when-others.html
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Video Transcript
Hi! Guys This is just a quick video entry on my blog post cyclical stocks be greedy when others are fearful and it's gonna summerise and information for you guys, if you can have got time or you can just listen to this video, listen to this video while do other things so this is all based on my experience,.. have been investing on and off since about 2006, 2007 and I'll talk a bit my past experience as well as and the last fifteen or sixteen months,... So basically I was started getting interested in Cyclical stocks from reading about Peter lynch and his work at a Fidelity Investments and reading his books on cyclical and rebounds etc....and then back in the crisis in America and I noticed some of the problems with Ford and GM, I basically looked at that and I didn't really invest, so I didn't reap the benefits of what turned out to be , I think what... turned out to be twenty bagger with ford and it went up about two thousand percent ....so I missed out on that unfortunately and I promised myself that I wouldn't miss out on that,a similar opportunity, and i would be a bit bolder. Hence being greedy when others are fearful, I would just take the step and just go for it.,
So yeh.. I sold some of my stocks, I sold some tesco stocks when I saw that the housing/house builders might/were in a similar situation (to ford and the distressed US companies) I sold that some of the housebuilder in the UK were selling at the same net asset value as the stock price . the same prices as their net assets
So (also)well the price of the valuations of the properties were also depressed in the market and probably, were not being treated for their value and also the market had kinda decided that they'd never earn a profit ever again .. which is kinda ridiculous... based on their share price .....so this is what I did I was looking around for cyclicals and I choose... because I well I was looking for rebound stock, I choose the stock that had the most damage to its earnings and umm low margins now I that would not necessarily be the right outlook or approach for long-term investing because you know you want a company that is going to stick around and have essentially fat margins, but in this case I was looking for thin margins so that umm then when they recovered the recovery would actually boost their EPS growth even more, so I looked at Barratts developments you can see in the chart that the earnings went down from circa 75p right down to 5p or 7p pence something with that, in a 2010, I started investing in 2011 and I look in the fundamentalists and actually in 2010 went down to minus 2.9 pence, so thats ridiculous really they were 52 P in 2008 and such say yeh.. the market really killed them in times of their share price they went down from I think 900 to something like 60p, I think I started investing around 130P or something, but anyway, so you can see from the statements see the Image of the statements in that image it has gone up sixty-five percent actually since making this blog post is has actually gone up a further twenty percent , so I've done fairly well on that.. I just wanted to say that it is still risky, I mean right now umm these are not for the faint hearted investors because basically, it wasn't guaranteed that these houses builders were ever going to reverse the situation.. barratt developments in the UK have some debt so I did split the investments with barratt developments and persimmon which is the market leader Is the market leader, from what I know, and Tailor Wimpey.. now these had varying levels of debt but essentially I was banking on the housing recovery... more transcript available at http://waystofattenyourwallet.blogspot.co.uk/2013/04/cyclical-stocks-be-greedy-when-others.html Video is there too..... ciao for now folks! Twitter: @jakew99
