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wlkleo00cpz
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Posted: Fri 19:39, 30 Aug 2013 Post subject: woolrich parka Golden rules for losing money 2 |
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Following last issue's [link widoczny dla zalogowanych] article, here are more great ways to blow your hard-earned savings.
As we said last issue, to make money, sometimes it's better to first concentrate [link widoczny dla zalogowanych] on not losing it. With [link widoczny dla zalogowanych] that in mind, here's the second part of our series, [link widoczny dla zalogowanych] with five more golden rules for losing money.
5. Buy cyclical stocks at the top
In last issue's review of property group FKP, we discussed the natural human tendency to extrapolate recent events. So when a cyclical stock like a steel company or property developer has a few tough years, investors [link widoczny dla zalogowanych] tend to make the assumption that the bad times will last indefinitely. This can sometimes offer good opportunities for the canny [link widoczny dla zalogowanych] investor, as it did for subscribers who followed our first strong buy recommendation on FKP in issue 84/Jul 01 .
In the same way, [link widoczny dla zalogowanych] when these stocks show a few years of good results, thanks, for example, to strong Chinese metal demand, a booming property [link widoczny dla zalogowanych] market or some other factor, the market tends to extrapolate the good times. It's the same [link widoczny dla zalogowanych] mistake made at different ends of the cycle. Just at the peak of a cycle, investors can confuse a cyclical stock with a growth stock and bid the shares up, perhaps to a [link widoczny dla zalogowanych] very high PER. But when earnings are at a peak, that's exactly when cyclical [link widoczny dla zalogowanych] stocks should be selling on a low PER. When earnings fall, as they inevitably do with a cyclical downturn, the shares come crashing down. Farmers-who are used to the feast/famine cycle of a life on the land-seem less susceptible to this folly than most.
6. Follow overly acquisitive management
In his comprehensive book, Two Centuries of Panic, Trevor Sykes says that 'more companies are [link widoczny dla zalogowanych] ruined by bad management than by bad economies'. We'd most definitely agree. Overly acquisitive managements - those hell-bent on growth, seemingly at any cost, are especially prone to getting into trouble. How so?
Visit for the rest of this article on to find out more on .
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wlkleo00cpz
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Posted: Fri 22:42, 06 Sep 2013 Post subject: |
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