In July and August, a friend asked me if COSCO Shipping Holdings had such a low valuation, with a price-to-earnings ratio of only 5, and it was a long-term bull, could I invest in it?
I didn’t directly tell him whether he could invest. I analyzed the characteristics of cyclical stocks for him:
1. Cyclical stocks generally have a big market trend every seven or eight years. When cyclical companies take off, one wave of market prices may make more money than the previous four or five years combined. There are more!
2. The highlight moment only lasts for one or two years. This is when the stock price is the highest, and it is also when the valuation seems to be the "cheapest"!
3. Once the highlight moment is over, profits drop rapidly and valuations immediately become expensive! The stock price has been falling! Investors become takers...
4. Cyclical stocks should enter when the valuation, that is, the price-to-earnings ratio is high, and come out when the price-to-earnings ratio is low and ! See if you are doing the opposite?
Sure enough, when we wait until November, we will see that COSCO SHIPPING Holdings has reached a peak market in early July, and now it has begun to decline, falling from 25 yuan to 15 yuan in four months! Dropped 40%!
Why? Because next year’s profits will definitely not be as high as this year’s, and it’s possible that profits will fall by half!
Knowledge changes destiny, and pattern determines the outcome! Stock trading must reach the top of the pattern and look into the future!
pay attention to @value大哥!
