Although companies with moats are often the best long term investment you can do so as well, are affected by various events that make that the share price temporarily becomes more attractive. Often much more attractive. You should värdeinvesterare make sure that both the discover and the fearless use of these opportunities, no matter how long the horizon of your location.
They are without a doubt the best chance for a good return that I have received in the last ten years have arisen after the various special events at the market as a whole or in a specific company. This applies to both large events and more everyday as rapportbesvikelser. I think this is the case for most of the värdeinvesterare who are constantly chasing new entry points in good stocks. Is the man who said fearless and taking advantage of these times, and the payout is often as fast as spectacular.
The goal is, of course, not fast money, although this, of course, is fun even for a long-term investor, and even more important for the even returns over the longer term is that the man who is well-versed in one specific business by small events that makes the market overly disappointed over time can build on its holdings. Nothing will give you so easily improved return on a really long-term placement as buying on at different times then your favoritaktie been traded down.
A special event is thus any form of shock that affects the market. It can as I said apply to the whole of the market, t.ex. a wide börsras, a credit crunch, global makrooro or a disaster of any kind. Far more often it is, however, an individual company affected by nothing, i.e. bad news of any kind, which allowed its share to fall brutally. Often this case occurs very quickly, on the parts of a second, but sometimes drag the process out for months. The direction is either way always down even if the course safely bounces up along the way if the downturn lasts for a longer period of time.
Really, any kind of bad news to trigger the race, and everyone with any experience of the stock exchange has seen it happen. However, we are värdeinvesterare, of course, only interested in excessive reactions, where the price by a good margin less than the value we put on the stock. A race can be a belated correction of the price of a bad business and probably be followed not by a quick rise, but new downs.
Before I go through the different examples of the attractive race so I want to caution against the very common belief that downturns are generally the same as the time of purchase (”it has become cheap”) and encounter a ”value trap”. A business t.ex. H&M very long been a stable placement may have problems and fall for that reason. Then you have to analyze the problem and see if you think it will resolve itself in order to get an idea if the new price is attractive. Often follows bad news new bad news. A warning to is to try to very quickly form an opinion about a company we do not have any knowledge of since earlier to quickly decide to buy when the stock plummeted. Both are tailor made methods to lose money.
Events in the world:
The best and most extreme example of events in the world, is, of course, the financial Crisis in 2008. It was probably this century’s great financial meltdown, just as the 1929 had been the twentieth century. When Lehman Brothers surprisingly requested in the bankruptcy of the third week in september 2008 froze credit markets in the world to the ice, and especially the heavier investment (trucks, airplanes, construction sites, etc.) was interrupted in unison the world over. All the stock exchanges plummeted, and the company recently traded at high multiples in the months before the began immediately goes on sale when everyone wanted to assume risk.
The swedbank share, my purchase is arrows, the wider the arrow the greater the purchase. I have sold the entire holding of over 200 ce, the Stars are the new issues.
Shares in fordontillverkare that suddenly stood with empty order books of the shipyards, mining companies, Boliden regularly invest heavily and now had a hard time finding credit, manufacturers of luxury products as the market is not thought that anyone would be able to buy and many other traded at a fraction of the equity and race on the 90 % from the top of the year before was not unusual. This, therefore, despite the fact that nothing in the companies ‘ actual business had been changed. Similar, but less global race occurs on a regular basis, often it is concern about China or the concern for the u.s. government debt that is causing them. Sometimes, nobody knows really why the breed will.
Volvoaktien fell from 153 to 30 (Images from Avanza)
During times of great concern in the markets is just a piece of advice that works: stay calm! If you are rational, when most are not in it so you can make fantastic profits. If you buy when a good share has fallen.ex. 60 % so you have 150% profit on the share will up to his old level.
Serious events in the individual companies:
Accidents in businesses is done, unfortunately, at regular intervals, and of course, they can lead to that the company goes under, but they can also lead to that the share falls far more than is reasonable, given the negative effects of the accident. A good example was when BP had the explosion on the platform Deepwater Horizon in the Gulf of mexico in 2010. This was a terrible accident with severe impact on fisheries, etc., but for investors opened up a great opportunity.
Since the accident, and the controversy afterwards was played up in the nonstop in the media world for several weeks pressured the share in this very profitable and stable businesses far more than what was reasonable. How I counted on the damages and compensation to the affected so it was not reasonable that the account more than halved when the stock fell from $ 60 down to 27 during the ten weeks as the media coverage was the greatest.
In the five weeks rose to 41 dollars and leveled, and then out. A gain of up to 50 % for those who were able to stay calm and take the opportunity when the other ran in all directions. Admittedly, there are, of course, is always a moral dilemma in these cases, but BP had not consciously asked for this, but simply suffered an accident of the kind which, unfortunately, regularly occurs in the oil industry.
Everyday events in the individual companies:
Most of the race in the company’s shares takes place, of course, of less dramatic reasons. Sooner or later, businesses are faced with different adverse events and a lot of these, but as I said certainly not all, are of a transitory nature, but leads to överreaktioner in the stock price. The without doubt most common is rapportbesvikelsen.
Companies report as a familiar every quarter, and anyone who has done their homework and the company may without and before can be much easier than the other to assess whether there was an overreaction when a company makes the market disappointed. Exactly the same thing applies, of course, other less welcome news that the CEO drop off, insiderförsäljningar, missed orders, failed studies, etc
Are you sitting with more information than the market at large, and also have cold nerves when di.see (etc) associated with large headlines accompanied with a picture of a sad the PRESIDENT so you can separate the wheat from the chaff. You know when the fall is justified and where it clearly is too large in relation to the figures.
Especially the different knowledge level extremely between different investors in a particular company, what comes to the individual parts of the business. The less påläste can become terrified when he sees that t.ex. marketing costs rise or revenues fall within a segment. If you have detaljkunskapen as you probably know from previous communication, if this is normal or something that the management has a good explanation for.
It is, therefore, as usual for värdeinvesterare: Have a very good track of the companies you invest in! There are no shortcuts but on the other hand, timpenningen usually very good when you read on and discuss with other talented investors who own the stock. Alternatively, be happy with those who do not at all own the share and can act as Devil’s advocate for you.
Heart of stone,
Mind of steel.
On the phone,
Do the deal!