CYCLICALS
• Keep a close watch on inventories, and the supply-demand relationship. Watch for new entrants into the market, which is usually a dangerous development.
• Anticipate a shrinking p/e multiple over time as business recovers and investors look ahead to the end of the cycle, when peak earnings are achieved.
• If you know your cyclical, you have an advantage in figuring out the cycles.
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These are some lessons that peter lynch thought us in one up on wall street
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Here, the trick is not to lose the potential tenbagger. On the other hand, if the company falls apart and the earnings shrink, then so will the p/e multiple that investors have bid up on the stock. This is a very expensive double whammy for the loyal shareholders.Unlike the cyclical where the p/e...
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