Like I keep saying guys, you need to have a long enough time horizon in individual stocks. I'm more than confident that 3 - 5 years from now, my currently being down 40% in CBI will markedly outpace the S&P500 across the entire time horizon of ownership.
As long as the company is not broken, the broken stock will correct itself.
The market obviously is irrational. Companies like SalesForce, Amazon, and Facebook are wildly overvalued. But look at Apple being doubted. It's often a popularity contest. As Buffett famously said: the market is a voting machine in the short term, but a weighing machine in the long term.
It's but a matter of time. I know it's cold comfort if you're concentrated and losing, but it is what it is. All the best.
I'm still holding. And I once was up 4x in TRN on my initial 2/3 position. Maybe I should have sold? In hindsight, sure.
But from a value investing standpoint, not really. In fact, I bought a 1/3 position at $36, which is obviously down significantly now. But overall I remain up 25% based on my average cost of $16/share.
TRN is a great company. It simply got caught up in a commodity crash and legal witch hunt. The stock is broken, not the company. Mind you, the legal specter is large...as corruption can rear itself even in a country like the USA.
But I'm betting it won't. I'm confident the market will normalize. Implying huge value in TRN. It might take a few years. But I've ridden many solid companies like this, waiting patiently, significant beating the S&P500 when price finally reverts earnings.
All the best.
Disclaimer: I posted the preceding on Seeking Alpha last October. The point is that you might have to wait years for a stock to revert to its norm...assuming it is in fact a quality company.
I believe this will be the case with CBI.
I'm with you all in suffering a current ugly PAPER loss on CBI. 44% on a $26k basis = -$11k. Individually catastrophic...but not in the context of being 1 of 23 stocks I own, with some funds thrown in.Thank goodness for MSFT, KO, JNJ, CNI, and the likes.
BTW: I'm not only looking to average down in CBI, but also buy more into DOW, WFC, and DIS. These should be more stable and are at least at fair value. Anchors when commodity cycles swing suddenly and impact holdings like CBI and TRN.
All the best.
I'll respond by posting my concrete results with MSFT over the years. Basically, I hope this illustrates how making a disciplined value investment in what one judges to be a quality business yields great results. Here is my position:
date shares total price $/share
8-May-2006 500 $11,831.95 $23.66 basis
14-Sep-2006 1.73 $45.00 $26.07 div
14-Dec-2006 1.69 $50.17 $29.76 div
8-Mar-2007 1.81 $50.34 $27.77 div
14-Jun-2007 1.65 $50.52 $30.54 div
13-Sep-2007 1.75 $50.69 $29.03 div
13-Dec-2007 1.59 $55.95 $35.10 div
13-Mar-2008 1.96 $56.12 $28.65 div
12-Jun-2008 2.05 $56.34 $27.44 div
11-Sep-2008 2.11 $56.57 $26.78 div
11-Dec-2008 3.35 $67.12 $20.04 div
12-Mar-2009 4.06 $67.56 $16.63 div
18-Jun-2009 2.9 $68.09 $23.46 div
10-Sep-2009 2.75 $68.47 $24.88 div
10-Dec-2009 2.31 $68.82 $29.78 div
11-Mar-2010 2.38 $69.12 $29.01 div
10-Jun-2010 2.77 $69.43 $25.07 div
9-Sep-2010 2.9 $69.79 $24.11 div
9-Dec-2010 3.17 $86.36 $27.28 div
10-Mar-2011 3.4 $86.87 $25.57 div
9-Jun-2011 3.67 $87.41 $23.84 div
8-Sep-2011 3.34 $88.00 $26.35 div
8-Dec-2011 4.34 $110.67 $25.48 div
8-Mar-2012 3.48 $111.54 $32.10 div
14-Jun-2012 3.86 $112.23 $29.11 div
13-Sep-2012 3.7 $113.00 $30.53 div
13-Dec-2012 4.77 $130.80 $27.44 div
14-Mar-2013 4.71 $131.90 $28.00 div
13-Jun-2013 3.84 $132.98 $34.66 div
12-Sep-2013 4.09 $133.87 $32.76 div
12-Dec-2013 4.38 $164.11 $37.45 div
13-Mar-2014 4.32 $165.34 $38.31 div
12-Jun-2014 4.105 $166.55 $40.57 div
11-Sep-2014 3.606 $167.70 $46.50 div
11-Dec-2014 3.892 $186.78 $47.99 div
12-Mar-2015 4.411 $187.99 $42.62 div
11-Jun-2015 4.121 $189.36 $45.95 div
10-Sep-2015 4.48 $190.63 $42.55 div
total shares: 619.445
avg $/share: $19.10
current price: $53.46
current value: $33,115.53
total return: 179.88%
S&P500 wi reinvested dividends total return: 84.203%
S&P500 wi reinvested dividends CAGR: 6.764%
shares earned as reinvested dividends: 119.445
base value of shares earned as reinvested dividends: $3,764.19
current value of shares earned as rein
I agree we are in cyclical bear. But a modest secular bull. So yes, I am confident the price will rise over the longer term...and eventually outpace the S&P500.
Obviously, for commodities, this might take some time.
I lived this with MSFT. I bought in 2007 or so. Reinvested dividends. All consistently at valuations below its norm. Eventually the price normalized and I now have a 180% gain, well beating the S&P500...especially accounting for what happened in 2008.
I'm going to average down at some point and have patience in CBI. It indeed takes years. Which is why I always caveat these discussions about diversified value. It REALLY does take time...which I'm going to need on this one.
I'm a value investor. SCTY is anything but a value investment. It's young, volatile, and losing money. It's an emergent company in an emergent industry...where most companies will fail as such markets develop.
Think of automobile, tech, and biotech companies that emerged with those industries. The majority of companies failed. A few became Ford, BMW, Microsoft, Google, etc. It's difficult to identify such companies.
Solar has a long way to go before the economics become compelling. Sure, you can bet. But it's a gamble. I reserve 5% of my money for what is a deep dice roll here. Just my 2 cents.
This is true.
I bought a basket of stocks in betting on the North American energy renaissance these past 2 years. These purchases complemented earlier buys in the energy-transportation-manufacturing supply chains.
I'm down 30% - 60% in pure energy buys. DVN. CBI. NOV. DNOW. RDS-A. RDS-B. I'm down in AA and MT. But I'm up big in TRN, AWK, CNI, DOW. I starte buying XOM, which is actually making money. As well as stocks like JNJ, KO, and so. Well, you know the deal about diversification and buying low...something I think adds color to this situation.
But yeah, I got caught in a confluence of factors killing energy right now. It was a commodity based sector bet. I have little choice but to be patient. I will...withstanding my greatest fear that fossil fuels face a secular decline due to correlated environmental degradation..
CBI however would do well regardless. Energy is energy when it comes to infrastructure. CBI would adapt to whatever energy is in vogue. So we're talking me losing in DVN, RDS, NOV, DNOW, and XOM if this happens...although I believe XOM would also adapt and diversify by acquisition into alternate energies.
Lots to think about. But I will say this: solar looks like a good long term secular bet. Maybe FSLR? But the economics of solar are tenuous. Companies will boom and but, as they have up to now. There's no sure secular bet here either.
Long on CBI for now. Grimly holding. Hoping to have the courage to average down when things stabilize.
I'm down 44% on a $26k basis in CBI. This is not pretty. But I'm prepared to hold until the price of oil stabilizes. Then I'll assess averaging down.
Oil is in a free fall. I think I posted here several months ago that I would wait for it to fall to $30. But it's going below even that. I didn't think it was probable, but we might see below $25.
I still believe CBI is a sound company. But it's unfortunately caught up in a serious oil price war. Saudi Arabia is desperate and sees losing market share as an existential threat...which is probably true.
This could take some years to play out. But like I said, I'm holding. I won't take a 44% loss.
All the best.