run,
Then you have Peter Lynch who says you buy the cyclicals when their PEs are high and sell them when their PEs are low, because this is when the earnings have improved.
I know what Coxe would say to that..."Peter Lynch, meet China"
The point is that some of these stocks are back to where they were in January. The chart of CLF has got to be the poster child or what went wrong. Even before BHP and others started doing deals CLF put together that January deal with the Auzzie iron ore miner. From $50-55 in Jan they went to $88 and back to $57.
Coxe is right, these are great companies. They have great assets and great prospects.
However, we own the shares of these companies, and the market is fickle. Even Donald Trump would not try to sell the best Manhattan real estate on Christmas Eve at midnight, but that is what Coxe is saying. Right now is Christmas Eve at midnight in terms of buyers and liquidity and market sentiment for these companies' shares.
CLF was $10/shr 5 years ago in April 2000.
Coxe says 'This time is different'. CLF went to $88 and is back at $58. That was 5.8 to 8.8x the April 01 share price.
In the next 5 years who thinks CLF will go to between $336 (5.8 * 58) and $774 (88*8.8), as these would be the low and high ends of the range.
I don't think CLF will surpass $88 by more than 15% for at least 3 years. How about these other miners like RIO, BHP, RTP? If this is more than a temporary lull, there are better places to park money. I'm in park and wait mode. If I do invest, I'll only buy high yield issues like MSB, RIO, LIF.UN, NIF.UN or very good juniors, but I don't see these majors doubling and tripling like they have.
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