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Strategies & Market Trends : Buffettology -- Ignore unavailable to you. Want to Upgrade?

To: E_K_S who wrote (4546)	11/14/2016 1:33:15 PM
From: bruwin	Read Replies (1) \| Respond to of 4691

" .. s/d see their BV growing every year or at least most of the years during that 10 year period." Yes, and as we have often discussed in the past, if the company issues no new shares in the period, then BV (Book Value) can only increase via the insertion of the Bottom Line, Net Income, into the Balance Sheet's Retained Income, after any dividend payment. Therefore I've always asserted how important it is to interrogate the Income Statement in order to determine how much of the Top Line Revenue has made it to the Bottom Line, and how much of that Top Line Revenue has been lost to Debt Expense, CoS, SG&A, Tax, etc, etc.... Would you regard Coca Cola, Johnson & Johnson, Mastercard, etc, as cyclical businesses ?

To: E_K_S who wrote (4546)	11/14/2016 7:09:39 PM
From: Shane M	Read Replies (1) \| Respond to of 4691

I'll add to this cyclical bottom idea as I've been giving it some thought. As an example: Right now there are some RV related companies (RV = recreational vehicle) that I think look good by the metrics, but their stocks are likely to get demolished during a serious recession. I think something like WGO Winnebago and similar peers (there are many in that industry chain), or perhaps something like PII Polaris Industries or peers. The theme is high cost, consumer discretionary purchases. I think some of these companies have characteristics that a Buffettology investor might find interesting, but are quite scary as investments during a recession, but can have blue sky coming out of recession. To top it off, many of these type companies are more leveraged than you'd expect for heavy cyclicals, increasing volatility. There are many others I have on my list to check when the next recession hits. The above are some I have on my recession buy list that seem to be particularly "boom/bust" in their nature, but over full economic cycles can do pretty well assuming they survive the downturn. I'd be interested in other ideas in this vein if folks are willing to share.