Overall, this hypothetical group has done well, gaining 18% since April 5. I've always believed in the power of the sector in stock valuation. I identified this sector first through my own work first, and then noticed that more folks were writing about them (there is a behavior attributed to this--like buying a white car and then noticing how many white cars are on the road). Anyway....best stock purchase outcomes have always come from doing this sort of winnowing through the stock universe. It is important to note, though, that with cyclical stocks such as these, while the recoveries are attractive, when they hit their demise, the red ink can flow pretty heavily. The reversals in these sectors can be quite stark--as in 40-50% reversals. I don't like to hold through such reversals, but there are certainly tax considerations if you hold stocks such as these in a taxable v. deferred taxable account. If you have such accounts and you've not thought about allocating different types of holdings among the two, perhaps talking with your financial advisor would be prudent. As they say...it's not what you earn but what you keep.
1 comment:
Coal stocks are an interesting pick because it still remains attractive for long-term play. Many factors continue to drive the demand for coal upwards, therefore, increasing coal stock as a whole. I recommend this report i found, it has been very valuable to me so far...
Coal Stock Report
Cheers!
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