The Big 3: Cycles, Rallies, and Stocks Below Book Value

Heres what was crashing the stocks in my head today:

1. BRIC Sucks Too

2. I Was Wrong: Losing to Win

3. Buy Their Checking Account

1. Terex was one of those global infrastructure plays that were supposed to decouple from the U.S. downturn and grow right through it from demand in China, India and so on. Stay away from the cyclicals…the cycle is OVER!

2. I’d been calling for DJIA 12,000 before we see 11,000. We’re now a percent or two below where we were when I made that wrong call. Let me repeat – my near-term rally call was wrong. Best trade you’ll ever make is taking a loss. A trade is a trade is a trade.

3. In 2003, I loaded up on a basket of stocks trading not just below their book value…but below their cash balances. Apple (AAPL) was the biggest winner of that batch, but almost every single one of those stocks eventually got back above their cash balance and I made a lot of money for my partners and me. There aren't nearly as many out there right now trading that cheaply, but we’re getting there, and that’s going to make me increasingly bullish as stocks get cheaper.