Is Now the Time to Buy Paper/Forestry or Building Materials? - James Cullen

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Is Now the Time to Buy Paper/Forestry or Building Materials?
Jun 17, 2008 10:17 AM UTC

James Cullen

Return	Risk
-13.37%	MID

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Symbol	Sentiment	Start	Return	Closed
WY		06/17/08	-33.11%	--
RYN		06/17/08	-15.38%	--
NUE	n/a

Via Long Investment Ideas from Seeking Alpha:

As part of David Merkel’s rules on industry selection, he lists the following:

Buy strong companies in weak industries when the industry pricing outlook seems hopeless.
Buy moderate to strong companies in strong industries where the earnings power and duration are underestimated.
Underweight/ Ignore/ Short industries where pricing power is likely to be negative for several more years, and especially industries that are in terminal decline.
Avoid fad industries. There are P/E levels that no industry can grow into.

My best example of #1 is the P&C insurance industry in early 2000. Total gloom. I bought a lot of The St. Paul (STA) then. Another example: Steel in 2001-2002. I bought Nucor (NUE).

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Comments (1)

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guliamo

47%

1 point commented 503 days ago reply

I think RYN is a great idea and own it myself. The beautiful thing about this industry is that if the price isn't right - you can keep your inventory to grow - literally. With the way the market is looking, this is as good a time as any to pick up some RYN.
http://www.marketguru.com/opinions/inventory-that-keeps-growing-ryn/1002,405

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