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XMFSinchiruna (27.09)

It's a Brave New Uncertain World

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October 20, 2008 – Comments (3)

Nucor crushed earnings for the 3rd quarter, with a 93% increase over Q307... but that's not what caught my eye... or ear rather.  :)

Don't buy new positions in steel or aluminum here, Fools. Too scary! If you're already as deep in the hole as I am with ACH, then I can't really recommend selling either, but know that the road to recovery could be bumpy for these more industry-sensitive commodity plays. I continue to place my investing focus on the commodities people can't/won't do without: coal, NG, oil, silver... and the quasi-commodity that's actually a currency: gold.

 

3 Comments – Post Your Own

#1) On October 20, 2008 at 5:17 PM, klemenv (99.65) wrote:

Perhaps CPSL is a play on cheap steel. They are cold roller, so they benefit from low steel prices.

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#2) On October 21, 2008 at 7:16 PM, adventurerneil (< 20) wrote:

Hey Sinch...    I have to go a tad contrarian with you here. At these prices, steel (GGB) and copper (PCU) are looking really attractive to me. True, they're still being sold off and no end is in sight...   but even if dividends get cut, they're still paying well, and would likely resume divy growth once the global market picks back up.

I'm not gonna try to catch any falling knives, but I don't think they'll be this cheap in a year. And in 5 or 10 years, well, I think they'll have looked like a steal at this point.

If I had money to be even remotely aggressive with right now (which I don't), I'd start wading into some of these 4 P/E companies by dollar cost averaging over a few months, and then just hold and enjoy the dividends (which make the volatility more palatable).

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#3) On November 05, 2008 at 9:46 PM, achumpage (< 20) wrote:

I believe Nucor is way better placed than other steel companies due to its prediliction to use scrap ferrous metals.  The bottom is out of scrap ferrous -- check AMM -- and while there may be a short term hiatus on NUE I think the overall market says buy if you have a 12 month perspective.  Bottom line -- inventories get used up and NUE is lower cost producer.

And BTW, did you check the dividend history... ?

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