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HistoricalPEGuy (67.27)

Sell VMC, MLM and take some profits?



February 21, 2007 – Comments (2)

You've got to be kidding me - on CAPS I'm up quite a bit, but in my real portfolio I'm up over 70% on both since buying them in August. Takes some profits, right? No freaking way. These are still great stocks with nothing but great futures ahead of them. Time to sit back and watch the power of exponential growth work in my favor. What if I'm wrong? If the stock is still trading at the same levels 3 years from now, I've still got a great annual return! But that won't happen, the world needs rocks. Too many roads to build, to many reconstruction efforts in south after hurricanes and the world will always need concrete and asphalt. This is the sweet spot of investing, watching your money grow with no end in sight!


2 Comments – Post Your Own

#1) On March 05, 2007 at 9:45 PM, dwot (28.89) wrote:

I'd sell and look for something else that might give me 70%...

I guess just look at it differently, if it is at the same rate 3 years from now, that's

0%, 0%, 0%.

And actually, with inflation, it is negative. What you have now is yours, so I evaluate performance from today, and whether I'd consider buying today.

MLM has a P/E of 23, fairly rich, and the construction industry is probably declining right now, not growing, so I would tend to think this stock would be down in 3 years.

What are the economics of the rest of the business? I'm just looking on the very surface so I don't know the back room on it.

For example, Molybdenum has the normal growth prospects from the world economy as a whole, but then it has an enormous kicker, gas pipelines are rusting and better quality molysteel is needed. Well, I've copied an article on my other blog,

Same deal on VMC, I don't trust the construction industry to not have a slow down and pull this stock down.

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#2) On March 08, 2007 at 1:03 PM, HistoricalPEGuy (67.27) wrote:

Actually, these guys have amazing pricing power going into 2007 and 2008.  This means they will easily get the same volume and 7-10% increases in pricing.  A huge recipe for growth and bottom line.  Remember, 10% increase in revenues can mean 50% increase in profits.  I love what these guys are doing right now.

Both Vulcan and Martin Marietta have forecast double-digit price increases in 2007. 

My point about holding on was from a 'worse case scenario' perspective.  Best case is much, much better.  Getting 70% to me is almost absurd - and if you can get that, on a regular basis - you should quit whatever job you have and switch to investing.

Finally, let me say that I love the fact that it really helps diversify my portfolio.  I don't think those stocks are going to have the run they just had, but they'll go up and I'm going to hold, hold, hold.

I'm running over to your blog on Molybdenum...




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