As I write, the S&P/ASX 200 is down 55 points, or over 1%.That’s not part of the “Christmas rally” plans, Foolish Investors. Still, the silver lining is many shares are cheaper today than they were yesterday. Who doesn’t like to snap up a bargain or three? Speaking of bargains, as witnessed by the massive 20% fall in mining and energy services provider WorleyParsons (ASX: WOR) today, just because a stock is already down 36% from its 2011 peak, doesn’t mean it’s cheap. Here at The Motley Fool, we’ve steered well clear of mining services companies, a stance that has served…
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As I write, the S&P/ASX 200 is down 55 points, or over 1%.That’s not part of the “Christmas rally” plans, Foolish Investors.
Still, the silver lining is many shares are cheaper today than they were yesterday. Who doesn’t like to snap up a bargain or three?
Speaking of bargains, as witnessed by the massive 20% fall in mining and energy services provider WorleyParsons (ASX: WOR) today, just because a stock is already down 36% from its 2011 peak, doesn’t mean it’s cheap.
Here at The Motley Fool, we’ve steered well clear of mining services companies, a stance that has served us, and hopefully you, very well.
I asked Motley Fool Share Advisor stock-picker extraordinaire Scott Phillips for his thoughts on the WorleyParsons profit warning…
“The only thing I’m surprised about is that investors are still surprised.”
It’s not the only surprise today…
As you’ll read below, that wasn’t the only surprise today, although thankfully for myself, Scott, and our thousands of Motley Fool Share Advisor subscribers, this surprise was of the altogether more pleasant variety — stunningly so!
It just goes to show that bargains sometimes turn up in the most peculiar places.
Meanwhile, on the markets, The Age quotes IG Market analyst Evan Lucas as saying it looks like world markets are starting to retreat, going on to say…
“These are classic signs of market fatigue; the ASX has seen volumes remaining below average (only $4.1 billion changed hands yesterday) as the banks and the big miners are starting to find buyers becoming a rarity.”
Imagine what volumes are going to be like tomorrow and Friday as half the country tunes in for the first day of the Ashes test.
Or maybe that’s just me. I’ll be there, in person at the Gabba, cheering the boys on. And if Mitchell Johnson fails to fire, and David Warner flops… there’s always the local hostelries in which to drown my sorrows.
But I digress…
Why would you buy a big four bank when there are 160% winners like this to be found?
It’s no surprise to me that investors are not rushing out to buy the big four banks.
Those that already hold them — a bunch of Mum and Dad SMSF investors — are probably already sitting on massive gains. They’re not about to increase their exposure, happy to bask in the massive wealth effect calendar year 2013 has brought to them.
And for those that don’t own the banks — like Scott Phillips — given their lofty valuations, they are not likely to go out and pile into them.
For Scott, and myself, there are plenty more fish in the sea.
In these pages, we’ve told you before about at least one of Motley Fool Share Advisor‘s 100%+ winners — Corporate Travel Management (ASX: CTD).
Well today, while the banks wallow and the miners wane, Foolish Investors like myself and Scott are celebrating another big gain for the world’s favourite* travel stock.
* Excuse the exaggeration. It’s actually my favourite travel stock. The world’s favourite travel stock might be Priceline.com (Nasdaq: PCLN), ironically one of Motley Fool Share Advisor‘s U.S.-listed stock recommendations — up 35% since our recommendation, but up a whopping 1978% over the past five years — or perhaps Flight Centre (ASX: FLT), up 381% over the same period.
Scott and I liked Corporate Travel Management stock so much we bought some ourselves — of course, buying after we recommended the stock to our members.
Up 17% TODAY — I couldn’t believe my eyes
Corporate Travel Management shares have jumped as much as 17% higher in morning trade with the company agreeing to acquire 75.1% of Westminster Travel, “an award winning travel management and services provider with offices in five Asian countries / territories (Hong Kong, Singapore, China, Macau and Taiwan).”
In an understatement of epic proportions, it seems the market likes the acquisition!
Corporate Travel Management will fund the acquisition via a fully underwritten entitlement offer of fully paid ordinary shares to eligible shareholders at $4.60 per share.
In the coming days, Scott Phillips will be updating Motley Fool Share Advisor subscribers with guidance and his advice on how to deal with the entitlement offer.
Today, however, we’re just basking in the glory of another big winner for ourselves, but more importantly, our paying members. If we don’t pick the winners, we ain’t got much hope in the world of investment newsletter subscriptions.
Motley Fool Share Advisor subscribers who bought around the time we first recommended Corporate Travel Group, including dividends, after today’s surge, will be up around 160%.
I couldn’t help but sneak a look at my SMSF…and the news is good. Very good.
On such an auspicious day, I couldn’t help but sneak a look at how my SMSF is faring. I don’t look too often, happy in the knowledge it’s chock-full of high quality companies trading at good to fair prices.
Not surprisingly, the news is good. I’m up over 90% on my buy price of Corporate Travel Management, and my SMSF portfolio is up 25% so far in 2013, handily outpacing the S&P/ASX 200.
I’d be sitting even prettier If only I could have knocked a couple of losers out of my SMSF.
I know everyone HATES a loser, but I didn’t realise just how much they hate OUR loser
Speaking of losers…
Last Friday, the Motley Fool team hosted a Motley Fool Share Advisor member event in Sydney.
It was a casual affair, the Fool providing drinks and nibbles, the members providing myself, Joe Magyer and Scott Phillips with some curly investing questions.
Two things quickly became apparent…
1) Investors remember, and focus on, their losers far more than their winners. As seems very common amongst Australian investors, many people in the room had been burnt buying some small, highly speculative mining stocks, hoping for untold riches, but getting 90%+ losers.
2) Motley Fool Share Advisor subscribers focus far more on our losers, and want to know much more about one of our losing recommendations than they did about all our winners put together.
It’s a known fact that the pain of losing money outweighs the thrill of making money. We saw it, and heard about it, on Friday evening.
I’ve been investing for 25 years, and even I was surprised…
Speaking of losers…
That many subscribers wanted to know “what went wrong” with one of our relatively few losers shouldn’t have been a surprise.
But what was surprising was not one of the 130 Motley Fool Share Advisor subscribers in attendance publicly asked about the prospects of our big winners to date, including Corporate Travel Management.
Zero. Nada. Zilch.
We’ve recommended a couple of ASX ‘dogs’ to Motley Fool Share Advisor members… although, to be fair, the ‘dogs’ are ‘only’ down 25% each. We’re not talking Armageddon here!
I own one of our dogs. Scott owns the other. We eat our own cooking here at The Motley Fool.
I’m down a few grand too…
So yes, I’m feeling the pain too. I’m down a few thousand dollars.
It sucks. I wish I was up, just like I wish I was up on every investment I’ve ever made.
But life, and investing, isn’t like that.
As a reminder, you’re doing well in this stock-picking business if you pick six winners out of every 10.
A 60% success rate may not sound exceptional. But when you consider the most a stock can fall is 100%, yet the most it can rise is totally uncapped, you can see how the maths works.
Corporate Travel Management, after today’s huge jump, is now the biggest winner on the Motley Fool Share Advisor scorecard. But it’s not alone.
These huge gains are the sorts of returns that allow you to live with the odd dog
We’re just coming up to our two year anniversary, and in that time, including Corporate Travel, we now have two ASX picks up ~140% or more, two more up ~90%, and three more up ~65%.
Not bad for a slow Wednesday, huh?
And… that’s without even mentioning any of our massive U.S.-listed winners, four of which are sitting on triple digit gains, and one of which has jumped an astonishing 584% in less than 18 months.
We’re proud of our record.
Proud that we’ve steered you clear of mining services companies.
Proud that we’ve managed to pick some big winners in our short history.
But our job is not done. In the eyes of our readers, and our paying members, we know we’re only as good as our next stock pick.
A U.S.-listed stock leveraged to U.S. housing recovery…one you won’t want to miss
Speaking of which, tomorrow, Thursday November 21st, after the market close, I’ll be presenting the latest U.S.-listed stock recommendation, exclusively to Motley Fool Share Advisor members.
Not many Australians invest in U.S.-listed stocks, and that’s despite a headline in this week’s AFR saying…
“Local investors need to think globally…”
You’re missing a trick, Foolish investor.
In case you’re thinking it’s all too hard, we’ve produced a free guide, How to Invest in International Share Markets, exclusively for Motley Fool Share Advisor subscribers. The short answer is… it’s not.
As for currency risk, let me just say you’re better off buying U.S. stocks when the Aussie dollar is buying US94 cents, like it is today, than you are when it’s buying just US80 cents, like it might be in the future. Personally, I ignore the currency risk. The bigger risk is picking the wrong stock… and that’s where we can help!
See you at the cricket.
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Of the companies mentioned above, Bruce Jackson has an interest in Corporate Travel Group.