In hindsight it's always easy to see the profitable trades you could have made but unfortunately having the foresight to see these things is much more difficult!
The 2009 GFC lows were an obvious (in hindsight) opportunity to buy shares in Woolworths Limited (ASX: WOW). Looking back, the opportunity to buy stock in one of the world's best retailers at just $25 should have been very tempting.
Another opportunity just around the corner?
This week, Woolworths' management has updated the market on the Home Improvement division. In a nutshell, the update confirmed many investors' fears that the retailer was struggling to gain traction in its vision to build a hardware chain that will effectively compete against the Wesfarmers Ltd (ASX: WES) owned Bunnings.
Furthermore, it would appear that management took the opportunity to provide the update prior to releasing the retail giant's full year results on 29 August so as to not detract from what will probably be a strong set of profit results from Woolworths' supermarket and liquor divisions.
Wait and See
It's of course not easy to time the market or predict how the market will react, but there is a chance that while investors have remained calm so far in light of the Home Improvement update, once a full reassessment of value is conducted after August 29 the stock could come under selling pressure.
One of the best opportunities to buy shares in high quality businesses is during periods of short-term uncertainty. Patiently adding blue-chip stocks to your portfolio when they are temporarily out of favour can certainly help build wealth.
The past six months has seen the share price in Woolworths track sideways, gaining just 1%. In comparison the S&P/ASX 200 Index (Index: ^AXJO) (ASX: XJO) has added nearly 7%. The stock looks fully valued at present, particularly if the hoped for growth opportunity in Home Improvement fails to materialise. If the market does negatively reassess Woolworths' outlook, it may offer a great buying opportunity for long-term investors.
